Exhibit 10.3

 

EXECUTION COPY

 

SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

Dated as of April 27, 2017

 

Among

 

THE BORROWERS PARTY HERETO,

 

as Borrowers,

 

HOSPITALITY INVESTORS TRUST, INC.,

 

and

 

HOSPITALITY INVESTORS TRUST OPERATING PARTNERSHIP, L.P.,

 

as Guarantors,

 

THE INITIAL LENDERS NAMED HEREIN,

 

as Initial Lenders,

 

and

 

CITIBANK, N.A.,

 

as Administrative Agent and as Collateral Agent,

 

with

 

CITIGROUP GLOBAL MARKETS INC. and DEUTSCHE BANK SECURITIES INC.,

 

as Joint Lead Arrangers and Joint Book Running Managers

 

 

 

 

TABLE OF CONTENTS

 

Section Page     Article I   DEFINITIONS AND ACCOUNTING TERMS       SECTION
1.01. Certain Defined Terms 1 SECTION 1.02. Computation of Time Periods; Other
Definitional Provisions 37 SECTION 1.03. Accounting Terms 37     Article II  
LOAN       SECTION 2.01. Agreement to Lend and Borrow 38 SECTION 2.02. Making
the Advances 38 SECTION 2.03. [Intentionally Omitted] 39 SECTION 2.04. Repayment
of Advances 39 SECTION 2.05. Mandatory Reduction of Commitments 39 SECTION 2.06.
Prepayments 39 SECTION 2.07. Interest 40 SECTION 2.08. Fees 41 SECTION 2.09.
Conversion of Advances 41 SECTION 2.10. Increased Costs, Etc. 42 SECTION 2.11.
Payments and Computations 43 SECTION 2.12. Taxes 45 SECTION 2.13. Sharing of
Payments, Etc 49 SECTION 2.14. Use of Proceeds 50 SECTION 2.15. Evidence of Debt
50 SECTION 2.16. Extension of Maturity Date 51 SECTION 2.17. Defaulting Lenders
53 SECTION 2.18. Interest Rate Cap Agreements 55 SECTION 2.19. Replacement of
Lenders 61 SECTION 2.20. Protective Advances. 61 SECTION 2.21. [Intentionally
Omitted]. 62 SECTION 2.22. Reallocation of Lender Pro Rata Shares; No Novation.
62     Article III   CONDITIONS PRECEDENT TO CLOSING AND FUNDING       SECTION
3.01. Conditions Precedent to Closing 63 SECTION 3.02. Conditions Precedent to
Funding Advances 67 SECTION 3.03. Determinations Under Sections 3.01 and 3.02 72
    Article IV   REPRESENTATIONS AND WARRANTIES       SECTION 4.01.
Representations and Warranties of the Borrowers 72

 

 

 

 

Article V   COVENANTS       SECTION 5.01. Affirmative Covenants 83 SECTION 5.02.
Negative Covenants 94 SECTION 5.04. Financial Covenant – Guarantor Minimum Net
Worth 107     Article VI   EVENTS OF DEFAULT       SECTION 6.01. Events of
Default 107     Article VII   GUARANTY       SECTION 7.01. Guaranty; Limitation
of Liability 111 SECTION 7.02. Guaranty Absolute 111 SECTION 7.03. Waivers and
Acknowledgments 112 SECTION 7.04. Subrogation 114 SECTION 7.05. [Intentionally
Omitted] 114 SECTION 7.06. Indemnification by Guarantors 114 SECTION 7.07.
Subordination 115 SECTION 7.08. Continuing Guaranty 115     Article VIII   THE
AGENTS       SECTION 8.01. Authorization and Action; Appointment of Supplemental
Agents; Servicer 116 SECTION 8.02. Agents’ Reliance, Etc. 117 SECTION 8.03.
Citibank and Affiliates 118 SECTION 8.04. Lender Credit Decision 118 SECTION
8.05. Indemnification by Lenders 118 SECTION 8.06. Successor Agents 119 SECTION
8.07. Relationship of Agents and Lenders 119     Article IX   MISCELLANEOUS    
  SECTION 9.01. Amendments, Etc 120 SECTION 9.02. Notices, Etc 121 SECTION 9.03.
No Waiver; Remedies 122 SECTION 9.04. Costs and Expenses 123 SECTION 9.05. Right
of Set-off 124 SECTION 9.06. Binding Effect 125 SECTION 9.07. Assignments and
Participations; Replacement Notes 125 SECTION 9.08. Execution in Counterparts
128 SECTION 9.09. Severability 128 SECTION 9.10. Survival of Representations 129
SECTION 9.11. Usury Not Intended 129 SECTION 9.12. Confidentiality 130 SECTION
9.13. Release of Collateral 131 SECTION 9.14. Patriot Act Notification 133
SECTION 9.15. Jurisdiction, Etc 134 SECTION 9.16. Governing Law 134

 

 ii

 

 

SECTION 9.17. WAIVER OF JURY TRIAL 135 SECTION 9.18. No Fiduciary Duties 135
SECTION 9.19. Liability of Borrowers 135 SECTION 9.20. Acknowledgement and
Consent to Bail-In of EEA Financial Institutions 135 SECTION 9.21. Bifurcation
of Loan 136     Article X   RECOURSE       SECTION 10.01. Exculpation 136
SECTION 10.02. Personal Liability of Borrowers 137

 

SCHEDULES

 

Schedule I - Commitments and Applicable Lending Offices Schedule II - Collateral
Assets Schedule III - Borrower SPE Requirements Schedule IV - Non-Eligible
Assignees Schedule V - Approved Franchisors Schedule VI - Approved Managers
Schedule VII - Allocated Loan Amounts Schedule VIII - Pledgor SPE Requirements
Schedule IX - TRS Lessee SPE Requirements Schedule X - PIP Budget Schedule
Schedule XI - [Intentionally Omitted] Schedule XII - [Intentionally Omitted]  
Schedule XIII - Appraised Values Schedule XIV - Additional Summit Collateral
Assets Schedule XV - [Intentionally Omitted] Schedule XVI - Retiring Debt
Schedule 4.01(b) - Subsidiaries Schedule 4.01(f) - Material Litigation Schedule
4.01(o) - Existing Liens Schedule 4.01(p) - Real Property                 Part I
- Owned Assets                 Part II - Leased Assets and Operating Leases
                Part III - Exceptions to Representations Regarding Rights of Way
and Utilities                 Part IV - Exceptions to Representations Regarding
Tax Lot                 Part V - Exceptions to Representations Regarding
Assessments                 Part VI - Exceptions to Representations Regarding
Use                 Part VII - Exceptions to Representations Regarding Survey
Schedule 4.01(n) - Existing Debt Schedule 4.01(q) - Environmental Concerns
Schedule 4.01(w) - Plans and Welfare Plans Schedule 4.01(ii) - Collective
Bargaining Agreements and Union Contracts

 

 iii

 

 

EXHIBITS           Exhibit A - Form of Note Exhibit B - Form of Notice of
Borrowing Exhibit C-1 - Form of Pledgor Security Agreement (Georgia Tech Owner)
Exhibit C-2 - Form of Pledgor Security Agreement (Georgia Tech TRS Lessee)
Exhibit D - Form of Assignment and Acceptance Exhibit E-1 - Form of Opinion of
NY counsel Exhibit E-2 - Form of Opinion of MD counsel Exhibit E-3 - Form of
Opinion of DE counsel Exhibit F - Form of Amended and Restated Security
Agreement Exhibit G - Form of Mortgage Exhibit H - Form of Assignment of Leases
Exhibit I - Form of Assignment of Interest Rate Cap Agreement Exhibit J - Form
of Cash Management Agreement Exhibit K - [Intentionally Omitted] Exhibit L-1 -
Form of Section 2.12(g) U.S. Tax Compliance Certificate (For Foreign Lenders
That Are Not Partnerships For U.S. Federal Income Tax Purposes) Exhibit L-2 -
Form of Section 2.12(g) U.S. Tax Compliance Certificate (For Foreign
Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Exhibit L-3 - Form of Section 2.12(g) U.S. Tax Compliance Certificate (For
Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit L-4 - Form of Section 2.12(g) U.S. Tax Compliance Certificate (For
Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit M - Form of Amended and Restated Consent and Subordination of Management
Agreement Exhibit N - Form of Guarantor Consent Exhibit O - Form of Guaranty
Supplement Exhibit P - Form of Borrower Accession Agreement

 

 iv

 

 

SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT dated as of April 27, 2017 (this
“Agreement”) among the borrowers party hereto (together with any Additional
Borrowers (as hereinafter defined) acceding hereto pursuant to Section 3.02,
collectively, the “Borrowers”), HOSPITALITY INVESTORS TRUST, INC., a Maryland
corporation (the “Parent Guarantor”), HOSPITALITY INVESTORS TRUST OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (the “Operating Partnership”,
and, together with the Parent Guarantor, the “Guarantors”), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the initial lenders (the “Initial Lenders”), and CITIBANK, N.A.
(“Citibank”), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VIII, the “Administrative
Agent”) for Lenders (as hereinafter defined), Citibank, as collateral agent
(together with any successor collateral agent appointed pursuant to Article IX,
the “Collateral Agent”, and together with the Administrative Agent, the
“Agents”) for the Secured Parties, with CITIGROUP GLOBAL MARKETS INC. (“CGMI”)
and DEUTSCHE BANK SECURITIES INC., as joint lead arrangers and joint book
running managers (collectively, the “Arrangers”).

 

WITNESSETH THAT:

 

(1)          Pursuant to the Amended and Restated Term Loan Agreement, dated as
of October 15, 2015, as amended by Amendment No. 1 thereto dated as of February
11, 2016 (as so amended, the “Existing Loan Agreement”), among certain of the
parties hereto and DBNY, as the administrative agent, the lenders party thereto
agreed to extend certain commitments to make term loans available to certain of
the Borrowers, and

 

(2)          The Borrowers, the Guarantors, the Agents and the Initial Lenders
desire (a) that Citibank be appointed as the Collateral Agent and successor
Administrative Agent, and (b) to amend and restate the Existing Loan Agreement
in its entirety to make certain amendments thereto.

 

NOW, THEREFORE, in consideration of the recitals set forth above, which by this
reference are incorporated into this Agreement set forth below, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and subject to the terms and conditions hereof and on the basis of
the representations and warranties herein set forth, the parties hereto hereby
agree to amend and restate the Existing Loan Agreement to read in its entirety
as follows:

 

Article I
DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Acknowledgment” means the Acknowledgment, dated on or about the date of the
Interest Rate Cap Agreement or the Replacement Interest Rate Cap Agreement, as
applicable, made by the Counterparty, or as applicable, the Approved
Counterparty.

 

“Additional Borrower” means any Person that becomes a Borrower pursuant to
Section 3.02.

 

“Additional PIP” means (a) any property improvement plans required in connection
with a replacement Approved Franchisor Agreement, as amended, modified,
supplemented or replaced in accordance with the terms of this Agreement, and (b)
any new property improvement plans imposed by an Approved Franchisor, including
any repairs, maintenance, alterations or improvements demanded by an Approved
Franchisor pursuant to an Approved Franchise Agreement.

 

 

 

 

“Additional Security Deliverables” means (a) a Borrower Accession Agreement in
substantially the form of Exhibit P hereto, (b) replacement Notes, duly executed
by each applicable Borrower and payable to the order of each Lender that has
requested the same, (c) a supplement to the Security Agreement in the form
attached to the Security Agreement and otherwise in form and substance
reasonably satisfactory to the Administrative Agent, (d) a cash management
agreement supplement in the form attached to the Cash Management Agreement and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent, and (e) a Control Agreement amendment (or supplement thereto) in form and
substance reasonably satisfactory to the Administrative Agent.

 

“Additional Summit Collateral Assets” means the Collateral Assets described on
Part I of Schedule XIV.

 

“Adjusted Net Operating Income” means, with respect to any Collateral Asset,
(a) the Net Operating Income attributable to such Asset less (without
duplication of the deductions taken when calculating Net Operating Income)
(b) the Deemed FF&E Reserve for such Collateral Asset, less (without duplication
of the deductions taken when calculating Net Operating Income) (c) the Deemed
Management Fee for such Collateral Asset, in each case for the consecutive four
fiscal quarters most recently ended for which financial statements are required
to be delivered to Lenders pursuant to Section 5.03(b) or (c), as the case may
be.

 

“Administrative Agent” has the meaning specified in the recital of parties to
this Agreement.

 

“Administrative Agent’s Account” means the account of the Administrative Agent
maintained by the Administrative Agent with Citibank, N.A., at its office at
1615 Brett Road, OPS III, New Castle, Delaware 19720, ABA No. 021000089, Account
No. 36852248, Account Name: Agency/Medium Term Finance, Reference: Hospitality
Investors Trust Operating Partnership, L.P., Attention: Global Loans/Agency, or
such other account as the Administrative Agent shall specify in writing to
Lenders.

 

“Advance” means any advance of the Loan, including any Delayed Draw Advance and
any Protective Advance.

 

“Affiliate” means, as to any Person, any other Person that (i) owns directly or
indirectly ten percent (10%) or more of all Equity Interests in such Person,
and/or (ii) is in Control of, is Controlled by or is under common ownership or
Control with such Person.

 

“Agents” has the meaning specified in the recital of parties to this Agreement.

 

“Agreement” has the meaning specified in the recital of parties to this
Agreement.

 

“Allocated Loan Amount” means, with respect to each Collateral Asset, the
applicable amount set forth on Schedule VII.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Operating Partnership, the Parent Guarantor or
their Subsidiaries from time to time concerning or relating to bribery,
corruption or money laundering including, without limitation, the United Kingdom
Bribery Act of 2010 and the United States Foreign Corrupt Practices Act of 1977,
as amended.

 

 2 

 

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

“Applicable Margin” means (a) in the case of Eurodollar Rate Advances, 3.00% per
annum, and (b) in the case of Base Rate Advances, 2.00% per annum.

 

“Appraisal” means, for any Collateral Asset, an appraisal complying with all
applicable legal and regulatory requirements (including, without limitation,
conforming in all respects to the criteria for appraisals set forth in (a) the
Uniform Standards of Professional Appraisal Practice and (b) the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended, and the
regulations promulgated thereunder, in each case determined as if the
Administrative Agent were an institution under the jurisdiction thereof),
commissioned by and prepared for the account of the Administrative Agent (for
the benefit of Lenders) by a MAI appraiser acceptable to the Administrative
Agent and in scope, form and substance satisfactory to the Administrative Agent.

 

“Appraised Value” means in the case of any Collateral Asset, the “as-is”
appraised value of such Collateral Asset in accordance with the Appraisal of
such Collateral Asset.

 

“Approved Alterations” means (a) the Required Repairs, (b) any work to be
performed in connection with any Emergency Expenses, (c) any alterations in
respect of a Collateral Asset performed as part of a Restoration, (d) any PIP
Work, (e) any tenant improvement work or other alterations in respect of a
Collateral Asset performed with respect to any Tenancy Lease in effect on the
Closing Date or any Tenancy Lease entered into subsequent to the Closing Date in
compliance with the terms of this Agreement, or (f) any decorative work in
respect of a Collateral Asset performed in the ordinary course of business of
any Borrower or TRS Lessee.

 

“Approved Counterparty” means (a) the Administrative Agent, (b) any Lender
approved by the Administrative Agent, and (c) any other bank or other financial
institution which has a long-term unsecured debt rating of “A-” or higher by S&P
or “A-3” or higher by Moody’s.

 

“Approved Electronic Communications” means each Communication that any Loan
Party is obligated to, or otherwise chooses to, provide to the Administrative
Agent pursuant to any Loan Document or the transactions contemplated therein,
including any financial statement, financial and other report, notice, request,
certificate and other information materials required to be delivered pursuant to
Sections 5.03(b), (c), (e), (g), and (k); provided, however, that solely with
respect to delivery of any such Communication by any Loan Party to the
Administrative Agent and without limiting or otherwise affecting either the
Administrative Agent’s right to effect delivery of such Communication by posting
such Communication to the Approved Electronic Platform or the protections
afforded hereby to the Administrative Agent in connection with any such posting,
“Approved Electronic Communication” shall exclude (i) any notice of borrowing,
notice of conversion or continuation, and any other notice, demand,
communication, information, document and other material relating to a request
for a new, or a conversion of an existing, Borrowing, (ii) any notice pursuant
to Section 2.06(a) and any other notice relating to the payment of any principal
or other amount due under any Loan Document prior to the scheduled date
therefor, (iii) all notices of any Default or Event of Default and (iv) any
notice, demand, communication, information, document and other material required
to be delivered to satisfy any of the conditions set forth in Article III.

 

 3 

 

 

“Approved Electronic Platform” has the meaning specified in Section 9.02(c).

 

“Approved Franchise Agreement” means with respect to any Collateral Asset (a)
any franchise or similar agreement with an Approved Franchisor that is in effect
as of the Closing Date (as the same may be amended, modified, supplemented and
renewed from time to time in accordance with the provisions hereof), or (b) a
replacement franchise or similar agreement with an Approved Franchisor (as the
same may be amended, modified, supplemented and renewed from time to time in
accordance with the provisions hereof), provided that (i) such agreement is (A)
substantially in the same form and substance as one of the franchise or similar
agreements described in clause (a) or previously approved by the Administrative
Agent hereunder or (B) on an arms’-length basis and otherwise on commercially
reasonable terms, with economic terms and franchise fees comparable to the then
existing local market rates and otherwise reasonably acceptable to the
Administrative Agent, and (ii) the applicable Borrower has delivered to the
Administrative Agent a Franchise Comfort Letter duly executed by the Applicable
Franchisor.

 

“Approved Franchisor” means (a) any franchisor party to any franchise or similar
agreement with respect to any Collateral Asset that is in effect as of the
Closing Date, (b) any hotel franchisor that is in the family of brands of any of
the companies listed on Schedule V hereto, provided that either (i) with respect
to any Collateral Asset, such franchisor is in the same or better category of
hotels as the applicable franchisor as on the Closing Date, based on the annual
chain scale published by Smith Travel Reports, or (ii) with respect to any
Collateral Asset, such franchisor is a Downgrade Franchisor but only so long as
(A) such Downgrade Franchisor is within the family of brands of any of the
entities listed on Schedule V hereto and (B) the Collateral Assets that are
subject to a franchise agreement with a Downgrade Franchisor, in the aggregate,
would not, at such time of the execution of the franchise agreement with the
applicable Downgrade Franchisor, constitute more than twenty percent (20%) of
the Collateral Assets (in the aggregate) based on the Allocated Loan Amounts, or
(c)  any hotel franchisor that is reasonably acceptable to the Administrative
Agent, that, in the case of clauses (a), (b) and (c), has entered into an
Approved Franchise Agreement.

 

“Approved Management Agreement” means with respect to any Collateral Asset (a)
any property management, operating agreement or similar agreement with an
Approved Manager that is in effect as of the Closing Date (as the same may be
amended, modified, supplemented and renewed from time to time in accordance with
the provisions hereof), or (b) a replacement property management, operating
agreement or similar agreement with an Approved Manager (as the same may be
amended, modified, supplemented and renewed from time to time in accordance with
the provisions hereof), provided that (i) such agreement is (A) substantially in
the same form and substance as one of the property management, operating
agreement or similar agreement agreements described in clause (a) or previously
approved by the Administrative Agent hereunder or (B) on an arms’-length basis
and otherwise on commercially reasonable terms, with economic terms and
management fees comparable to the then existing local market rates and otherwise
reasonably acceptable to the Administrative Agent, and (ii) the applicable
Borrower has delivered to the Administrative Agent a Subordination of Management
Agreement duly executed by the Applicable Manager.

 

 4 

 

 

“Approved Manager” means (a) any manager party to any property management,
operating agreement or similar agreement with respect to any Collateral Asset
that is in effect as of the Closing Date, (b) any manager listed on Schedule VI
hereto (or that is controlled by or under common control with any management
company on Schedule VI), or (c) any manager that is reasonably acceptable to the
Administrative Agent, that, in the case of clauses (a), (b) and (c), has entered
into an Approved Management Agreement. For purposes of this definition, the term
“control” (including the term “controlled by”) of a Person means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Interests, by contract or otherwise.

 

“Arrangers” has the meaning specified in the recital of parties to this
Agreement.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit D hereto.

 

“Assignment of Interest Rate Cap Agreement” means the collateral assignment of
an Interest Rate Cap Agreement in the form set forth in Exhibit I and executed
by the Borrowers and an Approved Counterparty on the Closing Date, as the same
may be amended, supplemented, or otherwise modified from time to time.

 

“Assignment of Leases” means, with respect to any Collateral Asset, an amended
and restated assignment of leases and rents or an assignment of leases and rents
in substantially the form of Exhibit H hereto (in each case with such changes as
may be required to account for local law matters and otherwise in form and
substance reasonably satisfactory to the Collateral Agent), as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Awards” has the meaning specified in the Mortgages.

 

“Bail-In Action” means 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” means, 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.

 

“Bankruptcy Law” means any applicable law governing a proceeding of the type
referred to in Section 6.01(f) or Title 11, U.S. Code, or any similar foreign,
federal or state law for the relief of debtors.

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the highest of (a) the
rate of interest announced publicly by Citibank in New York, New York, from time
to time, as Citibank’s base rate, (b) ½ of 1% per annum above the Federal Funds
Rate and (c) the one-month Eurodollar Rate plus 1% per annum; provided, however,
that in no circumstance shall the Base Rate be less than 0% per annum.
Citibank’s base rate is a rate set by Citibank based upon various factors,
including Citibank’s costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in such base
rate announced by Citibank shall take effect at the opening of business on
the day specified in the public announcement of such change.

 

 5 

 

 

“Base Rate Advance” means an Advance that bears interest as provided in
Section 2.07(a)(i).

 

“Base Release Price” means, with respect to each Collateral Asset, an amount
equal to the Allocated Loan Amount for such Collateral Asset multiplied by (a)
until such time as $77,500,000 of the Outstanding Principal Balance has been
repaid in accordance with Section 2.06, 105%, and (b) thereafter, 110%.

 

“Borrower Accession Agreement” means the Borrower Accession Agreement, between
the Administrative Agent and an Additional Borrower relating to such Additional
Borrower which is to become a Borrower hereunder at any time after the Closing
Date, the form of which is attached hereto as Exhibit P.

 

“Borrowers” has the meaning specified in the recital of parties to this
Agreement.

 

“Borrowers’ Account” means such account as the Borrowers shall specify in
writing to the Administrative Agent.

 

“Borrower SPE Requirements” means the obligation of each Borrower to (a) at all
times that it is a Borrower include in its constitutive documents the provisions
set forth in Schedule III hereto (as such provisions are modified solely for the
purposes of conforming to the defined terms in the applicable constitutive
documents) and (b) deliver all applicable executed engagement or staffing
agreements with independent managers or independent directors, as applicable, in
form and substance approved by the Administrative Agent.

 

“Borrowing” means a borrowing consisting of simultaneous Advances of the same
Type made by Lenders.

 

“Borrower Cure Rights” has the meaning assigned to it in Section 6.01.

 

“Brookfield Investor” means Brookfield Strategic Real Estate Partners II
Hospitality REIT II LLC.

 

“Brookfield Transaction” means the purchase by the Brookfield Investor of (i)
one share of a new series of preferred stock of the Parent Guarantor designated
as the Redeemable Preferred Share, par value $0.01 per share, for a nominal
purchase price, and (ii) 9,152,542.37 units of a new class of limited partner
interests in the Operating Partnership entitled “Class C Units”, for a purchase
price of $14.75 per Class C Unit, as more particularly described in the Form 8-K
of the Parent Guarantor filed on January 12, 2017.

 

“Building” means a building or structure with at least two walls and a roof or
any such building or structure in the course of construction.

 

“Business Day” means a day of the year on which banks are not required or
authorized by law to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.

 

 6 

 

 

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

 

“Cash Equivalents” means any of the following, to the extent owned by the
applicable Loan Party or any of its Subsidiaries free and clear of all Liens
(other than Liens created under the Loan Documents) and having a maturity of not
greater than ninety (90) days from the date of issuance thereof: (a) readily
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States,
(b) certificates of deposit of or time deposits with any commercial bank that is
a Lender or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c) below, is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1,000,000,000 or (c) commercial paper
in an aggregate amount of not more than $50,000,000 per issuer outstanding at
any time, issued by any corporation organized under the laws of any State of the
United States and rated at least “Prime-1” (or the then equivalent grade) by
Moody’s or “A-1” (or the then equivalent grade) by S&P.

 

“Cash Management Agreement” means, with respect to the Collateral Assets, a Cash
Management Agreement among the Borrowers and the Administrative Agent, for the
ratable benefit of the Secured Parties, in substantially the form of Exhibit J
hereto, or such alternative similar agreement in form and substance reasonably
satisfactory to the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Casualty” has the meaning specified in the Mortgages.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“CGMI” has the meaning specified in the recital of parties to this Agreement.

 

“Change in Law” means the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any Legal Requirement, (b) any
change in any Legal Requirement or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of law) by any Governmental Authority, provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act, as amended, and all requests, rules,
guidelines or directives thereunder or issued in connection therewith and (y)
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 in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Citibank” has the meaning specified in the recital of parties to this
Agreement.

 

 7 

 

 

“Closing Asset Deliverables” means, with respect to each Collateral Asset, the
following items, each in form and substance satisfactory to the Administrative
Agent (unless otherwise specified):

 

(a)          Copies of all PIPs, if any, and quality assurance reports with
respect to each Collateral Asset;

 

(b)          Copies of all Material Contracts and management, franchise, lease
and material operating and service agreements relating to each Collateral Asset
and all modifications and assignments thereof;

 

(c)          Historical operating statements (including most recent audited
financial statements) for each Collateral Asset;

 

(d)          Financial projections for each Collateral Asset;

 

(e)          A zoning report for each Collateral Asset addressed to the
Collateral Agent and issued by Massey Consulting Group or another professional
firm reasonably acceptable to the Administrative Agent;

 

(f)          Engineering, environmental and, if reasonably required by the
Administrative Agent, soils and seismic and other similar reports as to the
Collateral Assets addressed to the Collateral Agent (or reliance letters
addressed to the Collateral Agent relating to any such reports if reasonably
acceptable to the Administrative Agent), in each case in form and substance and
from professional firms reasonably acceptable to the Administrative Agent (all
commissioned by the Administrative Agent);

 

(g)          Evidence as to whether each Collateral Asset is or is not a Flood
Hazard Property pursuant to a Flood Hazard Determination; and

 

(h)          Such other due diligence information related to the Collateral
Assets or any Borrower as any Lender through the Administrative Agent may
reasonably request.

 

“Closing Date” means April 27, 2017.

 

“Collateral” means all “Collateral” and all “Mortgaged Property” referred to in
the Collateral Documents and all other property that is or, by the express terms
and provisions of the Loan Documents is intended to be, subject to any Lien in
favor of the Collateral Agent for the benefit of the Secured Parties and
includes, without limitation, all Collateral Assets.

 

“Collateral Agent” has the meaning specified in the recital of parties to this
Agreement.

 

“Collateral Assets” means the Real Property described in Schedule II.

 

“Collateral Asset Operating Lease” means, with respect to a Collateral Asset,
the Operating Lease (if any) with respect to such Collateral Asset.

 

 8 

 

 

“Collateral Documents” means the Security Agreement, each Pledgor Security
Agreement, the Mortgages, the Assignments of Leases, the Cash Management
Agreement, the Control Agreement, the Assignment of Interest Rate Cap Agreement
and any other agreement (exclusive of this Agreement) entered into by a Loan
Party that creates or purports to create a Lien in favor of the Collateral Agent
for the benefit of the Secured Parties.

 

“Commitment” means, with respect to any Lender at any time, (a) the amount set
forth opposite such Lender’s name on Schedule I hereto as the amount of such
Lender’s Commitment to make the Loan to the Borrowers or (b) if such Lender has
entered into one or more Assignment and Acceptances, set forth for such Lender
in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as such Lender’s “Commitment”.

 

“Communications” means each notice, demand, communication, information, document
and other material provided for hereunder or under any other Loan Document or
otherwise transmitted between the parties hereto relating to this Agreement, the
other Loan Documents, any Loan Party or its Affiliates, or the transactions
contemplated by this Agreement or the other Loan Documents including, without
limitation, all Approved Electronic Communications.

 

“Condemnation” has the meaning specified in the Mortgages.

 

“Consent Request Date” has the meaning specified in Section 9.01(b).

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Consolidated Tangible Net Worth” means the sum of the following (without
duplication) (a) Consolidated stockholders’ equity (without duplication) of the
Sponsor Parties (at such times they are Guarantors hereunder) and their
respective Subsidiaries or the Replacement Guarantor and its Subsidiaries, as
applicable, determined in accordance with GAAP (excluding accumulated
depreciation and amortization), plus (b) equity invested in Class C units of the
Operating Partnership (regardless of whether such investment qualifies as
stockholders’ equity in accordance with GAAP), plus (c) the Obligatory Funding
Commitments of the Brookfield Investor to the Sponsor Parties in respect of the
Brookfield Transaction (including, for the avoidance of doubt and without
duplication, any additional Class C units of the Operating Partnership that the
Brookfield Investor is obligated to purchase (regardless of whether such
investment qualifies as stockholders’ equity in accordance with GAAP)), plus (d)
in the case of the Replacement Guarantor, the Obligatory Funding Commitments
relating to such Replacement Guarantor, minus (e) goodwill and intangible
assets, minus (f) the Consolidated stockholders’ equity attributable to the
Collateral Assets (excluding accumulated depreciation and amortization).

 

“Contingent Obligation” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any
Indebtedness, leases, dividends or other payment Obligations (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, (a) the direct or
indirect guarantee, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the Obligation of a primary obligor, (b) the
Obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c) any
Obligation of such Person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or payment of any
such primary obligation or (B) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made (or, if less, the maximum amount of such primary obligation for which
such Person may be liable pursuant to the terms of the instrument evidencing
such Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder), as determined by such Person in good faith.

 

 9 

 

 

“Control” means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, through the ownership of voting securities, by contract
or otherwise, and the terms Controlled, Controlling and Common Control shall
have correlative meanings.

 

“Control Affiliate” means, as to any Person, any other Person that (i) owns
directly or indirectly fifty percent (50%) or more of all Equity Interests in
such Person, and/or (ii) is in Control of, is Controlled by or is under common
ownership or Control with such Person.

 

“Control Agreement” means an Account Control Agreement or a Property Account
Control Agreement (as such terms are defined in the Cash Management Agreement).

 

“Conversion”, “Convert” and “Converted” each refer to a conversion of Advances
of one Type into Advances of the other Type pursuant to Section 2.07(d), 2.09 or
2.10.

 

“Counterparty” means, with respect to the Interest Rate Cap Agreement and any
Replacement Interest Rate Cap Agreement, any Approved Counterparty thereunder.

 

“Counterparty Opinion” has the meaning specified in Section 2.18(c)(vii).

 

“DBNY” means Deutsche Bank AG New York Branch.

 

“Debt for Borrowed Money” of any Person means all items that, in accordance with
GAAP, would be classified as indebtedness on a Consolidated balance sheet of
such Person.

 

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

 

“Debt Service” means, at any date of determination, the scheduled principal and
interest payments due in respect of the Outstanding Principal Balance of the
Loan as of the date of determination for the consecutive four fiscal quarters
most recently ended for which financial statements are required to be delivered
to Lenders pursuant to Section 5.03(b) or (c), as the case may be.

 

“Debt Service Coverage Ratio” means, a ratio, calculated by the Administrative
Agent, in which:

 

(a)          the numerator is the Adjusted Net Operating Income for all
Collateral Assets; and

 

 10 

 

 

(b)          the denominator is the Debt Service.

 

“Debtor Subsidiary” has the meaning specified in Section 6.01(f).

 

“Debt Yield” means, at any date of determination, as calculated by the Borrowers
in good faith, the aggregate Adjusted Net Operating Income for all Collateral
Assets divided by the Outstanding Principal Balance.

 

“Deemed FF&E Reserve” means, with respect to any Collateral Asset for the
consecutive four fiscal quarters most recently ended, the greater of (i) an
amount equal to 4% of the Gross Hotel Revenues of such Collateral Asset for such
fiscal period and (ii) all actual FF&E reserve payments made in respect of such
Collateral Asset during such fiscal period.

 

“Deemed Management Fee” means, with respect to any Collateral Asset for the
consecutive four fiscal quarters most recently ended, an amount equal to the
greater of (i) 3% of the Gross Hotel Revenues of such Collateral Asset for such
fiscal period and (ii) all actual management fees payable in respect of such
Collateral Asset during such fiscal period.

 

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

 

“Default Rate” means a rate per annum equal at all times to the sum of (a) the
Base Rate in effect from time to time plus (b) the Applicable Margin plus (c) 2%
per annum.

 

“Defaulting Lender” means, subject to Section 2.17(b), any Lender that, as
determined by the Administrative Agent, (a) has failed to perform any of its
funding obligations hereunder, including in respect of its Advances or share of
Protective Advances, within three Business Days of the date required to be
funded by it hereunder, (b) has notified any Borrower or the Administrative
Agent that it does not intend to comply with its funding obligations or has made
a public statement to that effect with respect to its funding obligations
hereunder or under other agreements in which it commits to extend credit, (c)
has failed, within three Business Days after request by the Administrative
Agent, to confirm in a manner satisfactory to the Administrative Agent that it
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 Law, (ii) had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or a custodian appointed for it,
or (iii) taken any action in furtherance of, or indicated its consent to,
approval of or acquiescence in any such proceeding or appointment, 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.

 

“Delayed Draw Advances” means a portion of the Loan in the aggregate maximum
principal amount of $0.

 

“Delayed Draw Borrowing” means the Borrowing relating to the Delayed Draw
Advances.

 

“Delayed Draw Election Notice” means a notice, given no later than 12:00 Noon
(New York City time) at least two (2) Business Days prior to the Closing Date,
by the Borrowers to the Administrative Agent making an election to utilize the
Delayed Draw Period.

 

 11 

 

 

“Delayed Draw Period” means the period commencing on the Closing Date and ending
on May 11, 2017.

 

“Departing Lender” has the meaning specified in Section 2.19.

 

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, as the case may be, or such other office of such Lender as such
Lender may from time to time specify to the Borrowers and the Administrative
Agent.

 

“Downgrade Franchisor” means a franchisor in one (1) category lower than the
applicable franchisor as of the Closing Date, based on the annual chain scale
published by Smith Travel Reports.

 

“Earnout Amount” has the meaning set forth in the Georgia Tech Purchase
Agreement.

 

“EEA Financial Institution” means (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” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means 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.

 

“Eligible Assignee” means with respect to the Loan, (a) a Lender; (b) a Lender
Affiliate or Fund Affiliate of a Lender; (c) a commercial bank organized under
the laws of the United States, or any State thereof, respectively, and having
total assets in excess of $500,000,000; (d) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof,
and having total assets in excess of $500,000,000; (e) a commercial bank
organized under the laws of any other country that is a member of the OECD or
has concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a political subdivision
of any such country, and having total assets in excess of $500,000,000, so long
as such bank is acting through a branch or agency located in the United States;
(f) the central bank of any country that is a member of the OECD; (g) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $500,000,000; and (h) any
other Person approved by the Administrative Agent, such approval not to be
unreasonably withheld or delayed; provided, however, that neither any Loan Party
nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under
this definition; provided further that during any period in which there exists
no Event of Default, none of the Persons listed on Schedule IV, nor any
Affiliates thereof, shall qualify as an Eligible Assignee under this definition.

 

 12 

 

 

“Emergency Expenses” means any capital, operating or other expenses which the
Borrowers determine in good faith are necessary in the case of an emergency at a
Collateral Asset in order to avoid immediate harm to individuals at such
Collateral Asset or to the Collateral Asset and of which the Borrowers have
given the Administrative Agent one (1) day’s prior notice (or such shorter or no
notice, but subsequent notice to the Administrative Agent as soon thereafter as
reasonably possible, to the extent that one (1) day’s prior notice would
jeopardize the Collateral Asset or the health, safety or welfare of individuals
located thereon or therein), together with a reasonably detailed description of
the Emergency Expenses and the nature of the emergency giving rise thereto.

 

“Environmental Action” means any enforcement action, litigation, demand, demand
letter, claim of liability, notice of non-compliance or violation, notice of
liability or potential liability, investigation, enforcement proceeding, consent
order or consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury or
threat to health, safety or the environment, including, without limitation,
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.

 

“Environmental Law” means any Federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or
judicial or agency interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural resources, including,
without limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials.

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“Equipment” has the meaning specified in the Mortgages.

 

“Equity Interests” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

 

“Equity Transfer” has the meaning specified in Section 5.02(k).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the controlled group of any Loan Party, or under common control with
any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

 

 13 

 

 

“ERISA Event” means (a)(i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan (other than a
Multiemployer Plan) unless the 30-day notice requirement with respect to such
event has been waived by the PBGC or (ii) the requirements of Section 4043(b) of
ERISA apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan (other than a Multiemployer Plan), and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
thirty (30) days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan (other than a Multiemployer Plan) pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any
Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer, such
Plan.

 

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

 

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrowers and the Administrative Agent.

 

“Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum equal
to the rate per annum obtained by dividing (a) the Screen Rate determined as of
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period by (b) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage for such Interest Period, or, if for any reason the
Screen Rate is not available at such time, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Advance being made, continued or converted by Citibank and with
a term equivalent to such Interest Period would be offered by Citibank’s London
Branch (or other Citibank branch or Affiliate) to major banks in the London or
other offshore interbank market for Dollars at their request at approximately
11:00 A.M. (London time) two Business Days prior to the commencement of such
Interest Period; provided, however, that in no circumstance shall the Eurodollar
Rate be less than 0% per annum. For purposes of determining the Base Rate, the
one-month Eurodollar Rate shall be calculated as set forth in this
paragraph utilizing the Screen Rate for a one-month period determined as of
approximately 11:00 A.M. (London time) on the applicable date of determination
(or on the previous Business Day if such date of determination is not a Business
Day).

 

 14 

 

 

“Eurodollar Rate Advance” means an Advance that bears interest as provided in
Section 2.07(a)(ii).

 

“Eurodollar Rate Reserve Percentage” means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two (2) Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Excluded Taxes” means 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 an Advance or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Advance or Commitment (other than pursuant to an assignment
request by the Borrowers under Section 2.19 or Section 9.01(b)) or (ii) such
Lender changes its lending office except in each case to the extent that,
pursuant to Section 2.12, 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 Section 2.12(f) and
Section 2.12(g) (other than if such failure is due to a Change in Law, or in the
interpretation or application thereof, occurring after the date on which a form
or other document originally was required to be provided) and (d) any U.S.
federal withholding Taxes imposed under FATCA.

 

“Existing Loan Agreement” has the meaning specified in the recitals.

 

“Facility Assigned Rights and Obligations” has the meaning specified in Section
2.22(a).

 

“Facility Purchasing Lender” has the meaning specified in Section 2.22(a).

 

“Facility Selling Lender” has the meaning specified in Section 2.22(a).

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the
Closing Date (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any applicable
intergovernmental agreements entered into in connection with such sections of
the Internal Revenue Code, any current or future regulations or official
interpretation or application thereof and any agreements entered into pursuant
to Section 1471(b)(1) of the Internal Revenue Code.

 

 15 

 

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System, as published for such day (or, if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, an analogous
rate determined the Administrative Agent with reference to another commercially
available source or sources designated by the Administrative Agent; provided,
however, that in no circumstance shall the Federal Funds Rate be less than 0%
per annum.

 

“Fee Letter” means any separate letter agreement executed and delivered by any
Borrower or an Affiliate of any Borrower and to which the Administrative Agent
or an Arranger is a party, as the same may be amended, restated or replaced from
time to time.

 

“FF&E” means all “furniture, furnishings and equipment” (as such phrase is
commonly understood in the hotel industry) and all appurtenances and additions
thereto and substitutions or replacements thereof owned by the applicable Loan
Party and now or hereafter attached to, contained in or used in connection with
the use, occupancy, operation or maintenance of the applicable Collateral Asset,
including, without limitation, any and all fixtures, furnishings, equipment,
furniture, and other items of tangible personal property, appliances, machinery,
equipment, signs, artwork (including paintings, prints, sculpture and other fine
art), office furnishings and equipment, guest room furnishings, and specialized
equipment for kitchens, laundries, drying, bars, restaurants, spas, public
rooms, health and recreational facilities, linens, dishware, two-way radios, all
partitions, screens, awnings, shades, blinds, rugs, carpets, 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; generators, boilers, compressors and
engines; gas and electric machinery and equipment; facilities used to provide
utility services; garbage disposal machinery or equipment; communication
apparatus, including television, radio, music, and cable antennae and systems;
attached floor coverings, window coverings, curtains, drapes and rods; storm
doors and windows; stoves, refrigerators, dishwashers and other installed
appliances; attached cabinets; trees, plants and other items of landscaping;
visual and electronic surveillance systems; and swimming pool heaters and
equipment, fuel, water and other pumps and tanks; irrigation equipment;
reservation system computer and related equipment; all equipment, manual,
mechanical or motorized, for the construction, maintenance, repair and cleaning
of, parking areas, walks, underground ways, truck ways, driveways, common areas,
roadways, highways and streets and all equipment, fixtures, furnishings, and
articles of personal property now or hereafter attached to or used in or about
any such Collateral Asset which is or may be used in or related to the planning,
development, financing or operation thereof and all renewals of or replacements
or substitutions for any of the foregoing.

 

“FF&E PIP Funds” means that portion of the FF&E Reserve Funds (as defined in the
Cash Management Agreement) that may be used by the Borrowers, at the Borrowers’
election, for the payment of the costs of PIP Work, such amount shall not exceed
$5,000,000 in the aggregate in any twelve (12) month period.

 

 16 

 

 

“First Extended Maturity Date” means May 1, 2020.

 

“First Monthly Payment Date” means June 1, 2017.

 

“Fiscal Year” means a fiscal year of the Parent Guarantor and its Consolidated
Subsidiaries ending on December 31 in any calendar year.

 

“Flood Compliance Event” means the occurrence of any of the following: (a) a
Flood Redesignation with respect to any Collateral Asset, or (b) any extension
of the Maturity Date pursuant to Section 2.16.

 

“Flood Hazard Determination” means a “Life-of-Loan” FEMA Standard Flood Hazard
Determination obtained by the Administrative Agent.

 

“Flood Hazard Property” means any Collateral Asset that on the relevant date of
determination includes a Building and, as shown on a Flood Hazard Determination,
such Building is located in a Special Flood Hazard Area.

 

“Flood Insurance” means (a) federally-backed flood insurance available under the
National Flood Insurance Program to owners of real property improvements located
in Special Flood Hazard Areas in a community participating in the National Flood
Insurance Program or (b) to the extent permitted by the Flood Laws, a private
flood insurance policy from a financially sound and reputable insurance company
that is not an Affiliate of any Borrower.

 

“Flood Insurance Documents” means (a) evidence as to whether each Collateral
Asset is a Flood Hazard Property pursuant to a Flood Hazard Determination, and
(b) if such Collateral Asset is a Flood Hazard Property, (i) evidence as to
whether the community in which such Collateral Asset is located is participating
in the National Flood Insurance Program, (ii) the applicable Borrower’s written
acknowledgment of receipt of written notification from the Administrative Agent
as to the fact that such Collateral Asset is a Flood Hazard Property and as to
whether the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (iii) copies of the
applicable Borrower’s application for a Flood Insurance policy plus proof of
premium payment, a declaration page confirming that Flood Insurance has been
issued, or such other evidence of Flood Insurance, in an amount equal to at
least the amount required by the Flood Laws and naming the Collateral Agent as
sole loss payee and mortgagee on behalf of the Secured Parties, and otherwise
including terms satisfactory to the Collateral Agent.

 

“Flood Laws” means the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as revised by the National Flood Insurance
Reform Act of 1994, and as the same may be further amended, modified or
supplemented, and including the regulations issued thereunder.

 

“Flood Redesignation” means the designation of any Collateral Asset as a Flood
Hazard Property where such property was not a Flood Hazard Property previous to
such designation.

 

“Foreign Lender” has the meaning specified in Section 2.12(g)(ii).

 

 17 

 

 

“Franchisor Comfort Letter” means, with respect to any Approved Franchise
Agreement related to a Collateral Asset, a franchisor comfort letter reasonably
acceptable to the Administrative Agent on the applicable Approved Franchisor’s
standard form or otherwise reasonably acceptable to the Administrative Agent,
provided that in the case of a replacement Approved Franchisor that franchises
another Collateral Asset, the form of comfort letter delivered on the Closing
Date with respect to such other Collateral Asset, with necessary property
specific information changed, shall be deemed acceptable to the Administrative
Agent.

 

“Fund Affiliate” means, with respect to any Lender that is a fund that invests
in bank loans, any other fund that is regularly engaged in investing in bank
loans in the ordinary course of business and is advised or managed by the same
investment advisor as such Lender or by a Lender Affiliate of such investment
advisor.

 

“GAAP” has the meaning specified in Section 1.03.

 

“Georgia Tech Borrower” means HIT GA Tech Holding, LLC, a Delaware limited
liability company.

 

“Georgia Tech Entity” means each of the Georgia Tech Owner and the Georgia Tech
TRS Lessee.

 

“Georgia Tech Excess Cash Flow” means, with respect to the Georgia Tech Hotel
for any calendar month, (a) the Net Operating Income attributable to the Georgia
Tech Hotel for such month, less (b) the sum of (i) the Georgia Tech Ground Lease
Rent for such month, (ii) the Master Reserve (as defined in the Georgia Tech
Ground Lease) payment payable by Georgia Tech Owner to the fee owner of the
Georgia Tech Hotel for such month under the Georgia Tech Ground Lease, and (iii)
the Parking Payment (as defined in the Georgia Tech Ground Lease) payable by
Georgia Tech Owner to the fee owner of the Georgia Tech Hotel for such month
under the Georgia Tech Ground Lease.

 

“Georgia Tech Owner” means HIT GA Tech, LLC, a Delaware limited liability
company.

 

“Georgia Tech Ground Lease” means that certain Hotel Lease Agreement, dated as
of October 29, 2001, between Fifth Street Hotel, LLC, as lessor, and CC
Technology Square LLC, as lessee, as amended by that certain First Amendment to
Hotel Lease Agreement, dated as of January 17, 2002, as amended by that certain
Second Amendment to Hotel Lease Agreement, dated as of February 26, 2003, as
assigned by CC Technology Square LLC to Georgia Tech Owner pursuant to that
certain Assignment and Assumption of Ground Lease, dated as of March 21, 2014,
as the same may be amended, restated, supplemented or otherwise modified in
accordance with this Agreement.

 

“Georgia Tech Ground Lease Rent” means, for any calendar month, the Rent (as
defined in the Georgia Tech Ground Lease) payable by the Georgia Tech Owner to
the fee owner of the Georgia Tech Hotel under the Georgia Tech Ground Lease for
such month.

 

“Georgia Tech Hotel” means the Collateral Asset commonly known as The Georgia
Tech Hotel & Conference Center, 800 Spring Street NW, Atlanta, Georgia 30354.

 

“Georgia Tech Operating Lease” means that certain Lease Agreement of the Georgia
Tech Hotel dated as of March 14, 2014 between the Georgia Tech Owner, as lessor,
and the Georgia Tech TRS Lessee, as lessee, as the same may be amended,
restated, supplemented or otherwise modified in accordance with this Agreement.

 

 18 

 

 

“Georgia Tech Operating Lease Rent” means, for any calendar month, the Rent (as
defined in the Georgia Tech Operating Lease) payable by the Georgia Tech TRS
Lessee to the Georgia Tech Owner under the Georgia Tech Operating Lease for such
month.

 

“Georgia Tech Purchase Agreement” means the Agreement of Purchase and Sale dated
as of January 30, 2014 among Georgia Tech Owner, the Parent Guarantor and
certain other Affiliates of the Parent Guarantor, collectively, as the
purchaser, and HFP Hotel Owner II, LLC, CSB Stratford LLC and CC Technology
Square LLC, collectively, as seller, as amended by a first amendment thereto
dated as of March 11, 2014, a second amendment thereto dated of March 21, 2014
and a third amendment thereto dated as of August 10, 2016.

 

“Georgia Tech Pledgor” means HIT TRS GA Tech Holding, LLC, a Delaware limited
liability company.

 

“Georgia Tech TRS Lessee” means HIT TRS GA Tech, LLC, a Delaware limited
liability company.

 

“Good Faith Contest” means the contest of an item as to which: (a) such item is
contested in good faith, by appropriate proceedings, (b) reserves that are
adequate are established with respect to such contested item in accordance with
GAAP and (c) the failure to pay or comply with such contested item during the
period of such contest would not reasonably be expected to result in a Material
Adverse Effect.

 

“Government Lists” means (a) the Specially Designated Nationals and Blocked
Persons Lists maintained by OFAC, (b) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules
and Regulations of OFAC that the Administrative Agent notified the Borrowers in
writing is now included in “Government Lists”, or (c) any similar lists
maintained by the United States Department of State, the United States
Department of Commerce or any other Governmental Authority or pursuant to any
Executive Order of the President of the United States of America that the
Administrative Agent notified the Borrowers in writing is now included in
“Government Lists”.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any Federal, state, municipal, national, local or other governmental
department, agency, authority, commission, instrumentality, board, bureau,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).

 

“Gross Hotel Revenues” means all revenues and receipts of every kind derived
from operating a Collateral Asset or Collateral Assets, as the case may be, 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 (including rentals from timeshare marketing and
sales desks); 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 Collateral Asset or Collateral Assets);
service charges, to the extent not distributed to the employees at such
Collateral Asset or Collateral Assets 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 Collateral Asset or Collateral Assets; 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); Awards; or any proceeds from any sale of such
Collateral Asset or Collateral Assets.

 

 19 

 

 

“Guaranteed Obligations” has the meaning specified in Section 7.01(a).

 

“Guarantors” has the meaning specified in the recital of parties to this
Agreement, but shall, from and after the delivery of the Guaranty Documents by
any Replacement Guarantor hereunder, also mean the applicable Replacement
Guarantor; provided, however, that such Replacement Guarantor shall become a
Guarantor effective as of the date of the delivery of such Guaranty Documents
with respect to liabilities arising from and after such date, and effective as
of such date the existing Guarantor to be deemed to be released from its
Guaranty Obligations in its capacity as a Guarantor under the Loan Documents for
the period following such release date, it being understood and agreed, however,
that such Guarantor shall remain liable for any Guaranty Obligations under the
Loan Documents arising prior to the delivery of such Guarantor Documents by such
Replacement Guarantor.

 

“Guaranty” means the Guaranty by the Guarantors pursuant to Article VII.

 

“Guaranty Documents” means, with respect to any Replacement Guarantor, (a) a
Guaranty Supplement duly executed by such Replacement Guarantor, (b) the
documents set forth in Sections 3.01(a)(ii),(iii), (iv), (vi), (vii), (viii),
(x) and 3.01(e), as they relate to such Replacement Guarantor and such Guaranty
Supplement, mutatis mutandis, and (c) a customary corporate formalities opinion
of counsel for such Replacement Guarantor in the state in which such Replacement
Guarantor is formed or organized, in form and substance reasonably acceptable to
the Administrative Agent.

 

“Guaranty Supplement” means a Guaranty Supplement substantially in the form
attached hereto as Exhibit O.

 

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls, radon gas and mold and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.

 

“ICE LIBOR” has the meaning specified in the definition of “Screen Rate”.

 

“Improvements” has the meaning specified in the Mortgages.

 

“Indebtedness” of any Person means the sum of (without duplication) (i) all Debt
for Borrowed Money and for the deferred purchase price of property or services,
(ii) the aggregate amount of all Capitalized Leases Obligations, (iii) all
indebtedness of the types described in clause (i) or (ii) of this definition of
Persons secured by any Lien on any property owned by such Person, whether or not
such indebtedness has been assumed by such Person (provided that, if the Person
has not assumed or otherwise become liable in respect of such indebtedness, such
indebtedness shall be deemed to be the outstanding principal amount (or maximum
principal amount, if larger) of such indebtedness or, if not stated or if
indeterminable, in an amount equal to the fair market value of the property to
which such Lien relates, as determined in good faith by such Person), and (iv)
all Contingent Obligations.

 

 20 

 

 

“Indemnified Costs” has the meaning specified in Section 8.05(a).

 

“Indemnified Party” has the meaning specified in Section 7.06(a).

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any Obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

 

“Information” has the meaning specified in Section 9.12(a).

 

“Initial Lenders” has the meaning specified in the recital of parties to this
Agreement.

 

“Initial Maturity Date” means May 1, 2019.

 

“Initial PIP” means those certain property improvement plans required in
connection with the Approved Franchise Agreements as of the Closing Date, as
amended, modified, supplemented or replaced in accordance with the terms of this
Agreement.

 

“Insurance Proceeds” has the meaning specified in the Mortgages.

 

“Intellectual Property” has the meaning specified in Section 4.01(ff).

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the
same Borrowing, the period commencing on (and including) the eighth (8th) day of
each calendar month during the term of the Loan and ending on (and including)
the seventh (7th) day of the next succeeding calendar month; provided, however,
that no Interest Period shall be shortened by reason of any payment of the Loan
prior to the expiration of such Interest Period.

 

“Interest Rate Cap Agreement” means the Confirmation and Agreement (together
with the confirmation and schedules relating thereto), between the Counterparty
and the Borrowers, obtained by the Borrowers on the Closing Date and
collaterally assigned to the Administrative Agent for the benefit of Lenders
pursuant to this Agreement. After delivery of a Replacement Interest Rate Cap
Agreement to the Administrative Agent, the term Interest Rate Cap Agreement
shall be deemed to mean such Replacement Interest Rate Cap Agreement. The
Interest Rate Cap Agreement shall be governed by the laws of the State of New
York and shall contain each of the following:

 

(a)          the notional amount of the Interest Rate Cap Agreement shall be
equal to the Outstanding Principal Balance;

 

(b)          the remaining term of the Interest Rate Cap Agreement shall be in
accordance with the term specified in Section 2.18;

 

(c)          the Interest Rate Cap Agreement shall be issued by the Counterparty
to the Borrowers and shall be pledged to the Administrative Agent on behalf of
Lenders by the Borrowers in accordance with this Agreement;

 

 21 

 

 

(d)          the Counterparty under the Interest Rate Cap Agreement shall be
obligated to make a stream of payments from time to time equal to the product of
(i) the notional amount of such Interest Rate Cap Agreement multiplied by (ii)
the excess, if any, of the Screen Rate (including any upward rounding under the
definition of Screen Rate) over the Strike Price or the Strike Price (Extension
Options), as applicable, and shall provide that such payment shall be made on a
monthly basis in each case not later than (after giving effect to and assuming
the passage of any cure period afforded to such Counterparty under the Interest
Rate Cap Agreement, which cure period shall not in any event be more than three
Business Days) each date that a payment of Interest is due hereunder pursuant to
Section 2.07;

 

(e)          the Counterparty under the Interest Rate Cap Agreement shall
execute and deliver the Acknowledgment; and

 

(f)          the Interest Rate Cap Agreement shall be in all material respects
reasonably satisfactory in form and substance to the Administrative Agent.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

 

“Interpolated Rate” means, for the relevant Interest Period, the rate per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%) which results from
interpolating on a linear basis between: (a) the applicable Published Screen
Rate for the longest period (for which that Published Screen Rate is available)
which is less than the relevant Interest Period; and (b) the applicable
Published Screen Rate for the shortest period (for which that Published Screen
Rate is available) which exceeds the relevant Interest Period.

 

“Intervening Entities” means each Subsidiary of the Parent Guarantor which
directly or indirectly holds any ownership interest in a Borrower and is not a
Loan Party.

 

“Investment” means, with respect to any Person, any acquisition or investment
(whether or not of a controlling interest) by such Person, by means of any of
the following: (a) the purchase or other acquisition of any Equity Interest in
another Person, (b) a loan, advance or extension of credit to, capital
contribution to, guaranty of Indebtedness of, or purchase or other acquisition
of any Indebtedness of, another Person, including any partnership or joint
venture interest in such other Person, (c) the purchase or other acquisition (in
one transaction or a series of transactions) of assets of another Person that
constitute the business or a division or operating unit of another Person, or
(d) the purchase or other acquisition of any real property. Any binding
commitment to make an Investment, as well as any option of another Person to
require an Investment in such Person, shall constitute an Investment. Except as
expressly provided otherwise, for purposes of determining compliance with any
covenant contained in a Loan Document, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“JPMCB” means JPMorgan Chase Bank, National Association.

 

 22 

 

 

“Legal Requirements” means all present and future laws, statutes, codes,
ordinances, orders, treaties, judgments, decrees, injunctions, rules,
regulations and requirements, and irrespective of the nature of the work to be
done, of every Governmental Authority including, without limitation, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives promulgated thereunder or issued in connection
therewith, 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 of America or foreign
regulatory authorities, in each case pursuant to Basel III, Environmental Laws
and all covenants, restrictions and conditions now or hereafter of record which
may be applicable to any Borrower or to any Collateral Asset and the
Improvements and the Equipment thereon, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or reconstruction of the
Collateral Assets and the Improvements and the Equipment thereon including,
without limitation, building and zoning codes and ordinances and laws relating
to handicapped accessibility.

 

“Lender Affiliate” means, as to any Lender, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Lender or is a director or officer of such Lender. For purposes of this
definition, the term “control” (including the terms “controlling”, “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to vote 35% or more of the Voting Interests of such
Person or to direct or cause the direction of the management and policies of
such Person, whether through the ownership of Voting Interests, by contract or
otherwise.

 

“Lender Insolvency Event” means, with respect to any Lender, that, other than in
connection with an Undisclosed Administration, (a) such Lender or its Parent
Company is insolvent, or is generally unable to pay its debts as they become
due, or admits in writing its inability to pay its debts as they become due, or
makes a general assignment for the benefit of its creditors, (b) such Lender or
its Parent Company is the subject of a bankruptcy, insolvency, reorganization,
liquidation or similar proceeding, or a receiver, trustee, conservator,
intervenor or sequestrator or the like has been appointed for such Lender or its
Parent Company, or such Lender or its Parent Company has taken any action in
furtherance of or indicating its consent to or acquiescence in any such
proceeding or appointment or (c) such Lender or its Parent Company has become
the subject of a Bail-in Action. Notwithstanding the above, a Lender Insolvency
Event shall not occur solely by virtue of the ownership or acquisition of any
Equity Interest in the applicable Lender or any direct or indirect Parent
Company thereof by a Governmental Authority so long as such ownership interest
does not result in or provide such Lender with immunity from the jurisdiction of
courts within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender.

 

“Lenders” means the Initial Lenders and each Person that shall become a Lender
hereunder pursuant to Section 9.07 for so long as such Initial Lender or Person,
as the case may be, shall be a party to this Agreement.

 

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor, the
lien or assessment relating to any property assessed clean energy loan and any
easement, right of way or other encumbrance on title to real property.

 

“Loan” means the term loan made to the Borrowers by Lenders pursuant to the
terms of this Agreement in an aggregate maximum original principal amount not to
exceed $310,000,000.

 

 23 

 

 

“Loan Documents” means (a) this Agreement, (b) the Notes, (c) the Fee Letter,
(d) the Collateral Documents, (e) the Post-Closing Letter, and (f) each other
document or instrument now or hereafter executed and delivered by a Loan Party
in connection with, pursuant to or relating to this Agreement, in each case, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“Loan Parties” means the Borrowers, the Pledgors, the TRS Lessees and the
Guarantors.

 

“Lockbox Account” has the meaning specified in the Cash Management Agreement.

 

“Lockbox Period” has the meaning specified in the Cash Management Agreement.

 

“Losses” means any and all claims, suits, liabilities (including strict
liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, fines, penalties, charges, fees, expenses, judgments, awards, amounts
paid in settlement of whatever kind or nature (including out-of-pocket,
reasonable attorneys’ fees and other costs of defense).

 

“Margin Stock” has the meaning specified in Regulation U.

 

“Material Adverse Change” means a material adverse change in the business,
assets, properties, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects (which material adverse change, in the
case of prospects only, shall be based on the specific business activities and
geographic locations of the Loan Parties and their respective Subsidiaries and
their Collateral Assets and not on the general condition of the U.S. or relevant
foreign economies or the capital markets generally) of (a) the Operating
Partnership or (b) the Parent Guarantor and its Subsidiaries, taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, properties, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects (which material adverse effect, in the
case of prospects only, shall be based on the specific business activities and
geographic locations of the Loan Parties and their respective Subsidiaries and
not on the general condition of the U.S. or relevant foreign economies or the
capital markets generally) of the Guarantors and their respective Subsidiaries,
taken as a whole, (b) the business, assets, properties, liabilities (actual or
contingent), operations, condition (financial or otherwise) or prospects (which
material adverse effect, in the case of prospects only, shall be based on the
specific business activities and geographic locations of the Borrowers and their
respective Subsidiaries and not on the general condition of the U.S. or relevant
foreign economies or the capital markets generally) of the Borrowers and their
respective Subsidiaries, taken as a whole, (c) the rights and remedies of the
Administrative Agent or any Lender under any Loan Document, (d) the ability of
any Loan Party to perform its Obligations under any Loan Document to which it is
or is to be a party, (e) the value of the Collateral or (f) the value, use,
operation or ability to sell or refinance any Collateral Asset.

 

“Material Contract” means each contract to which any Borrower is a party
involving aggregate consideration payable to or by such Borrower in an amount of
$1,000,000 or more per annum or otherwise material to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrowers and their Subsidiaries, taken as a whole. Without limitation of
the foregoing, the Georgia Tech Ground Lease, the Collateral Asset Operating
Leases, the Approved Management Agreements and the Approved Franchise Agreements
shall be deemed to be Material Contracts hereunder, and all existing Approved
Management Agreements and existing Approved Franchise Agreements are hereby
approved by the Administrative Agent as of the Closing Date.

 

 24 

 

 

“Material Lease” means any Tenancy Lease (a) demising a premises within a
Collateral Asset that is more than 5,000 net rentable square feet or (b) that is
for a term equal to or greater than sixty (60) months.

 

“Material Litigation” has the meaning specified in Section 3.01(f).

 

“Maturity Date” means the Initial Maturity Date, subject to any extension
thereof pursuant to Section 2.16, or such other date on which the final payment
of principal on the Loan becomes due and payable as provided herein or in the
Notes, whether at such stated maturity date, by declaration of acceleration, or
otherwise.

 

“Mezzanine Debt” means any Indebtedness that is secured by any security interest
in any direct or indirect Equity Interest or other interest (actual, economic or
otherwise) in any Collateral Asset or any Borrower at any level of ownership.

 

“Monthly Payment Date” shall mean the First Monthly Payment Date and the first
(1st) day of every calendar month occurring thereafter during the term of the
Loan.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage Policy” means, which respect to any Mortgage, (a) a fully paid
American Land Title Association Lender’s Extended Coverage title insurance
policy insuring such Mortgage or (b) in the case of a Collateral Asset (as
defined in the Existing Loan Agreement), a Mortgage Policy (as defined in the
Existing Loan Agreement) that has, by way of date-down endorsement or otherwise
been modified in a manner reasonably acceptable to the Administrative Agent to
provide for (i) an effective date no earlier than the later of the Closing Date
and the date of recording of the applicable Mortgage and (ii) an amount of
coverage that is no less than the Allocated Loan Amount relating to such
Collateral Asset.

 

“Mortgages” means, with respect to any Collateral Assets, deeds of trust, trust
deeds and mortgages (or amendments and restatements thereof), as applicable,
executed and delivered by the applicable Borrower and the applicable TRS Lessee,
in substantially the form of Exhibit G hereto (in each case with such changes as
may be required to account for local law matters and otherwise satisfactory in
form and substance to the Collateral Agent in its reasonable discretion), as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA, to which any
Loan Party or any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.

 

“Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA that is subject to Title IV of ERISA, that (a) is
maintained for employees of any Loan Party or any ERISA Affiliate and at least
one Person other than the Loan Parties and the ERISA Affiliates or (b) was so
maintained and in respect of which any Loan Party or any ERISA Affiliate would
have liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.

 

 25 

 

 

“National Flood Insurance Program” means the program created pursuant to the
Flood Laws.

 

“Negative Pledge” means, with respect to any asset, any provision of a document,
instrument or agreement (other than a Loan Document) which prohibits or purports
to prohibit the creation or assumption of any Lien on such asset as security for
Indebtedness of the Person owning such asset or any other Person.

 

“Net Operating Income” means, with respect to any Collateral Asset, the amount
obtained by subtracting Operating Expenses for such Collateral Asset from
Operating Income for such Collateral Asset, in each case for consecutive four
fiscal quarters most recently ended.

 

“Net Proceeds” has the meaning specified in the Mortgages.

 

“Non-Consenting Lender” has the meaning specified in Section 9.01(b).

 

“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting
Lender.

 

“Note” means a promissory note or amended and restated promissory note of any
Borrower payable to the order of any Lender, in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of such Borrower to such
Lender resulting from the Advances made by such Lender, as the same may be
amended, supplemented, extended, replaced or otherwise modified from time to
time.

 

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

 

“NPL” means the National Priorities List under CERCLA.

 

“Obligation” means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Loan Party under any Loan Document
and (b) the obligation of such Loan Party to reimburse any amount in respect of
any of the foregoing that any Lender, in its sole discretion, may elect to pay
or advance on behalf of such Loan Party pursuant to such Loan Document.

 

“Obligatory Funding Commitment” means (a) a capital commitment or a funding
obligation (including an obligation to purchase preferred Equity Interests but
excluding an obligation to make a debt investment that is not convertible into
equity) of a Person’s investors to fund cash to such Person that satisfies each
of the following requirements: (i) such capital commitment or funding obligation
is unconditional, irrevocable, unpledged and otherwise unencumbered, and (ii)
such capital commitment or funding obligation is from an entity that is not
subject to a bankruptcy, insolvency or similar proceeding and is not in default
under the applicable constituent documents‎ governing such capital commitment or
funding obligation, and/or (b) undrawn commitments from available subscription
credit facilities that are secured by the capital commitments of a Person’s
investors.

 

 26 

 

 

“OECD” means the Organization for Economic Cooperation and Development.

 

“OFAC” has the meaning specified in Section 4.01(x).

 

“Operating Expenses” means, with respect to any Collateral Asset for any
applicable measurement period, the actual costs and expenses of owning,
operating, managing, insuring and maintaining such Asset during such period,
including, without limitation, repairs, real estate and chattel taxes and bad
debt expenses, but excluding (i) depreciation or amortization or other noncash
items, (ii) the principal of and interest on Debt for Borrowed Money, (iii)
income taxes or other taxes in the nature of income taxes, (iv) distributions to
the shareholders, members or partners of the Collateral Asset owner, (v)
transaction costs and related expenses incurred in connection with the
acquisition of such Collateral Asset, and (vi) capital expenditures, payments
(without duplication) for FF&E or into FF&E reserves or management fees actually
paid or payable during such period, all as determined in accordance with GAAP.

 

“Operating Income” means, with respect to any Collateral Asset for any
applicable measurement period, all income received from any Person during such
period in connection with the ownership or operation of such Collateral Asset,
including, without limitation, (i) the Gross Hotel Revenues, (ii) all amounts
payable pursuant to any reciprocal easement and/or operating agreements,
covenants, conditions and restrictions, condominium documents and similar
agreements affecting such Asset (but excluding any amounts payable in respect of
any Approved Management Agreements), and (iii) Awards to the extent that such
Awards are compensation for lost rent allocable to such period, all as
determined in accordance with GAAP.

 

“Operating Lease” means any operating lease of any Collateral Asset between the
applicable Person (i.e., a Borrower or the applicable Subsidiary of such
Borrower) that owns such Collateral Asset (whether in fee simple or subject to a
ground lease), as lessor, and the applicable TRS Lessee, as lessee, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

 

“Operating Partnership” has the meaning specified in the recital of parties to
this Agreement.

 

“Other Charges” means all maintenance charges, impositions other than Taxes, and
any other charges, including vault charges and license fees for the use of
vaults, chutes and similar areas adjoining any Collateral Asset, now or
hereafter levied or assessed or imposed against any Collateral Asset or any part
thereof.

 

“Other Connection Taxes” means, 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 from such
Recipient having executed, delivered, become a party to, performed any
Obligation 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 pledged or assigned or granted an interest in any
Advance or Loan Document).

 

 27 

 

 

“Other Taxes” means all present or future stamp, court or documentary, excise,
property, intangible, recording, filing or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement,
recordation, filing 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 Section 2.19 or Section
9.01(b)).

 

“Outstanding Principal Balance” means, as of any date of determination, the then
outstanding principal balance of the Loan.

 

“Parent Company” means, with respect to a Lender, the bank holding company (as
defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or
any Person owning, beneficially or of record, directly or indirectly, a majority
of the shares of such Lender.

 

“Parent Guarantor” has the meaning specified in the recital of parties to this
Agreement.

 

“Participant Register” has the meaning specified in Section 9.07(g).

 

“Patriot Act” has the meaning specified in Section 9.14.

 

“Patriot Act Offense” means any violation of the criminal laws of the United
States of America or of any of the several states, or that would be a criminal
violation if committed within the jurisdiction of the United States of America
or any of the several states, relating to terrorism or the laundering of
monetary instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
(e) the Patriot Act. “Patriot Act Offense” also includes the crimes of
conspiracy to commit, or aiding and abetting another to commit, a Patriot Act
Offense.

 

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

 

“Permitted Liens” means such of the following (except for Liens described in
clause (b) that are the subject of a Good Faith Contest, to which the following
lead-in language will not apply) as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced: (a) Liens
for taxes, assessments and governmental charges or levies not yet due and
payable (excluding any lien or assessment in respect of any Collateral Asset
relating to any property assessed clean energy loan); (b) Liens imposed by law,
such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens
and other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than thirty (30) days or
are otherwise subject to a Good Faith Contest; (c) pledges or deposits to secure
obligations under workers’ compensation or unemployment laws or similar
legislation or to secure public or statutory obligations; (d) easements, zoning
restrictions, rights of way and other encumbrances on title to real property
that either (i) do not render title to the property encumbered thereby
uninsurable (assuming payment of only customary title insurance premiums) or
materially adversely affect the use or value of such property for its present
purposes, (ii) are disclosed in the Mortgage Policies or (iii) otherwise
approved by the Administrative Agent in its reasonable discretion; (e) Tenancy
Leases and Operating Leases; and (f) with respect to each Collateral Asset,
Permitted Encumbrances (as defined in each of the Mortgages).

 

 28 

 

 

“Permitted Transfer” means each of the following Equity Transfers: (a) the
transfer of publicly traded shares in any indirect equity owner of any Borrower;
(b) any sale, transfer or issuance of shares of stock in any Sponsor/Brookfield
Qualified Equityholder, provided that either (i) such shares of stock are listed
on the New York Stock Exchange, NASDAQ Global Select Market, the Toronto Stock
Exchange or another nationally recognized stock exchange in the United States of
America or Canada or (ii) such shares of stock are sold, transferred or issued
in the ordinary course of business through licensed broker dealers in accordance
with all applicable Legal Requirements to third party investors in a manner
consistent with previous offerings conducted by any Sponsor/Brookfield Qualified
Equityholder or any of its Affiliates to date; and (c) provided that no Event of
Default shall have then occurred and be continuing, an Equity Transfer of an
indirect Equity Interest in any Borrower shall be permitted without the
Administrative Agent’s consent, provided that in the case of this clause (c),
(i) each Borrower shall continue to be in compliance with the Borrower SPE
Requirements, each TRS Lessee shall continue to be in compliance with the TRS
Lessee SPE Requirements, and each Pledgor shall continue to be in compliance
with the Pledgor SPE Requirements, (ii) to the extent that the transfer would
result in the transferee (either itself or collectively with its Affiliates)
owning a 10% or greater (direct or indirect) Equity Interest in any Borrower
(unless such transferee together with such Affiliates owned a 10% or more
(direct or indirect) Equity Interest in such Borrower immediately prior to such
transfer), (A) such transferee is a Qualified Transferee and (B) the Borrowers
shall provide to the Administrative Agent (x) ten (10) Business Days’ prior
written notice thereof in the case of any transfer to a domestic transferee or
(y) thirty (30) days’ prior written notice thereof in the case of any transfer
to a foreign transferee, (iii) after giving effect to such Transfer, one or more
Sponsor/Brookfield Qualified Equityholders shall continue to control the day to
day operations of each Borrower and shall continue to own at least thirty-five
percent (35%) of all Equity Interests (direct or indirect) in each Borrower and
each TRS Lessee, and (iv) each Collateral Asset shall continue to be managed by
an Approved Manager; provided, however, that if, immediately upon the
consummation of any Permitted Transfer, neither of the Sponsor Parties will own
a direct or indirect Equity Interest in the Borrowers or Control the Borrowers,
(A) one or more Affiliates of the Brookfield Investor formed in the United
States (except that Control Affiliates of the Brookfield Investor shall not be
required to be formed in the United States) that collectively satisfy the
minimum Consolidated Tangible Net Worth test set forth in Section 5.04, or (B)
such other Person that is acceptable to the Administrative Agent, shall become a
replacement guarantor hereunder (a “Replacement Guarantor”), and shall as a
condition precedent to the effectiveness of such Permitted Transfer, deliver the
Guaranty Documents to the Administrative Agent. For the avoidance of doubt, any
listing of the shares of stock in any Sponsor/Brookfield Qualified Equityholder
on the New York Stock Exchange, NASDAQ Global Select Market, the Toronto Stock
Exchange or another nationally recognized stock exchange in the United States of
America or Canada shall not be a prohibited Equity Transfer hereunder.

 

“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.

 

“PIP” means, collectively, the Initial PIP and the Additional PIP.

 

“PIP Budget” means, with respect to each Collateral Asset, the projected budget
associated with the PIP Work for such Asset, as approved by the Administrative
Agent in its reasonable discretion, together with such modifications or
amendments to such budget approved in accordance with Section 5.02(v).

 

 29 

 

 

“PIP Completion Date” means the date for completion of PIP Work as required
under the related PIP, as such date may be modified in accordance with Section
5.02(v).

 

“PIP Reserve Account” has the meaning specified in Section 5.01(bb)(v).

 

“PIP Reserve Funds” has the meaning specified in Section 5.01(bb)(v).

 

“PIP Work” means, with respect to each Collateral Asset, any repair, maintenance
or alterations of, or improvements to, such Asset required to be made in
accordance with the PIP relating to such Collateral Asset in effect at such
time.

 

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

 

“Pledged Interests” means (a) 100% of the direct Equity Interests in the Georgia
Tech Owner and (b) 100% of the direct Equity Interests in the Georgia Tech TRS
Lessee.

 

“Pledgor” means (a) the Georgia Tech Borrower, the owner of 100% of the direct
Equity Interests in the Georgia Tech Owner, and (b) the Georgia Tech Pledgor,
the owner of 100% of the direct Equity Interests in the Georgia Tech TRS Lessee.

 

“Pledgor Security Agreement” means each of the Pledgor Security Agreement
(Georgia Tech Owner) and the Pledgor Security Agreement (Georgia Tech TRS
Lessee).

 

“Pledgor Security Agreement (Georgia Tech Owner)” means a security agreement in
substantially the form of Exhibit C-1 hereto, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Pledgor Security Agreement (Georgia Tech TRS Lessee)” means a security
agreement in substantially the form of Exhibit C-2 hereto, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Pledgor SPE Requirements” means the obligation of the Borrowers to cause each
Pledgor to (a) at all times that it is a Pledgor include in its constitutive
documents the provisions set forth in Schedule VIII hereto (as such provisions
are modified solely for the purposes of conforming to the defined terms in the
applicable constitutive documents) and (b) deliver all applicable executed
engagement or staffing agreements with independent managers or independent
directors, as applicable, in form and substance approved by the Administrative
Agent.

 

“Post-Closing Letter” means the post-closing letter agreement, dated as of the
Closing Date, between the Administrative Agent and the Borrowers.

 

“Post Petition Interest” has the meaning specified in Section 7.07(c).

 

“Pro Rata Share” of any amount means, with respect to any Lender at any time,
the product of such amount times a fraction the numerator of which is the amount
of such Lender’s Advances at such time and the denominator of which is the
Outstanding Principal Balance.

 

“Pro Forma Debt Yield” means, at any date of determination, as calculated by the
Borrowers in good faith, the aggregate Adjusted Net Operating Income for all
Collateral Assets (excluding the Collateral Assets that the Borrowers propose be
released from the Collateral) divided by the Outstanding Principal Balance
(excluding the principal balance of the Loan to be prepaid in connection with
such proposed release in accordance with this Agreement).

 

 30 

 

 

“Project Gateway Loan Agreements” means, collectively, (a) the Loan Agreement,
dated as of the Closing Date, between DBNY, Citigroup Global Markets Realty
Corp. and JPMCB, as the initial lenders, and certain Subsidiaries of the Parent
Guarantor, as the borrowers, as the same may be amended, restated and/or
modified from time to time, and (b) the Mezzanine Loan Agreement, dated as of
the Closing Date, between DBNY, Citigroup Global Markets Realty Corp. and JPMCB,
as the initial lenders, and certain Subsidiaries of the Parent Guarantor, as the
borrowers, as the same may be amended, restated and/or modified from time to
time.

 

“Project Gateway Loan” means the loans in the aggregate principal amount of
$915,000,000 made on the Closing Date by DBNY, Citigroup Global Markets Realty
Corp. and JPMCB, as the initial lenders, pursuant to the terms of the Project
Gateway Loan Agreements.

 

“Property Material Adverse Effect” means a material adverse effect on a
Collateral Asset or the value, use, operation or ability to sell or refinance
such Collateral Asset.

 

“Property Release DY Test” means a financial test that is satisfied if, as of
the date of determination, the Pro Forma Debt Yield shall be equal to or greater
than the greater of (a) the Debt Yield immediately prior to the proposed release
of the applicable Collateral Asset (but in no event in excess of 13%) and (b)
11%.

 

“Protective Advance” means all sums expended by the Administrative Agent or
Lenders in accordance with Section 5.01(bb).

 

“Published Screen Rate” has the meaning specified in the definition of “Screen
Rate”.

 

“Purchase Agreement” means each purchase agreement, contract of sale or
equivalent agreement pursuant to which any Borrower will acquire one or more
Collateral Assets on the Closing Date (or after the Closing Date but no later
than the last day of the Delayed Draw Period), including all assignments and
amendments related thereto.

 

“Qualified Ground Lease Default” has the meaning specified in Section 9.13(c).

 

“Qualified Sponsor Equityholder” has the meaning specified in the definition of
Sponsor/Brookfield Qualified Equityholder.

 

“Qualified Transferee” shall mean a transferee for whom, prior to the Equity
Transfer, the Administrative Agent shall have received: (a) evidence that the
proposed transferee (i) has never been indicted or convicted of, or pled guilty
or no contest to, a felony, (ii) has never been indicted or convicted of, or
pled guilty or no contest to, a Patriot Act Offense and is not on any Government
List, (iii) has not been the subject of a voluntary or involuntary (to the
extent the same has not been discharged) bankruptcy proceeding in the past
fifteen (15) years and (iv) has no material outstanding judgments against such
proposed transferee, and for the purpose of this clause (iv), “material” shall
mean an outstanding judgment or outstanding judgments of $5,000,000 or more in
the aggregate which are not covered by insurance and (b) if the proposed
transferee will obtain Control of any Borrower or to the extent that the
transfer would result in the transferee (either itself or collectively with its
Affiliates) owning a 10% or greater (direct or indirect) Equity Interest in any
Borrower (unless such transferee together with such Affiliates owned a 10% or
more (direct or indirect) Equity Interest in such Borrower immediately prior to
such transfer), acceptable documentation complying with each Lender’s then
current “know your customer” requirements.

 

 31 

 

 

“Rate Cap Collateral” has the meaning specified in Section 2.18(b).

 

“Real Property” means all right, title and interest of the Borrowers in and to
any land and any improvements and fixtures located thereon, together with all
equipment, furniture, materials, supplies, personal property and all other
rights and property within the scope of the definition of Mortgaged Property (as
defined in the Form of Mortgage attached hereto as Exhibit G) in which such
Person has an interest now or hereafter located on or used in connection with
such land and improvements, and all appurtenances, additions, improvements,
renewals, substitutions and replacements thereof now or hereafter acquired by
such Person.

 

“Recipient” means (a) the Administrative Agent, or (b) any Lender.

 

“Register” has the meaning specified in Section 9.07(d).

 

“Registration Statement” means the Parent Guarantor’s Form S-11 Registration
Statement filed with the Securities and Exchange Commission on August 16, 2013,
as amended from time to time.

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“REIT” means a Person that is qualified to be treated for U.S. federal income
tax purposes as a real estate investment trust under Sections 856-860 of the
Internal Revenue Code.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Persons and of
such Person’s Affiliates.

 

“Replacement Interest Rate Cap Agreement” means an interest rate cap agreement
from an Approved Counterparty with terms that are the same in all material
respects as the terms of the Interest Rate Cap Agreement except that the same
shall be effective as of (i) in connection with a replacement pursuant to
Section 2.18(c)(iii) following a downgrade, withdrawal or qualification of the
long-term unsecured debt rating of the Counterparty, the date required in
Section 2.18 or (ii) in connection with a replacement (or extension of the
then-existing Interest Rate Cap Agreement) in connection to an extension of the
Maturity Date pursuant to Section 2.16, the date required in Section 2.16,
provided that to the extent any such interest rate cap agreement does not meet
the foregoing requirements, a Replacement Interest Rate Cap Agreement shall be
such interest rate cap agreement approved in writing by the Administrative
Agent.

 

“Replacement Guarantor” has the meaning specified in the definition of Permitted
Transfer.

 

 32 

 

 

“Replacement Lender” has the meaning specified in Section 9.01(b).

 

“Required Lenders” means, at any time, Lenders holding Commitments (including,
without limitation, funded Commitments) in an aggregate amount greater than
66²/3% of the Outstanding Principal Balance; provided, however, that the
Advances held or deemed held by any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

“Required Repairs” has the meaning set forth in the Post-Closing Letter.

 

“Responsible Officer” means, with respect to any Loan Party, any officer of, or
any officer of any general partner or managing member of, such Loan Party, which
Officer has (a) responsibility for performing the underlying function that is
the subject of the action required of such officer hereunder, or (b) supervisory
responsibility for such an officer.

 

“Restoration” has the meaning specified in the Mortgages.

 

“Restricting Information” has the meaning specified in Section 9.12(b).

 

“Retiring Debt” means the Indebtedness of the Loan Parties and their respective
Subsidiaries set forth on Schedule XVI.

 

“S&P” means Standard & Poor’s Financial Services LLC, a division of McGraw-Hill
Financial, Inc., and any successor thereto.

 

“Sale and Leaseback Transaction” means any arrangement with any Person providing
for the leasing by the Parent Guarantor or any of its Subsidiaries of any Real
Property that has been sold or transferred or is to be sold or transferred by
the Parent Guarantor or such Subsidiary, as the case may be, to such Person.

 

“Sanctions” has the meaning specified in Section 4.01(x).

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002, as amended.

 

“Screen Rate” means, for any Interest Period, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be the ICE Benchmark Administration Limited LIBOR Rate
(“ICE LIBOR”) for deposits in Dollars (for delivery on the first day of such
Interest Period) for a term equivalent to such Interest Period as published by
Reuters or another commercially available source providing quotations of ICE
LIBOR as designated by the Administrative Agent from time to time in place of
Reuters (the “Published Screen Rate”); provided, however, that if the Published
Screen Rate is not available for a period corresponding to the relevant Interest
Period but is available for other periods, then “Screen Rate” shall mean the
Interpolated Rate; provided further that in no circumstances shall the Screen
Rate be less than 0% per annum.

 

“Second Extended Maturity Date” means May 1, 2021.

 

“Secured Obligations” means, collectively, the “Secured Obligations” as defined
in the Security Agreement and the “Obligations” as defined in the Mortgages.

 

“Secured Parties” means the Agents and Lenders.

 

 33 

 

 

“Securities Act” means the Securities Act of 1933, as amended to the date hereof
and from time to time hereafter, and any successor statute.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended
to the date hereof and from time to time hereafter, and any successor statute.

 

“Security Agreement” means, with respect to the Collateral Assets and the
Borrowers, a security agreement in substantially the form of Exhibit F hereto,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Servicer” has the meaning specified in Section 8.01(c).

 

“Single Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA that is subject to Title IV of ERISA, that (a) is
maintained for employees of any Loan Party or any ERISA Affiliate and no Person
other than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been or were to
be terminated.

 

“Smith Travel Research” means Smith Travel Research or a substitute lodging
industry research company proposed by the Operating Partnership and approved by
the Administrative Agent in its reasonable discretion.

 

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person, on a going-concern
basis, is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person, on a going-concern basis, is not less than
the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
an unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time (including, without limitation, after taking
into account appropriate discount factors for the present value of future
contingent liabilities), represents the amount that can reasonably be expected
to become an actual or matured liability.

 

“Special Flood Hazard Area” means an area that FEMA has designated as an area
subject to special flood or mud slide hazards.

 

“Sponsor/Brookfield Qualified Equityholder” means (i) the Sponsor Parties or any
successor thereto by initial public offering (any Person described in this
clause (i), a “Qualified Sponsor Equityholder”), and (ii) the Brookfield
Investor or any of its Control Affiliates.

 

“Sponsor Parties” means the Parent Guarantor and the Operating Partnership.

 

“Spread Maintenance End Date” means the Monthly Payment Date occurring in May
2018.

 

 34 

 

 

“Spread Maintenance” means, with respect to any repayment or prepayment of all
or any portion of the Outstanding Principal Balance (or acceleration of the
Loan) prior to the Spread Maintenance End Date, a payment in an amount equal to
the product of (x) the Applicable Margin, (y) the portion of the Loan which is
being repaid that is subject to a spread maintenance fee as specified in Section
2.06; and (z) a fraction, the numerator of which is the number of days following
the date through which interest on the prepaid amount has been paid to the end
of the full interest accrual period associated with the Spread Maintenance End
Date and the denominator of which is 360.

 

“Springing Recourse Event” has the meaning specified in Section 10.02(b).

 

“Strike Price” means 4.00% per annum.

 

“Strike Price (Extension Options)” means the rate per annum that when added to
the Applicable Margin would result in a Debt Service Coverage Ratio equal to
1.10:1.00.

 

“Subordinated Obligations” has the meaning specified in Section 7.07(a).

 

“Subordination of Management Agreement” means, with respect to any Approved
Management Agreement related to a Collateral Asset, a consent and subordination
agreement or amended and restated consent and subordination agreement in form
and substance substantially similar to Exhibit M attached hereto, as applicable,
or in form and substance as otherwise reasonably satisfactory to and agreed upon
by Collateral Agent, the Borrowers and an Approved Manager, provided that in the
case of a replacement Approved Manager that manages another Collateral Asset,
the form of consent and subordination agreement delivered on the Closing Date
with respect to such other Collateral Asset, with necessary property specific
information changed, shall be deemed acceptable to the Administrative Agent.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) 50% or more of
(a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate, in each case, is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Supplemental Agent” has the meaning specified in Section 8.01(b).

 

“Surveys” has the meaning specified in Section 3.01(b)(iii).

 

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

 

“Tenancy Leases” means operating leases (excluding the Operating Leases),
subleases, licenses, occupancy agreements and rights-of-use entered into by any
of the Borrowers in such Borrower’s capacity as a lessor or a similar capacity
(excluding any ground lease and any other lease entered into in connection with
a Sale and Leaseback Transaction).

 

 35 

 

 

“Test Date” means the last day of each fiscal quarter of the Parent Guarantor
for which financial statements are required to be delivered pursuant to Sections
5.03(b) or (c), as the case may be.

 

“Third Extended Maturity Date” means May 1, 2022.

 

“Transaction Parties” means, jointly and severally, each Borrower, each TRS
Lessee, each Pledgor, the Georgia Tech Owner, each Guarantor and any other
Affiliate of any of the foregoing.

 

“Transfer” has the meaning specified in Section 5.02(e).

 

“TRS Lessee” means a lessee of an Asset constituting Real Property pursuant to
an Operating Lease that is wholly-owned directly or indirectly by the Operating
Partnership.

 

“TRS Lessee SPE Requirements” means the obligation of the Borrowers to cause the
TRS Lessee to (a) at all times that it is a TRS Lessee include in its
constitutive documents the provisions set forth in Schedule IX hereto (as such
provisions are modified solely for the purposes of conforming to the defined
terms in the applicable constitutive documents) and (b) deliver all applicable
executed engagement or staffing agreements with independent managers or
independent directors, as applicable, in form and substance approved by the
Administrative Agent.

 

“Type” refers to the distinction between Advances bearing interest at the Base
Rate and Advances bearing interest at the Eurodollar Rate.

 

“UCC” means, with respect to a Collateral Asset or a Borrower, the Uniform
Commercial Code as in effect in the state where such Collateral Asset is located
or such Borrower is formed or incorporated, as the case may be, or otherwise,
the Uniform Commercial Code as in effect the State of New York.

 

“UCC Title Insurance Policy” shall mean, with respect to the Pledged Interests,
a UCC title insurance policy in the form acceptable to Administrative Agent
issued with respect to the Pledged Interests and insuring the lien of the
security interest in favor of the Collateral Agent that encumbers the Pledged
Interests.

 

“Undisclosed Administration” means in relation to a Lender or its direct or
indirect parent company, the appointment of an administrator, provisional
liquidator, conservator, receiver, trust, custodian or other similar official by
a supervisory authority or regulator under or based on the law in the country
where such Lender is subject to home jurisdiction supervision if applicable law
requires that such appointment is not to be publicly disclosed.

 

“Unexpended FF&E PIP Funds” means, as of any date of determination, that portion
of the FF&E PIP Funds (a) that has not been expended to fund PIP Work, (b) that
remains on deposit in the FF&E Reserve Account (as defined in the Cash
Management Agreement), and (c) the unexpended amount of which has been certified
in writing to the Administrative Agent by a Responsible Officer of the Borrowers
on or about such date.

 

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

 

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“U.S. Tax Compliance Certificate” has the meaning specified in Section
2.12(g)(ii)(C).

 

“Voting Interests” means shares of capital stock issued by a corporation, or
equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or the election or appointment of persons performing similar
functions) of such Person, even if the right so to vote has been suspended by
the happening of such a contingency.

 

“Waste” has the meaning specified in Section 10.02(a).

 

“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that
is maintained for employees of any Loan Party or in respect of which any Loan
Party could have liability under applicable law.

 

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

 

“Withholding Agent” means (a) any Loan Party or (b) the Administrative Agent.

 

“Write-Down and Conversion Powers” means, 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.

 

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In
this Agreement and the other Loan Documents in the computation of periods of
time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding”. References in the Loan Documents to any agreement or contract “as
amended” shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.

 

SECTION 1.03. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements referred to in Section 4.01(g) (“GAAP”). If at any time after the
Closing Date there are any changes in accounting principles required by GAAP or
the Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or similar agencies that would result in a change in the
method of calculation of, or affects the results of such calculation of, any of
the financial covenants, standards or terms found in this Agreement, and either
the Borrowers or the Required Lenders shall so request, then the Administrative
Agent, the Required Lenders and the Borrowers shall negotiate in good faith to
amend such financial covenants, standards or terms so as to equitably reflect
such change, with the desired result that the criteria for evaluating the
financial condition of the applicable Loan Parties and their Subsidiaries shall
be the same after such change as if such change had not been made. Such
provisions shall be amended in a manner satisfactory to the Borrowers, the
Administrative Agent and the Required Lenders. Until covenants, standards, or
terms of this Agreement are amended in accordance with this Section 1.03, such
covenants, standards and terms shall be computed and determined in accordance
with accounting principles in effect prior to such change in accounting
principles.

 

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Article II
LOAN

 

SECTION 2.01. Agreement to Lend and Borrow. Subject to the terms and conditions
set forth herein, including Sections 2.02, 3.01 and 3.02, (a) on the Closing
Date, each Lender shall fund to the Borrowers its Pro Rata Share of a portion of
the Loan in the principal amount of $310,000,000, and (b) if the Borrowers shall
have timely delivered the Delayed Draw Election Notice to the Administrative
Agent (by the deadline specified in the definition thereof), then each Lender
shall fund to the Borrowers its Pro Rata Share of the amount of any Delayed Draw
Borrowing on the date specified in a Notice of Borrowing given in accordance
with Section 2.02(a). If the Borrowers do not timely submit the Delayed Draw
Election Notice, then no Delayed Draw Borrowing shall be permitted hereunder
and, for avoidance of doubt, any Commitment in respect of any Delayed Draw
Advance shall be deemed terminated. There shall be no more than two Borrowings
hereunder and if the Borrowers fail to make a Delayed Draw Borrowing in
accordance with Section 2.02(a) on or prior to the last day of the Delayed Draw
Period, the Borrowers shall have no further right to consummate any Delayed Draw
Borrowing and the provisions of Section 2.05 shall apply. The Borrowers shall
borrow and accept the Loan from Lenders. The obligation of each Lender to fund
its Pro Rata Share of such portion of the Loan shall be several, not joint and
several.

 

SECTION 2.02. Making the Advances. (a) Any Delayed Draw Borrowing shall be made
on notice, given not later than 12:00 Noon (New York City time) at least two (2)
Business Days prior to the date of such Delayed Draw Borrowing, by the Borrowers
to the Administrative Agent, which shall give to each Lender prompt notice
thereof by telex or telecopier. Such notice (the “Notice of Borrowing”) shall be
by telephone, confirmed immediately in writing via telecopier or e-mail, in each
case in substantially the form of Exhibit B hereto, specifying therein (i) the
requested date of such Delayed Draw Borrowing, and (ii) the requested aggregate
amount of such Delayed Draw Borrowing. Any Delayed Draw Borrowing requested
pursuant to this Section 2.02 shall be for a Borrowing of Eurodollar Rate
Advances. Each Lender shall, before 12:00 Noon (New York City time) on the date
of any Delayed Draw Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at the Administrative Agent’s
Account, in same day funds, such Lender’s ratable portion of any Delayed Draw
Borrowing in accordance with the respective Commitments of such Lender and the
other Lenders. In connection with each Borrowing, after the Administrative
Agent’s receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available to the Borrowers by crediting the Borrowers’ Account, and for the
purposes of this sentence, Borrowers’ Account shall be deemed to include any
bank account of Fidelity National Title Insurance Company, as escrow agent
designated for receipt of such funds in the escrow instructions for the Loan
executed by such escrow agent.

 

(b)          The Notice of Borrowing shall be irrevocable and binding on the
Borrowers. The Borrowers shall indemnify each Lender against any loss, cost or
expense actually incurred by such Lender as a result of any failure to fulfill
on or before the date specified in the Notice of Borrowing for any Delayed Draw
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss, cost or expense actually incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund its Delayed Draw Advance as part of such Delayed Draw Borrowing when
such Advance, as a result of such failure, is not made on such date.

 

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(c)          Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing consisting of Eurodollar Rate Advances
that such Lender will not make available to the Administrative Agent such
Lender’s ratable portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with Section 2.02(a) and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers on such date a corresponding amount. If and to the extent that
such Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrowers severally agree to repay or
pay to the Administrative Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrowers until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrowers, the interest rate
applicable at such time under Section 2.07 to Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender’s Advance as part of such Borrowing for all
purposes.

 

(d)          The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.

 

(e)          Without limitation of the requirements of Section 2.12, each Lender
may, at its option, make any Advance available to the Borrowers by causing any
foreign or domestic branch or Affiliate of such Lender to make such Advance;
provided, however, that (i) any exercise of such option shall not affect the
obligation of the Borrowers in accordance with the terms of this Agreement and
(ii) nothing in this Section 2.02(e) shall be deemed to obligate any Lender to
obtain the funds for any Advance in any particular place or manner or to
constitute a representation or warranty by any Lender that it has obtained or
will obtain the funds for any Advance in any particular place or manner.

 

SECTION 2.03. [Intentionally Omitted].

 

SECTION 2.04. Repayment of Advances. On the Maturity Date, the Borrowers shall
repay to the Administrative Agent for the ratable account of Lenders the entire
Outstanding Principal Balance, together with all accrued and unpaid interest
thereon and all other outstanding Obligations.

 

SECTION 2.05. Mandatory Reduction of Commitments. If the Borrowers have not
timely submitted a Notice of Borrowing pursuant to Section 2.02(a) and satisfied
the conditions precedent to any Delayed Draw Borrowing on or prior to the last
day of the Delayed Draw Period, then any unfunded Commitments existing as of the
last day of the Delayed Draw Period shall automatically be deemed terminated and
reduced to zero as of the end of the last day of the Delayed Draw Period.

 

SECTION 2.06. Prepayments. (a) Optional. The Borrowers may, upon same day notice
in the case of Base Rate Advances and two (2) Business Days’ notice in the case
of Eurodollar Rate Advances, in each case to the Administrative Agent stating
the proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrowers shall, prepay the outstanding aggregate principal
amount of the Advances in whole or ratably in part, together with accrued
interest to the date of such prepayment on the aggregate principal amount
prepaid; provided, however, that (i) each partial prepayment shall be in an
aggregate principal amount of at least $250,000 or, if less, the amount of the
Advances outstanding, (ii) if any such prepayment is made prior to the Spread
Maintenance End Date, the Borrowers shall pay the applicable Spread Maintenance
in accordance with and to the extent set forth in Section 2.06(c), and (iii) if
any prepayment of a Eurodollar Rate Advance is made on a date other than the
first day of an Interest Period, the Borrowers shall also pay any interest
through the end of the then current Interest Period.

 

 39 

 

 

(b)          Mandatory. The Borrowers shall prepay the Loan if and to the extent
required by Sections 9.13(b), (c) and (d). If any such prepayment is made prior
to the Spread Maintenance End Date, the Borrowers shall pay the applicable
Spread Maintenance in accordance with Section 2.06(c). This Section 2.06(b) does
not grant any Loan Party any independent right to sell or transfer any
Collateral Asset. Except during an Event of Default, each amount received by the
Administrative Agent pursuant Sections 9.13(b), (c) or (d) shall be applied by
the Administrative Agent to the Outstanding Principal Balance. Any amounts owing
pursuant to Section 9.04(c) shall be due in connection with any prepayment made
pursuant to this Section 2.06(b) at the time such prepayment is made.

 

(c)          Spread Maintenance. In connection with each prepayment of the Loan
made pursuant to Section 2.06(a) or 2.06(b) prior to the Spread Maintenance End
Date, as a condition to the effectiveness of such prepayment, the Borrowers
shall pay to the Administrative Agent for the benefit of Lenders, the Spread
Maintenance related to such prepayment. Notwithstanding the foregoing, no Spread
Maintenance will be due or payable on (i) the first $99,073,180 of the Loan
prepaid by the Borrowers, (ii) any prepayment resulting for a Condemnation or
Casualty at one or more of the Collateral Asset, (iii) any prepayment made in
accordance with the definition of Lockbox Trigger Event Cure in the Cash
Management Agreement, or (iv) any prepayment related to the release of the
Georgia Tech Hotel pursuant to Section 9.13(c) as a result of a Qualified Ground
Lease Default related to the Georgia Tech Ground Lease.

 

SECTION 2.07. Interest. (a) Scheduled Interest. The Borrowers shall pay interest
on the unpaid principal amount of each Advance owing to each Lender from the
date of such Advance until such principal amount shall be paid in full, at the
following rates per annum:

 

(i)          Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (A) the Base
Rate in effect from time to time plus (B) the Applicable Margin in respect of
Base Rate Advances, payable in arrears quarterly on the last day of each March,
June, September and December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full. Notwithstanding any provision of
this Agreement to the contrary, in no event shall the Borrowers have the right
to convert a Eurodollar Rate Advance to a Base Rate Advance.

 

(ii)         Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable Margin in respect of
Eurodollar Rate Advances, payable on each Monthly Payment Date in an amount
equal to the amount of interest which has accrued and will accrue during the
Interest Period in which such Monthly Payment Date occurs (notwithstanding the
fact that the Interest Period extends beyond such Monthly Payment Date).

 

Notwithstanding the foregoing, the Borrowers shall make a payment to the
Administrative Agent of interest on the Closing Date for the period from (and
including) the Closing Date through (and including) the seventh (7th) day of
either (i) the month in which the Closing Date occurs (if the Closing Date
occurs on or before the seventh (7th) day of such month), or (ii) the month
following the month in which the Closing Date occurs (if the Closing Date occurs
on or after the eighth (8th) day of the then current calendar month); provided,
however, if the Closing Date is the seventh (7th) day of a calendar month, no
such separate payment of interest shall be due.

 

 40 

 

 

(b)          Default Interest. Upon the occurrence and during the continuance of
any Event of Default, the Borrowers shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per
annum equal at all times to the lesser of the maximum rate permitted by
applicable law and the Default Rate and (ii) to the fullest extent permitted by
law, the amount of any interest, fee or other amount payable under the Loan
Documents that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to the Default Rate. Notwithstanding anything to the contrary in this
Agreement, the Borrowers shall pay interest on any outstanding Protective
Advances at a rate per annum equal at all times to the lesser of the maximum
rate permitted by applicable law and the Default Rate.

 

(c)          Notice of Interest Rate. The Eurodollar Rate for the initial
Interest Period shall be 1.00% per annum.

 

(d)          Interest Rate Determination. If the Screen Rate is unavailable and
the Administrative Agent is unable to determine the Eurodollar Rate for any
Eurodollar Rate Advances, as provided in the definition of Eurodollar Rate
herein,

 

(i)          the Administrative Agent shall forthwith notify the Borrowers and
Lenders that the interest rate cannot be determined for such Eurodollar Rate
Advances,

 

(ii)         each such Advance will automatically, on the last day of the
existing Interest Period therefor, Convert into a Base Rate Advance (or if such
Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and

 

(iii)        the obligation of Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrowers and Lenders that the circumstances causing such suspension
no longer exist.

 

SECTION 2.08. Fees. The Borrowers shall pay to each Agent and each Arranger for
their own account the fees, in the amounts and on the dates, set forth in the
Fee Letter and such other fees as may from time to time be agreed in writing
between the Borrowers and any Agent or Arranger.

 

SECTION 2.09. Conversion of Advances. Upon the occurrence and during the
continuance of any Event of Default, (a) each Eurodollar Rate Advance will
automatically, on the last day of the existing Interest Period therefor, Convert
into a Base Rate Advance and (b) the obligation of Lenders to make Eurodollar
Rate Advances shall be suspended until the applicable Event of Default is waived
in accordance with, and subject to Section 9.01, and thereafter, upon the
Borrowers’ written request, the Administrative Agent shall Convert the Base Rate
Advances into Eurodollar Advances within three (3) Business Days after receipt
of such request.

 

 41 

 

 

SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the introduction
of or any change in or in the interpretation or application of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or of
making, funding or maintaining Eurodollar Rate Advances (excluding, for purposes
of this Section 2.10, any such increased costs resulting from (y) Taxes
described in clauses (b) through (d) of the definition of Excluded Taxes,
Indemnified Taxes or Other Taxes (as to which Section 2.12 shall govern) and
(z) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender is organized, has its Applicable Lending Office or
otherwise has current or former connections (other than such connections arising
from such Lender having executed, delivered, became a party to, performed its
obligations under, received or perfected a security interest under, engaged in
any other transactions pursuant to, or enforced any Loan Documents, or sold or
assigned any interest in any Obligations or Loan Document) or any political
subdivision thereof), then the Borrowers shall, from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; provided, however,
that a Lender claiming additional amounts under this Section 2.10(a) agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the
Borrowers by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.

 

(b)          If any Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) affects or would affect the
amount of capital or liquidity required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital or liquidity requirement is increased by or based upon the existence of
such Lender’s commitment to lend then, upon demand by such Lender or such
corporation (with a copy of such demand to the Administrative Agent), the
Borrowers shall pay to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender in the light of such circumstances, to the extent that
such Lender reasonably determines such increase in capital or increase in
liquidity to be allocable to the existence of such Lender’s commitment to lend.
A certificate as to such amounts submitted to the Borrowers by such Lender shall
be conclusive and binding for all purposes, absent manifest error.

 

Notwithstanding anything to the contrary contained in this Agreement, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and all
requests, rules, guidelines or directives thereunder or issued in connection
therewith, regardless of the date enacted, adopted, implemented or issued, and
all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements or the Basel Committee on Banking Supervision (or any
successor or similar authority) or United States or foreign regulatory
authorities, in each case pursuant to Basel Supervision known as Basel III and
regardless of the date enacted, adopted, implemented or issued, shall be deemed
an introduction or change of the type referred to in Section 2.10(a) and this
Section 2.10(b).

 

(c)          If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of Lenders to make
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrowers that such Lenders have determined that the circumstances
causing such suspension no longer exist.

 

(d)          Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or application of any
law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrowers through the Administrative Agent, (i) each Eurodollar Rate
Advance will automatically, upon such demand, Convert into a Base Rate Advance
and (ii) the obligation of Lenders to make Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Borrowers that such
Lender has determined that the circumstances causing such suspension no longer
exist; provided, however, that, before making any such demand, such Lender
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender.

 

 42 

 

 

(e)          Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s right to
demand such compensation, provided that the Borrowers shall not be required to
compensate a Lender pursuant to this Section for any increased costs incurred or
reductions suffered more than nine (9) months prior to the date that such
Lender, as the case may be, notifies the Borrowers of the Change in Law giving
rise to such increased costs or reductions, and of such Lender’s intention to
claim compensation therefor (except that, if the change in, or in the
interpretation or application of, any law or regulation or the compliance with
any guideline or request from any central bank or other Governmental Authority
giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).

 

SECTION 2.11. Payments and Computations. (a) The Borrowers shall make each
payment hereunder and under the Notes, irrespective of any right of counterclaim
or set-off (except as otherwise provided in Section 2.13), not later than
12:00 Noon (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at the Administrative Agent’s Account in same day funds,
with payments being received by the Administrative Agent after such time being
deemed to have been received on the next succeeding Business Day. The
Administrative Agent shall promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrowers is in respect of principal,
interest, commitment fees or any other Obligation then payable hereunder and
under the Notes to more than one Lender, to such Lenders for the account of
their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lenders and (ii) if
such payment by the Borrowers is in respect of any Obligation then payable
hereunder to one Lender, to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.

 

(b)          Each Borrower hereby authorizes each Lender and each of its
Affiliates, if and to the extent payment owed to such Lender is not made when
due hereunder or under the Note held by such Lender, to charge from time to
time, to the fullest extent permitted by law, against any or all of any of the
Borrower’s accounts with such Lender any amount so due.

 

(c)          All computations of interest based on the Base Rate shall be made
by the Administrative Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate or
the Federal Funds Rate and of fees shall be made by the Administrative Agent on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. The accrual period for
calculating interest due on each Monthly Payment Date shall be the Interest
Period in which the related Monthly Payment Date occurs. Each determination by
the Administrative Agent of an interest rate, fee or commission hereunder shall
be conclusive and binding for all purposes, absent manifest error.

 

 43 

 

 

(d)          Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
immediately preceding Business Day.

 

(e)          Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to any Lender hereunder
that the Borrowers will not make such payment in full, the Administrative Agent
may assume that the Borrowers have made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each such Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent
the Borrowers shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate.

 

(f)          Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in full
all amounts due and payable to the Administrative Agent and Lenders under or in
respect of this Agreement and the other Loan Documents on any date, such payment
shall be distributed by the Administrative Agent and applied by the
Administrative Agent and Lenders in the following order of priority:

 

(i)          first, to the payment of all of the fees, indemnification payments,
costs and expenses that are due and payable to the Agents (solely in their
respective capacities as Agents) under or in respect of this Agreement and the
other Loan Documents on such date, ratably based upon the respective aggregate
amounts of all such fees, indemnification payments, costs and expenses owing to
the Agents on such date;

 

(ii)         second, to the payment of all of the indemnification payments,
costs and expenses that are due and payable to Lenders under Section 9.04, and
any similar section of any of the other Loan Documents on such date, ratably
based upon the respective aggregate amounts of all such indemnification
payments, costs and expenses owing to Lenders on such date;

 

(iii)        third, to the payment of all of the amounts that are due and
payable to the Administrative Agent and Lenders under Sections 2.10 and 2.12 on
such date, ratably based upon the respective aggregate amounts thereof owing to
the Administrative Agent and Lenders on such date;

 

(iv)        fourth, to the payment of all of the fees that are due and payable
to Lenders under Section 2.08 on such date, ratably based upon the respective
aggregate Commitments of Lenders on such date;

 

(v)         fifth, to the payment of all of the accrued and unpaid interest on
the Obligations of the Loan Parties owing under or in respect of the Loan
Documents that is due and payable to the Administrative Agent and Lenders under
Section 2.07(b) on such date, ratably based upon the respective aggregate
amounts of all such interest owing to the Administrative Agent and Lenders on
such date;

 

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(vi)        sixth, to the payment of all of the accrued and unpaid interest on
the Advances that is due and payable to the Administrative Agent and Lenders
under Section 2.07(a) on such date, ratably based upon the respective aggregate
amounts of all such interest owing to the Administrative Agent and Lenders on
such date;

 

(vii)       seventh, to the payment of any other accrued and unpaid interest
comprising Obligations of the Loan Parties owing under or in respect of the Loan
Documents that is due and payable on such date, ratably based upon the
respective aggregate amounts of all such interest owing to the respective
obligees thereof on such date;

 

(viii)      eighth, to the payment of the principal amount of the Loan that is
due and payable to the Administrative Agent and Lenders on such date, ratably
based upon the respective aggregate amounts of all such principal and
reimbursement obligations owing to the Administrative Agent and Lenders on such
date; and

 

(ix)         ninth, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Agents and Lenders on such date.

 

SECTION 2.12. Taxes.

 

(a)          Any and all payments by or on account of any Obligation of any Loan
Party or the Administrative Agent under any Loan Document shall be made, in
accordance with Section 2.11 or the applicable provisions of such Loan Document,
if any, 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 applicable Loan Party
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 Section 2.12) the applicable Recipient receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

 

(b)          Each Loan Party shall timely pay to the relevant Governmental
Authority in accordance with applicable law, or at the option of the
Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)          Without duplication of Sections 2.12(a) or 2.12(b), each Loan Party
shall indemnify each Recipient for the full amount of Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 2.12) payable or paid by such Recipient, or required
to be deducted or withheld 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 Loan Parties by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error. This
indemnification shall be made within ten (10) days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.

 

 45 

 

 

(d)          Each Lender shall severally indemnify the Administrative Agent,
within ten (10) days after demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (but only to the extent that any Loan Party has not
already indemnified the Administrative Agent for such Indemnified Taxes and
without limiting the obligation of the Loan Parties to do so), (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of Section
9.07 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 Administrative 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 an Agent shall be conclusive absent
manifest error. Each Lender hereby authorizes each 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 such Agent to such Lender from any other source against any
amount due to such Agent under this Section 2.12(d).

 

(e)          As soon as reasonably practicable after, but in any case within
thirty (30) days after, the date of any payment of Taxes by any Loan Party to a
Governmental Authority pursuant to this Section 2.12, such Loan Party shall
deliver to the Administrative Agent, at its address referred to in Section 9.02,
the original or a certified copy of any 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 Administrative
Agent. In the case of any payment hereunder or under the other Loan Documents by
or on behalf of a Loan Party through an account or branch outside the United
States or by or on behalf of a Loan Party by a payor that is not a U.S. Person,
if such Loan Party determines that no Taxes are payable in respect thereof, such
Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For
purposes of subsections (e) and (g) of this Section 2.12, the term “United
States” shall have the meaning specified in Section 7701(a)(9) of the Internal
Revenue Code.

 

(f)          Any Lender that is entitled to an exemption from, or reduction of,
withholding Taxes with respect to payments made under any Loan Document shall
deliver to the Operating Partnership (on behalf of the Borrowers) and the
Administrative Agent, at the time or times reasonably requested by the Operating
Partnership (on behalf of the Borrowers) or the Administrative Agent, such
properly completed and executed documentation reasonably requested by the
Operating Partnership (on behalf of the Borrowers) or the Administrative 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
Operating Partnership (on behalf of the Borrowers) or the Administrative Agent,
shall deliver such other documentation prescribed by any applicable law or
reasonably requested by the Operating Partnership (on behalf of the Borrowers)
or the Administrative Agent as will enable the Operating Partnership (on behalf
of the Borrowers) or the Administrative 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 Section 2.12(g)(i), (ii) and (iv) below) shall not be
required if in the applicable 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.

 

 46 

 

 

(g)          Without limiting the generality of Section 2.12(f),

 

(i)          each Lender that is a U.S. Person shall, to the extent it is
legally entitled to do so, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender, and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter as reasonably requested in
writing by the Operating Partnership (on behalf of the Borrowers) (but only so
long thereafter as such Lender remains lawfully able to do so), provide the
Administrative Agent and the Borrower with executed originals of Internal
Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

 

(ii)         each Lender that is not a U.S. Person (a “Foreign Lender”) shall,
to the extent it is legally entitled to do so, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender, and
on the date of the Assignment and Acceptance pursuant to which it becomes a
Lender in the case of each other Lender, and from time to time thereafter as
reasonably requested in writing by the Operating Partnership (on behalf of the
Borrowers) (but only so long thereafter as such Lender remains lawfully able to
do so), provide the Administrative Agent and the Operating Partnership (on
behalf of the Borrowers) with 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, executed originals of Internal Revenue
Service Form W-8BEN or Form W-8BEN-E, as applicable, 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, Internal Revenue Service Form W-8BEN or Form W-8BEN-E,
as applicable, 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)         executed originals of Internal Revenue Service Form W-8ECI;

 

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

 

(iv)        to the extent that the Foreign Lender is not the beneficial owner,
executed originals of Internal Revenue Service Form W-8IMY, accompanied by
Internal Revenue Service Form W-8BEN or Form W-8BEN-E, as applicable, a U.S. Tax
Compliance Certificate substantially in the form of Exhibit L-2 or Exhibit L-3,
Internal Revenue Service Form W-9 and/or other certification documents from each
beneficial owner, as applicable; provided, however, 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
L-4 on behalf of each such direct and indirect partner;

 

 47 

 

 

(iii)        any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Operating Partnership (on behalf of the Borrowers) and the
Administrative Agent (in such number of copies as shall be requested by the
Recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable
request of the Operating Partnership (on behalf of the Borrowers) or the
Administrative Agent), executed originals of any other form prescribed by any
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 any applicable law to permit the Operating
Partnership (on behalf of the Borrowers) or the Administrative Agent to
determine the withholding or deduction required to be made; and

 

(iv)        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 Internal Revenue Code, as
applicable), such Lender shall deliver to the Operating Partnership (on behalf
of the Borrowers) and the Administrative Agent at the time or times prescribed
by law and at such time or times reasonably requested by the Operating
Partnership (on behalf of the Borrowers) or the Administrative Agent such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional
documentation reasonably requested by the Operating Partnership (on behalf of
the Borrowers) or the Administrative Agent as may be necessary for the Operating
Partnership (on behalf of the Borrowers) and the Administrative 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 the purposes of this
subsection (g), “FATCA” shall include any amendments made to FATCA after the
Closing Date;

 

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 Borrowers and the Administrative
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 received an
indemnification payment pursuant to this Section 2.12 (including by the payment
of additional amounts pursuant to this Section 2.12), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 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 (h) (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 (h), in no event will the indemnified party be required to
pay any amount to an indemnifying party pursuant to this subsection (h) if such
payment 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 had 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 deems confidential) to the
indemnifying party or any other Person. No party shall have any obligation to
pursue, or any right to assert, any refund of Indemnified Taxes that may be paid
by another party.

 

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(i)          For any period with respect to which a Lender has failed to provide
the Operating Partnership (on behalf of the Borrowers) with the appropriate form
or other document described in subsection (f) or subsection (g) above (other
than if such failure is due to a Change in Law, or in the interpretation or
application thereof, occurring after the date on which a form or other document
originally was required to be provided and the Lender has not been advised that
such change requires it to provide such form or if such form or other document
otherwise is not required under subsection (f) or subsection (g) above), such
Lender shall not be entitled to indemnification under subsection (a) or (c) of
this Section 2.12 with respect to Taxes imposed by the United States by reason
of such failure; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form or other document required hereunder,
the Borrowers shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.

 

(j)          Any Lender claiming any additional amounts payable pursuant to this
Section 2.12 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

 

(k)          Without prejudice to the survival of any other agreement of any
party hereunder or under any other Loan Document, the agreements and obligations
under this Section 2.12 shall survive the resignation or replacement of any
Agent, the assignment of rights by, or the replacement of, a Lender, the
termination of the Commitments and the payment in full of principal, interest
and all other amounts payable hereunder and under any of the other Loan
Documents.

 

SECTION 2.13. Sharing of Payments, Etc. Subject to the provisions of Section
2.11(f), if any Lender shall obtain at any time any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise, other
than as a result of an assignment pursuant to Section 9.07) (a) on account of
Obligations due and payable to such Lender under the Loan Documents at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lenders under the
Loan Documents at such time) of payments on account of the Obligations due and
payable to all Lenders under the Loan Documents at such time obtained by all
Lenders at such time or (b) on account of Obligations owing (but not due and
payable) to such Lender under the Loan Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
owing to such Lender at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lenders under the Loan
Documents at such time) of payments on account of the Obligations owing (but not
due and payable) to all Lenders under the Loan Documents at such time obtained
by all Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender’s ratable share
(according to the proportion of (i) the purchase price paid to such Lender to
(ii) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such other Lender’s required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. Each Borrower agrees that any Lender so purchasing an interest or
participating interest from another Lender pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or participating
interest, as the case may be, as fully as if such Lender were the direct
creditor of such Borrower in the amount of such interest or participating
interest, as the case may be.

 

 49 

 

 

SECTION 2.14. Use of Proceeds. The proceeds of the Advances shall be available
(and the Borrowers agree that they shall use such proceeds) for (a) subject to
Section 2.22, the refinancing pursuant to this Agreement of the Indebtedness
governed by the Existing Loan Agreement, (b) the acquisition of the Additional
Summit Collateral Assets either (i) on the Closing Date, if no Delayed Draw
Election Notice is timely given by the Borrowers to the Administrative Agent, or
(ii) on the date of the Delayed Draw Borrowing, if the Delayed Draw Election
Notice is timely given by the Borrowers to the Administrative Agent, (c) the
payment of fees and expenses related to the Loan and the other transactions
contemplated by the Loan Documents, and (d) the funding of a reserve pursuant to
Section 6.5.1 of the Project Gateway Loan Agreement. The proceeds described in
clause (d) shall be available (and the Borrowers agree to cause such proceeds to
be funded to the applicable borrowers under the Project Gateway Loan Agreement
as additional capital contributions) for the purposes specified in Section 6.5.1
of the Project Gateway Loan Agreement. None of the Borrowers will directly or
indirectly use the proceeds of the Advances or lend, contribute or otherwise
make available to any Person such extensions of credit or proceeds, (A) to fund
any activities or business of or with any Person, or in any country or
territory, that, at the time of such funding, is, or whose government is, the
subject of Sanctions, or (B) in any other manner that would result in a
violation of Sanctions or any Anti-Corruption Laws applicable to any party
hereto or to any participant in the Loan.

 

SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrowers to such Lender resulting from each Advance owing to such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder. Each Borrower agrees that upon
notice by any Lender to the Borrowers (with a copy of such notice to the
Administrative Agent) to the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such Lender to evidence
(whether for purposes of pledge, enforcement or otherwise) the Advances owing
to, or to be made by, such Lender, each Borrower shall promptly execute and
deliver to such Lender, with a copy to the Administrative Agent, a Note, in
substantially the form of Exhibit A hereto, payable to the order of such Lender
in a principal amount equal to the aggregate Advances of such Lender. All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder. To the extent no Note has been issued to a Lender, this
Agreement shall be deemed to comprise conclusive evidence for all purposes of
the indebtedness resulting from the Advances and extensions of credit hereunder.

 

(b)          The Register maintained by the Administrative Agent pursuant to
Section 9.07(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder and the Type of Advances comprising
such Borrowing, (ii) the terms of each Assignment and Acceptance delivered to
and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender
hereunder, and (iv) the amount of any sum received by the Administrative Agent
from the Borrowers hereunder and each Lender’s share thereof.

 

(c)          Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrowers to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the failure of the Administrative Agent or such
Lender to make an entry, or any finding that an entry is incorrect, in the
Register or such account or accounts shall not limit or otherwise affect the
obligations of the Borrowers under this Agreement.

 

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SECTION 2.16. Extension of Maturity Date. (a) First Extension. At least ten (10)
Business Days but not more than one hundred eighty (180) days prior to the
Initial Maturity Date, the Borrowers, by written notice to the Administrative
Agent, may request, with respect to the Advances then outstanding, an extension
of the Initial Maturity Date. The Administrative Agent shall promptly notify
each Lender of such request and the Initial Maturity Date shall, subject to the
following conditions having been satisfied on or prior to the Initial Maturity
Date, be extended to the First Extended Maturity Date:

 

(i)          the Guarantors shall have executed a written consent to such
extension in substantially the form attached hereto as Exhibit N,

 

(ii)         as of the date of such written notice from the Borrowers, the
following statements shall be true and the Administrative Agent shall have
received for the account of each Lender a certificate signed by a Responsible
Officer of the Borrowers, dated as of such date, stating that: (1) the
representations and warranties contained in Section 4.01 are true and correct in
all material respects on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date), except to the extent modified
by the actions of any Borrower or changes in facts and circumstances that in
each case would not constitute a Default or Event of Default (and the parties
agree that, in connection with the remaking of any such representations and
warranties pursuant to this Section 2.16(a)(ii), any such representations and
warranties that are qualified to knowledge shall continue to be qualified to
knowledge in the same manner when so remade), and (2) no Event of Default has
occurred and is continuing or would result from such extension, and

 

(iii)        the Borrowers shall have (A) obtained and delivered to the
Administrative Agent not later than the Initial Maturity Date, one or more
Replacement Interest Rate Cap Agreements from an Approved Counterparty, in a
notional amount equal to the then Outstanding Principal Balance, which
Replacement Interest Rate Cap Agreement(s) shall be (1) effective for the period
commencing on the first day of the applicable extension period and ending on the
last day of the Interest Period in which the First Extended Maturity Date
occurs, and (2) otherwise on the terms set forth in Section 2.18, and (B) caused
the Counterparty to execute and deliver to the Administrative Agent an
Acknowledgment with respect to each such Replacement Interest Rate Cap
Agreement.

 

In the event that an extension is effected pursuant to this Section 2.16(a) (but
subject to the provisions of Sections 2.06 and 6.01), the aggregate principal
amount of all Advances shall be repaid in full ratably to Lenders on the First
Extended Maturity Date. As of the first day after the delivery by the Borrowers
of the extension notice described above that the conditions set forth in the
immediately preceding clauses are satisfied, any and all references in this
Agreement, the Notes, if any, or any of the other Loan Documents to the
“Maturity Date” shall refer to the First Extended Maturity Date.

 

(b)          Second Extension. Provided that the Borrowers shall have extended
the Initial Maturity Date in accordance with Section 2.16(a), at least ten (10)
Business Days but not more than one hundred eighty (180) days prior to the First
Extended Maturity Date, the Borrowers, by written notice to the Administrative
Agent, may request, with respect to the Advances then outstanding, a second
extension of the Maturity Date. The Administrative Agent shall promptly notify
each Lender of such request and the First Extended Maturity Date shall, subject
to the following conditions having been satisfied on or prior to the First
Extended Maturity Date, be extended to the Second Extended Maturity Date:

 

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(i)          the Guarantors shall have executed a written consent to such
extension in substantially the form attached hereto as Exhibit N,

 

(ii)         as of the date of such written notice from the Borrowers, the
following statements shall be true and the Administrative Agent shall have
received for the account of each Lender a certificate signed by a Responsible
Officer of the Borrowers, dated as of such date, stating that: (1) the
representations and warranties contained in Section 4.01 are true and correct in
all material respects on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date), except to the extent modified
by the actions of any Borrower or changes in facts and circumstances that in
each case would not constitute a Default or Event of Default (and the parties
agree that, in connection with the remaking of any such representations and
warranties pursuant to this Section 2.16(b)(ii), any such representations and
warranties that are qualified to knowledge shall continue to be qualified to
knowledge in the same manner when so remade), and (2) no Event of Default has
occurred and is continuing or would result from such extension,

 

(iii)        the Borrowers shall have (A) obtained and delivered to the
Administrative Agent not later than the First Extended Maturity Date, one or
more Replacement Interest Rate Cap Agreements from an Approved Counterparty, in
a notional amount equal to the then Outstanding Principal Balance, which
Replacement Interest Rate Cap Agreement(s) shall be (1) effective for the period
commencing on the first day of the applicable extension period and ending on the
last day of the Interest Period in which the Second Extended Maturity Date
occurs, and (2) otherwise on the terms set forth in Section 2.18, and (B) caused
the Counterparty to execute and deliver to the Administrative Agent an
Acknowledgment with respect to each such Replacement Interest Rate Cap
Agreement,

 

(iv)        the Borrowers shall have delivered to the Administrative Agent
evidence reasonably satisfactory to the Administrative Agent that all PIP Work
in connection with the Initial PIPs has been completed in accordance with the
Initial PIPs, and

 

(v)         in the case of the Additional PIPs, the Borrowers shall have either
(A) delivered to the Administrative Agent evidence reasonably satisfactory to
the Administrative Agent that all PIP Work in connection with such Additional
PIPs has been completed in accordance with such Additional PIPs, or (B)
deposited into the PIP Reserve Account the amount then required to be deposited
in the PIP Reserve Account pursuant to Section 5.01(bb)(v) related to the PIP
Work in connection with such Additional PIPs.

 

In the event that an extension is effected pursuant to this Section 2.16(b) (but
subject to the provisions of Sections 2.06 and 6.01), the aggregate principal
amount of all Advances shall be repaid in full ratably to Lenders on the Second
Extended Maturity as so extended. As of the first day after the delivery by the
Borrowers of the extension notice described above that the conditions set forth
in the immediately preceding clauses are satisfied, any and all references in
this Agreement, the Notes, if any, or any of the other Loan Documents to the
“Maturity Date” shall refer to the Second Extended Maturity Date.

 

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(c)          Third Extension. Provided that the Borrowers shall have extended
the First Extended Maturity Date in accordance with Section 2.16(b), at least
ten (10) Business Days but not more than one hundred eighty (180) days prior to
the Second Extended Maturity Date, the Borrowers, by written notice to the
Administrative Agent, may request, with respect to the Advances then
outstanding, a third extension of the Maturity Date. The Administrative Agent
shall promptly notify each Lender of such request and the Second Extended
Maturity Date shall, subject to the following conditions having been satisfied
on or prior to the Second Extended Maturity Date, be extended to the Third
Extended Maturity Date:

 

(i)          the Guarantors shall have executed a written consent to such
extension in substantially the form attached hereto as Exhibit N,

 

(ii)         as of the date of such written notice from the Borrowers, the
following statements shall be true and the Administrative Agent shall have
received for the account of each Lender a certificate signed by a Responsible
Officer of the Borrowers, dated as of such date, stating that: (1) the
representations and warranties contained in Section 4.01 are true and correct in
all material respects on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date (in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date), except to the extent modified
by the actions of any Borrower or changes in facts and circumstances that in
each case would not constitute a Default or Event of Default (and the parties
agree that, in connection with the remaking of any such representations and
warranties pursuant to this Section 2.16(c)(ii), any such representations and
warranties that are qualified to knowledge shall continue to be qualified to
knowledge in the same manner when so remade), and (2) no Event of Default has
occurred and is continuing or would result from such extension, and

 

(iii)        the Borrowers shall have (A) obtained and delivered to the
Administrative Agent not later than the Second Extended Maturity Date, one or
more Replacement Interest Rate Cap Agreements from an Approved Counterparty, in
a notional amount equal to the then Outstanding Principal Balance, which
Replacement Interest Rate Cap Agreement(s) shall be (1) effective for the period
commencing on the first day of the applicable extension period and ending on the
last day of the Interest Period in which the Third Extended Maturity Date
occurs, and (2) otherwise on the terms set forth in Section 2.18, and (B) caused
the Counterparty to execute and deliver to the Administrative Agent an
Acknowledgment with respect to each such Replacement Interest Rate Cap
Agreement.

 

In the event that an extension is effected pursuant to this Section 2.16(c) (but
subject to the provisions of Sections 2.06 and 6.01), the aggregate principal
amount of all Advances shall be repaid in full ratably to Lenders on the Third
Extended Maturity as so extended. As of the first day after the delivery by the
Borrowers of the extension notice described above that the conditions set forth
in the immediately preceding clauses are satisfied, any and all references in
this Agreement, the Notes, if any, or any of the other Loan Documents to the
“Maturity Date” shall refer to the Third Extended Maturity Date.

 

SECTION 2.17. Defaulting Lenders. (a) Consequences. Notwithstanding anything to
the contrary contained in this Agreement, if any Lender becomes a Defaulting
Lender, then, until such time as that Lender is no longer a Defaulting Lender,
to the extent permitted by applicable Law:

 

(i)          Waivers and Amendments. That Defaulting Lender’s right to approve
or disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in the definition of “Required Lenders” and
Section 9.01.

 

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(ii)         Reallocation of Payments. Any payment of principal, interest, fees
or other amounts received by the Administrative Agent for the account of that
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VII or otherwise, and including any amounts made available to the
Administrative Agent by that Defaulting Lender pursuant to Section 9.05), will
not be paid or distributed to such Defaulting Lender, but will instead be
retained by the Administrative Agent in a segregated non-interest bearing
account until (subject to Section 2.19(b)) the termination of the Commitments
and payment in full of all obligations of the Borrowers hereunder and will be
applied at such time or times as may be determined by the Administrative Agent
as follows: first, to the payment of any amounts owing by that Defaulting Lender
to the Administrative Agent hereunder in such capacity; second, to the payment
of post-default interest and then current interest due and payable to Lenders
hereunder other than Defaulting Lenders, ratably among them in accordance with
the amounts of such interest then due and payable to them, third to the payment
of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably
among them in accordance with the amounts of such fees then due and payable to
them, fourth to the ratable payment of other amounts then due and payable to the
Non-Defaulting Lenders, and fifth after the termination of the Commitments and
payment in full of all obligations of the Borrowers hereunder, to pay amounts
owing under this Agreement to such Defaulting Lender or as a court of competent
jurisdiction may otherwise direct. 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 shall be deemed paid to and redirected by that
Defaulting Lender, and each Lender irrevocably consents hereto.

 

(b)          Defaulting Lender Cure. If the Borrowers and the Administrative
Agent agree in writing in their sole discretion that a Defaulting Lender should
no longer be deemed to be a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein, that Lender will, to the
extent applicable, purchase that portion of outstanding Advances of the other
Lenders or take such other actions as the Administrative Agent may determine to
be necessary to cause the Loan to be held on a pro rata basis by Lenders in
accordance with their Pro Rata Shares, whereupon that 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 Borrowers while
that 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 that Lender’s having been a Defaulting
Lender.

 

(c)          Removal of Agent. Anything herein to the contrary notwithstanding,
if at any time the Required Lenders determine that the Person serving as an
Agent is (without taking into account any provision in the definition of
“Defaulting Lender” requiring notice from the Administrative Agent or any other
party) a Defaulting Lender pursuant to clause (d) of the definition thereof, the
Required Lenders (determined after giving effect to Section 9.01) may by notice
to the Borrowers and such Person remove such Person as an Agent and, in
consultation with the Borrowers, appoint a replacement Agent hereunder. Such
removal will, to the fullest extent permitted by applicable law, be effective on
the earlier of (i) the date a replacement Agent is appointed and (ii) the date
30 days after the giving of such notice by the Required Lenders (regardless of
whether a replacement Agent has been appointed).

 

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SECTION 2.18. Interest Rate Cap Agreements. (a) On the Closing Date, the
Borrowers shall have obtained, and thereafter shall maintain in effect, an
Interest Rate Cap Agreement, which shall be have a term expiring no earlier than
the last day of the Interest Period in which the Initial Maturity Date occurs
and which shall have a notional amount which shall not at any time be less than
the Outstanding Principal Balance. As a condition precedent to each extension of
the Maturity Date pursuant to Section 2.16, the Borrowers shall obtain, and
thereafter shall maintain in effect, the Replacement Interest Rate Cap
Agreements described in Section 2.16(a)(iii), 2.16(b)(iii) or 2.16(c)(iii), as
applicable. Any failure to comply with the preceding two sentences shall be an
Event of Default in accordance with Section 6.01(n). Each Interest Rate Cap
Agreement shall have a strike rate not higher than the (i) Strike Price until
the initial Maturity Date and (ii) thereafter, the Strike Price (Extension
Options). If more than one Interest Rate Cap Agreement and/or Replacement
Interest Rate Cap Agreement exists, such agreements shall collectively have a
notional amount which shall not at any time be less than the Outstanding
Principal Balance.

 

(b)          Pledge and Collateral Assignment. As security for the full and
punctual payment and performance of the Obligations of the Loan Parties under
the Loan Documents when due (whether upon stated maturity, by acceleration,
early termination or otherwise), the Borrowers, as pledgor, hereby pledges,
assigns, hypothecates, transfers and delivers to the Collateral Agent, on behalf
of the Secured Parties, as collateral and hereby grants to the Collateral Agent,
on behalf of the Secured Parties, a continuing first priority Lien on and
security interest in, to and under all of the following whether now owned or
hereafter acquired and whether now existing or hereafter arising (the “Rate Cap
Collateral”): all of the right, title and interest of the applicable Borrowers
in and to (A) the Interest Rate Cap Agreements; (B) all payments, distributions,
disbursements or proceeds due, owing, payable or required to be delivered to the
applicable Borrowers in respect of the Interest Rate Cap Agreements or arising
out of the Interest Rate Cap Agreements, whether as contractual obligations,
damages or otherwise; and (C) all of the Borrowers’ claims, rights, powers,
privileges, authority, options, security interests, Liens and remedies, if any,
under or arising out of the Interest Rate Cap Agreements, in each case including
all accessions and additions to, substitutions for and replacements, products
and proceeds of any or all of the foregoing, such assignment to be evidenced by
the Assignment of Interest Rate Cap Agreement, which shall be delivered by the
Borrowers to the Collateral Agent on the Closing Date.

 

(c)          Covenants.

 

(i)          Each applicable Borrower shall comply with all of its obligations
under the terms and provisions of each Interest Rate Cap Agreement. Subject to
terms hereof, provided no Event of Default has occurred and is continuing, the
Borrowers shall be entitled to exercise all rights, powers and privileges of the
Borrowers under, and to control the prosecution of all claims with respect to,
each Interest Rate Cap Agreement and the other Rate Cap Collateral. The
applicable Borrowers shall take all actions reasonably requested by the
Collateral Agent to enforce the Borrowers’ rights under each Interest Rate Cap
Agreement in the event of a default by the Counterparty thereunder and shall not
waive, amend or otherwise modify any of its rights thereunder.

 

(ii)         The Borrowers shall defend the Collateral Agent’s right, title and
interest in and to the Rate Cap Collateral pledged by the Borrowers pursuant
hereto or in which it has granted a security interest pursuant hereto against
the claims and demands of all other Persons.

 

(iii)        In the event of any downgrade, withdrawal or qualification of the
rating of the Counterparty such that it ceases to qualify as an “Approved
Counterparty”, the Borrowers shall replace the Interest Rate Cap Agreement with
a Replacement Interest Rate Cap Agreement not later than ten (10) Business Days
following receipt of notice from the Administrative Agent or any other Person of
such downgrade, withdrawal or qualification. In the event that the Counterparty
is downgraded below “A-” by S&P or below “A3” by Moody’s, a Replacement Interest
Rate Cap Agreement shall be required regardless of the posting of collateral.

 

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(iv)        In the event that the Borrowers fail to purchase and deliver to the
Administrative Agent the Interest Rate Cap Agreement as and when required
hereunder, the Administrative Agent may purchase the Interest Rate Cap Agreement
and the cost incurred by the Administrative Agent in purchasing the Interest
Rate Cap Agreement shall be paid by the Borrowers to the Administrative Agent
with interest thereon at the Default Rate from the date such cost was incurred
by the Administrative Agent until such cost is paid by the Borrowers to
Administrative Agent.

 

(v)         The Borrowers shall not sell, assign, or otherwise dispose of, or
mortgage, pledge or grant a security interest in, any of the Rate Cap Collateral
or any interest therein, and any sale, assignment, mortgage, pledge or security
interest whatsoever made in violation of this covenant shall be a nullity and of
no force and effect, and upon demand of the Collateral Agent, shall forthwith be
cancelled or satisfied by an appropriate instrument in writing.

 

(vi)        The Borrowers shall not (A) without the prior written consent of the
Administrative Agent, modify, amend or supplement, in any material respect, the
terms of any Interest Rate Cap Agreement, (B) without the prior written consent
of the Administrative Agent, except in accordance with the terms of any Interest
Rate Cap Agreement, cause the termination of any Interest Rate Cap Agreement
prior to its stated maturity date, (C) without the prior written consent of the
Administrative Agent, except as aforesaid, waive or release any obligation of
the Counterparty (or any successor or substitute party to any Interest Rate Cap
Agreement) under any Interest Rate Cap Agreement, (D) without the prior written
consent of the Administrative Agent, consent or agree to any act or omission to
act on the part of the Counterparty (or any successor or substitute party to any
Interest Rate Cap Agreement) which, without such consent or agreement, would
constitute a default under any Interest Rate Cap Agreement, (E) fail to exercise
promptly and diligently each and every material right which it may have under
any Interest Rate Cap Agreement, (F) take or intentionally omit to take any
action or intentionally suffer or permit any action to be omitted or taken, the
taking or omission of which would result in any right of offset against sums
payable under any Interest Rate Cap Agreement or any defense by the Counterparty
(or any successor or substitute party to any Interest Rate Cap Agreement) to
payment or (G) fail to give prompt notice to the Administrative Agent of any
notice of default given by or to the Borrowers under or with respect to the
Interest Rate Cap Agreement, together with a complete copy of such notice.

 

(vii)       In connection with an Interest Rate Cap Agreement, the Borrowers
shall obtain and deliver to the Administrative Agent within fifteen (15)
Business Days after the date of each Advance an opinion of counsel from counsel
(which counsel may be in-house counsel for the Counterparty) for the
Counterparty upon which the Agents and their successors and assigns may rely
(the “Counterparty Opinion”), under New York law and, if the Counterparty is a
non-U.S. entity, the applicable foreign law, which shall provide in relevant
part, that: (A) the issuer is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has the
organizational power and authority to execute and deliver, and to perform its
obligations under, the applicable Interest Rate Cap Agreement; (B) the execution
and delivery of the applicable Interest Rate Cap Agreement by the issuer, and
any other agreement which the issuer has executed and delivered pursuant
thereto, and the performance of its obligations thereunder have been and remain
duly authorized by all necessary action and do not contravene any provision of
its certificate of incorporation or by-laws (or equivalent organizational
documents) or any law, regulation or contractual restriction binding on or
affecting it or its property; (C) all consents, authorizations and approvals
required for the execution and delivery by the issuer of the applicable Interest
Rate Cap Agreement, and any other agreement which the issuer has executed and
delivered pursuant thereto, and the performance of its obligations thereunder
have been obtained and remain in full force and effect, all conditions thereof
have been duly complied with, and no other action by, and no notice to or filing
with any governmental authority or regulatory body is required for such
execution, delivery or performance; and (D) the applicable Interest Rate Cap
Agreement, and any other agreement which the issuer has executed and delivered
pursuant thereto, has been duly executed and delivered by the issuer and
constitutes the legal, valid and binding obligation of the issuer, enforceable
against the issuer in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).

 

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(d)          Powers of the Borrowers Prior to an Event of Default. Subject to
Section 2.18(c)(i), provided no Event of Default has occurred and is continuing,
the Borrowers shall be entitled to exercise all rights, powers and privileges of
the Borrowers under, and to control the prosecution of all claims with respect
to, each Interest Rate Cap Agreement and the other Rate Cap Collateral.

 

(e)          Representations and Warranties. The Borrowers hereby covenant with,
and represent and warrant to, the Agents and Lenders as follows:

 

(i)          Each Interest Rate Cap Agreement constitutes the legal, valid and
binding obligation of the applicable Borrowers, enforceable against the
applicable Borrowers in accordance with its terms, subject only to applicable
bankruptcy, insolvency and similar laws affecting rights of creditors generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).

 

(ii)         The Rate Cap Collateral is free and clear of all claims or security
interests of every nature whatsoever, except such as are created pursuant to
this Agreement and the other Loan Documents, and the Borrowers have the right to
pledge and grant a security interest in the same as herein provided without the
consent of any other Person other than any such consent that has been obtained
and is in full force and effect.

 

(iii)        The Rate Cap Collateral has been duly and validly pledged
hereunder. All consents and approvals required to be obtained by the Loan
Parties for the consummation of the transactions contemplated by this Agreement
have been obtained.

 

(iv)        Giving effect to the aforesaid grant and assignment to the
Collateral Agent, the Collateral Agent has, as of the Closing Date, and as to
Rate Cap Collateral acquired from time to time after such date, shall have, a
valid, and upon proper filing, perfected and continuing first priority lien upon
and security interest in the Rate Cap Collateral, provided that no
representation or warranty is made with respect to the perfected status of the
security interest of the Collateral Agent in the proceeds of Rate Cap Collateral
consisting of “cash proceeds” or “non-cash proceeds” as defined in the UCC
except if, and to the extent, the provisions of Section 9-306 of the UCC shall
be complied with.

 

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(v)         Except for financing statements filed or to be filed in favor of the
Collateral Agent, as secured party, there are no financing statements under the
UCC covering any or all of the Rate Cap Collateral and the Borrowers shall not
permit, without the prior written consent of the Collateral Agent, until payment
in full of all of the Obligations of the Loan Parties under the Loan Documents,
the execution or filing in any public office of any enforceable financing
statement or statements covering any or all of the Rate Cap Collateral, except
financing statements filed or to be filed in favor of Collateral Agent as
secured party.

 

(f)          Payments. If the Borrowers at any time shall be entitled to receive
any payments with respect to any Interest Rate Cap Agreement during the
continuance of any Lockbox Period, pursuant to the Assignment of Interest Rate
Cap Agreement, the Counterparty has agreed to pay such amounts directly to the
Collateral Agent.

 

(g)          Remedies. Subject to the provisions of each Interest Rate Cap
Agreement, if an Event of Default shall occur and then be continuing:

 

(i)          The Collateral Agent, without obligation to resort to any other
security, right or remedy granted under any other agreement or instrument, shall
have the right to, in addition to all rights, powers and remedies of a secured
party pursuant to the UCC, at any time and from time to time, sell, resell,
assign and deliver, in its sole discretion, any or all of the Rate Cap
Collateral (in one or more parcels and at the same or different times) and all
right, title and interest, claim and demand therein and right of redemption
thereof, at public or private sale, for cash, upon credit or for future
delivery, and in connection therewith the Collateral Agent may grant options and
may impose reasonable conditions such as requiring any purchaser to represent
that any “securities” constituting any part of the Rate Cap Collateral are being
purchased for investment only, the Borrowers hereby waiving and releasing any
and all equity or right of redemption to the fullest extent permitted by the UCC
or applicable law. If all or any of the Rate Cap Collateral is sold by the
Collateral Agent upon credit or for future delivery, the Collateral Agent shall
not be liable for the failure of the purchaser to purchase or pay for the same
and, in the event of any such failure, the Collateral Agent may resell such Rate
Cap Collateral. It is expressly agreed that the Collateral Agent may exercise
its rights with respect to less than all of the Rate Cap Collateral, leaving
unexercised its rights with respect to the remainder of the Rate Cap Collateral;
provided, however, that such partial exercise shall in no way restrict or
jeopardize the Collateral Agent’s right to exercise its rights with respect to
all or any other portion of the Rate Cap Collateral at a later time or times.

 

(ii)         The Collateral Agent may exercise, either by itself or by its
nominee or designee, in the name of any Borrower, all of the Collateral Agent’s
rights, powers and remedies in respect of the Rate Cap Collateral, hereunder and
under law.

 

(iii)        The Borrowers hereby irrevocably, in the name of the Borrowers or
otherwise, authorize and empower the Collateral Agent and assign and transfer
unto the Collateral Agent, and constitute and appoint the Collateral Agent their
true and lawful attorney-in-fact, and as its agent, irrevocably, with full power
of substitution for the Borrowers and in the name of the Borrowers, (i) to
exercise and enforce every right, power, remedy, authority, option and privilege
of the Borrowers under each Interest Rate Cap Agreement, including any power to
subordinate or modify each Interest Rate Cap Agreement (but not, unless an Event
of Default exists and is continuing, the right to terminate or cancel any
Interest Rate Cap Agreement), or to give any notices, or to take any action
resulting in such subordination, termination, cancellation or modification and
(ii) in order to more fully vest in the Collateral Agent the rights and remedies
provided for herein, to exercise all of the rights, remedies and powers granted
to the Collateral Agent in this Agreement, and the Borrowers further authorize
and empower the Collateral Agent, as the Borrowers’ attorney-in-fact, and as its
agent, irrevocably, with full power of substitution for the Borrowers and in the
name of the Borrowers, to give any authorization, to furnish any information, to
make any demands, to execute any instruments and to take any and all other
action on behalf of and in the name of the Borrowers which in the opinion of the
Collateral Agent may be necessary or appropriate to be given, furnished, made,
exercised or taken under any Interest Rate Cap Agreement, in order to comply
therewith, to perform the conditions thereof or to prevent or remedy any default
by the Borrowers thereunder or to enforce any of the rights of the Borrowers
thereunder. These powers-of-attorney are irrevocable and coupled with an
interest, and any similar or dissimilar powers heretofore given by the Borrowers
in respect of the Rate Cap Collateral to any other Person are hereby revoked.

 

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(iv)        The Collateral Agent may, without notice to, or assent by, the
Borrowers or any other Person (to the extent permitted by law), but without
affecting any of the Obligations of the Loan Parties under the Loan Documents,
in the name of the Borrowers or in the name of the Collateral Agent, notify the
Counterparty, or if applicable, any other counterparty to any Interest Rate Cap
Agreement, to make payment and performance directly to the Collateral Agent;
extend the time of payment and performance of, compromise or settle for cash,
credit or otherwise, and upon any terms and conditions, any obligations owing to
the Borrowers, or claims of the Borrowers, under any Interest Rate Cap
Agreement; file any claims, commence, maintain or discontinue any actions, suits
or other proceedings deemed by the Collateral Agent necessary or advisable for
the purpose of collecting upon or enforcing any Interest Rate Cap Agreement; and
execute any instrument and do all other things deemed necessary and proper by
the Collateral Agent to protect and preserve and realize upon the Rate Cap
Collateral and the other rights contemplated hereby.

 

(v)         Pursuant to the powers-of-attorney provided for above, the
Collateral Agent may take any action and exercise and execute any instrument
which it may deem necessary or advisable to accomplish the purposes hereof;
provided, however, that the Collateral Agent shall not be permitted to take any
action pursuant to such power-of-attorney that would conflict with any
limitation on the Collateral Agent’s rights with respect to the Rate Cap
Collateral. Without limiting the generality of the foregoing, the Collateral
Agent, after the occurrence and during the continuance of an Event of Default,
shall have the right and power to receive, endorse and collect all checks and
other orders for the payment of money made payable to the Borrowers
representing: (A) any payment of obligations owed pursuant to any Interest Rate
Cap Agreement, (B) interest accruing on any of the Rate Cap Collateral or (C)
any other payment or distribution payable in respect of the Rate Cap Collateral
or any part thereof, and for and in the name, place and stead of the Borrowers,
to execute endorsements, assignments or other instruments of conveyance or
transfer in respect of any property which is or may become a part of the Rate
Cap Collateral hereunder.

 

(vi)        The Collateral Agent may exercise all of the rights and remedies of
a secured party under the UCC.

 

(vii)       Without limiting any other provision of this Agreement or any of the
Loan Parties’ rights hereunder, and without waiving or releasing any Loan Party
from any obligation or default hereunder, the Collateral Agent shall have the
right, but not the obligation, to perform any act or take any appropriate
action, as it, in its reasonable judgment, may deem necessary to protect the
security of this Agreement, to cure such Event of Default or to cause any term,
covenant, condition or obligation required under this Agreement or any Interest
Rate Cap Agreement to be performed or observed by the Borrowers to be promptly
performed or observed on behalf of the Borrowers. All amounts advanced by, or on
behalf of, the Collateral Agent in exercising its rights under this Section
2.18(g)(vii) (including reasonable legal expenses and disbursements incurred in
connection therewith), together with interest thereon at the Default Rate from
the date of each such advance, shall be payable by the Borrowers to the
Collateral Agent upon demand and shall be secured by this Agreement.

 

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(h)          Sales of Rate Cap Collateral. No demand, advertisement or notice,
all of which are, to the fullest extent permitted by law, hereby expressly
waived by the Borrowers, shall be required in connection with any sale or other
disposition of all or any part of the Rate Cap Collateral, except that the
Collateral Agent shall give the Borrowers at least thirty (30) days’ prior
written notice of the time and place of any public sale or of the time when and
the place where any private sale or other disposition is to be made, which
notice the Loan Parties hereby agree is reasonable, all other demands,
advertisements and notices being hereby waived. To the extent permitted by law,
the Collateral Agent shall not be obligated to make any sale of the Rate Cap
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given, and the Collateral Agent may without notice
or publication adjourn any public or private sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. Upon each private sale of the Rate Cap Collateral of a type
customarily sold in a recognized market and upon each public sale, unless
prohibited by any applicable statute which cannot be waived, the Collateral
Agent (or its nominee or designee) may purchase any or all of the Rate Cap
Collateral being sold, free and discharged from any trusts, claims, equity or
right of redemption of the Loan Parties, all of which are hereby waived and
released to the extent permitted by law, and may make payment therefor by credit
against any of the Obligations of the Loan Parties under the Loan Documents in
lieu of cash or any other obligations. In the case of all sales of the Rate Cap
Collateral, public or private, the Borrowers shall pay all reasonable
out-of-pocket costs and expenses of every kind for sale or delivery, including
brokers’ and attorneys’ fees and disbursements and any tax imposed thereon.
However, the proceeds of sale of Rate Cap Collateral shall be available to cover
such costs and expenses, and, after deducting such costs and expenses from the
proceeds of sale, the Collateral Agent shall apply any residue to the payment of
the Obligations of the Loan Parties under the Loan Documents in the order of
priority as set forth in this Agreement.

 

(i)          Public Sales Not Possible. The Borrowers acknowledge that the terms
of the Interest Rate Cap Agreement may prohibit public sales, that the Rate Cap
Collateral may not be of the type appropriately sold at public sales, and that
such sales may be prohibited by law. In light of these considerations, the
Borrowers agree that private sales of the Rate Cap Collateral shall not be
deemed to have been made in a commercially unreasonably manner by mere virtue of
having been made privately.

 

(j)          Receipt of Sale Proceeds. Upon any sale of the Rate Cap Collateral
by the Collateral Agent hereunder (whether by virtue of the power of sale herein
granted, pursuant to judicial process or otherwise), the receipt by the
Collateral Agent or the officer making the sale or the proceeds of such sale
shall be a sufficient discharge to the purchaser or purchasers of the Rate Cap
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Collateral Agent or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

 

(k)          Replacement Interest Rate Cap Agreement. If, in connection with the
Borrowers’ exercise of the extension options pursuant to Section 2.16 hereof,
the Borrowers deliver a Replacement Interest Rate Cap Agreement, all the
provisions of this Section 2.18 applicable to the Interest Rate Cap Agreement
delivered on the Closing Date shall be applicable to the Replacement Interest
Rate Cap Agreement.

 

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SECTION 2.19. Replacement of Lenders. If any Lender requests compensation under
Section 2.10, or if any Loan Party is required to pay any additional amounts to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.12 and, in each case, such Lender has declined or is unable to
designate a different Applicable Lending Office, or if any Lender is a
Defaulting Lender or a Non-Consenting Lender, then the Operating Partnership (on
behalf of the Borrowers) may, at Borrowers’ sole expense (provided that the
Administrative Agent shall cooperate in all reasonable respects with the
Operating Partnership in furtherance thereof, at the Borrowers’ sole expense),
upon notice to such Lender and the Administrative Agent, require such Lender (a
“Departing Lender”) to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by, Sections
9.01(b) and 9.07, as applicable, in each case except to the extent provided in
this Section 2.19), all of its interests, rights (other than its existing rights
to payments pursuant to Section 2.10 or Section 2.12) and obligations under this
Agreement and the other Loan Documents to a Replacement Lender that shall assume
such obligations (which may be another Lender, if a Lender accepts such
assignment), provided that:

 

(a)          the Borrowers shall have paid to the Administrative Agent the
assignment fee (if any) specified in Section 9.07;

 

(b)          such Departing Lender shall have received payment of an amount
equal to the outstanding principal of its Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents from the applicable Replacement Lender (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts);

 

(c)          in the case of any such assignment resulting from a claim for
compensation under Section 2.10 or payments required to be made pursuant to
Section 2.12, such assignment will result in a reduction in such compensation or
payments thereafter;

 

(d)          such assignment does not conflict with applicable law; and

 

(e)          in the case of any assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable Replacement Lender shall have consented to
the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Operating Partnership (on behalf of the Borrowers)
to require such assignment and delegation cease to apply. Each Departing Lender
required to make an assignment pursuant to this Section 2.19 shall promptly
execute and deliver an Assignment and Acceptance with the applicable Replacement
Lender. If such Departing Lender does not execute and deliver to the
Administrative Agent a duly completed Assignment and Acceptance and/or any other
documentation necessary to reflect such replacement within a period of time
deemed reasonable by the Administrative Agent after the later of (i) the date on
which the Replacement Lender executes and delivers such Assignment and
Acceptance and/or such other documentation and (ii) the date on which the
Departing Lender receives all payments described in clause (b) of this Section
2.19, then such Departing Lender shall be deemed to have executed and delivered
such Assignment and Acceptance and/or such other documentation as of such date
and the Operating Partnership (on behalf of the Borrowers) shall be entitled
(but not obligated) to execute and deliver such Assignment and Acceptance and/or
such other documentation on behalf of such Departing Lender.

 

SECTION 2.20. Protective Advances. The Administrative Agent may make, and shall
be reimbursed by Lenders (ratably based upon the Pro Rata Shares on such date)
to the extent not reimbursed by the Borrowers for, Protective Advances pursuant
to Section 5.01(bb), and each Lender shall, upon such reimbursement, be deemed
to have purchased a participation in each Protective Advance based upon the Pro
Rata Share of such Lender on such date. The Borrowers agree to pay on demand all
Protective Advances.

 

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SECTION 2.21. [Intentionally Omitted]. 

 

SECTION 2.22. Reallocation of Lender Pro Rata Shares; No Novation. On the
Closing Date, the advances made under the Existing Loan Agreement shall be
deemed to have been made under this Agreement, without the execution by the
Borrowers or Lenders of any other documentation, and all such advances currently
outstanding shall be deemed to have been simultaneously reallocated among
Lenders as follows:

 

(a)          On the Closing Date, each Lender that will have a greater Pro Rata
Share of the Loan upon the Closing Date than its Pro Rata Share (under and as
defined in the Existing Loan Agreement) of the Loan (under and as defined in the
Existing Loan Agreement) immediately prior to the Closing Date (each, a
“Facility Purchasing Lender”), without executing an Assignment and Acceptance,
shall be deemed to have purchased assignments pro rata from each Lender that
will have a smaller Pro Rata Share of the Loan upon the Closing Date than its
Pro Rata Share (under and as defined in the Existing Loan Agreement) of the Loan
(under and as defined in the Existing Loan Agreement) immediately prior to the
Closing Date (each, a “Facility Selling Lender”) in all such Facility Selling
Lender’s rights and obligations under this Agreement and the other Loan
Documents as a Lender (collectively, the “Facility Assigned Rights and
Obligations”) so that, after giving effect to such assignments, each Lender
shall have its respective Commitment as set forth in Schedule I hereto and a
corresponding Pro Rata Share of all Advances then outstanding under the Loan.
Each such purchase hereunder shall be at par for a purchase price equal to the
principal amount of the loans and without recourse, representation or warranty,
except that each Facility Selling Lender shall be deemed to represent and
warrant to each Facility Purchasing Lender that the Facility Assigned Rights and
Obligations of such Facility Selling Lender are not subject to any Liens created
by that Facility Selling Lender. For the avoidance of doubt, in no event shall
the aggregate amount of each Lender’s Revolving Credit Advances outstanding at
any time exceed its Commitment as set forth in Schedule I hereto.

 

(b)          [Intentionally Omitted].

 

(c)          The Administrative Agent shall calculate the net amount to be paid
or received by each Lender in connection with the assignments effected hereunder
on the Closing Date. Each Lender required to make a payment pursuant to this
Section shall make the net amount of its required payment available to the
Administrative Agent, in same day funds, at the office of the Administrative
Agent not later than 12:00 P.M. (New York time) on the Closing Date. The
Administrative Agent shall distribute on the Closing Date the proceeds of such
amounts to Lenders entitled to receive payments pursuant to this Section, pro
rata in proportion to the amount each such Lender is entitled to receive at the
primary address set forth in Schedule I hereto or at such other address as such
Lender may request in writing to the Administrative Agent.

 

(d)          Nothing in this Agreement shall be construed as a discharge,
extinguishment or novation of the Obligations of the Loan Parties outstanding
under the Existing Loan Agreement or any instruments securing the same, which
Obligations shall remain outstanding under this Agreement after the date hereof
as “Advances” except as expressly modified hereby or by instruments executed
concurrently with this Agreement.

 

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Article III
CONDITIONS PRECEDENT TO CLOSING AND FUNDING

 

SECTION 3.01. Conditions Precedent to Closing . The obligation of the
Administrative Agent and each Lender to execute and deliver this Agreement and
the effectiveness of this Agreement is subject to the satisfaction of the
following conditions precedent on or before the Closing Date:

 

(a)          The Administrative Agent shall have received on or before the
Closing Date the following, each dated such day (unless otherwise specified), in
form and substance satisfactory to the Administrative Agent (unless otherwise
specified) and in sufficient copies for each Lender:

 

(i)          This Agreement duly executed by the Loan Parties and the other
parties thereto.

 

(ii)         UCC, judgment, tax, litigation and bankruptcy searches of a recent
date with respect to each Loan Party, and, in the case of UCC searches, listing
all effective financing statements filed in the jurisdictions of formation of
each such Loan Party and in such other jurisdictions as may be specified by the
Administrative Agent in its reasonable discretion, together with copies of such
financing statements.

 

(iii)        Certified copies of the resolutions of the Board of Directors of
the Parent Guarantor on its behalf and on behalf of each Loan Party for which it
is the ultimate signatory approving the transactions contemplated by the Loan
Documents and each Loan Document to which it or such Loan Party is or is to be a
party, and of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any, with respect
to the transactions under the Loan Documents and each Loan Document to which it
or such Loan Party is or is to be a party.

 

(iv)        A copy of a certificate of the Secretary of State (or equivalent
authority) of the jurisdiction of incorporation, organization or formation of
each Loan Party and of each general partner or managing member (if any) of each
Loan Party, dated reasonably near the Closing Date, certifying, if and to the
extent such certification is generally available for entities of the type of
such Loan Party, (A) as to a true and correct copy of the charter, certificate
of limited partnership, limited liability company agreement or other
organizational document of such Loan Party, general partner or managing member,
as the case may be, and each amendment thereto on file in such Secretary’s
office, (B) that (1) such amendments are the only amendments to the charter,
certificate of limited partnership, limited liability company agreement or other
organizational document, as applicable, of such Loan Party, general partner or
managing member, as the case may be, on file in such Secretary’s office,
(2) such Loan Party, general partner or managing member, as the case may be, has
paid all franchise taxes to the date of such certificate and (C) such Loan
Party, general partner or managing member, as the case may be, is duly
incorporated, organized or formed and in good standing or presently subsisting
under the laws of the jurisdiction of its incorporation, organization or
formation.

 

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(v)         A copy of a certificate of the Secretary of State (or equivalent
authority) of each jurisdiction in which any Loan Party or any general partner
or managing member of a Loan Party owns or leases property or in which the
conduct of its business requires it to qualify or be licensed as a foreign
corporation except where the failure to so qualify or be licensed would not
reasonably be expected to result in a Material Adverse Effect, dated reasonably
near (but prior to) the Closing Date, stating, with respect to each such Loan
Party, general partner or managing member, that such Loan Party, general partner
or managing member, as the case may be, is duly qualified and in good standing
as a foreign corporation, limited partnership or limited liability company in
such State and has filed all annual reports required to be filed to the date of
such certificate.

 

(vi)        A certificate of each Loan Party and of each general partner or
managing member (if any) of each Loan Party, signed on behalf of such Loan
Party, general partner or managing member, as applicable, by its President or
Vice President and its Secretary or any Assistant Secretary (or those of its
general partner or managing member, if applicable), dated the Closing Date (the
statements made in which certificate shall be true on and as of the Closing
Date), certifying as to (A) the absence of any amendments to the constitutive
documents of such Loan Party, general partner or managing member, as applicable,
since the date of the certificate referred to in Section 3.01(a)(iv), (B) a true
and correct copy of the bylaws, operating agreement, partnership agreement or
other governing document of such Loan Party, general partner or managing member,
as applicable, as in effect on the date on which the resolutions referred to in
Section 3.01(a)(iii) were adopted and on the Closing Date, (C) the due
incorporation, organization or formation and good standing or valid existence of
such Loan Party, general partner or managing member, as applicable, as a
corporation, limited liability company or partnership organized under the laws
of the jurisdiction of its incorporation, organization or formation and the
absence of any proceeding for the dissolution or liquidation of such Loan Party,
general partner or managing member, as applicable, (D) the truth of the
representations and warranties contained in the Loan Documents as though made on
and as of the Closing Date (provided that the Loan Parties may update such
representations and warranties in such certificate so long as such updates are
not the result of any violation of any covenant in any Loan Document) and
(E) the absence of any event occurring and continuing, or resulting from the
closing of the Loan on the Closing Date, that constitutes a Default.

 

(vii)       A certificate of the Secretary or an Assistant Secretary of each
Loan Party (or Responsible Officer of the general partner or managing member of
any Loan Party) and of each general partner or managing member (if any) of each
Loan Party certifying the names and true signatures of the officers of such Loan
Party, or of the general partner or managing member of such Loan Party,
authorized to sign each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.

 

(viii)      Such financial, business and other information regarding each Loan
Party and its Subsidiaries and the Collateral Assets as Lenders shall have
reasonably requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters, obligations under
Plans, Multiemployer Plans and Welfare Plans, collective bargaining agreements
and other arrangements with employees, historical operating statements, audited
annual financial statements for the year ending December 31, 2016 of the Parent
Guarantor, interim financial statements dated the end of the most recent fiscal
quarter for which financial statements are available, and financial information
relating the Collateral Assets, including without limitation monthly operating
statements, rent rolls, budgets, letters of intent and tax bills.

 

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(ix)         The Closing Asset Deliverables for all Collateral Assets (other
than the Additional Summit Collateral Assets to the extent that the acquisition
of the Additional Summit Collateral Assets is being funded in part with Delayed
Draw Advances).

 

(x)          An opinion of Cleary Gottlieb Steen & Hamilton LLP, New York
counsel for the Loan Parties, with respect to the matters (and in substantially
the form) set forth in Exhibit E-1 hereto and as to such other matters as any
Lender through the Administrative Agent may reasonably request.

 

(xi)         An opinion of Duane Morris LLP, Maryland counsel for the Loan
Parties, with respect to the matters (and in substantially the form) set forth
in Exhibit E-2 hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request.

 

(xii)        An opinion of Berger Harris LLP, Delaware counsel for the Loan
Parties, with respect to the matters (and in substantially the form) set forth
in Exhibit E-3 hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request.

 

(xiii)       A certificate signed by a Responsible Officer of the Borrowers,
dated the Closing Date, attaching a true and complete copy of the Georgia Tech
Ground Lease, together with all amendments and assignments related thereto.

 

(xiv)      A ground landlord estoppel certificate addressed to the
Administrative Agent and executed by the landlord under the ground lease
relating to the leasehold interest in the Georgia Tech Hotel.

 

(xv)       A certificate signed by a Responsible Officer of the Borrowers, dated
the Closing Date, stating that as of the Closing Date the Loan Parties shall be
in compliance with the covenant contained in Section 5.04, together with
supporting information in form satisfactory to the Administrative Agent showing
the computations used in determining compliance with such covenant.

 

(b)          Each Pledgor shall have (i) complied with the Pledgor SPE
Requirements and the Borrowers shall have provided evidence of such compliance
reasonably satisfactory to the Administrative Agent, (ii) satisfied the “know
your customer” requirements of the Administrative Agent and each Lender, and
(iii) provided evidence to the Administrative Agent reasonably satisfactory to
the Administrative Agent that such Pledgor has (A) delivered to the applicable
issuer of the Pledged Interests an Authorization Statement substantially in the
form of Exhibit A to the applicable Pledgor Security Agreement and (B) caused
such issuer to deliver to the Collateral Agent (I) an Acknowledgement and
Consent substantially in the form of Exhibit B to the applicable Pledgor
Security Agreement and (II) a Transaction Statement substantially in the form of
Exhibit C to the applicable Pledgor Security Agreement, confirming that such
issuer will comply with instructions with respect to the applicable Pledged
Interests originated by the Collateral Agent without further consent or approval
of the applicable Pledgor.

 

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(c)          The Lenders shall be satisfied with the corporate and legal
structure and capitalization of each Loan Party and its Subsidiaries, including
their review of the financial condition, cash flow projection assumptions, terms
and conditions of the charter and bylaws, operating agreement, partnership
agreement or other governing document and business history (including, without
limitation, references, credit and other background reports and searches) of
each Loan Party and Intervening Entity.

 

(d)          The Borrowers shall, upon the reasonable request of any Lender made
at least ten Business Days prior to the Closing Date, provide to such Lender the
documentation and other information so requested in connection with applicable
“know your customer” and anti-money-laundering rules and regulations, including
the Patriot Act, in each case at least five Business Days prior to the Closing
Date.

 

(e)          Before and after giving effect to the transactions contemplated by
the Loan Documents, there shall have occurred no material adverse change in the
business, assets, properties, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Loan Parties since
December 31, 2016.

 

(f)          There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i) would
reasonably be expected to result in a Material Adverse Effect other than the
matters described on Schedule 4.01(f) hereto (the “Material Litigation”) or
(ii) purports to affect the legality, validity or enforceability of any Loan
Document or the consummation of the transactions contemplated thereby, and there
shall have been no material adverse change in the status, or financial effect on
any Loan Party or any of its Subsidiaries, of the Material Litigation from that
described on Schedule 4.01(f) hereto.

 

(g)          All governmental and third party consents and approvals necessary
in connection with the transactions contemplated by the Loan Documents shall
have been obtained (without the imposition of any conditions that are not
acceptable to Lenders) and shall remain in effect, and no law or regulation
shall be applicable in the reasonable judgment of Lenders that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated by the Loan Documents.

 

(h)          The Administrative Agent shall have received evidence satisfactory
to it that (i) the closing of the acquisition of the Additional Summit
Collateral Assets will occur on the same day as the closing and funding of the
Loan (if no Delayed Draw Election Notice was timely delivered by the Borrowers
to the Administrative Agent hereunder), (ii) the Project Gateway Loan has been
or shall simultaneously with the closing of the Loan be closed and been funded
in full, and (iii) the Earnout Amount has been paid in full.

 

(i)          The Administrative Agent shall have received a Delayed Draw
Election Notice from the Borrowers pursuant to Section 2.01(b), if the closing
of the acquisition of the Additional Summit Collateral Assets will not occur on
the same day as the closing and funding of the Loan.

 

(j)          The Administrative Agent shall have received evidence satisfactory
to it that the costs of all PIP Work in connection with the Initial PIP will be
capable of being paid in full on a timely basis from (i) Net Operating Income
less Routine Capital Expenditures (as defined in the Cash Management Agreement),
(ii) the PIP Reserve Funds, and/or (iii) the FF&E PIP Funds.

 

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(k)          The Administrative Agent shall have received evidence satisfactory
to it of the payment in full of the Retiring Debt and the termination of any
security instruments securing such Retiring Debt.

 

(l)          The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.

 

SECTION 3.02. Conditions Precedent to Funding Advances. The obligation of each
Lender to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) shall in each case be subject to the satisfaction of the
conditions set forth in Section 3.01 (to the extent not previously satisfied
pursuant to that Section) and the following further conditions precedent as of
the date of such Borrowing:

 

(a)          The Administrative Agent shall have received on or before the
Closing Date the following, each dated such day (unless otherwise specified), in
form and substance satisfactory to the Administrative Agent (unless otherwise
specified) and (except for the Notes, as to which one original of each shall be
sufficient) in sufficient copies for each Lender:

 

(i)          Notes, duly executed by each applicable Borrower and payable to the
order of each Lender that has requested the same.

 

(ii)         In connection with (A) the initial Borrowing, (1) a Cash Management
Agreement duly executed by the initial Borrowers, the initial TRS Lessees and
the other parties thereto, (2) a Control Agreement duly executed by each TRS
Lessee (excluding the Georgia Tech TRS Lessee) and the other parties thereto,
(3) a Security Agreement duly executed by each initial Borrower and each TRS
Lessee, and (4) each Pledgor Security Agreement duly executed by the applicable
Pledgor, and (B) any Delayed Draw Borrowing, the applicable Additional Security
Deliverables duly executed by the Loan Parties party thereto, in each case
together with:

 

(A)         proper financing statements or amendments to the existing financing
statements under the UCC in form suitable for filing in the jurisdiction(s) of
formation of each Borrower, each TRS Lessee and each Pledgor in order to perfect
and protect the first priority liens and security interests in favor of the
Collateral Agent for the benefit of the Secured Parties created under the
Collateral Documents, covering the Collateral described therein,

 

(B)         UCC, judgment, tax, litigation and bankruptcy searches of a recent
date with respect to each applicable Loan Party, and, in the case of UCC
searches, listing all effective financing statements filed in the jurisdictions
referred to in clause (ii)(A) above and in such other jurisdictions as may be
specified by the Administrative Agent in its reasonable discretion, together
with copies of such financing statements,

 

(C)         evidence of the completion of all other recordings and filings of or
with respect to the Security Agreement, the Pledgor Security Agreements and the
Cash Management Agreement that the Collateral Agent may deem reasonably
necessary or desirable in order to perfect and protect the Liens created thereby
relating to the Collateral,

 

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(D)         copies of the Assigned Agreements referred to in the Security
Agreement (which shall include, without limitation, the Approved Management
Agreement and (other than with respect to the Georgia Tech Hotel) the Approved
Franchise Agreement) and all amendments thereto entered into on or before the
Closing Date with respect to each applicable Collateral Asset, together with
copies of any related management company acknowledgement agreements or owner
agreements executed by the applicable Borrower, the applicable TRS Lessee,
Approved Manager and Approved Franchisor, as applicable, issued in connection
with such Approved Franchise Agreement,

 

(E)         in connection with the initial Borrowing, a fully paid UCC Title
Insurance Policy in amount reasonably acceptable to the Administrative Agent,
issued, coinsured and reinsured by title insurers reasonably acceptable to the
Administrative Agent. The Administrative Agent hereby approves Fidelity National
Title Insurance Company as an acceptable title insurer, and

 

(F)         evidence that all other action that the Collateral Agent may deem
reasonably necessary or desirable in order to perfect and protect the first
priority Liens created under the Security Agreement, the Pledgor Security
Agreements and the Cash Management Agreement has been taken (including, without
limitation, receipt of any applicable duly executed payoff letters or UCC
termination statements).

 

(iii)        Each of the items set forth in clauses (iii) through (viii) of
Section 3.01(a), mutatis mutandis, in each case in respect of each Collateral
Asset that is the subject of the applicable Advance and each Loan Party that
owns an interest in such Collateral Asset, as applicable.

 

(iv)        Mortgages and Assignments of Leases covering the applicable
Collateral Assets (which, in the case of the initial Borrowing, shall exclude
the Additional Summit Collateral Assets if a Delayed Draw Election Notice was
timely given), in each case duly executed by the appropriate Borrowers, together
with in respect of such Collateral Assets:

 

(A)         evidence that counterparts of the Mortgages and Assignments of
Leases have been duly executed, acknowledged and delivered on or before the day
of the applicable Borrowing by the applicable Borrowers and the applicable TRS
Lessees and, in the case of the Assignments of Leases, the applicable TRS
Lessees, and are in form suitable for filing or recording in all filing or
recording offices that the Administrative Agent may deem necessary or desirable
in order to create a valid first and subsisting Lien on the collateral described
therein in favor of the Collateral Agent for the benefit of the Secured Parties
and that all required affidavits, tax forms and filings pertaining to any
applicable documentary stamp, intangible and mortgage recordation taxes have
been executed and delivered by all appropriate parties and are in form suitable
for filing with all applicable governmental authorities,

 

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(B)         fully paid Mortgage Policies in form and substance, with
endorsements (including zoning endorsements where available) and in amount
reasonably acceptable to the Administrative Agent, issued, coinsured and
reinsured by title insurers reasonably acceptable to the Administrative Agent,
insuring the Mortgages to be valid first and subsisting Liens on the property
described therein, free and clear of all defects (including, but not limited to,
mechanics’ and materialmen’s Liens) and encumbrances, excepting only Permitted
Encumbrances (as defined in the Mortgages), and providing for such other
affirmative insurance (including endorsements for future advances under the Loan
Documents and for mechanics’ and materialmen’s Liens) and such coinsurance and
direct access reinsurance as the Administrative Agent may deem necessary or
desirable. The Administrative Agent hereby approves each of Chicago Title
Insurance Company and Fidelity National Title Insurance Company as an acceptable
title insurer,

 

(C)         American Land Title Association/American Congress on Surveying and
Mapping form surveys or, if a survey in such form is not available in the
applicable jurisdiction, such other survey in form and substance acceptable to
the Collateral Agent in its discretion (the “Surveys”), in either case for which
all necessary fees have been paid, dated no more than 60 days before the date of
their delivery to the Administrative Agent, certified to each Agent and the
issuer of the Mortgage Policies in a manner reasonably satisfactory to the
Collateral Agent by a land surveyor duly registered and licensed in the States
in which the property described in such surveys is located and reasonably
acceptable to the Collateral Agent, showing all buildings and other
improvements, any off-site improvements, the location of any easements, parking
spaces, rights of way, building set-back lines and other dimensional regulations
and the absence of encroachments, either by such improvements or on to such
property, and other defects, other than encroachments and other defects
reasonably acceptable to the Collateral Agent, or existing surveys in lieu
thereof so long as each such survey is certified to each Agent and accompanied
by an affidavit of no-change, reasonably satisfactory to the Collateral Agent
and sufficient for the applicable title insurer to eliminate all standard
survey-related exceptions to the applicable Mortgage Policy,

 

(D)         [Intentionally Omitted.];

 

(E)         copies of all licenses, permits and approvals, including, without
limitation, any liquor license, innkeeper’s license and certificate of occupancy
for each applicable Collateral Asset; provided, however, that the absence of any
such licenses, permits, and approvals shall not constitute a failure of a
condition precedent so long as the applicable Borrower (i) has made reasonable
arrangements (including, without limitation, obtaining an interim beverage
agreement or other similar arrangement permitting the use of another party’s
liquor license) to ensure that the applicable Collateral Asset shall be on the
date of the applicable Borrowing, and shall thereafter remain, in compliance
with all applicable material Legal Requirements relating to such licenses,
permits, and approvals, and (ii) is actively making commercially reasonable
efforts to promptly obtain such licenses, permits, and approvals,

 

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(F)         copies of each Approved Management Agreement and (other than with
respect to the Georgia Tech Hotel) Approved Franchise Agreement and all
amendments thereto entered into with respect to each applicable Collateral
Asset,

 

(G)         copies of all Material Leases, Operating Leases and Material
Contracts relating to each applicable Collateral Asset,

 

(H)         copies of all Liens on each applicable Collateral Asset, including,
without limitation, any reciprocal easement agreements, easements and other
items of record,

 

(I)         a Subordination of Management Agreement executed and delivered by
the Approved Manager of each applicable Collateral Asset,

 

(J)         a Franchise Comfort Letter executed and delivered by the Approved
Franchisor of each such Collateral Asset (other than the Georgia Tech Hotel),

 

(K)         if requested by the Administrative Agent, estoppel certificates from
the counterparties to any material reciprocal easement agreements affecting each
such Collateral Asset, in form and substance reasonably acceptable to the
Collateral Agent (provided that an estoppel certificate in the form specified or
provided in the applicable reciprocal easement agreement shall be deemed to be
acceptable to the Collateral Agent), provided that such reciprocal easement
agreements by their terms or the Mortgage Policy are not subordinate to the
Mortgage and provided further that the Administrative Agent may waive the
requirement for the delivery of such estoppel certificates with respect to any
particular Collateral Asset in its reasonable discretion, and

 

(L)         such other consents, agreements, and confirmations of third parties
as the Administrative Agent may deem reasonably necessary or desirable and
evidence that all other action that the Administrative Agent may deem reasonably
necessary or desirable in order to create valid first and subsisting Liens on
the property described in the Mortgages has been taken.

 

(v)         Evidence of insurance (which may consist of binders or certificates
of insurance) in respect of such Collateral Asset and the applicable Borrower
owner thereof naming the Administrative Agent as loss payee and additional
insured with such responsible and reputable insurance companies or associations,
and in such amounts and covering such risks, as is reasonably satisfactory to
Lenders, including, without limitation, the insurance required by the terms of
Section 5.01(d), the Security Agreement and the Mortgages.

 

(vi)        A customary enforceability opinion of local counsel for the
applicable Borrower and applicable TRS Lessee in the state in which each
Collateral Asset is located, in form and substance reasonably acceptable to the
Administrative Agent.

 

(vii)       A customary opinion of New York counsel for the applicable Borrowers
and applicable TRS Lessees covering enforceability of the Loan Documents to be
executed by such Borrowers and TRS Lessees and creation and perfection of Liens
(in each case, to the extent such opinions are not already provided pursuant to
clause (vi) of Section 3.01(a)), in form and substance reasonably acceptable to
the Administrative Agent.

 

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(viii)      A customary corporate formalities opinion of local counsel for the
applicable Borrowers and applicable TRS Lessees in the states in which such
Borrowers and TRS Lessees that own or lease a Collateral Asset are formed or
organized, in form and substance reasonably acceptable to the Administrative
Agent.

 

(ix)         The Flood Insurance Documents.

 

(x)          An Appraisal of each applicable Collateral Asset.

 

(b)          The Administrative Agent shall have received for the account of
such Lender, a certificate signed by a Responsible Officer of the Borrowers,
dated the date of such Borrowing, stating the following (which statements shall
be true and correct) that: (A) the representations and warranties contained in
each Loan Document are true and correct in all material respects (unless
qualified as to materiality or Material Adverse Effect, in which case such
representations and warranties shall be true and correct in all respects)
(except to the extent modified by the actions of any Borrower or changes in
facts and circumstances that in each case would not constitute a Default or
Event of Default) on and as of such date, before and after giving effect to (1)
such Borrowing, and (2) the application of the proceeds therefrom, as though
made on and as of such date; and (B) no Default or Event of Default has occurred
and is continuing, or would result from (1) such Borrowing or (2) from the
application of the proceeds therefrom. In connection with the remaking of any
such representations and warranties pursuant to this Section 3.02(b), the
parties agree that any such representations and warranties that are qualified to
knowledge shall continue to be qualified to knowledge in the same manner when so
remade.

 

(c)          Each Borrower shall have (i) complied with the Borrower SPE
Requirements and provided evidence of such compliance reasonably satisfactory to
the Administrative Agent, and (ii) satisfied the “know your customer”
requirements of the Administrative Agent and each Lender.

 

(d)          Each TRS Lessee shall have complied with the TRS Lessee SPE
Requirements and the Borrower shall have provided evidence of such compliance
reasonably satisfactory to the Administrative Agent.

 

(e)          The Borrowers shall, upon the reasonable request of any Lender made
at least ten Business Days prior to the date of the applicable Borrowing,
provide to such Lender the documentation and other information so requested in
connection with applicable “know your customer” and anti-money-laundering rules
and regulations, including the Patriot Act, in each case at least five Business
Days prior to the date of such Borrowing.

 

(f)          The Borrowers shall have executed and delivered to the
Administrative Agent a duly executed closing statement in form and substance
acceptable to the Administrative Agent.

 

(g)          The Borrowers shall have paid all accrued fees of the Arrangers,
the Agents and Lenders and all reasonable, out-of-pocket expenses of the
Arrangers and the Agents (including the reasonable fees and expenses of counsel
to the Arrangers and the Agents).

 

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(h)          The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.

 

(i)          In respect of any Delayed Draw Borrowing, the Administrative Agent
shall have received for the account of each Lender a duly executed Notice of
Borrowing dated not later than three (3) Business Days prior to the date of such
Delayed Draw Borrowing.

 

(j)          In respect of any Delayed Draw Borrowing, the Administrative Agent
shall have received the Closing Asset Deliverables for all of the Additional
Summit Collateral Assets, from all Additional Borrowers and all additional TRS
Lessees.

 

(k)          In respect of any Delayed Draw Borrowing, the Administrative Agent
shall have received evidence satisfactory to it that (i) the closing of the
acquisition of the Additional Summit Collateral Assets will occur on the same
day as with the funding of the Delayed Draw Advances and (ii) each Additional
Summit Collateral Asset is branded as described on Part 2 of Schedule XIV.

 

SECTION 3.03. Determinations Under Sections 3.01 and 3.02. For purposes of
determining compliance with the conditions specified in Sections 3.01 and 3.02,
each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to Lenders unless an officer of
the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the Closing
Date specifying its objection thereto and such Lender shall not have made
available to the Administrative Agent such Lender’s ratable portion of the
Borrowing on the Closing Date.

 

Article IV
REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01. Representations and Warranties of the Borrowers. Each Borrower
represents and warrants as follows:

 

(a)          Organization and Powers; Qualifications and Good Standing. Each
Loan Party and each Intervening Entity and each general partner or managing
member, if any, of each Loan Party (i) is a corporation, limited liability
company or partnership duly incorporated, organized or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
organization or formation, (ii) is duly qualified and in good standing as a
foreign corporation, limited liability company or partnership in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not reasonably be expected to result in a Material
Adverse Effect and (iii) has all requisite corporate, limited liability company
or partnership power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted. All of the outstanding Equity Interests in each Borrower have been
validly issued, are fully paid and non-assessable. The Parent Guarantor directly
or indirectly owns all of the general partnership interests in the Operating
Partnership and the Parent Guarantor owns all of the limited partnership
interests in the Operating Partnership, except for the Class C units in the
Operating Partnership owned by Brookfield Investor and the special general
partnership interest in the Operating Partnership owned by BSREP II Hospitality
II Special GP OP LLC, a Delaware limited liability company. All Equity Interests
in the Operating Partnership owned by the Parent Guarantor and all Equity
Interests in each Borrower are owned free and clear of all Liens. The Parent
Guarantor is organized in conformity with the requirements for qualification as
a REIT under the Internal Revenue Code, and its method of operation enables it
to meet the requirements for qualification and taxation as a REIT under the
Internal Revenue Code.

 

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(b)          Subsidiaries. Set forth on Schedule 4.01(b) hereto is an
organizational chart showing the Loan Parties and all Subsidiaries of each
Borrower as of the Closing Date indicating, as to each Loan Party or Subsidiary,
its respective jurisdiction of incorporation, organization or formation, and the
percentage of Equity Interests owned (directly or indirectly) in such Loan Party
or Subsidiary as of the Closing Date. All of the outstanding Equity Interests in
each Loan Party and each Intervening Entity have been validly issued, are fully
paid and non-assessable and to the extent owned by such Loan Party or one or
more Intervening Entities, are owned by such Loan Party or Intervening Entity
free and clear of all Liens, except for Liens created under the Loan Documents.

 

(c)          Due Authorization; No Conflict. The execution and delivery by each
Loan Party and of each general partner or managing member (if any) of each Loan
Party of each Loan Document to which it is or is to be a party, and the
performance of its obligations thereunder and the other transactions
contemplated by the Loan Documents, are within the corporate, limited liability
company or partnership powers of such Loan Party, general partner or managing
member, have been duly authorized by all necessary corporate, limited liability
company or partnership action, and do not (i) contravene the charter or bylaws,
operating agreement, partnership agreement or other governing document of such
Loan Party, general partner or managing member, (ii) violate any law, rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default or require any payment to be made under, any Material
Contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any Intervening Entity or any
of their properties, or any general partner or managing member of any Loan Party
or (iv) except for the Liens created under the Loan Documents, result in or
require the creation or imposition of any Lien upon or with respect to any of
the properties of any Loan Party. Neither any Loan Party nor any Intervening
Entity is in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or other instrument,
the violation or breach of which would reasonably be expected to result in a
Material Adverse Effect.

 

(d)          Authorizations and Consents. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority or
regulatory body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party or any general
partner or managing member of any Loan Party of any Loan Document to which it is
or is to be a party or for the consummation the transactions contemplated by the
Loan Documents, (ii) the grant by any Loan Party (or the general partner or
managing member of such Loan Party) of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens created
under the Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by any Agent or any Lender of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for authorizations, approvals, actions, notices and
filings which have been duly obtained, taken, given or made and are in full
force and effect.

 

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(e)          Binding Obligation. This Agreement has been, and each other Loan
Document when delivered hereunder will have been, duly executed and delivered by
each Loan Party and general partner or managing member (if any) of each Loan
Party that is a party thereto. This Agreement is, and each other Loan Document
when delivered hereunder will be, the legal, valid and binding obligation of
each Loan Party and general partner or managing member (if any) of each Loan
Party thereto, enforceable against such Loan Party, general partner or managing
member, as the case may be, in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general principles of equity.

 

(f)          Litigation. There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any Intervening Entity or any general
partner or managing member (if any) of any Loan Party, including any
Environmental Action, pending or, to the knowledge of each Borrower, threatened
before any court, governmental agency or arbitrator that (i) would reasonably be
expected to result in a Material Adverse Effect (other than the Material
Litigation) or (ii) purports to affect the legality, validity or enforceability
of any Loan Document or the transactions contemplated by the Loan Documents, and
there has been no material adverse change in the status, or financial effect on
any Loan Party or any Intervening Entity or any general partner or managing
member (if any) of any Loan Party, of the Material Litigation from that
described on Schedule 4.01(f) hereto.

 

(g)          Financial Condition. The Consolidated balance sheets of the Parent
Guarantor as at December 31, 2016 and the related Consolidated statements of
income and Consolidated statements of cash flows of the Parent Guarantor for the
fiscal year then ended, accompanied by opinions of KPMG LLP, independent public
accountants, copies of which have been furnished to each Lender, fairly present
in all material respects the Consolidated financial condition of the Parent
Guarantor as at such dates and the Consolidated results of operations of the
Parent Guarantor for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis and, as
applicable, properly apply the pro forma adjustments, if any, to the historical
amounts in the compilation of those statements. Since December 31, 2016 there
has been no Material Adverse Change.

 

(h)          Forecasts. The Consolidated forecasted balance sheets, statements
of income and statements of cash flows of the Parent Guarantor and its
Consolidated Subsidiaries delivered to Lenders pursuant to Section 5.03 were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were believed by the Parent Guarantor to be reasonable at the time
(it being understood and agreed that any forward looking information is subject
to uncertainties and contingencies, some of which are or may be beyond the
Parent Guarantor’s control, that no assurance is given by any Loan Party that
any particular projections will be realized, that actual results may differ and
that such differences may be material, and that such assumptions may, in
retrospect, be deemed to have been unreasonable when made).

 

(i)          Full Disclosure. No written information, exhibit or report
furnished by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the negotiation and syndication of the Loan Documents
or pursuant to the terms of the Loan Documents (including the documents and
agreements delivered pursuant to Section 3.01) contained any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements made therein not materially misleading in light of all of the
information disclosed. The Borrowers have disclosed to the Administrative Agent,
in writing, any and all existing facts that have or may have (to the extent any
of the Borrowers can now reasonably foresee) a Material Adverse Effect;
provided, however, that the Borrowers are not obligated to report on the
potential Material Adverse Effect of any general economic condition.

 

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(j)          Margin Regulations; Not a Foreign Person. No Loan Party is engaged
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no proceeds of any Advance will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. No Borrower is a foreign person within the meaning of
§ 1445(f)(3) of the Code.

 

(k)          Certain Governmental Regulations. Neither any Loan Party nor any
general partner or managing member of any Loan Party, as applicable, is an
“investment company”, or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company”, as such terms are defined in the
Investment Company Act of 1940, as amended. Without limiting the generality of
the foregoing, each Loan Party and each general partner or managing member of
any Loan Party, as applicable: (i) is primarily engaged, directly or through a
wholly-owned subsidiary or subsidiaries, in a business or businesses other than
that of (A) investing, reinvesting, owning, holding or trading in securities or
(B) issuing face-amount certificates of the installment type; (ii) is not
engaged in, does not propose to engage in and does not hold itself out as being
engaged in the business of (A) investing, reinvesting, owning, holding or
trading in securities or (B) issuing face-amount certificates of the installment
type; (iii) does not own or propose to acquire investment securities (as defined
in the Investment Company Act of 1940, as amended) having a value exceeding
forty percent (40%) of the value of such company’s total assets (exclusive of
government securities and cash items) on an unconsolidated basis; (iv) has not
in the past been engaged in the business of issuing face-amount certificates of
the installment type; and (v) does not have any outstanding face-amount
certificates of the installment type. None of the making of any Advances or the
application of the proceeds or repayment thereof by any Borrower, or the
consummation of the other transactions contemplated by the Loan Documents, will
violate any provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.

 

(l)          Materially Adverse Agreements. No Guarantor is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter, corporate, partnership, membership or
other governing restriction that would reasonably be expected to result in a
Material Adverse Effect (absent a material default under a Material Contract).
None of any Borrower or any TRS Lessee has any material financial obligation
(contingent or otherwise) under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any Borrower or any TRS
Lessee is a party or by which any Borrower, any TRS Lessee, or any Collateral
Asset is otherwise bound, other than (i) obligations incurred in the ordinary
course of the operation of the Collateral Assets, (ii) obligations under the
Loan Documents, and (iii) obligations disclosed in the financial statements
delivered to Lender prior to the Closing Date.

 

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(m)          Perfection and Priority of Security Interests. All filings and
other actions necessary to perfect and protect the security interest in the
Collateral created under the Collateral Documents have been duly made or taken
and are in full force and effect, and the Collateral Documents create in favor
of the Collateral Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority security
interest in the Collateral, securing the payment of the Secured Obligations, and
all filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken. The Mortgages, when properly recorded in
the appropriate records, and Collateral Documents, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first mortgage lien on the
Collateral Assets, subject only to Permitted Liens and (b) perfected security
interests in and to, and perfected collateral assignments of, all personalty
(including the Tenancy Leases and the Operating Leases), all in accordance with
the terms thereof, in each case subject only to any applicable Permitted Liens.
The Borrowers, the TRS Lessees and the Pledgors, as applicable, are the legal
and beneficial owners of the Collateral free and clear of any Lien, except for
Permitted Liens and the Liens created under the Loan Documents. All transfer
taxes, deed stamps, intangible taxes or other amounts in the nature of transfer
taxes required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the transfer of any Collateral Asset to
the applicable Borrower have been paid and the granting and recording of the
Mortgage required to be filed in connection with the Loan. All mortgage,
mortgage recording, stamp, intangible or other similar tax required to be paid
by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Mortgages, have been paid, and, under current Legal
Requirements, each Mortgage is enforceable against the applicable Borrower in
accordance with its terms by the Collateral Agent (or any subsequent holder
thereof) subject only to applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally, and subject as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law.

 

(n)          Existing Debt. As of the Closing Date, no Borrower has any
outstanding Indebtedness, except as set forth on Schedule 4.01(n).

 

(o)          Liens. Set forth on Schedule 4.01(o) hereto is a complete and
accurate list of (i) all Liens on the property or assets of any Borrower that
directly or indirectly owns any Collateral Asset securing Debt for Borrowed
Money, and (ii) all Liens with a principal balance in excess of $250,000 on the
property or assets of any Borrower securing Debt for Borrowed Money; in each
case showing as of the Closing Date the lienholder thereof, the principal amount
of the obligations secured thereby and the property or assets of such Borrower
subject thereto; provided, however, that easements and other real property
restrictions, covenants and conditions of record (exclusive of Liens securing
Debt) and the Liens created under the Loan Documents shall not be listed on
Schedule 4.01(o).

 

(p)          Real Property; Leases. (i) Set forth on Part I of Schedule 4.01(p)
hereto is a complete and accurate list of all Real Property owned in fee or
leasehold by any Borrower, showing as of the Closing Date, and as of each other
date such Schedule 4.01(p) is required to be supplemented hereunder, the street
address, state and record owner thereof and whether the interest in such Real
Property is a fee or leasehold interest. Each such Borrower has fee simple title
to such Real Property owned by it, free and clear of all Liens, other than
existing Liens and Liens permitted under Section 5.02(a), which title is
insurable without the payment of additional, non-customary title insurance
premiums.

 

(ii)          Set forth on Part II of Schedule 4.01(p) hereto is a complete and
accurate list of any Operating Leases in which any Borrower is a lessor, as of
the Closing Date, and as of each other date such Schedule 4.01(p) is required to
be supplemented hereunder, the street address, state, lessor, lessee, and record
owner thereof. Each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms. There are no leases of
Real Property under which any Borrower is the lessee.

 

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(iii)         Except as set forth on Part III of Schedule 4.01(p), each
Collateral Asset has rights of access to public ways and is served by water,
sewer, sanitary sewer and storm drain facilities adequate to service the
Collateral Asset for its intended uses. To the Borrowers’ knowledge, except as
set forth on Part III of Schedule 4.01(p), all utilities necessary to the
existing uses of the Collateral Assets are located either in the public
right-of-way abutting the Collateral Assets (which are connected so as to serve
the Collateral Assets without passing over other property) or in recorded
easements serving the applicable Collateral Assets. Except as set forth on Part
III of Schedule 4.01(p), all roads necessary for the use of the Collateral
Assets for their current purposes have been completed and, if necessary,
dedicated to public use.

 

(iv)         Except as set forth on Part IV of Schedule 4.01(p), each Collateral
Asset is comprised of one (1) or more contiguous parcels which constitute a
separate tax lot or lots and does not constitute or include a portion of any
other tax lot not a part of such Collateral Asset.

 

(v)          Except as set forth on Part V of Schedule 4.01(p), to the
Borrowers’ knowledge, there are no pending or proposed special or other
assessments for public improvements or otherwise affecting any Collateral Asset,
nor are there any contemplated improvements to any Collateral Assets that may
result in such special or other assessments.

 

(vi)         The Borrowers have heretofore delivered to the Administrative Agent
true and complete copies of all Tenancy Leases and Operating Leases and any and
all amendments or modifications thereof. No tenant under any Tenancy Lease has a
right or option pursuant to such Tenancy Lease or otherwise to purchase all or
any part of the property of which the leased premises are a part.

 

(vii)        Except as set forth on Part VI of Schedule 4.01(p), each Collateral
Asset is used exclusively for hotel purposes and other appurtenant and related
uses.

 

(viii)       To the Borrowers’ knowledge, except as disclosed on the Surveys and
except as set forth on Part VII of Schedule 4.01(p), all of the Improvements lie
wholly within the boundaries and building restriction lines of the applicable
Real Property, and no improvements on adjoining properties encroach upon the
Real Property, and no easements or other encumbrances upon the Real Property
encroach upon any of the Improvements, so as to have a material adverse effect
on the value or marketability of the Real Property except those which are
insured against by the applicable Mortgage Policy.

 

(ix)          Each Collateral Asset is operated and managed by an Approved
Manager pursuant to an Approved Management Agreement.

 

(x)          Each Collateral Asset (other than the Georgia Tech Hotel) is
licensed or franchised pursuant to an Approved Franchise Agreement with an
Approved Franchisor, subject to Section 5.01(q).

 

(xi)          Each Initial PIP is appended to an Approved Franchise Agreement
and the copy of such Approved Franchise Agreement heretofore delivered to the
Administrative Agent by the Borrowers is true, correct and complete in all
material respects. The timelines for completion of each Initial PIP and the PIP
Completion Dates are accurate indications of the expected timelines for
completing the applicable Initial PIP as currently required by the applicable
Approved Franchisor. Each Initial PIP has been approved by the applicable
Borrower and the applicable Approved Franchisor. No Borrower has received any
written notice or demand from any Approved Franchisor demanding any repair,
maintenance, alterations or improvement to any Collateral Asset other than as
specifically identified in an Initial PIP.

 

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(xii)          No Collateral Asset (other than the Georgia Tech Hotel) is
subject to any ground lease.

 

(q)          Environmental Matters. (i) Except as otherwise set forth on Part I
of Schedule 4.01(q) hereto or in any environmental assessment report delivered
by the any Loan Party to the Administrative Agent, the operations and properties
of each Borrower comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past material non-compliance
with such Environmental Laws and Environmental Permits has been resolved without
ongoing material obligations or costs, and, to the knowledge of each Borrower,
no circumstances exist that would be reasonably likely to (A) form the basis of
an Environmental Action against any Borrower or any of its properties that would
have a Material Adverse Effect or (B) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability under any
Environmental Law.

 

(ii)          Except as otherwise set forth on Part II of Schedule 4.01(q)
hereto or in any environmental assessment report delivered by any Loan Party to
the Administrative Agent, none of the properties currently or formerly owned or
operated by any Borrower is listed or, to the knowledge of each Borrower and its
Subsidiaries, proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or is adjacent to any such listed property; to the
knowledge of each Borrower, there are no underground or above ground storage
tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed on any
property currently owned or operated by any Borrower; to the knowledge of each
Borrower, there is no asbestos or asbestos-containing material on any property
currently owned or operated by any Borrower except for any non-friable
asbestos-containing material that is being managed pursuant to, and in
compliance with, an operations and maintenance plan and that does not currently
require removal, remediation, abatement or encapsulation under Environmental
Law; and, to the knowledge of each Borrower, Hazardous Materials have not been
released, discharged or disposed of in any material amount or in violation of
any Environmental Law or Environmental Permit on any property currently owned or
operated by any Borrower or, to the knowledge of each Borrower, during the
period of their ownership or operation thereof, on any property formerly owned
or operated by any Borrower.

 

(iii)          Except as otherwise set forth on Part III of Schedule 4.01(q)
hereto or in any environmental assessment report delivered by any Loan Party to
the Administrative Agent, no Borrower is undertaking, and has not completed,
either individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any governmental or regulatory authority or the requirements of any
Environmental Law; to the knowledge of each Borrower, all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by any Borrower have been
disposed of in a manner not reasonably expected to result in a Material Adverse
Effect; and, with respect to any property formerly owned or operated by any
Borrower, all Hazardous Materials generated, used, treated, handled, stored or
transported by or, to the knowledge of each Borrower, on behalf of any Borrower
have been disposed of in a manner that would not reasonably be expected to
result in a Material Adverse Effect.

 

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(r)          Compliance with Laws. Each Loan Party and each Intervening Entity
is in compliance with all Legal Requirements (including, without limitation, the
Securities Act and the Securities Exchange Act, and the applicable rules and
regulations thereunder, state securities law and “Blue Sky” laws) applicable to
it and its business, where the failure to so comply would reasonably be expected
to result in a Material Adverse Effect.

 

(s)          Force Majeure. Neither the business nor the Collateral Assets of
any Loan Party or any Intervening Entity are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that would reasonably be expected to
result in a Material Adverse Effect.

 

(t)          Loan Parties’ Credit Decisions. Each Loan Party has, independently
and without reliance upon any Agent or any Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement (and in the case of the Guarantors, to
give the guaranty under this Agreement) and each other Loan Document to which it
is or is to be a party, and each Loan Party has established adequate means of
obtaining from each other Loan Party on a continuing basis information
pertaining to, and is now and on a continuing basis will be completely familiar
with, the business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.

 

(u)          Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent. To the Borrowers’ knowledge, no petition for bankruptcy
has been filed against any Loan Party. No Loan Party, is contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of such entity’s
assets or property, and Borrower has no knowledge of any Person contemplating
the filing of any such petition against any Loan Party.

 

(v)          Sarbanes-Oxley. No Loan Party has made any extension of credit to
any of its directors or executive officers in contravention of any applicable
restrictions set forth in Section 402(a) of Sarbanes-Oxley.

 

(w)          ERISA Matters. (i) Set forth on Schedule 4.01(w) hereto is a
complete and accurate list of all Plans and Welfare Plans which list may be
updated by the Loan Parties from time to time upon notice to the Administrative
Agent.

 

(ii)          Except as would not reasonably be expected to result in a
liability to a Loan Party of an amount equal to or greater than $5,000,000.00,
no ERISA Event has occurred within the preceding five plan years or is
reasonably expected to occur with respect to any Plan that has resulted in or is
reasonably expected to result in a material liability of any Loan Party or any
ERISA Affiliate.

 

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(iii)          Except as would not reasonably be expected to result in a
liability to a Loan Party of an amount equal to or greater than $5,000,000.00,
Schedule B (Actuarial Information) to the most recent annual report (Form 5500
Series) for each Plan, copies of which have been filed with the Internal Revenue
Service and furnished to Lenders, is complete and accurate and fairly presents
the funding status of such Plan as of the date of such Schedule B, and since the
date of such Schedule B there has been no material adverse change in such
funding status.

 

(iv)          Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan
in an amount equal to or greater than $5,000,000.00.

 

(v)          Except as would not reasonably be expected to result in a liability
to a Loan Party of an amount equal to or greater than $5,000,000.00, neither any
Loan Party nor any ERISA Affiliate has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated, within
the meaning of Title IV of ERISA.

 

(x)           OFAC; Patriot Act. None of the Borrowers, any Guarantor, or any of
their respective Subsidiaries or, to their knowledge, any director, officer,
employee, agent or Affiliate thereof, is a Person that is, or is owned or
controlled by Persons that are: (i) the subject of any sanctions administered or
enforced by the U.S. Department of the Treasury’s Office of Foreign Assets
Control (“OFAC”), the U.S. Department of State, the United Nations Security
Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions
authority (collectively, “Sanctions”), or (ii) located, organized or resident in
a country or territory that is, or whose government is, the subject of
Sanctions. None of any Borrower or any of its Subsidiaries have within the
preceding five years knowingly engaged in, or is now knowingly engaged in, any
dealings or transactions with any Person, or in any country or territory, that
at the time of the dealing or transaction is or was, or whose government is or
was, the subject of Sanctions. No portion of any Collateral Asset has been or
will be purchased with proceeds of any illegal activity. To the extent
applicable, each of the Loan Parties and their Subsidiaries is in compliance in
all material respects with (i) the Trading with the Enemy Act, as amended, and
each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended), and any other enabling
legislation or executive order relating thereto, and (ii) the Patriot Act.

 

(y)          Anti-Corruption Laws. Each Loan Party and its Subsidiaries and, to
the knowledge of each such Loan Party, their respective directors, officers and
employees and the agents of such Loan Party and its Subsidiaries, are in
compliance with the Anti-Corruption Laws in all material respects. Each Loan
Party and its Subsidiaries have instituted and maintain policies and procedures
designed to promote and achieve continued compliance therewith.

 

(z)          Purchase Agreements. The Borrowers have heretofore delivered to the
Administrative Agent correct and complete copies of all Purchase Agreements and
all modifications and assignments thereof.

 

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(aa)         Improvements. To the Borrowers’ knowledge, except as expressly
disclosed in the physical conditions reports or the property improvement plans
in each case delivered to the Administrative Agent on or prior the Closing Date,
each Collateral Asset, including, without limitation, all buildings,
Improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects; to the knowledge of the Borrowers and except as
disclosed in such reports, there exists no structural or other material defects
or damages in or to any Collateral Asset, whether latent or otherwise, and no
Borrower has received any written notice from any insurance company or bonding
company of any defects or inadequacies in any Collateral Asset, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

 

(bb)        Material Contracts. Except to the extent set forth in certain
quality assurance letters delivered in connection with the Approved Franchise
Agreements and provided to the Administrative Agent prior to the Closing Date,
no event of default by any Borrower, any TRS Lessee or any Subsidiary of any of
the foregoing exists under any Material Contract to which any Borrower, any TRS
Lessee or any such Subsidiary is a party.

 

(cc)         Reciprocal Easement Agreements. To the Borrowers’ knowledge, no
default or any event that would constitute an event of default but for the
requirement that notice be given or time elapse or both currently exists under
any reciprocal easement agreement or other similar agreement relating to any of
the Collateral Assets which default or event would reasonably be expected to
have a Material Adverse Effect.

 

(dd)        Casualty and Condemnation. To the Borrowers’ knowledge, except as
expressly disclosed in the zoning reports delivered on or prior the Closing
Date, none of the Collateral Assets is affected by any material Casualty,
Condemnation or pending or threatened Condemnation.

 

(ee)        Taxes. The Borrowers and their Subsidiaries have filed all Tax
returns which are required to be filed and have paid all Taxes due pursuant to
such returns or pursuant to any assessment received by the Borrowers or any of
its Subsidiaries except (i) such Taxes, if any, that are subject to a Good Faith
Contest and (ii) with respect to the Subsidiaries, to the extent the failure to
so file any such returns or to pay any such Taxes could not reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, no Tax liens
have been field and no claims are being asserted with respect to such Taxes. The
charges, accruals and reserves on the books of the Borrowers and their
Subsidiaries, taken as a whole, in respect of any Taxes, are adequate.

 

(ff)          Intellectual Property. Except as could not reasonably be expect to
have a Material Adverse Effect, and subject to the terms and conditions of each
applicable Approved Franchise Agreement:

 

(i)         The Borrowers own or have the right to use, under valid license
agreements or otherwise, all material patents, licenses, franchises, trademarks,
trademark rights, trade names, trade name rights, trade secrets and copyrights
(collectively, “Intellectual Property”) necessary to the conduct of their
respective businesses as now conducted and as contemplated by the Loan
Documents, 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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(ii)        The Borrowers have taken all such steps as they deem reasonably
necessary to protect their respective rights under and with respect to such
Intellectual Property;

 

(iii)       No claim has been asserted by any Person with respect to the use of
any Intellectual Property by any Borrower, or challenging or questioning the
validity or effectiveness of any Intellectual Property; and

 

(iv)      The use of such Intellectual Property by each Borrower does not
infringe on the rights of any Person, subject to such claims and infringements
as do not, in the aggregate, give rise to any material liabilities on the part
of any Borrower.

 

(gg)        Insurance. The Borrowers have obtained and have delivered to the
Administrative Agent certified copies or certificates of all insurance policies
required under this Agreement, reflecting the insurance coverages, amounts and
other requirements set forth in this Agreement. Borrower has not, and to the
Borrowers’ knowledge no Person has, done by act or omission anything which would
impair the coverage of any such policy.

 

(hh)        Certificate of Occupancy; Licenses. To the Borrowers’ knowledge,
except as expressly disclosed in the zoning reports delivered on or prior the
Closing Date all certifications, permits, licenses (including, without
limitation, a license to serve alcohol at the Collateral Assets) and approvals,
including without limitation, certificates of completion and occupancy permits
required of any Borrower for the legal use, occupancy and operation of any
Collateral Asset for hotel purposes (collectively, the “Licenses”), have been
obtained and are in full force and effect, except for those Licenses the absence
of which could not reasonably be expected to have a Property Material Adverse
Effect on any Collateral Asset, and provided, however, that the absence of any
such Licenses shall not constitute a breach of the foregoing representation and
warranty in this Section 4.01(hh) so long as the applicable Borrower (I) has
made reasonable arrangements (including, without limitation, obtaining an
interim beverage agreement or other similar arrangement permitting the use of
another party’s liquor license) to ensure that the applicable Collateral Asset
is in compliance with all applicable material Legal Requirements relating to
such Licenses; and (II) is actively making commercially reasonable efforts to
promptly obtain such Licenses. The use being made of each Collateral Asset is in
conformity with the certificate of occupancy issued for such Collateral Asset,
except to the extent that lack of such conformity could not reasonably be
expected to have a Property Material Adverse Effect on the applicable Collateral
Asset. With respect to Improvements for which no certificate of occupancy
exists, the absence of a certificate of occupancy is not in violation of any
Legal Requirements.

 

(ii)          Labor. To the Borrowers’ knowledge, no work stoppage, labor
strike, slowdown or lockout is pending or threatened by employees and other
laborers at any Collateral Asset. None of any Borrower, any TRS Lessee or any
Manager (i) is involved in or, to the Borrowers’ knowledge, threatened with any
labor dispute, grievance or litigation relating to labor matters involving any
employees and other laborers at any Collateral Asset, including, without
limitation, violation of any federal, state or local labor, safety or employment
Legal Requirements (domestic or foreign) and/or charges of unfair labor
practices or discrimination complaints that, in any case, could reasonably be
expected to have a Property Material Adverse Effect on any Collateral Asset,
(ii) to the Borrowers’ knowledge, has engaged with respect to any Collateral
Asset, in any unfair labor practices within the meaning of the National Labor
Relations Act or the Railway Labor Act that could reasonably be expected to have
a Property Material Adverse Effect on any Collateral Asset, or (iii) is a party
to, or bound by, any existing collective bargaining agreement or union contract
with respect to employees and other laborers at any Collateral Asset, except for
those collective bargaining agreements and union contracts set forth on Schedule
4.01(ii) hereto.

 

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(jj)          Special Flood Hazard Properties. Either (i) no Collateral Asset is
a Flood Hazard Property or (ii) if a Collateral Asset is a Flood Hazard
Property, the Borrower or the applicable Loan Party has delivered to the
Administrative Agent the Flood Insurance Documents with respect to such
Collateral Asset.

 

(kk)        EEA Financial Institution. Neither any Loan Party nor any of its
Subsidiaries nor any general partner or managing member of any Loan Party, as
applicable, is an EEA Financial Institution.

 

(ll)          Georgia Tech Purchase Agreement. Following the payment of the
Earnout Amount on or prior to the Closing Date, no further amounts shall be due
or payable to the seller pursuant to the Georgia Tech Purchase Agreement.

 

Article V
COVENANTS

 

SECTION 5.01. Affirmative Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid or any
Lender shall have any Commitment hereunder, each Borrower will (or, in the case
of the covenants in Sections 5.01(r) and 5.01(t) below, the Parent Guarantor
will):

 

(a)          Compliance with Laws, Etc. Comply, and cause each Intervening
Entity to comply, in all material respects, with all applicable Legal
Requirements, such compliance to include, without limitation, compliance with
ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970. Each Borrower shall keep and maintain all
Licenses necessary for the operation of each Collateral Asset for hotel
purposes; provided, however, that the absence of any such Licenses, shall not
constitute a breach of the foregoing covenant of this Section 5.01(a) so long as
the applicable Borrower (I) has made reasonable arrangements (including, without
limitation, obtaining an interim beverage agreement or other similar arrangement
permitting the use of another party’s liquor license) to ensure that the
applicable Collateral Asset shall be, and shall thereafter remain, in compliance
with all applicable material Legal Requirements relating to such Licenses; and
(II) is actively making commercially reasonable efforts to promptly obtain such
Licenses.

 

(b)          Payment of Taxes, Etc. Pay and discharge, and cause each
Intervening Entity to pay and discharge, before the same shall become
delinquent, (i) all Taxes imposed upon it or upon its property and (ii) all
lawful claims that, if unpaid, might by law become a Lien upon its property;
provided, however, that neither the Loan Parties nor any Intervening Entity
shall be required to pay or discharge any such Tax or claim that is the subject
of a Good Faith Contest, unless and until any Lien resulting therefrom attaches
to its property and becomes enforceable against its other creditors.

 

(c)          Compliance with Environmental Laws. Comply, and cause each
Intervening Entity and use commercially reasonable efforts to cause all lessees
and other Persons operating or occupying its properties to comply, in all
material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew and cause each Intervening Entity to obtain and renew
all Environmental Permits necessary for its operations and properties; and
conduct, and cause each Intervening Entity to conduct, any investigation, study,
sampling and testing, and, if required by any Governmental Authority or under
any Environmental Laws, undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties in material compliance with the requirements of all Environmental
Laws; provided, however, that neither the Loan Parties nor any Intervening
Entity shall be required to undertake any such cleanup, removal, remedial or
other action to the extent that its obligation to do so is the subject of a Good
Faith Contest.

 

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(d)          Maintenance of Insurance. (i) Maintain, and cause each Intervening
Entity to maintain, insurance (including, with respect to the Collateral Assets,
the insurance required by the terms of the Mortgages) with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the applicable
Borrower or Intervening Entity operates, but in no event shall such amounts be
lower or coverages be less comprehensive than the respective insurance amounts
and coverages maintained by the Borrowers and the Intervening Entities on the
Closing Date approved by the Administrative Agent. The Borrowers shall from time
to time deliver to the Administrative Agent upon written request a list in
reasonable detail, together with copies of all policies (or other available
evidence) of the insurance then in effect, stating the names of the insurance
companies, the coverages and amounts of such insurance, the dates of the
expiration thereof and the properties and risks covered thereby.

 

(ii)           If any Collateral Asset is at any time a Flood Hazard Property,
then the Borrowers shall provide to the Administrative Agent the Flood Insurance
Documents with respect to such Collateral Asset. The Administrative Agent shall
provide to Lenders copies of the Flood Insurance Documents (including any Flood
Insurance Documents delivered in connection with a Flood Compliance Event), to
the extent received from the Borrowers. The Administrative Agent agrees to
request such Flood Insurance Documents at the request of any Lender. Unless the
Borrowers provide the Administrative Agent with the Flood Insurance Documents,
the Administrative Agent may purchase Flood Insurance meeting the requirements
of clause (iii) of the definition of “Flood Insurance Documents” at the
Borrowers’ expense to protect the interests of the Administrative Agent and
Lenders. The Borrowers shall cooperate with the Administrative Agent in
connection with compliance with the Flood Laws, including by providing any
information reasonably required by the Administrative Agent (or by any Lender
through the Administrative Agent) in order to confirm compliance with the Flood
Laws.

 

(iii)          If a Flood Redesignation shall occur with respect to any
Collateral Asset, the Administrative Agent shall obtain a completed Flood Hazard
Determination with respect to the applicable Collateral Asset, and the Borrowers
shall provide to the Administrative Agent the Flood Insurance Documents with
respect to such Collateral Asset by not later 45 days after the date of the
Flood Redesignation or any earlier date required by the Flood Laws.

 

(iv)          The Borrowers shall give to the Administrative Agent written
notice of any Flood Compliance Event (other than a Flood Redesignation) not less
than 45 days prior to such Flood Compliance Event. The Administrative Agent
shall provide a copy of such notice to Lenders and shall obtain a completed
Flood Hazard Determination. For avoidance of doubt, the Borrowers shall provide,
or re-provide, as the case may be, to the Administrative Agent the Flood
Insurance Documents by not later than the date of the Flood Compliance Event and
as a condition precedent to the occurrence of such Flood Compliance Event.

 

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(e)          Preservation of Partnership or Corporate Existence, Etc. Preserve
and maintain, and cause each Intervening Entity to preserve and maintain, its
existence (corporate or otherwise), legal structure, legal name, rights (charter
and statutory), approvals, privileges and franchises, except, in the case of the
Intervening Entities only, if in the reasonable business judgment of such
Intervening Entity it is in its best economic interest not to preserve and
maintain such existence, legal structure, legal name, rights, approvals,
privileges and franchises and such failure is not reasonably likely to result in
a Material Adverse Effect (it being understood that the foregoing shall not
prohibit, or be violated as a result of any transaction by or involving any Loan
Party or Intervening Entity otherwise permitted under Section 5.02(d) or (e)
below); and cause the direct or indirect Equity Interests (including, without
limitation, the indirect Equity Interests held by the Operating Partnership and
the Parent Guarantor) in any Borrower or any TRS Lessee to at all times not be
subject to any Lien (other than Permitted Liens and Liens created under the
Collateral Documents) or any Negative Pledge.

 

(f)          Visitation Rights. At any reasonable time and from time to time,
permit any of the Agents or Lenders, or any agent or representatives thereof, to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, any Loan Party and any Intervening Entity (but,
in each case not more frequently than one time per year unless an Event of
Default shall have occurred and be continuing), and to discuss the affairs,
finances and accounts of any Loan Party and any Intervening Entity with any of
their general partners, managing members, officers or directors and with their
independent certified public accountants.

 

(g)          Keeping of Books. Keep, and cause each Intervening Entity to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of each Loan
Party and each Intervening Entity in accordance with GAAP.

 

(h)          Maintenance of Properties, Etc. Maintain and preserve all of its
properties that are used or useful in the conduct of its business in good
working order and condition, in all material respects, ordinary wear and tear
excepted and will from time to time make or cause to be made all appropriate
repairs, renewals and replacement thereof, and Borrowers shall not remove,
demolish or alter any Improvements or Equipment (except for alterations
performed in accordance with Section 5.02(q) below).

 

(i)          Transactions with Affiliates. Conduct all transactions otherwise
not prohibited under the Loan Documents with any of its Affiliates (other than
transactions exclusively among or between the Borrowers and/or one or more of
the Guarantors) on terms that are fair and reasonable and no less favorable to
the applicable Borrower than it would obtain in a comparable arm’s-length
transaction with a Person not an Affiliate; provided, however, that all
transactions pursuant to any operating leases that are in the standard form of
operating lease used by the Borrowers, shall be deemed fair and reasonable.

 

(j)          Georgia Tech Ground Lease. With respect to the Georgia Tech Ground
Lease, cause the Georgia Tech Owner to:

 

(i)          timely perform and observe all of the material terms, covenants and
conditions required to be performed and observed by it as tenant thereunder
(subject to applicable cure or grace periods);

 

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(ii)          do all things necessary to preserve and keep unimpaired the
Georgia Tech Ground Lease and the Georgia Tech Owner’s rights thereunder;

 

(iii)          diligently and continuously enforce the material obligations of
the lessor or other obligor thereunder;

 

(iv)          within five (5) Business Days after any Borrower’s receipt
thereof, deliver to the Administrative Agent a true copy of any notice received
by any Borrower or any Affiliate thereof of any bankruptcy, reorganization or
insolvency of the lessor under the Georgia Tech Ground Lease;

 

(v)          deliver to the Administrative Agent all default and other material
notices received by it or sent by it under the Georgia Tech Ground Lease;

 

(vi)          prior to the recordation of any fee mortgage which may encumber
the Georgia Tech Hotel, Borrower shall cause Georgia Tech Owner to enforce the
terms of the Georgia Tech Ground Lease to obtain or cause the lessor under the
Georgia Tech Ground Lease to obtain a nondisturbance agreement, if and to the
extent that such lessor is required to deliver such a nondisturbance agreement
in accordance with the Georgia Tech Ground Lease;

 

(vii)         upon the Administrative Agent’s reasonable written request and at
reasonable intervals, unless an Event of Default shall have occurred and be
continuing, in which case, upon written request at any time, provide to the
Administrative Agent any information or materials relating to Georgia Tech
Ground Lease and evidencing the Georgia Tech Owner’s due observance and
performance of its material obligations thereunder, in each case to the extent
in the Georgia Tech Owner’s possession;;

 

(viii)       execute and deliver (if and to the extent permitted to do so under
the Georgia Tech Ground Lease), upon the request of the Administrative Agent,
any documents, instruments or agreements as may be required to permit the
Administrative Agent to cure any default of the Loan Party under the Georgia
Tech Ground Lease;

 

(ix)          provide to the Collateral Agent written notice of its intention to
exercise any option or renewal or extension rights with respect to the Georgia
Tech Ground Lease at least 30 days prior to the expiration of the time to
exercise such right or option and, upon the direction of the Administrative
Agent, duly exercise any renewal or extension option with respect to the Georgia
Tech Ground Lease (provided, that each Loan Party hereby appoints the Collateral
Agent its attorney-in-fact, coupled with an interest, to execute and deliver,
for and in the name of such Person, all instruments, documents or agreements
necessary to extend or renew the Georgia Tech Ground Lease);

 

(x)          in connection with the bankruptcy or other insolvency proceedings
of any ground lessor or other obligor, ratify the legality, binding effect and
enforceability of the Georgia Tech Ground Lease within the applicable time
period therefore in such proceedings, notwithstanding any rejection by such
ground lessor or obligor or trustee, custodian or receiver related thereto;

 

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(xi)          provide to the Administrative Agent not less than 30 days’ prior
written notice of the date on which the Georgia Tech Owner shall apply to any
court or other Governmental Authority for authority or permission to reject the
Georgia Tech Ground Lease in the event that there shall be filed by or against
the Georgia Tech Owner any petition, action or proceeding under Bankruptcy Law
or any similar federal or state law; provided, however, that the Administrative
Agent shall have the right, but not the obligation, to serve upon the Georgia
Tech Owner within such 30 day period a notice stating that (1) the
Administrative Agent demands that the Georgia Tech Owner assume and then assign
the Georgia Tech Ground Lease to the Administrative Agent subject to and in
accordance with Bankruptcy Law and (2) the Administrative Agent covenants to
cure or provide reasonably adequate assurance thereof with respect to all
defaults susceptible of being cured by the Administrative Agent and of future
performance under the Georgia Tech Ground Lease; provided further that if the
Administrative Agent serves such notice upon the Georgia Tech Owner, the Loan
Parties shall cause the Georgia Tech Owner to not seek to reject the Georgia
Tech Ground Lease and to promptly comply with such demand;

 

(xii)         permit the Collateral Agent (at its option), but only to the
extent permitted under the Georgia Tech Ground Lease, during the continuance of
any Event of Default, to (1) perform and comply with all obligations under the
Georgia Tech Ground Lease; (2) do and take such action as the Collateral Agent
reasonably deems necessary or desirable to prevent or cure any default by the
Georgia Tech Owner under the Georgia Tech Ground Lease and (3) enter in and upon
the applicable premises related to the Georgia Tech Ground Lease to the extent
and as often as the Administrative Agent reasonably deems necessary or desirable
in order to prevent or cure any default under the Georgia Tech Ground Lease;

 

(xiii)        if such event could reasonably be expected to result in a Material
Adverse Effect, in the event of any arbitration, court or other adjudicative
proceedings under or with respect to the Georgia Tech Ground Lease, permit the
Administrative Agent (at its option), but only to the extent permitted under the
Georgia Tech Ground Lease, to exercise all right, title and interest of the
Georgia Tech Owner in connection with such proceedings, provided that (i) the
Borrowers shall cause the Georgia Tech Owner to irrevocably appoint the
Administrative Agent as its attorney-in-fact (which appointment shall be deemed
coupled with an interest) to exercise such right, interest and title and
(ii) the Loan Parties shall bear all costs, fees and expenses related to such
proceedings; provided further that each Loan Party hereby further agrees that
the Administrative Agent shall have the right, but not the obligation, to
proceed in respect of any claim, litigation, action or proceeding relating to
the rejection of the Georgia Tech Ground Lease referenced above by the relevant
ground lessor as a result of bankruptcy or similar proceedings (including,
without limitation, the right to file and prosecute all proofs of claims,
complaints, notices and other documents in any such bankruptcy case or similar
proceeding); and

 

(xiv)        at reasonable times and at reasonable intervals, deliver to the
Collateral Agent (but not more than one per calendar year during the term of the
Loan, absent an Event of Default), an estoppel certificate from the Georgia Tech
Pledgor in relation to the Georgia Tech Ground Lease in form and substance
acceptable to the Collateral Agent in its reasonable discretion, and, in the
case of the estoppel certificate, setting forth (i) the name of lessee and
lessor under the Georgia Tech Ground Lease (if applicable); (ii) that the
Georgia Tech Ground Lease is in full force and effect and has not been modified
except to the extent the Collateral Agent has received notice of such
modification; (iii) that no rental and other payments due thereunder are
delinquent as of the date of such estoppel; and (iv) whether such Person knows
of any actual or alleged defaults or events of default under the Georgia Tech
Ground Lease.

 

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(k)          Control Agreements. In the event of a resignation by a depository
bank from its obligations under any Control Agreement, cause each applicable TRS
Lessee to appoint a successor bank which assumes the obligations of such
depository bank under such Control Agreement (substantially in accordance with
the Administrative Agent’s then customary form of agreement) on or before the
effective date of such depository bank’s resignation from its obligations
thereunder. Provided an Event of Default is not then continuing, the
Administrative Agent shall reasonably cooperate with each TRS Lessee in
connection with the appointment of a successor bank necessitated on account of
the termination of any Control Agreement.

 

(l)          Further Assurances. (i) Promptly upon request by any Agent, or any
Lender through the Administrative Agent, correct, and cause each Loan Party to
promptly correct, any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or recordation
thereof.

 

(ii)          Promptly upon request by any Agent, or any Lender through the
Administrative Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts, deeds,
conveyances, pledge agreements, account control agreements, mortgages, deeds of
trust, trust deeds, assignments of leases and rents, assignments, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments as any
Agent, or any Lender through the Administrative Agent, may reasonably require
from time to time in order (A) to carry out more effectively the purposes of the
Loan Documents, (B) to the fullest extent permitted by applicable law, to
subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights
or interests to the Liens now or hereafter intended to be covered by any of the
Collateral Documents, (C) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and any of the Liens intended to
be created thereunder and (D) to assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively unto the Secured Parties the
rights granted or now or hereafter intended to be granted to the Secured Parties
under any Loan Document or under any other instrument executed in connection
with any Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so.

 

(m)          Performance of Material Contracts. Perform and observe all the
material terms and provisions of each Material Contract to be performed or
observed by it, maintain each such Material Contract in full force and effect,
enforce each such Material Contract in accordance with its terms, take all such
action to such end as may be from time to time reasonably requested by the
Administrative Agent, and, upon the reasonable request of the Administrative
Agent, make to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Borrower is entitled
to make under such Material Contract. Notwithstanding the above, nothing in this
subsection (m) shall prohibit or reduce the rights of any Borrower to enter
into, terminate, modify, amend, renew or otherwise deal with any Material
Contract to the extent the same does not constitute a violation of the terms and
provisions of Section 5.02(l) hereof.

 

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(n)          Compliance with Leases. Make all payments and otherwise perform all
material obligations in respect of all leases of real property to which any
Borrower is a party, keep such leases in full force and effect and not allow
such leases to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled (except if in the reasonable business judgment of such
Person it is in its best economic interest not to maintain such lease or prevent
such lapse, termination, forfeiture or cancellation and such failure to maintain
such lease or prevent such lapse, termination, forfeiture or cancellation is not
in respect of a Collateral Asset Operating Lease and could not otherwise
reasonably be expected to result in a Material Adverse Effect), notify the
Administrative Agent of any material default by any party with respect to such
leases and cooperate in all reasonable respects with the Administrative Agent in
all respects to cure any such default.

 

(o)          Interest Rate Hedging. Maintain at all times Interest Rate Cap
Agreements required by Section 2.18.

 

(p)          Management Agreements. Cause an Approved Manager to cause the
applicable Collateral Asset to be managed and operated, in all material
respects, in accordance with (i) an Approved Management Agreement that is
subject to a Subordination of Management Agreement and (ii) all applicable Legal
Requirements. In the event that an Approved Management Agreement expires or is
terminated, the Borrowers shall promptly cause a replacement Approved Management
Agreement to be entered into with an Approved Manager, subject to Section
5.01(r)(ii). For the avoidance of doubt, the Borrowers shall be permitted at any
time to replace any Approved Manager with respect to any Collateral Asset with
another Approved Manager without the Administrative Agent’s consent to any such
replacement so long as (i) the replacement Approved Manager has executed and
delivered an Approved Management Agreement that is subject to a Subordination of
Management Agreement and (ii) the requirements in Section 5.01(r)(ii) have been
complied with.

 

(q)          Franchise Agreements. Subject to Section 5.01(r)(ii), cause an
Approved Franchisor to cause the applicable Collateral Asset (other than the
Georgia Tech Hotel) to be licensed or franchised pursuant to, and operated in
compliance with, in all material respects, in accordance with (i) an Approved
Franchise Agreement that is subject to a Franchise Comfort Letter and (ii) all
applicable Legal Requirements. In the event that an Approved Franchise Agreement
expires or is terminated, the Borrowers shall promptly cause a replacement
Approved Franchise Agreement to be entered into with an Approved Franchisor. For
the avoidance of doubt, the Borrowers shall be permitted at any time to replace
any Approved Franchisor with respect to any Collateral Asset with another
Approved Franchisor without the Administrative Agent’s consent to any such
replacement so long as (i) the replacement Approved Franchisor has executed and
delivered an Approved Franchise Agreement that is subject to a Franchise Comfort
Letter and (ii) the requirements in Section 5.01(r)(ii) have been complied with.

 

(r)          Operation of Collateral Assets. (i)(A) Promptly perform and/or
cause the performance of, in all material respects, all of the covenants and
agreements required to be performed and observed by the Borrowers and TRS
Lessees under each Approved Management Agreement and each Approved Franchise
Agreement and do all things necessary to preserve and to keep unimpaired the
material rights thereunder of the Borrowers and the TRS Lessees thereunder; (B)
promptly after any Borrower or TRS Lessee becoming aware, notify the
Administrative Agent of any material default under any Approved Management
Agreement or any Approved Franchise Agreement; (C) promptly deliver to
Administrative Agent or cause the delivery to the Administrative Agent of a copy
of each financial statement, business plan, capital expenditures plan, and
material written notice received by any Borrower or TRS Lessee under an Approved
Management Agreement or an Approved Franchise Agreement; and (D) enforce or
cause the enforcement of the performance and observance of all of the covenants
and agreements required to be performed and/or observed by an Approved Manager
under an Approved Management Agreement or an Approved Franchisor under an
Approved Franchise Agreement, in each case in a commercially reasonable manner.

 

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(ii)          Cause any replacement Approved Management Agreement to be with an
Approved Manager and cause each replacement Approved Management Agreement to
either (A) include franchise and intellectual property rights substantially
similar to those set forth in the Approved Management Agreement in respect of
the applicable Collateral Asset in effect as of the Closing Date or (B) if an
Approved Franchise Agreement shall not be in place for such Collateral Asset
(other than the Georgia Tech Hotel), the applicable Borrower or applicable TRS
Lessee, as the case may be, shall enter into an Approved Franchise Agreement
reasonably acceptable to the Administrative Agent on third-party market rate
terms with an Approved Franchisor. Except as set forth in the definition of
Approved Franchisor, neither any Borrower nor any TRS Lessee shall permit an
Approved Manager to rebrand any Collateral Asset to a lower category based on
the annual chain scale published by Smith Travel Reports without the consent of
the Administrative Agent, which consent shall not be unreasonably withheld,
conditioned or delayed. Other than with respect to the Georgia Tech Hotel, at no
time shall any Collateral Asset be operated as an unbranded hotel for more than
thirty (30) days.

 

(s)          Maintenance of REIT Status. In the case of the Parent Guarantor, be
organized in conformity with the requirements for qualification as a REIT under
the Internal Revenue Code, and at all times continue to qualify as a REIT and
elect to be treated as a REIT under all applicable laws, rules and regulations.

 

(t)          Reciprocal Easement Agreements. Perform and observe, or cause the
applicable TRS Lessee to perform and observe, in all material respects, the
terms and provisions of all reciprocal easement agreements or other similar
agreements relating to any of the Collateral Assets to be performed or observed
by it, enforce, or cause the applicable TRS Lessee to enforce, in all material
respects, its rights under each such reciprocal easement agreement or other
similar agreement in accordance with its terms, take, or cause the applicable
TRS Lessee to take, all such action to such end as may be from time to time
reasonably requested by the Administrative Agent, and, upon reasonable request
of the Administrative Agent, make, or cause the applicable TRS Lessee or
Subsidiary of any Borrower to make, to each other party to each such reciprocal
easement agreement or other similar agreement such demands and requests for
information and reports or for action as any Borrower or any of its Subsidiaries
or any applicable TRS Lessee is entitled to make under such reciprocal easement
agreement or other similar agreement.

 

(u)          Sarbanes-Oxley. In the case of Parent Guarantor, comply at all
times with all applicable provisions of Section 402(a) of Sarbanes-Oxley.

 

(v)          Cash Management. Comply at all times with the terms and provisions
of the Cash Management Agreement for so long as the same is in effect pursuant
to the terms thereof.

 

(w)          SPE Requirements. In the case of (i) each Borrower (A) maintain in
its constitutive documents the provisions referred to in the definitions of
Borrower SPE Requirements and (B) comply with such provisions at all times, (ii)
each Pledgor, cause such Pledgor to (A) maintain in its constitutive documents
the provisions referred to in the definition of Pledgor SPE Requirements and (B)
comply with such provisions at all times, and (iii) each TRS Lessee, cause such
TRS Lessee to (A) maintain in its constitutive documents the provisions referred
to in the definition of TRS Lessee SPE Requirements and (B) comply with such
provisions at all times.

 

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(x)          Collateral Asset Operating Leases. Promptly (i) perform and
observe, in all material respects, all of the covenants and agreements required
to be performed and observed by the applicable Borrower under the Collateral
Asset Operating Leases and do all things necessary to preserve and to keep
unimpaired the Borrowers’ rights thereunder; (ii) notify the Administrative
Agent of any material default under the Collateral Asset Operating Leases of
which any Borrower is aware; (iii) deliver to the Administrative Agent a copy of
any notice of default, notice of termination, extension notice or other material
notice received by any Borrower under the Collateral Asset Operating Leases; and
(iv) enforce in all material respects the performance and observance of all of
the covenants and agreements required to be performed or observed by the
applicable lessor under each Collateral Asset Operating Lease.

 

(y)          Insurance Proceeds and Condemnation Awards. With respect to each
Collateral Asset, comply with the requirements of Schedule I to the Mortgage
encumbering such Collateral Asset.

 

(z)          OFAC. Provide to the Agents and Lenders any information that such
Agent or such Lender deems reasonably necessary from time to time in order to
ensure compliance with all applicable Sanctions and Anti-Corruption Laws.

 

(aa)          Permitted Transfers. Pay all out-of-pocket, reasonable costs and
expenses of the Administrative Agent in connection with any Equity Transfer,
whether or not such Equity Transfer is deemed to be a Permitted Transfer,
including, without limitation, all reasonable fees and expenses of the
Administrative Agent’s counsel, provided that to the extent that any processing
fee is charged in connection with any such Equity Transfer, such processing fee
shall not exceed $5,000. The Borrowers shall, within five (5) Business Days
after a request by the Administrative Agent, provide the Administrative Agent
with an updated version of the organizational chart delivered to the
Administrative Agent in connection with the closing of the Loan reflecting the
applicable Equity Transfer. In connection with any Permitted Transfer, to the
extent that the transfer would result in the transferee (either itself or
collectively with its Affiliates) owning a 10% or greater (direct or indirect)
Equity Interest in any Borrower (unless such transferee together with such
Affiliates owned a 10% or more (direct or indirect) Equity Interest in such
Borrower immediately prior to such transfer), the Borrowers shall deliver (and
the Borrowers shall be responsible for any reasonable out-of-pocket costs and
expenses in connection therewith), customary searches reasonably requested by
the Administrative Agent in writing (including judgment, lien, litigation,
bankruptcy, criminal and watch list) reasonably acceptable to the Administrative
Agent with respect to such transferee.

 

(bb)          PIP. (i) Each Borrower shall take all necessary action to
diligently complete in a manner acceptable to the applicable Approved Franchisor
the PIP Work applicable to such Borrower’s Collateral Asset as contemplated
under the applicable PIP and in accordance with the applicable PIP Budget on or
before the PIP Completion Date, as any of the same may have been modified or
amended in accordance with Section 5.02(v); provided, however, that in the case
of any PIP having a budget in excess of $15,000 per room, the Agents, Lenders
and their respective agents and representatives (including the Administrative
Agent’s engineer, architect or inspector) shall be entitled to enter onto any
Borrower’s Collateral Asset during normal business hours upon reasonable notice
(subject to the rights of guests or invitees of such Collateral Asset) to
inspect the progress of any PIP Work and all materials being used in connection
therewith and to examine all plans and shop drawings relating to such PIP Work.
Such Borrower shall deliver to the Administrative Agent as soon as practicable
following the completion of the applicable PIP Work evidence reasonably
satisfactory to the Administrative Agent that the applicable Approved Franchisor
has accepted the applicable PIP Work as complete.

 

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(ii)          Not less than thirty (30) days prior to any Borrower’s
commencement of any PIP Work related to a PIP, the applicable Borrower shall
deliver to the Administrative Agent a detailed PIP Budget showing line-item
detail reasonably acceptable to Administrative Agent in respect of such PIP.

 

(iii)          If the Administrative Agent receives notice from an Approved
Franchisor or a Borrower that a Borrower has failed to complete the required PIP
Work applicable to such Borrower’s Collateral Asset by the applicable PIP
Completion Date (subject to any force majeure event and/or cure period provided
for under the applicable PIP or Approved Franchise Agreement), the
Administrative Agent (with the approval of the Required Lenders) may (after
notice and a reasonable cure period not to exceed sixty (60) days unless the
Administrative Agent reasonably determines that a shorter period is necessary to
avoid any default or termination of the Approved Franchise Agreement) elect to
complete such PIP Work, and the Borrowers shall reimburse the Administrative
Agent and Lenders upon demand for all sums expended by the Administrative Agent
in connection with such completion of the PIP Work. Any amount expended by the
Administrative Agent or Lenders to complete any PIP Work shall be a Protective
Advance and shall be secured by the Collateral Documents.

 

(iv)          The Borrowers shall give the Administrative Agent prompt written
notice of any demand from an Approved Franchisor for an amendment to a PIP, and
any demand from an Approved Franchisor for any repairs, maintenance,
alterations, or improvements required to comply with an Approved Franchise
Agreement.

 

(v)          During the continuance of any PIP Work on any Collateral Asset, the
Borrowers shall deposit or cause to be deposited with or on behalf of the
Administrative Agent (x) such amounts as the Administrative Agent from time to
time reasonably determines are necessary to cover the costs of such PIP Work
required by an Approved Franchisor under a PIP or any modification to a PIP or
to cover PIP Work contemplated by any new property improvement plan imposed by
an Approved Franchisor, and the cost of any repairs, maintenance, alterations,
or improvements demanded by a Franchisor pursuant to an Approved Franchise
Agreement less (y) the Unexpended FF&E PIP Funds. All such amounts shall be
deposited directly by or at the direction of the Administrative Agent, into an
account established with the Administrative Agent or the Servicer in the name of
the Administrative Agent to hold such funds (the “PIP Reserve Account”). Amounts
deposited from time to time in the PIP Reserve Account pursuant to this Section
5.01(bb)(v) are referred to herein as the “PIP Reserve Funds” and shall be
disbursed to fund PIP Work at the Collateral Assets from time to time in
accordance with and subject to the applicable PIPs and the terms and provisions
of Section 5.01(bb)(vi). Without limitation of the foregoing, the applicable
Borrower shall deposit into the PIP Reserve Account, (y) at least fifty percent
(50%) of the aggregate projected cost of the PIP Work for each Asset less the
Unexpended FF&E PIP Funds, no later than ninety (90) days prior to the
commencement date for the applicable PIP Work set forth in Schedule X and (y)
the balance of the aggregate projected cost of the PIP Work in respect of such
Collateral Asset, less the Unexpended FF&E PIP Funds, on or prior to the
commencement date for the applicable PIP Work set forth in Schedule X, as such
commencement date may be extended from time to time following the approval of
the applicable Approved Franchisor and notice of such approval to the
Administrative Agent.

 

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(vi)          Provided no Event of Default shall have occurred and be
continuing, the Administrative Agent shall disburse (or cause the Servicer to
disburse) PIP Reserve Funds and FF&E PIP Funds to the Borrowers out of the PIP
Reserve Account or the FF&E Reserve Account (as defined in the Cash Management
Agreement) for payment of PIP Work expenditures contemplated by the applicable
PIP within ten (10) days after the delivery by the applicable Borrower to the
Administrative Agent of a request therefor (but not more often than once each
calendar month), provided that:  (i) such disbursement is for PIP Work
contemplated by the applicable PIP; (ii) the Administrative Agent has received
invoices evidencing that the costs for which such disbursement is requested are
due and payable (other than for costs and expenses less than or equal to
$10,000) and are in respect of such PIP Work; (iii) the applicable Borrower has
applied any amounts previously received by it in accordance with this Section
for the PIP Work to which specific draws made hereunder relate and received any
lien waivers or other releases (with respect to any expenses greater than
$10,000) which would customarily be obtained with respect to the PIP Work in
question; and (iv) the request for the disbursement is accompanied by a
certificate of a Responsible Officer of the Borrowers that (A) the conditions in
the foregoing clauses (ii) and (iii) have been satisfied, (B) that the PIP Work
to be funded by such disbursement has been completed in a good and workmanlike
manner and in accordance with all applicable Legal Requirements, (C) that the
copies of invoices and evidence of lien waivers (to the extent required above)
attached to such Responsible Officer’s certificate are true, complete and
correct in all material respects, to such Responsible Officer’s knowledge, and
(D) upon such disbursement to the applicable Borrower, the PIP Work expenditures
to be funded by the requested disbursement will be paid promptly in accordance
with the invoices and lien waivers (where applicable) presented.  The
Administrative Agent shall not be required to disburse (or cause the Servicer to
disburse) any PIP Reserve Funds or FF&E PIP Funds more frequently than once each
calendar month.

 

(vii)         Nothing in this Section 5.01(bb) shall (A) make any Agent or any
Lender responsible for performing or completing any PIP Work; (B) require any
Agent or any Lender to expend funds in addition to the PIP Reserve Funds and the
FF&E PIP Funds to complete any PIP Work; (C) obligate any Agent or any Lender to
proceed with any PIP Work; or (D) obligate any Agent or any Lender to demand
from the Borrowers additional sums to complete any PIP Work. Each Borrower shall
cause all applicable contractors and subcontractors to cooperate with the
Agents, each Lender or any Agent’s or any Lender’s agents or representatives
described above in connection with inspections described in this Section
5.01(bb)(i).

 

(viii)        Provided that no Event of Default has occurred and is continuing,
the Administrative Agent shall direct the Servicer to disburse any remaining PIP
Reserve Funds to the Borrowers within ten (10) days after the earliest to occur
of (A) the Borrowers delivering to the Administrative Agent a certificate of a
Responsible Officer of the Borrowers stating that all PIP Work for all of the
Collateral Assets has been fully paid for and completed in a good, workmanlike
and Lien-free manner in accordance with all Legal Requirements, and (B) the
repayment of the Loan in full, including all accrued interest thereon and all
other outstanding Obligations in respect thereof.

 

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(ix)          In addition to any insurance required under the Loan Documents,
each Borrower shall provide or cause to be provided workmen’s compensation
insurance, builder’s risk insurance, public liability insurance and other
insurance to the extent required under applicable law in connection with the PIP
Work to such Borrower’s Asset. All such policies shall be in form and amount
satisfactory to the Administrative Agent.

 

(cc)        Georgia Tech Excess Cash Flow.

 

(i)          At all times cause the Georgia Tech Owner to pay the Georgia Tech
Ground Lease Rent and other amounts due and payable by the lessee under the
Georgia Tech Ground Lease as and when due (subject to any applicable grace or
cure periods);

 

(ii)          at all times cause the Georgia Tech TRS Lessee to pay the Georgia
Tech Operating Lease Rent under the Georgia Tech Operating Lease to the Georgia
Tech Owner as and when due;

 

(iii)          Upon the occurrence and during the continuation of a Lockbox
Period, cause the Georgia Tech Owner to distribute all Georgia Tech Excess Cash
Flow for each calendar month to the Georgia Tech Borrower not later than the
last day of such month; and

 

(iv)          Upon the occurrence and during the continuation of a Lockbox
Period, cause the Georgia Tech Borrower to deposit the Georgia Tech Excess Cash
Flow for each calendar month into the Lockbox Account not later than the last
day of such month.

 

SECTION 5.02. Negative Covenants. So long as any Advance shall be outstanding,
or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid or any Lender shall have any Commitment hereunder, at any time:

 

(a)          Liens, Etc. No Borrower will create, incur, assume or suffer to
exist any Lien on or with respect to any of its assets of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or authorize or file or suffer to exist under the Uniform
Commercial Code of any jurisdiction, a financing statement that names such
Borrower as debtor, or sign or authorize or suffer to exist any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign any accounts or other right to receive income, except, in
each case:

 

(i)          Liens created under the Loan Documents;

 

(ii)          Permitted Liens; and

 

(iii)          Liens described on Schedule 4.01(o) hereto;

 

(b)          Indebtedness. (i) No Borrower will create, incur, assume or suffer
to exist any Indebtedness, without in each case the prior consent of the
Administrative Agent, not to be unreasonably withheld, except: (A) Indebtedness
under the Loan Documents; (B) unsecured trade payables, equipment leases for
equipment used at the Collateral Assets or similar arrangements in each case
incurred in the ordinary course of any Borrower’s business, not secured by Liens
on the Collateral Assets (other than in the case of an equipment lease, the
applicable equipment being leased), payable by or on behalf of such Borrower for
or in respect of the operation of the Collateral Asset, provided that (1) each
such amount shall, in the case of such trade payables, be paid within ninety
(90) days following the date on which each such amount is invoiced or otherwise
becomes due and payable (except to the extent subject to a Good Faith Contest)
and (2) the aggregate outstanding amount of which shall not at any time exceed
four percent (4%) of the Outstanding Principal Balance as of the date of
determination; (C) insurance premiums, capital expenditures, obligations to
tenants under Tenancy Leases and customers and operating expenses, in each case
related to the Collateral Assets and incurred in the ordinary course of
business; and (D) contractual indemnity obligations entered into or assumed in
the ordinary course of business.

 

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(ii)          No Mezzanine Debt shall be permitted without the prior written
consent of the Administrative Agent in each case, which may be granted or
withheld in the Administrative Agent’s sole and absolute discretion; provided,
however, that any pledge of an indirect Equity Interest in any Borrower by a
Sponsor/Brookfield Qualified Equityholder (provided that in the case of any such
pledge by a Qualified Sponsor Equityholder, at the time the applicable pledge is
made, such Qualified Sponsor Equityholder’s pro rata share of net operating
income attributable to the Collateral Assets is less than 25% of such Qualified
Sponsor Equityholder’s aggregate net operating income) or any other Person
approved by the Administrative Agent in its sole discretion to secure Mezzanine
Debt consisting of an upper tier corporate or similar loan facility that is
secured by all or a substantial portion of such Person’s assets shall be
permitted.

 

(iii)          No Borrower shall suffer any Georgia Tech Entity to create,
incur, assume or otherwise be an obligor of, grant a Lien on or otherwise or
make its assets available in support of, any Indebtedness, without in each case
the prior consent of the Administrative Agent, except: (A) unsecured trade
payables, equipment leases for equipment used at the Georgia Tech Hotel or
similar arrangements in each case incurred in the ordinary course of the
business of the Georgia Tech Entities, not secured by Liens on the Georgia Tech
Hotel (other than in the case of an equipment lease, the applicable equipment
being leased), payable by or on behalf of any Georgia Tech Entity for or in
respect of the operation of the Georgia Tech Hotel, provided that (1) each such
amount shall, in the case of such trade payables, be paid within ninety (90)
days following the date on which each such amount is invoiced or otherwise
becomes due and payable (except to the extent subject to a Good Faith Contest)
and (2) the aggregate outstanding amount of which shall not at any time exceed
four percent (4%) of the Allocated Loan Amount for the Georgia Tech Hotel as of
the date of determination; (B) insurance premiums, capital expenditures,
obligations to tenants under Tenancy Leases and customers and operating
expenses, in each case related to the Georgia Tech Hotel and incurred in the
ordinary course of business; and (C) contractual indemnity obligations entered
into or assumed in the ordinary course of business.

 

(c)          [Intentionally Omitted.]

 

(d)          Mergers, Etc. No Borrower will (i) dissolve, terminate or wind-up
(except following the sale of all of the Collateral Assets owned by such
Borrower and the release of such Borrower from the Loan Documents in accordance
with Section 5.02(e)), (ii) merge or consolidate with or into any Person, (iii)
convey, transfer (except as permitted by Section 5.02(e)), lease (but not
including entry into Operating Leases between any Borrower and TRS Lessees) or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to, any Person.

 

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(e)          Sales of Assets. No Borrower will sell, lease (other than by
entering into Tenancy Leases permitted hereunder), transfer or otherwise dispose
of, or grant any option or other right to purchase, lease (other than any option
or other right to enter into Tenancy Leases) or otherwise acquire (each action
described herein, including, without limitation, any Sale and Leaseback
Transaction, being a “Transfer”), any Collateral Asset or Collateral Assets (or
any direct or indirect Equity Interests in the owner thereof except as otherwise
permitted pursuant to Section 5.02(k), in each case other than the following
Transfers, which shall be permitted hereunder only so long as no Default or
Event of Default shall exist or would result therefrom:

 

(i)          the Transfer of a Collateral Asset in accordance with Section 9.13,

 

(ii)         the Transfer of (1) obsolete or worn out FF&E in the ordinary
course of business or (2) inventory in the ordinary course of business, which
FF&E or inventory, as the case may be, is used or held in connection with a
Collateral Asset,

 

(iii)        the Transfer of any Collateral located at or used solely in
connection with any Asset or Collateral Asset (1) in connection with any
Transfer of such Asset or Collateral Asset permitted under this Section 5.02(e)
or (2) as is otherwise expressly permitted under the Collateral Documents, or

 

(iv)       the Transfer of Cash Equivalents.

 

A Transfer within the meaning of this Section 5.02(e) shall be deemed to include
(i) an installment sales agreement wherein any Borrower agrees to sell any Asset
or any part thereof for a price to be paid in installments; and (ii) an
agreement by any Borrower for the leasing of all or a substantial part of any
Asset for any purpose other than the actual occupancy by a space tenant
thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, any Borrower’s right, title and interest in and to any
Tenancy Leases or any rents or other amounts payable under any Tenancy Lease.

 

Following a Transfer of one or more Collateral Asset owned by a Borrower in
accordance with Section 5.02(e)(i), the Administrative Agent shall, upon the
request of a Borrower and at the Borrowers’ expense, promptly release the
Borrower that owned such Collateral Asset or Collateral Assets from each of the
applicable Loan Documents.

 

(f)           Investments. No Borrower will make or hold any Investment other
than:

 

(i)           Investments in Cash Equivalents;

 

(ii)          Investments in Collateral Assets; and

 

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(iii)          Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss.

 

(g)          Restricted Payments. During the occurrence and continuation of a
Lockbox Period, the Borrowers, without the prior consent of the Required
Lenders, will not declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests now or
hereafter outstanding, return any capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its stockholders,
partners or members (or the equivalent Persons thereof) as such.

 

(h)          Amendments of Constitutive Documents. No Borrower or Pledgor will
amend, in each case in any material respect, its limited liability company
agreement, partnership agreement, certificate of incorporation or bylaws or
other constitutive documents, provided that (1) any amendment to any such
constitutive document that would be adverse to any of the Secured Parties shall
be deemed “material” for purposes of this Section; and (2) any amendment to any
such constitutive document that would designate a Borrower or Pledgor as a
“special purpose entity” or otherwise confirm such Borrower’s or Pledgor’s
status as a “special purpose entity” shall be deemed “not material” for purposes
of this Section.

 

(i)          Accounting Changes. No Loan Party will make or permit any change in
(i) accounting policies or reporting practices, except as required or permitted
by generally accepted accounting principles, or (ii) Fiscal Year.

 

(j)          Speculative Transactions. No Loan Party will engage in any
transaction involving commodity options or futures contracts or any similar
speculative transactions other than the Interest Rate Cap Agreements that the
Borrowers are required to obtain and maintain pursuant to Section 5.01(o).

 

(k)          Transfers. No Borrower nor any other Person having a direct or
indirect ownership or beneficial interest in any Borrower shall sell, convey,
mortgage, grant, bargain, encumber, pledge, assign or transfer any Equity
Interest, direct or indirect, in any Borrower, whether voluntarily or
involuntarily (an “Equity Transfer”) other than pursuant to (x) a Permitted
Transfer or (y) in the case of pledges, pledges permitted pursuant to Section
5.02(b)(ii). An Equity Transfer within the meaning of this Section 5.02(k) shall
be deemed to include (i) if any Borrower, any Guarantor or any general partner,
managing member or controlling shareholder of any Borrower or any Guarantor is a
corporation, the voluntary or involuntary sale, conveyance or transfer of such
corporation’s Equity Interests (or the Equity Interests of any corporation
directly or indirectly controlling such corporation by operation of law or
otherwise) or the creation or issuance of new stock; (ii) if any Borrower, any
Guarantor or any general partner, managing member or controlling shareholder of
Borrower or any Guarantor is a limited or general partnership, joint venture or
limited liability company, the change, removal, resignation or addition of a
general partner, managing partner, limited partner, joint venturer or member or
the transfer of the partnership interest of any general partner, managing
partner or limited partner or the transfer of the interest of any joint venturer
or member; and (iii) subject to Section 5.02(b)(ii), any pledge, hypothecation,
assignment, transfer or other encumbrance of any direct or indirect Equity
Interest in any Borrower. Notwithstanding anything to the contrary herein, (A)
no Borrower shall permit the transfer of a direct Equity Interest in Borrower,
except in connection with an exercise of remedies by the Collateral Agent in
accordance with the terms of the Pledgor Security Agreements, (B) the creation
of any mortgage, pledge or other Lien on of any Operating Lease or the leasehold
interest related thereto shall not be permitted and shall constitute an
unpermitted transfer hereunder, (C) the creation of any mortgage, pledge or
other Lien on the Georgia Tech Ground Lease or the leasehold interest related
thereto shall not be permitted and shall constitute an unpermitted transfer
hereunder, and (D) except as expressly permitted pursuant to the terms of the
Pledgor Security Agreements, the creation of certificates in respect of any of
the Pledged Interests or the delivery of any certificate evidencing a Pledged
Interest to any Person (other than the Collateral Agent) shall in each case not
be permitted and shall in each case constitute an unpermitted transfer
hereunder.

 

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(l)          Amendment, Etc. of Material Contracts. No Borrower will enter into,
cancel or terminate any Material Contract or consent to or accept any
cancellation or termination thereof (except for the termination of any Approved
Management Agreement or Approved Franchise Agreement in accordance with Section
5.01(p) or Section 5.01(q), as applicable), amend or otherwise modify any
Material Contract or give any consent, waiver or approval thereunder, waive any
default under or breach of any Material Contract, agree in any manner to any
other amendment, modification or change of any term or condition of any Material
Contract in each case without the prior approval of the Administrative Agent.

 

(m)          Negative Pledge. No Borrower will enter into or suffer to exist any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its property or assets (including, without limitation, any
Collateral Assets), except pursuant to the Loan Documents.

 

(n)          Zoning; Partition. Without the prior written consent of the
Administrative Agent, which shall not be unreasonably withheld, delayed or
conditioned, no Borrower shall (a) initiate or consent to any zoning
reclassification of any portion of any Collateral Asset, (b) seek any variance
under any existing zoning ordinance that would result in the use of any
Collateral Asset becoming a non-conforming use under any zoning ordinance or any
other applicable land use Legal Requirement, or (c) allow any portion of any
Collateral Asset to be used in any manner that could result in the use of any
Collateral Asset becoming a non-conforming use under any zoning ordinance or any
other applicable land use Legal Requirement. No Borrower shall permit the
partition of any Collateral Asset.

 

(o)          Accounts. No Borrower will, without the approval of the
Administrative Agent, open or permit the opening of any account for the deposit
of revenues of any Borrower, other than (i) the PIP Reserve Account, (ii) the
Lockbox Account (as defined in the Cash Management Agreement), (iii) the
Property Accounts (as defined in the Cash Management Agreement), and (iv) any
account for amounts required by law to be segregated by any Borrower. For the
avoidance of doubt, the foregoing shall not restrict or be deemed to restrict
the Borrowers or any Approved Manager from depositing, holding and/or disbursing
amounts released to the Borrowers, such Approved Manager or their respective
affiliates in accordance with the terms and provisions of the Cash Management
Agreement in one or more accounts.

 

(p)          SPE Requirements. (i) No Loan Party will amend or otherwise modify
any provisions in the constitutive documents of any Borrower that incorporate
the terms of the Borrower SPE Requirements or give any consent, waiver or
approval to such amendments or modifications, waive any default under or breach
of the Borrower SPE Requirements incorporated into such constitutive documents,
agree in any manner to any other amendment, modification or change of any term
or condition of the Borrower SPE Requirements incorporated into such
constitutive documents or take any other action in connection with the Borrower
SPE Requirements that would impair in any material respect the value of the
interest or rights of any Loan Party thereunder or that would impair or
otherwise adversely affect in any material respect the interest or rights, if
any, of any Agent or any Lender.

 

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(ii)          No Loan Party will amend or otherwise modify any provisions in the
constitutive documents of any Pledgor that incorporate the terms of the Pledgor
SPE Requirements or give any consent, waiver or approval to such amendments or
modifications, waive any default under or breach of the Pledgor SPE Requirements
incorporated into such constitutive documents, agree in any manner to any other
amendment, modification or change of any term or condition of the Pledgor SPE
Requirements incorporated into such constitutive documents or take any other
action in connection with the Pledgor SPE Requirements that would impair in any
material respect the value of the interest or rights of any Loan Party
thereunder or that would impair or otherwise adversely affect in any material
respect the interest or rights, if any, of any Agent or any Lender.

 

(iii)          No Loan Party will amend or otherwise modify any provisions in
the constitutive documents of any TRS Lessee that incorporate the terms of the
TRS Lessee SPE Requirements or give any consent, waiver or approval to such
amendments or modifications, waive any default under or breach of the TRS Lessee
Requirements incorporated into such constitutive documents, agree in any manner
to any other amendment, modification or change of any term or condition of the
TRS Lessee SPE Requirements incorporated into such constitutive documents or
take any other action in connection with the TRS Lessee SPE Requirements that
would impair in any material respect the value of the interest or rights of any
Loan Party thereunder or that would impair or otherwise adversely affect in any
material respect the interest or rights, if any, of any Agent or any Lender.

 

(iv)          No Loan Party will amend or otherwise modify any provisions in the
constitutive documents of the Georgia Tech Owner relating to the single purpose
entity or bankruptcy remote provisions therein (including any amendment to “opt
into” Article 8 of the Uniform Commercial Code) or give any consent, waiver or
approval to such amendments or modifications, waive any default under or breach
of such provisions, agree in any manner to any other amendment, modification or
change of any term or condition of any such provisions or take any other action
in connection with such provisions that would impair in any material respect the
value of the interest or rights of any Loan Party thereunder or that would
impair or otherwise adversely affect in any material respect the interest or
rights, if any, of any Agent or any Lender in respect thereof.

 

(q)          Multiemployer Plans. Except as would not reasonably be expected to
result in a liability to a Loan Party of an amount equal to or greater than
$5,000,000.00, neither any Loan Party nor any ERISA Affiliate will contribute to
or be required to contribute to any Multiemployer Plan.

 

(r)          OFAC. No Loan Party shall knowingly engage in any dealings or
transactions with any Person, or in any country or territory, that at the time
of the dealing or transaction is, or whose government is, the subject of
Sanctions.

 

(s)          Operating Leases; Control Agreements. (i) Without the prior written
consent of the Administrative Agent, no Borrower shall surrender, terminate or
modify any Operating Lease, provided, however, notwithstanding the foregoing, so
long as the applicable Operating Lease remains fully subordinate to the Lien of
the applicable Mortgage, the Borrower and TRS Lessee party thereto shall be
permitted to amend such Operating Lease to (i) extend the term of such Operating
Lease, (ii) increase the rent payable thereunder or (iii) reduce the rent
payable thereunder, provided that any such amendment could not reasonably be
expected to have a Material Adverse Effect. So long as the Loan is outstanding,
the Borrowers and TRS Lessees shall extend the Operating Leases on or before the
then applicable expiration date.

 

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(ii)          Borrower shall not suffer or permit any TRS Lessee to terminate
any Control Agreement without the Administrative Agent’s prior consent.

 

(t)          Tenancy Leases. (i) No Borrower shall (and shall not suffer or
permit any TRS Lessee) to enter into any Tenancy Lease (x) other than in good
faith or (y) for a use that detracts in any material respect from the principal
use of the Collateral Asset as a hotel. Except as otherwise provided in this
Section 5.02(t), no Borrower shall and shall not permit any TRS Lessee to (A)
enter into any Tenancy Lease on other than “market” rental rates (in the
Borrowers’ good faith judgment), (B) enter into any Material Lease (a “New
Lease”), (C) consent to the assignment of any Material Lease (unless required to
do so by the terms of such Material Lease) that releases the original tenant
from its obligations under the Material Lease, or (D) modify or terminate any
Material Lease (including, without limitation, accept a surrender of any portion
of the Collateral Asset subject to a Material Lease (unless otherwise permitted
or required by law), allow a reduction in the term of any Material Lease or a
reduction in the rent payable under any Material Lease, change any renewal
provisions of any Material Lease, materially increase the obligations of the
landlord or materially decrease the obligations of any Tenant) or terminate any
Material Lease) (any such action referred to in clauses (C) and (D) being
referred to herein as a “Lease Modification”) without the prior written consent
of the Administrative Agent in each case which consent, so long as no Event of
Default is then continuing, shall not be unreasonably withheld, delayed or
conditioned. Any New Lease or Lease Modification that requires the
Administrative Agent’s consent shall be delivered to the Administrative Agent
for approval not less than ten (10) Business Days prior to the effective date of
such New Lease or Lease Modification. If the Administrative Agent shall have not
have responded within ten (10) Business Days after notice from the applicable
Borrower requesting consent, which request shall include a copy of the proposed
Lease Modification, such Borrower may send a second notice to the Administrative
Agent requesting consent and if the Administrative Agent shall not respond
within five (5) Business Days after its receipt of such second notice, its
approval shall be deemed given. Any such second notice shall be in an envelope
marked “PRIORITY” containing a bold-faced, conspicuous in a font size that is
not less than fourteen (14)) legend at the top of the first page thereof stating
that “SECOND AND FINAL NOTICE: THIS IS A REQUEST FOR CONSENT UNDER THE LOAN BY
CITIBANK, N.A. AND CERTAIN OTHER LENDERS TO AFFILIATES OF HOSPITALITY INVESTORS
TRUST, INC. IF YOU FAIL TO PROVIDE A SUBSTANTIVE RESPONSE (E.G., APPROVAL,
DENIAL OR REQUEST FOR CLARIFICATION OR MORE INFORMATION) TO THIS REQUEST FOR
APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED
GIVEN.”

 

(i)          Subject to terms of this Section 5.02(t), provided no Event of
Default shall have occurred and be continuing, the Borrowers may or may cause
the TRS Lessees to enter into a New Lease or Lease Modification, without the
Administrative Agent’s prior written consent, that satisfies each of the
following conditions: (A) with respect to a New Lease or Lease Modification, the
premises demised thereunder is not more than 5,000 net rentable square feet of
the applicable Collateral Asset; (B) the term of such New Lease or Lease
Modification, as applicable, does not exceed 60 months, plus up to two (2)
60-month option terms (or equivalent combination of renewals); (C) the New Lease
or Lease Modification provides for “market” rental rates and does not contain
any terms which would adversely affect any Agent’s or any Lender’s rights under
the Loan Documents or that would have a Material Adverse Effect; (D) the New
Lease or Lease Modification, as applicable, provides that the premises demised
thereby cannot be used for any of the following uses: any pornographic or
obscene purposes, any commercial sex establishment, any pornographic, obscene,
nude or semi-nude performances, modeling, materials, activities or sexual
conduct or any other use that has or could reasonably be expected to have a
Material Adverse Effect; (E) the tenant under such New Lease or Lease
Modification, as applicable, is not an Affiliate of any Borrower; (F) the New
Lease or Lease Modification, as applicable, does not prevent Insurance Proceeds
or Awards from being held and disbursed by the Administrative Agent in
accordance with the terms hereof and does not entitle any tenant to receive and
retain Insurance Proceeds or Awards, except those that may be specifically
awarded to it in Condemnation proceedings because of the Condemnation of its
trade fixtures and its leasehold improvements which have not become part of the
Collateral Asset and such business loss as tenant may specifically and
separately establish; and (G) the New Lease or Lease Modification, as applicable
satisfies the requirements of Section 5.02(t)(vii) and (viii).

 

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(ii)          Upon the execution of any New Lease or Lease Modification, as
applicable, the Borrowers shall deliver to the Administrative Agent an executed
copy of the Lease.

 

(iii)          The Borrowers agree that no Borrower or TRS Lessee shall have the
right or power, as against the Administrative Agent without its consent, to
cancel, abridge, or otherwise modify any Tenancy Lease unless such modification
complies with this Section 5.02(t).

 

(iv)          All security or other deposits of tenants of the Collateral Assets
shall be treated as trust funds and shall, if required by law or the applicable
Tenancy Lease not be commingled with any other funds of Borrowers, and such
deposits shall be deposited, upon receipt of the same by the Borrowers in a
separate trust account maintained by the Borrowers expressly for such purpose.
Within ten (10) Business Days after written request by the Administrative Agent,
the Borrowers shall furnish to Administrative Agent reasonably satisfactory
evidence of compliance with this Section 5.02(t)(v), together with a statement
of all lease securities deposited with the Borrowers by the tenants and the
location and account number of the account in which such security deposits are
held.

 

(v)          The Borrowers shall and shall cause each TRS Lessee to (i) promptly
perform and observe all of the material terms, covenants and conditions required
to be performed and observed by the Borrowers under the Tenancy Leases, if the
failure to perform or observe the same would have a Material Adverse Effect;
(ii) exercise, within ten (10) Business Days after a written request by the
Administrative Agent, any right to request from the tenants under any Tenancy
Lease a certificate with respect to the status thereof and (iii) not collect any
of the rents, more than one (1) month in advance (except that the Borrowers may
collect such security deposits and last month’s rents as are permitted by Legal
Requirements and are commercially reasonable in the prevailing market and
collect other charges in accordance with the terms of each Tenancy Lease).

 

(vi)          All Lease Modifications and New Leases entered into by the
Borrowers or a TRS Lessee after the Closing Date shall by their express terms be
subject and subordinate to the Loan Documents (through a subordination provision
contained in such Lease or otherwise).

 

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(vii)          Each Lease Modification and New Lease entered into from and after
the Closing Date shall provide (through an attornment provision contained in
such Lease or otherwise) that in the event of the enforcement by the
Administrative Agent of any remedy under the Loan Documents, the tenant under
such Tenancy Lease shall, at the option of the Administrative Agent or of any
other Person succeeding to the interest of the Administrative Agent as a result
of such enforcement, attorn to the Administrative Agent or to such Person and
shall recognize the Administrative Agent or such successor in the interest as
lessor under such Lease without change in the provisions thereof; provided,
however, the Administrative Agent or such successor in interest shall not be
liable for or bound by (i) any payment of an installment of rent or additional
rent made more than thirty (30) days before the due date of such installment,
(ii) any act or omission of or default by the applicable Borrower under any such
Tenancy Lease (but the Administrative Agent, or such successor, shall be subject
to the continuing obligations of the landlord to the extent arising from and
after such succession to the extent of the Administrative Agent’s, or such
successor’s, interest in the applicable Collateral Asset), (iii) any credits,
claims, setoffs or defenses which any tenant may have against such Borrower,
(iv) any obligation on such Borrower’s part, pursuant to such Tenancy Lease, to
perform any tenant improvement work or (v) any obligation on such Borrower’s
part, pursuant to such Lease, to pay any sum of money to any tenant. Each such
Lease Modification or New Lease shall also provide that, upon the reasonable
request by the Administrative Agent or such successor in interest, the tenant
shall execute and deliver an instrument or instruments confirming such
attornment.

 

(u)          Alterations. No Borrower shall perform any alteration or
improvement with respect to any Collateral Asset without the prior written
consent of the Administrative Agent, provided that a Borrower may, without the
prior written consent of the Administrative Agent, perform (i) Approved
Alterations, and (ii) any alterations and improvements at a Collateral Asset so
long as the aggregate amount required to complete such alterations or
improvements at such time does not exceed $15,500,000 or $1,000,000 per
alteration or improvement with respect to any individual Collateral Asset,
excepting from such caps alterations made pursuant to a capital budget approved
by the Administrative Agent, Approved Alterations or as otherwise reasonably
approved by the Administrative Agent.

 

(v)          PIP. The Administrative Agent hereby approves each Initial PIP and
each PIP Budget set forth on Schedule X. No Borrower shall, without the prior
written approval of the Administrative Agent, adopt, modify or amend in any
material respect any PIP or any PIP Budget; provided, however, that (i) any PIP
Budget that is part of a replacement Approved Franchise Agreement or adopted in
connection with a replacement Approved Franchise Agreement shall be approved or
disapproved by the Administrative Agent within five (5) Business Days after a
written request for approval by the Borrowers and if the Administrative Agent
does not respond within such five (5) Business Day period its approval shall be
deemed given, or (ii) any modification or amendment to any PIP or any PIP Budget
accepted by the applicable Approved Franchisor shall be deemed approved by the
Administrative Agent so long as (A) no Event of Default shall have occurred and
be continuing, (B) such modification or amendment shall not serve to increase
any PIP Budget by more than ten percent (10%) in the aggregate or accelerate any
PIP Completion Date by more than ninety (90) days without the Administrative
Agent’s approval; provided further that (x) if, following any such acceleration
to any PIP Completion Date, such PIP Completion Date is not at least ninety (90)
days after the proposed commencement date for the applicable PIP Work set forth
in Schedule X, the applicable Borrower shall accelerate such commencement date
by the same number of days by which the applicable PIP Completion Date was
accelerated and (y) after taking into account any changes to any such completion
date, the applicable Borrower shall be in compliance with the funding
requirements for the PIP Reserve Funds set forth in Section 5.01(bb)(v), and (C)
in all cases, the Borrowers shall provide prompt written notice of all such
modifications or amendments.

 

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(w)          Georgia Tech Ground Lease. With respect to the Georgia Tech Ground
Lease, the Borrowers shall not cause, permit or suffer the Georgia Tech Owner
to:

 

(i)          waive, excuse or discharge any of the material obligations of the
lessor or other obligor thereunder;

 

(ii)          do, permit or suffer (1) any act, event or omission which would be
likely to result in a default or permit the applicable lessor or other obligor
to terminate or exercise any other remedy with respect to the Georgia Tech
Ground Lease or (2) any act, event or omission which, with the giving of notice
or the passage of time, or both, would constitute a default or permit the lessor
or such other obligor to exercise any other remedy under the Georgia Tech Ground
Lease;

 

(iii)          cancel, terminate, surrender, modify or amend any of the
provisions of the Georgia Tech Ground Lease or agree to any termination,
amendment, modification or surrender thereof without the prior written consent
of the Administrative Agent;

 

(iv)          permit or consent to the subordination of the Georgia Tech Ground
Lease to any mortgage or other leasehold interest of the premises related
thereto, provided that the Georgia Tech Ground Lease may be subordinated to the
Lien of a fee mortgage so long as the Georgia Tech Owner has obtained or caused
to be obtained a nondisturbance agreement from the fee mortgagee to the extent
required pursuant to Section 5.01(j)(vi);

 

(v)          without the prior written consent of the Administrative Agent,
acquire the fee interest in the Georgia Tech Hotel;

 

(vi)          notwithstanding anything contained in the Georgia Tech Ground
Lease to the contrary, without prior written consent of the Administrative
Agent, sublet any portion of the leasehold estate created by the Georgia Tech
Ground Lease except in accordance with the express terms and conditions of this
Agreement (including, without limitation, pursuant to a Tenancy Lease entered
into in accordance with this Agreement); or

 

(vii)          treat, in connection with the bankruptcy or other insolvency
proceedings of any ground lessor or other obligor, the Georgia Tech Ground Lease
as terminated, cancelled or surrendered pursuant to Bankruptcy Law without the
Administrative Agent’s prior written consent.

 

SECTION 5.03. Reporting Requirements. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid or any
Lender shall have any Commitment hereunder, the Borrowers will furnish to the
Administrative Agent and Lenders in accordance with Section 9.02(b):

 

(a)          Default Notice. As soon as possible and in any event within five
(5) Business Days after the occurrence of each Default or any event, development
or occurrence reasonably expected to result in a Material Adverse Effect
continuing on the date of such statement, a statement of the Chief Financial
Officer (or other Responsible Officer) of the Borrowers setting forth details of
such Default or such event, development or occurrence and the action that the
Borrowers have taken and propose to take with respect thereto.

 

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(b)          Annual Financials. As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year, a copy of the annual audit
report for such year for the Parent Guarantor and its Consolidated Subsidiaries,
including therein Consolidated and consolidating balance sheets of the Parent
Guarantor and its Subsidiaries as of the end of such Fiscal Year and
Consolidated and consolidating statements of income and a Consolidated and
consolidating statement of cash flows of the Parent Guarantor and its
Subsidiaries for such Fiscal Year (it being acknowledged that a copy of the
annual audit report filed by the Parent Guarantor with the Securities and
Exchange Commission shall satisfy the foregoing requirements), in each case
accompanied by (x) an opinion of KPMG, LLP (or any other so-called “Big Four”
accounting firm), Grant Thornton LLP or other independent public accountants of
recognized standing reasonably acceptable to the Required Lenders, which opinion
shall be prepared in accordance with generally accepted auditing standards, and
(y) if applicable, a report of such independent public accountants as to the
Parent Guarantor’s internal controls required under Section 404 of the
Sarbanes-Oxley Act of 2002, together with (i) a schedule in form satisfactory to
the Administrative Agent of the computations used by the Borrowers in
determining, as of the end of such Fiscal Year, compliance with the covenant
contained in Section 5.04, provided that in the event of any change in GAAP used
in the preparation of such financial statements, the Borrowers shall also
provide, if necessary for the determination of compliance with Section 5.04, a
statement of reconciliation conforming such financial statements to GAAP and
(ii) a certificate of the Chief Financial Officer (or other Responsible Officer)
of the Borrowers stating that (A) no Default has occurred and is continuing or,
if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrowers have taken and propose to take with
respect thereto and (B) the Debt Yield as of the last day of Fiscal Year
(together with supporting evidence reasonably acceptable to the Administrative
Agent).

 

(c)          Quarterly Financials. As soon as available and in any event within
forty-five (45) days after the end of each of the first three quarters of each
Fiscal Year, Consolidated and consolidating balance sheets of the Parent
Guarantor and its Subsidiaries as of the end of such quarter and Consolidated
and consolidating statements of income and a Consolidated and consolidating
statement of cash flows of the Parent Guarantor and its Subsidiaries for the
period commencing at the end of the previous fiscal quarter and ending with the
end of such fiscal quarter and Consolidated and consolidating statements of
income and a Consolidated and consolidating statement of cash flows of the
Parent Guarantor and its Subsidiaries for the period commencing at the end of
the previous Fiscal Year and ending with the end of such quarter, setting forth
in each case in comparative form the corresponding figures for the corresponding
date or period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to normal year-end audit adjustments) by the Chief Executive
Officer, Chief Financial Officer or Treasurer (or other Responsible Officer
performing similar functions) of the Borrowers as having been prepared in
accordance with GAAP (it being acknowledged that a copy of the quarterly
financials filed by the Parent Guarantor with the Securities and Exchange
Commission shall satisfy the foregoing requirements), together with (i) a
certificate of such officer stating (A) that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrowers have taken and propose to
take with respect thereto and (B) the Debt Yield as of the last day of such
quarter (together with supporting evidence reasonably acceptable to the
Administrative Agent), and (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Borrowers in determining
compliance with the covenant contained in Section 5.04, provided that in the
event of any change in GAAP used in the preparation of such financial
statements, the Borrowers shall also provide, if necessary for the determination
of compliance with Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP.

 

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(d)          OFAC. Promptly upon the written request of the Administrative
Agent, any information that any Agent or Lender deems reasonably necessary from
time to time in order to ensure compliance with all applicable Sanctions and
Anti-Corruption Laws.

 

(e)          Collateral Asset Financials. As soon as available and in any event
within forty five (45) days after the end of each calendar quarter, a statement
of profits and losses in respect of each individual hotel comprising the
Collateral Assets, which lists in Microsoft Excel format the following
information for each Collateral Asset: (1) the city and state where each such
Collateral Asset is located, (2) the number of rooms, (3) the Appraised Value,
and (4) for the twelve (12) consecutive months most recently occurring, (A) the
rate of occupancy, (B) the “ADR” or average daily rate, (C) the “RevPAR” or
average revenue per available room, and (D) a detailed income statement showing
all revenues and expenses on a line item basis.

 

(f)          Annual Budgets. As soon as available and in any event within than
forty-five (45) days after the end of each Fiscal Year, forecasts prepared by
management of the Parent Guarantor, in form reasonably satisfactory to the
Administrative Agent, of income statements on a quarterly basis for the then
current Fiscal Year and on an annual basis for each Fiscal Year thereafter.

 

(g)          Material Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any
Intervening Entity of the type described in Section 4.01(f), and promptly after
the occurrence thereof, notice of any material adverse change in the status or
the financial effect on any Loan Party or any Intervening Entity of the Material
Litigation from that described on Schedule 4.01(f) hereto.

 

(h)          Securities Reports. Promptly after the sending or filing thereof,
to the extent not publicly available electronically at www.sec.gov, copies of
all proxy statements, Forms 10-K, 10-Q and 8-K (or their equivalents), and all
registration statements (but only in the event they are not redundant of a prior
filing already delivered to the Administrative Agent pursuant to this
subsection), that any Loan Party or any Intervening Entity files with the
Securities and Exchange Commission or any Governmental Authority that may be
substituted therefor, or with any national securities exchange.

 

(i)          Environmental Conditions. Notice to the Administrative Agent (i)
promptly upon obtaining knowledge of any material violation of any Environmental
Law affecting any Collateral Asset or the operations thereof or the operations
of any Borrower, (ii) promptly upon obtaining knowledge of any known release,
discharge or disposal of any Hazardous Materials at, from, or into any
Collateral Asset which it reports in writing or is legally required to report in
writing to any Governmental Authority and which is material in amount or nature
or which would reasonably be expected to materially adversely affect the value
of such Collateral Asset, (iii) promptly upon its receipt of any written notice
of material violation of any Environmental Laws or of any material release,
discharge or disposal of Hazardous Materials in violation of any Environmental
Laws or any matter that would reasonably be expected to result in an
Environmental Action, including a notice or claim of liability or potential
responsibility from any third party (including without limitation any federal,
state or local governmental officials) and including notice of any formal
inquiry, proceeding, demand, investigation or other action with regard to (A)
such Borrower’s or any other Person’s operation of any Collateral Asset in
compliance with Environmental Laws, (B) Hazardous Materials contamination on,
from or into any Collateral Asset, or (C) investigation or remediation of
off-site locations at which such Borrower or any of its predecessors are alleged
to have directly or indirectly disposed of Hazardous Materials, or (iv) promptly
upon such Borrower obtaining knowledge that any expense or loss has been
incurred by such Governmental Authority in connection with the assessment,
containment, removal or remediation of any Hazardous Materials with respect to
which such Borrower would reasonably be expected to incur material liability or
for which a Lien may be imposed on any Collateral Asset, provided that notice is
required only for any of the events described in clauses (i) through (iv) above
that would reasonably be expected to result in a Material Adverse Effect, would
reasonably be expected to result in a material Environmental Action with respect
to any Collateral Asset or would reasonably be expected to result in a Lien
against any Collateral Asset.

 

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(j)          Collateral Asset Value. Promptly after discovery of any setoff,
claim, withholding or defense asserted or effected against any Borrower, or to
which any Collateral Asset is subject, which would reasonably be expected to (i)
have a material adverse effect on the value of a Collateral Asset, (ii) have a
Material Adverse Effect or (iii) result in the imposition or assertion of a Lien
against any Collateral Asset which is not a Permitted Lien, notice to the
Administrative Agent thereof.

 

(k)          Appraisals. At the expense of the Borrowers, (i) during the
continuance of an Event of Default, new Appraisals of all Collateral Assets if
requested by the Administrative Agent, provided that the Administrative Agent
shall not make any such request more frequently than once in a twelve (12) month
period, and (ii) to the extent necessary for any Agent or Lender to comply with
any applicable legal or regulatory requirements, new Appraisals of one or more
Collateral Assets if requested by any Agent or any Lender. The Administrative
Agent shall order any Appraisal required to be commissioned pursuant to this
Section 5.03(k).

 

(l)          Reconciliation Statements. If, as a result of any change in
accounting principles and policies from those used in the preparation of the
audited financial statements referred to in Section 4.01(g), the Consolidated
and consolidating financial statements of the Parent Guarantor and its
Subsidiaries delivered pursuant to Section 5.03(b) or (c) will differ in any
material respect from the Consolidated and consolidating financial statements
that would have been delivered pursuant to such Section had no such change in
accounting principles and policies been made, then (i) together with the first
delivery of financial statements pursuant to Section 5.03(b) or (c) following
such change, Consolidated and consolidating financial statements of the Parent
Guarantor and its Subsidiaries for the fiscal quarter immediately preceding the
fiscal quarter in which such change is made, prepared on a pro forma basis as if
such change had been in effect during such fiscal quarter, and (ii) if requested
by Administrative Agent, a written statement of the Chief Executive Officer,
Chief Financial Officer or Treasurer (or other Responsible Officer performing
similar functions) of the Parent Guarantor setting forth the differences
(including any differences that would affect any calculations relating to the
financial covenant set forth in Section 5.04) which would have resulted if such
financial statements had been prepared without giving effect to such change.

 

(m)          Material Contract; Approved Franchise Agreements. As soon as
available, (i) a copy of any Material Contract entered into with respect to any
Collateral Asset after the Closing Date, and (ii) a copy of any quality
assurance letter or other notice under an Approved Franchise Agreement that
indicates that any Collateral Asset is in a “red zone 1” or “red zone 2” (or the
equivalent thereof in each case).

 

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(n)          Other Information. Promptly, such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects (which information, in the case of prospects only, shall
be related to the specific business activities and geographic locations of the
Loan Parties and their respective Subsidiaries and their Assets and not on the
general condition of the U.S. or relevant foreign economies or the capital
markets generally) of any Loan Party or any of its Subsidiaries as the any
Agent, or any Lender through the Administrative Agent, may from time to time
reasonably request.

 

From and after the execution and delivery of the Guaranty Supplement by the
Replacement Guarantor hereunder, all of the reporting requirements specified in
Section 5.03 that pertain to any Guarantor shall apply to the Replacement
Guarantor, mutatis mutandis.

 

SECTION 5.04. Financial Covenant – Guarantor Minimum Net Worth. So long as any
Advance or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid or any Lender shall have any Commitment hereunder, the Guarantors
collectively (or from and after the delivery of the Guaranty Supplement by the
Replacement Guarantor hereunder, the Replacement Guarantor) will maintain at all
times a Consolidated Tangible Net Worth of not less than $250,000,000. Each
calculation of Consolidated Tangible Net Worth of the Guarantors collectively
shall be made without duplication. To the extent any calculation described in
this Section 5.04 is required to be made on any date of determination other than
the last day of a fiscal quarter of the Guarantors or the Replacement Guarantor,
as applicable, such calculation shall be made on a pro forma basis to account
for any acquisitions or dispositions of Assets (including in respect of revenues
generated by such acquired or disposed of Assets), and the incurrence or
repayment of any Debt for Borrowed Money relating to such Assets, that have
occurred since the last day of the fiscal quarter of the Parent Guarantor or the
Replacement Guarantor, as applicable, most recently ended. To the extent any
calculations described in this Section 5.04 are required to be made on a Test
Date relating to an Advance, a merger permitted under Section 5.02(d), or a
Transfer permitted under Section 5.02(e)(i), such calculations shall be made on
a pro forma basis after giving effect to such Advance, merger, Transfer or such
other event, as applicable. All such calculations shall be reasonably acceptable
to the Administrative Agent.

 

Article VI
EVENTS OF DEFAULT

 

SECTION 6.01. Events of Default. If any of the following events shall occur and
be continuing, the Borrowers may take one of the following actions, as
determined by the Borrowers in their sole and absolute discretion: (i) cure such
Default within the number of days set forth below with respect to such Default
(if any), (ii) other than with respect to a Default pursuant to Section 6.01(f),
if the Default pertains solely to or is caused solely by one or more Collateral
Assets and the release of such Collateral Asset or Collateral Assets in
accordance with Sections 2.06(b) and 5.02(e)(i) would cure such Default and
immediately after the Transfer of such Collateral Asset no Default or Event of
Default would then exist, Transfer such Collateral Asset(s) in accordance and in
compliance with such Sections, provided that the Transfer of such Asset and any
required adjustments to the Advances outstanding shall be completed not later
than five (5) Business Days after the date of the Default or (iii) other than
with respect to a Default pursuant to Section 6.01(f), repay all Obligations
under the Loan Documents by the later of (A) the last day of any applicable cure
period set forth below with respect to such Default (if any) and (B) five (5)
Business Days after the date of Default (items (i), (ii) and (iii) above,
collectively the “Borrower Cure Rights”). If none of the Borrower Cure Rights
are completed by the Loan Parties within the applicable time periods described
above, or any event described in Section 6.01(f) below shall occur, an event of
default (“Events of Default”) shall occur and be continuing:

 

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(a)          Failure to Make Payments When Due. (i) Any Borrower shall fail to
pay any principal of any Advance when the same shall become due and payable,
(ii) any Borrower shall fail to pay any interest on any Advance when the same
shall become due and payable, or (iii) any Loan Party shall fail to make any
other payment under any Loan Document under this clause (iii) within three (3)
Business Days after the earlier of the date on which (A) a Responsible Officer
of any Loan Party obtains actual knowledge of such failure or (B) written notice
thereof shall have been given to the Borrower by any Agent or any Lender; or

 

(b)          Breach of Representations and Warranties. Any representation or
warranty made by any Loan Party (or any of its officers or the officers of its
general partner or managing member, as applicable) under or in connection with
any Loan Document shall prove to have been incorrect in any material respect
when made; or

 

(c)          Breach of Certain Covenants. Any Loan Party shall fail to perform
or observe any term, covenant or agreement contained in Section 2.14, 5.01(d),
(e) (only with respect to a Loan Party), (i), (k), (n) (solely to the extent
such failure would permit the lessor under the applicable Collateral Asset
Operating Lease to terminate such lease), (s), (u), (w), (z) or (cc), 5.02(a) –
(o), (q), (r), (w), 5.03(a), (g), (i), (j) or (k), 5.04 or 9.14; or

 

(d)          Other Defaults under Loan Documents. Any Loan Party shall fail to
perform or observe any other term, covenant or agreement contained in any Loan
Document on its part to be performed or observed if such failure shall remain
unremedied for 30 days after the earlier of the date on which (i) a Responsible
Officer of a Loan Party becomes aware of such failure or (ii) written notice
thereof shall have been given to the Borrowers by the Administrative Agent or
any Lender, provided that in the case of any such default which is susceptible
to cure but cannot be cured within thirty (30) days through the exercise of
reasonable diligence, if such Loan Party commences such cure within the initial
thirty (30) day period and diligently prosecutes same to completion, such period
of thirty (30) days shall be extended for such additional period of time as may
be reasonably necessary to cure same, provided such additional period shall in
no event exceed thirty (30) days; or

 

(e)          Termination of Control Agreements. Following the termination of a
Control Agreement, the failure of any Borrower to (i) appoint a successor
Lockbox Bank or a successor Property Account Bank (as such terms are defined in
the Cash Management Agreement) and (ii) execute and deliver to the
Administrative Agent a replacement Control Agreement in respect of the accounts
that were the subject of the terminated Control Agreement, such replacement
Control Agreement to be executed by the applicable Loan Parties and the
successor Lockbox Bank or the successor Property Account Bank, as applicable, in
each case within fifteen (15) Business Days after the date of such termination;
or

 

(f)          Insolvency Events. Any Loan Party shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is being
diligently contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of sixty (60) days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or any substantial part of its property) shall
occur; or any Loan Party shall take any corporate action to authorize any of the
actions set forth above in this subsection (f); or

 

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(g)          Monetary Judgments. Any judgments or orders, either individually or
in the aggregate, for the payment of money in excess of $500,000, shall be
rendered against any Borrower or any Subsidiary thereof and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of thirty (30) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; provided, however, that
any such judgment or order shall not give rise to an Event of Default under this
Section 6.01(g) if and so long as (A) the amount of such judgment or order which
remains unsatisfied is covered by a valid and binding policy of insurance
between the respective Borrower or Subsidiary and the insurer covering full
payment (subject to any customary deductible) of such unsatisfied amount and (B)
such insurer, which shall be rated at least “A” by A.M. Best Company, has been
notified, and has not disputed the claim made for payment, of the amount of such
judgment or order; or

 

(h)          Non-Monetary Judgments. (i) Any non-monetary judgment, order or
writ shall be rendered against any Borrower or Subsidiary thereof or (ii) any
seizure or attachment shall be issued or enforced against any Borrower or any of
its Collateral Assets, in any such case that would reasonably be expected to
result in a Material Adverse Effect, and there shall be any period of thirty
(30) consecutive days during which a stay of enforcement of such judgment,
order, writ, seize or attachment, by reason of a pending appeal or otherwise,
shall not be in effect; or

 

(i)          Unenforceability of Loan Documents. (i) Any material provision of
any Loan Document after delivery thereof pursuant to Section 3.01 shall for any
reason (other than pursuant to the terms thereof) cease to be valid and binding
on or enforceable against any Loan Party which is party to it, or (ii) any such
Loan Party shall so state in writing; provided, however, that solely with
respect to clause (i), any such failure shall not give rise to an Event of
Default hereunder if such failure is unintentional on the part of the Loan
Parties and reasonably susceptible of cure by the Loan Parties with the
reasonable cooperation of the Administrative Agent and Lenders and is cured
within ten (10) days after the earlier of the date on which (A) a Responsible
Officer of a Loan Party obtains actual knowledge of such failure or (B) written
notice thereof shall have been given to the Borrowers by the Administrative
Agent or any Lender; provided further that the Administrative Agent and Lenders
shall reasonably cooperate with the Loan Parties in effecting such cure; or

 

(j)          Security Failure. Any Collateral Document or financing statement
after delivery thereof pursuant to Section 3.01 shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority lien on and security interest in the Collateral purported to be covered
thereby; provided, however, that any such failure shall not give rise to an
Event of Default hereunder if (i) such failure is unintentional on the part of
the Loan Parties, (ii) no other Default or Event of Default has occurred and is
then continuing, (iii) such failure is reasonably susceptible of cure by the
Loan Parties (with the reasonable cooperation of the Agents and Lenders, if
necessary) and is cured within ten (10) days after the earlier of the date on
which (A) a Responsible Officer of a Loan Party obtains actual knowledge of such
failure or (B) written notice thereof has been given to the Borrowers by any
Agent or any Lender; provided further that the Agents and Lenders shall
cooperate in all commercially reasonable respects with the Loan Parties in
effecting such cure; or

 

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(k)          [Intentionally Omitted].

 

(l)           ERISA Events. Any ERISA Event shall have occurred with respect to
a Plan and the liability of the Loan Parties related to such ERISA Event is
reasonably expected to exceed $5,000,000; or

 

(m)          Defaults under the SPE Requirements. Any Borrower, any Pledgor, any
TRS Lessee or the Georgia Tech Owner shall breach in any material respect the
Borrower SPE Requirements (which, for the purposes of this Section 6.1(m), shall
be deemed to apply to the Georgia Tech Owner as is they had been incorporated in
full into the constituent documents of the Georgia Tech Owner), the Pledgor SPE
Requirements or the TRS Lessee SPE Requirements, respectively; provided,
however, that any such breach shall not give rise to an Event of Default
hereunder if (i) such breach was unintentional, non-recurring and immaterial and
(ii) such breach is susceptible of cure and is cured within ten (10) days after
the earlier of the date on which (A) the Georiga Tech Owner, any Borrower, any
Pledgor, any TRS Lessee or the Operating Partnership discovers such
unintentional, non-recurring and immaterial breach or (B) written notice thereof
shall have been given to the Borrowers by the Administrative Agent or any
Lender; or

 

(n)          Interest Rate Cap Agreements. The Borrowers shall fail to obtain or
maintain an Interest Rate Cap Agreement or a replacement thereof in accordance
with Sections 2.16 and Section 2.18; provided, however, that any such failure
shall not give rise to an Event of Default hereunder if such failure is
unintentional on the part of the Loan Parties and reasonably susceptible of cure
by the Loan Parties and is cured within ten (10) days after the earlier of the
date on which (A) a Responsible Officer of a Loan Party obtains actual knowledge
of such failure or (B) written notice thereof shall have been given to the
Borrowers by the Administrative Agent or any Lender;

 

then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Commitments of each Lender and the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith terminate,
(ii) shall at the request, or may with the consent, of the Required Lenders, by
notice to the Borrowers, declare the Loan, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Loan, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrowers; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Loan Party under any
Bankruptcy Law, (y) the Commitments of each Lender and the obligation of each
Lender to make Advances shall automatically be terminated and (z) the Loan, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Loan Parties, and (iii) shall at the
request, or may with the consent of the Required Lenders, proceed to enforce its
rights and remedies under the Loan Documents for the benefit of Lenders by
appropriate proceedings.

 

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Article VII
GUARANTY

 

SECTION 7.01. Guaranty; Limitation of Liability. (a) Each Guarantor (which for
avoidance of doubt includes each Borrower for the purposes of this Article 7)
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of the
Borrowers (x) pursuant to clause (ii) of Section 9.04(b) and (y) for which the
Borrowers are personally liable or which are fully recourse to the Borrowers
pursuant to Section 10.02 (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Loan Party to any Secured Party under or in respect
of the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party. This Guaranty is and constitutes a
guaranty of payment and not merely of collection.

 

(b)          Each Guarantor, each Agent and each other Lender and, by its
acceptance of the benefits of this Guaranty, each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty and the
Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this Guaranty and the Obligations of each
Guarantor hereunder. To effectuate the foregoing intention, the Guarantors, the
Agents, the other Lenders and, by their acceptance of the benefits of this
Guaranty, the other Secured Parties hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance.

 

(c)          Each Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guaranty or any other guaranty, such Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other Guarantor and each
other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.

 

SECTION 7.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this Agreement
and the other Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Administrative Agent or any other Secured Party with respect
thereto. The Obligations of each Guarantor under or in respect of this Guaranty
are independent of the Guaranteed Obligations or any other Obligations of any
other Loan Party under or in respect of this Agreement or the other Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against any Borrower or any other Loan Party or whether any
Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:

 

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(a)        any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;

 

(b)        any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Obligations
of any other Loan Party under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrowers, any other
Loan Party or any of their Subsidiaries or otherwise;

 

(c)        any taking, exchange, release or non-perfection of any collateral, or
any taking, release or amendment or waiver of, or consent to departure from, any
other guaranty, for all or any of the Guaranteed Obligations;

 

(d)        any manner of application of collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents or any other assets of
any Loan Party or any of its Subsidiaries;

 

(e)        any change, restructuring or termination of the corporate structure
or existence of any Loan Party or any of its Subsidiaries;

 

(f)        any failure of the Administrative Agent or any other Secured Party to
disclose to any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party now or hereafter known to the Administrative Agent or such
other Secured Party (each Guarantor waiving any duty on the part of the
Administrative Agent and each other Secured Party to disclose such information);

 

(g)       the failure of any other Person to execute or deliver this Agreement,
any other Loan Document, any Borrower Accession Agreement or any other guaranty
or agreement or the release or reduction of liability of any Guarantor or other
guarantor or surety with respect to the Guaranteed Obligations; or

 

(h)       any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Administrative Agent or any other Secured Party that might otherwise constitute
a defense available to, or a discharge of, any Loan Party or any other guarantor
or surety.

 

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of any Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.

 

SECTION 7.03. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any other Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any collateral.

 

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(b)          Each Guarantor hereby unconditionally and irrevocably waives any
right (including without limitation any such right arising under California
Civil Code Section 2815) to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.

 

(c)          Each Guarantor hereby unconditionally and irrevocably waives
(i) any and all rights and defenses available to it by reason of Sections 2787
to 2855, inclusive, 2899 and 3433 of the California Civil Code, including
without limitation any and all rights or defenses such Guarantor may have by
reason of protection afforded to the principal with respect to any of the
Guaranteed Obligations, or to any other guarantor of any of the Guaranteed
Obligations with respect to any of such guarantor’s obligations under its
guaranty, in either case pursuant to the antideficiency or other laws of the
State of California limiting or discharging the principal’s indebtedness or such
guarantor’s obligations, including without limitation Section 580a, 580b, 580d
or 726 of the California Code of Civil Procedure, (ii) any defense arising by
reason of any claim or defense based upon an election of remedies by the
Administrative Agent or any other Secured Party that in any manner impairs,
reduces, releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such Guarantor or other
rights of such Guarantor to proceed against any of the other Loan Parties, any
other guarantor or any other Person or any collateral and (iii) any defense
based on any right of set-off or counterclaim against or in respect of the
Obligations of such Guarantor hereunder. No other provision of this Guaranty
shall be construed as limiting the generality of any of the covenants and
waivers set forth in this Section 7.03(c). As provided below, this Guaranty
shall be governed by, and shall be construed and enforced in accordance with,
the laws of the State of New York. This Section 7.03(c) is included solely out
of an abundance of caution, and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this
Guaranty or to any of the Guaranteed Obligations.

 

(d)          Each Guarantor waives any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have against any Loan
Party or any of its assets in connection with this Guaranty or the performance
by such Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute (including without
limitation under California Civil Code Section 2847, 2848 or 2849), under common
law or otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against any such Loan Party, (b) any right to enforce, or to participate
in, any claim, right or remedy that any Secured Party now has or may hereafter
have against any Loan Party, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any Secured
Party.

 

(e)          Each Guarantor acknowledges that the Administrative Agent may,
without notice to or demand upon such Guarantor and without affecting the
liability of such Guarantor under this Guaranty, foreclose under any mortgage by
nonjudicial sale, and each Guarantor hereby waives any defense to the recovery
by the Administrative Agent and the other Secured Parties against such Guarantor
of any deficiency after such nonjudicial sale and any defense or benefits that
may be afforded by applicable law (including, without limitation, Sections 580a
and 580d of the California Code of Civil Procedure or any other law of any other
jurisdiction having similar effect).

 

(f)          Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of the Administrative Agent or any other Secured Party to
disclose to such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrowers, any other Loan Party or any of their Subsidiaries
now or hereafter known by the Administrative Agent or such other Secured Party.

 

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(g)          Each Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by this
Agreement and the other Loan Documents and that the waivers set forth in
Section 7.02 and this Section 7.03 are knowingly made in contemplation of such
benefits.

 

SECTION 7.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against any Borrower, any other Loan Party or any other insider guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor’s Obligations under or in respect of this Guaranty, this Agreement or
any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Secured Party against any
Borrower, any other Loan Party or any other insider guarantor or any collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from any Borrower, any other Loan Party or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been indefeasibly paid in full in cash and the
Commitments shall have expired or been terminated. If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the indefeasible payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty and (b)
the termination in whole of the Commitments, such amount shall be received and
held in trust for the benefit of the Secured Parties, shall be segregated from
other property and funds of such Guarantor and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so received (with any
necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents. If (i) any Guarantor shall make payment to any Secured Party of all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
indefeasibly paid in full in cash, and (iii) the termination in whole of the
Commitments shall have occurred, the Administrative Agent and the other Secured
Parties will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment made by such Guarantor pursuant to this Guaranty.

 

SECTION 7.05. [Intentionally Omitted].

 

SECTION 7.06. Indemnification by Guarantors. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Administrative Agent or the
Secured Parties under this Agreement, this Guaranty or the other Loan Documents,
each Guarantor shall, to the fullest extent permitted by law, indemnify, defend
and save and hold harmless each Agent, each Arranger, each other Secured Party,
each Servicer and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of external counsel) that may be incurred by or asserted or awarded
against any Indemnified Party in connection with or as a result of any failure
of any Guaranteed Obligations to be the legal, valid and binding obligations of
any Loan Party enforceable against such Loan Party in accordance with their
terms.

 

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(b)          Each Guarantor hereby also agrees that no Indemnified Party shall
have any liability (whether direct or indirect, in contract, tort or otherwise)
to any of the Guarantors or any of their respective Affiliates or any of their
respective officers, directors, employees, agents and advisors, and each
Guarantor hereby agrees not to assert any claim against any Indemnified Party on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Loan, the actual or proposed
use of the proceeds of the Loan, the Loan Documents or any of the transactions
contemplated by the Loan Documents.

 

SECTION 7.07. Subordination. (a) Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by each other
Loan Party (the “Subordinated Obligations”) to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 7.07.

 

(b)          Prohibited Payments, Etc. Except during the continuance of an Event
of Default (including the commencement and continuation of any proceeding under
any Bankruptcy Law relating to any other Loan Party), each Guarantor may receive
regularly scheduled payments or payments made in the ordinary course of business
from any other Loan Party on account of the Subordinated Obligations. After the
occurrence and during the continuance of any Event of Default (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any other Loan Party), however, unless required pursuant to Section
7.07(d), no Guarantor shall demand, accept or take any action to collect any
payment on account of the Subordinated Obligations.

 

(c)          Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that
the Secured Parties shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not
constituting an allowed claim in such proceeding (“Post Petition Interest”))
before such Guarantor receives payment of any Subordinated Obligations.

 

(d)          Turn-Over. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Administrative Agent so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the Secured
Parties and deliver such payments to the Administrative Agent on account of the
Guaranteed Obligations (including all Post Petition Interest), together with any
necessary endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of such Guarantor under the other
provisions of this Guaranty.

 

(e)          Administrative Agent Authorization. After the occurrence and during
the continuance of any Event of Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other
Loan Party), the Administrative Agent is authorized and empowered (but without
any obligation to so do), in its discretion, (i) in the name of each Guarantor,
to collect and enforce, and to submit claims in respect of, Subordinated
Obligations and to apply any amounts received thereon to the Guaranteed
Obligations (including any and all Post Petition Interest), and (ii) to require
each Guarantor (A) to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and (B) to pay any amounts received on such obligations
to the Administrative Agent for application to the Guaranteed Obligations
(including any and all Post Petition Interest).

 

SECTION 7.08. Continuing Guaranty. This Guaranty is a continuing guaranty and
shall (a) remain in full force and effect until the later of (i) the
indefeasible payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Guaranty, and (ii) the termination in whole of the
Commitments and the payment of all Obligations, (b) be binding upon the
Guarantors, their successors and assigns and (c) inure to the benefit of and be
enforceable by the Administrative Agent and the other Secured Parties and their
successors, transferees and assigns.

 

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Article VIII
THE AGENTS

 

SECTION 8.01. Authorization and Action; Appointment of Supplemental Agents;
Servicer. (a) Each Lender hereby appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to such Agent by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. In that connection, Lenders hereby delegate to
(i) the Administrative Agent the power to manager and administer the Advances
and the Loan Documents, and the Administrative Agent may, without the consent of
any Lender, take any and all actions necessary or required to be taken by the
Administrative Agent under the Loan Documents, except to the extent that the
consent of all Lenders or the Required Lenders is expressly required pursuant to
any Loan Document, and (ii) the Collateral Agent the power to manager and
administer the Collateral Documents, and the Collateral Agent may, without the
consent of any Lender, take any and all actions necessary or required to be
taken by the Collateral Agent under the Loan Documents, except to the extent
that the consent of all Lenders or the Required Lenders is expressly required
pursuant to any Loan Document. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders or such greater number of Lenders as may be required
pursuant to this Agreement, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that no Agent shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law, including without
limitation, for the avoidance of doubt, any action that may be in violation of
the automatic stay under any Debtor Relief Law. Each Agent agrees to give to
each Lender prompt notice of each notice given to it by the Operating
Partnership (on behalf of any Borrower) or any Borrower pursuant to the terms of
this Agreement. Notwithstanding anything to the contrary in any Loan Document,
no Person identified as a syndication agent, documentation agent, senior
manager, lead arranger or book-running manager, in such Person’s capacity as
such, shall have any obligations or duties to any Loan Party, any Agent or any
other Secured Party under any of such Loan Documents. In its capacity as
Lenders’ contractual representative, each Agent is a “representative” of Lenders
as used within the meaning of “Secured Party” under Section 9-102 of the Uniform
Commercial Code.

 

(b)          Anything contained herein or in the Collateral Documents to the
contrary notwithstanding, the Collateral Agent may from time to time, when the
Collateral Agent deems it to be necessary, appoint one or more trustees,
co-trustees, collateral co-agents or collateral subagents (each, a “Supplemental
Agents”) with respect to all or any part of the Collateral. In the event that
the Collateral Agent so appoints any Supplemental Agent with respect to any
Collateral, (i) such Supplemental Agent shall automatically be vested, in
addition to the Collateral Agent, with all rights, powers, privileges, interests
and remedies of the Collateral Agent under the Collateral Documents with respect
to such Collateral; (ii) such Supplemental Agent shall be deemed to be an
“Agent” for purposes of this Agreement and the other Loan Documents, and the
provisions of Section 22 of the Security Agreement, this Article and Section
9.04 hereof that refer to the Collateral Agent shall inure to the benefit of
such Supplemental Agent, and all references therein and in the other Loan
Documents to the Collateral Agent shall be deemed to be references to the
Collateral Agent and/or such Supplemental Agent, as the context may require; and
(iii) the term “Collateral Agent”, when used herein or in any applicable
Collateral Document in relation to the Liens on or security interests in such
Collateral granted in favor of the Collateral Agent, and any rights, powers,
privileges, interests and remedies of the Collateral Agent with respect to such
Collateral, shall be deemed to include such Supplemental Agent; provided,
however, that no such Supplemental Agent shall be authorized to take any action
with respect to any such Collateral unless and except to the extent expressly
authorized in writing by the Collateral Agent. Should any instrument in writing
from the Borrowers or any other Loan Party be required by any Supplemental Agent
so appointed by the Collateral Agent to more fully or certainly vest in and
confirming to such Supplemental Agent such rights, powers, privileges and
duties, the Borrowers shall, or shall cause such Loan Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
the Collateral Agent. If any Supplemental Agent, or successor thereto, shall
die, become incapable of acting, resign or be removed, all the rights, powers,
privileges and duties of such Supplemental Agent, to the extent permitted by
law, shall automatically vest in and be exercised by the Collateral Agent until
the appointment of a new Supplemental Agent.

 

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(c)          At the option of the Administrative Agent, the Loan may be serviced
by a servicer/special servicer/trustee selected by the Administrative Agent
(collectively, the “Servicer”) and the Administrative Agent may delegate all or
any portion of its responsibilities under this Agreement and the other Loan
Documents to such Servicer pursuant to a servicing agreement between the
Administrative Agent and such Servicer. The Servicer shall be deemed to be an
“Agent” for purposes of this Agreement and the other Loan Documents, and the
provisions of Section 22 of the Security Agreement, this Article and Section
9.04 hereof that refer to the Administrative Agent shall inure to the benefit of
the Servicer, and all references therein and in the other Loan Documents to the
Administrative Agent shall be deemed to be references to the Administrative
Agent and/or the Servicer, as the context may require. Without limitation of any
other provision contained herein, the Borrowers shall be liable for the third
party out-of-pocket costs and expenses of the Administrative Agent incurred with
respect to any Servicer, including, without limitation, any initial set up costs
and fees and ongoing monthly costs and fees, in each case, charged by such
Servicer, provided that such servicing fee shall be in an amount customary in
the marketplace for commercial mortgage loans similar to the Loan; provided,
however, that at no time shall such servicing fee exceed an annual rate equal to
0.01% of the then Outstanding Principal Balance.

 

SECTION 8.02. Agents’ Reliance, Etc. Neither any Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with the Loan Documents, except
for its or their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, each Agent: (a) in the case of the
Administrative Agent, may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 9.07; (b) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance, observance or satisfaction of any of the
terms, covenants or conditions of any Loan Document on the part of any Loan
Party or the existence at any time of any Default under the Loan Documents or to
inspect the property (including the books and records) of any Loan Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; (f) shall incur no liability
under or in respect of any Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, telecopy
or telex or other electronic communication) believed by it to be genuine and
signed or sent by the proper party or parties; and (g) shall not be required to
take any action that, in its opinion or the opinion of its counsel, may expose
such Agent to liability or that is contrary to any Loan Document or applicable
law, including for the avoidance of doubt, any action that may be in violation
of the automatic stay under any Bankruptcy Law.

 

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SECTION 8.03. Citibank and Affiliates. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Citibank shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
the same as though it were not an Agent; and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated, include Citibank in its individual
capacity. Citibank and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, any Loan Party, any
Subsidiary of any Loan Party and any Person that may do business with or own
securities of any Loan Party or any such Subsidiary, all as if Citibank were not
the Administrative Agent or the Collateral Agent and without any duty to account
therefor to Lenders.

 

SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement. Nothing in this Agreement or any other Loan Document shall
require any Agent or any of its respective directors, officers, agents or
employees to carry out any “know your customer” or other checks in relation to
any Person on behalf of any Lender and each Lender confirms to each Agent that
it is solely responsible for any such checks it is required to carry out and
that it may not rely on any statement in relation to such checks made by the
Agents or any of their respective directors, officers, agents or employees.
Subject to the terms of the immediately preceding sentence, each Agent agrees to
deliver to Lenders any “know your customer” related information received by such
Agent from the Borrowers.

 

SECTION 8.05. Indemnification by Lenders. (a) Each Lender severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Borrowers)
from and against such Lender’s ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against such Agent
in any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents (collectively, the
“Indemnified Costs”); provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from any Agent’s
gross negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender agrees to reimburse each Agent promptly upon demand for
its ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrowers under Section 9.04, to the
extent that such Agent is not promptly reimbursed for such costs and expenses by
the Borrowers. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Costs, this Section 8.05 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other
Person.

 

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(b)          For purposes of this Section 8.05, Lenders’ respective ratable
shares of any amount shall be determined, at any time, according to their
respective Commitments at such time. The failure of any Lender to reimburse any
Agent promptly upon demand for its ratable share of any amount required to be
paid by Lender to such Agent as provided herein shall not relieve any other
Lender of its obligation hereunder to reimburse any Agent for its ratable share
of such amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse any Agent for such other Lender’s ratable share of such
amount. The term “Agent” shall be deemed to include the employees, directors,
officers and affiliates of each Agent for purposes of this Section 8.05. Without
prejudice to the survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this Section 8.05 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

 

SECTION 8.06. Successor Agents. Any Agent may resign at any time by giving
thirty (30) days’ prior written notice thereof to Lenders and the Operating
Partnership (on behalf of the Borrowers) and may be removed at any time with or
without cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within thirty (30) days after the retiring
Agent’s giving of notice of resignation or the Required Lenders’ removal of the
retiring Agent, then the retiring Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $250,000,000. Upon the acceptance of any appointment as the
Agent hereunder by a successor Agent, and upon the execution and filing or
recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages and Assignments of Leases, and such
other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents. If
within forty-five (45) days after written notice is given of the retiring
Agent’s resignation or removal under this Section 8.06 no successor Agent shall
have been appointed and shall have accepted such appointment, then on such
forty-fifth (45th) day (i) the retiring Agent’s resignation or removal shall
become effective, (ii) the retiring Agent shall thereupon be discharged from its
duties and obligations under the Loan Documents and (iii) the Required Lenders
shall thereafter perform all duties of the retiring Agent under the Loan
Documents until such time, if any, as the Required Lenders appoint a successor
Agent as provided above. After any retiring Agent’s resignation or removal
hereunder as the Agent shall have become effective, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent under this Agreement.

 

SECTION 8.07. Relationship of Agents and Lenders. The relationship between
Agents (or either of them) and Lenders, and the relationship among Lenders, is
not intended by the parties to create, and shall not create, any trust, joint
venture or partnership relation between them.

 

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Article IX
MISCELLANEOUS

 

SECTION 9.01. Amendments, Etc. (a) No amendment or waiver of any provision of
this Agreement or the Notes or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all Lenders, do any of the following at
any time: (i) modify the definition of Required Lenders or otherwise change the
percentage vote of Lenders required to take any action under this Agreement or
any other Loan Document, (ii) except to the extent expressly permitted under
this Agreement (including, without limitation, as contemplated by Section
9.13(c)), release the Borrowers with respect to the Obligations of the Borrowers
hereunder or, reduce or limit the obligations of any Guarantor under Article VII
or release such Guarantor or otherwise limit such Guarantor’s liability with
respect to the Guaranteed Obligations, (iii) release any of the Collateral
(other than pursuant to Section 5.02(e) or 9.13) or permit the Loan Parties to
encumber the Collateral Assets or any other Collateral, except as expressly
permitted in the Loan Documents, (iv) amend Section 5.02(e)(i), 9.13 or this
Section 9.01, (v) increase the Commitments of Lenders or subject Lenders to any
additional obligations, (vi) forgive or reduce the principal of, or interest on,
the Obligations of the Loan Parties under the Loan Documents or any fees or
other amounts payable thereunder, (vii) postpone or extend any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (viii) modify the Allocated Loan Amounts, or (xiv)
extend the Maturity Date, other than as provided by Section 2.16; provided
further that (A) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent or the Collateral Agent, as applicable, in
addition to Lenders required above to take such action, affect the respective
rights or duties of the Administrative Agent or the Collateral Agent under this
Agreement or the other Loan Documents; (B) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders affect the
definitions of “Closing Asset Deliverables”, “Collateral Assets”, Section 5.04,
the definitions of the terms used or incorporated in Section 5.04, or waive any
default under the financial covenant set forth in Section 5.04; and (C) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that (x) the Commitment of any Defaulting
Lender may not be increased or extended 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.

 

(b)          In the event that any Lender (a “Non-Consenting Lender”) shall fail
to consent to a waiver or amendment to, or a departure from, the provisions of
this Agreement which requires the consent of all Lenders and that has been
consented to by the Administrative Agent and the Required Lenders, then the
Borrowers shall have the right, upon written demand to such Non-Consenting
Lender and the Administrative Agent given within thirty (30) days after the
first date on which such consent was solicited in writing from Lenders by the
Administrative Agent (a “Consent Request Date”), to cause such Non-Consenting
Lender to assign its rights and obligations under this Agreement (including,
without limitation, its Commitment or Commitments, the Advances owing to it and
the Note or Notes, if any, held by it) to an Eligible Assignee designated by the
Operating Partnership and approved by the Administrative Agent (such approval
not to be unreasonably withheld) (a “Replacement Lender”), provided that (i) as
of such Consent Request Date, no Default or Event of Default shall have occurred
and be continuing, (ii) as of the date of the Operating Partnership’s written
demand to replace such Non-Consenting Lender, no Default or Event of Default
shall have occurred and be continuing other than a Default or Event of Default
that resulted solely from the subject matter of the waiver or amendment for
which such consent was being solicited from Lenders by the Administrative Agent,
and (iii) the replacement of any Non-Consenting Lender shall be consummated in
accordance with and subject to the provisions of Section 2.19. The Replacement
Lender shall purchase such interests of the Non-Consenting Lender and shall
assume the rights and obligations of the Non-Consenting Lender under this
Agreement upon execution by the Replacement Lender of an Assignment and
Acceptance delivered pursuant to Section 9.07.

 

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SECTION 9.02. Notices, Etc. (a) All notices and other communications provided
for hereunder shall be either (x) in writing (including telecopier
communication) and mailed, telecopied or delivered by hand or by overnight
courier service, (y) as and to the extent set forth in Section 9.02(b) and in
the proviso to this Section 9.02(a), in an electronic medium and delivered as
set forth in Section 9.02(b) or (z) as and to the extent not prohibited by this
Agreement, transmitted by e-mail, provided that such e-mail shall in all cases
include an attachment (in PDF format or similar format) containing a legible
signature of the person providing such notice, if to any Loan Party, in the case
of the Operating Partnership at its address at 405 Park Avenue, New York, New
York 10022, Attention: Chief Executive Officer and 405 Park Avenue, New York,
New York 10022, Attention: General Counsel (and in the case of transmission by
e-mail not prohibited to be made by e-mail, to JMehlman@hitreit.com and
PHughes@hitreit.com, with a copy by U.S. mail to the Operating Partnership at
its address set forth above, provided that no notices of Default shall be sent
to any Loan Party solely by e-mail transmission); if to any Initial Lender, at
its Domestic Lending Office or, if applicable, at the telecopy number or e-mail
address specified opposite its name on Schedule I hereto (and in the case of a
transmission by e-mail, with a copy by U.S. mail to its Domestic Lending
Office); if to any other Lender, at its Domestic Lending Office or, if
applicable, at the telecopy number or e-mail address specified in the Assignment
and Acceptance pursuant to which it became a Lender (and in the case of a
transmission by e-mail, with a copy by U.S. mail to its Domestic Lending
Office); and if to the Administrative Agent or the Collateral Agent, at its
address at Citibank, N.A., 390 Greenwich Street, 7th Floor, New York, New York
10013, Attention: Ana Rosu Marmann, or, if applicable, at ana.rosu@citi.com (and
in the case of a transmission by e-mail, with a copy by U.S. mail to Citibank,
N.A., 390 Greenwich Street, 7th Floor, New York, New York 10013, Attention: Ana
Rosu Marmann) or, as to any Loan Party or Agent, at such other address as shall
be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrowers and the Administrative Agent. All notices,
demands, requests, consents and other communications described in this clause
(a) shall be effective (i) if delivered by hand, including any overnight courier
service, upon personal delivery (or refusal to accept delivery), (ii) if
delivered by mail, upon delivery thereof (or refusal to accept delivery), (iii)
if delivered by posting to an Approved Electronic Platform, an Internet website
or a similar telecommunication device requiring that a user have prior access to
such Approved Electronic Platform, website or other device (to the extent
permitted by Section 9.02(b) to be delivered thereunder), when such notice,
demand, request, consent and other communication shall have been made generally
available on such Approved Electronic Platform, Internet website or similar
device to the class of Person being notified (regardless of whether any such
Person must accomplish, and whether or not any such Person shall have
accomplished, any action prior to obtaining access to such items, including
registration, disclosure of contact information, compliance with a standard user
agreement or undertaking a duty of confidentiality) and such Person has been
notified in respect of such posting that a communication has been posted to the
Approved Electronic Platform, provided that if requested by any Lender, the
Administrative Agent shall deliver a copy of the Communications to such Lender
by e-mail or telecopier and (iv) if delivered by electronic mail or any other
telecommunications device, when receipt is confirmed by electronic mail as
provided in this clause (a); provided, however, that notices and communications
to the Administrative Agent pursuant to Article II, III or VIII or to the
Collateral Agent under the Collateral Documents shall not be effective until
received by the Administrative Agent or the Collateral Agent, as the case may
be. Delivery by telecopier of an executed counterpart of a signature page to any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof. Each Lender agrees (i) to
notify the Administrative Agent in writing of such Lender’s e-mail address to
which a notice may be sent by electronic transmission (including by electronic
communication) on or before the date such Lender becomes a party to this
Agreement (and from time to time thereafter to ensure that the Administrative
Agent has on record an effective e-mail address for such Lender) and (ii) that
any notice may be sent to such e-mail address.

 

(b)          Notwithstanding clause (a) (unless the Administrative Agent
requests that the provisions of clause (a) be followed) and any other provision
in this Agreement or any other Loan Document providing for the delivery of any
Approved Electronic Communication by any other means, the Loan Parties shall
deliver all Approved Electronic Communications to the Administrative Agent by
properly transmitting such Approved Electronic Communications in an
electronic/soft medium in a format acceptable to the Administrative Agent to
oploanswebadmin@citigroup.com or such other electronic mail address (or similar
means of electronic delivery) as the Administrative Agent may notify to the
Borrowers. Nothing in this clause (b) shall prejudice the right of the
Administrative Agent or any Lender to deliver any Approved Electronic
Communication to any Loan Party in any manner authorized in this Agreement or to
request that the Borrowers effect delivery in such manner.

 

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(c)          Each Lender and each Loan Party agrees that the Administrative
Agent may, but shall not be obligated to, make the Approved Electronic
Communications available to Lenders by posting such Approved Electronic
Communications on IntraLinks™ or a substantially similar electronic platform
chosen by the Administrative Agent to be its electronic transmission system (the
“Approved Electronic Platform”). Although the Approved Electronic Platform and
its primary web portal are secured with generally-applicable security procedures
and policies implemented or modified by the Administrative Agent from time to
time (including, as of the Closing Date, a dual firewall and a User ID/Password
Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the
Approved Electronic Platform only on a deal-by-deal basis, each Lender and each
Loan Party acknowledges and agrees that the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution. In consideration for the
convenience and other benefits afforded by such distribution and for the other
consideration provided hereunder, the receipt and sufficiency of which is hereby
acknowledged, each Lender and each Loan Party hereby approves distribution of
the Approved Electronic Communications through the Approved Electronic Platform
and understands and assumes the risks of such distribution.

 

(d)          THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC
COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE
ADMINISTRATIVE AGENT NOR ANY OF ITS DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES
WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC
COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS
ANY LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS
OR THE APPROVED ELECTRONIC PLATFORM. 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 THE ADMINISTRATIVE AGENT
OR ANY OF ITS DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES IN CONNECTION WITH THE
APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.

 

(e)          Each Lender and each Loan Party agrees that the Administrative
Agent may, but (except as may be required by applicable law) shall not be
obligated to, store the Approved Electronic Communications on the Approved
Electronic Platform in accordance with the Administrative Agent’s
generally-applicable document retention procedures and policies.

 

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or any
Agent to exercise, and no delay in exercising, any right hereunder or under any
other Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

 

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SECTION 9.04. Costs and Expenses. (a) Each Borrower agrees jointly and severally
to pay on demand (i) all reasonable and documented out-of-pocket costs and
expenses of the Agents, the Arrangers and the Secured Parties in connection with
the preparation, execution, delivery, administration, modification and amendment
of the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses, (B) the reasonable and documented fees and expenses of counsel for the
Agents with respect thereto (including, without limitation, with respect to
reviewing and advising on any matters required to be completed by the Loan
Parties on a post-closing basis), with respect to advising the Agents, Arrangers
or any Secured Party as to their rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors’ rights generally and any
proceeding ancillary thereto and (C) the reasonable and documented fees and
expenses of counsel for the Agents with respect to the preparation, execution,
delivery and review of any documents and instruments at any time delivered
pursuant to Section 3.01 and (ii) all reasonable out-of-pocket costs and
expenses of the Agents, the Arrangers and each Lender in connection with any
work-out or the enforcement (whether through negotiations, legal proceedings or
otherwise) of the Loan Documents, whether in any action, suit or litigation, or
any bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Agents and each Lender with respect thereto).

 

(b)          Each Borrower agrees to indemnify, defend and save and hold
harmless each Indemnified Party from and against, and shall pay on demand, any
and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of external counsel) that may be
actually incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) (i) the Loan,
the actual or proposed use of the proceeds of the Loan, the Loan Documents or
any of the transactions contemplated thereby or (ii) the actual or alleged
presence of Hazardous Materials on any property of any Loan Party or any of its
Subsidiaries or any Environmental Action relating in any way to any Loan Party
or any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 9.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party, whether or not any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated by
the Loan Documents are consummated. Each Loan Party also agrees not to assert
any claim against any Agent, any Arranger, any Lender or any of their
Affiliates, or any of their respective officers, directors, employees, agents
and advisors, on any theory of liability, for special, indirect, incidental,
consequential or punitive damages arising out of or otherwise relating to the
Loan, the actual or proposed use of the proceeds of the Loan, the Loan Documents
or any of the transactions contemplated by the Loan Documents. This Section
9.04(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)          If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrowers to or for the account of a Lender (other
than on a Monthly Payment Date where interest has been paid by the Borrowers
through the end of the then current Interest Period for such Advance), as a
result of a payment or Conversion pursuant to Section 2.06, 2.09, or 2.10(d),
replacement of a Lender pursuant to Section 2.19 or a termination of Commitments
or acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or if the Borrowers fail to make any payment or prepayment of an
Advance for which a notice of prepayment has been given or that is otherwise
required to be made, whether pursuant to Section 2.04, 2.06, 6.01 or otherwise,
the Borrowers shall, upon demand by such Lender (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably and actually incur as a result
of such payment or Conversion or such failure to pay or prepay, as the case may
be, including, without limitation, any loss, cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.

 

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(d)          If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by any Agent or any Lender, in its sole
discretion.

 

(e)          Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers and the other Loan Parties contained in
Sections 2.10 and 2.12, Section 7.06 and this Section 9.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under any of the other Loan Documents. The obligations and liabilities of
each Loan Party under this Section 9.04 shall fully survive indefinitely
notwithstanding the exercise of any of Indemnified Party’s rights pursuant to
Section 726.5 of the California Code of Civil Procedure. This Section 9.04 is
intended by the parties to constitute an “environmental provision” as defined in
Section 736 of the California Code of Civil Procedure, and the Indemnified
Parties shall have all rights and remedies in such section.

 

(f)          No Indemnified Party referred to in Section 9.04(b) 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.

 

SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of any Borrower or any other party
to a Loan Document against any and all of the Obligations of any such Borrower
or such other party now or hereafter existing under the Loan Documents,
irrespective of whether such Agent or such Lender shall have made any demand
under this Agreement or any Note or Notes and although such obligations may be
unmatured. If such deposits are not pledged pursuant to a valid security
agreement, the prior written consent of the Administrative Agent shall be
obtained before any right of set-off shall be exercised. Each Agent and each
Lender agrees promptly to notify the Borrowers or such other party after any
such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Agent and each Lender and their respective Affiliates under this Section
9.05 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender and their
respective Affiliates may have. Notwithstanding the foregoing, no Agent or
Lender shall have any set off rights against deposits which are subject to a
security interest or rights in favor of another lender, or which are held for
the benefit of any other Person, in each case to the extent that such lender or
other Person is not an Affiliate of the Operating Partnership.

 

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SECTION 9.06. Binding Effect. This Agreement shall become effective when it
shall have been executed by each Borrower and each Guarantor named on the
signature pages hereto and the Administrative Agent shall have been notified by
each Initial Lender that such Initial Lender has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrowers and the
Guarantors named on the signature pages hereto and each Agent and each Lender
and their respective successors and assigns, except that none of the Borrowers
nor any other Loan Party shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of Lenders.

 

SECTION 9.07. Assignments and Participations; Replacement Notes. (a) Each Lender
may (and, if demanded by the Borrowers in accordance with Section 2.19 or
Section 9.01(b) will) assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including, without
limitation, the Loan owing to it and the Note or Notes held by it); provided,
however, that (i) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender, an Affiliate of any Lender
or a Fund Affiliate of any Lender or an assignment of all of a Lender’s rights
and obligations under this Agreement, the aggregate amount of the Loan being
assigned to such Eligible Assignee pursuant to such assignment (determined as of
the date of the Assignment and Acceptance with respect to such assignment) shall
in no event be less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof (or such lesser amount as shall be approved by the Administrative
Agent and, so long as no Event of Default shall have occurred and be continuing
at the time of effectiveness of such assignment, the Operating Partnership on
behalf of the Borrowers), (ii) each such assignment shall be to an Eligible
Assignee, (iii) each such assignment made as a result of a demand by the
Borrowers pursuant to Section 2.19 or Section 9.01(b) shall be an assignment of
all rights and obligations of the assigning Lender under this Agreement, (iv)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender, a Lender Affiliate or a Fund Affiliate of any Lender
in which case notice of such assignment shall be provided to the Administrative
Agent and the Borrowers, no such assignments shall be permitted (A) until the
Administrative Agent shall have notified Lenders that syndication of the Loan
hereunder has been completed, without the consent of the Administrative Agent,
and (B) at any other time without the consent of the (1) Administrative Agent
and (2) the Operating Partnership on behalf of the Borrowers (which consent, in
each case, shall not be unreasonably withheld (and such consent shall be deemed
given if not denied in writing within ten (10) Business Days following a written
request therefor given in accordance with Section 9.02(a)), except that no
consent shall be required pursuant to this clause (2) (x) if an Event of Default
has occurred and is continuing at the time any assignment is effected or (y)
with respect to any assignment by (I) JPMCB or an Affiliate thereof, if such
assignment results in (a) JPMCB and its Affiliates continuing to own at least
$25,000,000 of the Outstanding Principal Balance and (b) JPMCB, Citibank, DBNY
and/or their respective Affiliates continuing to collectively own at least 50.1%
of the Outstanding Principal Balance or (II) Citibank. or an Affiliate thereof
or DBNY or an Affiliate thereof, as applicable, if such assignment results in
(b) either such Lender and its Affiliates continuing to own at least $50,000,000
of the Outstanding Principal Balance and (b) JPMCB, Citibank, DBNY and/or their
respective Affiliates continuing to collectively own at least 50.1% of the
Outstanding Principal Balance, and (v) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and, except if such assignment is being made
by a Lender to an Affiliate or Fund Affiliate of such Lender, a processing and
recordation fee of $3,500; provided, however, that (x) the Administrative Agent
may, in its sole discretion, elect to waive such processing and recordation fee
in the case of any assignment, and (y) for each such assignment made as a result
of a demand by the Borrowers pursuant to Section 2.19 or Section 9.01(b), the
Borrowers shall pay to the Administrative Agent the applicable processing and
recordation fee. In connection with any assignment of rights and obligations of
any Defaulting Lender hereunder, no such assignment will be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment make such additional payments to the Administrative Agent in
an aggregate amount sufficient, upon distribution thereof as appropriate (which
may be outright payment, purchases by the assignee of participations or
subparticipations, or other compensating actions, including funding, with the
consent of the Borrowers and the Administrative Agent, the applicable pro rata
share of Advances 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 Administrative Agent and each other Lender
hereunder (and interest accrued thereon), and (y) acquire (and fund as
appropriate) its full pro rata share of all Advances in accordance with its Pro
Rata Share. Notwithstanding the foregoing, in the event that any assignment of
rights and obligations of any Defaulting Lender hereunder becomes effective
under applicable law without compliance with the provisions of this
Section 9.07(a), then the assignee of such interest will be deemed to be a
Defaulting Lender for all purposes of this Agreement until such compliance
occurs.

 

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(b)          Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.10, 2.12, 7.06,
8.05 and 9.04 to the extent any claim thereunder relates to an event arising
prior to such assignment) and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).

 

(c)          By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender.

 

(d)          The Administrative Agent shall maintain at its address referred to
in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
Lenders and the Commitments, and principal amount (and stated interest) of the
Advances owing with respect to the Loan to, each Lender from time to time (the
“Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Agents and Lenders shall
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 Operating Partnership (on behalf of the Borrowers), the
Borrowers, any Agent or any Lender at any reasonable time and from time to time
upon reasonable prior notice.

 

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(e)          Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit D
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and each other Agent. In the case of any assignment by a Lender,
within five (5) Business Days after its receipt of such notice, each Borrower,
at its own expense, shall, if requested by the applicable Lender, execute and
deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a substitute Note to the order of such Eligible Assignee in an amount
equal to the portion of the Loan purchased by it pursuant to such Assignment and
Acceptance and, if any assigning Lender has retained any portion of the Loan, a
substitute Note to the order of such assigning Lender in an amount equal to the
portion of the Loan retained by it hereunder. Such substitute Note or Notes, if
any, shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A hereto.

 

(f)          [Intentionally Omitted].

 

(g)          Each Lender may sell participations to one or more Persons (other
than any Loan Party or any of its Affiliates, any natural person or any
Defaulting Lender) in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of the Loan
owing to it and the Note or Notes (if any) held by it) in a minimum gross amount
of $5,000,000; provided, however, that (i) such Lender’s obligations under this
Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral and (vi) a participant shall be entitled to
the benefits of Sections 2.10, 2.12, and 9.04(c) (subject to the requirements
and limitations therein, including the requirements under Sections 2.12(f) and
2.12(g) (it being understood that the documentation required under
Sections 2.12(f) and 2.12(g) shall be delivered to the participating Lender)) to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 9.07(a); provided, however, that such participant
shall not be entitled to receive any greater payment under Section 2.10, 2.12,
or 9.04(c) with respect to any participation than its participating Lender would
have been entitled to receive, except, in the case of Sections 2.10 and 2.12
only, to the extent such entitlement to receive a greater payment results from a
change in law or increased cost, as applicable, that occurs after the
participant acquired the applicable participation. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the
Borrowers, 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, letters of credit 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, letter of credit 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 Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

 

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(h)          Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
to the assignee or participant or proposed assignee or participant any
information relating to the Loan Parties (or any of them) furnished to such
Lender by or on behalf of any Loan Party; provided, however, that prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Information received by it
from such Lender on the same terms as provided in Section 9.12.

 

(i)          Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time pledge or assign, or grant a security interest in all
or any portion of its rights under this Agreement (including, without
limitation, any pledge or assignment of, or grant of a security interest in, the
Advances owing to such Lender and any Note or Notes held by it), including in
favor of any Federal Reserve Bank in accordance with Regulation A of the Board
of Governors of the Federal Reserve System or any other central bank in
accordance with applicable local laws or regulations.

 

(j)          Upon notice to the Borrowers from the Administrative Agent or any
Lender of the loss, theft, destruction or mutilation of any Lender’s Note, each
Borrower will execute and deliver, in lieu of such original Note, a replacement
promissory note, identical in form and substance to, and dated as of the same
date as, the Note so lost, stolen or mutilated, subject to delivery by such
Lender to the Borrowers of an affidavit of lost note and indemnity in customary
form. Upon the execution and delivery of the replacement Note, all references
herein or in any of the other Loan Documents to the lost, stolen or mutilated
Note shall be deemed references to the replacement Note.

 

SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier or by
email with a pdf or similar attachment shall be effective as delivery of an
original executed counterpart of this Agreement.

 

SECTION 9.09. Severability. In case one or more provisions of this Agreement or
the other Loan Documents shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality and enforceability of
the remaining provisions contained herein or therein shall not be affected or
impaired thereby.

 

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SECTION 9.10. Survival of Representations. All representations and warranties
contained in this Agreement and in any other Loan Document or made in writing by
or on behalf of any Loan Party in connection herewith or therewith shall survive
the execution and delivery of this Agreement and the Loan Documents, the making
of the Advances and any investigation made by or on behalf of the any Lender,
none of which investigations shall diminish any Lender’s right to rely on such
representations and warranties.

 

SECTION 9.11. Usury Not Intended. It is the intent of the Borrowers and each
Lender in the execution and performance of this Agreement and the other Loan
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Advances of each Lender including such
applicable laws of the State of New York and the United States of America from
time to time in effect. In furtherance thereof, Lenders and the Borrowers
stipulate and agree that none of the terms and provisions contained in this
Agreement or the other Loan Documents shall ever be construed to create a
contract to pay, as consideration for the use forbearance or detention of money,
interest at a rate in excess of the maximum rate permitted by applicable law and
that for purposes hereof “interest” shall include the aggregate of all charges
which constitute interest under such laws that are contracted for, taken,
charged, received, reserved or paid under this Agreement; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
contracted for, taken, charged, received, reserved or paid on the Advances,
include amounts which, by applicable law, are deemed interest which would exceed
the maximum rate permitted by applicable law, then such excess shall be deemed
to be a mistake and, each Lender receiving the same shall credit the same on the
principal of the Obligations of the Borrowers under the Loan Documents (or if
such Obligations shall have been paid in full, refund said excess to the
Borrowers). In the event that the Obligations of the Borrowers under the Loan
Documents are accelerated by reason of any Event of Default under this Agreement
or otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the maximum
rate permitted by applicable law and excess interest, if any, provided for in
this Agreement or otherwise shall be canceled automatically as of the date of
such acceleration or prepayment and, if theretofore paid, shall be credited on
the principal of the Obligations of the Borrowers under the Loan Documents (or,
if such Obligations shall have been paid in full, refunded to the Borrowers). In
determining whether or not the interest paid or payable under any specific
contingencies exceeds the maximum rate permitted by applicable law, the
Borrowers and Lenders shall to the maximum extent permitted under applicable law
amortize, prorate, allocate and spread in equal parts during the period of the
full stated term of the Loan all amounts considered to be interest under
applicable law at any time contracted for, taken, charged, received, reserved or
paid in connection with the Obligations of the Loan Parties under the Loan
Documents. The provisions of this Section shall control over all other
provisions of this Agreement or the other Loan Documents which may be in
apparent conflict herewith.

 

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SECTION 9.12. Confidentiality. (a) Each of the Agents and Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (i) to its Affiliates and to its and its
Affiliates’ Related Parties (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority purporting to have jurisdiction
over such Person or any such Related Party (including any self-regulatory
authority, such as the National Association of Insurance Commissioners),
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to any other party hereto, (v) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject
to an agreement containing provisions at least as restrictive as those of this
Section, to (A) any assignee of or participant in, or any prospective assignee
of or participant in, any of its rights or obligations under this Agreement, or
(B) any actual or prospective party (or its Related Parties) to any swap,
derivative or other transaction under which payments are to be made by reference
to the Borrowers and its obligations, this Agreement or payments hereunder,
(vii) to (A) any rating agency in connection with rating the Operating
Partnership or its Subsidiaries or the Loan, (B) the CUSIP Service Bureau or any
similar agency in connection with the issuance and monitoring of CUSIP numbers
with respect to the Loan or (C) external auditors as may be required by a
Lender’s policies or policies of any governmental or quasi-governmental entity
affecting a Lender, (viii) with the consent of the Operating Partnership or
(ix) to the extent such Information (A) becomes publicly available other than as
a result of a breach of this Section 9.12 or (B) becomes available to such
Agent, such Lender or any of their respective Affiliates on a non-confidential
basis from a source other than the Parent or any of its Subsidiaries without
such Agent, such Lender or any of their respective Affiliates having knowledge
that a duty of confidentiality to the Parent Guarantor or any of its
Subsidiaries has been breached. In addition, the Agents and 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 Agents and Lenders in connection with the administration of
this Agreement, the other Loan Documents, and the Commitments. For purposes of
this Section, “Information” means all information received from or on behalf of
any Loan Party relating to the Loan Parties, their Subsidiaries or Affiliates or
their respective businesses, but does not include any such information that is
or becomes generally available to the public other than by way of a breach of
the confidentiality provisions of this Section 9.12 or that is or becomes
available to such Agent or such Lender from a source other than the Loan Parties
prior to disclosure by the Loan Parties, provided that, in the case of
information received from or on behalf of the Loan Parties after the Closing
Date, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.

 

(b)          Certain of the Lenders may enter into this Agreement and take or
not take action hereunder or under the other Loan Documents on the basis of
information that does not contain material non-public information with respect
to the Parent Guarantor, any or its Subsidiaries or their respective securities
(“Restricting Information”). Other Lenders may enter into this Agreement and
take or not take action hereunder or under the other Loan Documents on the basis
of information that may contain Restricting Information. Each Lender
acknowledges that United States federal and state securities laws prohibit any
person from purchasing or selling securities on the basis of material,
non-public information concerning the issuer of such securities or, subject to
certain limited exceptions, from communicating such information to any other
Person. None of any Agent or any of its respective directors, officers, agents
or employees shall, by making any Communications (including Restricting
Information) available to a Lender, by participating in any conversations or
other interactions with a Lender or otherwise, make or be deemed to make any
statement with regard to or otherwise warrant that any such information or
Communication does or does not contain Restricting Information nor shall any
Agent or any of its respective directors, officers, agents or employees be
responsible or liable in any way for any decision a Lender may make to limit or
to not limit its access to Restricting Information. In particular, none of any
Agent or any of its respective directors, officers, agents or employees (i)
shall have, and each Agent, on behalf of itself and each of its directors,
officers, agents and employees, hereby disclaims, any duty to ascertain or
inquire as to whether or not a Lender has or has not limited its access to
Restricting Information, such Lender’s policies or procedures regarding the
safeguarding of material, nonpublic information or such Lender’s compliance with
applicable laws related thereto or (ii) shall have, or incur, any liability to
any Loan Party, any Lender or any of their respective Affiliates, directors,
officers, agents or employees arising out of or relating to any Agent or any of
its respective directors, officers, agents or employees providing or not
providing Restricting Information to any Lender, other than as found by a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of any Agent or any of its respective directors, officers, agents or
employees.

 

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(c)          [Intentionally Omitted].

 

(d)          Each Lender acknowledges that circumstances may arise that require
it to refer to Communications that might contain Restricting Information.
Accordingly, each Lender agrees that it will nominate at least one designee to
receive Communications (including Restricting Information) on its behalf and
identify such designee (including such designee’s contact information) in
writing to the Administrative Agent. Each Lender agrees to notify the
Administrative Agent from time to time of such Lender’s designee’s e-mail
address to which notice of the availability of Restricting Information may be
sent by electronic transmission.

 

(e)          Each Lender acknowledges that Communications delivered hereunder
and under the other Loan Documents may contain Restricting Information and that
such Communications are available to all Lenders generally. Each Lender that
elects not to take access to Restricting Information does so voluntarily and, by
such election, acknowledges and agrees that the Agents and other Lenders may
have access to Restricting Information that is not available to such electing
Lender. Each such electing Lender acknowledges the possibility that, due to its
election not to take access to Restricting Information, it may not have access
to any Communications (including, without being limited to, the items required
to be made available to the Administrative Agent in Section 5.03 unless or until
such Communications (if any) have been filed or incorporated into documents
which have been filed with the Securities and Exchange Commission by the
Parent). None of the Loan Parties, the Agents or any Lender with access to
Restricting Information shall have any duty to disclose such Restricting
Information to such electing Lender or to use such Restricting Information on
behalf of such electing Lender, and shall not be liable for the failure to so
disclose or use, such Restricting Information.

 

(f)          Sections 9.12(b), (d) and (e) are designed to assist the Agents,
Lenders and the Loan Parties, in complying with their respective contractual
obligations and applicable law in circumstances where certain Lenders express a
desire not to receive Restricting Information notwithstanding that certain
Communications hereunder or under the other Loan Documents or other information
provided to Lenders hereunder or thereunder may contain Restricting Information.
None of any Agent or any of its respective directors, officers, agents or
employees warrants or makes any other statement with respect to the adequacy of
such provisions to achieve such purpose nor does any Agent or any of its
respective directors, officers, agents or employees warrant or make any other
statement to the effect that a Loan Party’s or Lender’s adherence to such
provisions will be sufficient to ensure compliance by such Loan Party or Lender
with its contractual obligations or its duties under applicable law in respect
of Restricting Information and each Lender and each Loan Party assumes the risks
associated therewith.

 

SECTION 9.13. Release of Collateral. (a) Upon the sale, lease, transfer or other
disposition of any item of Collateral of any Loan Party (including, without
limitation, (x) as a result of a sale of the Equity Interests in the Loan Party
that owns such Collateral, and (y) any Transfer pursuant to Section 5.02(e)(i))
that in each case is permitted by the terms of the Loan Documents, then the
Collateral Agent will, at the Borrowers’ expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release of such item of Collateral from the assignment and
security interest granted under the Collateral Documents in accordance with the
terms of the Loan Documents.

 

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(b)          The Borrowers shall have the right from time to time to request the
release of the Collateral Agent’s security interests in a Collateral Asset (in
whole and not in part) in connection with a sale or a refinancing of such
Collateral Asset and, if the following conditions are satisfied, the Collateral
Agent shall, at the Borrowers’ expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such Collateral Asset from the Liens of the Collateral Documents
in accordance with the terms of the Loan Documents. Each such release pursuant
to this Section 9.13(b) shall be subject to the following conditions: (i) the
Borrowers shall have provided at least fifteen (15) days’ prior notice to the
Collateral Agent requesting such release, (ii) no Default or Event of Default
shall exist immediately before or immediately after such release, (iii) subject
to the proviso below, the Property Release DY Test shall be satisfied
immediately before and after such release, (iv) the notice requesting such
release shall include a certificate of a Responsible Officer of the Operating
Partnership certifying as to the matters in clauses (ii) and (iii) (together, in
the case of clause (iii), with supporting evidence reasonably satisfactory to
the Administrative Agent) and (v) on the date of such sale or refinancing, the
Borrowers shall repay the Loan in accordance with Section 2.06 in an amount
equal to the greater of (A) the Base Release Price for such Collateral Asset and
(B) the amount of the Outstanding Principal Balance required to be prepaid in
order to cause the Property Release DY Test to be satisfied, provided that in
connection with a sale of the Collateral Asset to a Person that is not an
Affiliate of any Loan Party, if a prepayment of the Loan in an amount equal to
the Base Release Price would not cause the Property Release DY Test to be
satisfied, the Borrowers shall not be required to satisfy clause (iii) so long
as on the date of such sale the Borrowers shall repay the Loan in an amount
equal to the greater of (1) the Base Release Price for such Collateral Asset,
and (2) the lesser of (I) all net proceeds payable to any Borrower in connection
with such sale (net of all reasonable and customary closing costs), and (II) the
amount of the Outstanding Principal Balance required to be prepaid in order to
cause the Property Release DY Test to be satisfied.

 

(c)          Notwithstanding anything to the contrary in Section 9.13(b), in the
event (i) the Georgia Tech Hotel is subject to a default under the Georgia Tech
Ground Lease that was not caused by any Borrower or Affiliate thereof in bad
faith to circumvent the requirements of Section 9.13(b) (a “Qualified Ground
Lease Default”), so long as the Borrowers have demonstrated to the
Administrative Agent that they have diligently in good faith pursued a cure of
such default under the Georgia Tech Ground Lease, (ii) there exists a
non-monetary Event of Default arising from an event or occurrence that is
specific to an individual Collateral Asset (including without limitation, any
breach of a representation or warranty with respect to such Collateral Asset)
that was not caused by the intentional acts of any Loan Party or an Affiliate
thereof, the Administrative Agent has delivered a default notice with respect
thereto, and the applicable Borrower has (x) demonstrated in good faith to the
Administrative Agent that it has pursued a cure of Event of Default and (y)
within five (5) Business Days of the occurrence of such Event of Default (after
the expiration of any applicable cure period with respect thereto other than a
cure obtained by a release under this Section 9.13(c)), provided notice to the
Administrative Agent of such Borrower’s intent to cure such Event of Default by
obtaining the release of such Collateral Asset pursuant to this Section 9.13(b),
or (iii) a Collateral Asset is subject to a material default under an Approved
Franchise Agreement (other than a default that was caused by any Borrower or
Affiliate thereof in bad faith to circumvent the requirements of Section
9.13(b)) that permits the Approved Franchisor thereunder to terminate such
Approved Franchise Agreement (regardless of whether the Approved Franchise
Agreement has been terminated), the Administrative Agent and the Approved
Franchisor have delivered a default notice with respect to such default, and the
applicable Borrower has demonstrated in good faith to the Administrative Agent
that it has pursued a cure of the default under such Approved Franchise
Agreement, then, in each case, the applicable Borrower will have the right, but
not the obligation, to request the release of the applicable Collateral Asset
(in whole and not in part) and, if the following conditions are satisfied, the
Collateral Agent shall, at the Borrowers’ expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release of the related Collateral Asset from the Liens of the
Collateral Documents in accordance with the terms of the Loan Documents. Each
such release pursuant to this Section 9.13(c) shall be subject to the following
conditions: (A) the Borrowers shall have provided at least fifteen (15) days’
prior notice to the Collateral Agent requesting such release, (B) no Default or
Event of Default shall exist immediately before or after such release (other
than as described in clause (ii) above or arising from the matters described in
clauses (i) or (iii) above), (C) in respect of any release pursuant to clause
(ii) above, such release shall occur within forty-five (45) days following the
occurrence of the applicable Event of Default, (D) the notice requesting such
release shall include a certificate of a Responsible Officer of the Operating
Partnership certifying as to the matters in clause (B), and (E) on the date of
such release, the Borrowers shall repay the Loan in accordance with Section 2.06
in an amount equal to the Base Release Price for such Collateral Asset. Any
release described in clause (ii) above that occurs within forty-five (45) days
following the occurrence of the applicable Event of Default shall be deemed to
concurrently cure each Event of Default described in clause (ii) above.

 

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(d)          Notwithstanding anything to the contrary in Section 9.13(b), the
Borrowers shall have the right from time to time to request the release of the
Collateral Agent’s security interests in a Collateral Asset (in whole and not in
part) in connection with a sale or a refinancing of such Collateral Asset
(including a sale to an Affiliate of a Loan Party) if such Collateral Asset is
either the subject of a Casualty or Condemnation (1) of more than sixty percent
(60%) of the value of such Collateral Asset (determined by the Administrative
Agent on the basis of Allocated Loan Amounts) or (2) for which the
Administrative Agent has not made the Net Proceeds available to the applicable
Borrower for Restoration. If the following conditions are satisfied, the
Collateral Agent shall, at the Borrowers’ expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release of such Collateral Asset from the Liens of the
Collateral Documents in accordance with the terms of the Loan Documents. Each
such release pursuant to this Section 9.13(d) shall be subject to the following
conditions: (i) the Borrowers shall have provided at least fifteen (15) days’
prior notice to the Collateral Agent requesting such release, (ii) no Default or
Event of Default shall exist immediately before such release or would exist
immediately upon the effectiveness of such release (except to the extent arising
from such Casualty or Condemnation), (iii) the notice requesting such release
shall include a certificate of a Responsible Officer of the Operating
Partnership certifying as to the matters in clause (ii), and (iv) on the date of
such sale, the Borrowers shall repay the Loan in accordance with Section 2.06 in
an amount equal to the Base Release Price for such Collateral Asset (minus any
Net Proceeds retained by any Agent).

 

(e)          Upon the later to occur of (i) the payment in full in cash of the
Secured Obligations, and (ii) the termination in whole of the Commitments, the
Liens granted by the Collateral Documents shall terminate and all rights to the
Collateral shall revert to the applicable Loan Party. Upon any such termination,
the Collateral Agent will, at the Borrowers’ expense, execute and deliver to the
applicable Loan Parties such documents as such Loan Parties shall reasonably
request to evidence such termination.

 

SECTION 9.14. Patriot Act Notification. Each Lender and each Agent (for itself
and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Patriot Act”), it is required to obtain,
verify and record information that identifies each Loan Party, which information
includes the name and address of such Loan Party and other information that will
allow such Lender or Agent, as applicable, to identify such Loan Party in
accordance with the Patriot Act. The Parent Guarantor and the Operating
Partnership shall, and shall cause each of their Subsidiaries to, provide, to
the extent commercially reasonable, such information and take such actions as
are reasonably requested by the Agents or any Lender in order to assist the
Agents and Lenders in maintaining compliance with the Patriot Act.

 

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SECTION 9.15. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally agrees that it will not commence any action,
litigation or other proceeding of any kind or description, whether in law or
equity, whether in contract or in tort or otherwise, arising out of or relating
to this Agreement or any of the other Loan Documents to which it is a party,
against any of the other parties hereto in any forum other than the courts of
the State of New York sitting in New York County, and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof and each of the parties hereto irrevocably and unconditionally
submits to the jurisdiction of such courts, and each of the Loan Parties hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action, litigation or proceeding may be heard and determined in any such New
York State court or, to the extent permitted or required by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this agreement shall affect any right that any Agent, any Lender or
any other Indemnified Party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents to which it is a
party in the courts of any jurisdiction in connection with the exercise of any
rights under any Loan Document or against any Collateral or the enforcement of
any judgment, and each Loan Party hereby submits to the jurisdiction of, and
consents to venue in, any such court.

 

(b)          Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or Federal court sitting
in City, County and State of New York. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

SECTION 9.16. Governing Law. THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, THE LOAN WAS MADE BY THE LENDER PARTIES AND ACCEPTED BY THE BORROWERS IN
THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO
WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY
APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS IN REAL PROPERTY (INCLUDING ALL IMPROVEMENTS AND FIXTURES
THEREON) CREATED PURSUANT TO THE COLLATERAL DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

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SECTION 9.17. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE OTHER LOAN
PARTIES, THE AGENTS AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES, OR THE ACTIONS OF THE AGENTS OR ANY LENDER PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

SECTION 9.18. No Fiduciary Duties. Each Loan Party agrees that nothing in the
Loan Documents or otherwise will be deemed to create an advisory, fiduciary or
agency relationship or fiduciary or other implied duty between any Agent, any
Lender or any Affiliate thereof, on the one hand, and such Loan Party, its
stockholders or its Affiliates, on the other. The Loan Parties agree that the
transactions contemplated by the Loan Documents (including the exercise of
rights and remedies hereunder and thereunder) are arm’s-length commercial
transactions. Each Loan Party agrees that it has consulted its own legal and
financial advisors to the extent it deemed appropriate and that it is
responsible for making its own independent judgment with respect to such
transactions and the process leading thereto. Each of the Loan Parties
acknowledges that the Agents, Lenders and their respective Affiliates may have
interests in, or may be providing or may in the future provide financial or
other services to other parties with interests which a Loan Party may regard as
conflicting with its interests and may possess information (whether or not
material to the Loan Parties) other than as a result of (w) the Collateral Agent
acting as collateral agent under the Collateral Documents, (x) the
Administrative Agent acting as administrative agent hereunder, or (y) Lenders
acting in their respective capacities as such hereunder, that any Agent or any
such Lender may not be entitled to share with any Loan Party. Without prejudice
to the foregoing, each of the Loan Parties agrees that the Agents, Lenders and
their respective Affiliates may (a) deal (whether for its own or its customers’
account) in, or advise on, securities of any Person, and (b) accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with other
Persons in each case, as if the Agents were not the Agents and as if Lenders
were not Lenders, and without any duty to account therefor to the Loan Parties.
Each of the Loan Parties hereby irrevocably waives, in favor of the Agents,
Lenders and the Arrangers, any conflict of interest which may arise by virtue of
the Agents, the Arrangers and/or Lenders acting in various capacities under the
Loan Documents or for other customers of the Agents, the Arrangers or any Lender
as described in this Section 9.18.

 

SECTION 9.19. Liability of Borrowers. The liability of each Person constituting
a Borrower under the Loan Documents shall be joint and several with all other
Persons that constitute a Borrower under the Loan Documents.

 

SECTION 9.20. 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

 

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(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.

 

SECTION 9.21. Bifurcation of Loan. If the Arrangers elect, in their sole
discretion, prior to or upon any syndication of the Loan, to split the Loan into
two or more parts, or the Notes into multiple component Notes or tranches which
may have different interest rates, principal amounts, payment priorities and
maturities, each Borrower agrees to cooperate with the Arrangers in connection
with the foregoing and to (i) execute any modifications, amendments and
supplements to this Agreement and the other Loan Documents reasonably requested
by the Administrative Agent, so long as the aggregate economic terms of the Loan
Documents, as so modified, amended or supplemented, will be no less favorable to
the Borrowers (except for the effect of any “rate creep” arising from different
Notes or components being paid on a non-pro rata basis following (x) an Event of
Default or (y) a Condemnation or Casualty affecting one or more of the
Collateral Assets) and (ii) provide legal opinions in relation to the same in
form and substance as reasonably acceptable to the Administrative Agent. Such
Notes or components may be assigned different interest rates, so long as the
initial weighted average of such interest rates does not exceed the applicable
interest rate hereunder. The Administrative Agent and the Arrangers shall bear
their own costs in relation to any bifurcation of the Loan pursuant to this
Section 9.21. The Loan Parties shall bear their own costs in relation to any
bifurcation of the Loan pursuant to this Section 9.21.

 

Article X
RECOURSE

 

SECTION 10.01. Exculpation. Notwithstanding any provision of this Agreement or
any Loan Document to the contrary, but subject to the further provisions of this
Article X, the Secured Parties shall not enforce the liability and obligation of
the Borrowers to perform and observe the obligations contained in the Loan
Documents by any action or proceeding wherein a money judgment shall be sought
against any Transaction Party or any of their respective officers, directors,
managers, shareholders or employees (collectively, the “Exculpated Parties”),
except that an Agent may bring a foreclosure action, action for specific
performance or other appropriate action or proceeding to enable the Agents to
enforce and realize upon this Agreement, the other Loan Documents, and the
interest in the Collateral; provided, however, that any judgment in any such
action or proceeding shall be enforceable only to the extent of the Borrowers’
interests in the Collateral. The Secured Parties agree that they shall not,
except as otherwise provided herein or in the Mortgages, sue for, seek or demand
any deficiency judgment against any of the Exculpated Parties in any such action
or proceeding, under or by reason of or under or in connection with the Loan
Documents. The provisions of this Section 10.01 shall not, however, (i)
constitute a waiver, release or impairment of any obligation evidenced or
secured by the Loan Documents; (ii) impair the right of any Agent to name any
Transaction Party as a party defendant in any action or suit for judicial
foreclosure and sale under any Mortgage; (iii) affect the validity or
enforceability of any indemnity, guaranty (including the Guaranty), master lease
or similar instrument made in connection with the Loan Documents; (iv) impair
the right of the any Agent to obtain the appointment of a receiver; (v) impair
the enforcement of any Assignment of Leases; (vi) impair the right of the
Secured Parties to enforce the provisions of the Mortgages; (vii) exercise of
any other remedy set forth in this Agreement or in any other Loan Document which
is not inconsistent with the terms of this Section 10.01; or (viii) impair the
right of the Secured Parties to obtain a deficiency judgment or other judgment
on the Notes against Borrowers if necessary to (A) preserve or enforce its
rights and remedies against the Collateral or (B) obtain any Insurance Proceeds
or Awards to which the Secured Parties would otherwise be entitled under the
terms of the Loan Documents; provided, however, the Secured Parties shall only
enforce such judgment to the extent of the Insurance Proceeds and/or Awards.

 

 136 

 

 

SECTION 10.02. Personal Liability of Borrowers. (a) Each Borrower shall be
personally liable to the Secured Parties for the actual Losses they incur due
to:

 

(i)            fraud or intentional material misrepresentation committed by any
Transaction Party in connection with the Loan;

 

(ii)          any Borrower or any TRS Lessee incurring any Indebtedness in
violation of the Loan Documents not otherwise set forth in clause (i) in the
definition of “Springing Recourse Event” below (unless such Indebtedness was
permitted when incurred but was not repaid due to the failure of the Collateral
Assets to generate sufficient cash flow or the failure of the Administrative
Agent to release funds from the Accounts (as defined in the Cash Management
Agreement));

 

(iii)          any Borrower or any TRS Lessee failing to obtain the
Administrative Agent’s prior consent to (a) any Transfer of any Collateral Asset
or (b) any Transfer of a direct or indirect interest in the Georgia Tech Owner,
any Pledgor, any Borrower or any TRS Lessee, in each case not otherwise set
forth in clause (ii) in the definition of “Springing Recourse Event” below;

 

(iv)          removal of personal property from the Collateral Assets during an
Event of Default by any Transaction Party, unless replaced with personal
property of substantially the same or greater utility and of the same or greater
value;

 

(v)          any intentional material physical Waste (as defined below) at any
Collateral Asset committed by any Transaction Party. “Waste” means any material
abuse or, other than demolition in connection with a Restoration or alteration
or improvement conducted in accordance with the Loan Documents, destructive use
of any Collateral Asset;

 

(vi)          the material misappropriation by any Transaction Party of (A) any
Insurance Proceeds paid by reason of any Casualty to any Collateral Asset, (B)
any Awards in connection with the Condemnation of any Collateral Asset and (C)
any Gross Hotel Revenues after (or that results in) a Lockbox Period or an Event
of Default, in each case, in violation of the Loan Documents;

 

(vii)          any defaults under any Approved Franchise Agreement for failure
to complete any PIP Work which results in the termination or cancellation of the
applicable Approved Franchise Agreement or any other termination or cancellation
of an Approved Franchise Agreement, provided that there shall not be personal
recourse liability pursuant to this clause (vii) if any Borrower or any TRS
Lessee delivers a replacement Approved Franchise Agreement in compliance with
Section 5.01(q) within ninety (90) days of such termination or cancellation or
if the Allocated Loan Amount for the Collateral Asset subject to such terminated
Approved Franchise Agreement together with the Allocated Loan Amount for all
other Collateral Assets that have had their Approved Franchise Agreements
terminated accounts for less than five percent (5%) of the aggregate Allocated
Loan Amounts of all of the Collateral Assets, provided that with respect to any
Collateral Asset that is in a “red zone 1” or “red zone 2” (or the equivalent
thereof in either case) as of the Closing Date, any default under the Approved
Franchise Agreement with respect to such Collateral Asset shall result in
personal recourse liability of the Borrowers notwithstanding that the Allocated
Loan Amount for all other Collateral Assets that have had their Approved
Franchise Agreements terminated accounts for less than five percent (5%) of the
aggregate Allocated Loan Amounts of all of the Collateral Assets;

 

 137 

 

 

(viii)          any breach of any provision of Section 5.01(w) or Section
5.02(p) or any breach by the Georgia Tech Owner of the Borrower SPE Requirements
(which, for the purposes of this clause (viii), shall be deemed to apply to the
Georgia Tech Owner as is they had been incorporated in full into the constituent
documents of the Georgia Tech Owner) that in each case does not result in the
substantive consolidation of the assets and liabilities of the Georgia Tech
Owner, any Pledgor, any Borrower or any TRS Lessee with any other Person as a
result of such breach;

 

(ix)          the modification, surrender, termination or rejection in a
bankruptcy proceeding by the Georgia Tech Owner of the Georgia Tech Ground Lease
if such modification, surrender, termination or rejection is prohibited under
this Agreement or under any other Loan Document; and/or

 

(x)          any breach by any Loan Party of any provision of Section 5.01(cc),
Section 5.02(b)(ii) or clause (C) or (D) of Section 5.02(k).

 

(b)          Notwithstanding anything to the contrary in this Agreement or any
of the other Loan Documents, (A) no Secured Party shall be deemed to have waived
any right which such Secured Party may have under Section 506(a), 506(b),
1111(b) or any other provisions of the Bankruptcy Law to file a claim for the
full amount of the Obligations or to require that all Collateral shall continue
to secure all of the Obligations owing to the Secured Parties in accordance with
the Loan Documents, and (B) the Obligations shall be fully recourse to each
Borrower (and guaranteed by any Guarantor pursuant to the Guaranty) in the event
that any of the following occur (each, a “Springing Recourse Event”): (i) any
Pledgor, any Borrower or any TRS Lessee fails to obtain the Administrative
Agent’s prior consent to any financing for borrowed money secured by any
Collateral Asset or any Pledged Interests, or any voluntary conveyance of a
mortgage, deed of trust, security deed, security agreement or similar grant by
any Pledgor, any Borrower or any TRS Lessee of a voluntary Lien upon any
Collateral Asset or any Pledged Interests, or any Pledgor, any Borrower or any
TRS Lessee fails to obtain the Administrative Agent’s prior consent to any
voluntary granting of a security interest in, voluntary pledge of or other
voluntary Lien upon any direct or indirect Equity Interest in any Pledgor, any
Borrower or any TRS Lessee, in each case, as security for any obligations or
liabilities that is not permitted under the Loan Documents (excluding, for the
avoidance of doubt, the security interests, pledges or Liens granted under the
Loan Documents securing the Loan), in each case under this clause (i) that is
not permitted under the Loan Documents or otherwise cured; (ii) any Borrower
fails to obtain the Administrative Agent’s prior consent to (A) any voluntary
transfer of fee (or ground leasehold) title to any Collateral Asset or any
Pledged Interests that is not permitted under the Loan Documents or otherwise
cured, or (B) any voluntary transfer of a direct or indirect interest in any
Pledgor, the Georgia Tech Owner, any Borrower or any TRS Lessee that results in
a change of Control of any Pledgor, the Georgia Tech Owner, any Borrower or any
TRS Lessee that is not permitted under the Loan Documents or otherwise cured;
(iii) any Pledgor, the Georgia Tech Owner, any Borrower or any TRS Lessee files
a voluntary petition under the Bankruptcy Law or any other Federal or state
bankruptcy or insolvency law; (iv) the filing of an involuntary petition against
any Pledgor, the Georgia Tech Owner, any Borrower or any TRS Lessee under the
Bankruptcy Law or any other Federal or state bankruptcy or insolvency law by any
other Person in which any Pledgor, the Georgia Tech Owner, any Borrower and/or
any TRS Lessee colludes with or otherwise assists such Person, and/or any
Pledgor, the Georgia Tech Owner, any Borrower and/or any TRS Lessee solicits or
causes to be solicited petitioning creditors for any involuntary petition
against any Pledgor, the Georgia Tech Owner, any Borrower and/or any TRS Lessee
by any Person; (v) any Pledgor, the Georgia Tech Owner, any Borrower or any TRS
Lessee files an answer consenting to, or joining in, any involuntary petition
filed against it by any other Person under the Bankruptcy Law or any other
Federal or state bankruptcy or insolvency law (except to the extent required by
applicable law); (vi) any Pledgor, the Georgia Tech Owner, any Borrower, any TRS
Lessee or any Affiliate, officer, director or representative which controls such
Pledgor, the Georgia Tech Owner, such Borrower or such TRS Lessee, as the case
may be, consents to, or joins in, an application for the appointment of a
custodian, receiver, trustee or examiner for such Pledgor, the Georgia Tech
Owner, such Borrower, such TRS Lessee, and/or any portion of any Collateral
Asset or the Pledged Interests, as the case may be; (vii) any Pledgor, the
Georgia Tech Owner, any Borrower or any TRS Lessee makes an assignment for the
benefit of creditors or admits, in any legal proceeding, its insolvency or
inability to pay its debts as they become due (in each case except to the extent
required by applicable law); (viii) any Pledgor, any Borrower or any TRS Lessee
fails to comply with any provision of Section 5.01(w) or Section 5.02(p) (other
than those relating to solvency or adequacy of capital or adequacy of cash
flow), and such failure results in an order of substantive consolidation of one
(1) or more of the Pledgors, the Borrowers or the TRS Lessees with any other
Person in a bankruptcy or similar proceeding under the Bankruptcy Law or any
other federal or state bankruptcy or insolvency law; or (ix) any breach by the
Georgia Tech Owner of the Borrower SPE Requirements (which, for the purposes of
this clause (ix), shall be deemed to apply to the Georgia Tech Owner as is they
had been incorporated in full into the constituent documents of the Georgia Tech
Owner) (other than those relating to solvency or adequacy of capital or adequacy
of cash flow), and such failure results in an order of substantive consolidation
of one (1) or more of the Georgia Tech Owner, the Borrowers or the TRS Lessees
with any other Person in a bankruptcy or similar proceeding under the Bankruptcy
Law or any other federal or state bankruptcy or insolvency law.

 

 138 

 

 

(c)          For purposes of the foregoing clauses (a) and (b), (i) a
foreclosure (or conveyance in lieu) of the Collateral (or exercise of remedial
rights or actions taken by any Agent or any agent thereof) shall not be deemed a
transfer in violation of the Loan Documents and (ii) the Guarantor will not have
any further liability with respect to actions taken by a Borrower first
occurring after the time that the Guarantor no longer Controls such Borrower as
a result of foreclosure, assignment in lieu of foreclosure or other remedial
action including the appointment of a receiver or custodian by any Agent.

 

[Balance of page intentionally left blank]

 

 139 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

  BORROWERS:      

HIT NBL HYP SCHIL OWNER, LLC

HIT NBL CY CBSOH OWNER, LLC

HIT NBL HH ATLGA OWNER, LLC

HIT SMT CY FLGAZ OWNER, LLC

HIT SMT BTRLAOOl OWNER, LLC

HIT SMT FIS BTRLA OWNER, LLC

HIT SMT FTWINOOl OWNER, LLC

HIT SMT MDFOROOl OWNER, LLC

HIT SMT RI FTWIN OWNER, LLC HIT

SMT SHS FLGAZ OWNER, LLC HIT

SMT SHS BTRLA OWNER, LLC HIT

SMT TPS BTRLA OWNER, LLC HIT

SMT FIS DENCO OWNER, LLC HIT

SMT FIS BELWA OWNER, LLC HIT

SMT FIS SPKWA OWNER, LLC HIT

SMT FTCCOOOl OWNER, LLC HIT

SMT FTCC0002 OWNER,  LLC HIT

SMT SHS DENCO OWNER, LLC HIT

SMT CY GRMTN OWNER, LLC HIT

SMT CY JKSMS OWNER, LLC HIT

SMT FIS GRMTN OWNER, LLC HIT

SMT RDGMSOOl OWNER, LLC HIT

SMT RI JKSMS OWNER, LLC HIT

SMT RI GRMTN OWNER, LLC HIT

SMT RDGMS002 OWNER, LLC HIT

GA TECH  HOLDING  LLC,

      each a Delaware limited liability company

 

  By: /s/ Paul C. Hughes     Name: Paul C. Hughes     Title: General Counsel and
Secretary

 

Second Amended and Restated Term Loan Agreement

 

 

 

 

  HIT NBL MNTCA001  OWNER,  LP, a  Delaware   limited partnership         By:
HIT NBL NTC Owner GP, LLC, a Delaware limited liability company, its general
partner             By: /s/ Paul C. Hughes       Name: Paul C. Hughes      
Title: General Counsel and Secretary

 

  HIT SMT ELPTX00l  OWNER, LP, a Delaware   limited partnership       By: HIT
SMT NTC Owner GP, LLC, a Delaware limited liability company, its general partner
        By: /s/ Paul C. Hughes     Name: Paul C. Hughes     Title: General
Counsel and Secretary

 

Second Amended and Restated Term Loan Agreement

 

 

 

 

  GUARANTORS:       HOSPITALITY INVESTORS TRUST, INC., a      
Maryland  corporation         By: /s/ Paul C. Hughes     Name: Paul C. Hughes  
  Title: General Counsel and Secretary

 

  HOSPITALITY INVESTORS TRUST OPERATING       PARTNERSHIP,  L.P., a Delaware
limited partnership       By: HOSPITALITY INVESTORS TRUST, INC., a     Maryland
corporation,  its general  partner         By: /s/ Paul C. Hughes     Name: Paul
C. Hughes     Title: General Counsel and Secretary

 

Second Amended and Restated Term Loan Agreement

 

 

 

 

  ADMINISTRATIVE AGENT AND COLLATERAL AGENT:       CITIBANK, N.A.       By: /s/
Harry Kramer     Name: Harry Kramer     Title: Vice President

  

Second Amended and Restated Term Loan Agreement

 

 

 

 

  LENDERS:       CITIBANK, N.A., as Initial Lender         By: /s/ Harry Kramer
    Name: Harry Kramer     Title: Vice President

 

Second Amended and Restated Term Loan Agreement

 

 

 

  

  DEUTSCHE BANK AG NEW YORK BRANCH, as   Initial Lender         By: /s/ George
R. Reynolds     Name: George R. Reynolds     Title: Director         By: /s/
Murray Mackinon     Name: Murray Mackinon     Title: Director

 

Second Amended and Restated Term Loan Agreement

 

 

 

 

  JPMORGAN CHASE BANK, NATIONAL       ASSOCIATION, as Initial Lender         By:
/s/ Anthony Shaskus           Name: Anthony Shaskus     Title: Vice President

 

Second Amended and Restated Term Loan Agreement

 

 

 

 

SCHEDULE I

 

COMMITMENTS AND APPLICABLE LENDING OFFICES

 

Name of Initial
Lender Commitments Domestic Lending Office Eurodollar Lending Office Citibank,
N.A. $124,000,000.00 1615 Brett Road, OPS III, New 1615 Brett Road, OPS III New
    Castle, DE 19720 Castle, DE 19720     Attn:  Agency Operations Attn:  Agency
Operations     Tel:  (302) 894-6010 Tel:  (302) 894-6010     Fax:  (646)
274-5080 Fax:  (646) 274-5080             390 Greenwich Street, 7th Fl. 390
Greenwich Street, 7th Fl.     New York, NY 10013 New York, NY 10013     Attn:
David Cappellini Attn: David Cappellini     Tel: (212) 723-2178 Tel: (212)
723-2178     Fax (866) 597-0918 Fax (866) 597-0918 Deutsche Bank $124,000,000.00
90 Hudson Street, 1st Floor 90 Hudson Street, 1st Floor AG New York  
(JCY05-0199), Jersey City, New (JCY05-0199), Jersey City, New Branch   Jersey
07302 Jersey 07302     Attn: Deirdre Wall Attn: Deirdre Wall     Tel: (201)
593-2178 Tel: (201) 593-2178     Fax: (201) 593- 2309/2310 Fax: (201)
593-2309/2310 JPMorgan $62,000,000.00 383 Madison Avenue 383 Madison Avenue
Chase Bank,   New York, New York 10179 New York, New York 10179 National  
Attention:  Nancy Alto Attention:  Nancy Alto Association   Tel: (212) 834-3038
Tel: (212) 834-3038     Fax:  (917) 546-2564 Fax:  (917) 546-2564 Totals
$310,000,000.00  

 

 Sch. I - 1 

 

 

SCHEDULE II

 

COLLATERAL ASSETS

 

1.Hilton Garden Inn, 1000 Aguajito Road, Monterey, CA 93940 (Monterey County)

 

2.Hyatt Place, 1851 McConnor Parkway, Schaumburg, IL 60173 (Cook County)

 

3.Courtyard Flagstaff, 2650 S. Beulah Blvd., Flagstaff, AZ 86001 (Coconino
County)

 

4.Springhill Suites, 2455 S. Beulah Blvd., Flagstaff, AZ 86001 (Coconino County)

 

5.Hampton Inn, 8219 West Jefferson Blvd., Fort Wayne, IN 46804 (Allen County)

 

6.Residence Inn, 7811 West Jefferson Blvd., Fort Wayne, IN 46804 (Allen County)

 

7.DoubleTree by Hilton Hotel, 4964 Constitution Avenue, Baton Rouge, LA 70808
(East Baton Rouge Parish)

 

8.Fairfield Inn & Suites, 7959 Essen Park Avenue, Baton Rouge, LA 70809 (East
Baton Rouge Parish)

 

9.Springhill Suites, 7979 Essen Park Avenue, Baton Rouge, LA 70809 (East Baton
Rouge Parish)

 

10.TownePlace Suites, 8735 Summa Avenue, Baton Rouge, LA 70809 (East Baton Rouge
Parish)

 

11.Hampton Inn, 1122 Morrow Road, Medford, OR 97504 (Jackson County)

 

12.Hampton Inn & Suites, 6635 Gateway Blvd. West, El Paso, TX 79925 (El Paso
County)

 

13.Hyatt House Atlanta Cobb Galleria, 3595 Cumberland Blvd., Atlanta, GA 30308
(Cobb County)

 

14.Georgia Tech Hotel & Conference Center, 800 Spring Street NW, Atlanta, GA
30354 (Fulton County)

 

15.Courtyard Columbus Downtown, 35 West Spring Street, Columbus, OH 43215
(Franklin County)

 

16.Fairfield Inn & Suites, 6851 Tower Road, Denver, CO 80249 (Denver County)

 

17.Hampton Inn, 1620 Oakridge Drive, Fort Collins, CO 80525 (Larimer County)

 

18.Hilton Garden Inn, 2821 East Harmony Road, Fort Collins, CO 80528 (Larimer
County)

 

19.SpringHill Suites, 18350 East 68th Avenue, Denver, CO 80249 (Denver County)

 

20.Fairfield Inn & Suites, 311 North Riverpoint Blvd., Spokane, WA 99202
(Spokane County)

 

21.Fairfield Inn & Suites, 14595 NE 29th Place, Bellevue, WA 98007 (King County)

 

22.Courtyard Jackson Ridgeland, 6280 Ridgewood Court Drive, Jackson, MS 39211
(Hinds County)

 

23.Homewood Suites Jackson Ridgeland, 853 Centre Street, Ridgeland, MS 39157
(Madison County)

 

24.Residence Inn Jackson Ridgeland, 855 Centre Street, Ridgeland, MS 39157
(Madison County)

 

 Sch. II - 1 

 

 

25.Staybridge Suites Jackson, 801 Ridgewood Road, Ridgeland, MS 39157 (Madison
County)

 

26.Courtyard Memphis Germantown, 7750 Wolf River Blvd., Germantown, TN 38138
(Shelby County)

 

27.Fairfield Inn & Suites Memphis Germantown, 9320 Poplar Pike, Germantown, TN
38138 (Shelby County)

 

28.Residence Inn Memphis Germantown, 9314 Poplar Pike, Germantown, TN 38138
(Shelby County)

 

 Sch. II - 2 

 

 

SCHEDULE III

 

BORROWER SPE REQUIREMENTS

 

[See Attached.]

 

 Sch. III - 1 

 

 

SCHEDULE III

 

BORROWER SPE REQUIREMENTS

 

Title to Company Property. Legal title to the Company’s interest in all Company
property shall be taken and at all times held in the name of the Company.

 

Company’s Purposes. Notwithstanding anything to the contrary contained in this
Agreement, the Loan Agreement or in any other document governing the formation,
management or operation of the Company, the sole purpose to be conducted or
promoted by the Company is to engage in the following activities: (i) to
acquire, own, hold, lease, operate, manage, maintain, develop and improve the
Collateral Asset[s] located at [INSERT THE NAMES OF EACH PROPERTY OWNED BY THE
COMPANY], commonly known as the “[______________]” (the [“Properties” and
individually, each a] “Property”), in each case, as defined in the Loan
Agreement (defined below); (ii) to enter into and perform its obligations under
the Loan Documents; (iii) to sell, transfer, service, convey, dispose of,
pledge, assign, borrow money against, finance, refinance or otherwise deal with
the Propert[ies][y] to the extent permitted under the Loan Agreement (as
hereinafter defined), the Company’s organizational documents and the Loan
Documents; and (iv) to engage in any lawful act or activity and to exercise any
powers permitted to limited liability companies organized under the laws of the
State of Delaware that are related or incidental to and necessary, convenient or
advisable for the accomplishment of the above mentioned purposes.

 

Special Provisions Regarding Loan. This Section is being adopted in order to
comply with certain provisions required in order to qualify the Company as a
“Special Purpose” entity. Notwithstanding anything in this Agreement to the
contrary or in any other document governing the formation, management or
operation of the Company, and for so long as the Obligations of the Loan Parties
under the Loan Documents are outstanding and [any][the] Property is a Collateral
Asset, the Company shall comply with the following provisions (all initial
capitalized terms used in this Section but not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Second Amended and
Restated Term Loan Agreement, dated as of April 27, 2017, among the Company and
the other borrowers party thereto, collectively as Borrower, Hospitality
Investors Trust Operating Partnership, L.P. and Hospitality Investors Trust,
Inc., collectively as guarantors, and Citibank, N.A., as administrative agent
(together with its successors and assigns, “Agent”), and the other parties party
thereto, as amended from time to time (the “Loan Agreement”):

 

(a)          The Company has not owned, does not own, and will not own any asset
or property other than (A) the Propert[ies][y], (B) incidental personal property
necessary for the ownership or operation of the Propert[ies][y], and (C) any
other assets permitted to be owned pursuant to the terms and provisions of the
Loan Agreement.

 

(b)          The Company has not engaged and will not engage in any business
unrelated to the applicable purposes set forth in Section [    ] above.

 

(c)          The Company has not and will not enter into any contract or
agreement with any Affiliate of the Company (other than the Approved Management
Agreement and Operating Lease), except upon terms and conditions that are
intrinsically fair, commercially reasonable, and no less favorable to it than
would be available on an arms-length basis with third parties other than any
such party.

 

(d)          The Company has not incurred and will not incur any Indebtedness
other than as expressly permitted under the Loan Agreement.

 

(e)          Other than intercompany Indebtedness permitted by the Loan
Agreement, the Company has not made and will not make any loans or advances to
any third party (including any Affiliate or constituent party), and has not and
shall not acquire obligations or securities of its Affiliates.

 

 Sch. III - 1 

 

 

(f)          The Company has been, is, and intends to remain solvent and the
Company has paid and intends to pay its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its assets (to the
extent sufficient cash flow exists from the Collateral Assets owned by it);
provided, however that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(g)          The Company has done or caused to be done, and will do, all things
necessary to observe organizational formalities and preserve their existence,
and the Company has not, and will not (i) terminate or fail to comply with the
provisions of its organizational documents, or (ii) unless Agent has consented,
amend, modify or otherwise change its [operating][limited partnership] agreement
or other organizational documents, in either case except as otherwise expressly
permitted by the Loan Agreement.

 

(h)          Except as otherwise provided in the Loan Documents and except to
the extent that the Company is (i) required to file consolidated tax returns by
law; or (ii) treated as a “disregarded entity” for tax purposes and is not
required to file tax returns under applicable law, (1) the Company has
maintained and will maintain all of its books, records, financial statements and
bank accounts separate from those of its Affiliates and any other Person; (2)
the Company’s assets will not be listed as assets on the financial statement of
any other Person; it being understood that the Company’s assets may be included
in a consolidated financial statement of its Affiliates provided that (i)
appropriate notation shall be made on such consolidated financial statements to
indicate the separateness of the Company and such Affiliates and to indicate
that the Company’s assets and credit are not available to satisfy the debts and
other obligations of such Affiliates (other than the other Borrowers with
respect to the Loan) or any other Person, and (ii) such assets shall be listed
on the Company’s own separate balance sheet; and (3) the Company will file its
own tax returns (to the extent the Company is required to file any tax returns)
and will not file a consolidated federal income tax return with any other
Person, unless required by applicable law. The Company has maintained and shall
maintain its books and records in the ordinary course of its business and so
long as the Obligations of the Loan Parties under the Loan Documents are
outstanding, shall maintain its books and records in the ordinary course of its
business and as otherwise required pursuant to the terms of the Loan Agreement.

 

(i)           The Company has been, will be, and at all times has held and will
hold itself out to the public as, a legal entity separate and distinct from any
other entity (recognizing that the Company may be treated as a “disregarded
entity” for tax purposes and is not required to file tax returns for tax
purposes under applicable law), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself or any of its Affiliates as a division or
department or part of the other and shall, to the extent reasonably necessary
for the operation of its business, maintain and utilize separate stationery,
invoices and checks bearing its own name.

 

(j)           The Company has maintained and intends to maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations;
provided, however that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(k)          Neither the Company nor any constituent party of the Company has
sought or will seek or effect the liquidation, dissolution, winding up,
consolidation or merger, in whole or in part, of the Company.

 

(l)           Other than to the extent permitted in the Cash Management
Agreement, the Company has not and will not commingle the funds and other assets
of the Company with those of any Affiliate or constituent party or any other
Person, and has held and will hold all of its assets in its own name.

 

(m)         The Company has and will maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person

 

 Sch. III - 2 

 

 

(n)          Except in connection with the Loan, the Company has not and will
not assume or guarantee or become obligated for the debts of any other Person
and does not and will not hold itself out to be responsible for or have its
credit available to satisfy the debts or obligations of any other Person.

 

(o)          [The organizational documents of the Company shall provide that the
business and affairs of the Company shall be managed by or under the direction
(A) of a board of one or more directors designated by the Company’s sole member
(the “Sole Member”), (B) a committee of managers designated by Sole Member (a
“Committee”) or (C) by Sole Member, and at all times there shall be at least one
(1) duly appointed Independent Director or Independent Manager. In addition, the
organizational documents of the Company shall provide that no Independent
Director or Independent Manager (as applicable) of the Company may be removed or
replaced without Cause and unless the Company provides Agent with not less than
three (3) Business Days’ prior written notice of (a) any proposed removal of an
Independent Director or Independent Manager (as applicable), together with a
statement as to the reasons for such removal, and (b) the identity of the
proposed replacement Independent Director or Independent Manager, as applicable,
together with a certification that such replacement satisfies the requirements
set forth in the organizational documents for an Independent Director or
Independent Manager (as applicable).]1

 

(p)          The organizational documents of the Company [and the Company’s
general partner (the “General Partner”)] shall also provide an express
acknowledgment that each of Agent and the Secured Parties is an intended
third-party beneficiary of the “special purpose” provisions of such
organizational documents.

 

(q)          [The organizational documents of the Company shall provide that the
Company will not and the Company agrees that it will not, without the unanimous
written consent of its board of directors, its Committee or its Sole Member (as
applicable), including, or together with, the Independent Director or
Independent Manager (as applicable) (i) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute, (ii) seek or
consent to the appointment of a receiver, liquidator or any similar official of
the Company, (iii) take any action that is reasonably likely to cause such
entity to become insolvent, (iv) make an assignment for the benefit of
creditors, (v) admit in writing (other than so-called customary “going concern”
language contained in any auditor’s report or in the footnotes to any financial
statements) its inability to pay debts generally as they become due, (vi)
intentionally omitted, or (vii) take any action in furtherance of the foregoing.
The Company shall not take any of the foregoing actions without the unanimous
written consent of its board of directors, its Committee or its Sole Member, as
applicable, including (or together with) any Independent Director or Independent
Manager, as applicable. In addition, the organizational documents of the Company
shall provide that, when voting with respect to any matters set forth in the
immediately preceding sentence of this clause (q), the Independent Director or
Independent Manager (as applicable) shall consider only the interests of the
Company, including its creditors. Without limiting the generality of the
foregoing, such documents shall expressly provide that, to the greatest extent
permitted by law, except for duties to the Company (including duties to the
members of the Company solely to the extent of their respective economic
interest in the Company and to the Company’s creditors as set forth in the
immediately preceding sentence), such Independent Director or Independent
Manager (as applicable) shall not owe any fiduciary duties to, and shall not
consider, in acting or otherwise voting on any matter for which their approval
is required, the interests of (i) the members of the Company, (ii) other
Affiliates of the Company, or (iii) any group of Affiliates of which the Company
are a part); provided, however, the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing.]2

 

 

1 If a Borrower is a limited partnership, the language in this clause will need
to appear in the organizational documents of the General Partner of such
Borrower and not in the organizational documents of such Borrower.

 

2 If a Borrower is a limited partnership, the language in this clause will need
to appear in the organizational documents of the General Partner of such
Borrower and not in the organizational documents of such Borrower.

 

 Sch. III - 3 

 

 

(r)          [The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding, upon the occurrence of any event that causes Sole
Member to cease to be a member of the Company (other than (i) upon an assignment
by Sole Member of all of its limited liability company interest in the Company
and the admission of the transferee, if permitted pursuant to the organizational
documents of the Company and the Loan Documents, or (ii) the resignation of Sole
Member and the admission of an additional member of the Company, if permitted
pursuant to the organizational documents of the Company and the Loan Documents),
the person acting as an Independent Director or Independent Manager (as
applicable) of the Company shall, without any action of any Person and
simultaneously with Sole Member ceasing to be a member of the Company,
automatically be admitted as a member of the Company (in each case, a “Special
Member”) and shall preserve and continue the existence of the Company without
dissolution. The organizational documents of the Company shall further provide
that for so long as any portion of the Obligations of the Loan Parties under the
Loan Document is outstanding, no Special Member may resign or transfer its
rights as Special Member unless (i) a successor Special Member has been admitted
to the Company as a Special Member, and (ii) such successor Special Member has
also accepted its appointment as an Independent Director or Independent Manager
(as applicable).]3

 

(s)          The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding, except as expressly permitted pursuant to the
terms of the Loan Agreement, (i) [Sole Member][General Partner] may not resign,
and (ii) no additional [member][partner] shall be admitted to the Company
without the Administrative Agent’s consent.

 

(t)          [The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding: (i) the Company shall be dissolved, and its
affairs shall be wound up, only upon the first to occur of the following: (A)
the termination of the legal existence of the [last remaining member][general
partner] of the Company or the occurrence of any other event which terminates
the continued membership of the [last remaining member][general partner] of the
Company in the Company unless the business of the Company is continued in a
manner permitted by its [operating][limited partnership] agreement or the
Delaware [Limited Liability Company][Revised Uniform Limited Partnership] Act
(the “Act”), or (B) the entry of a decree of judicial dissolution under Section
[18-802][17-802] of the Act; (ii) upon the occurrence of any event that causes
the [last remaining member][general partner] of the Company to cease to be [a
member][the general partner] of the Company or that causes [Sole Member][General
Partner] to cease to be [a member][the general partner] of the Company (other
than upon continuation of the Company without dissolution upon (A) an assignment
by [Sole Member][General Partner] of all of its [limited liability
company][partnership] interest in the Company and the admission of the
transferee, if permitted pursuant to the organizational documents of the Company
and the Loan Documents, or (B) the resignation of [Sole Member][General Partner]
and the admission of [an additional member][a new general partner] of the
Company, if permitted pursuant to the organizational documents of the Company
and the Loan Documents), to the fullest extent permitted by law, the personal
representative of such [last remaining member][general partner] shall be
authorized to, and shall, within ninety (90) days after the occurrence of the
event that terminated the continued membership of such member in the Company,
agree in writing (I) to continue the existence of the Company, and (II) to the
admission of the personal representative or its nominee or designee, as the case
may be, as a substitute [member][general partner] of the Company, effective as
of the occurrence of the event that terminated the continued [membership of such
member in][role of such entity as general partner of] the Company; (iii) the
bankruptcy of [Sole Member][General Partner] or a Special Member shall not cause
such [Sole Member][General Partner] or Special Member, respectively, to cease to
be a [member][partner] of the Company and upon the occurrence of such an event,
the business of the Company shall continue without dissolution; (iv) in the
event of the

 

 

3 If a Borrower is a limited partnership, the language in this clause will need
to appear in the organizational documents of the General Partner of such
Borrower and not in the organizational documents of such Borrower.

 

 Sch. III - 4 

 

 

dissolution of the Company, the Company shall conduct only such activities as
are necessary to wind up its affairs (including the sale of the assets of the
Company in an orderly manner), and the assets of the Company shall be applied in
the manner, and in the order of priority, set forth in Section [18-804][17-804]
of the Act; and (v) to the fullest extent permitted by law, each of [Sole
Member][General Partner] and the Special Members shall irrevocably waive any
right or power that they might have to cause the Company or any of its assets to
be partitioned, to cause the appointment of a receiver for all or any portion of
the assets of the Company, to compel any sale of all or any portion of the
assets of the Company pursuant to any applicable law or to file a complaint or
to institute any proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of the Company.]4

 

(u)          The Company has paid and intends to pay its own liabilities and
expenses, including the salaries of its own employees (if any), consultants and
agents from its own funds (to the extent sufficient cash flow exists from the
Collateral Assets owned by it), and has maintained and shall maintain a
sufficient number of employees (if any) in light of its contemplated business
operations; provided that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(v)         The Company has allocated and will allocate fairly and reasonably
any overhead expenses that are shared with any Affiliate, including shared
office space.

 

(w)          Except in connection with the Loan, the Company has not pledged and
will not pledge its assets for the benefit of any other Person.

 

(x)          [The organizational documents of the Company will provide that the
Company will have no obligation to indemnify its officers, director, member or
Special Member, as the case may be, in each case, unless such an obligation is
fully subordinated to the Indebtedness of the Company under the Loan Documents
and will not constitute a claim against it if cash flow in excess of the amount
required to pay the Indebtedness of the Company under the Loan Documents is
insufficient to pay such obligation.]5

 

(y)          Except in connection with the Loan, the Company has not, does not,
and will not have any of its obligations guaranteed by any Affiliate.

 

As used herein:

 

“Cause” shall mean, with respect to an Independent Director or Independent
Manager, (i) acts or omissions by such Independent Director or Independent
Manager, as applicable, that constitute willful disregard of, or gross
negligence with respect to, such Independent Director’s or Independent
Manager’s, as applicable, duties, (ii) such Independent Director or Independent
Manager, as applicable, has engaged in or has been charged with or has been
indicted or convicted for any crime or crimes of fraud or other acts
constituting a crime under any law applicable to such Independent Director or
Independent Manager, as applicable, (iii) such Independent Director or
Independent Manager, as applicable, has breached its fiduciary duties of loyalty
and care as and to the extent of such duties in accordance with the terms of the
Company’s organizational documents, (iv) there is a material increase in the
fees charged by such Independent Director or Independent Manager, as applicable,
or a material change to such Independent Director’s or Independent Manager’s, as
applicable, terms of service, (v) such Independent Director or Independent
Manager, as applicable, is unable to perform his or her duties as Independent
Director or Independent Manager, as applicable, due to death,

 

 

4 If a Borrower is a limited partnership, this provision should appear in both
the organizational documents of such Borrower and of its General Partner.

 

5 If a Borrower is a limited partnership, this provision should appear in both
the organizational documents of such Borrower and of its General Partner.

 

 Sch. III - 5 

 

 

disability or incapacity, or (vi) such Independent Director or Independent
Manager, as applicable, no longer meets the definition of Independent Director
or Independent Manager, as applicable.

 

“Independent Director” or “Independent Manager” shall mean a natural person
selected by the Company (a) with at least three (3) years of employment
experience as an independent director, independent manager or independent
member, (b) who is provided by a Nationally Recognized Service Company, and (c)
who is duly appointed as an Independent Director or Independent Manager and is
not, will not be while serving as Independent Director or Independent Manager
(except pursuant to an express provision in the Company’s operating agreement
providing for the appointment of such Independent Director or Independent
Manager to become a “special member” upon the last remaining member of the
Company ceasing to be a member of the Company) and shall not have been at any
time during the preceding five (5) years, any of the following:

 

(i)a stockholder, director (other than as an Independent Director), officer,
employee, partner, attorney or counsel of the Company, any Affiliate of the
Company or any direct or indirect parent of the Company;

 

(ii)a customer, supplier or other Person who derives any of its purchases or
revenues from its activities with the Company or any Affiliate of the Company;

 

(iii)a Person or other entity Controlling or under Common Control with any such
stockholder, partner, customer, supplier or other Person described in clause (i)
or clause (ii) above; or

 

(iv)a member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other Person described in clause (i) or
clause (ii) above.

 

A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (i) by reason of being the Independent Director or Independent
Manager of a “special purpose entity” affiliated with the Company shall be
qualified to serve as an Independent Director or Independent Manager of the
Company, provided that the fees that such individual earns from serving as
Independent Director or Independent Manager of affiliates of the Company in any
given year constitute in the aggregate less than five percent (5%) of such
individual's annual income for that year.

 

A natural person who satisfies the foregoing definition other than clause (ii)
shall not be disqualified from serving as an Independent Director or Independent
Manager of the Company if such individual is an independent director,
independent manager or special manager provided by a Nationally Recognized
Service Company that provides professional independent directors, independent
managers and special managers and also provides other corporate services in the
ordinary course of its business.

 

“Nationally Recognized Service Company” shall mean any of CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, National Corporate Research, Ltd., United Corporate Services, Inc.,
Independent Member Services LLC, Lord Securities Corporation or such other
nationally recognized company that provides independent director, independent
manager or independent member services and that is reasonably satisfactory to
Agent, in each case that is not an Affiliate of the Company and that provides
professional independent directors and other corporate services in the ordinary
course of its business.

 

 Sch. III - 6 

 

 

SCHEDULE IV

 

NON-ELIGIBLE ASSIGNEES

 

1.Apple Hospitality REIT, Inc.

 

2.Ashford Hospitality Prime, Inc.

 

3.Ashford Hospitality Trust

 

4.Chatham Lodging Trust

 

5.Chesapeake Lodging Trust

 

6.Diamondrock Hospitality Co

 

7.FelCor Lodging Trust

 

8.Hersha Hospitality Trust

 

9.Hospitality Properties Trust

 

10.Host Hotels & Resorts, Inc.

 

11.LaSalle Hotel Properties

 

12.Pebblebrook Hotel Trust

 

13.RLJ Lodging Trust

 

14.Ryman Hospitality Properties

 

15.Sotherly Hotels Inc.

 

16.Starwood Hotels & Resorts Worldwide, Inc.

 

17.Strategic Hotels & Resorts Inc.

 

18.Summit Hotel Properties

 

19.Sunstone Hotel Investors Inc.

 

20.Xenia Hotels & Resorts, Inc.

 

21.Blackstone Group, LP*

 

22.Northstar Realty Finance Corp.*

 

23.Starwood Capital Group*

 

 

* Any debt platforms or mortgage REITs affiliated with Blackstone Group, LP,
Northstar Realty Finance Corp. and Starwood Capital Group shall be excluded as
non-eligible assignees.

 

 Sch. IV - 1 

 

 

SCHEDULE V

 

APPROVED FRANCHISORS

 

1.Hilton

 

2.Marriott

 

3.IHG

 

4.Hyatt

 

5.Choice

 

6.Carlson

 

7.Wyndham

 

8.La Quinta

 

9.Red Lion

 

10.Red Roof Inn

 

 Sch. V - 1 

 

 

SCHEDULE VI

 

APPROVED MANAGERS

 

1.Aimbridge Hospitality

 

2.Crestline Hotels & Resorts, LLC

 

3.Concord Hospitality

 

4.Crescent Hotels & Resorts

 

5.First Hospitality

 

6.Hersha Hospitality Management

 

7.Highgate Hotels, L.P.

 

8.Hilton Hotels & Resorts

 

9.InterContinental Hotel Group PLC

 

10.Interstate Hotels & Resorts

 

11.McKibbon Hotel Management, Inc.

 

12.Noble House Hotels & Resorts

 

13.Pyramid Hotel Group

 

14.Pillar Hotels & Resorts

 

15.Sage Hospitality

 

16.Westmont Hospitality Group

 

17.White Lodging Services, Corporation

 

18.Island Hospitality Management

 

19.InnVentures, Inc.

 

20.Huntington Hospitality Management

 

21.Lin Gate Hospitality

 

22.Musselman Hotels LLC

 

23.Marriot International, Inc.

 

24.Hyatt Hotels and Resorts

 

25.Northwood Hospitality

 

 Sch. VI - 1 

 

 

26.HEI Hotels & Resorts

 

27.LBA

 

28.Dimension Development

 

 Sch. VI - 2 

 

 

SCHEDULE VII

 

ALLOCATED LOAN AMOUNTS

 

Portfolio Property Property Address Property Owner Allocated Loan
Amount Summit 1 Courtyard Flagstaff 2650 S. Beulah Blvd., Flagstaff,
Arizona 86001 (Coconino County)

HIT SMT CY FLGAZ

Owner, LLC

$25,550,000 Summit 1 Springhill Suites 2455 S. Beulah Blvd., Flagstaff,
Arizona 86001 (Coconino County)

HIT SMT SHS FLGAZ

Owner, LLC

$15,375,000 Summit 1 Hampton Inn 8219 West Jefferson Blvd., Fort
Wayne, Indiana 46804 (Allen
County)

HIT SMT FTWIN001

Owner, LLC

$10,780,000 Summit 1 Residence Inn 7811 West Jefferson Blvd., Fort
Wayne, Indiana 46804 (Allen
County)

HIT SMT RI FTWIN

Owner, LLC

$10,920,000 Summit 1 DoubleTree by Hilton Hotel 4964 Constitution Avenue, Baton
Rouge, Louisiana 70808 (East
Baton Rouge Parish)

HIT SMT BTRLA001

Owner, LLC

$14,420,000 Summit 1 Fairfield Inn & Suites 7959 Essen Park Avenue, Baton
Rouge, Louisiana 70809 (East
Baton Rouge Parish)

HIT SMT FIS BTRLA

Owner, LLC

$3,965,000 Summit 1 Springhill Suites 7979 Essen Park Avenue, Baton
Rouge, Louisiana 70809 (East
Baton Rouge Parish)

HIT SMT SHS BTRLA

Owner, LLC

$4,830,000 Summit 1 TownePlace Suites 8735 Summa Avenue, Baton
Rouge, Louisiana 70809 (East
Baton Rouge Parish)

HIT SMT TPS BTRLA

Owner, LLC

$6,440,000 Summit 1 Hampton Inn 1122 Morrow Road, Medford,
Oregon 97504 (Jackson County)

HIT SMT MDFOR001

Owner, LLC

$9,450,000 Summit 1 Hampton Inn & Suites 6635 Gateway Blvd. West, El
Paso, Texas 79925 (El Paso
County)

HIT SMT ELPTX001

Owner, LP

$13,440,000 Noble 1 Hilton Garden Inn 1000 Aguajito Road, Monterey,
California 93940 (Monterey
County)

HIT NBL MNTCA001

Owner, LP

$30,600,000 Noble 1 Hyatt Place 1851 McConnor Parkway,
Schaumburg, Illinois 60173 (Cook
County)

HIT NBL HYP SCHIL

Owner, LLC

$4,510,000 Noble 2 Courtyard Columbus Downtown 35 West Spring Street
Columbus, Ohio 43215
(Franklin County)

HIT NBL CY CBSOH

Owner, LLC

$18,830,000 Noble 2 Hyatt House Atlanta Cobb Galleria

3595 Cumberland Blvd.

Atlanta, Georgia 30339
(Cobb County)

HIT NBL HH ATLGA

Owner, LLC

$16,520,000

 

 Sch. VII - 1 

 

 

Summit 3 Fairfield Inn & Suites Denver

6851 Tower Road

Denver, Colorado 80249
(Denver County)

HIT SMT FIS DENCO

Owner, LLC

$15,260,000 Summit 3 Hampton Inn Ft. Collins

1620 Oakridge Drive

Fort Collins, Colorado 80525
(Larimer County)

HIT SMT FTCCO001

Owner, LLC

$5,600,000 Summit 3 Hilton Garden Inn Ft. Collins 2821 East Harmony Road
Fort Collins, Colorado 80528
(Larimer County)

HIT SMT FTCCO002

Owner, LLC

$13,090,000 Summit 3 SpringHill Suites Denver 18350 East 68th Avenue
Denver, Colorado 80249
(Denver County)

HIT SMT SHS DENCO

Owner, LLC

$12,075,000 Summit 3 Fairfield Inn & Suites Spokane 311 North Riverpoint Blvd.
Spokane, Washington 99202
(Spokane County)

HIT SMT FIS SPKWA

Owner, LLC

$7,420,000 Summit 3 Fairfield Inn & Suites Bellevue 14595 NE 29th Place
Bellevue, Washington 98007
(King County)

HIT SMT FIS BELWA

Owner, LLC

$20,798,000 Summit 2 Courtyard Germantown 7750 Wolf River Blvd.,
Germantown, Tennessee 38138
(Shelby County)

HIT SMT CY GRMTN

Owner, LLC

$8,680,000 Summit 2 Courtyard Jackson 6280 Ridgewood Court Drive,
Jackson, Mississippi 39211 (Hinds
County)

HIT SMT CY JKSMS

Owner, LLC

$3,520,000 Summit 2 Fairfield Inn & Suites Germantown 9320 Poplar Pike,
Germantown,
Tennessee 38138 (Shelby County)

HIT SMT FIS GRMTN

Owner, LLC

$3,640,000 Summit 2 Homewood Suites Ridgeland 853 Centre Street, Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RDGMS001

Owner, LLC

$6,150,000 Summit 2 Residence Inn Jackson Ridgeland 855 Centre Street,
Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RI JKSMS

Owner, LLC

$8,260,000 Summit 2 Residence Inn Germantown 9314 Poplar Pike, Germantown,
Tennessee 38138 (Shelby County)

HIT SMT RI GRMTN

Owner, LLC

$5,810,000 Summit 2 Staybridge Suites Ridgeland 801 Ridgewood Road, Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RDGMS002

Owner, LLC

$3,640,000 Barcelo Georgia Tech Hotel & Conference Center 800 Spring Street NW,
Atlanta,
Georgia 30308 HIT GA Tech, LLC $10,427,000 TOTAL $310,000,000

 

 Sch. VII - 2 

 

 

SCHEDULE VIII

 

PLEDGOR SPE REQUIREMENTS

 

[See attached.]

 

 Sch. VIII - 1 

 

 

SCHEDULE VIII

 

PLEDGOR SPE REQUIREMENTS

 

Title to Company Property. Legal title to the Company’s interest in all Company
property shall be taken and at all times held in the name of the Company.

 

Company’s Purposes. Notwithstanding anything to the contrary contained in this
Agreement, the Loan Agreement or in any other document governing the formation,
management or operation of the Company, the sole purpose to be conducted or
promoted by the Company is to engage in the following activities: (i) to own
100% of the ownership interests in an entity that will lease, sublease, operate,
manage, maintain, develop and improve the Collateral Asset[s] located at [INSERT
THE NAMES OF EACH PROPERTY OWNED BY THE COMPANY], commonly known as the
“[_____________]” (the [“Properties” and individually, each a] “Property”), in
each case, as defined in the Loan Agreement (defined below); (ii) to enter into
and perform its obligations under the Loan Documents; (iii) to borrow money
against, finance, refinance or otherwise deal with the Propert[ies][y] to the
extent permitted under the [Ground Lease], the Operating Lease, the Loan
Agreement (as hereinafter defined), the Company’s organizational documents and
the Loan Documents; and (iv) to engage in any lawful act or activity and to
exercise any powers permitted to limited liability companies organized under the
laws of the State of Delaware that are related or incidental to and necessary,
convenient or advisable for the accomplishment of the above mentioned purposes.

 

Special Provisions Regarding Loan. This Section is being adopted in order to
comply with certain provisions required in order to qualify the Company as a
“Special Purpose” entity. Notwithstanding anything in this Agreement to the
contrary or in any other document governing the formation, management or
operation of the Company, and for so long as the Obligations of the Loan Parties
under the Loan Documents are outstanding and [any][the] Property is a Collateral
Asset, the Company shall comply with the following provisions (all initial
capitalized terms used in this Section but not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Second Amended and
Restated Term Loan Agreement, dated as of April 27, 2017, among the Company and
the other borrowers party thereto, collectively as Borrower, Hospitality
Investors Trust Operating Partnership, L.P. and Hospitality Investors Trust,
Inc., collectively as guarantors, and Citibank, N.A., as administrative agent
(together with its successors and assigns, “Agent”), and the other parties party
thereto, as amended from time to time (the “Loan Agreement”):

 

(a)          The Company has not owned, does not own, and will not own any asset
or property other than its ownership interests in the owner of the
Propert[ies][y].

 

(b)          The Company has not engaged and will not engage in any business
unrelated to the applicable purposes set forth in Section [    ] above.

 

(c)          The Company has not and will not enter into any contract or
agreement with any Affiliate of the Company (other than the Approved Management
Agreement and Operating Lease), except upon terms and conditions that are
intrinsically fair, commercially reasonable, and no less favorable to it than
would be available on an arms-length basis with third parties other than any
such party.

 

(d)          The Company has not incurred and will not incur any Indebtedness
other than as expressly permitted under the Loan Agreement.

 

(e)          Other than intercompany Indebtedness permitted by the Loan
Agreement, the Company has not made and will not make any loans or advances to
any third party (including any Affiliate or constituent party), and has not and
shall not acquire obligations or securities of its Affiliates.

 

(f)          The Company has been, is, and intends to remain solvent and the
Company has paid and intends to pay its debts and liabilities (including, as
applicable, shared personnel and overhead expenses)

 

 Sch. VIII - 1 

 

 

from its assets (to the extent sufficient cash flow exists from the Collateral
Assets owned by it); provided, however that the foregoing shall not require any
direct or indirect member, partner or shareholder of the Company to make any
additional capital contributions to the Company.

 

(g)          The Company has done or caused to be done, and will do, all things
necessary to observe organizational formalities and preserve their existence,
and the Company has not, and will not (i) terminate or fail to comply with the
provisions of its organizational documents, or (ii) unless Agent has consented,
amend, modify or otherwise change its [operating][limited partnership] agreement
or other organizational documents, in either case except as otherwise expressly
permitted by the Loan Agreement.

 

(h)          Except as otherwise provided in the Loan Documents and except to
the extent that the Company is (i) required to file consolidated tax returns by
law; or (ii) treated as a “disregarded entity” for tax purposes and is not
required to file tax returns under applicable law, (1) the Company has
maintained and will maintain all of its books, records, financial statements and
bank accounts separate from those of its Affiliates and any other Person; (2)
the Company’s assets will not be listed as assets on the financial statement of
any other Person; it being understood that the Company’s assets may be included
in a consolidated financial statement of its Affiliates provided that (i)
appropriate notation shall be made on such consolidated financial statements to
indicate the separateness of the Company and such Affiliates and to indicate
that the Company’s assets and credit are not available to satisfy the debts and
other obligations of such Affiliates (other than the other Borrowers with
respect to the Loan) or any other Person, and (ii) such assets shall be listed
on the Company’s own separate balance sheet; and (3) the Company will file its
own tax returns (to the extent the Company is required to file any tax returns)
and will not file a consolidated federal income tax return with any other
Person, unless required by applicable law. The Company has maintained and shall
maintain its books and records in the ordinary course of its business and so
long as the Obligations of the Loan Parties under the Loan Documents are
outstanding, shall maintain its books and records in the ordinary course of its
business and as otherwise required pursuant to the terms of the Loan Agreement.

 

(i)           The Company has been, will be, and at all times has held and will
hold itself out to the public as, a legal entity separate and distinct from any
other entity (recognizing that the Company may be treated as a “disregarded
entity” for tax purposes and is not required to file tax returns for tax
purposes under applicable law), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself or any of its Affiliates as a division or
department or part of the other and shall, to the extent reasonably necessary
for the operation of its business, maintain and utilize separate stationery,
invoices and checks bearing its own name.

 

(j)           The Company has maintained and intends to maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations;
provided, however that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(k)          Neither the Company nor any constituent party of the Company has
sought or will seek or effect the liquidation, dissolution, winding up,
consolidation or merger, in whole or in part, of the Company.

 

(l)           Other than to the extent permitted in the Cash Management
Agreement, the Company has not and will not commingle the funds and other assets
of the Company with those of any Affiliate or constituent party or any other
Person, and has held and will hold all of its assets in its own name.

 

(m)         The Company has and will maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person

 

 Sch. VIII - 2 

 

 

(n)          Except in connection with the Loan, the Company has not and will
not assume or guarantee or become obligated for the debts of any other Person
and does not and will not hold itself out to be responsible for or have its
credit available to satisfy the debts or obligations of any other Person.

 

(o)          [The organizational documents of the Company shall provide that the
business and affairs of the Company shall be managed by or under the direction
(A) of a board of one or more directors designated by the Company’s sole member
(the “Sole Member”), (B) a committee of managers designated by Sole Member (a
“Committee”) or (C) by Sole Member, and at all times there shall be at least one
(1) duly appointed Independent Director or Independent Manager. In addition, the
organizational documents of the Company shall provide that no Independent
Director or Independent Manager (as applicable) of the Company may be removed or
replaced without Cause and unless the Company provides Agent with not less than
three (3) Business Days’ prior written notice of (a) any proposed removal of an
Independent Director or Independent Manager (as applicable), together with a
statement as to the reasons for such removal, and (b) the identity of the
proposed replacement Independent Director or Independent Manager, as applicable,
together with a certification that such replacement satisfies the requirements
set forth in the organizational documents for an Independent Director or
Independent Manager (as applicable).]1

 

(p)          The organizational documents of the Company [and the Company’s
general partner (the “General Partner”)] shall also provide an express
acknowledgment that each of Agent and the Secured Parties is an intended
third-party beneficiary of the “special purpose” provisions of such
organizational documents.

 

(q)          [The organizational documents of the Company shall provide that the
Company will not and the Company agrees that it will not, without the unanimous
written consent of its board of directors, its Committee or its Sole Member (as
applicable), including, or together with, the Independent Director or
Independent Manager (as applicable) (i) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute, (ii) seek or
consent to the appointment of a receiver, liquidator or any similar official of
the Company, (iii) take any action that is reasonably likely to cause such
entity to become insolvent, (iv) make an assignment for the benefit of
creditors, (v) admit in writing (other than so-called customary “going concern”
language contained in any auditor’s report or in the footnotes to any financial
statements) its inability to pay debts generally as they become due, (vi)
intentionally omitted, or (vii) take any action in furtherance of the foregoing.
The Company shall not take any of the foregoing actions without the unanimous
written consent of its board of directors, its Committee or its Sole Member, as
applicable, including (or together with) any Independent Director or Independent
Manager, as applicable. In addition, the organizational documents of the Company
shall provide that, when voting with respect to any matters set forth in the
immediately preceding sentence of this clause (q), the Independent Director or
Independent Manager (as applicable) shall consider only the interests of the
Company, including its creditors. Without limiting the generality of the
foregoing, such documents shall expressly provide that, to the greatest extent
permitted by law, except for duties to the Company (including duties to the
members of the Company solely to the extent of their respective economic
interest in the Company and to the Company’s creditors as set forth in the
immediately preceding sentence), such Independent Director or Independent
Manager (as applicable) shall not owe any fiduciary duties to, and shall not
consider, in acting or otherwise voting on any matter for which their approval
is required, the interests of (i) the members of the Company, (ii) other
Affiliates of the Company, or (iii) any group of Affiliates of which the Company
are a part); provided, however, the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing.]2

 

 

1 If a Pledgor is a limited partnership, the language in this clause will need
to appear in the organizational documents of the General Partner of such Pledgor
and not in the organizational documents of such Pledgor.

 

2 If a Pledgor is a limited partnership, the language in this clause will need
to appear in the organizational documents of the General Partner of such Pledgor
and not in the organizational documents of such Pledgor.

 

 Sch. VIII - 3 

 

 

(r)          [The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding, upon the occurrence of any event that causes Sole
Member to cease to be a member of the Company (other than (i) upon an assignment
by Sole Member of all of its limited liability company interest in the Company
and the admission of the transferee, if permitted pursuant to the organizational
documents of the Company and the Loan Documents, or (ii) the resignation of Sole
Member and the admission of an additional member of the Company, if permitted
pursuant to the organizational documents of the Company and the Loan Documents),
the person acting as an Independent Director or Independent Manager (as
applicable) of the Company shall, without any action of any Person and
simultaneously with Sole Member ceasing to be a member of the Company,
automatically be admitted as a member of the Company (in each case, a “Special
Member”) and shall preserve and continue the existence of the Company without
dissolution. The organizational documents of the Company shall further provide
that for so long as any portion of the Obligations of the Loan Parties under the
Loan Document is outstanding, no Special Member may resign or transfer its
rights as Special Member unless (i) a successor Special Member has been admitted
to the Company as a Special Member, and (ii) such successor Special Member has
also accepted its appointment as an Independent Director or Independent Manager
(as applicable).]3

 

(s)          The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding, except as expressly permitted pursuant to the
terms of the Loan Agreement, (i) [Sole Member][General Partner] may not resign,
and (ii) no additional [member][partner] shall be admitted to the Company
without the Administrative Agent’s consent.

 

(t)          [The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding: (i) the Company shall be dissolved, and its
affairs shall be wound up, only upon the first to occur of the following: (A)
the termination of the legal existence of the [last remaining member][general
partner] of the Company or the occurrence of any other event which terminates
the continued membership of the [last remaining member][general partner] of the
Company in the Company unless the business of the Company is continued in a
manner permitted by its [operating][limited partnership] agreement or the
Delaware [Limited Liability Company][Revised Uniform Limited Partnership] Act
(the “Act”), or (B) the entry of a decree of judicial dissolution under Section
[18-802][17-802] of the Act; (ii) upon the occurrence of any event that causes
the [last remaining member][general partner] of the Company to cease to be [a
member][the general partner] of the Company or that causes [Sole Member][General
Partner] to cease to be [a member][the general partner] of the Company (other
than upon continuation of the Company without dissolution upon (A) an assignment
by [Sole Member][General Partner] of all of its [limited liability
company][partnership] interest in the Company and the admission of the
transferee, if permitted pursuant to the organizational documents of the Company
and the Loan Documents, or (B) the resignation of [Sole Member][General Partner]
and the admission of [an additional member][a new general partner] of the
Company, if permitted pursuant to the organizational documents of the Company
and the Loan Documents), to the fullest extent permitted by law, the personal
representative of such [last remaining member][general partner] shall be
authorized to, and shall, within ninety (90) days after the occurrence of the
event that terminated the continued membership of such member in the Company,
agree in writing (I) to continue the existence of the Company, and (II) to the
admission of the personal representative or its nominee or designee, as the case
may be, as a substitute [member][general partner] of the Company, effective as
of the occurrence of the event that terminated the continued [membership of such
member in][role of such entity as general partner of] the Company; (iii) the
bankruptcy of [Sole Member][General Partner] or a Special Member shall not cause
such [Sole Member][General Partner] or Special Member, respectively, to cease to
be a [member][partner] of the Company and upon the occurrence of such an event,
the business of the Company shall continue without dissolution; (iv) in the
event of the

 

 

3 If a Pledgor is a limited partnership, the language in this clause will need
to appear in the organizational documents of the General Partner of such Pledgor
and not in the organizational documents of such Pledgor.

 

 Sch. VIII - 4 

 

 

dissolution of the Company, the Company shall conduct only such activities as
are necessary to wind up its affairs (including the sale of the assets of the
Company in an orderly manner), and the assets of the Company shall be applied in
the manner, and in the order of priority, set forth in Section [18-804][17-804]
of the Act; and (v) to the fullest extent permitted by law, each of [Sole
Member][General Partner] and the Special Members shall irrevocably waive any
right or power that they might have to cause the Company or any of its assets to
be partitioned, to cause the appointment of a receiver for all or any portion of
the assets of the Company, to compel any sale of all or any portion of the
assets of the Company pursuant to any applicable law or to file a complaint or
to institute any proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of the Company.]4

 

(u)          The Company has paid and intends to pay its own liabilities and
expenses, including the salaries of its own employees (if any), consultants and
agents from its own funds (to the extent sufficient cash flow exists from the
Collateral Assets owned by it), and has maintained and shall maintain a
sufficient number of employees (if any) in light of its contemplated business
operations; provided that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(v)         The Company has allocated and will allocate fairly and reasonably
any overhead expenses that are shared with any Affiliate, including shared
office space.

 

(w)         Except in connection with the Loan, the Company has not pledged and
will not pledge its assets for the benefit of any other Person.

 

(x)          [The organizational documents of the Company will provide that the
Company will have no obligation to indemnify its officers, director, member or
Special Member, as the case may be, in each case, unless such an obligation is
fully subordinated to the Indebtedness of the Company under the Loan Documents
and will not constitute a claim against it if cash flow in excess of the amount
required to pay the

Indebtedness of the Company under the Loan Documents is insufficient to pay such
obligation.]5

 

(y)          Except in connection with the Loan, the Company has not, does not,
and will not have any of its obligations guaranteed by any Affiliate.

 

As used herein:

 

“Cause” shall mean, with respect to an Independent Director or Independent
Manager, (i) acts or omissions by such Independent Director or Independent
Manager, as applicable, that constitute willful disregard of, or gross
negligence with respect to, such Independent Director’s or Independent
Manager’s, as applicable, duties, (ii) such Independent Director or Independent
Manager, as applicable, has engaged in or has been charged with or has been
indicted or convicted for any crime or crimes of fraud or other acts
constituting a crime under any law applicable to such Independent Director or
Independent Manager, as applicable, (iii) such Independent Director or
Independent Manager, as applicable, has breached its fiduciary duties of loyalty
and care as and to the extent of such duties in accordance with the terms of the
Company’s organizational documents, (iv) there is a material increase in the
fees charged by such Independent Director or Independent Manager, as applicable,
or a material change to such Independent Director’s or Independent Manager’s, as
applicable, terms of service, (v) such Independent Director or Independent
Manager, as applicable, is unable to perform his or her duties as Independent
Director or Independent Manager, as applicable, due to death,

 

 

4 If a Pledgor is a limited partnership, this provision should appear in both
the organizational documents of such Pledgor and of its General Partner.

 

5 If a Pledgor is a limited partnership, this provision should appear in both
the organizational documents of such Pledgor and of its General Partner.

 

 Sch. VIII - 5 

 

 

disability or incapacity, or (vi) such Independent Director or Independent
Manager, as applicable, no longer meets the definition of Independent Director
or Independent Manager, as applicable.

 

“Independent Director” or “Independent Manager” shall mean a natural person
selected by the Company (a) with at least three (3) years of employment
experience as an independent director, independent manager or independent
member, (b) who is provided by a Nationally Recognized Service Company, and (c)
who is duly appointed as an Independent Director or Independent Manager and is
not, will not be while serving as Independent Director or Independent Manager
(except pursuant to an express provision in the Company’s operating agreement
providing for the appointment of such Independent Director or Independent
Manager to become a “special member” upon the last remaining member of the
Company ceasing to be a member of the Company) and shall not have been at any
time during the preceding five (5) years, any of the following:

 

(i)a stockholder, director (other than as an Independent Director), officer,
employee, partner, attorney or counsel of the Company, any Affiliate of the
Company or any direct or indirect parent of the Company;

 

(ii)a customer, supplier or other Person who derives any of its purchases or
revenues from its activities with the Company or any Affiliate of the Company;

 

(iii)a Person or other entity Controlling or under Common Control with any such
stockholder, partner, customer, supplier or other Person described in clause (i)
or clause (ii) above; or

 

(iv)a member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other Person described in clause (i) or
clause (ii) above.

 

A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (i) by reason of being the Independent Director or Independent
Manager of a “special purpose entity” affiliated with the Company shall be
qualified to serve as an Independent Director or Independent Manager of the
Company, provided that the fees that such individual earns from serving as
Independent Director or Independent Manager of affiliates of the Company in any
given year constitute in the aggregate less than five percent (5%) of such
individual's annual income for that year.

 

A natural person who satisfies the foregoing definition other than clause (ii)
shall not be disqualified from serving as an Independent Director or Independent
Manager of the Company if such individual is an independent director,
independent manager or special manager provided by a Nationally Recognized
Service Company that provides professional independent directors, independent
managers and special managers and also provides other corporate services in the
ordinary course of its business.

 

“Nationally Recognized Service Company” shall mean any of CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, National Corporate Research, Ltd., United Corporate Services, Inc.,
Independent Member Services LLC, Lord Securities Corporation or such other
nationally recognized company that provides independent director, independent
manager or independent member services and that is reasonably satisfactory to
Agent, in each case that is not an Affiliate of the Company and that provides
professional independent directors and other corporate services in the ordinary
course of its business.

 

 Sch. VIII - 6 

 

 

SCHEDULE IX

 

TRS LESSEE SPE REQUIREMENTS

 

[See attached.]

 

 Sch. IX - 1 

 

 

SCHEDULE IX

 

TRS LESSEE SPE REQUIREMENTS

 

Title to Company Property. Legal title to the Company’s interest in all Company
property shall be taken and at all times held in the name of the Company.

 

Company’s Purposes. Notwithstanding anything to the contrary contained in this
Agreement, the Loan Agreement or in any other document governing the formation,
management or operation of the Company, the sole purpose to be conducted or
promoted by the Company is to engage in the following activities: (i) to lease,
sublease, operate, manage, maintain, develop and improve the Collateral Asset[s]
located at [INSERT THE NAMES OF EACH PROPERTY OWNED BY THE COMPANY], commonly
known as the “[____________]” (the [“Properties” and individually, each a]
“Property”), in each case, as defined in the Loan Agreement (defined below);
(ii) to enter into and perform its obligations under the Loan Documents; (iii)
to borrow money against, finance, refinance or otherwise deal with the
Propert[ies][y] to the extent permitted under the the Operating Lease, the Loan
Agreement (as hereinafter defined), the Company’s organizational documents and
the Loan Documents; and (iv) to engage in any lawful act or activity and to
exercise any powers permitted to limited liability companies organized under the
laws of the State of Delaware that are related or incidental to and necessary,
convenient or advisable for the accomplishment of the above mentioned purposes.

 

Special Provisions Regarding Loan. This Section is being adopted in order to
comply with certain provisions required in order to qualify the Company as a
“Special Purpose” entity. Notwithstanding anything in this Agreement to the
contrary or in any other document governing the formation, management or
operation of the Company, and for so long as the Obligations of the Loan Parties
under the Loan Documents are outstanding and [any][the] Property is a Collateral
Asset, the Company shall comply with the following provisions (all initial
capitalized terms used in this Section but not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Second Amended and
Restated Term Loan Agreement, dated as of April 27, 2017, among the Company and
the other borrowers party thereto, collectively as Borrower, Hospitality
Investors Trust Operating Partnership, L.P. and Hospitality Investors Trust,
Inc., collectively as guarantors, and Citibank, N.A., as administrative agent
(together with its successors and assigns, “Agent”), and the other parties party
thereto, as amended from time to time (the “Loan Agreement”):

 

(a)          The Company has not owned, does not own, and will not own any asset
or property other than (A) its leasehold interest in the Propert[ies][y], (B)
incidental personal property necessary for the ownership or operation of its
leasehold interest in the Propert[ies][y], and (C) any other assets permitted to
be owned pursuant to the terms and provisions of the Loan Agreement.

 

(b)          The Company has not engaged and will not engage in any business
unrelated to the applicable purposes set forth in Section [    ] above.

 

(c)          The Company has not and will not enter into any contract or
agreement with any Affiliate of the Company (other than the Approved Management
Agreement and Operating Lease), except upon terms and conditions that are
intrinsically fair, commercially reasonable, and no less favorable to it than
would be available on an arms-length basis with third parties other than any
such party.

 

(d)          The Company has not incurred and will not incur any Indebtedness
other than as expressly permitted under the Loan Agreement.

 

(e)          Other than intercompany Indebtedness permitted by the Loan
Agreement, the Company has not made and will not make any loans or advances to
any third party (including any Affiliate or constituent party), and has not and
shall not acquire obligations or securities of its Affiliates.

 

 Sch. IX - 1 

 

 

(f)          The Company has been, is, and intends to remain solvent and the
Company has paid and intends to pay its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its assets (to the
extent sufficient cash flow exists from the Collateral Assets owned by it);
provided, however that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(g)          The Company has done or caused to be done, and will do, all things
necessary to observe organizational formalities and preserve their existence,
and the Company has not, and will not (i) terminate or fail to comply with the
provisions of its organizational documents, or (ii) unless Agent has consented,
amend, modify or otherwise change its [operating][limited partnership] agreement
or other organizational documents, in either case except as otherwise expressly
permitted by the Loan Agreement.

 

(h)          Except as otherwise provided in the Loan Documents and except to
the extent that the Company is (i) required to file consolidated tax returns by
law; or (ii) treated as a “disregarded entity” for tax purposes and is not
required to file tax returns under applicable law, (1) the Company has
maintained and will maintain all of its books, records, financial statements and
bank accounts separate from those of its Affiliates and any other Person; (2)
the Company’s assets will not be listed as assets on the financial statement of
any other Person; it being understood that the Company’s assets may be included
in a consolidated financial statement of its Affiliates provided that (i)
appropriate notation shall be made on such consolidated financial statements to
indicate the separateness of the Company and such Affiliates and to indicate
that the Company’s assets and credit are not available to satisfy the debts and
other obligations of such Affiliates (other than the other Borrowers with
respect to the Loan) or any other Person, and (ii) such assets shall be listed
on the Company’s own separate balance sheet; and (3) the Company will file its
own tax returns (to the extent the Company is required to file any tax returns)
and will not file a consolidated federal income tax return with any other
Person, unless required by applicable law. The Company has maintained and shall
maintain its books and records in the ordinary course of its business and so
long as the Obligations of the Loan Parties under the Loan Documents are
outstanding, shall maintain its books and records in the ordinary course of its
business and as otherwise required pursuant to the terms of the Loan Agreement.

 

(i)           The Company has been, will be, and at all times has held and will
hold itself out to the public as, a legal entity separate and distinct from any
other entity (recognizing that the Company may be treated as a “disregarded
entity” for tax purposes and is not required to file tax returns for tax
purposes under applicable law), shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its own
name, shall not identify itself or any of its Affiliates as a division or
department or part of the other and shall, to the extent reasonably necessary
for the operation of its business, maintain and utilize separate stationery,
invoices and checks bearing its own name.

 

(j)           The Company has maintained and intends to maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations;
provided, however that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(k)          Neither the Company nor any constituent party of the Company has
sought or will seek or effect the liquidation, dissolution, winding up,
consolidation or merger, in whole or in part, of the Company.

 

(l)           Other than to the extent permitted in the Cash Management
Agreement, the Company has not and will not commingle the funds and other assets
of the Company with those of any Affiliate or constituent party or any other
Person, and has held and will hold all of its assets in its own name.

 

(m)         The Company has and will maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party or any other
Person

 

 Sch. IX - 2 

 

 

(n)          Except in connection with the Loan, the Company has not and will
not assume or guarantee or become obligated for the debts of any other Person
and does not and will not hold itself out to be responsible for or have its
credit available to satisfy the debts or obligations of any other Person.

 

(o)          [The organizational documents of the Company shall provide that the
business and affairs of the Company shall be managed by or under the direction
(A) of a board of one or more directors designated by the Company’s sole member
(the “Sole Member”), (B) a committee of managers designated by Sole Member (a
“Committee”) or (C) by Sole Member, and at all times there shall be at least one
(1) duly appointed Independent Director or Independent Manager. In addition, the
organizational documents of the Company shall provide that no Independent
Director or Independent Manager (as applicable) of the Company may be removed or
replaced without Cause and unless the Company provides Agent with not less than
three (3) Business Days’ prior written notice of (a) any proposed removal of an
Independent Director or Independent Manager (as applicable), together with a
statement as to the reasons for such removal, and (b) the identity of the
proposed replacement Independent Director or Independent Manager, as applicable,
together with a certification that such replacement satisfies the requirements
set forth in the organizational documents for an Independent Director or
Independent Manager (as applicable).]1

 

(p)          The organizational documents of the Company [and the Company’s
general partner (the “General Partner”)] shall also provide an express
acknowledgment that each of Agent and the Secured Parties is an intended
third-party beneficiary of the “special purpose” provisions of such
organizational documents.

 

(q)          [The organizational documents of the Company shall provide that the
Company will not and the Company agrees that it will not, without the unanimous
written consent of its board of directors, its Committee or its Sole Member (as
applicable), including, or together with, the Independent Director or
Independent Manager (as applicable) (i) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute, (ii) seek or
consent to the appointment of a receiver, liquidator or any similar official of
the Company, (iii) take any action that is reasonably likely to cause such
entity to become insolvent, (iv) make an assignment for the benefit of
creditors, (v) admit in writing (other than so-called customary “going concern”
language contained in any auditor’s report or in the footnotes to any financial
statements) its inability to pay debts generally as they become due, (vi)
intentionally omitted, or (vii) take any action in furtherance of the foregoing.
The Company shall not take any of the foregoing actions without the unanimous
written consent of its board of directors, its Committee or its Sole Member, as
applicable, including (or together with) any Independent Director or Independent
Manager, as applicable. In addition, the organizational documents of the Company
shall provide that, when voting with respect to any matters set forth in the
immediately preceding sentence of this clause (q), the Independent Director or
Independent Manager (as applicable) shall consider only the interests of the
Company, including its creditors. Without limiting the generality of the
foregoing, such documents shall expressly provide that, to the greatest extent
permitted by law, except for duties to the Company (including duties to the
members of the Company solely to the extent of their respective economic
interest in the Company and to the Company’s creditors as set forth in the
immediately preceding sentence), such Independent Director or Independent
Manager (as applicable) shall not owe any fiduciary duties to, and shall not
consider, in acting or otherwise voting on any matter for which their approval
is required, the interests of (i) the members of the Company, (ii) other
Affiliates of the Company, or (iii) any group of Affiliates of

 

 

1 If a TRS Lessee is a limited partnership, the language in this clause will
need to appear in the organizational documents of the General Partner of such
TRS Lessee and not in the organizational documents of such TRS Lessee.

 

 Sch. IX - 3 

 

 

which the Company are a part); provided, however, the foregoing shall not
eliminate the implied contractual covenant of good faith and fair dealing.]2

 

(r)          [The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding, upon the occurrence of any event that causes Sole
Member to cease to be a member of the Company (other than (i) upon an assignment
by Sole Member of all of its limited liability company interest in the Company
and the admission of the transferee, if permitted pursuant to the organizational
documents of the Company and the Loan Documents, or (ii) the resignation of Sole
Member and the admission of an additional member of the Company, if permitted
pursuant to the organizational documents of the Company and the Loan Documents),
the person acting as an Independent Director or Independent Manager (as
applicable) of the Company shall, without any action of any Person and
simultaneously with Sole Member ceasing to be a member of the Company,
automatically be admitted as a member of the Company (in each case, a “Special
Member”) and shall preserve and continue the existence of the Company without
dissolution. The organizational documents of the Company shall further provide
that for so long as any portion of the Obligations of the Loan Parties under the
Loan Document is outstanding, no Special Member may resign or transfer its
rights as Special Member unless (i) a successor Special Member has been admitted
to the Company as a Special Member, and (ii) such successor Special Member has
also accepted its appointment as an Independent Director or Independent Manager
(as applicable).]3

 

(s)          The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding, except as expressly permitted pursuant to the
terms of the Loan Agreement, (i) [Sole Member][General Partner] may not resign,
and (ii) no additional [member][partner] shall be admitted to the Company
without the Administrative Agent’s consent.

 

(t)          [The organizational documents of the Company shall provide that, as
long as any portion of the Obligations of the Loan Parties under the Loan
Documents remains outstanding: (i) the Company shall be dissolved, and its
affairs shall be wound up, only upon the first to occur of the following: (A)
the termination of the legal existence of the [last remaining member][general
partner] of the Company or the occurrence of any other event which terminates
the continued membership of the [last remaining member][general partner] of the
Company in the Company unless the business of the Company is continued in a
manner permitted by its [operating][limited partnership] agreement or the
Delaware [Limited Liability Company][Revised Uniform Limited Partnership] Act
(the “Act”), or (B) the entry of a decree of judicial dissolution under Section
[18-802][17-802] of the Act; (ii) upon the occurrence of any event that causes
the [last remaining member][general partner] of the Company to cease to be [a
member][the general partner] of the Company or that causes [Sole Member][General
Partner] to cease to be [a member][the general partner] of the Company (other
than upon continuation of the Company without dissolution upon (A) an assignment
by [Sole Member][General Partner] of all of its [limited liability
company][partnership] interest in the Company and the admission of the
transferee, if permitted pursuant to the organizational documents of the Company
and the Loan Documents, or (B) the resignation of [Sole Member][General Partner]
and the admission of [an additional member][a new general partner] of the
Company, if permitted pursuant to the organizational documents of the Company
and the Loan Documents), to the fullest extent permitted by law, the personal
representative of such [last remaining member][general partner] shall be
authorized to, and shall, within ninety (90) days after the occurrence of the
event that terminated the continued membership of such member in the

 

 

2 If a TRS Lessee is a limited partnership, the language in this clause will
need to appear in the organizational documents of the General Partner of such
TRS Lessee and not in the organizational documents of such TRS Lessee.

 

3 If a TRS Lessee is a limited partnership, the language in this clause will
need to appear in the organizational documents of the General Partner of such
TRS Lessee and not in the organizational documents of such TRS Lessee.

 

 Sch. IX - 4 

 

 

Company, agree in writing (I) to continue the existence of the Company, and (II)
to the admission of the personal representative or its nominee or designee, as
the case may be, as a substitute [member][general partner] of the Company,
effective as of the occurrence of the event that terminated the continued
[membership of such member in][role of such entity as general partner of] the
Company; (iii) the bankruptcy of [Sole Member][General Partner] or a Special
Member shall not cause such [Sole Member][General Partner] or Special Member,
respectively, to cease to be a [member][partner] of the Company and upon the
occurrence of such an event, the business of the Company shall continue without
dissolution; (iv) in the event of the dissolution of the Company, the Company
shall conduct only such activities as are necessary to wind up its affairs
(including the sale of the assets of the Company in an orderly manner), and the
assets of the Company shall be applied in the manner, and in the order of
priority, set forth in Section [18-804][17-804] of the Act; and (v) to the
fullest extent permitted by law, each of [Sole Member][General Partner] and the
Special Members shall irrevocably waive any right or power that they might have
to cause the Company or any of its assets to be partitioned, to cause the
appointment of a receiver for all or any portion of the assets of the Company,
to compel any sale of all or any portion of the assets of the Company pursuant
to any applicable law or to file a complaint or to institute any proceeding at
law or in equity to cause the dissolution, liquidation, winding up or
termination of the Company.]4

 

(u)          The Company has paid and intends to pay its own liabilities and
expenses, including the salaries of its own employees (if any), consultants and
agents from its own funds (to the extent sufficient cash flow exists from the
Collateral Assets owned by it), and has maintained and shall maintain a
sufficient number of employees (if any) in light of its contemplated business
operations; provided that the foregoing shall not require any direct or indirect
member, partner or shareholder of the Company to make any additional capital
contributions to the Company.

 

(v)         The Company has allocated and will allocate fairly and reasonably
any overhead expenses that are shared with any Affiliate, including shared
office space.

 

(w)          Except in connection with the Loan, the Company has not pledged and
will not pledge its assets for the benefit of any other Person.

 

(x)          [The organizational documents of the Company will provide that the
Company will have no obligation to indemnify its officers, director, member or
Special Member, as the case may be, in each case, unless such an obligation is
fully subordinated to the Indebtedness of the Company under the Loan Documents
and will not constitute a claim against it if cash flow in excess of the amount
required to pay the Indebtedness of the Company under the Loan Documents is
insufficient to pay such obligation.]5

 

(y)          Except in connection with the Loan, the Company has not, does not,
and will not have any of its obligations guaranteed by any Affiliate.

 

As used herein:

 

“Cause” shall mean, with respect to an Independent Director or Independent
Manager, (i) acts or omissions by such Independent Director or Independent
Manager, as applicable, that constitute willful disregard of, or gross
negligence with respect to, such Independent Director’s or Independent
Manager’s, as applicable, duties, (ii) such Independent Director or Independent
Manager, as applicable, has engaged in or has been charged with or has been
indicted or convicted for any crime or crimes of fraud or other acts
constituting a crime under any law applicable to such Independent Director or
Independent Manager, as applicable, (iii)

 

 

4 If a TRS Lessee is a limited partnership, this provision should appear in both
the organizational documents of such TRS Lessee and of its General Partner.

 

5 If a TRS Lessee is a limited partnership, this provision should appear in both
the organizational documents of such TRS Lessee and of its General Partner.

 

 Sch. IX - 5 

 

 

such Independent Director or Independent Manager, as applicable, has breached
its fiduciary duties of loyalty and care as and to the extent of such duties in
accordance with the terms of the Company’s organizational documents, (iv) there
is a material increase in the fees charged by such Independent Director or
Independent Manager, as applicable, or a material change to such Independent
Director’s or Independent Manager’s, as applicable, terms of service, (v) such
Independent Director or Independent Manager, as applicable, is unable to perform
his or her duties as Independent Director or Independent Manager, as applicable,
due to death, disability or incapacity, or (vi) such Independent Director or
Independent Manager, as applicable, no longer meets the definition of
Independent Director or Independent Manager, as applicable.

 

“Independent Director” or “Independent Manager” shall mean a natural person
selected by the Company (a) with at least three (3) years of employment
experience as an independent director, independent manager or independent
member, (b) who is provided by a Nationally Recognized Service Company, and (c)
who is duly appointed as an Independent Director or Independent Manager and is
not, will not be while serving as Independent Director or Independent Manager
(except pursuant to an express provision in the Company’s operating agreement
providing for the appointment of such Independent Director or Independent
Manager to become a “special member” upon the last remaining member of the
Company ceasing to be a member of the Company) and shall not have been at any
time during the preceding five (5) years, any of the following:

 

(i)a stockholder, director (other than as an Independent Director), officer,
employee, partner, attorney or counsel of the Company, any Affiliate of the
Company or any direct or indirect parent of the Company;

 

(ii)a customer, supplier or other Person who derives any of its purchases or
revenues from its activities with the Company or any Affiliate of the Company;

 

(iii)a Person or other entity Controlling or under Common Control with any such
stockholder, partner, customer, supplier or other Person described in clause (i)
or clause (ii) above; or

 

(iv)a member of the immediate family of any such stockholder, director, officer,
employee, partner, customer, supplier or other Person described in clause (i) or
clause (ii) above.

 

A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (i) by reason of being the Independent Director or Independent
Manager of a “special purpose entity” affiliated with the Company shall be
qualified to serve as an Independent Director or Independent Manager of the
Company, provided that the fees that such individual earns from serving as
Independent Director or Independent Manager of affiliates of the Company in any
given year constitute in the aggregate less than five percent (5%) of such
individual's annual income for that year.

 

A natural person who satisfies the foregoing definition other than clause (ii)
shall not be disqualified from serving as an Independent Director or Independent
Manager of the Company if such individual is an independent director,
independent manager or special manager provided by a Nationally Recognized
Service Company that provides professional independent directors, independent
managers and special managers and also provides other corporate services in the
ordinary course of its business.

 

“Nationally Recognized Service Company” shall mean any of CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, National Corporate Research, Ltd., United Corporate Services, Inc.,
Independent Member Services LLC, Lord Securities Corporation or such other
nationally recognized company that provides independent director, independent
manager or independent member services and that is reasonably satisfactory to
Agent, in each case that is not an Affiliate of the

 

 Sch. IX - 6 

 

 

Company and that provides professional independent directors and other corporate
services in the ordinary course of its business.

 

 Sch. IX - 7 

 

 

SCHEDULE X

 

PIP BUDGET SCHEDULE

 

[See attached.]

 

 Sch. X - 1 

 

 

ARC Hospitality PIP Schedule for Summit and Noble Portfolios 4/14/2017

 

Hotel State Keys Portfolio Comm
Date Original PIP
Pricing
Estimates Revised
Comm
Date(1) Revised PIP
Pricing
Estimates Per Key
$000s Hyatt House Atlanta Cobb(2) GA 149 Noble 10/01/16 $61,766 04/01/16 $0 $0.0
SpringHill Suites Baton Rouge South LA 78 Summit 10/01/16 530,673 07/01/16
600,000 7.7 TownePlace Suites Baton Rouge South LA 90 Summit 10/01/18 0 07/01/16
600,000 6.7 Hyatt Place Chicago Schaumburg IL 127 Noble 10/01/16 $2,652,543
12/01/17 2,100,000 $16.5 Hampton Inn Ft. Wayne Southwest IN 118 Summit 10/01/17
851,366 12/01/17 851,366 7.2 DoubleTree Baton Rouge LA 127 Summit 10/01/17
2,540,000 12/01/17 2,540,000 20.0 Hampton Inn Medford OR 75 Summit 10/01/17
280,331 12/01/17 280,331 3.7 Courtyard Flagstaff AZ 164 Summit 10/01/16
2,296,000 12/01/17 2,600,000 15.9 SpringHill Suites Flagstaff AZ 112 Summit
10/01/16 1,299,284 12/01/17 1,500,000 13.4 SpringHill Suites Denver Airport CO
124 Summit 01/01/17 1,636,104 01/01/18 2,600,000 21.0 Fairfield Inn & Suites
Spokane Downtown WA 84 Summit 10/01/17 543,881 04/01/18 543,881 6.5 Fairfield
Inn & Suites Bellevue WA 144 Summit 10/01/17 866,953 04/01/18 866,953 6.0
Fairfield Inn & Suites Denver Airport CO 160 Summit 10/01/17 761,312 04/01/18
761,312 4.8 Hilton Garden Inn Fort Collins CO 120 Summit 10/01/17 0 04/01/18 0
0.0 Fairfield Inn & Suites Baton Rouge South LA 78 Summit 10/01/17 78,000
05/01/18 78,000 1.0 Hampton Inn & Suites El Paso Airport TX 139 Summit 10/01/17
1,008,267 12/01/18 1,008,267 7.3 Hampton Inn Fort Collins CO 75 Summit 01/01/18
896,403 12/01/18 896,403 12.0 Courtyard Columbus Downtown OH 150 Noble 10/01/19
1,575,452 11/01/19 1,575,452 10.5 Hilton Garden Inn Monterey CA 204 Noble
10/01/19 3,432,393 11/01/19 3,432,393 16.8 Residence Inn Ft. Wayne Southwest IN
109 Summit 10/01/19 0 11/01/19 0 0.0 Courtyard Jackson Ridgeland MS 117 Summit
05/01/18 420,600 05/01/18 420,600 3.6 Courtyard Memphis Germantown TN 93 Summit
05/01/18 594,000 05/01/18 594,000 6.4 Fairfield Inn & Suites Memphis Germantown
TN 80 Summit 05/01/18 272,250 05/01/18 272,250 3.4 Homewood Suites Jackson
Ridgeland MS 91 Summit 05/01/18 2,475,000 05/01/18 2,475,000 27.2 Residence Inn
Jackson Ridgeland MS 100 Summit 05/01/18 158,400 05/01/18 158,400 1.6 Residence
Inn Memphis Germantown TN 78 Summit 05/01/18 297,000 05/01/18 297,000 3.8
Staybridge Suites Jackson MS 92 Summit 05/01/18 891,000 05/01/18 891,000 9.7    
              Totals   3,078     $26,418,978   $27,942,608 $9.1

 

Notes

(1) Indicates current anticipated PIP commencement dates. Commencement and
completion dates are subject to ongoing negotiations with the Brands.

 

 

 

 

SCHEDULE XI

 

[INTENTIONALLY OMITTED]

 

 Sch. XI - 1 

 

 

SCHEDULE XII

 

[INTENTIONALLY OMITTED]

 

 Sch. XII - 1 

 

 

SCHEDULE XIII

 

APPRAISED VALUES

 

Portfolio Property Property Address Property Owner As-Is Market Value Summit 1
Courtyard Flagstaff 2650 S. Beulah Blvd., Flagstaff,
Arizona 86001 (Coconino County)

HIT SMT CY FLGAZ

Owner, LLC

$36,500,000.00 Summit 1 Springhill Suites 2455 S. Beulah Blvd., Flagstaff,
Arizona 86001 (Coconino County)

HIT SMT SHS FLGAZ

Owner, LLC

$20,500,000.00 Summit 1 Hampton Inn 8219 West Jefferson Blvd., Fort
Wayne, Indiana 46804 (Allen
County)

HIT SMT FTWIN001

Owner, LLC

$15,400,000.00 Summit 1 Residence Inn 7811 West Jefferson Blvd., Fort
Wayne, Indiana 46804 (Allen
County)

HIT SMT RI FTWIN

Owner, LLC

$15,600,000.00 Summit 1 DoubleTree by Hilton Hotel 4964 Constitution Avenue,
Baton
Rouge, Louisiana 70808 (East
Baton Rouge Parish)

HIT SMT BTRLA001

Owner, LLC

$20,600,000.00 Summit 1 Fairfield Inn & Suites 7959 Essen Park Avenue, Baton
Rouge, Louisiana 70809 (East
Baton Rouge Parish)

HIT SMT FIS BTRLA

Owner, LLC

$6,100,000.00 Summit 1 Springhill Suites 7979 Essen Park Avenue, Baton
Rouge, Louisiana 70809 (East
Baton Rouge Parish)

HIT SMT SHS BTRLA

Owner, LLC

$6,900,000.00 Summit 1 TownePlace Suites 8735 Summa Avenue, Baton
Rouge, Louisiana 70809 (East
Baton Rouge Parish)

HIT SMT TPS BTRLA

Owner, LLC

$9,200,000.00 Summit 1 Hampton Inn 1122 Morrow Road, Medford,
Oregon 97504 (Jackson County)

HIT SMT MDFOR001

Owner, LLC

$13,500,000.00 Summit 1 Hampton Inn & Suites 6635 Gateway Blvd. West, El
Paso, Texas 79925 (El Paso
County)

HIT SMT ELPTX001

Owner, LP

$19,200,000.00 Noble 1 Hilton Garden Inn 1000 Aguajito Road, Monterey,
California 93940 (Monterey
County)

HIT NBL MNTCA001

Owner, LP

$40,800,000.00 Noble 1 Hyatt Place 1851 McConnor Parkway,
Schaumburg, Illinois 60173 (Cook
County)

HIT NBL HYP SCHIL

Owner, LLC

$8,200,000.00 Noble 2 Courtyard Columbus Downtown 35 West Spring Street
Columbus, Ohio 43215
(Franklin County)

HIT NBL CY CBSOH

Owner, LLC

$26,900,000.00 Noble 2 Hyatt House Atlanta Cobb Galleria 3595 Cumberland Blvd.
Atlanta, Georgia 30339
(Cobb County)

HIT NBL HH ATLGA

Owner, LLC

$23,600,000.00

 

 Sch. XIII - 1 

 

 

Summit 3 Fairfield Inn & Suites Denver

6851 Tower Road

Denver, Colorado 80249
(Denver County)

HIT SMT FIS DENCO

Owner, LLC

$21,800,000.00 Summit 3 Hampton Inn Ft. Collins

1620 Oakridge Drive

Fort Collins, Colorado 80525
(Larimer County)

HIT SMT FTCCO001

Owner, LLC

$8,000,000.00 Summit 3 Hilton Garden Inn Ft. Collins 2821 East Harmony Road
Fort Collins, Colorado 80528
(Larimer County)

HIT SMT FTCCO002

Owner, LLC

$18,700,000.00 Summit 3 SpringHill Suites Denver 18350 East 68th Avenue
Denver, Colorado 80249
(Denver County)

HIT SMT SHS DENCO

Owner, LLC

$16,100,000.00 Summit 3 Fairfield Inn & Suites Spokane 311 North Riverpoint
Blvd.
Spokane, Washington 99202
(Spokane County)

HIT SMT FIS SPKWA

Owner, LLC

$10,600,000.00 Summit 3 Fairfield Inn & Suites Bellevue 14595 NE 29th Place
Bellevue, Washington 98007
(King County)

HIT SMT FIS BELWA

Owner, LLC

$28,800,000.00 Summit 2 Courtyard Germantown 7750 Wolf River Blvd.,
Germantown, Tennessee 38138
(Shelby County)

HIT SMT CY GRMTN

Owner, LLC

$12,400,000.00 Summit 2 Courtyard Jackson 6280 Ridgewood Court Drive,
Jackson, Mississippi 39211 (Hinds
County)

HIT SMT CY JKSMS

Owner, LLC

$6,400,000.00 Summit 2 Fairfield Inn & Suites Germantown 9320 Poplar Pike,
Germantown,
Tennessee 38138 (Shelby County)

HIT SMT FIS GRMTN

Owner, LLC

$5,600,000.00 Summit 2 Homewood Suites Ridgeland 853 Centre Street, Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RDGMS001

Owner, LLC

$8,200,000.00 Summit 2 Residence Inn Jackson Ridgeland 855 Centre Street,
Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RI JKSMS

Owner, LLC

$11,800,000.00 Summit 2 Residence Inn Germantown 9314 Poplar Pike, Germantown,
Tennessee 38138 (Shelby County)

HIT SMT RI GRMTN

Owner, LLC

$8,300,000.00 Summit 2 Staybridge Suites Ridgeland 801 Ridgewood Road,
Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RDGMS002

Owner, LLC

$5,200,000.00 Barcelo Georgia Tech Hotel & Conference Center 800 Spring Street
NW, Atlanta,
Georgia 30308 HIT GA Tech, LLC $19,300,000.00 TOTAL $444,200,000.00

 

 Sch. XIII - 2 

 

 

SCHEDULE XIV

 

ADDITIONAL SUMMIT COLLATERAL ASSETS

 

1.Courtyard Jackson Ridgeland, 6280 Ridgewood Court Drive, Jackson, MS 39211
(Hinds County)

 

2.Homewood Suites Jackson Ridgeland, 853 Centre Street, Ridgeland, MS 39157
(Madison County)

 

3.Residence Inn Jackson Ridgeland, 855 Centre Street, Ridgeland, MS 39157
(Madison County)

 

4.Staybridge Suites Jackson, 801 Ridgewood Road, Ridgeland, MS 39157 (Madison
County)

 

5.Courtyard Memphis Germantown, 7750 Wolf River Boulevard, Germantown, TN 38138
(Shelby County)

 

6.Fairfield Inn & Suites Memphis Germantown, 9320 Poplar Pike, Germantown, TN
38138 (Shelby County)

 

7.Residence Inn Memphis Germantown, 9314 Poplar Pike, Germantown, TN 38138
(Shelby County)

 

 Sch. XIV - 1 

 

 

SCHEDULE XV

 

[INTENTIONALLY OMITTED]

 

 Sch. XV - 1 

 

 

SCHEDULE XVI

 

RETIRING DEBT

 

1.A loan in the original principal amount of 293,400,000, as set forth in that
certain Amended and Restated Term Loan Agreement dated as of October 15, 2015,
as amended by Amendment No. 1 thereto dated as of February 11, 2016, among the
borrower parties thereto, Hospitality Investors Trust, Inc. (f/k/a American
Realty Capital Hospitality Trust, Inc.) and Hospitality Investors Trust
Operating Partnership, L.P. (f/k/a American Realty Capital Hospitality Trust
Operating Partnership, L.P.), and Deutsche Bank AG New York Branch, as the
administrative agent.

 

2.An earnout obligation in the amount of the “Earnout Amount”, as such term is
defined and as set forth in that certain Third Amendment to Agreement for
Purchase and Sale, dated as of August 10, 2016, by and among (i) HIT Baltimore,
LLC (f/k/a ARC Hospitality Baltimore, LLC), HIT Providence, LLC (f/k/a ARC
Hospitality Providence, LLC), HIT Stratford, LLC (f/k/a ARC Hospitality
Stratford, LLC), and HIT GA Tech, LLC (f/k/a ARC Hospitality GA Tech, LLC), each
a Delaware limited liability company, and HIT Investors Trust, Inc. (f/k/a
American Realty Capital Hospitality Trust, Inc.), a Maryland corporation, and
(ii) HFP Hotel Owner II, LLC, CSB Stratford LLC, and CC Technology Square LLC,
each a Delaware limited liability company

 

3.A loan in the original principal amount of $3,000,000, as set forth in that
certain Loan Agreement, dated January 12, 2017, between Hospitality Investors
Trust, Inc. (f/k/a American Realty Capital Hospitality Trust, Inc.), a Maryland
corporation and Summit Hotel OP, LP.

 

 Sch. XVI - 1 

 

 

SCHEDULE 4.01(b)

 

SUBSIDIARIES

 

[See attached.]

 

 Sch. 4.01(b) - 1 

 

 

[bankloan_ex10-3.jpg]

 

 

 

 

SCHEDULE 4.01(f)

 

MATERIAL LITIGATION

 

None.

 

 Sch. 4.01(f) - 1 

 

 

SCHEDULE 4.01(o)

 

EXISTING LIENS

 

None.

 

 Sch. 4.01(o) - 1 

 

 

SCHEDULE 4.01(p)

 

REAL PROPERTY

 

Part I – Owned Assets

 

Portfolio Borrower Hotel Address Record Owner Summit 1

HIT SMT CY FLGAZ

Owner, LLC

Courtyard

Flagstaff

2650 S. Beulah Blvd.

Flagstaff, Arizona 86001

HIT SMT CY FLGAZ

Owner, LLC

Summit 1

HIT SMT SHS FLGAZ

Owner, LLC

Springhill Suites 2455 S. Beulah Blvd.
Flagstaff, Arizona 86001 HIT SMT SHS FLGAZ Owner, LLC Summit 1

HIT SMT FTWIN001

Owner, LLC

Hampton Inn 8219 West Jefferson Blvd.
Fort Wayne, Indiana 46804

HIT SMT FTWIN001

Owner, LLC

Summit 1

HIT SMT RI FTWIN

Owner, LLC

Residence Inn 7811 West Jefferson Blvd.
Fort Wayne, Indiana 46804

HIT SMT RI FTWIN

Owner, LLC

Summit 1

HIT SMT BTRLA001

Owner, LLC

DoubleTree by Hilton Hotel

4964 Constitution Avenue
Baton Rouge, Louisiana

70808

HIT SMT BTRLA001

Owner, LLC

Summit 1

HIT SMT FIS BTRLA

Owner, LLC

Fairfield Inn & Suites 7959 Essen Park Avenue
Baton Rouge, Louisiana
70809

HIT SMT FIS BTRLA

Owner, LLC

Summit 1

HIT SMT SHS BTRLA

Owner, LLC

Springhill Suites 7979 Essen Park Avenue
Baton Rouge, Louisiana
70809 HIT SMT SHS BTRLA Owner, LLC Summit 1

HIT SMT TPS BTRLA

Owner, LLC

TownePlace Suites 8735 Summa Avenue
Baton Rouge, Louisiana
70809 HIT SMT TPS BTRLA Owner, LLC Summit 1

HIT SMT MDFOR001

Owner, LLC

Hampton Inn 1122 Morrow Road
Medford, Oregon 97504

HIT SMT MDFOR001

Owner, LLC

Summit 1

HIT SMT ELPTX001

Owner, LP

Hampton Inn & Suites 6635 Gateway Blvd. West
El Paso, Texas 79925

HIT SMT ELPTX001

Owner, LP

Noble 1

HIT NBL MNTCA001

Owner, LP

Hilton Garden Inn Monterey 1000 Aguajito Road,
Monterey, California 93940
(Monterey County)

HIT NBL MNTCA001

Owner, LP

Noble 1

HIT NBL HYP SCHIL

Owner, LLC

Hyatt Place 1851 McConnor Parkway,
Schaumburg, IL 60173 (Cook
County)

HIT NBL HYP SCHIL

Owner, LLC

Noble 2

HIT NBL CY CBSOH

Owner, LLC

Courtyard Columbus Downtown 35 West Spring Street
Columbus, Ohio 43215
(Franklin County)

HIT NBL CY CBSOH

Owner, LLC

Noble 2

HIT NBL HH ATLGA

Owner, LLC

Hyatt House Atlanta Cobb Galleria 3595 Cumberland Blvd.
Atlanta, Georgia 30339
(Cobb County)

HIT NBL HH ATLGA

Owner, LLC

Summit 3

HIT SMT FIS DENCO

Owner, LLC

Fairfield Inn & Suites Denver 6851 Tower Road
Denver, Colorado 80249
(Denver County) HIT SMT FIS DENCO Owner, LLC Summit 3

HIT SMT FTCCO001

Owner, LLC

Hampton Inn Ft. Collins 1620 Oakridge Drive
Fort Collins, Colorado 80525
(Larimer County)

HIT SMT FTCCO001

Owner, LLC

Summit 3

HIT SMT FTCCO002

Owner, LLC

Hilton Garden Inn Ft. Collins 2821 East Harmony Road
Fort Collins, Colorado 80528
(Larimer County)

HIT SMT FTCCO002

Owner, LLC

Summit 3 HIT SMT SHS SpringHill 18350 East 68th Avenue HIT SMT SHS

 

 Sch. 4.01(p) - 1 

 

 

  DENCO Owner, LLC Suites Denver Denver, Colorado 80249
(Denver County) DENCO Owner, LLC Summit 3

HIT SMT FIS SPKWA

Owner, LLC

Fairfield Inn & Suites Spokane 311 North Riverpoint Blvd.
Spokane, Washington 99202
(Spokane County) HIT SMT FIS SPKWA Owner, LLC Summit 3

HIT SMT FIS BELWA

Owner, LLC

Fairfield Inn & Suites Bellevue 14595 NE 29th Place
Bellevue, Washington 98007
(King County) HIT SMT FIS BELWA Owner, LLC Summit 2

HIT SMT CY GRMTN

Owner, LLC

Courtyard Germantown 7750 Wolf River Blvd.,
Germantown, Tennessee
38138 (Shelby County) HIT SMT CY GRMTN Owner, LLC Summit 2

HIT SMT CY JKSMS

Owner, LLC

Courtyard Jackson 6280 Ridgewood Court Drive,
Jackson, Mississippi 39211
(Hinds County)

HIT SMT CY JKSMS

Owner, LLC

Summit 2

HIT SMT FIS GRMTN

Owner, LLC

Fairfield Inn & Suites Germantown 9320 Poplar Pike,
Germantown, Tennessee
38138 (Shelby County) HIT SMT FIS GRMTN Owner, LLC Summit 2

HIT SMT RDGMS001

Owner, LLC

Homewood Suites Ridgeland 853 Centre Street, Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RDGMS001

Owner, LLC

Summit 2

HIT SMT RI JKSMS

Owner, LLC

Residence Inn Jackson Ridgeland 855 Centre Street, Ridgeland,
Mississippi 39157 (Madison
County)

HIT SMT RI JKSMS

Owner, LLC

Summit 2

HIT SMT RI GRMTN

Owner, LLC

Residence Inn Germantown 9314 Poplar Pike,
Germantown, Tennessee
38138 (Shelby County)

HIT SMT RI GRMTN

Owner, LLC

Summit 2

HIT SMT RDGMS002

Owner, LLC

Staybridge Suites Ridgeland 801 Ridgewood Road,
Ridgeland, Mississippi 39157
(Madison County)

HIT SMT RDGMS002

Owner, LLC

Barcelo HIT GA Tech Holding, LLC Georgia Tech Hotel & Conference Center 800
Spring Street NW,
Atlanta, Georgia 30308 HIT GA Tech, LLC

 

Part II – Leased Assets and Operating Leases

 

Portfolio Lessor and Record
Owner Hotel Address Lessee Summit 1

HIT SMT CY FLGAZ

Owner, LLC

Courtyard Flagstaff 2650 S. Beulah Blvd.
Flagstaff, Arizona 86001 HIT SWN TRS, LLC Summit 1

HIT SMT SHS FLGAZ

Owner, LLC

Springhill Suites 2455 S. Beulah Blvd.
Flagstaff, Arizona 86001 HIT SWN TRS, LLC Summit 1

HIT SMT FTWIN001

Owner, LLC

Hampton Inn 8219 West Jefferson
Blvd.
Fort Wayne, Indiana
46804 HIT SWN TRS, LLC Summit 1

HIT SMT RI FTWIN

Owner, LLC

Residence Inn 7811 West Jefferson
Blvd.
Fort Wayne, Indiana
46804 HIT SWN TRS, LLC Summit 1

HIT SMT BTRLA001

Owner, LLC

DoubleTree by Hilton Hotel 4964 Constitution Avenue
Baton Rouge, Louisiana
70808 HIT SWN TRS, LLC Summit 1 HIT SMT FIS BTRLA Fairfield Inn & 7959 Essen
Park Avenue HIT SWN TRS,

 

 Sch. 4.01(p) - 2 

 

 

  Owner, LLC Suites Baton Rouge, Louisiana
70809 LLC Summit 1

HIT SMT SHS BTRLA

Owner, LLC

Springhill Suites 7979 Essen Park Avenue
Baton Rouge, Louisiana
70809 HIT SWN TRS, LLC Summit 1

HIT SMT TPS BTRLA

Owner, LLC

TownePlace Suites 8735 Summa Avenue
Baton Rouge, Louisiana
70809 HIT SWN TRS, LLC Summit 1

HIT SMT MDFOR001

Owner, LLC

Hampton Inn 1122 Morrow Road
Medford, Oregon 97504 HIT SWN TRS, LLC Summit 1

HIT SMT ELPTX001

Owner, LP

Hampton Inn & Suites 6635 Gateway Blvd. West
El Paso, Texas 79925 HIT SWN INT NTC TRS, LP Noble 1

HIT NBL MNTCA001

Owner, LP

Hilton Garden Inn Monterey 1000 Aguajito Road,
Monterey, California
93940 (Monterey County) HIT SWN CRS NTC TRS, LP Noble 1

HIT NBL HYP SCHIL

Owner, LLC

Hyatt Place 1851 McConnor Parkway,
Schaumburg, Illinois
60173 (Cook County) HIT SWN TRS, LLC Noble 2

HIT NBL CY CBSOH

Owner, LLC

Courtyard Columbus Downtown 35 West Spring Street
Columbus, Ohio 43215
(Franklin County) HIT SWN TRS, LLC Noble 2

HIT NBL HH ATLGA

Owner, LLC

Hyatt House Atlanta Cobb Galleria 3595 Cumberland Blvd.
Atlanta, Georgia 30339
(Cobb County) HIT SWN TRS, LLC Summit 3

HIT SMT FIS DENCO

Owner, LLC

Fairfield Inn & Suites Denver 6851 Tower Road
Denver, Colorado 80249
(Denver County) HIT SWN TRS, LLC Summit 3

HIT SMT FTCCO001

Owner, LLC

Hampton Inn Ft. Collins 1620 Oakridge Drive
Fort Collins, Colorado
80525
(Larimer County) HIT SWN TRS, LLC Summit 3

HIT SMT FTCCO002

Owner, LLC

Hilton Garden Inn Ft. Collins 2821 East Harmony Road
Fort Collins, Colorado
80528
(Larimer County) HIT SWN TRS, LLC Summit 3

HIT SMT SHS DENCO

Owner, LLC

SpringHill Suites Denver 18350 East 68th Avenue
Denver, Colorado 80249
(Denver County) HIT SWN TRS, LLC Summit 3

HIT SMT FIS SPKWA

Owner, LLC

Fairfield Inn & Suites Spokane

311 North Riverpoint
Blvd.
Spokane, Washington
99202

(Spokane County)

HIT SWN TRS, LLC Summit 3

HIT SMT FIS BELWA

Owner, LLC

Fairfield Inn & Suites Bellevue

14595 NE 29th Place
Bellevue, Washington
98007

(King County)

HIT SWN TRS, LLC Summit 2

HIT SMT CY GRMTN

Owner, LLC

Courtyard Germantown 7750 Wolf River Blvd.,
Germantown, Tennessee
38138 (Shelby County) HIT SWN TRS, LLC Summit 2

HIT SMT CY JKSMS

Owner, LLC

Courtyard Jackson 6280 Ridgewood Court
Drive, Jackson,
Mississippi 39211 (Hinds
County) HIT SWN TRS, LLC

 

 Sch. 4.01(p) - 3 

 

 

Summit 2

HIT SMT FIS GRMTN

Owner, LLC

Fairfield Inn & Suites Germantown 9320 Poplar Pike,
Germantown, Tennessee
38138 (Shelby County) HIT SWN TRS, LLC Summit 2

HIT SMT RDGMS001

Owner, LLC

Homewood Suites Ridgeland 853 Centre Street,
Ridgeland, Mississippi
39157 (Madison County) HIT SWN TRS, LLC Summit 2

HIT SMT RI JKSMS

Owner, LLC

Residence Inn Jackson Ridgeland 855 Centre Street,
Ridgeland, Mississippi
39157 (Madison County) HIT SWN TRS, LLC Summit 2

HIT SMT RI GRMTN

Owner, LLC

Residence Inn Germantown 9314 Poplar Pike,
Germantown, Tennessee
38138 (Shelby County) HIT SWN TRS, LLC Summit 2

HIT SMT RDGMS002

Owner, LLC

Staybridge Suites Ridgeland 801 Ridgewood Road,
Ridgeland, Mississippi
39157 (Madison County) HIT SWN TRS, LLC Barcelo HIT GA Tech, LLC Georgia Tech
Hotel & Conference Center 800 Spring Street NW,
Atlanta, Georgia 30308

HIT TRS GA

Tech, LLC

 

Part III – Exceptions to Representations Regarding Rights of Way and Utilities

 

None.

 

Part IV – Exceptions to Representations Regarding Tax Lot

 

None.

 

Part V – Exceptions to Representations Regarding Assessments

 

None.

 

Part VI – Exceptions to Representations Regarding Use

 

None.

 

Part VII – Exceptions to Representations Regarding Survey

 

None.

 

 Sch. 4.01(p) - 4 

 

 

SCHEDULE 4.01(n)

 

EXISTING DEBT

 

None.

 

 Sch. 4.01(n) - 1 

 

 

SCHEDULE 4.01(q)

 

ENVIRONMENTAL CONCERNS

 

None.

 

 Sch. 4.01(q) - 1 

 

 

SCHEDULE 4.01(w)

 

PLANS AND WELFARE PLANS

 

None.

 

 Sch. 4.01(w) - 1 

 

 

SCHEDULE 4.01(ii)

 

COLLECTIVE BARGAINING AGREEMENTS AND UNION CONTRACTS

 

1.A Collective Bargaining Agreement between Hilton Garden Inn Monterey and Unite
Here Local 483, effective as of April 1, 2015.

 

 Sch. 4.01(ii) - 1 

 

 

EXHIBIT A TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF NOTE

 

PROMISSORY NOTE

 

$[______________] Dated: [____________,_______]

 

FOR VALUE RECEIVED, the undersigned, [INSERT NAME OF BORROWER], a Delaware
[_________] (the “Borrower”), HEREBY PROMISES TO PAY [________________________]
(the “Lender”) for the account of its Applicable Lending Office (as defined in
the Loan Agreement referred to below) the aggregate principal amount of the Term
Advance (as defined below) in the amount of [___________] and No/100 Dollars
($[_________]), owing to the Lender by the Borrower pursuant to the Second
Amended and Restated Term Loan Agreement dated as of April 27, 2017 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”; capitalized terms not otherwise defined herein shall have
their respective meanings set forth in the Loan Agreement) among the Borrower,
the other borrowers party thereto, the Lender, certain other lenders party
thereto, Hospitality Investors Trust Operating Partnership, L.P., a Delaware
limited partnership, Hospitality Investors Trust, Inc., a Maryland corporation,
certain other parties party thereto, Citibank, N.A., as Administrative Agent for
the Lender and the other lenders, and the Arrangers party thereto, on the
Maturity Date.

 

The Borrower promises to pay to the Lender interest on the unpaid principal
amount of the Term Advance from the date of such Term Advance, as the case may
be, until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Loan Agreement.

 

Both principal and interest are payable in lawful money of the United States of
America to Citibank, N.A., as Administrative Agent, at 1615 Brett Road, OPS III,
New Castle, Delaware 19720, in same day funds. The Term Advance owing to the
Lender by the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto, which is part of this
Promissory Note; provided, however, that the failure of the Lender to make any
such recordation or endorsement shall not affect the Obligations of the Borrower
under this Promissory Note.

 

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Loan Agreement. The Loan Agreement, among other things, (a)
provides for the making of advances (each a “Term Advance”) by the Lender to or
for the benefit of each of the “Borrowers” (as such term is defined in the Loan
Agreement) from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. Dollar amount first above mentioned, the indebtedness of
each of the Borrowers resulting from the Term Advance being evidenced by the
applicable Note, and (b) contains provisions for acceleration of the maturity
hereof upon the occurrence and during the continuance of an Event of Default and
also for prepayments on account of principal hereof prior to the Maturity Date
upon the terms and conditions therein specified.

 

Exh. A-1

 

 

The obligations of the Borrower under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are secured by the Collateral as provided in the Loan Documents.

 

This Promissory Note shall be governed by, and construed in accordance with, the
laws of the State of New York. BORROWER AND LENDER EACH HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS PROMISSORY NOTE OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

  [INSERT NAME OF BORROWER],   a Delaware [limited liability company][limited
partnership]         By:     Name:     Title:  

 

Exh. A-2

 

 

TERM ADVANCE AND

PAYMENTS OF PRINCIPAL

 

Date Amount of Term
Advance Amount of
Principal Paid
or Prepaid Unpaid
Principal
Balance Notation
Made By                                                                        
                                                                               
                                               

 

Exh. A-3

 

 

EXHIBIT B TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF NOTICE OF BORROWING1

 

NOTICE OF BORROWING

 

_____________, ____

 

Citibank, N.A.,

as Administrative Agent

under the Loan Agreement

referred to below

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

Ladies and Gentlemen:

 

The undersigned, [___________], a Delaware [limited liability company], and
[___________], a Delaware [limited liability company], refer to the Second
Amended and Restated Term Loan Agreement dated as of April 27, 2017 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”; capitalized terms not otherwise defined herein shall have
their respective meanings set forth in the Loan Agreement), among the
undersigned, Hospitality Investors Trust Operating Partnership, L.P.,
Hospitality Investors Trust, Inc., certain other parties party thereto, the
Lenders party thereto, and Citibank, N.A., as Administrative Agent for the
Lenders, and the Arrangers party thereto, and hereby give you notice,
irrevocably, pursuant to Section 2.02 of the Loan Agreement that the undersigned
hereby request a Borrowing under the Loan Agreement, and in that connection set
forth below the information relating to such Borrowing (the “Proposed
Borrowing”) as required by Section 2.02(a) of the Loan Agreement:

 

(i)The Business Day of the Proposed Borrowing is _______________,_______.

 

(ii)The aggregate amount of the Proposed Borrowing is [$ ____________].

 

The undersigned hereby certify that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:

 

(A)The representations and warranties contained in each Loan Document are true
and correct in all material respects (unless qualified as to materiality or
Material Adverse Effect, in which case such representations and warranties shall
be true and correct in all respects) on and as of the date of the Proposed
Borrowing, before and after giving effect to (1) such Proposed Borrowing and (2)
the application of the proceeds therefrom, as though made on and as of the date
of the Proposed Borrowing;

 

(B)No Default or Event of Default has occurred and is continuing, or would
result from (1) such Proposed Borrowing or (2) from the application of the
proceeds therefrom;

 

 

1 Note to Draft: This Exhibit will only be applicable in the event there will be
a delayed draw period.

 

Exh. B-1

 

 

Attached hereto is supporting information showing the computations used in
determining such compliance both before and after giving effect to the Proposed
Borrowing.

 

Delivery of an executed counterpart of this Notice of Borrowing by telecopier or
e-mail (which e-mail shall include an attachment in PDF format or similar format
containing the legible signature of the undersigned) shall be effective as
delivery of an original executed counterpart of this Notice of Borrowing.

 

[Signature page follows]

 

Exh. B-2

 

 

[______________________________], a Delaware [limited liability company]     By:
  Name:   Title:       [______________________________], a Delaware [limited
liability company]     By:   Name:   Title:  

 

Exh. B-3

 

 

EXHIBIT C-1 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF PLEDGOR SECURITY AGREEMENT (GEORGIA TECH OWNER)

 

[Attached.]

 

Exh. C-1

 

  

EXHIBIT C-1 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF PLEDGOR SECURITY AGREEMENT (GEORGIA TECH OWNER)

 

PLEDGE AND SECURITY AGREEMENT (GEORGIA TECH OWNER)

 

PLEDGE AND SECURITY AGREEMENT (GEORGIA TECH OWNER) (this “Agreement”), dated as
of [_____________], 2017, made by HIT GA TECH HOLDING, LLC, a Delaware limited
liability company (“Pledgor”), in favor of CITIBANK, N.A., in its capacity as
collateral agent for the Lenders under the Loan Agreement (as defined below)
(together with its successors and assigns, “Agent”).

 

RECITALS

 

A.           Pursuant to that certain Second Amended and Restated Term Loan
Agreement dated as of the date hereof (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”)
among Pledgor and the other borrowers party thereto (collectively, “Borrower”),
Hospitality Investors Trust Operating Partnership, L.P., Hospitality Investors
Trust, Inc., certain other parties party thereto, the Lenders party thereto,
Citibank, N.A., as the issuing bank and the administrative agent (in its
capacity as administrative agent for the Lenders, “Administrative Agent”), and
Agent, the Lenders agreed to extend credit to Borrower in the maximum aggregate
principal amount of $[312,900,000] (the “Loan”) which Loan is evidenced by
certain promissory notes dated the date hereof (collectively, the “Note”) made
by Borrower to the Lenders and secured by, among other things, the Mortgages (as
defined in the Loan Agreement).

 

B.           Pledgor is the legal and beneficial owner of all of the Equity
Interests in HIT GA Tech, LLC, a Delaware limited liability company (“GA Tech
Owner”), consisting of 100% of the limited liability company interests therein;

 

C.           It is a condition precedent to the obligation of the Lenders to
make the Loan to Borrower under the Loan Agreement that Pledgor shall have
executed and delivered this Agreement to Agent and the Lenders.

 

NOW, THEREFORE, in consideration of the premises and to induce the Lenders to
make the Loan, Pledgor hereby agrees with Agent as follows:

 

1.           Defined Terms. As used in this Agreement, the following terms have
the meanings set forth in or incorporated by reference below:

 

“Administrative Agent” has the meaning ascribed to such term in the Recitals.
“Agent” has the meaning ascribed to such term in the introductory paragraph.

 

“Agreement” means this Pledge and Security Agreement, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Code” means the Uniform Commercial Code from time to time in effect in the
State of New

York.

 

“Collateral” has the meaning ascribed to such term in Section 2 hereof.

 

“Debt” means all Obligations of Pledgor and Borrower under the Loan Documents.

 

 

 

 

“Loan” has the meaning ascribed to such term in the Recitals.

 

“Loan Agreement” has the meaning ascribed to such term in the Recitals.

 

“Loan Documents” has the meaning ascribed to such term in the Loan Agreement.
“Borrower” has the meaning ascribed to such term in the Recitals.

 

“GA Tech Owner ” has the meaning ascribed to such term in the Recitals.

 

“GA Tech Owner Company Agreement” means the Limited Liability Company Agreement
of GA Tech Owner.

 

“Note” has the meaning ascribed to such term in the Recitals.

 

“Pledged Company Interests” means the limited liability company interests of
Pledgor in GA Tech Owner listed on Schedule 1 hereto, together with all limited
liability company interest options or rights of any nature whatsoever which may
be issued or granted by GA Tech Owner to Pledgor while this Agreement is in
effect.

 

“Pledgor” has the meaning ascribed to such term in the introductory paragraph.

 

“Proceeds” means (i) Pledgor’s share, right, title and interest in and to all
distributions, monies, fees, payments, compensations and proceeds now or
hereafter becoming due and payable to Pledgor by GA Tech Owner with respect to
the Pledged Company Interests whether payable as profits, distributions, asset
distributions, repayment of loans or capital or otherwise and including all
“proceeds” as such term is defined in Section 9-102(a)(64) of the Code; (ii) all
contract rights, general intangibles, claims, powers, privileges, benefits and
remedies of Pledgor relating to the foregoing; and (iii) all cash or non-cash
proceeds of any of the foregoing.

 

“Special Damages” has the meaning ascribed to such term in Section 18(l) hereof.

 

Terms used herein but not otherwise defined herein shall have the respective
meanings ascribed to them in the Loan Agreement. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.

 

2.           Pledge; Grant of Security Interest. Pledgor hereby pledges and
grants to Agent, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Debt, a first priority security interest in all of Pledgor’s
right, title and interest to the following (collectively, the “Collateral”):

 

(i)          all Pledged Company Interests;

 

(ii)         all securities, moneys or property representing dividends or
interest on any of the Pledged Company Interests, or representing a distribution
in respect of the Pledged Company Interests, or resulting from a split-up,
revision, reclassification or other like change of the Pledged Company Interests
or otherwise received in exchange therefor, and any

 

 - 2 -

 

 

subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, the Pledged Company Interests;

 

(iii)        all right, title and interest of Pledgor in, to and under any
policy of insurance payable by reason of loss or damage to the Pledged Company
Interests and any other Collateral;

 

(iv)        all “accounts”, “general intangibles”, “instruments” and “investment
property” (in each case as defined in the Code) constituting or relating to the
foregoing; and

 

(v)         all Proceeds of any of the foregoing property of Pledgor (including,
without limitation, any proceeds of insurance thereon, all “accounts”, “general
intangibles”, “instruments” and “investment property”, in each case as defined
in the Code, constituting or relating to the foregoing).

 

3.           Closing Date Actions. Concurrently with the execution and delivery
of this Agreement, Pledgor shall (a) send to the issuer of the Pledged Company
Interests an Authorization Statement substantially in the form of Exhibit A
hereto and (b) cause such issuer to deliver to Agent (i) an Acknowledgement and
Consent substantially in the form of Exhibit B hereto and (ii) a Transaction
Statement substantially in the form of Exhibit C hereto, confirming that such
issuer will comply with instructions with respect to such Pledged Company
Interests originated by Agent without further consent or approval of Pledgor.

 

4.           Representations and Warranties. Pledgor represents and warrants as
of the date hereof that:

 

(a)          no authorization, consent of or notice to any other Person
(including, without limitation, any member, partner or creditor of Pledgor or GA
Tech Owner) that has not been obtained, is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
including, without limitation, the assignment and transfer by the Pledgor of any
of the Collateral to Agent or the subsequent transfer thereof by Agent pursuant
to the terms hereof;

 

(b)          all of the Pledged Company Interests have been duly and validly
issued and are fully paid and nonassessable;

 

(c)          the Pledged Company Interests constitute all the issued and
outstanding limited liability company interests in GA Tech Owner;

 

(d)          Pledgor is the record and beneficial owner of, and has good title
to, the Pledged Company Interests, free of any and all Liens or options in favor
of, or claims of, any other Person, except the Lien created by this Agreement
and the Pledged Company Interests have not previously been assigned, sold,
transferred, pledged or encumbered (except pursuant to this Agreement);

 

(e)          upon the execution of this Agreement and the filing of the UCC-1
financing statements referred to in Section 12 with the Delaware Secretary of
State, the Lien granted pursuant to this Agreement will constitute a valid,
perfected first priority Lien on the Collateral and related Proceeds in such
jurisdictions, enforceable as such against all creditors of Pledgor and any
Persons purporting to purchase any Pledged Company Interests and related
Proceeds from Pledgor;

 

(f)          the principal place of business and chief executive office of
Pledgor is, and for the immediately preceding four (4) months (or any shorter
period of its existence), has been, located at c/o Hospitality Investors Trust
Operating Partnership, L.P., 3950 University Drive, Suite 301, Fairfax, Virginia
22030;

 

 - 3 -

 

 

(g)          the exact name of Pledgor is HIT GA Tech Holding, LLC;

 

(h)          Pledgor is organized under the laws of the State of Delaware;

 

(i)           there currently exist no certificates, instruments or writings
representing the Pledged Company Interests. However, to the extent that in the
future there exist any such certificates, instruments or writings, Pledgor shall
deliver all such certificates, instruments or writings to Agent together with
the undated limited liability company interest powers, duly executed in blank
with, if Agent so requests, signature guaranteed;

 

5.           Covenants. Pledgor covenants and agrees with Agent that, from and
after the date of this Agreement until the latest of the date that (i) the Debt
(exclusive of any indemnification or other obligations which are expressly
stated in any of the Loan Documents to survive satisfaction of the Note) is paid
in full and (ii) the Commitments are terminated (such latest date, the
“Termination Date”):

 

(a)          Acknowledgements of Parties. If Pledgor shall, as a result of its
ownership of the Pledged Company Interests, become entitled to receive or shall
receive any limited liability company certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any shares of the Pledged Company Interests, or otherwise in respect
thereof, Pledgor shall accept the same as Agent’s agent, hold the same in trust
for Agent and deliver the same forthwith to Agent in the exact form received,
duly endorsed by Pledgor to Agent, if required, together with an undated limited
liability company interest power covering such certificate duly executed in
blank and with, if Agent so requests, signature guaranteed, to be held by Agent
hereunder as additional security for the Debt. Any sums paid upon or in respect
of the Pledged Company Interests upon the liquidation or dissolution of GA Tech
Owner shall be paid over to Agent to be held by it hereunder as additional
security for the Debt, and in case any distribution of capital shall be made on
or in respect of the Pledged Company Interests or any property shall be
distributed upon or with respect to the Pledged Company Interests pursuant to
the recapitalization or reclassification of the capital of GA Tech Owner or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to Agent to be held by it, subject to the terms hereof, as additional
security for the Debt. If any sums of money or property so paid or distributed
in respect of the Pledged Company Interests shall be received by Pledgor,
Pledgor shall deliver the same to Agent and, until such money or property is
paid or delivered to Agent, hold such money or property in trust for Agent,
segregated from other funds of Pledgor, as additional security for the Debt.

 

(b)          Without the prior written consent of Agent, Pledgor shall not,
directly or indirectly (i) vote to enable, or take any other action to permit,
GA Tech Owner to issue or certificate any limited liability company interests or
to issue any other securities convertible into or granting the right to purchase
or exchange for any membership interests in GA Tech Owner, or (ii) except as
permitted by the Loan Agreement, sell, assign, transfer, exchange or otherwise
dispose of, or grant any option with respect to, the Collateral, or (iii)
create, incur, authorize or permit to exist any Lien or option in favor of, or
any claim of any Person with respect to, any of the Collateral, or any interest
therein, except for the Lien provided for by this Agreement. Pledgor shall
defend the right, title and interest of Agent in, to and under the Collateral
against the claims and demands of all Persons whomsoever.

 

(c)          At any time and from time to time, upon the written request of
Agent, and at the sole expense of Pledgor, Pledgor shall promptly and duly give,
execute, deliver file and/or record such further instruments and documents and
take such further actions as Agent may reasonably request for the purposes of
obtaining, creating, perfecting, validating or preserving the full benefits of
this Agreement and of the rights and powers herein granted including without
limitation filing UCC financing or continuation statements, provided that the
amount of the Debt shall not be increased thereby. Pledgor hereby authorizes
Agent to file any such financing statement or continuation statement without the
signature of Pledgor to the

 

 - 4 -

 

  

extent permitted by law. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or chattel paper shall be
promptly delivered to Agent, duly endorsed in a manner satisfactory to Agent, to
be held as Collateral pursuant to this Agreement.

 

(d)          Limitation on Liens. At its sole cost and expense, Pledgor will not
create, incur or permit to exist, will warrant and defend title to and ownership
of the Collateral against, and will take all such other action as is necessary
to remove, any Lien or claim on or to the Pledged Company Interests, other than
the Liens created hereby, and will defend the right, title and interest of Agent
in, to and under the Pledged Company Interests against the claims and demands of
all Persons whomsoever.

 

(e)          Further Identification of Pledged Company Interests. Pledgor will
furnish to Agent from time to time statements and schedules further identifying
and describing the Pledged Company Interests and other Collateral and such other
reports in connection with the Pledged Company Interests and other Collateral as
Agent may reasonably request, all in reasonable detail.

 

(f)          Changes in Location, Name, etc. Pledgor will not, unless (i) it
shall have given thirty (30) days’ prior written notice to such effect to Agent
and (ii) all action necessary or advisable, in Agent’s reasonable opinion, to
protect and perfect the Liens and security interests intended to be created
hereunder with respect to the Pledged Company Interests shall have been taken,
(A) change the location of its chief executive office or principal place of
business from that specified in Section 4(g), or (B) change its name, identity
or structure, or (c) reorganize or reincorporate under the laws of another
jurisdiction.

 

(g)          Taxes. Pledgor shall pay, and save Agent harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

 

6.           Intentionally Omitted.

 

7.           Cash Dividends; Voting Rights. Subject to Section 14 (relating to
the application of distributions to pay the Loan) and the cash management
provisions of the Loan Agreement and unless an Event of Default shall have
occurred and be continuing, Pledgor shall be permitted to receive all limited
liability company interest distributions or cash dividends paid in the normal
course of business of GA Tech Owner and to exercise all voting and limited
liability company interests or other rights with respect to the Pledged Company
Interests, provided that no vote shall be cast or right exercised or other
action taken which, in Agent’s judgment, would adversely impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Loan Agreement, the Note, this Agreement or any other Loan Documents.

 

8.           Rights of Agent.

 

(a)          If an Event of Default shall occur and be continuing, Agent shall
have the right to receive any and all income, cash dividends, distributions,
proceeds or other property received or paid in respect of the Pledged Company
Interests and make application thereof to the Debt, in such order as Agent, in
its sole discretion, may elect, in accordance with the Loan Documents. If an
Event of Default shall occur and be continuing, then all such Pledged Company
Interests at Agent’s option, shall be registered in the name of Agent or its
nominee (if not already so registered), and Agent or its nominee may thereafter
exercise (i) all voting, limited liability company and other rights pertaining
to the Pledged Company Interests and (ii) any and all rights of conversion,
exchange, and subscription and any other rights, privileges or options
pertaining to such Pledged Company Interests as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Company Interests upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
organizational structure of

 

 - 5 -

 

  

GA Tech Owner or upon the exercise by Pledgor or Agent of any right, privilege
or option pertaining to such Pledged Company Interests, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Company
Interests with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it, but
Agent shall have no duty to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

 

(b)          The rights of Agent under this Agreement shall not be conditioned
or contingent upon the pursuit by any Secured Party of any right or remedy
against Pledgor or against any other Person which may be or become liable in
respect of all or any part of the Debt or against any other security therefor,
guarantee thereof or right of offset with respect thereto. No Secured Party
shall be liable for any failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so, nor shall it be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
Pledgor or any other Person or to take any other action whatsoever with regard
to the Collateral or any part thereof.

 

(c)          Upon the Termination Date, Agent’s rights under this Agreement
shall terminate and Agent shall, at Pledgor’s sole cost and expense, execute and
deliver to Pledgor UCC-3 termination statements or similar documents and
agreements to terminate all of Agent’s rights under this Agreement and all other
Loan Documents.

 

(d)          Pledgor also authorizes Agent, at any time and from time to time,
to execute, in connection with the sale provided for in Sections 9 or 10 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

 

(e)          The powers conferred on Agent hereunder are solely to protect
Agent’s and each Secured Party’s interest in the Collateral and shall not impose
any duty upon any Secured Party to exercise any such powers. Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither any Secured Party nor any of its officers,
directors, employees or agents shall be responsible to Pledgor for any act or
failure to act hereunder, except for its or their gross negligence or willful
misconduct.

 

(f)          If Pledgor fails to perform or comply with any of its agreements
contained herein and Agent, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the expenses of Agent incurred in connection with such
performance or compliance, together with interest at the Default Rate if such
expenses are not paid on demand, shall be payable by Pledgor to Agent on demand
and shall constitute obligations secured hereby.

 

9.           Remedies. (a) If an Event of Default shall occur and be continuing,
Agent may, in addition to all other rights and remedies granted in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Debt:

 

(i)          exercise all rights and remedies of a secured party under the Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if
Agent were the sole and absolute owner thereof (and Pledgor agrees to take all
such action as may be appropriate to give effect to such right);

 

(ii)         make any reasonable compromise or settlement deemed desirable with
respect to any of the Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, any of the
Collateral; and

 

 - 6 -

 

 

(iii)        in its name or in the name of Pledgor or otherwise, demand, sue
for, collect, direct payment of or receive any money or property at any time
payable or receivable on account of or in exchange for any of the Collateral,
but shall be under no obligation to do so.

 

(b)          Without limiting the generality of the foregoing, if an Event of
Default shall occur and be continuing, Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below or otherwise required hereby) to or
upon Pledgor, GA Tech Owner or any other Person (all and each of which demands,
presentments, protests, advertisements and notices, or other defenses, are
hereby waived to the extent permitted under applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker’s board or office of Agent or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best in
its sole discretion, for cash or on credit or for future delivery without
assumption of any credit risk. Agent shall have the right, without notice or
publication, to adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for such
sale, and any such sale may be made at any time or place to which the same may
be adjourned without further notice. Agent shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption of Pledgor, which right or equity of
redemption is hereby waived or released. Agent shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of Agent hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Debt, in such order as Agent may elect, and only after such application and
after the payment by Agent of any other amount required by any provision of law,
including, without limitation, Sections 9-610 and 9-615 of the Code, need Agent
account for the surplus, if any, to Pledgor. To the extent permitted by
applicable law, Pledgor waives all claims, damages and demands it may acquire
against the Secured Parties arising out of the exercise by Agent of any of its
rights hereunder, except for any claims, damages and demands it may have against
Agent arising from the willful misconduct or gross negligence of Agent or its
affiliates, or any agents or employees of the foregoing. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale or other disposition.

 

(c)          The rights, powers, privileges and remedies of Agent under this
Agreement are cumulative and shall be in addition to all rights, powers,
privileges and remedies available to Agent at law or in equity. All such rights,
powers and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the rights of Agent hereunder.

 

10.         Private Sales. Pledgor recognizes that Agent may be unable to effect
a public sale of any or all of the Pledged Company Interests, by reason of
certain prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof. Pledgor acknowledges and agrees that any such private sale may result
in prices and other terms less favorable to Agent than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of being a private sale. Agent shall be
under no obligation to delay a sale of any of the Pledged Company Interests for
the period of time necessary to permit GA Tech Owner or Pledgor to register such
securities for public sale under the Securities Act of 1933, as amended, or
under applicable state securities laws, even if GA Tech Owner or Pledgor would
agree to do so.

 

 - 7 -

 

 

(a)          Pledgor further shall use its best efforts to do or cause to be
done all such other acts as may be reasonably necessary to make any sale or
sales of all or any portion of the Pledged Company Interests pursuant to this
Section 10 valid and binding and in compliance with any and all other
requirements of applicable law. Pledgor further agrees that a breach of any of
the covenants contained in this Section 10 will cause irreparable injury to
Agent, that Agent has no adequate remedy at law in respect of such breach and,
as a consequence, that each and every covenant contained in this Section 10
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Loan Agreement.

 

(b)          Agent shall not incur any liability as a result of the sale of any
Collateral, or any part thereof, at any private sale conducted in a commercially
reasonable manner, it being agreed that some or all of the Collateral is or may
be of one or more types that threaten to decline speedily in value and that are
not customarily sold in a recognized market. Pledgor hereby waives any claims
against the Secured Parties arising by reason of the fact that the price at
which any of the Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale or was less than
the aggregate amount of the Debt, even if Agent accepts the first offer received
and does not offer any Collateral to more than one offeree, provided that Agent
has acted in a commercially reasonable manner in conducting such private sale.

 

(c)          The Code states that each Secured Party is able to purchase the
Pledged Company Interests only if they are sold at a public sale. Agent has
advised Pledgor that SEC staff personnel have issued various No-Action Letters
describing procedures which, in the view of the SEC staff, permit a foreclosure
sale of securities to occur in a manner that is public for purposes of Article 9
of the Code, yet not public for purposes of Section 4(2) of the Securities Act
of 1933. The Code permits Pledgor to agree on the standards for determining
whether a Secured Party has complied with its obligations under Article 9.
Pursuant to the Code, Pledgor specifically agrees (x) that it shall not raise
any objection to any Secured Party’s purchase of the Pledged Company Interests
(through bidding on the obligations or otherwise) and (y) that a foreclosure
sale conducted in conformity with the principles set forth in the No-Action
Letters (i) shall be considered to be a “public” sale for purposes of the Code;
(ii) will be considered commercially reasonable notwithstanding that Agent, has
not registered or sought to register the Pledged Company Interests under the
Securities Laws, even if Pledgor or GA Tech Owner agrees to pay all costs of the
registration process; and (iii) shall be considered to be commercially
reasonable notwithstanding that a Secured Party purchases the Pledged Company
Interests at such a sale.

 

(d)          Pledgor agrees that no Secured Party has any general duty or
obligation to make any effort to obtain or pay any particular price for any
Pledged Company Interests sold by Agent pursuant to this Agreement. Agent, may,
in its sole discretion, among other things, accept the first offer received, or
decide to approach or not to approach any potential purchasers. Without in any
way limiting Agent’s right to conduct a foreclosure sale in any manner which is
considered commercially reasonable, Pledgor hereby agrees that any foreclosure
sale conducted in accordance with the following provisions shall be considered a
commercially reasonable sale and hereby irrevocably waives any right to contest
any such sale:

 

(i)          Agent conducts the foreclosure sale in the State of New York,

 

(ii)         The foreclosure sale is conducted in accordance with the laws of
the State of New York,

 

(iii)        Not more than ten (10) days before, and not less than five (5) days
in advance of the foreclosure sale, Agent notifies Pledgor at the address set
forth herein of the time and place of such foreclosure sale,

 

 - 8 -

 

 

(iv)        The foreclosure sale is conducted by an auctioneer licensed in the
State of New York and is conducted in front of the New York Supreme Court
located in New York City or such other New York State Court having jurisdiction
over the Collateral on any Business Day between the hours of 9 a.m. and 5 p.m.,

 

(v)         The notice of the date, time and location of the foreclosure sale is
published in the New York Times or Wall Street Journal (or such other newspaper
widely circulated in New York, New York) for seven (7) consecutive days prior to
the date of the foreclosure sale, and

 

(vi)        Agent sends notification of the foreclosure sale to all secured
parties identified as a result of a search of the UCC financings statements in
the filing offices located in the State of Delaware conducted not later than
twenty (20) days and not earlier than thirty

(30) days before such notification date.

 

(e)          No Secured Party shall incur any liability as a result of the sale
of any Collateral, or any part thereof, at any private sale conducted in a
commercially reasonable manner, it being agreed that some or all of the
Collateral is or may be of one or more types that threaten to decline speedily
in value and that are not customarily sold in a recognized market. Pledgor
hereby waives any claims against any Secured Party arising by reason of the fact
that the price at which any of the Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale or was less than the aggregate amount of the Debt, even if Agent accepts
the first offer received and does not offer any Collateral to more than one
offeree, provided that Agent has acted in a commercially reasonable manner in
conducting such private sale.

 

11.         Limitation on Duties Regarding Collateral. Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as Agent deals with similar securities and
property for its own account. Neither any Secured Party nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of Pledgor or otherwise.

 

12.         Financing Statements; Other Documents. Pledgor hereby authorizes
Agent to file UCC-1 financing statements with respect to the Collateral. Pledgor
authorizes Agent to use the collateral description “all personal property” or
“all assets” in any such financing statements. Pledgor agrees to deliver any
other document or instrument which Agent may reasonably request with respect to
the Collateral for the purposes of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted. Without limiting the
generality of the foregoing, Pledgor hereby authorizes the filing of UCC-1
financing statements (and amendments of such financing statements and
continuation statements) that name Pledgor as debtor and Agent as secured party
and that cover all personal property or all assets of Pledgor.

 

13.         Attorney-in-Fact. Without limiting any rights or powers granted by
this Agreement to Agent, Agent is hereby appointed, which appointment as
attorney-in-fact is irrevocable and coupled with an interest, the
attorney-in-fact of Pledgor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instruments which Agent
may deem necessary or advisable to accomplish the purposes hereof including,
without limitation:

 

(a)          to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

 

(b)          to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;

 

 - 9 -

 

 

(c)          to file any claims or take any action or institute any proceedings
that Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Agent, with respect to any of
the Collateral; and

 

(d)          to execute, in connection with the sale provided for in Section 9
or 10, any endorsement, assignments, or other instruments of conveyance or
transfer with respect to the Collateral, including without limitation, to
transfer or cause the transfer of the Collateral, or any part thereof, on the
books of GA Tech Owner or other entity issuing such Collateral, to Agent or any
nominee.

 

If so requested by Agent, Pledgor shall ratify and confirm any such sale or
transfer by executing and delivering to Agent at Pledgor’s expense all proper
deeds, bills of sale, instruments of assignment, conveyance of transfer and
releases as may be designated in any such request.

 

14.         Additional Covenants of Pledgor Relating to Covenants of GA Tech
Owner. Pledgor covenants and agrees with Agent that, from and after the date of
this Agreement until the Termination Date, (i) Pledgor shall take any and all
actions either necessary or reasonably requested by Agent to ensure complete
compliance with Sections 5.01 and 5.02 of the Loan Agreement, (ii) Pledgor shall
cause GA Tech Owner to take such actions as are required by or to comply with
the terms of the Loan Documents and to not take any actions that violate any
such documents and (iii) Pledgor shall cause GA Tech Owner to not apply amounts
disbursed to GA Tech Owner pursuant to the requirements of the Loan in a manner
contrary to the requirements of the Loan Documents.

 

15.         Non-Recourse. The provisions of Sections 10.01 and 10.02 of the Loan
Agreement are hereby incorporated by reference into this Agreement as to the
liability of Pledgor hereunder to the same extent and with the same force as if
fully set forth herein.

 

16.         Indemnity. Pledgor agrees that the terms and provisions of Section
9.04(b) of the Loan Agreement are hereby incorporated by reference into this
Agreement to the same extent and with the same force as if fully set forth
herein.

 

17.         Third Party Waivers. (a) Pledgor authorizes Agents to perform any or
all of the following acts at any time in its sole discretion, all without notice
to Pledgor (except as otherwise provided in the Loan Documents), without
affecting Pledgor’s obligations under this Agreement or any other Loan Documents
and without affecting the liens and encumbrances against the Collateral in favor
of Agent (provided that the following are undertaken in accordance with the
terms and provisions of the Loan Documents and applicable law and provided,
further that none of the following shall or shall be deemed to afford to Agent
or any of the Secured Parties any rights (or any expanded rights) beyond those
rights expressly provided in the other Loan Documents or applicable law):

 

(i)          Subject to Section 9.01 of the Loan Agreement, the Administrative
Agent may alter any terms of the Debt or any part thereof, including renewing,
compromising, extending or accelerating, or otherwise changing the time for
payment of, or increasing or decreasing the rate of interest on, the Debt or any
part thereof;

 

(ii)         Agent may take and hold security for the Debt, accept additional or
substituted security, and subordinate, exchange, enforce, waive, release,
compromise, fail to perfect and sell or otherwise dispose of any such security;

 

(iii)        Agent may direct the order and manner of any sale of all or any
part of any security now or later to be held for the Debt, and Agent (or its
nominees or designees) may also bid at any such sale;

 

 - 10 -

 

  

(iv)        The Administrative Agent may apply any payments or recoveries from
GA Tech Owner, Pledgor or any other source, and any proceeds of any security, to
the obligations under the Loan Documents in such manner, order and priority as
the Administrative Agent may elect;

 

(v)         The Administrative Agent may release GA Tech Owner or any other
person or entity of its liability for the Debt or any part thereof;

 

(vi)        The Administrative Agent may substitute, add or release any one or
more guarantors or endorsers; and

 

(vii)       In addition to the Debt, the Secured Parties may extend other credit
to GA Tech Owner, and may take and hold security agreed to by GA Tech Owner for
the credit so extended.

 

(b)          Pledgor waives:

 

(i)          Any right it may have to require any Agent to proceed against GA
Tech Owner, Pledgor or any other person or entity, proceed against or exhaust
any security held from GA Tech Owner, Pledgor or any person or entity, or pursue
any other remedy in such Agent's power to pursue;

 

(ii)         Any defense based on any claim that Pledgor’s obligations exceed or
are more burdensome than those of GA Tech Owner, Pledgor or any other Person;

 

(iii)        Any defense: (A) based on any legal disability of any other Person,
(B) based on any release, discharge, modification, impairment or limitation of
the liability of any other person or entity to any Agent from any cause, whether
consented to by such Agent or arising by operation of law, (C) arising out of or
able to be asserted as a result of any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of any
other person or entity or any of their respective affiliates, or any general
assignment for the benefit of creditors, composition, marshaling of assets for
creditors or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in each case as undertaken under any
U.S. Federal or State law (each of the foregoing described in this clause (C)
being referred to herein as an “Insolvency Proceeding”); or (D) arising from any
rejection or disaffirmance of the Debt, or any part thereof, or any security
held therefor, in any such Insolvency Proceeding;

 

(iv)        Any defense based on any action taken or omitted by any Agent in any
Insolvency Proceeding involving any other Person, including any election to have
such Agent's claim allowed as being secured, partially secured or unsecured, any
extension of credit by any Secured Party to any other Person in any Insolvency
Proceeding, and the taking and holding by such Agent of any security for any
such extension of credit;

 

(v)         All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
intention to accelerate, notices of acceleration, notices of acceptance of this
Agreement or any other Loan Document and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of every
kind (in each instance, except as expressly required by the Loan Agreement or
applicable law);

 

 - 11 -

 

 

(vi)        Any duty on the part of Agent or any other Secured Party to disclose
to Pledgor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of GA
Tech Owner, any other Loan Party or any of their Subsidiaries now or hereafter
known by Agent or such other Secured Party; and

 

(vii)       Except for such notices as required by the Loan Documents, any
defense based on or arising out of any defense that GA Tech Owner or any of its
affiliates may have to the payment or performance of the Debt (other than the
defense that the particular Debt in question have been paid or performed (to the
extent paid or performed));

 

(c)          Subject to Section 9.13 of the Loan Agreement, after the occurrence
and during the continuance of any Event of Default, in its sole discretion,
without prior notice (except as expressly required by the Loan Agreement, the
Mortgage or applicable law) to or consent of Pledgor or GA Tech Owner, Agent may
elect to: (A) foreclose against any collateral for the Debt, (B) accept any
offer to transfer any such collateral for the Debt in lieu of foreclosure, (C)
compromise or adjust the Debt or any part thereof or make any other
accommodation with GA Tech Owner or any Person, or (D) exercise any other remedy
against GA Tech Owner or any person or entity or any collateral for the Debt. No
such action by Agent shall release or limit any Secured Party’s rights hereunder
or under the other Loan Documents, even if the effect of the action is to
deprive Pledgor of any subrogation rights, rights of indemnity, or other rights
to collect reimbursement from GA Tech Owner or any other Person for any sums
paid to the Secured Parties, whether contractual or arising by operation of law
or otherwise. Pledgor expressly agrees that under no circumstances shall Pledgor
be deemed to have any right, title, interest or claim in or to any real or
personal property of Pledgor to be held by Agent or any third party after any
foreclosure or transfer in lieu of foreclosure of any security for the Debt.

 

18.         Miscellaneous.

 

(a)          Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

(b)          Headings. The headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof. The Recitals to this Agreement are
hereby incorporated by reference as if originally set forth in full herein.

 

(c)          No Waiver; Cumulative Remedies. Agent shall not by any act (except
by a written instrument pursuant to Section 18(d)), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by Agent of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Agent would otherwise have on any future occasion. The rights,
remedies, powers and privileges herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights, remedies, powers or
privileges provided by law.

 

(d)          Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this Agreement may be waived, amended, or otherwise modified
except in accordance with Section 9.01 of the Loan Agreement. This Agreement
shall be binding upon and shall inure to the benefit of Pledgor and the
respective successors and assigns of Pledgor and shall inure to the benefit of
Agent and its

 

 - 12 -

 

 

successors and assigns; provided Pledgor shall not have any right to assign its
rights hereunder and any purported assignment by Pledgor shall be void. The
rights of Agent under this Agreement shall automatically be transferred to any
permitted assignee under the Loan Agreement.

 

(e)          Notices. Notices by Agent to Pledgor or GA Tech Owner to be
effective shall be in writing (including by facsimile or electronic mail
transmission), addressed or transmitted to Pledgor or GA Tech Owner at the
address, facsimile number or electronic mail address of Borrower set forth in
the Loan Agreement, and shall be deemed to have been duly given or made in
accordance with the terms and provisions of Section 9.02 of the Loan Agreement.

 

(f)          Jurisdiction, Etc.. Section 9.15 of the Loan Agreement is hereby
incorporated herein by reference, mutatis mutandis.

 

(g)          Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

(h)          Agents. Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for their actions except for the gross
negligence or willful misconduct of any such agents or attorneys-in-fact
selected by it in good faith.

 

(i)          Irrevocable Authorization and Instruction to GA Tech Owner. Pledgor
hereby authorizes and instructs GA Tech Owner to comply with any instruction
received by it from Agent in writing that (i) states that an Event of Default
has occurred and is continuing and (ii) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from Pledgor,
and Pledgor agrees that GA Tech Owner shall be fully protected in so complying.

 

(j)          Counterparts. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.

 

(k)          WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS, THE ADVANCES, OR THE ACTIONS OF AGENT OR ANY LENDER PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

(l)          No Special Damages. No claim may be made by Pledgor against any
Secured Party, its affiliates and its respective directors, officers, employees,
or attorneys for any special, indirect or consequential damages (“Special
Damages”) in respect of any breach or wrongful conduct (whether the claim
therefor is based on contract, tort or duty imposed by law) in connection with,
arising out of, or in any way related to the transactions contemplated or
relationship established by this Agreement, or any act, omission or event
occurring in connection herewith or therewith; and to the fullest extent
permitted by law Pledgor hereby waives, releases and agrees not to sue upon any
such claim for Special Damages, whether or not accrued and whether or not known
or suspected to exist in its favor.

 

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

 - 13 -

 

  

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date set forth above.

 

PLEDGOR:   HIT GA TECH HOLDING, LLC, a Delaware limited liability company    
By:     Name:   Title:

 

[Signatures continue on next page]

 

[Pledge Agreement (Georgia Tech Owner)]

 

 

 

 

AGENT:   CITIBANK, N.A., as collateral agent     By:     Name:   Title:

 

[Pledge Agreement (Georgia Tech Owner)]

 

 

 

  

SCHEDULE 1

To Pledge Agreement

 

DESCRIPTION OF PLEDGED MEMBERSHIP

INTERESTS

 

Issuer   Owner   Class of Membership
Interest   Percentage of
Membership
Interests HIT GA Tech, LLC   HIT GA Tech   Limited Liability   100%     Holding,
LLC   Company Interests    

 

SCH. 1-1

 

 

EXHIBIT A

 

FORM OF AUTHORIZATION STATEMENT

 

April____, 2017

 

To:         HIT GA Tech, LLC

c/o Hospitality Investors Trust Operating Partnership, L.P.

3950 University Drive

Fairfax, Virginia 22030

 

Reference is made to the Pledge and Security Agreement, dated as of April , 2017
(the “Pledge Agreement”; capitalized terms used herein without definition shall
have the respective meanings ascribed to them in the Pledge Agreement), made by
the undersigned to Citibank, N.A., as Collateral Agent (“Agent”), a copy of
which is attached hereto. Pursuant to the Pledge Agreement, the undersigned
hereby notifies HIT GA Tech, LLC, a Delaware limited liability company
(“Issuer”), that the undersigned has granted to Agent, for the ratable benefit
of the Secured Parties, a security interest (the “Security Interest”) in all of
the undersigned’s right, title and interest in and to all of the Collateral
(including all of the interests of the undersigned in Issuer), and hereby
instructs Issuer to register the security interest in favor of:

 

CITIBANK, N.A., as Collateral Agent

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

Very truly yours,   HIT GA TECH HOLDING, LLC, a Delaware limited liability
company     By:   Name: Title:

 

EXH. A-1

 

 

EXHIBIT B

 

FORM OF ACKNOWLEDGEMENT AND CONSENT

 

The undersigned hereby acknowledges receipt of a copy of the Authorization
Statement, dated as of April___, 2017 and the Pledge Agreement referred to
therein.

 

HIT GA TECH, LLC, a Delaware limited liabiltiy company     By:   Name: Title:

 

EXH. B-1

 

 

EXHIBIT C

 

FORM OF TRANSACTION STATEMENT

 

April ___, 2017

 

To:HIT GA TECH HOLDING, LLC

c/o Hospitality Investors Trust Operating Partnership, L.P.

3950 University Drive

Fairfax, Virginia 22030

 

and

 

CITIBANK, N.A., as Collateral Agent

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

This Transaction Statement is to advise you that the pledge of 100% of the
limited liability company interests in HIT GA Tech, LLC (the “Pledged Equity”)
has been registered in favor of Citibank, N.A., as Collateral Agent (the
“Lienholder”), as follows:

 

CITIBANK, N.A., as Collateral Agent

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

Taxpayer identification number: 13-5266470.

 

The pledge was registered on April____, 20171.

 

To the extent the Pledged Equity shall at any time be deemed “uncertificated
securities” under Article 8 of the Uniform Commercial Code as in effect from
time to time in the jurisdiction of the undersigned, the undersigned agrees that
it will comply with instructions originated by the Lienholder with respect to
the Pledged Equity without further consent by HIT GA Tech Holding, LLC.

 

This Transaction Statement is merely a record of the rights of the addressees as
of the time of its issuance. Delivery of this Transaction Statement, of itself,
confers no rights on the recipients. This Transaction Statement is neither a
negotiable instrument nor a security.

 

  Very truly yours,

 

 

1 Note to Draft: This will be the Closing Date.

 

EXH. C-1

 

 

HIT GA TECH, LLC, a Delaware limited liability company     By:   Name:   Title:
 

 

EXH. C-2

 

 

EXHIBIT C-2 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF PLEDGOR SECURITY AGREEMENT (GEORGIA TECH TRS LESSEE)

 

[Attached.]

 

Exh. C-2

 

 

EXHIBIT C-2 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF PLEDGOR SECURITY AGREEMENT (GEORGIA TECH TRS LESSEE)

 

PLEDGE AND SECURITY AGREEMENT (GEORGIA TECH TRS LESSEE)

 

PLEDGE AND SECURITY AGREEMENT (GEORGIA TECH TRS LESSEE) (this “Agreement”),
dated as of [___________], 2017, made by HIT TRS GA TECH HOLDING, LLC, a
Delaware limited liability company (“Pledgor”), in favor of CITIBANK, N.A., in
its capacity as collateral agent for the Lenders under the Loan Agreement (as
defined below) (together with its successors and assigns, “Agent”).

 

RECITALS

 

A.           Pursuant to that certain Second Amended and Restated Term Loan
Agreement dated as of the date hereof (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”)
among the borrowers party thereto (collectively, “Borrower”), Hospitality
Investors Trust Operating Partnership, L.P., Hospitality Investors Trust, Inc.,
certain other parties party thereto, the Lenders party thereto, Citibank, N.A.,
as the issuing bank and the administrative agent (in its capacity as
administrative agent for the Lenders, “Administrative Agent”), and Agent, the
Lenders agreed to extend credit to Borrower in the maximum aggregate principal
amount of $[312,900,000] (the “Loan”) which Loan is evidenced by certain
promissory notes dated the date hereof (collectively, the “Note”) made by
Borrower to the Lenders and secured by, among other things, the Mortgages (as
defined in the Loan Agreement).

 

B.           Pledgor is the legal and beneficial owner of all of the Equity
Interests in HIT TRS GA Tech, LLC, a Delaware limited liability company (“GA
Tech Lessee”), consisting of 100% of the limited liability company interests
therein;

 

C.           It is a condition precedent to the obligation of the Lenders to
make the Loan to Borrower under the Loan Agreement that Pledgor shall have
executed and delivered this Agreement to Agent and the Lenders.

 

NOW, THEREFORE, in consideration of the premises and to induce the Lenders to
make the Loan, Pledgor hereby agrees with Agent as follows:

 

1.           Defined Terms. As used in this Agreement, the following terms have
the meanings set forth in or incorporated by reference below:

 

“Administrative Agent” has the meaning ascribed to such term in the Recitals.
“Agent” has the meaning ascribed to such term in the introductory paragraph.

 

“Agreement” means this Pledge and Security Agreement, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Code” means the Uniform Commercial Code from time to time in effect in the
State of New York.

 

“Collateral” has the meaning ascribed to such term in Section 2 hereof.

 

“Debt” means all Obligations of Pledgor and Borrower under the Loan Documents.

 

 

 

 

“Loan” has the meaning ascribed to such term in the Recitals.

 

“Loan Agreement” has the meaning ascribed to such term in the Recitals.

 

“Loan Documents” has the meaning ascribed to such term in the Loan Agreement.
“Borrower” has the meaning ascribed to such term in the Recitals.

 

“GA Tech Lessee ” has the meaning ascribed to such term in the Recitals.

 

“GA Tech Lessee Company Agreement” means the Limited Liability Company Agreement
of GA Tech Lessee.

 

“Note” has the meaning ascribed to such term in the Recitals.

 

“Pledged Company Interests” means the limited liability company interests of
Pledgor in GA Tech Lessee listed on Schedule 1 hereto, together with all limited
liability company interest options or rights of any nature whatsoever which may
be issued or granted by GA Tech Lessee to Pledgor while this Agreement is in
effect.

 

“Pledgor” has the meaning ascribed to such term in the introductory paragraph.

 

“Proceeds” means (i) Pledgor’s share, right, title and interest in and to all
distributions, monies, fees, payments, compensations and proceeds now or
hereafter becoming due and payable to Pledgor by GA Tech Lessee with respect to
the Pledged Company Interests whether payable as profits, distributions, asset
distributions, repayment of loans or capital or otherwise and including all
“proceeds” as such term is defined in Section 9-102(a)(64) of the Code; (ii) all
contract rights, general intangibles, claims, powers, privileges, benefits and
remedies of Pledgor relating to the foregoing; and (iii) all cash or non-cash
proceeds of any of the foregoing.

 

“Special Damages” has the meaning ascribed to such term in Section 18(l) hereof.

 

Terms used herein but not otherwise defined herein shall have the respective
meanings ascribed to them in the Loan Agreement. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. All uses of the word “including” shall mean “including, without
limitation” unless the context shall indicate otherwise. Unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.

 

2.           Pledge; Grant of Security Interest. Pledgor hereby pledges and
grants to Agent, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Debt, a first priority security interest in all of Pledgor’s
right, title and interest to the following (collectively, the “Collateral”):

 

(i)          all Pledged Company Interests;

 

(ii)         all securities, moneys or property representing dividends or
interest on any of the Pledged Company Interests, or representing a distribution
in respect of the Pledged Company Interests, or resulting from a split-up,
revision, reclassification or other like change of the Pledged Company Interests
or otherwise received in exchange therefor, and any

 

- 2 -

 

 

subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, the Pledged Company Interests;

 

(iii)        all right, title and interest of Pledgor in, to and under any
policy of insurance payable by reason of loss or damage to the Pledged Company
Interests and any other Collateral;

 

(iv)        all “accounts”, “general intangibles”, “instruments” and “investment
property” (in each case as defined in the Code) constituting or relating to the
foregoing; and

 

(v)         all Proceeds of any of the foregoing property of Pledgor (including,
without limitation, any proceeds of insurance thereon, all “accounts”, “general
intangibles”, “instruments” and “investment property”, in each case as defined
in the Code, constituting or relating to the foregoing).

 

3.           Closing Date Actions. Concurrently with the execution and delivery
of this Agreement, Pledgor shall (a) send to the issuer of the Pledged Company
Interests an Authorization Statement substantially in the form of Exhibit A
hereto and (b) cause such issuer to deliver to Agent (i) an Acknowledgement and
Consent substantially in the form of Exhibit B hereto and (ii) a Transaction
Statement substantially in the form of Exhibit C hereto, confirming that such
issuer will comply with instructions with respect to such Pledged Company
Interests originated by Agent without further consent or approval of Pledgor.

 

4.           Representations and Warranties. Pledgor represents and warrants as
of the date hereof that:

 

(a)          no authorization, consent of or notice to any other Person
(including, without limitation, any member, partner or creditor of Pledgor or GA
Tech Lessee) that has not been obtained, is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
including, without limitation, the assignment and transfer by the Pledgor of any
of the Collateral to Agent or the subsequent transfer thereof by Agent pursuant
to the terms hereof;

 

(b)          all of the Pledged Company Interests have been duly and validly
issued and are fully paid and nonassessable;

 

(c)          the Pledged Company Interests constitute all the issued and
outstanding limited liability company interests in GA Tech Lessee;

 

(d)          Pledgor is the record and beneficial owner of, and has good title
to, the Pledged Company Interests, free of any and all Liens or options in favor
of, or claims of, any other Person, except the Lien created by this Agreement
and the Pledged Company Interests have not previously been assigned, sold,
transferred, pledged or encumbered (except pursuant to this Agreement);

 

(e)          upon the execution of this Agreement and the filing of the UCC-1
financing statements referred to in Section 12 with the Delaware Secretary of
State, the Lien granted pursuant to this Agreement will constitute a valid,
perfected first priority Lien on the Collateral and related Proceeds in such
jurisdictions, enforceable as such against all creditors of Pledgor and any
Persons purporting to purchase any Pledged Company Interests and related
Proceeds from Pledgor;

 

(f)          the principal place of business and chief executive office of
Pledgor is, and for the immediately preceding four (4) months (or any shorter
period of its existence), has been, located at c/o Hospitality Investors Trust
Operating Partnership, L.P., 3950 University Drive, Suite 301, Fairfax, Virginia
22030;

 

- 3 -

 

  

(g)          the exact name of Pledgor is HIT TRS GA Tech Holding, LLC;

 

(h)          Pledgor is organized under the laws of the State of Delaware;

 

(i)           there currently exist no certificates, instruments or writings
representing the Pledged Company Interests. However, to the extent that in the
future there exist any such certificates, instruments or writings, Pledgor shall
deliver all such certificates, instruments or writings to Agent together with
the undated limited liability company interest powers, duly executed in blank
with, if Agent so requests, signature guaranteed;

 

5.           Covenants. Pledgor covenants and agrees with Agent that, from and
after the date of this Agreement until the latest of the date that (i) the Debt
(exclusive of any indemnification or other obligations which are expressly
stated in any of the Loan Documents to survive satisfaction of the Note) is paid
in full and (ii) the Commitments are terminated (such latest date, the
“Termination Date”):

 

(a)          Acknowledgements of Parties. If Pledgor shall, as a result of its
ownership of the Pledged Company Interests, become entitled to receive or shall
receive any limited liability company certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any shares of the Pledged Company Interests, or otherwise in respect
thereof, Pledgor shall accept the same as Agent’s agent, hold the same in trust
for Agent and deliver the same forthwith to Agent in the exact form received,
duly endorsed by Pledgor to Agent, if required, together with an undated limited
liability company interest power covering such certificate duly executed in
blank and with, if Agent so requests, signature guaranteed, to be held by Agent
hereunder as additional security for the Debt. Any sums paid upon or in respect
of the Pledged Company Interests upon the liquidation or dissolution of GA Tech
Lessee shall be paid over to Agent to be held by it hereunder as additional
security for the Debt, and in case any distribution of capital shall be made on
or in respect of the Pledged Company Interests or any property shall be
distributed upon or with respect to the Pledged Company Interests pursuant to
the recapitalization or reclassification of the capital of GA Tech Lessee or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to Agent to be held by it, subject to the terms hereof, as additional
security for the Debt. If any sums of money or property so paid or distributed
in respect of the Pledged Company Interests shall be received by Pledgor,
Pledgor shall deliver the same to Agent and, until such money or property is
paid or delivered to Agent, hold such money or property in trust for Agent,
segregated from other funds of Pledgor, as additional security for the Debt.

 

(b)          Without the prior written consent of Agent, Pledgor shall not,
directly or indirectly (i) vote to enable, or take any other action to permit,
GA Tech Lessee to issue or certificate any limited liability company interests
or to issue any other securities convertible into or granting the right to
purchase or exchange for any membership interests in GA Tech Lessee, or (ii)
except as permitted by the Loan Agreement, sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to, the Collateral, or
(iii) create, incur, authorize or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Collateral, or any
interest therein, except for the Lien provided for by this Agreement. Pledgor
shall defend the right, title and interest of Agent in, to and under the
Collateral against the claims and demands of all Persons whomsoever.

 

(c)          At any time and from time to time, upon the written request of
Agent, and at the sole expense of Pledgor, Pledgor shall promptly and duly give,
execute, deliver file and/or record such further instruments and documents and
take such further actions as Agent may reasonably request for the purposes of
obtaining, creating, perfecting, validating or preserving the full benefits of
this Agreement and of the rights and powers herein granted including without
limitation filing UCC financing or continuation statements, provided that the
amount of the Debt shall not be increased thereby. Pledgor hereby authorizes
Agent to file any such financing statement or continuation statement without the
signature of Pledgor to the

 

- 4 -

 

  

extent permitted by law. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or chattel paper shall be
promptly delivered to Agent, duly endorsed in a manner satisfactory to Agent, to
be held as Collateral pursuant to this Agreement.

 

(d)          Limitation on Liens. At its sole cost and expense, Pledgor will not
create, incur or permit to exist, will warrant and defend title to and ownership
of the Collateral against, and will take all such other action as is necessary
to remove, any Lien or claim on or to the Pledged Company Interests, other than
the Liens created hereby, and will defend the right, title and interest of Agent
in, to and under the Pledged Company Interests against the claims and demands of
all Persons whomsoever.

 

(e)          Further Identification of Pledged Company Interests. Pledgor will
furnish to Agent from time to time statements and schedules further identifying
and describing the Pledged Company Interests and other Collateral and such other
reports in connection with the Pledged Company Interests and other Collateral as
Agent may reasonably request, all in reasonable detail.

 

(f)          Changes in Location, Name, etc. Pledgor will not, unless (i) it
shall have given thirty (30) days’ prior written notice to such effect to Agent
and (ii) all action necessary or advisable, in Agent’s reasonable opinion, to
protect and perfect the Liens and security interests intended to be created
hereunder with respect to the Pledged Company Interests shall have been taken,
(A) change the location of its chief executive office or principal place of
business from that specified in Section 4(g), or (B) change its name, identity
or structure, or (c) reorganize or reincorporate under the laws of another
jurisdiction.

 

(g)          Taxes. Pledgor shall pay, and save Agent harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

 

6.           Intentionally Omitted.

 

7.           Cash Dividends; Voting Rights. Subject to Section 14 (relating to
the application of distributions to pay the Loan) and the cash management
provisions of the Loan Agreement and unless an Event of Default shall have
occurred and be continuing, Pledgor shall be permitted to receive all limited
liability company interest distributions or cash dividends paid in the normal
course of business of GA Tech Lessee and to exercise all voting and limited
liability company interests or other rights with respect to the Pledged Company
Interests, provided that no vote shall be cast or right exercised or other
action taken which, in Agent’s judgment, would adversely impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Loan Agreement, the Note, this Agreement or any other Loan Documents.

 

8.           Rights of Agent.

 

(a)          If an Event of Default shall occur and be continuing, Agent shall
have the right to receive any and all income, cash dividends, distributions,
proceeds or other property received or paid in respect of the Pledged Company
Interests and make application thereof to the Debt, in such order as Agent, in
its sole discretion, may elect, in accordance with the Loan Documents. If an
Event of Default shall occur and be continuing, then all such Pledged Company
Interests at Agent’s option, shall be registered in the name of Agent or its
nominee (if not already so registered), and Agent or its nominee may thereafter
exercise (i) all voting, limited liability company and other rights pertaining
to the Pledged Company Interests and (ii) any and all rights of conversion,
exchange, and subscription and any other rights, privileges or options
pertaining to such Pledged Company Interests as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Company Interests upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
organizational structure of

 

- 5 -

 

 

GA Tech Lessee or upon the exercise by Pledgor or Agent of any right, privilege
or option pertaining to such Pledged Company Interests, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Company
Interests with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it, but
Agent shall have no duty to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

 

(b)          The rights of Agent under this Agreement shall not be conditioned
or contingent upon the pursuit by any Secured Party of any right or remedy
against Pledgor or against any other Person which may be or become liable in
respect of all or any part of the Debt or against any other security therefor,
guarantee thereof or right of offset with respect thereto. No Secured Party
shall be liable for any failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so, nor shall it be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
Pledgor or any other Person or to take any other action whatsoever with regard
to the Collateral or any part thereof.

 

(c)          Upon the Termination Date, Agent’s rights under this Agreement
shall terminate and Agent shall, at Pledgor’s sole cost and expense, execute and
deliver to Pledgor UCC-3 termination statements or similar documents and
agreements to terminate all of Agent’s rights under this Agreement and all other
Loan Documents.

 

(d)          Pledgor also authorizes Agent, at any time and from time to time,
to execute, in connection with the sale provided for in Sections 9 or 10 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

 

(e)          The powers conferred on Agent hereunder are solely to protect
Agent’s and each Secured Party’s interest in the Collateral and shall not impose
any duty upon any Secured Party to exercise any such powers. Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither any Secured Party nor any of its officers,
directors, employees or agents shall be responsible to Pledgor for any act or
failure to act hereunder, except for its or their gross negligence or willful
misconduct.

 

(f)          If Pledgor fails to perform or comply with any of its agreements
contained herein and Agent, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the expenses of Agent incurred in connection with such
performance or compliance, together with interest at the Default Rate if such
expenses are not paid on demand, shall be payable by Pledgor to Agent on demand
and shall constitute obligations secured hereby.

 

9.           Remedies. (a) If an Event of Default shall occur and be continuing,
Agent may, in addition to all other rights and remedies granted in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Debt:

 

(i)          exercise all rights and remedies of a secured party under the Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if
Agent were the sole and absolute owner thereof (and Pledgor agrees to take all
such action as may be appropriate to give effect to such right);

 

(ii)         make any reasonable compromise or settlement deemed desirable with
respect to any of the Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, any of the
Collateral; and

 

- 6 -

 

  

(iii)        in its name or in the name of Pledgor or otherwise, demand, sue
for, collect, direct payment of or receive any money or property at any time
payable or receivable on account of or in exchange for any of the Collateral,
but shall be under no obligation to do so.

 

(b)          Without limiting the generality of the foregoing, if an Event of
Default shall occur and be continuing, Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below or otherwise required hereby) to or
upon Pledgor, GA Tech Lessee or any other Person (all and each of which demands,
presentments, protests, advertisements and notices, or other defenses, are
hereby waived to the extent permitted under applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker’s board or office of Agent or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best in
its sole discretion, for cash or on credit or for future delivery without
assumption of any credit risk. Agent shall have the right, without notice or
publication, to adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for such
sale, and any such sale may be made at any time or place to which the same may
be adjourned without further notice. Agent shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption of Pledgor, which right or equity of
redemption is hereby waived or released. Agent shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of Agent hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Debt, in such order as Agent may elect, and only after such application and
after the payment by Agent of any other amount required by any provision of law,
including, without limitation, Sections 9-610 and 9-615 of the Code, need Agent
account for the surplus, if any, to Pledgor. To the extent permitted by
applicable law, Pledgor waives all claims, damages and demands it may acquire
against the Secured Parties arising out of the exercise by Agent of any of its
rights hereunder, except for any claims, damages and demands it may have against
Agent arising from the willful misconduct or gross negligence of Agent or its
affiliates, or any agents or employees of the foregoing. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale or other disposition.

 

(c)          The rights, powers, privileges and remedies of Agent under this
Agreement are cumulative and shall be in addition to all rights, powers,
privileges and remedies available to Agent at law or in equity. All such rights,
powers and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the rights of Agent hereunder.

 

10.         Private Sales. Pledgor recognizes that Agent may be unable to effect
a public sale of any or all of the Pledged Company Interests, by reason of
certain prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their
own account for investment and not with a view to the distribution or resale
thereof. Pledgor acknowledges and agrees that any such private sale may result
in prices and other terms less favorable to Agent than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of being a private sale. Agent shall be
under no obligation to delay a sale of any of the Pledged Company Interests for
the period of time necessary to permit GA Tech Lessee or Pledgor to register
such securities for public sale under the Securities Act of 1933, as amended, or
under applicable state securities laws, even if GA Tech Lessee or Pledgor would
agree to do so.

 

- 7 -

 

 

(a)          Pledgor further shall use its best efforts to do or cause to be
done all such other acts as may be reasonably necessary to make any sale or
sales of all or any portion of the Pledged Company Interests pursuant to this
Section 10 valid and binding and in compliance with any and all other
requirements of applicable law. Pledgor further agrees that a breach of any of
the covenants contained in this Section 10 will cause irreparable injury to
Agent, that Agent has no adequate remedy at law in respect of such breach and,
as a consequence, that each and every covenant contained in this Section 10
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Loan Agreement.

 

(b)          Agent shall not incur any liability as a result of the sale of any
Collateral, or any part thereof, at any private sale conducted in a commercially
reasonable manner, it being agreed that some or all of the Collateral is or may
be of one or more types that threaten to decline speedily in value and that are
not customarily sold in a recognized market. Pledgor hereby waives any claims
against the Secured Parties arising by reason of the fact that the price at
which any of the Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale or was less than
the aggregate amount of the Debt, even if Agent accepts the first offer received
and does not offer any Collateral to more than one offeree, provided that Agent
has acted in a commercially reasonable manner in conducting such private sale.

 

(c)          The Code states that each Secured Party is able to purchase the
Pledged Company Interests only if they are sold at a public sale. Agent has
advised Pledgor that SEC staff personnel have issued various No-Action Letters
describing procedures which, in the view of the SEC staff, permit a foreclosure
sale of securities to occur in a manner that is public for purposes of Article 9
of the Code, yet not public for purposes of Section 4(2) of the Securities Act
of 1933. The Code permits Pledgor to agree on the standards for determining
whether a Secured Party has complied with its obligations under Article 9.
Pursuant to the Code, Pledgor specifically agrees (x) that it shall not raise
any objection to any Secured Party’s purchase of the Pledged Company Interests
(through bidding on the obligations or otherwise) and (y) that a foreclosure
sale conducted in conformity with the principles set forth in the No-Action
Letters (i) shall be considered to be a “public” sale for purposes of the Code;
(ii) will be considered commercially reasonable notwithstanding that Agent, has
not registered or sought to register the Pledged Company Interests under the
Securities Laws, even if Pledgor or GA Tech Lessee agrees to pay all costs of
the registration process; and (iii) shall be considered to be commercially
reasonable notwithstanding that a Secured Party purchases the Pledged Company
Interests at such a sale.

 

(d)          Pledgor agrees that no Secured Party has any general duty or
obligation to make any effort to obtain or pay any particular price for any
Pledged Company Interests sold by Agent pursuant to this Agreement. Agent, may,
in its sole discretion, among other things, accept the first offer received, or
decide to approach or not to approach any potential purchasers. Without in any
way limiting Agent’s right to conduct a foreclosure sale in any manner which is
considered commercially reasonable, Pledgor hereby agrees that any foreclosure
sale conducted in accordance with the following provisions shall be considered a
commercially reasonable sale and hereby irrevocably waives any right to contest
any such sale:

 

(i)          Agent conducts the foreclosure sale in the State of New York,

 

(ii)         The foreclosure sale is conducted in accordance with the laws of
the State of New York,

 

(iii)        Not more than ten (10) days before, and not less than five (5) days
in advance of the foreclosure sale, Agent notifies Pledgor at the address set
forth herein of the time and place of such foreclosure sale,

 

- 8 -

 

 

(iv)        The foreclosure sale is conducted by an auctioneer licensed in the
State of New York and is conducted in front of the New York Supreme Court
located in New York City or such other New York State Court having jurisdiction
over the Collateral on any Business Day between the hours of 9 a.m. and 5 p.m.,

 

(v)         The notice of the date, time and location of the foreclosure sale is
published in the New York Times or Wall Street Journal (or such other newspaper
widely circulated in New York, New York) for seven (7) consecutive days prior to
the date of the foreclosure sale, and

 

(vi)        Agent sends notification of the foreclosure sale to all secured
parties identified as a result of a search of the UCC financings statements in
the filing offices located in the State of Delaware conducted not later than
twenty (20) days and not earlier than thirty (30) days before such notification
date.

 

(e)          No Secured Party shall incur any liability as a result of the sale
of any Collateral, or any part thereof, at any private sale conducted in a
commercially reasonable manner, it being agreed that some or all of the
Collateral is or may be of one or more types that threaten to decline speedily
in value and that are not customarily sold in a recognized market. Pledgor
hereby waives any claims against any Secured Party arising by reason of the fact
that the price at which any of the Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale or was less than the aggregate amount of the Debt, even if Agent accepts
the first offer received and does not offer any Collateral to more than one
offeree, provided that Agent has acted in a commercially reasonable manner in
conducting such private sale.

 

11.         Limitation on Duties Regarding Collateral. Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as Agent deals with similar securities and
property for its own account. Neither any Secured Party nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of Pledgor or otherwise.

 

12.         Financing Statements; Other Documents. Pledgor hereby authorizes
Agent to file UCC-1 financing statements with respect to the Collateral. Pledgor
authorizes Agent to use the collateral description “all personal property” or
“all assets” in any such financing statements. Pledgor agrees to deliver any
other document or instrument which Agent may reasonably request with respect to
the Collateral for the purposes of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted. Without limiting the
generality of the foregoing, Pledgor hereby authorizes the filing of UCC-1
financing statements (and amendments of such financing statements and
continuation statements) that name Pledgor as debtor and Agent as secured party
and that cover all personal property or all assets of Pledgor.

 

13.         Attorney-in-Fact. Without limiting any rights or powers granted by
this Agreement to Agent, Agent is hereby appointed, which appointment as
attorney-in-fact is irrevocable and coupled with an interest, the
attorney-in-fact of Pledgor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instruments which Agent
may deem necessary or advisable to accomplish the purposes hereof including,
without limitation:

 

(a)          to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

 

(b)          to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;

 

- 9 -

 

  

(c)          to file any claims or take any action or institute any proceedings
that Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Agent, with respect to any of
the Collateral; and

 

(d)          to execute, in connection with the sale provided for in Section 9
or 10, any endorsement, assignments, or other instruments of conveyance or
transfer with respect to the Collateral, including without limitation, to
transfer or cause the transfer of the Collateral, or any part thereof, on the
books of GA Tech Lessee or other entity issuing such Collateral, to Agent or any
nominee.

 

If so requested by Agent, Pledgor shall ratify and confirm any such sale or
transfer by executing and delivering to Agent at Pledgor’s expense all proper
deeds, bills of sale, instruments of assignment, conveyance of transfer and
releases as may be designated in any such request.

 

14.         Additional Covenants of Pledgor Relating to Covenants of GA Tech
Lessee. Pledgor covenants and agrees with Agent that, from and after the date of
this Agreement until the Termination Date, (i) Pledgor shall take any and all
actions either necessary or reasonably requested by Agent to ensure complete
compliance with Sections 5.01 and 5.02 of the Loan Agreement, (ii) Pledgor shall
cause GA Tech Lessee to take such actions as are required by or to comply with
the terms of the Loan Documents and to not take any actions that violate any
such documents and (iii) Pledgor shall cause GA Tech Lessee to not apply amounts
disbursed to GA Tech Lessee pursuant to the requirements of the Loan in a manner
contrary to the requirements of the Loan Documents.

 

15.         Non-Recourse. The provisions of Sections 10.01 and 10.02 of the Loan
Agreement are hereby incorporated by reference into this Agreement as to the
liability of Pledgor hereunder to the same extent and with the same force as if
fully set forth herein.

 

16.         Indemnity. Pledgor agrees that the terms and provisions of Section
9.04(b) of the Loan Agreement are hereby incorporated by reference into this
Agreement to the same extent and with the same force as if fully set forth
herein.

 

17.         Third Party Waivers. (a) Pledgor authorizes Agents to perform any or
all of the following acts at any time in its sole discretion, all without notice
to Pledgor (except as otherwise provided in the Loan Documents), without
affecting Pledgor’s obligations under this Agreement or any other Loan Documents
and without affecting the liens and encumbrances against the Collateral in favor
of Agent (provided that the following are undertaken in accordance with the
terms and provisions of the Loan Documents and applicable law and provided,
further that none of the following shall or shall be deemed to afford to Agent
or any of the Secured Parties any rights (or any expanded rights) beyond those
rights expressly provided in the other Loan Documents or applicable law):

 

(i)          Subject to Section 9.01 of the Loan Agreement, the Administrative
Agent may alter any terms of the Debt or any part thereof, including renewing,
compromising, extending or accelerating, or otherwise changing the time for
payment of, or increasing or decreasing the rate of interest on, the Debt or any
part thereof;

 

(ii)         Agent may take and hold security for the Debt, accept additional or
substituted security, and subordinate, exchange, enforce, waive, release,
compromise, fail to perfect and sell or otherwise dispose of any such security;

 

(iii)        Agent may direct the order and manner of any sale of all or any
part of any security now or later to be held for the Debt, and Agent (or its
nominees or designees) may also bid at any such sale;

 

- 10 -

 

 

(iv)        The Administrative Agent may apply any payments or recoveries from
GA Tech Lessee, Pledgor or any other source, and any proceeds of any security,
to the obligations under the Loan Documents in such manner, order and priority
as the Administrative Agent may elect;

 

(v)         The Administrative Agent may release GA Tech Lessee or any other
person or entity of its liability for the Debt or any part thereof;

 

(vi)        The Administrative Agent may substitute, add or release any one or
more guarantors or endorsers; and

 

(vii)       In addition to the Debt, the Secured Parties may extend other credit
to GA Tech Lessee, and may take and hold security agreed to by GA Tech Lessee
for the credit so extended.

 

(b)          Pledgor waives:

 

(i)          Any right it may have to require any Agent to proceed against GA
Tech Lessee, Pledgor or any other person or entity, proceed against or exhaust
any security held from GA Tech Lessee, Pledgor or any person or entity, or
pursue any other remedy in such Agent's power to pursue;

 

(ii)         Any defense based on any claim that Pledgor’s obligations exceed or
are more burdensome than those of GA Tech Lessee, Pledgor or any other Person;

 

(iii)        Any defense: (A) based on any legal disability of any other Person,
(B) based on any release, discharge, modification, impairment or limitation of
the liability of any other person or entity to any Agent from any cause, whether
consented to by such Agent or arising by operation of law, (C) arising out of or
able to be asserted as a result of any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of any
other person or entity or any of their respective affiliates, or any general
assignment for the benefit of creditors, composition, marshaling of assets for
creditors or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in each case as undertaken under any
U.S. Federal or State law (each of the foregoing described in this clause (C)
being referred to herein as an “Insolvency Proceeding”); or (D) arising from any
rejection or disaffirmance of the Debt, or any part thereof, or any security
held therefor, in any such Insolvency Proceeding;

 

(iv)        Any defense based on any action taken or omitted by any Agent in any
Insolvency Proceeding involving any other Person, including any election to have
such Agent's claim allowed as being secured, partially secured or unsecured, any
extension of credit by any Secured Party to any other Person in any Insolvency
Proceeding, and the taking and holding by such Agent of any security for any
such extension of credit;

 

(v)         All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
intention to accelerate, notices of acceleration, notices of acceptance of this
Agreement or any other Loan Document and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of every
kind (in each instance, except as expressly required by the Loan Agreement or
applicable law);

 

- 11 -

 

 

(vi)        Any duty on the part of Agent or any other Secured Party to disclose
to Pledgor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of GA
Tech Lessee, any other Loan Party or any of their Subsidiaries now or hereafter
known by Agent or such other Secured Party; and

 

(vii)       Except for such notices as required by the Loan Documents, any
defense based on or arising out of any defense that GA Tech Lessee or any of its
affiliates may have to the payment or performance of the Debt (other than the
defense that the particular Debt in question have been paid or performed (to the
extent paid or performed));

 

(c)          Subject to Section 9.13 of the Loan Agreement, after the occurrence
and during the continuance of any Event of Default, in its sole discretion,
without prior notice (except as expressly required by the Loan Agreement, the
Mortgage or applicable law) to or consent of Pledgor or GA Tech Lessee, Agent
may elect to: (A) foreclose against any collateral for the Debt, (B) accept any
offer to transfer any such collateral for the Debt in lieu of foreclosure, (C)
compromise or adjust the Debt or any part thereof or make any other
accommodation with GA Tech Lessee or any Person, or (D) exercise any other
remedy against GA Tech Lessee or any person or entity or any collateral for the
Debt. No such action by Agent shall release or limit any Secured Party’s rights
hereunder or under the other Loan Documents, even if the effect of the action is
to deprive Pledgor of any subrogation rights, rights of indemnity, or other
rights to collect reimbursement from GA Tech Lessee or any other Person for any
sums paid to the Secured Parties, whether contractual or arising by operation of
law or otherwise. Pledgor expressly agrees that under no circumstances shall
Pledgor be deemed to have any right, title, interest or claim in or to any real
or personal property of Pledgor to be held by Agent or any third party after any
foreclosure or transfer in lieu of foreclosure of any security for the Debt.

 

18.         Miscellaneous.

 

(a)          Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

(b)          Headings. The headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof. The Recitals to this Agreement are
hereby incorporated by reference as if originally set forth in full herein.

 

(c)          No Waiver; Cumulative Remedies. Agent shall not by any act (except
by a written instrument pursuant to Section 18(d)), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by Agent of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Agent would otherwise have on any future occasion. The rights,
remedies, powers and privileges herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights, remedies, powers or
privileges provided by law.

 

(d)          Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this Agreement may be waived, amended, or otherwise modified
except in accordance with Section 9.01 of the Loan Agreement. This Agreement
shall be binding upon and shall inure to the benefit of Pledgor and the
respective successors and assigns of Pledgor and shall inure to the benefit of
Agent and its

 

- 12 -

 

 

successors and assigns; provided Pledgor shall not have any right to assign its
rights hereunder and any purported assignment by Pledgor shall be void. The
rights of Agent under this Agreement shall automatically be transferred to any
permitted assignee under the Loan Agreement.

 

(e)          Notices. Notices by Agent to Pledgor or GA Tech Lessee to be
effective shall be in writing (including by facsimile or electronic mail
transmission), addressed or transmitted to Pledgor or GA Tech Lessee at the
address, facsimile number or electronic mail address of Borrower set forth in
the Loan Agreement, and shall be deemed to have been duly given or made in
accordance with the terms and provisions of Section 9.02 of the Loan Agreement.

 

(f)           Jurisdiction, Etc.. Section 9.15 of the Loan Agreement is hereby
incorporated herein by reference, mutatis mutandis.

 

(g)          Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

(h)          Agents. Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for their actions except for the gross
negligence or willful misconduct of any such agents or attorneys-in-fact
selected by it in good faith.

 

(i)           Irrevocable Authorization and Instruction to GA Tech Lessee.
Pledgor hereby authorizes and instructs GA Tech Lessee to comply with any
instruction received by it from Agent in writing that (i) states that an Event
of Default has occurred and is continuing and (ii) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
Pledgor, and Pledgor agrees that GA Tech Lessee shall be fully protected in so
complying.

 

(j)           Counterparts. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.

 

(k)          WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS, THE ADVANCES, OR THE ACTIONS OF AGENT OR ANY LENDER PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

(l)           No Special Damages. No claim may be made by Pledgor against any
Secured Party, its affiliates and its respective directors, officers, employees,
or attorneys for any special, indirect or consequential damages (“Special
Damages”) in respect of any breach or wrongful conduct (whether the claim
therefor is based on contract, tort or duty imposed by law) in connection with,
arising out of, or in any way related to the transactions contemplated or
relationship established by this Agreement, or any act, omission or event
occurring in connection herewith or therewith; and to the fullest extent
permitted by law Pledgor hereby waives, releases and agrees not to sue upon any
such claim for Special Damages, whether or not accrued and whether or not known
or suspected to exist in its favor.

 

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

 - 13 - 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date set forth above.

 

  PLEDGOR:       HIT TRS GA TECH HOLDING, LLC,   a Delaware limited liability
company         By:       Name:     Title:

 

[Signatures continue on next page]

 

[Pledge Agreement (Georgia Tech TRS Lessee)]

 

 

 

 

  AGENT:       CITIBANK, N.A., as collateral agent         By:       Name:    
Title:

 

[Pledge Agreement (Georgia Tech TRS Lessee)]

 

 

 

 

SCHEDULE 1

To Pledge Agreement

 

DESCRIPTION OF PLEDGED MEMBERSHIP
INTERESTS

 

Issuer   Owner   Class of Membership
Interest   Percentage of
Membership
Interests HIT TRS GA Tech, LLC   HIT TRS GA Tech Holding, LLC   Limited
Liability Company Interests   100%

 

 SCH. 1-1  

 

 

EXHIBIT A

 

FORM OF AUTHORIZATION STATEMENT

 

April        , 2017

 

To:HIT TRS GA Tech, LLC

c/o Hospitality Investors Trust Operating Partnership, L.P.
3950 University Drive

Fairfax, Virginia 22030

 

Reference is made to the Pledge and Security Agreement, dated as of
April        , 2017 (the “Pledge Agreement”; capitalized terms used herein
without definition shall have the respective meanings ascribed to them in the
Pledge Agreement), made by the undersigned to Citibank, N.A., as Collateral
Agent (“Agent”), a copy of which is attached hereto. Pursuant to the Pledge
Agreement, the undersigned hereby notifies HIT TRS GA Tech, LLC, a Delaware
limited liability company (“Issuer”), that the undersigned has granted to Agent,
for the ratable benefit of the Secured Parties, a security interest (the
“Security Interest”) in all of the undersigned’s right, title and interest in
and to all of the Collateral (including all of the interests of the undersigned
in Issuer), and hereby instructs Issuer to register the security interest in
favor of:

 

CITIBANK, N.A., as Collateral Agent
390 Greenwich Street, 7th Floor

New York, New York 10013
Attn: Ana Rosu Marmann

 

  Very truly yours,       HIT TRS GA Tech Holding, LLC, a Delaware limited
liability company         By:     Name:     Title:  

 

 EXH. A-1  

 

 

EXHIBIT B

 

FORM OF ACKNOWLEDGEMENT AND CONSENT

 

The undersigned hereby acknowledges receipt of a copy of the Authorization
Statement, dated as of April        , 2017 and the Pledge Agreement referred to
therein.

 

  HIT TRS GA TECH, LLC, a Delaware limited liabiltiy company         By:    
Name:     Title:  

 

 EXH. B-1  

 

 

EXHIBIT C

 

FORM OF TRANSACTION STATEMENT

 

April___, 2017

 

To:HIT TRS GA TECH HOLDING, LLC

c/o Hospitality Investors Trust Operating Partnership, L.P.
3950 University Drive

Fairfax, Virginia 22030

 

and

 

CITIBANK, N.A., as Collateral Agent
390 Greenwich Street, 7th Floor

New York, New York 10013
Attn: Ana Rosu Marmann

 

This Transaction Statement is to advise you that the pledge of 100% of the
limited liability company interests in HIT TRS GA Tech, LLC (the “Pledged
Equity”) has been registered in favor of Citibank, N.A., as Collateral Agent
(the “Lienholder”), as follows:

 

CITIBANK, N.A., as Collateral Agent
390 Greenwich Street, 7th Floor

New York, New York 10013
Attn: Ana Rosu Marmann

 

Taxpayer identification number: 13-5266470.

 

The pledge was registered on April        , 2017.

 

To the extent the Pledged Equity shall at any time be deemed “uncertificated
securities” under Article 8 of the Uniform Commercial Code as in effect from
time to time in the jurisdiction of the undersigned, the undersigned agrees that
it will comply with instructions originated by the Lienholder with respect to
the Pledged Equity without further consent by HIT TRS GA Tech Holding, LLC.

 

This Transaction Statement is merely a record of the rights of the addressees as
of the time of its issuance. Delivery of this Transaction Statement, of itself,
confers no rights on the recipients. This Transaction Statement is neither a
negotiable instrument nor a security.

 

  Very truly yours,       HIT TRS GA TECH, LLC, a Delaware limited liabiltiy
company         By:     Name:     Title:  

 

 EXH. C-1  

 

 

EXHIBIT D TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Second Amended and Restated Term Loan Agreement dated
as of April 27, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”; capitalized terms
not otherwise defined herein shall have their respective meanings set forth in
the Loan Agreement) among the borrowers party thereto, collectively as Borrower,
Hospitality Investors Trust Operating Partnership, L.P., a Delaware limited
partnership (“Operating Partnership”), Hospitality Investors Trust, Inc.,
certain other parties party thereto, the Lenders party thereto, and Citibank,
N.A., as Administrative Agent for the Lenders and the Arrangers party thereto.

 

Each “Assignor” referred to on Schedule 1 hereto (each, an “Assignor”) and each
“Assignee” referred to on Schedule 1 hereto (each, an “Assignee”) agrees
severally with respect to all information relating to it and its assignment
hereunder and on Schedule 1 hereto as follows:

 

1.          Such Assignor hereby sells and assigns, without recourse except as
to the representations and warranties made by it herein, to such Assignee, and
such Assignee hereby purchases and assumes from such Assignor, an interest in
and to such Assignor’s rights and obligations under the Loan Agreement as of the
date hereof equal to the percentage interest specified on Schedule 1 hereto of
all outstanding rights and obligations under the Loan specified on Schedule 1
hereto. After giving effect to such sale and assignment, such Assignee’s
Commitments and the amount of the Advances owing to such Assignee will be as set
forth on Schedule 1 hereto.

 

2.          Such Assignor (a) represents and warrants that its name set forth on
Schedule 1 hereto is its legal name, that it is the legal and beneficial owner
of the interest or interests being assigned by it hereunder and that such
interest or interests are free and clear of any adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(c) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; and (d) attaches
the Note or Notes (if any) held by such Assignor and requests that the
Administrative Agent exchange such Note or Notes for a new Note or Notes payable
to the order of such Assignee in an amount equal to the Commitments assumed by
such Assignee pursuant hereto or new Notes payable to the order of such Assignee
in an amount equal to the Commitments assumed by such Assignee pursuant hereto
and such Assignor in an amount equal to the Commitments retained by such
Assignor under the Loan Agreement, respectively, as specified on Schedule 1
hereto.

 

3.          Such Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Loan Agreement, together with copies of the financial
statements referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon any Agent, any Assignor or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement; (d) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name; (e) confirms that it is an
Eligible Assignee; (f) appoints and authorizes each Agent to take such action as
agent on its behalf and to

 

 Exh. D-1  

 

 

exercise such powers and discretion under the Loan Documents as are delegated to
such Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (g) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Loan Agreement
are required to be performed by it as a Lender; and (h) attaches any U.S.
Internal Revenue Service forms required under Section 2.12 of the Loan
Agreement.

 

4.          Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.

 

5.          Upon such acceptance by the Administrative Agent and, if applicable,
Operating Partnership, and recording by the Administrative Agent, as of the
Effective Date, (a) such Assignee shall be a party to the Loan Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (b) such Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Agreement (other than its rights
and obligations under the Loan Documents that are specified under the terms of
such Loan Documents to survive the payment in full of the Obligations of the
Loan Parties under the Loan Documents to the extent any claim thereunder relates
to an event arising prior to the Effective Date of this Assignment and
Acceptance) and, if this Assignment and Acceptance covers all of the remaining
portion of the rights and obligations of such Assignor under the Loan Agreement,
such Assignor shall cease to be a party thereto.

 

6.          Upon such acceptance by the Administrative Agent and, if applicable,
Operating Partnership and recording by the Administrative Agent, from and after
the Effective Date, the Administrative Agent shall make all payments under the
Loan Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to such Assignee. Such Assignor and such
Assignee shall make all appropriate adjustments in payments under the Loan
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.

 

7.          This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

8.          This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier or
e-mail (which e-mail shall include an attachment in PDF format or similar format
containing the legible signature of the person executing this Assignment and
Acceptance) shall be effective as delivery of an original executed counterpart
of this Assignment and Acceptance.

 

 Exh. D-2  

 

 

IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

 Exh. D-3  

 

 

SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE

 

ASSIGNORS:           Term Loan           Percentage interest assigned % % % % %
Aggregate outstanding principal amount of Advances assigned $ $ $ $ $ Principal
amount of Note payable to Assignor $ $ $ $ $

 

 

ASSIGNEES:           Term Loan           Percentage interest assumed % % % % %
Aggregate outstanding principal amount of Advances assumed $ $ $ $ $ Principal
amount of Note payable to Assignee $ $ $ $ $

 

 Exh. D-4  

 

 

Effective Date (if other than date of acceptance by Administrative Agent):

2________________, ___

 

  Assignors       ______________________________, as Assignor   [Type or print
legal name of Assignor]         By       Title:        

Dated:____________, ___

        ______________________________, as Assignor   [Type or print legal name
of Assignor]         By       Title:        

Dated:____________, ___

        ______________________________, as Assignor   [Type or print legal name
of Assignor]         By       Title:        

Dated:____________, ___

      ______________________________, as Assignor   [Type or print legal name of
Assignor]         By     Title:         Dated:____________, ___

 

 

2This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Administrative Agent and, if applicable,
the Borrowers.

 

 Exh. D-5  

 

 

  Assignees       ______________________________, as Assignee   [Type or print
legal name of Assignee]         By       Title:     E-mail address for notices:
       

Dated:____________, ___

        Domestic Lending Office:         Eurodollar Lending Office:        
______________________________, as Assignee   [Type or print legal name of
Assignee]         By       Title:     E-mail address for notices:        

Dated:____________, ___

        Domestic Lending Office:         Eurodollar Lending Office:        
______________________________, as Assignee   [Type or print legal name of
Assignee]         By       Title:     E-mail address for notices:        

Dated:____________, ___

        Domestic Lending Office:         Eurodollar Lending Office:

 

 Exh. D-6  

 

 

  ______________________________, as Assignee   [Type or print legal name of
Assignee]         By       Title:     E-mail address for notices:        

Dated:____________, ___

        Domestic Lending Office:         Eurodollar Lending Office:

 

 Exh. D-7  

 

 

Accepted [and Approved] this ___

day of_____________, ___

 

CITIBANK, N.A.,   as Administrative Agent         By       Name:     Title:    
    By       Name:     Title:  

 

[Approved this___day

of_____________, ___

 

HOSPITALITY INVESTORS TRUST OPERATING PARTNERSHIP, L.P.,   a Delaware limited
partnership         By:     Name:    

Title:

   

 

 Exh. D-8  

 

 

EXHIBIT E-1 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF OPINION OF NY COUNSEL

 

[Attached.]

 

 Exh. E-1  

 

 

EXHIBIT E-2 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF OPINION OF MD COUNSEL

 

[Attached.]

 

 Exh. E-2  

 

 

EXHIBIT E-3 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF OPINION OF DE COUNSEL

 

[Attached.]

 

 Exh. E-3  

 

 

EXHIBIT F TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF AMENDED AND RESTATED SECURITY AGREEMENT

 

[Attached.]

 

 Exh. F  

 

 

EXHIBIT F TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF AMENDED AND RESTATED SECURITY AGREEMENT

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

Dated April 27, 2017

 

from

 

THE GRANTORS REFERRED TO HEREIN

 

to

 

CITIBANK, N.A.,

 

as Collateral Agent

 

 

 

 

TABLE OF CONTENTS

 

Section   Page       Section 1. Grant of Security 1       Section 2. Security
for Obligations 4       Section 3. Grantors Remain Liable 4       Section 4.
Maintaining the Account Collateral 4       Section 5. Reserved 5       Section
6. Reserved 5       Section 7. Reserved 5       Section 8. Representations and
Warranties 5       Section 9. Further Assurances 6       Section 10. As to FF&E
and Inventory 7       Section 11. Reserved 7       Section 12. Post-Closing
Changes; Bailees; Collections on Assigned Agreements, Receivables and Related
Contracts 7       Section 13. Reserved 8       Section 14. Reserved 8      
Section 15. Transfers and Other Liens; Additional Equity Interests 8      
Section 16. Collateral Agent Appointed Attorney-in-Fact 8       Section 17.
Collateral Agent May Perform 8       Section 18. The Collateral Agent’s Duties 9
      Section 19. Remedies 9       Section 20. Indemnity and Expenses 10      
Section 21. Amendments; Waivers; Additional Grantors, Etc. 11       Section 22.
Notices, Etc. 11       Section 23. Continuing Security Interest; Assignments
under the Loan Agreement 11       Section 24. Release; Termination 11      
Section 25. Security Interest Absolute 11       Section 26. Third Party Waivers
12

 

 

 

 

Section 27. Execution in Counterparts 14       Section 28. The Loan Agreement
and the Mortgages 14       Section 29. Jurisdiction, Etc. 15       Section 30.
Governing Law 15       Section 31. WAIVER OF JURY TRIAL 15       Section 32.
Change of Agent 15

 

Schedules

 

Schedule I - Location, Chief Executive Office, Type of Organization,
Jurisdiction of Organization and Organizational Identification Number Schedule
II - Assigned Agreements Schedule III - Hotels and Locations of FF&E and
Inventory Schedule IV - Changes in Name, Location, Etc.

 

Exhibits

 

Exhibit A - Form of Security Agreement Supplement

 

 

 

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

AMENDED AND RESTATED SECURITY AGREEMENT dated April 27, 2017 (this “Agreement”)
among the entities listed on the signature pages hereof as the grantors and the
ADDITIONAL GRANTORS (as defined in Section 21) (collectively, the “Grantors”)
and CITIBANK, N.A., as collateral agent (in such capacity, together with any
successor collateral agent appointed pursuant to Article VIII of the Loan
Agreement (as hereinafter defined), the “Collateral Agent”) for the Secured
Parties (as defined in the Loan Agreement).

 

PRELIMINARY STATEMENTS

 

(1)         In connection with that certain Amended and Restated Term Loan
Agreement dated as of October 15, 2015 (the “Existing Loan Agreement”), certain
Grantors entered into a Security Agreement dated as of October 15, 2015 (the
“Existing Security Agreement”) among such Grantors and Deutsche Bank AG New York
Branch, as the administrative agent (“DB Agent”), for the benefit of the Secured
Parties under the Existing Credit Agreement.

 

(2)         The Grantors and certain other Loan Parties have entered into a
Second Amended and Restated Credit Agreement dated as of the date hereof (such
Agreement, as it may hereafter be amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”) with the Lenders,
the Agents, and the Arrangers (each as defined therein).

 

(3)         Pursuant to the Loan Agreement, Citibank, N.A. is replacing DB Agent
as administrative agent thereunder and is being appointed as collateral agent
thereunder.

 

(4)         Pursuant to the Loan Agreement the Grantors are entering into this
Agreement in order to grant to the Collateral Agent for the ratable benefit of
the Secured Parties a security interest in the Collateral (as hereinafter
defined).

 

(5)         It is a condition precedent to the making of the Loan by the Lenders
under the Loan Agreement that the Grantors shall have executed and delivered
this Agreement to the Collateral Agent.

 

(6)         Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.

 

(7)         Terms defined in the Loan Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Loan Agreement.
Further, unless otherwise defined in this Agreement or in the Loan Agreement,
terms defined in Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9. “UCC” means the
Uniform Commercial Code as in effect, from time to time, in the State of New
York; provided, however, that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, “UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.

 

NOW, THEREFORE, in consideration of the premises, in order to induce the Lenders
to make the Loan under the Loan Agreement, and for good and valuable other
consideration, the receipt and sufficiency of which is hereby conclusively
acknowledged, each Grantor hereby agrees with the Collateral Agent for the
ratable benefit of the Secured Parties as follows:

 

Section 1.          Grant of Security. Subject to Section 24 hereof, each
Grantor hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, such Grantor’s right,

 

 

 

 

title and interest in and to the following (if any), in each case, as to each
type of property described below, whether now owned or hereafter acquired by
such Grantor, wherever located, and whether now or hereafter existing or arising
and in all events to the extent the same is assignable and relates solely and
exclusively to one or more Collateral Assets (collectively, the “Collateral”):

 

(a)          all “furniture, furnishings and equipment” (as such phrase is
commonly understood in the hotel industry) and all appurtenances and additions
thereto and substitutions or replacements thereof owned by such Grantor and now
or hereafter attached to, contained in or used in connection with the use,
occupancy, operation or maintenance of each hotel set forth opposite such
Grantor’s name in Schedule III hereto (each, a “Hotel”), including, without
limitation, any and all fixtures, furnishings, equipment, furniture, and other
items of tangible personal property, appliances, machinery, equipment, signs,
artwork (including paintings, prints, sculpture and other fine art), office
furnishings and equipment, guest room furnishings, and specialized equipment for
kitchens, laundries, drying, bars, restaurants, spas, public rooms, health and
recreational facilities, linens, dishware, two-way radios, all partitions,
screens, awnings, shades, blinds, rugs, carpets, 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; generators, boilers, compressors and engines; gas and electric
machinery and equipment; facilities used to provide utility services; garbage
disposal machinery or equipment; communication apparatus, including television,
radio, music, and cable antennae and systems; attached floor coverings, window
coverings, curtains, drapes and rods; storm doors and windows; stoves,
refrigerators, dishwashers and other installed appliances; attached cabinets;
trees, plants and other items of landscaping; visual and electronic surveillance
systems; and swimming pool heaters and equipment fuel, water and other pumps and
tanks; irrigation equipment; reservation system computer and related equipment;
all equipment, manual, mechanical or motorized, for the construction,
maintenance, repair and cleaning of, parking areas, walks, underground ways,
truck ways, driveways, common areas, roadways, highways and streets and all
equipment, fixtures, furnishings, and articles of personal property now or
hereafter attached to or used in or about any such Hotel which is or may be used
in or related to the planning, development, financing or operation thereof and
all renewals of or replacements or substitutions for any of the foregoing (the
“FF&E”);

 

(b)          all inventory in all of its forms, including, without limitation,
(i) all provisions in storerooms, refrigerators, pantries and kitchens,
beverages in wine cellars and bars, other merchandise intended for sale, fuel,
mechanical supplies, stationary and other expenses, supplies and similar items
and raw materials and work in process therefor, finished goods thereof and
materials used or consumed in the manufacture, production, preparation or
shipping thereof, (ii) goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind (including, without limitation,
goods in which such Grantor has an interest or right as consignee) and (iii)
goods that are returned to or repossessed or stopped in transit by such Grantor,
and all accessions thereto and products thereof and documents therefor, and all
software related thereto, including, without limitation, software that is
embedded in and is part of the inventory (any and all such property being the
“Inventory”);

 

(c)          all fees, charges, accounts (including, without limitation,
insurance receivables), chattel paper, instruments (including, without
limitation, promissory notes), deposit accounts, letter-of-credit rights,
general intangibles (including, without limitation, payment intangibles) and
other obligations and/or other payments, including, without limitation, payments
for the use or occupancy of rooms, suites, or other lodging facilities of any
kind and/or public facilities in or at any such Hotel or for the provision of
any food and beverages or other services at any such Hotel, including fees,
charges, accounts and/or other payments arising from the following: (i) sale of
food and beverages, whether in a restaurant, through “room service” dining, or
through banquets, catering facilities and services; (ii) sales of food and
beverages from mini-bar facilities in guest rooms; (iii) laundry, vending
machine

 

 2 

 

 

and telecommunications receipts, whether billed to guests of any such Hotel or
collected in cash; (iv) rental of conference rooms, meeting rooms and ball
rooms; (v) operation of health club, spa, personal care, and other facilities
located in, on or at any such Hotel; (vi) incidental charges to guests of any
such Hotel or other users or customers; (vii) any other charges of any kind that
appear on any bill or statement rendered to any guest of any such Hotel or other
user or customer of any such Hotel; and (viii) any payments (and the right to
receive payments) from any consumer credit/charge card organization or entity
(such as, or similar to, the organizations or entities that sponsor and
administer the American Express Card, the Visa Card, the MasterCard, the Carte
Blanche Card or the Discover Card), whether now existing or hereafter created,
substitutions therefor, proceeds (whether cash or non-cash, movable or
immovable, tangible or intangible) received upon the sale, exchange, transfer,
collection or other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom, proceeds or fees received from travel agents
or arising from reservation systems or services, all rights now or hereafter
existing in and to all supporting obligations and in and to all security
agreements, mortgages, Liens, leases, letters of credit and other contracts
securing or otherwise relating to the foregoing property, in each case excluding
the revenues or other income earned by third party licensees and lessees (other
than Affiliates of Grantor) of any portion of any Hotel (but including such
revenues or other income payable by such third party licensee or lessee to any
Grantor) (any and all of such fees, charges, accounts and/or other payments,
instruments, deposit accounts, letter-of-credit rights, general intangibles and
other obligations, to the extent not referred to in clause (f) or (g) below,
being the “Receivables”, and any and all such supporting obligations, security
agreements, mortgages, Liens, leases, letters of credit and other contracts
being the “Related Contracts”);

 

(d)          each of the Material Contracts listed on Schedule II hereto, and
each Approved Management Agreement to which such Grantor is now or may hereafter
become a party, in each case as such agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time (collectively,
the “Assigned Agreements”), including, without limitation, (i) all rights of
such Grantor to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all such
Collateral being the “Agreement Collateral”);

 

(e)          all agreements, permits, consents, orders and franchises relating
to the construction, use or operation of any of the Hotels to which such
Grantor, now or hereafter, is a party or a beneficiary;

 

(f)           the following (collectively, the “Account Collateral”):

 

(i)          all promissory notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time delivered to or otherwise
possessed by the Collateral Agent for or on behalf of such Grantor, including,
without limitation, those delivered or possessed in substitution for or in
addition to any or all of the then existing Account Collateral; and

 

(ii)         all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing collateral
described in subsection 1(f)(i);

 

(g)          all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and records)
of such Grantor pertaining to any of the Collateral; and

 

 3 

 

 

(h)          all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral (including, without
limitation, proceeds, collateral and supporting obligations that constitute
property of the types described in clauses (a) through (g) of this Section 1 and
this clause (h)) and, to the extent not otherwise included, all (A) subject to
the terms and provisions of the Loan Agreement and the Mortgages, payments under
insurance (whether or not any Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, (B) tort claims,
including, without limitation, all commercial tort claims and (C) subject to the
terms and provisions of the Cash Management Agreement, cash on hand of such
Grantor.

 

Notwithstanding anything herein to the contrary, in no event shall the
Collateral include or the security interest granted under this Section 1 attach
to any agreement, permit, consent, order or franchise covering real or personal
property of any Grantor, and any of its rights or interest thereunder, if and to
the extent that the grant of a security interest or lien is prohibited by or in
violation of (y) any law, rule, regulation or order, or (z) a term, provision or
condition of any such agreement, permit, consent, order or franchise (unless
such law, rule, regulation, term, provision or condition would be rendered
ineffective with respect to the creation of the security interest hereunder
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor
provision or provisions) of any relevant jurisdiction or any other applicable
law (including any Bankruptcy Law) or principles of equity) and such provision
or condition has not been waived or the consent of the other party to such
agreement, permit, consent, order or franchise has not been obtained; provided
however that the Collateral shall include (and such security interest shall
attach) immediately at such time as the contractual or legal prohibition shall
no longer be applicable and to the extent severable, shall attach immediately to
any portion of such agreement, permit, consent, order or franchise not subject
to the prohibitions specified in (y) or (z) above; provided further that the
exclusions referred to in this paragraph shall not include any proceeds of any
such agreement, permit, consent, order or franchise.

 

Section 2.          Security for Obligations. Subject to Section 24, this
Agreement secures the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the “Secured
Obligations”). Without limiting the generality of the foregoing, this Agreement
secures, as to each Grantor, the payment of all amounts that constitute part of
the Secured Obligations and would be owed by such Grantor to any Secured Party
under the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving a Loan Party.

 

Section 3.          Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, and (b) no Secured Party shall have any
obligation or liability under the contracts and agreements included in the
Collateral solely by reason of this Agreement or any other Loan Document, nor
shall any Secured Party be obligated to perform any of the obligations or duties
of any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder except to the extent required by law.

 

Section 4.          Maintaining the Account CollateralSo long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, or any Lenders shall have, at any time after the Closing Date, any
Commitment, the Collateral Agent may, at any time and without notice to, or
consent from, the Borrower or any Grantor, transfer, or direct the transfer of,
funds from the Account Collateral to satisfy the Borrower’s or such Grantor’s
obligations under the Loan Documents if an Event of Default shall have occurred
and be continuing.

 

 4 

 

 

Section 5.          Reserved

 

Section 6.          Reserved

 

Section 7.          Reserved

 

Section 8.          Representations and Warranties. Each Grantor represents and
warrants as of the date hereof as follows:

 

(a)          Such Grantor’s exact legal name is correctly set forth in Schedule
I hereto. Such Grantor is located (within the meaning of Section 9-307 of the
UCC) and has its chief executive office, all original copies of each Assigned
Agreement and Related Contract to which such Grantor is a party, and all
originals of all chattel paper that evidence Receivables of such Grantor, in the
state or jurisdiction set forth in Schedule I hereto. The information set forth
in Schedule I hereto with respect to such Grantor is true and accurate in all
respects. Such Grantor has not previously changed its name, location, chief
executive office, type of organization, jurisdiction of organization or
organizational identification number from those set forth in Schedule I hereto
except as disclosed in Schedule IV hereto.

 

(b)          All of the FF&E and Inventory of such Grantor are located at the
places specified therefor in Schedule III hereto, as such Schedule III may be
amended from time to time pursuant to Section 10(a). Within the five years
preceding the execution of this Agreement (or such shorter period as the related
Qualified Asset has been owned by such Grantor), such Grantor has not previously
changed the location of its FF&E and Inventory except as set forth in Schedule
IV hereto. All Account Collateral consisting of certificated securities and
instruments have been delivered to the Collateral Agent. None of the Receivables
or Agreement Collateral is evidenced by a promissory note or other instrument
(other than credit card receipts) that has not been delivered to the Collateral
Agent.

 

(c)          Such Grantor is the legal and beneficial owner of the Collateral of
such Grantor free and clear of any Lien, claim, option or right of others,
except for Permitted Liens and as otherwise expressly permitted under the Loan
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral or listing Grantor or any
trade name of Grantor as debtor is on file in any recording office, except (i)
such as may have been filed in favor of the Collateral Agent relating to the
Loan Documents, (ii) as set forth on Schedule 4.01(p) of the Loan Agreement and
(iii) to the extent that such financing statement or other instrument similar in
effect does not relate to such Grantor’s interest in the Collateral.

 

(d)          Subject to the terms and provisions of applicable management,
franchise and operating leases, such Grantor has exclusive possession and
control of its FF&E and Inventory.

 

(e)          The Assigned Agreements to which such Grantor is a party, true and
complete copies of which have been furnished to the Collateral Agent, have been
duly authorized, executed and delivered by such Grantor, have not been amended,
amended and restated, supplemented or otherwise modified, are in full force and
effect and are binding upon and enforceable against all parties thereto in
accordance with their terms (subject to Bankruptcy Law and principles of
equity). There exists no material default by such Grantor (or, to Grantor’s
knowledge, any other party thereto) under any Assigned Agreement to which such
Grantor is a party.

 

(f)           Such Grantor is not a beneficiary or assignee under any letter of
credit other than those provided as security by parties under leases.

 

(g)          All filings and other actions (including, without limitation, (A)
actions necessary to obtain control of Collateral as provided in Sections 9-104,
9-105, 9-106 and 9-107 of the UCC and (B)

 

 5 

 

 

actions necessary to perfect the security interest in the Collateral of such
Grantor created under this Agreement have been duly made or taken and are in
full force and effect, and this Agreement creates in favor of the Collateral
Agent for the benefit of the Secured Parties a valid and, together with such
filings and other actions, perfected first priority security interest in the
Collateral of such Grantor, securing the payment of the Secured Obligations, to
the extent a security interest in the Collateral may be perfected under the UCC
by filing a financing statement.

 

(h)          No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other party
that is not an affiliate of Grantor is required for (i) the grant by such
Grantor of the security interest granted hereunder or for the execution,
delivery or performance of this Agreement by such Grantor, (ii) the perfection
or maintenance of the security interest created hereunder (including the first
priority nature of such security interest), except for the filing of financing
and continuation statements under the UCC, which financing statements have been
duly filed and are, or upon filing by Collateral Agent shall be, in full force
and effect or (iii) the exercise by the Collateral Agent of its rights provided
for in this Agreement or the remedies in respect of the Collateral pursuant to
this Agreement, except as may be required in connection with the disposition of
any portion of the Collateral consisting of securities, security entitlements or
pledged financial assets by laws affecting the offering and sale of securities
generally.

 

(i)           Such Grantor has no commercial tort claims (as defined in Section
9-102(13) of the UCC)

 

Section 9.          Further Assurances. (a) Each Grantor agrees that from time
to time, at its own expense, such Grantor will promptly execute and deliver, or
otherwise authenticate, all further instruments and documents, and take all
further action that may be reasonably necessary, or that the Collateral Agent
may reasonably request, in order to perfect and protect any pledge or security
interest granted or purported to be granted by such Grantor hereunder covering
the Collateral or any part thereof or to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to any Collateral of
such Grantor. Without limiting the generality of the foregoing (but without
increasing the rights of the Collateral Agent and the Secured Parties granted
herein), each Grantor will, upon the reasonable request of the Collateral Agent,
promptly with respect to Collateral of such Grantor: (i) if any such Collateral
shall be evidenced by a promissory note or other instrument, deliver and pledge
to the Collateral Agent hereunder such note or instrument duly indorsed in blank
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance reasonably satisfactory to the Collateral Agent; (ii)
authenticate and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be reasonably necessary,
or as the Collateral Agent may reasonably request, in order to perfect and
preserve the security interest granted or purported to be granted by Grantor
hereunder; (iii) deliver and pledge to the Collateral Agent for benefit of the
Secured Parties certificates representing any Account Collateral consisting of
certificated securities, accompanied by undated stock or bond powers executed in
blank; (iv) take all action necessary to ensure that the Collateral Agent has
control of the Account Collateral, investment property related to the Account
Collateral (upon the occurrence and during the continuance of any Event of
Default), transferable records as provided in Sections 9-104, 9-105 and 9-106 of
the UCC; and (v) deliver to the Collateral Agent evidence that all other action
that the Collateral Agent may reasonably deem necessary in order to perfect and
protect the security interest created by Grantor under this Agreement has been
taken.

 

(b)          Each Grantor hereby authorizes the Collateral Agent to file one or
more financing or continuation statements, and amendments thereto in each
jurisdiction necessary to perfect a security interest in the Collateral granted
hereby. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. Each Grantor ratifies its
authorization for the Collateral Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.

 

 6 

 

 

(c)          Each Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of
such Grantor and such other reports in connection with such Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.

 

Section 10. As to FF&E and Inventory. (a) Each Grantor will keep the FF&E and
Inventory of such Grantor (other than any FF&E or Inventory transferred in
accordance with Section 5.02(e)(ii) of the Loan Agreement) at the places
therefor specified in Section 8(b).

 

(b)          Each Grantor will cause the FF&E of such Grantor to be maintained
and preserved in all material respects in the same condition, repair and working
order as of the date hereof, ordinary wear and tear excepted, and, subject to
the terms and provisions of the Loan Agreement and the Mortgages with respect to
FF&E constituting fixtures, will forthwith, or in the case of any material loss
or damage to any of such FF&E as soon as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith that are reasonably necessary to such end.
Subject to the terms and provisions of the Loan Agreement and the Mortgages with
respect to FF&E constituting fixtures, each Grantor will promptly furnish to the
Collateral Agent a statement respecting any loss or damage exceeding

$250,000 to any of the FF&E or Inventory of such Grantor.

 

(c)          Each Grantor will pay promptly prior to the date the same would be
delinquent, all property and other taxes, assessments and governmental charges
or levies imposed upon, and all claims (including, without limitation, claims
for labor, materials and supplies) against, the FF&E and Inventory of such
Grantor, except to the extent payment thereof is not required by Section 5.01(b)
of the Loan Agreement.

 

Section 11. ReservedPost-Closing Changes; Bailees; Collections on Assigned
Agreements, Receivables and Related Contracts. (a) No Grantor will change its
name, type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 8(a) of this
Agreement without first giving at least 30 days’ prior written notice to the
Collateral Agent and taking all action reasonably required by the Collateral
Agent for the purpose of perfecting or protecting the security interest granted
by this Agreement; provided, however, that nothing contained in this Section 12
shall be deemed to require notice to or consent by the Collateral Agent with
respect to any Equity Transfer that would be permitted without notice to or
consent by the Collateral Agent under the terms of the Loan Agreement. No
Grantor will change the location of its FF&E and Inventory (other than any FF&E
or Inventory (i) transferred in accordance with Section 5.02(e)(ii) of the Loan
Agreement, or (ii) sold in the ordinary course of business) or the place where
it keeps the originals of the Assigned Agreements and Related Contracts to which
such Grantor is a party and the originals of all chattel paper that evidence
Receivables of such Grantor from the locations therefor specified in Sections
8(a) and 8(b) without first giving the Collateral Agent 30 days’ prior written
notice of such change. Except as not otherwise prohibited by the Loan Agreement,
no Grantor will become bound by a security agreement authenticated by another
Person (determined as provided in Section 9- 203(d) of the UCC) without giving
the Collateral Agent 30 days’ prior written notice thereof and taking all action
reasonably required by the Collateral Agent to ensure that the perfection and
first priority nature of the Collateral Agent’s security interest in the
Collateral will be maintained. Each Grantor will hold and preserve its records
relating to the Collateral, including, without limitation, the Assigned
Agreements and Related Contracts, and will, upon reasonable prior notice (but in
no event less than 48 hours’ notice unless an Event of Default has occurred and
is continuing), permit representatives of the Collateral Agent at any time
during normal business hours to inspect and make abstracts from such records and
other documents. If the Grantor does not have an organizational identification
number and later obtains one, it will forthwith notify the Collateral Agent of
such organizational identification number.

 

(b)          Reserved.

 

(c)          Except as otherwise provided in this subsection (c), each Grantor
will use commercially reasonable efforts to continue to collect, at its own
expense, all amounts due or to become due such Grantor under the Assigned
Agreements, Receivables and Related Contracts. In connection with such
collections, the

 

 7 

 

 

Collateral Agent shall have the right at any time upon the occurrence and during
the continuance of an Event of Default under the Loan Agreement, and upon
written notice to such Grantor of its intention to do so, to notify the Obligors
under any Assigned Agreements, Receivables and Related Contracts of the
assignment of such Assigned Agreements, Receivables and Related Contracts to the
Collateral Agent and to direct such Obligors to make payment of all amounts due
or to become due to such Grantor thereunder directly to the Collateral Agent
and, upon such notification and at the expense of such Grantor, to enforce in
accordance with the terms thereof and applicable law collection of any such
Assigned Agreements, Receivables and Related Contracts, to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done, and to otherwise exercise all rights
with respect to such Assigned Agreements, Receivables and Related Contracts,
including, without limitation, those set forth set forth in Section 9-607 of the
UCC. After receipt by any Grantor of the notice from the Collateral Agent
referred to in the preceding sentence, (i) all amounts and proceeds (including,
without limitation, instruments) received by such Grantor in respect of the
Assigned Agreements, Receivables and Related Contracts of such Grantor shall be
received in trust for the benefit of the Collateral Agent hereunder, during the
continuance of an Event of Default, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement) and applied as provided in
Section 19(b) and (ii) such Grantor will not adjust, settle or compromise the
amount or payment of any Receivable or amount due on any Assigned Agreement or
Related Contract, release wholly or partly any Obligor thereof, or allow any
credit or discount thereon. No Grantor will permit or consent to the
subordination of its right to payment under any of the Assigned Agreements,
Receivables and Related Contracts to any other indebtedness or obligations of
the Obligor thereof.

 

Section 13. ReservedReservedTransfers and Other Liens; Additional Equity
Interests. Each Grantor agrees that it will not (a) sell, assign or otherwise
dispose of, or grant any option with respect to, any of the Collateral, other
than sales, assignments and other dispositions of Collateral, and options
relating to Collateral, permitted under the terms of the Loan Agreement or the
other Loan Documents, or (b) create or suffer to exist any Lien upon or with
respect to any of the Collateral except for the pledge, assignment and security
interest created under this Agreement and Permitted Liens, except as otherwise
expressly permitted under the Loan Documents.

 

Section 16. Collateral Agent Appointed Attorney-in-Fact. To the extent permitted
by applicable law, each Grantor hereby irrevocably appoints the Collateral Agent
such Grantor’s attorney-in-fact, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, from time to time
upon the occurrence and during the continuance of an Event of Default in the
Collateral Agent’s discretion, to take any action and to execute any instrument
that the Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

 

(a)          subject to the terms and provisions of the Loan Agreement and the
Mortgages, to obtain and adjust any insurance required to be paid to the
Collateral Agent pursuant to the Loan Documents,

 

(b)          to ask for, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,

 

(c)          to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and

 

(d)          to file any claims or take any action or institute any proceedings
that the Collateral Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Collateral Agent with
respect to any of the Collateral.

 

Section 17. Collateral Agent May Perform. If any Grantor fails to perform any
agreement contained herein, the Collateral Agent may, upon the occurrence and
during the continuance of an Event of

 

 8 

 

 

Default, but without any obligation to do so and without notice, itself perform,
or cause performance of, such agreement, and the actual and documented expenses
of the Collateral Agent incurred in connection therewith shall be payable by
such Grantor under Section 20.

 

Section 18. The Collateral Agent’s Duties. (a) The powers conferred on the
Collateral Agent hereunder are solely to protect the Secured Parties’ interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for (i) the exercise of reasonable care with respect to, and the
safe custody of, any Collateral in its possession and the accounting for moneys
actually received by it hereunder, and (ii) the gross negligence or willful
misconduct of any of the Collateral Agent’s officers, directors, agents or
employees, the Collateral Agent shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral. The Collateral Agent shall be deemed
to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which it accords its own property.

 

(b)          Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time and at the Collateral Agent’s sole cost
and expense, when the Collateral Agent deems it to be necessary, appoint one or
more subagents as are reasonably acceptable to the Borrower (each, a “Subagent”)
for the Collateral Agent hereunder with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any Subagent with
respect to any Collateral, (i) the assignment and pledge of such Collateral and
the security interest granted in such Collateral by each Grantor hereunder shall
be deemed for purposes of this Security Agreement to have been made to such
Subagent, in addition to the Collateral Agent, for the ratable benefit of the
Secured Parties, as security for the Secured Obligations of such Grantor, (ii)
such Subagent shall automatically be vested, in addition to the Collateral
Agent, with all rights, powers, privileges, interests and remedies of the
Collateral Agent hereunder with respect to such Collateral, provided that such
Subagent shall be bound by the obligations of the Collateral Agent hereunder and
the Collateral Agent shall continue to remain primarily liable for its
obligations hereunder, and (iii) the term “Collateral Agent,” when used herein
in relation to any rights, powers, privileges, interests and remedies of the
Collateral Agent with respect to such Collateral, shall include such Subagent;
provided, however, that no such Subagent shall be authorized to take any action
with respect to any such Collateral unless and except to the extent expressly
authorized in writing by the Collateral Agent and then only provided that such
action is in accordance with this Agreement and the other Loan Documents and
applicable law.

 

Section 19. Remedies. Subject to the terms of the Loan Agreement, if any Event
of Default shall have occurred and be continuing:

 

(a)          The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral but in any event in
accordance with applicable law) and also may: (i) require each Grantor to, and
each Grantor hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral as directed
in writing by the Collateral Agent and make it available to the Collateral Agent
at a place and time to be designated by the Collateral Agent that is reasonably
convenient to both parties; (ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral Agent may
deem commercially reasonable; (iii) occupy any premises owned or leased by any
of the Grantors where the Collateral or any part thereof is assembled or located
for a reasonable period in order to effectuate its rights and remedies hereunder
or under law, without obligation to such Grantor in respect of such occupation;
and (iv) exercise any and all rights and remedies of any of the Grantors under
or in connection with the Collateral, or otherwise in respect of the Collateral,

 

 9 

 

 

including, without limitation, (A) subject to the terms and provisions of this
Agreement, any and all rights of such Grantor to demand or otherwise require
payment of any amount under, or performance of any provision of, the Assigned
Agreements, the Receivables, the Related Contracts and the other Collateral, (B)
withdraw, or cause or direct the withdrawal, of all funds with respect to the
Account Collateral, (C) without notice to the Borrower or any other Loan Party,
except as required by law and at any time or from time to time, charge, set-off
and otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Collateral in any deposit account and (D) exercise all
other rights and remedies with respect to the Assigned Agreements, the
Receivables, the Related Contracts and the other Collateral, including, without
limitation, those set forth in Section 9- 607 of the UCC. Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten days’
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.

 

(b)          Any cash held by or on behalf of the Collateral Agent and all cash
proceeds received by or on behalf of the Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
will be applied (after payment of any amounts payable to the Collateral Agent
pursuant to Section 20) by the Collateral Agent for the ratable benefit of the
Secured Parties against the Secured Obligations, in the following manner:

 

(i)          first, paid to the Collateral Agent for any amounts then owing to
the Collateral Agent pursuant to Section 9.04 of the Loan Agreement or otherwise
under the Loan Documents, ratably in accordance with such respective amounts
then owing to the Collateral Agent; and

 

(ii)         second, ratably paid to the Lenders for any amounts then owing to
them under the Loan Documents ratably in accordance with such respective amounts
then owing to such Lenders.

 

Any surplus of such cash or cash proceeds held by or on the behalf of the
Collateral Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus.

 

(c)          Reserved.

 

(d)          The Collateral Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Account Collateral or in any other deposit account of
such Grantor.

 

Section 20. Indemnity and Expenses. (a) Each Grantor agrees to indemnify, defend
and save and hold harmless each Secured Party and each of their Affiliates and
their respective officers, directors, employees, agents and advisors (each, an
“Indemnified Party”) from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and out-of-pocket expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct.

 

 10 

 

 

(b)          Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable and documented out-of-pocket expenses,
including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents, that the Collateral Agent may incur in connection
with (i) the administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from or other realization upon,
any of the Collateral of such Grantor, (iii) the exercise or enforcement of any
of the rights of the Collateral Agent or the other Secured Parties hereunder or
(iv) the failure by such Grantor to perform or observe any of the provisions
hereof.

 

Section 21. Amendments; Waivers; Additional Grantors, Etc. (a) This Agreement
may be amended from time to time in accordance with Section 9.01 of the Loan
Agreement.

 

(b)          Upon the execution and delivery, or authentication, by any Person
of a security agreement supplement in substantially the form of Exhibit A hereto
(each, a “Security Agreement Supplement”), (i) such Person shall be referred to
as an “Additional Grantor” and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Loan Documents to “Grantor” shall also
mean and be a reference to such Additional Grantor, and each reference in this
Agreement and the other Loan Documents to “Collateral” shall also mean and be a
reference to the Collateral of such Additional Grantor, and (ii) the
supplemental schedules I-V attached to each Security Agreement Supplement shall
be incorporated into and become a part of and supplement Schedules I-V,
respectively, hereto, and the Collateral Agent may attach such supplemental
schedules to such Schedules; and each reference to such Schedules shall mean and
be a reference to such Schedules as supplemented pursuant to each Security
Agreement Supplement.

 

Section 22. Notices, Etc.. All notices and other communications provided for
hereunder shall be given in accordance with Section 9.02 of the Loan Agreement.

 

Section 23. Continuing Security Interest; Assignments under the Loan Agreement.
Subject to Section 24 hereof, this Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect until
the latest of (i) the payment in full in cash of the Secured Obligations and
(ii) the Maturity Date, (b) be binding upon each Grantor, its successors and
assigns and (c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Loan Agreement in accordance
with the terms thereof (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes, if any, held by it)
to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or otherwise,
in each case as provided in, and subject to all of the terms and provisions of,
Section 9.07 of the Loan Agreement.

 

Section 24. Release; Termination. Section 9.13 of the Loan Agreement is hereby
incorporated herein by reference, mutatis mutandis.

 

Section 25. Security Interest Absolute. The obligations of each Grantor under
this Agreement are independent of the Secured Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan Documents,
and a separate action or actions may be brought and prosecuted against each
Grantor to enforce this Agreement, irrespective of whether any action is brought
against such Grantor or any other Loan Party or whether such Grantor or any
other Loan Party is joined in any such action or actions. Subject to Section 24
and except as may otherwise be provided in the Loan Agreement, all rights of the
Collateral Agent and the other Secured Parties and the pledge, assignment and
security interest hereunder, and all obligations of each Grantor hereunder,
shall be irrevocable, absolute and unconditional irrespective of, and each
Grantor hereby irrevocably waives (to the maximum extent permitted by applicable
law) any defenses it may now have or may hereafter acquire in any way relating
to, any or all of the following:

 

 11 

 

 

(a)          any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto;

 

(b)          any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other Obligations of
any other Loan Party under or in respect of the Loan Documents or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Secured Obligations resulting
from the extension of additional credit to any Loan Party or any of its
Subsidiaries or otherwise;

 

(c)          any taking, exchange, release or non-perfection of any Collateral
or any other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Obligations;

 

(d)          any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations, or
any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other Obligations of
any other Loan Party under or in respect of the Loan Documents or any other
assets of any Loan Party or any of its Subsidiaries;

 

(e)          any change, restructuring or termination of the corporate structure
or existence of any Loan Party or any of its Subsidiaries;

 

(f)           any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities or prospects of
any other Loan Party now or hereafter known to such Secured Party (each Grantor
waiving any duty on the part of the Secured Parties to disclose such
information);

 

(g)          the failure of any other Person to execute this Agreement or any
other Collateral Document, guaranty or agreement or the release or reduction of
liability of any Grantor or other grantor or surety with respect to the Secured
Obligations; or

 

(h)          any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by any
Secured Party that might otherwise constitute a defense available to, or a
discharge of, such Grantor or any other Grantor or a third party grantor of a
security interest.

 

Subject to Section 24, this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Secured
Obligations is rescinded or must otherwise be returned by any Secured Party or
by any other Person upon the insolvency, bankruptcy or reorganization of any
Loan Party or otherwise, all as though such payment had not been made.

 

Section 26. Third Party Waivers. (a) Each Grantor authorizes the Agents to
perform any or all of the following acts at any time in its sole discretion, all
without notice to any Grantor (except as otherwise provided in the Loan
Documents), without affecting such Grantor’s obligations under this Agreement or
any other Loan Documents and without affecting the liens and encumbrances
against the Collateral in favor of the Collateral Agent (provided that the
following are undertaken in accordance with the terms and provisions of the Loan
Documents and applicable law and provided, further that none of the following
shall or shall be deemed to afford to the Collateral Agent or any of the Secured
Parties any rights (or any expanded rights) beyond those rights expressly
provided in the other Loan Documents or applicable law):

 

(i)          Subject to Section 9.01 of the Loan Agreement, the Administrative
Agent may alter any terms of the Obligations or any part thereof, including
renewing, compromising, extending or

 

 12 

 

 

accelerating, or otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Obligations or any part thereof.

 

(ii)         The Collateral Agent may take and hold security for the
Obligations, accept additional or substituted security, and subordinate,
exchange, enforce, waive, release, compromise, fail to perfect and sell or
otherwise dispose of any such security.

 

(iii)        The Collateral Agent may direct the order and manner of any sale of
all or any part of any security now or later to be held for the Obligations, and
the Collateral Agent (or its nominees or designees) may also bid at any such
sale.

 

(iv)        The Administrative Agent may apply any payments or recoveries from
the any Borrower, any Grantor or any other source, and any proceeds of any
security, to the obligations under the Loan Documents in such manner, order and
priority as the Administrative Agent may elect.

 

(v)         The Administrative Agent may release any Borrower or any other
person or entity of its liability for the Obligations or any part thereof.

 

(vi)        The Administrative Agent may substitute, add or release any one or
more guarantors or endorsers.

 

(vii)       In addition to the Obligations, the Secured Parties may extend other
credit to any Borrower, and may take and hold security agreed to by the Borrower
for the credit so extended.

 

(b)         Each Grantor waives:

 

(i)          Any right it may have to require any Agent to proceed against any
Borrower, any Grantor or any other person or entity, proceed against or exhaust
any security held from any Borrower, any Grantor or any person or entity, or
pursue any other remedy in such Agent's power to pursue;

 

(ii)         Any defense based on any claim that any Grantor’s obligations
exceed or are more burdensome than those of any Borrower, any Grantor or any
other Person;

 

(iii)        Any defense: (A) based on any legal disability of any other Person,
(B) based on any release, discharge, modification, impairment or limitation of
the liability of any other person or entity to any Agent from any cause, whether
consented to by such Agent or arising by operation of law, (C) arising out of or
able to be asserted as a result of any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of any
other person or entity or any of their respective affiliates, or any general
assignment for the benefit of creditors, composition, marshaling of assets for
creditors or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in each case as undertaken under any
U.S. Federal or State law (each of the foregoing described in this clause (C)
being referred to herein as an “Insolvency Proceeding”); or (D) arising from any
rejection or disaffirmance of the Obligations, or any part thereof, or any
security held therefor, in any such Insolvency Proceeding;

 

(iv)        Any defense based on any action taken or omitted by any Agent in any
Insolvency Proceeding involving any other Person, including any election to have
such Agent's claim allowed as being secured, partially secured or unsecured, any
extension of credit by any Secured Party to any other Person in any Insolvency
Proceeding, and the taking and holding by such Agent of any security for any
such extension of credit;

 

 13 

 

 

(v)         All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
intention to accelerate, notices of acceleration, notices of acceptance of this
Agreement or any other Loan Document and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of every
kind (in each instance, except as expressly required by the Loan Agreement or
applicable law);

 

(vi)        Any duty on the part of the Collateral Agent or any other Secured
Party to disclose to such Grantor any matter, fact or thing relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, any other Loan Party or any of their
Subsidiaries now or hereafter known by the Collateral Agent or such other
Secured Party; and

 

(vii)       Except for such notices as required by the Loan Documents, any
defense based on or arising out of any defense that the Borrower or any of its
affiliates may have to the payment or performance of the Obligations (other than
the defense that the particular Obligations in question have been paid or
performed (to the extent paid or performed)).

 

(c)          (i) Subject to Section 24, after the occurrence and during the
continuance of any Event of Default, in its sole discretion, without prior
notice (except as expressly required by the Loan Agreement, the Mortgage or
applicable law) to or consent of any Grantor or any Borrower, the Collateral
Agent may elect to: (A) foreclose against any collateral for the Secured
Obligations, (B) accept any offer to transfer any such collateral for the
Secured Obligations in lieu of foreclosure, (C) compromise or adjust the Secured
Obligations or any part thereof or make any other accommodation with any
Borrower or any Person, or (D) exercise any other remedy against any Borrower or
any person or entity or any collateral for the Secured Obligations. No such
action by the Collateral Agent shall release or limit any Secured Party’s rights
hereunder or under the other Loan Documents, even if the effect of the action is
to deprive Grantor of any subrogation rights, rights of indemnity, or other
rights to collect reimbursement from any Borrower or any other Person for any
sums paid to the Secured Parties, whether contractual or arising by operation of
law or otherwise. Each Grantor expressly agrees that under no circumstances
shall such Grantor be deemed to have any right, title, interest or claim in or
to any real or personal property of any Grantor to be held by the Collateral
Agent or any third party after any foreclosure or transfer in lieu of
foreclosure of any security for the Secured Obligations.

 

(ii)         Subject to the full, final and indefeasible payment of all Secured
Obligations to the Secured Parties, each Grantor shall retain its rights to seek
contribution and reimbursement from, and rights of subrogation with respect to,
any other Grantor to the extent the Secured Obligations hereunder render such
Grantor insolvent. Such rights of subrogation, contribution and reimbursement
shall be subordinate to the Secured Obligations, and no Grantor shall enforce
any such rights until the Secured Obligations shall have been finally paid in
full.

 

Section 27. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier or
email with a pdf or similar attachment shall be effective as delivery of an
original executed counterpart of this Agreement.

 

Section 28. The Loan Agreement and the Mortgages. If any conflict or
inconsistency exists between this Agreement and the Loan Agreement, the Loan
Agreement shall control and govern to the extent of such inconsistency. In the
event that any of the Collateral hereunder is also subject to a valid and
enforceable Lien under the terms of any Mortgage and the terms of such Mortgage
are inconsistent with the terms of this Agreement, then with respect to such
Collateral, the terms of such Mortgage shall be controlling in the case of
fixtures and real estate leases, letting and licenses of, and contracts and
agreements relating to the lease of, real property, and the terms of this
Agreement shall be controlling in the case of all other Collateral.

 

 14 

 

 

Section 29. Jurisdiction, Etc.. Section 9.15 of the Loan Agreement is hereby
incorporated herein by reference, mutatis mutandis.

 

Section 30. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

Section 31. WAIVER OF JURY TRIAL.. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS, THE ADVANCES, OR THE ACTIONS OF THE COLLATERAL AGENT OR ANY
LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.

 

Section 32. Change of Agent. DB Agent hereby consents to Collateral Agent
replacing DB Agent as the agent under this Agreement and assigns to Collateral
Agent all of its interest under the Existing Security Agreement in such
capacity.

 

[Signatures on following pages]

 

 15 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

  CITIBANK, N.A.,   as Collateral Agent         By:       Name:     Title:

 

[Signatures continue on following pages]

 

[Signature page to Security Agreement]

 

 

 

 

  Accepted and Agreed:       DEUTSCHE BANK AG NEW YORK BRANCH,   as
Administrative Agent under the Existing Loan Agreement         By:       Name:  
  Title:         By:       Name:     Title:

 

[Signature page to Security Agreement]

 

 

 

 

 GRANTORS:     [________________],  a Delaware [limited liability company]   
 By:    Name:   Title:

 

[Signature page to Security Agreement]

 

 
 

 

Schedule I to the Security Agreement

 

LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION, JURISDICTION OF

ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER

 

        Chief                     Executive   Type of   Jurisdiction of  
Organizational Grantor   Location   Office   Organization   Organization   I.D.
No.                      

 

Schedule I

 

 

Schedule II to the

Security Agreement

 

ASSIGNED AGREEMENTS

 

Grantor   Assigned Agreement      

 

Schedule II

 

 

Schedule III to the

Security Agreement

 

HOTELS AND LOCATION OF FF&E AND INVENTORY

 

Grantor   Hotel   Locations of FF&E   Locations of Inventory              

 

Schedule III 

 

 

 

Schedule IV to the

Security Agreement

 

CHANGES IN NAME, LOCATION, ETC.

 

Schedule IV

 

 

Exhibit A to the

Security Agreement

 

FORM OF AMENDED AND RESTATED SECURITY AGREEMENT SUPPLEMENT

 

[Date of Security Agreement Supplement]

 

To:CITIBANK, N.A.,

as Collateral Agent

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

[Name of Subsidiary Guarantor]

 

Ladies and Gentlemen:

 

Reference is made to (i) the Second Amended and Restated Term Loan Agreement
dated as of April 27, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among the borrowers
party thereto, collectively as the Borrower, the Lenders party thereto,
Citibank, N.A., as Collateral Agent (together with any successor Collateral
Agent appointed pursuant to Article VIII of the Loan Agreement, the “Collateral
Agent”), and (ii) the Amended and Restated Security Agreement dated April 27,
2017 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Security Agreement”) made by the Grantors from time to time
party thereto in favor of the Collateral Agent for the Secured Parties. Terms
defined in the Loan Agreement or the Security Agreement and not otherwise
defined herein are used herein as defined in the Loan Agreement or the Security
Agreement.

 

SECTION 1. Grant of Security. The undersigned hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in,
all of its right, title and interest in and to all of the Collateral of the
undersigned, whether now owned or hereafter acquired by the undersigned,
wherever located and whether now or hereafter existing or arising, including,
without limitation, the property and assets of the undersigned set forth on the
attached supplemental schedules to the Schedules to the Security Agreement (but
in all events subject to the terms and provisions of the Security Agreement
(including, without limitation, Section 24 thereof).

 

SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral by the undersigned under this Security Agreement Supplement and the
Security Agreement secures the payment of all Obligations of the undersigned now
or hereafter existing under or in respect of the Loan Documents, whether direct
or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise. Without limiting the generality
of the foregoing, this Security Agreement Supplement and the Security Agreement
secure the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to any Secured Party under
the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.

 

SECTION 3. Supplements to Security Agreement Schedules. The undersigned has
attached hereto supplemental Schedules I through V to Schedules I through V
respectively, to the Security Agreement, and the undersigned hereby certifies,
as of the date first above written, that such supplemental schedules have

 

 Exhibit A-1 

 

 

been prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement and are complete and correct in all material
respects.

 

SECTION 4. Representations and Warranties. As of the date hereof, the
undersigned hereby makes as to itself and its Collateral Assets each
representation and warranty set forth in Section 8 of the Security Agreement (as
supplemented by the attached supplemental schedules) to the same extent as each
other Grantor.

 

SECTION 5. Obligations Under the Security Agreement. The undersigned hereby
agrees, as of the date first above written, to be bound as a Grantor by all of
the terms and provisions of the Security Agreement to the same extent as each of
the other Grantors. The undersigned further agrees, as of the date first above
written, that each reference in the Security Agreement to an “Additional
Grantor” or a “Grantor” shall also mean and be a reference to the undersigned.

 

SECTION 6. Jurisdiction, Etc. Section 9.15 of the Loan Agreement is hereby
incorporated herein by reference, mutatis mutandis.

 

SECTION 7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

SECTION 8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS, THE ADVANCES, OR THE ACTIONS OF THE COLLATERAL AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

  Very truly yours,       [NAME OF ADDITIONAL GRANTOR]       By         Name  
Title:

 

  Address for notices:                    

 

 Exhibit A-2 

 

 

EXHIBIT G TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF MORTGAGE

 

[Attached.]

 

Exh. G

 

 

EXHIBIT G TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF MORTGAGE

 

[INDIVIDUAL BORROWER],

a Delaware limited [liability company/partnership], as a mortgagor

 

(Individual Borrower)

 

and

 

[OPERATING LESSEE],

a Delaware limited liability company/partnership], as a mortgagor

 

(Operating Lessee)

 

to

 

CITIBANK, N.A.,

in its capacity as Agent, as mortgagee

 

(Mortgagee)

 

[AMENDED AND RESTATED] MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF

RENTS AND LEASES AND FIXTURE FILING ([____])

 

Dated:As of April 27, 2017

 

Location:[___________]   [___________]

 

County:[___________]

 

[insert only for States with mortgage recording tax or similar taxes on
indebtedness: THE MAXIMUM

PRINCIPAL INDEBTEDNESS WHICH IS SECURED BY OR WHICH BY ANY CONTINGENCY MAY

BE SECURED BY THIS MORTGAGE IS $310,000,000.]

 

PREPARED BY AND UPON

RECORDATION RETURN TO:

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York 10022

Attention: Malcolm K. Montgomery, Esq.

 

 
 

 

[AMENDED AND RESTATED] MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF

RENTS AND LEASES AND FIXTURE FILING

 

THIS [AMENDED AND RESTATED] MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (this “Mortgage”) is made as of this 27th day of
April, 2017, by [INDIVIDUAL BORROWER], a Delaware limited [liability
company/partnership], having its principal place of business at c/o Hospitality
Investors Trust Operating Partnership, L.P., 3950 University Drive, Suite 301,
Fairfax, Virginia 22030, as a mortgagor (“Individual Borrower”), and [OPERATING
LESSEE], a Delaware limited [liability company/partnership], having its
principal place of business at c/o Hospitality Investors Trust Operating
Partnership, L.P., 3950 University Drive, Suite 301, Fairfax, Virginia 22030, as
a mortgagor (“Operating Lessee”, and together with Individual Borrower,
individually or collectively, as the context may require, “Mortgagor”), for the
benefit of CITIBANK, N.A., as collateral agent (in such capacity, “Agent”) for
the Secured Parties as defined in the Loan Agreement (defined below), having an
address at 390 Greenwich Street, 7th Floor, New York, New York 10013, as
mortgagee (Agent, together with its successors and assigns, “Mortgagee”).

 

[insert only for States with mortgage recording tax or similar tax on
indebtedness: ANY PROVISION HEREIN TO THE CONTRARY NOTWITHSTANDING, THE MAXIMUM
PRINCIPAL INDEBTEDNESS WHICH IS SECURED BY OR WHICH BY ANY CONTINGENCY MAY BE
SECURED BY THIS MORTGAGE IS $310,000,000 (THE “SECURED AMOUNT”).]

 

[insert only for amended and restated mortgage:

 

WITNESSETH:

 

WHEREAS, as of [ ], Individual Borrower executed and delivered that certain
Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing
in favor of Deutsche Bank AG New York Branch (in its capacity as administrative
agent, “DB Agent”), as evidenced by an instrument recorded [ ] as document
number [ ] in the Official Records of [ ] County, [ ] (the “Original Mortgage”);

 

WHEREAS, DB Agent is the present owner and holder of the Original Mortgage;

 

WHEREAS, pursuant to the Loan Agreement, Agent is replacing DB Agent as
administrative agent thereunder and is being appointed as collateral agent
thereunder;

 

WHEREAS, pursuant to that certain Lease Agreement by and between Individual
Borrower and Operating Lessee (as the same may be amended, restated,
supplemented, renewed, extended or otherwise modified from time to time, the
“Operating Lease”), Operating Lessee has agreed to lease and operate the
Property (as defined herein);

 

WHEREAS, Operating Lessee will directly and indirectly benefit from the Lenders
making the Loan to Borrower (as defined herein), and has given this Mortgage and
executed various other Loan Documents in order to induce the Lenders to make the
Loan to Borrower; and

 

WHEREAS, the parties hereto wish to amend and restate the Original Mortgage in
its entirety on the terms and provisions of this Mortgage.

 

NOW THEREFORE, in consideration of the acceptance by the Lenders of the Loan
Agreement, the terms and provisions set forth therein and other good and
valuable consideration, each to the other in hand paid, the receipt and
sufficiency of which is hereby acknowledged and in consideration of the
covenants, agreements, representations and warranties set forth in this
Mortgage, the parties hereto hereby amend and restate the Original Mortgage in
its entirety on the terms and provisions of this Mortgage and hereby agree as
follows:]

 

 
 

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.01        Definitions. All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in that certain
Second Amended and Restated Term Loan Agreement dated as of April 27, 2017, as
the same may be amended, amended and restated, supplemented or otherwise
modified from time to time (the “Loan Agreement”), among the borrowers party
thereto, collectively as borrower (“Borrower”), Hospitality Investors Trust
Operating Partnership, L.P., Hospitality Investors Trust, Inc., certain other
parties party thereto, Agent and the other Secured Parties identified therein.
As used herein, the following terms shall have the following meanings:

 

(a)          “Indebtedness”: (1) All indebtedness of Mortgagor to Mortgagee or
any of the other Secured Parties under the Loan Agreement or any other Loan
Document to which Mortgagor is a party, including, without limitation (except as
otherwise set forth in Section 5.02(b) of the Loan Agreement), the sum of all
(a) principal, interest and other amounts owing under or evidenced or secured by
the Loan Documents, (b) principal, interest and other amounts which may
hereafter be lent by Mortgagee or any of the other Secured Parties under the
Loan Agreement or any of the other Loan Documents, whether evidenced by a
promissory note or other instrument which, by its terms, is secured hereby, and
(c) obligations and liabilities of any nature now or hereafter existing under or
arising in connection with Letters of Credit and other extensions of credit
under the Loan Agreement or any of the other Loan Documents and reimbursement
obligations in respect thereof, together with interest and other amounts payable
with respect thereto, and (2) all other indebtedness, obligations and
liabilities now or hereafter existing of any kind of Mortgagor to Mortgagee or
any of the other Secured Parties under documents which recite that they are
intended to be secured by this Mortgage. The Indebtedness secured hereby
includes, without limitation, all interest and expenses accruing after the
commencement by or against Mortgagor or any of its affiliates of a proceeding
under the Bankruptcy Code or any similar law for the relief of debtors.

 

(b)          “Obligations”: All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor under the Loan
Agreement and the other Loan Documents to which it is a party.

 

ARTICLE II.

 

GRANTS OF SECURITY

 

Section 2.01        Property Mortgaged. Mortgagor does hereby irrevocably
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Mortgagee and its successors and assigns, WITH THE STATUTORY POWER OF SALE, all
right, title, interest and estate of Mortgagor now owned, or hereafter acquired,
in and to the following (collectively, the “Property”):

 

(a)          Land. [The real property described in Exhibit A attached hereto and
made a part hereof (the “Land”)];

 

(b)          Operating Lease. All of Operating Lessee’s estate, right, title and
interest in, and under the Operating Lease and the leasehold estate in the
Leased Property (as defined in the Operating Lease) created thereby including,
but not limited to (i) extension, renewal, modification and option rights, and
all of the estate and right of Operating Lessee of, in, and to the Land under
and by virtue of the Operating Lease, (ii) all credits to and deposits of
Operating Lessee under the Operating Lease and all other options, privileges and
rights granted and demised to Operating Lessee under the Operating Lease and
(iii) all the right or privilege of Operating Lessee to terminate, cancel,
surrender or merge the Operating Lease;

 

 2 

 

 

(c)          Additional Land. All additional lands, estates and development
rights hereafter acquired by Mortgagor for use in connection with the Land and
the development of the Land and all additional lands and estates therein which
may, from time to time, by supplemental mortgage or otherwise be expressly made
subject to the lien of this Mortgage;

 

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

 

(e)         Easements. All easements, rights-of-way or use, rights, strips and
gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, and all
estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Mortgagor of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;

 

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

 

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

 

(h)         Personal Property. All furniture, furnishings, objects of art,
machinery, goods, tools, supplies, appliances, general intangibles, contract
rights, accounts, accounts receivable, franchises, licenses, certificates and
permits, and all other personal property of any kind or character whatsoever (as
defined in and subject to the provisions of the Uniform Commercial Code), other
than Fixtures, which are now or hereafter

 

 3 

 

 

owned by Mortgagor and which are located within or about the Land and the
Improvements, together with all accessories, replacements and substitutions
thereto or therefor and the proceeds thereof (collectively, the “Personal
Property”), and the right, title and interest of Mortgagor in and to any of the
Personal Property which may be subject to any security interests, as defined in
the Uniform Commercial Code, as adopted and enacted by the state or states where
any of the Property is located (as amended from time to time, the “Uniform
Commercial Code”), superior in lien to the lien of this Mortgage, and all
proceeds and products of any of the above (provided that the foregoing shall not
include any operating accounts of Mortgagor or any Intellectual Property owned
by an Approved Franchisor or Approved Manager);

 

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

 

(j)          Condemnation Awards. All awards or payments, including interest
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including,
but not limited to, any transfer made in lieu of or in anticipation of the
exercise of such right), or for a change of grade, or for any other injury to or
decrease in the value of the Property (collectively, the “Awards”), in
accordance with the Loan Agreement and this Mortgage;

 

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

 

(l)          Tax Certiorari. All refunds, rebates or credits in connection with
any reduction in Taxes or Other Charges charged against the Property as a result
of tax certiorari proceedings or any other applications or proceedings for
reduction;

 

(m)         Rights. The right, in the name and on behalf of Mortgagor, to appear
in and defend any action or proceeding brought with respect to the Property and
to commence any action or proceeding to protect the interest of Mortgagee in the
Property;

 

(n)         Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or respecting any business or
activity conducted on the Land and any part thereof and all right, title and
interest of Mortgagor therein and thereunder, to the extent any such instruments
or rights may be so mortgaged or collaterally assigned pursuant to the terms
thereof, including,

 

 4 

 

 

without limitation, the right, upon the happening of any default hereunder, to
receive and collect any sums payable to Mortgagor thereunder;

 

(o)          Intellectual Property. All trade names, trademarks, servicemarks,
logos, copyrights, goodwill, URLs or other online media, books and records and
all other general intangibles relating to or used in connection with the
operation of the Property. Notwithstanding the foregoing, the foregoing shall
not include any property belonging to any Approved Franchisor or Approved
Manager (collectively, the “Intellectual Property”);

 

(p)          Accounts. All (i) accounts receivable (including, without
limitation, any account, fees, charges or other payments arising from the use
and occupancy of hotel rooms and/or other hotel or public facilities at the
Property), (ii) credit card receivables, and (iii) reserves, escrows and deposit
accounts maintained by Mortgagor with respect to the Property, including,
without limitation, all accounts established or maintained pursuant to the Loan
Agreement, the Cash Management Agreement, the Control Agreement or any other
Loan Document, together with all deposits or wire transfers made to such
accounts, and all cash, checks, drafts, certificates, securities, investment
property, financial assets, instruments and other property held therein from
time to time, and all proceeds, products, distributions, dividends and/or
substitutions thereon and thereof (provided that the foregoing shall not include
any operating accounts of Mortgagor or any Intellectual Property owned by an
Approved Franchisor or Approved Manager), in accordance with the terms of the
Loan Documents;

 

(q)         Uniform Commercial Code Property. All accounts, documents,
instruments, chattel paper, general intangibles and investment property (subject
to the Cash Management Agreement) as the foregoing terms are defined in the
Uniform Commercial Code, not otherwise described above;

 

(r)          Minerals. All minerals, crops, timber, trees, shrubs, flowers and
landscaping features now or hereafter located on, under or above Land;

 

(s)          Proceeds. All proceeds of any of the foregoing, including, without
limitation, proceeds of insurance and condemnation awards (subject to the terms
of the Loan Agreement), whether in cash or in liquidation or other claims, or
otherwise; and

 

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

 

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

 

Notwithstanding anything herein to the contrary, in no event shall the
Collateral (as defined below) include or the security interest granted under
Sections 1(g), (m), (n), (o) and (p) attach to any agreement, permit, consent,
order or franchise covering real or personal property of Mortgagor, and any of
its rights or interest thereunder, if and to the extent that the grant of a
security interest or lien is prohibited by or in violation of (y) any law, rule,
regulation or order, or (z) a term, provision or condition of any such
agreement, permit, consent, order or franchise (unless such law, rule,
regulation, term, provision or condition would be rendered ineffective with
respect to the creation of the security interest hereunder pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor
provision or provisions) of any relevant jurisdiction or any other applicable
law (including any Bankruptcy Law) or principles of equity) and such provision
or condition has not been waived or the consent of the other party to such
agreement, permit,

 

 5 

 

 

consent, order or franchise has not been obtained; provided however that the
Collateral shall include (and such security interest shall attach) immediately
at such time as the contractual or legal prohibition shall no longer be
applicable and to the extent severable, shall attach immediately to any portion
of such agreement, permit, consent, order or franchise not subject to the
prohibitions specified in (y) or (z) above; provided further that the exclusions
referred to in this paragraph shall not include any proceeds of any such
agreement, permit, consent, order or franchise.

 

Section 2.02         Assignment of Rents. Mortgagor hereby absolutely and
unconditionally assigns to Mortgagee all of Mortgagor’s right, title and
interest in and to all current and future Leases and Rents; it being intended by
Mortgagor that this assignment constitutes a present, absolute assignment and
not an assignment for additional security only. Notwithstanding the foregoing,
but subject to the terms of the Assignment of Leases, the Cash Management
Agreement, and Section 9.01(i) of this Mortgage, Mortgagee grants to Mortgagor a
revocable license to collect, receive, use, distribute and enjoy the Rents.
Mortgagor shall hold the Rents in trust for use in the payment and performance
of the Obligations and to otherwise use the same.

 

Section 2.03        Security Agreement. This Mortgage is both a real property
mortgage and a “security agreement” within the meaning of the Uniform Commercial
Code. The Property includes both real and personal property and all other rights
and interests, whether tangible or intangible in nature, of Mortgagor in the
Property. By executing and delivering this Mortgage, Mortgagor hereby grants to
Mortgagee, as security for the Obligations, a security interest in the Fixtures,
the Equipment, the Personal Property and the other property constituting the
Property to the full extent that the Fixtures, the Equipment, the Personal
Property and such other property may be subject to the Uniform Commercial Code
(said portion of the Property so subject to the Uniform Commercial Code being
called the “Collateral”). If an Event of Default shall occur and be continuing,
Mortgagee, in addition to any other rights and remedies which it may have, shall
have and may exercise immediately and without demand, any and all rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code, including, without limiting the generality of the foregoing, the right to
take possession of the Collateral or any part thereof, and to take such other
measures as Mortgagee may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Mortgagee after the
occurrence and during the continuance of an Event of Default, Mortgagor shall,
at its expense, assemble the Collateral and make it available to Mortgagee at a
convenient place (at the Land if tangible property) reasonably acceptable to
Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all out-of-pocket
expenses, including reasonable attorneys’ fees and costs, incurred or paid by
Mortgagee in protecting its interest in the Collateral and in enforcing its
rights hereunder with respect to the Collateral after the occurrence and during
the continuance of an Event of Default. Any notice of sale, disposition or other
intended action by Mortgagee with respect to the Collateral sent to Mortgagor in
accordance with the provisions hereof at least ten (10) Business Days prior to
such action, shall, except as otherwise provided by applicable law, constitute
reasonable notice to Mortgagor. The proceeds of any disposition of the
Collateral, or any part thereof, may, except as otherwise required by applicable
law, be applied by Mortgagee to the payment of the Indebtedness in such priority
and proportions as Mortgagee in its discretion shall deem proper. In the event
of any conflict or inconsistency between the terms of this Mortgage and the
terms of the Security Agreement with respect to the collateral covered both
therein and herein, the Security Agreement shall control and govern to the
extent of any such conflict or inconsistency.

 

Section 2.04        Fixture Filing. Certain of the Property is or will become
“fixtures” (as that term is defined in the Uniform Commercial Code) on the Land,
described or referred to in this Mortgage, and this Mortgage, upon being filed
for record in the real estate records of the city or county wherein such
fixtures are situated, shall operate also as a financing statement naming
Mortgagor as the Debtor and Mortgagee as the Secured Party filed as a fixture
filing in accordance with the applicable provisions of said Uniform Commercial
Code upon such of the Property that is or may become fixtures. The principal
place of business of Mortgagor (Debtor) is as set forth on page one hereof and
the address of Mortgagee (Secured Party) is as set forth on page one hereof. A
statement describing the portion of the Property comprising the fixtures hereby
secured is set forth in Section 2.01(g) of this Mortgage. Individual Borrower
represents and warrants to Mortgagee that Individual Borrower is the record
owner of the Property.

 

 6 

 

 

Section 2.05        Reduction of Secured Amount. [insert only for States with
mortgage recording tax: The Secured Amount shall be reduced only by the last and
final sums that Individual Borrower repays with respect to the Indebtedness and
shall not be reduced by any intervening repayments of the Indebtedness. So long
as the balance of the Indebtedness exceeds the Secured Amount, any payments and
repayments of the Indebtedness shall not be deemed to be applied against, or to
reduce, the portion of the Indebtedness secured by this Mortgage. Such payments
shall instead be deemed to reduce only such portions of the Indebtedness as are
secured by other collateral located outside of the State of [____________].]]1

 

CONDITIONS TO GRANT

 

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

 

PROVIDED, HOWEVER, these presents are upon the express condition that, in the
event of any of the following: (i) payment in full of the Indebtedness,
performance in full of the Obligations, termination or expiration of the
Commitments in accordance with the terms of the Loan Agreement, (ii) a sale or
other disposition of the Property permitted by the Loan Agreement or (iii)
release of the Real Property as collateral securing the Loan as provided in
Sections 5.02(e) or 9.13 of the Loan Agreement or as otherwise provided in the
Loan Documents, these presents and the estate hereby granted shall cease,
terminate and be void; provided, however, subject to Section 10.01 of the Loan
Agreement, Mortgagor’s obligation to indemnify and hold harmless Mortgagee
pursuant to the provisions hereof shall survive any such payment or release.

 

ARTICLE III.

 

DEBT AND OBLIGATIONS SECURED

 

Section 3.01        Obligations. This Mortgage and the grants, assignments and
transfers made in Article 2 are given for the purpose of securing the
Obligations, including, but not limited to, the Indebtedness.

 

Section 3.02         Other Mortgages; No Election of Remedies.

 

(a)          The Indebtedness is now or may hereafter be secured by one or more
other mortgages, deeds of trust and other security agreements (collectively, as
the same may be amended and in effect from time to time, are herein collectively
called the “Other Mortgages”), which cover or will hereafter cover other
properties that are or may be located in various states (the “Other
Collateral”). The Other Mortgages will secure the Indebtedness and the
performance of the other covenants and agreements of Borrower set forth in the
Loan Documents. Upon the occurrence and during the continuance of an Event of
Default, Mortgagee may proceed under this Mortgage and/or any or all the Other
Mortgages against either the Property and/or any or all the Other Collateral in
one or more parcels and in such manner and order as Mortgagee shall elect.
Mortgagor hereby irrevocably waives and releases, to the extent permitted by
law, and whether now or hereafter in force, any right to have the Property
and/or the Other Collateral marshaled upon any foreclosure of this Mortgage or
any Other Mortgage.

 

(b)          Without limiting the generality of the foregoing, and without
limitation as to any other right or remedy provided to Mortgagee in this
Mortgage or the other Loan Documents, in the case of an Event of Default (i)
Mortgagee shall have the right to pursue all of its rights and remedies under
this Mortgage and the Loan Documents, at law and/or in equity, in one
proceeding, or separately and independently in separate proceedings from time to
time, as Mortgagee, in its sole and absolute discretion, shall determine from
time to time, (ii) Mortgagee shall not be required to either marshal assets,
sell the Property and/or any Other

 

 

1Section 2.05 is to be revised to incorporate appropriate state specific
provisions and Mortgagee to reasonably cooperate with Mortgagor to minimize
recordation tax.

 

 7 

 

 

Collateral in any particular order of alienation (and may sell the same
simultaneously and together or separately), or be subject to any “one action” or
“election of remedies” law or rule with respect to the Property and/or any Other
Collateral, (iii) the exercise by Mortgagee of any remedies against any one item
of Property and/or any Other Collateral will not impede Mortgagee from
subsequently or simultaneously exercising remedies against any other item of
Property and/or Other Collateral, (iv) all liens and other rights, remedies or
privileges provided to Mortgagee herein shall remain in full force and effect
until Mortgagee has exhausted all of its remedies against the Property and all
Property has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Indebtedness, and (v) Mortgagee may resort for the payment
of the Indebtedness to any security held by Mortgagee in such order and manner
as Mortgagee, in its discretion, may elect and Mortgagee may take action to
recover the Indebtedness, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Mortgagee thereafter to foreclose this
Mortgage.

 

(c)          Without notice to or consent of Mortgagor and without impairment of
the lien and rights created by this Mortgage, Mortgagee may, at any time (in its
sole and absolute discretion, but Mortgagee shall have no obligation to),
execute and deliver to Mortgagor a written instrument releasing all or a portion
of the lien of this Mortgage as security for any or all of the obligations of
Mortgagor now existing or hereafter arising under or in respect of the Note, the
Loan Agreement and each of the other Loan Documents, whereupon following the
execution and delivery by Mortgagee to Mortgagor of any such written instrument
of release, this Mortgage shall no longer secure such obligations of Mortgagor
so released.

 

ARTICLE IV.

 

MORTGAGOR COVENANTS

 

Mortgagor covenants and agrees that throughout the term of the Loan:

 

Section 4.01       Payment and Performance. Mortgagor shall pay the Indebtedness
when due under the Loan Agreement and the other Loan Documents and shall perform
the Obligations in full when they are required to be performed pursuant to the
Loan Agreement.

 

Section 4.02        Other Covenants. All of the covenants in the Loan Agreement
are incorporated herein by reference and, together with covenants in this
Article 4, shall be covenants running with the Land.

 

Section 4.03        Replacement of Fixtures and Personal Property. Mortgagor
shall not, without the prior written consent of Mortgagee, permit any of the
Fixtures or Personal Property owned or leased by Mortgagor (other than food,
liquor and other consumables which shall be replaced in the ordinary course) to
be removed at any time from the Land or Improvements, unless the removed item is
removed temporarily for maintenance and repair, is replaced with Fixtures of
similar quality with respect to Fixtures only, or is otherwise permitted to be
removed by the Loan Agreement.

 

Section 4.04        Inspection. Mortgagor shall permit Mortgagee and its agents,
representatives and employees, upon reasonable prior notice to Mortgagor, to
inspect the Property and all books and records of Mortgagor located thereon,
and, following an Event of Default, to the extent that Mortgagee has a
reasonable basis to believe that there has been a material adverse change to the
environmental or physical condition of the Property, to conduct such
environmental and engineering studies as Mortgagee may reasonably require,
provided that such inspections and studies shall not materially interfere with
the use and operation of the Property.

 

Section 4.05        Performance of Other Agreements. Mortgagor shall observe and
perform each and every term, covenant and provision to be observed or performed
by Mortgagor pursuant to the Loan Agreement, any other Loan Document and each
and every material term, covenant and provisions to be observed or performed by
Mortgagor pursuant to any other agreement or recorded instrument affecting or
pertaining to the Property, and any amendments, modifications or changes
thereto.

 

 8 

 

 

Section 4.06        Insurance; Condemnation Awards and Insurance Proceeds.

 

(a)          Insurance. Mortgagor shall maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to the Property
in compliance with the requirements set forth on Schedule I attached hereto.

 

(b)          Condemnation Awards. Subject to (i) the terms of the Loan Agreement
and (ii) the applicable provisions of Schedule I attached hereto, Mortgagor
assigns all Awards to Mortgagee and authorizes Mortgagee to collect and receive
such Awards and to give proper receipts and acquittances therefor.

 

(c)          Insurance Proceeds. Subject to the terms of the Loan Agreement and
the applicable provisions of Schedule I attached hereto, Mortgagor assigns to
Mortgagee all proceeds of any insurance policies (“Policies”) insuring against
loss or damage to the Property. Subject to the terms of the Loan Agreement and
the applicable provisions of Schedule I attached hereto, Mortgagor authorizes
Mortgagee to collect and receive such proceeds and authorizes and directs the
issuer of each of such insurance policies to make payment for all such losses
directly to Mortgagee, instead of to Mortgagor and Mortgagee jointly.

 

ARTICLE V.

 

RESERVED

 

ARTICLE VI.

 

OBLIGATIONS AND RELIANCES

 

Section 6.01        Relationship of Mortgagor and Mortgagee. The relationship
between Mortgagor and Mortgagee is solely that of debtor and creditor, and
Mortgagee has no fiduciary or other special relationship with Mortgagor, and no
term or condition of any of the Loan Agreement, the Note, this Mortgage or the
other Loan Documents shall be construed so as to deem the relationship between
Mortgagor and Mortgagee to be other than that of debtor and creditor.

 

Section 6.02        No Reliance on Mortgagee. The general partners, members,
principals and (if Mortgagor is a trust) beneficial owners of Mortgagor, as
applicable, are experienced in the ownership and operation of properties similar
to the Property, and Mortgagor and Mortgagee are relying solely upon such
expertise and business plan in connection with the ownership and operation of
the Property. Mortgagor is not relying on Mortgagee’s expertise, business acumen
or advice in connection with the Property.

 

Section 6.03        No Mortgagee Obligations.

 

(a)          Notwithstanding the provisions of Section 2.01 or Section 2.02,
Mortgagee is not undertaking the performance of (i) any obligations under the
Leases or the Operating Lease, or (ii) any obligations with respect to any other
agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses or other documents.

 

(b)          By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Mortgagee pursuant to this Mortgage,
the Loan Agreement, the Note or the other Loan Documents, including, without
limitation, any officer’s certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal or insurance policy,
Mortgagee shall not be deemed to have

 

 9 

 

 

warranted, consented to, or affirmed the sufficiency, legality or effectiveness
of same, and such acceptance or approval thereof shall not constitute any
warranty or affirmation with respect thereto by Mortgagee.

 

Section 6.04        Reliance. Mortgagor recognizes and acknowledges that in
accepting the Loan Agreement, the Note, this Mortgage and the other Loan
Documents, Mortgagee is expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in the Loan Documents
without any obligation to investigate the Property and notwithstanding any
investigation of the Property by Mortgagee; that such reliance existed on the
part of Mortgagee prior to the date hereof; that the warranties and
representations are a material inducement to Mortgagee and the Secured Parties
in making the Loan; and that Mortgagee and the Secured Parties would not be
willing to make the Loan and accept this Mortgage in the absence of the
warranties and representations as set forth in the Loan Documents.

 

ARTICLE VII.

 

FURTHER ASSURANCES

 

Section 7.01        Recording of Mortgage, Etc. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time, will
cause this Mortgage and any of the other Loan Documents creating a Lien or
security interest or evidencing the Lien hereof upon the Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect and perfect the Lien or security
interest hereof upon, and the interest of Mortgagee in, the Property. Mortgagor
will pay all taxes, filing, registration or recording fees, and all expenses
incident to the preparation, execution, acknowledgment and/or recording of the
Note, this Mortgage, the other Loan Documents, any note, deed of trust or
mortgage supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and any modification or
amendment of any of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Mortgage, any deed of trust
or mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of any of the foregoing documents, except where prohibited by law so
to do.

 

Section 7.02        Further Acts, Etc. Mortgagor will, at the cost of Mortgagor,
and without out-of- pocket expense to Mortgagee, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, deeds of trust,
mortgages, assignments, notices of assignments, transfers and assurances as
Mortgagee shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Mortgagee the property
and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed,
confirmed, pledged, assigned, warranted and transferred or intended now or
hereafter so to be, or which Mortgagor may be or may hereafter become bound to
convey or assign to Mortgagee, or for carrying out the intention or facilitating
the performance of the terms of this Mortgage or for filing, registering or
recording this Mortgage, or for complying with all applicable laws. Mortgagor,
on demand, will execute and deliver, and in the event it shall fail to so
execute and deliver, hereby authorizes Mortgagee to execute in the name of
Mortgagor or without the signature of Mortgagor to the extent Mortgagee may
lawfully do so, one or more financing statements to evidence more effectively
the security interest of Mortgagee in the Property. Mortgagor grants to
Mortgagee an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available
to Mortgagee at law and in equity, including, without limitation, such rights
and remedies available to Mortgagee pursuant to this Section 7.02.

 

Section 7.03         Changes in Tax, Debt, Credit and Documentary Stamp Laws.

 

(a)          If any law is enacted or adopted or amended after the date of this
Mortgage which deducts the Indebtedness from the value of the Property for the
purpose of taxation or which imposes a tax, either directly or indirectly, on
the Indebtedness or Mortgagee’s interest in the Property, Mortgagor will pay

 

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the tax, with interest and penalties thereon, if any. If Mortgagee is advised by
counsel chosen by it that the payment of tax by Mortgagor would be unlawful or
taxable to Mortgagee or unenforceable or provide the basis for a defense of
usury, then Mortgagee shall have the option by written notice of not less than
one hundred eighty (180) days to declare the Indebtedness immediately due and
payable, in which case no Spread Maintenance or other prepayment premium or
penalty shall be due in connection with such prepayment.

 

(b)          Mortgagor will not claim or demand or be entitled to any credit or
credits on account of the Indebtedness for any part of the Taxes assessed
against the Property, or any part thereof, and no deduction shall otherwise be
made or claimed from the assessed value of the Property, or any part thereof,
for real estate tax purposes by reason of this Mortgage or the Indebtedness. If
such claim, credit or deduction shall be required by law, Mortgagee shall have
the option, by written notice of not less than one hundred eighty (180) days, to
declare the Indebtedness immediately due and payable, in which case no Spread
Maintenance or other prepayment premium or penalty shall be due in connection
with such prepayment.

 

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

 

ARTICLE VIII.

 

DUE ON SALE/ENCUMBRANCE

 

Section 8.01        Mortgagee Reliance. Mortgagor acknowledges that Mortgagee
has examined and relied on the experience of Mortgagor and its general partners,
members, principals and (if Mortgagor is a trust) beneficial owners in owning
and operating properties such as the Property in agreeing to make the Loan, and
will continue to rely on Mortgagor’s ownership of the Property as a means of
maintaining the value of the Property as security for the payment and
performance of the Obligations, including the repayment of the Indebtedness.
Mortgagor acknowledges that Mortgagee has a valid interest in maintaining the
value of the Property so as to ensure that, should Mortgagor default in the
payment and/or performance of the Obligations, including the repayment of the
Indebtedness, Mortgagee can recover the Indebtedness by a sale of the Property.

 

Section 8.02         No Transfer. Mortgagor shall not permit or suffer any
Transfer to occur except in accordance with the terms of the Loan Agreement.

 

ARTICLE IX.

 

RIGHTS AND REMEDIES UPON DEFAULT

 

Section 9.01        Remedies. Upon the occurrence and during the continuance of
any Event of Default, Mortgagor agrees that Mortgagee may take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Property, including, but not limited
to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Mortgagee:

 

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

 

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

 

 11 

 

 

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

 

(d)          sell for cash or upon credit the Property or any part thereof and
all estate, claim, demand, right, title and interest of Mortgagor therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entirety or in parcels, at such time and place, upon such
terms and after such notice thereof, all as may be required or permitted by law;
and, without limiting the foregoing:

 

(e)            (i) In connection with any sale or sales hereunder, Mortgagee
shall be entitled to elect to treat any of the Property which consists of (x) a
right in action, or (y) property that can be severed from the Real Property
covered hereby, or (z) any improvements (without causing structural damage
thereto), as if the same were personal property, and dispose of the same in
accordance with applicable law, separate and apart from the sale of the Real
Property. Where the Property consists of Real Property, Personal Property,
Equipment or Fixtures, whether or not such Personal Property or Equipment is
located on or within the Real Property, Mortgagee shall be entitled to elect to
exercise its rights and remedies against any or all of the Real Property,
Personal Property, Equipment and Fixtures in such order and manner as is now or
hereafter permitted by applicable law;

 

(ii)         Mortgagee shall be entitled to elect to proceed against any or all
of the Real Property, Personal Property, Equipment and Fixtures in any manner
permitted under applicable law; and if Mortgagee so elects pursuant to
applicable law, the power of sale herein granted shall be exercisable with
respect to all or any of the Real Property, Personal Property, Equipment and
Fixtures covered hereby, as designated by Mortgagee and Mortgagee is hereby
authorized and empowered to conduct any such sale of any Real Property, Personal
Property, Equipment and Fixtures in accordance with the procedures applicable to
Real Property;

 

(iii)        Should Mortgagee elect to sell any portion of the Property which is
Real Property or which is Personal Property, Equipment or Fixtures that the
Mortgagee has elected under applicable law to sell together with Real Property
in accordance with the laws governing a sale of the Real Property, Mortgagee
shall give such notice of the occurrence of an Event of Default, if any, and its
election to sell such Property, each as may then be required by law. Thereafter,
upon the expiration of such time and the giving of such notice of sale as may
then be required by law, subject to the terms hereof and of the other Loan
Documents, and without the necessity of any demand on Mortgagor, Mortgagee at
the time and place specified in the notice of sale, shall sell such Real
Property or part thereof at public auction to the highest bidder for cash in
lawful money of the United States. Mortgagee may from time to time postpone any
sale hereunder by public announcement thereof at the time and place noticed for
any such sale; and

 

(iv)        If the Property consists of several lots, parcels or items of
property, Mortgagee shall, subject to applicable law, (A) designate the order in
which such lots, parcels or items shall be offered for sale or sold, or (B)
elect to sell such lots, parcels or items through a single sale, or through two
or more successive sales, or in any other manner Mortgagee designates. Any
Person, including Mortgagor or Mortgagee, may purchase at any sale hereunder.
Should Mortgagee desire that more than one sale or other disposition of the
Property be conducted, Mortgagee shall, subject to applicable law, cause such
sales or dispositions to be conducted simultaneously, or successively, on the
same day, or at such different days or times and in such order as Mortgagee may
designate, and no such sale shall terminate or otherwise affect the Lien of this
Mortgage on any part of the Property not sold until all the Obligations have
been satisfied in full. In the event Mortgagee elects to dispose of the Property
through more than one sale, except as otherwise provided by applicable law,
Mortgagor agrees to pay the costs and expenses of each such sale and of any
judicial proceedings wherein such sale may be made;

 

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

 

(g)          recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Mortgage or the other Loan Documents;

 

(h)          apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the adequacy
of the security for the Indebtedness and without regard for the solvency of
Mortgagor, any guarantor or indemnitor with respect to the Facility or any
Person otherwise liable for the payment of the Indebtedness or any part thereof;

 

(i)          the license granted to Mortgagor under Section 2.02 hereof shall
automatically be revoked and Mortgagee may enter into or upon the Property,
either personally or by its agents, nominees or attorneys and dispossess
Mortgagor and its agents and servants therefrom, without liability for trespass,
damages or otherwise and exclude Mortgagor and its agents or servants wholly
therefrom, and take possession of all books, records and accounts relating
thereto and Mortgagor agrees to surrender possession of the Property and of such
books, records and accounts to Mortgagee upon demand, and thereupon Mortgagee
may, (i) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat; (ii) complete any construction on the Property in such manner and form
as Mortgagee deems advisable; (iii) make alterations, additions, renewals,
replacements and improvements to or on the Property; (iv) exercise all rights
and powers of Mortgagor with respect to the Property, whether in the name of
Mortgagor or otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants and demand, sue for,
collect and receive all Rents of the Property and every part thereof; (v)
require Mortgagor to pay monthly in advance to Mortgagee, or any receiver
appointed to collect the Rents, the fair and reasonable rental value for the use
and occupation of such part of the Property as may be occupied by Mortgagor;
(vi) require Mortgagor to vacate and surrender possession of the Property to
Mortgagee or to such receiver and, in default thereof, Mortgagor may be evicted
by summary proceedings or otherwise; and (vii) apply the receipts from the
Property to the payment and performance of the Obligations (including, without
limitation, the payment of the Indebtedness), in such order, priority and
proportions as Mortgagee shall deem appropriate in its sole discretion after
deducting therefrom all expenses (including reasonable out-of-pocket attorneys’
fees and costs) incurred in connection with the aforesaid operations and all
amounts necessary to pay the Taxes, Other Charges, Insurance Premiums and other
expenses in connection with the Property;

 

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

 

(k)          apply any sums then deposited or held in escrow or otherwise by or
on behalf of Mortgagee in accordance with the terms of the Loan Agreement, this
Mortgage or any other Loan Document to the payment of any sums payable pursuant
to the Note, the Loan Agreement, this Mortgage and the other Loan Documents in
its sole discretion; and/or

 

(l)          exercise all other rights, remedies and recourses granted under the
Loan Documents or otherwise available at law or in equity.

 

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

 

Section 9.02       Application of Proceeds. The purchase money proceeds and
avails of any disposition of the Property or any part thereof, or any other sums
collected by Mortgagee pursuant to the Note, this Mortgage or the other Loan
Documents, may be applied by Mortgagee to the payment of the Obligations in such
priority and proportions as Mortgagee in its discretion shall deem proper, to
the extent consistent with law.

 

Section 9.03       Right to Cure Defaults. During the continuance of any Event
of Default, Mortgagee may, but without any obligation to do so and without
notice to or demand on Mortgagor and without releasing Mortgagor from any
obligation hereunder, perform the obligations in Default in such manner and to
such extent as Mortgagee may deem necessary to protect the security hereof.
Mortgagee is authorized to enter upon the Property for such purposes or appear
in, defend or bring any action or proceeding to protect its interest in the
Property or to foreclose this Mortgage or collect the Indebtedness, and the cost
and expense thereof (including reasonable out-of-pocket attorneys’ fees and
disbursements to the extent permitted by law), with interest thereon at the
default rate applicable to Base Rate Advances pursuant to Section 2.07(b) of the
Loan Agreement, for the period after notice from Mortgagee that such cost or
expense was incurred to the date of payment to Mortgagee, shall constitute a
portion of the Indebtedness, shall be secured by this Mortgage and the other
Loan Documents and shall be due and payable to Mortgagee upon demand.

 

Section 9.04         Other Rights, Etc.

 

(a)          The failure of Mortgagee to insist upon strict performance of any
term hereof shall not be deemed to be a waiver of any term of this Mortgage.
Mortgagor shall not be relieved of Mortgagor’s obligations hereunder by reason
of (i) the failure of Mortgagee to comply with any request of Mortgagor or any
guarantor or indemnitor with respect to the Facility to take any action to
foreclose this Mortgage or otherwise enforce any of the provisions hereof or of
the Note or the other Loan Documents, (ii) the release, regardless of
consideration, of the whole or any part of the Property, or of any Person liable
for the Obligations or any portion thereof, or (iii) any agreement or
stipulation by Mortgagee extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Mortgage or the other Loan Documents.

 

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

 

(c)          Mortgagee may resort for the payment and performance of the
Obligations (including, but not limited to, the payment of the Indebtedness) to
any other security held by Mortgagee in such order and manner as Mortgagee, in
its discretion, may elect. Mortgagee may take action to recover the
Indebtedness, or any portion thereof, or to enforce the Obligations or any
covenant hereof, without prejudice to the right of Mortgagee thereafter to
foreclose this Mortgage. The rights of Mortgagee under this Mortgage shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision. Mortgagee shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.

 

Section 9.05        Right to Release Any Portion of the Property. Mortgagee may
release any portion of the Property for such consideration as Mortgagee may
reasonably require without, as to the remainder of the Property, in any way
impairing or affecting the Lien or priority of this Mortgage, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the Indebtedness shall have been

 

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reduced by the actual monetary consideration, if any, received by Mortgagee for
such release, and Mortgagee may accept by assignment, pledge or otherwise any
other property in place thereof as Mortgagee may require without being
accountable for so doing to any other lienholder. This Mortgage shall continue
as a Lien and security interest in the remaining portion of the Property.

 

Section 9.06        Right of Entry. Upon reasonable advance notice to Mortgagor,
Mortgagee and its agents shall have the right to enter and inspect the Property
at all reasonable times.

 

ARTICLE X.

 

INDEMNIFICATION

 

Section 10.01      Mortgage and/or Intangible Tax. Mortgagor shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless
Mortgagee and any Person claiming by or through Mortgagee (collectively with
Mortgagee, the “Indemnified Parties”) from and against any and all losses
imposed upon or incurred by or asserted against any Indemnified Party arising
out of or in connection with Mortgagor’s failure to pay any mortgage recording
or intangible tax on the making and/or recording of this Mortgage, the Note or
any of the other Loan Documents, but excluding any income, franchise or similar
taxes.

 

Section 10.02      Duty to Defend; Attorneys’ Fees and Other Fees and Expenses.
Upon written request by any Indemnified Party, Mortgagor shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals reasonably approved by
the Mortgagee. Notwithstanding the foregoing, if the defendants in any such
claim or proceeding include both Mortgagor and any Indemnified Party and
Mortgagor and such Indemnified Party shall have reasonably concluded that there
is an actual conflict of interest among such parties, such Indemnified Party
shall have the right to select one other separate counsel to participate or
defend such action on behalf of such Indemnified Party. In connection with the
foregoing, upon demand, Mortgagor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of the out- of-pocket reasonable fees and disbursements of
attorneys.

 

ARTICLE XI.

 

WAIVERS

 

Section 11.01     Waiver of Counterclaim. To the extent permitted by applicable
law, Mortgagor hereby waives the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Mortgagee arising out of or in any way connected with this
Mortgage, the Loan Agreement, the Note, any of the other Loan Documents or the
Obligations.

 

Section 11.02      Marshalling and Other Matters. To the extent permitted by
applicable law, Mortgagor hereby waives the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, to the extent
permitted by applicable law, Mortgagor hereby expressly waives any and all
rights of redemption from sale under any order or decree of foreclosure of this
Mortgage on behalf of Mortgagor, and on behalf of each and every Person
acquiring any interest in or title to the Property subsequent to the date of
this Mortgage.

 

Section 11.03      Waiver of Notice. To the extent permitted by applicable law,
Mortgagor shall not be entitled to any notices of any nature whatsoever from
Mortgagee, except with respect to matters for which this Mortgage or the Loan
Documents specifically and expressly provide for the giving of notice by
Mortgagee to Mortgagor, and except with respect to matters for which Mortgagee
is required by applicable law to give notice, and Mortgagor hereby expressly
waives the right to receive any notice from Mortgagee with respect to

 

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any matter for which this Mortgage or the Loan Documents does not specifically
and expressly provide for the giving of notice by Mortgagee to Mortgagor.

 

Section 11.04     Waiver of Statute of Limitations. To the extent permitted by
applicable law, Mortgagor hereby expressly waives and releases its right to
plead any statute of limitations as a defense to the payment and performance of
the Obligations (including, without limitation, the payment of the
Indebtedness).

 

Section 11.05     Waiver of Jury Trial. MORTGAGOR AND MORTGAGEE EACH HEREBY
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND
FOREVER WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST, WITH REGARD TO THE NOTE, THIS MORTGAGE OR
THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY MORTGAGOR AND MORTGAGEE AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH OF MORTGAGOR AND MORTGAGEE IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER.

 

Section 11.06      Survival. The indemnifications made pursuant to Article 10
herein shall continue indefinitely in full force and effect and shall survive
and shall in no way be impaired by (a) any satisfaction, release or other
termination of this Mortgage or any other Loan Document, (b) any assignment or
other transfer of all or any portion of this Mortgage or any other Loan Document
or Mortgagee’s interest in the Property (but, in such case, such
indemnifications shall benefit both the Indemnified Parties and any such
assignee or transferee), (c) any exercise of Mortgagee’s rights and remedies
pursuant hereto, including, but not limited to, foreclosure or acceptance of a
deed in lieu of foreclosure, any exercise of any rights and remedies pursuant to
the Loan Agreement, the Note or any of the other Loan Documents, any transfer of
all or any portion of the Property (whether by Mortgagor or by Mortgagee
following foreclosure or acceptance of a deed in lieu of foreclosure or at any
other time), (d) any amendment to this Mortgage, the Loan Agreement, the Note or
any other Loan Document, and/or (e) any act or omission that might otherwise be
construed as a release or discharge of Mortgagor from the Obligations or any
portion thereof.

 

ARTICLE XII.

 

NOTICES

 

Any notice required or permitted to be given under this Mortgage shall be given
in accordance with Section 9.02 of the Loan Agreement.

 

ARTICLE XIII.

 

APPLICABLE LAW

 

Section 13.01      Governing Law; Jurisdiction; Service of Process. WITH RESPECT
TO MATTERS RELATING TO THE CREATION, PERFECTION AND PROCEDURES RELATING TO THE
ENFORCEMENT OF THIS MORTGAGE, THIS MORTGAGE SHALL BE GOVERNED BY, AND BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, EXCEPT AS EXPRESSLY SET FORTH ABOVE IN THIS
PARAGRAPH AND TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES SHALL
GOVERN ALL MATTERS RELATING TO THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS AND
ALL OF THE INDEBTEDNESS OR

 

 16 

 

 

OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. ALL PROVISIONS OF THE LOAN
AGREEMENT INCORPORATED HEREIN BY REFERENCE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, AS SET FORTH IN THE GOVERNING LAW PROVISION OF THE
LOAN AGREEMENT.

 

Section 13.02      Usury Laws. Notwithstanding anything to the contrary in this
Mortgage or the Loan Agreement, (a) all agreements and communications between
Mortgagor and Mortgagee are hereby and shall automatically be limited so that,
after taking into account all amounts deemed to constitute interest, the
interest contracted for, charged or received by Mortgagee shall never exceed the
Maximum Rate, (b) in calculating whether any interest exceeds the Maximum Rate,
all such interest shall be amortized, prorated, allocated and spread over the
full amount and term of all principal indebtedness of Mortgagor to Mortgagee,
and (c) if through any contingency or event, Mortgagee receives or is deemed to
receive interest in excess of the Maximum Rate, any such excess shall be deemed
to have been applied toward payment of the principal of any and all then
outstanding indebtedness of Mortgagor to Mortgagee, or if there is no such
indebtedness, shall immediately be returned to Mortgagor.

 

Section 13.03      Provisions Subject to Applicable Law. All rights, powers and
remedies provided in this Mortgage may be exercised only to the extent that the
exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Mortgage invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law. If any term of this Mortgage
or any application thereof shall be invalid or unenforceable, the remainder of
this Mortgage and any other application of the term shall not be affected
thereby.

 

ARTICLE XIV.

 

DEFINITIONS

 

Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Mortgage may be used
interchangeably in the singular or plural form and the word “Mortgagor” shall
mean “each Mortgagor and any subsequent owner or owners of the Property or any
part thereof or any interest therein,” the word “Note” shall mean “the Note and
any other evidence of indebtedness secured by this Mortgage,” the word
“Property” shall include any portion of the Property and any interest therein,
and the phrases “attorneys’ fees”, “legal fees” and “counsel fees” shall include
any and all attorneys’, paralegal and law clerk fees and disbursements,
including, but not limited to, fees and disbursements at the pre-trial, trial
and appellate levels, incurred or paid by Mortgagee in protecting its interest
in the Property, the Leases and/or the Rents and/or in enforcing its rights
hereunder. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms.

 

ARTICLE XV.

 

MISCELLANEOUS PROVISIONS

 

Section 15.01     No Oral Change. This Mortgage, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Mortgagor or Mortgagee,
but only in accordance with Section 9.01 of the Loan Agreement.

 

Section 15.02     Successors and Assigns. This Mortgage shall be binding upon,
and shall inure to the benefit of, Mortgagor, Mortgagee and the other Secured
Parties and their respective successors and permitted assigns. Mortgagor shall
not, without the prior written consent of Mortgagee, assign any rights, duties
or obligations hereunder. Upon the request of Mortgagor, Mortgagee shall
cooperate in all reasonable respects with Mortgagor (at Mortgagor’s sole cost
and expense) in connection with Mortgagor’s efforts to minimize recordation
taxes in connection with a refinancing of the Property upon removal of the
Property as a

 

 17 

 

 

Collateral Asset. For the avoidance of doubt, Mortgagee shall not be responsible
for any losses, costs or expenses incurred by Mortgagor in connection with the
loss of any recording tax credits or savings pertaining to this Mortgage and
Mortgagor will expressly indemnify Mortgagee from any and all losses, costs and
expenses (including reasonable attorneys’ fees) Mortgagee may incur as a result
of failure by Mortgagor to pay any recording or other documentary taxes
associated with this Mortgage.

 

Section 15.03      No Merger of Estates. So long as any portion of the
Indebtedness and the Obligations secured hereby remain unpaid and undischarged
and the Commitments have not expired or been terminated, the fee and leasehold
estates to the Property shall not merge, but shall remain separate and distinct,
notwithstanding the union of such estates either in Mortgagor, Mortgagee, any
tenant or any third party by purchase or otherwise.

 

Section 15.04     Inapplicable Provisions. If any provision of this Mortgage is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Mortgage, such provision shall be fully
severable and this Mortgage shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this Mortgage,
and the remaining provisions of this Mortgage shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Mortgage, unless such continued
effectiveness of this Mortgage, as modified, would be contrary to the basic
understandings and intentions of the parties as expressed herein.

 

Section 15.05     Headings, Etc. The headings and captions of the various
Sections of this Mortgage are for convenience of reference only and are not to
be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.

 

Section 15.06      Subrogation. If any or all of the proceeds of the
Indebtedness have been used to extinguish, extend or renew any indebtedness
heretofore existing against the Property, then, to the extent of the funds so
used, Mortgagee and the other Secured Parties shall be subrogated to all of the
rights, claims, liens, titles and interests existing against the Property
heretofore held by, or in favor of, the holder of such indebtedness and such
former rights, claims, liens, titles and interests, if any, are not waived, but
rather are continued in full force and effect in favor of Mortgagee and the
other Secured Parties and are merged with the Lien and security interest created
herein as cumulative security for the payment, performance and discharge of the
Obligations (including, but not limited to, the payment of the Indebtedness).

 

Section 15.07     Exculpation. Section 10.01 of the Loan Agreement is hereby
incorporated herein by reference, mutatis mutandis.

 

Section 15.08      Entire Agreement. The Note, the Loan Agreement, this Mortgage
and the other Loan Documents constitute the entire understanding and agreement
between Mortgagor and Mortgagee with respect to the transactions arising in
connection with the Obligations and supersede all prior written or oral
understandings and agreements between Mortgagor and Mortgagee with respect
thereto. Mortgagor hereby acknowledges that, except as incorporated in writing
in the Note, the Loan Agreement, this Mortgage and the other Loan Documents,
there are not, and were not, and no Persons are or were authorized by Mortgagee
to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Note, the Loan Agreement, this Mortgage and the other Loan Documents.

 

Section 15.09      Limitation on Mortgagee’s Responsibility. No provision of
this Mortgage shall operate to place any obligation or liability for the
control, care, management or repair of the Property upon Mortgagee, nor shall it
operate to make Mortgagee responsible or liable for any waste committed on the
Property by the tenants under any leases (“Tenant”) or any other Person, or for
any dangerous or defective condition of the Property, or for any negligence in
the management, upkeep, repair or control of the Property resulting in loss or
injury or death to any Tenant, licensee, employee or stranger (unless Mortgagee
has

 

 18 

 

 

acquired title to the Property). Nothing herein contained shall be construed as
constituting Mortgagee a “mortgagee in possession.”

 

Section 15.10              Mortgagee as Agent; Successor Agents.

 

(a)          Agent has been appointed to act as Agent hereunder by the other
Secured Parties. Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of the Property) in accordance with and pursuant to the terms of
the Loan Agreement and this Mortgage. Mortgagor and all other Persons shall be
entitled to rely on releases, waivers, consents, approvals, notifications and
other acts of Agent, without inquiry into the existence of required consents or
approvals of the Secured Parties therefor.

 

(b)          Mortgagee shall at all times be the same Person that is Agent under
the Loan Agreement. Resignation, removal and appointment of a successor Agent
shall be in accordance with the terms of the Loan Agreement.

 

Section 15.11     Recitals. The recitals hereof are a part hereof, form a basis
for this Mortgage and shall be considered prima facie evidence of the facts and
documents referred to therein.

 

Section 15.12      [No Release or Novation. The Obligations secured by this
Mortgage are continuing obligations and nothing contained herein shall be deemed
to release, terminate or subordinate any lien, security interest or assignment
created or evidenced by this Mortgage and all such liens, security interests and
assignments and the priority thereof shall relate back to the date that the
Original Mortgage was filed as referenced in the recitals above. Mortgagor and
Mortgagee intend that this Mortgage shall in no way affect the priority of the
Mortgage or constitute a novation of the indebtedness secured thereby.

 

Section 15.13   Change of Agent. DB Agent hereby consents to Agent replacing DB
Agent as the mortgagee under this Mortgage and assigns to Agent all of its
interest under the Original Mortgage in such capacity.]2

 

ARTICLE XVI.

 

STATE-SPECIFIC PROVISIONS

 

[To Come]

 

[NO FURTHER TEXT ON THIS PAGE]

 

 

2Insert only for amended and restated mortgage.

 

 19 

 

 

IN WITNESS WHEREOF, THIS MORTGAGE has been executed by the parties hereto as of
the day and year first above written.

 

  INDIVIDUAL BORROWER:       [_______________]       By:________________________
  Name:   Title:       OPERATING LESSEE:       [_______________]      
By:________________________   Name:   Title:

 

[Signature page to Mortgage]

 

 
 

 

  MORTGAGEE:       CITIBANK, N.A., as Collateral Agent      
By:________________________   Name:   Title:

 

[Signature page to Mortgage]

 

 
 

 

For purposes of Section 15.13 only:

 

DB AGENT:

 

DEUTSCHE BANK AG NEW YORK BRANCH,

as administrative agent

 

By:________________________ Name: Title:   By:________________________ Name:
Title:

 

[Signature page to Mortgage]

 

 
 

 

INDIVIDUAL BORROWER ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

OPERATING LESSEE ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

[Acknowledgement page to Mortgage]

 

 
 

 

MORTGAGEE ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

[Acknowledgement page to Mortgage]

 

   

 

 

DB AGENT ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

[Acknowledgement page to Mortgage]

 

   

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

[see attached]

 

Exh. A-1 
 

 

SCHEDULE I

 

INSURANCE, CASUALTY AND CONDEMNATION REQUIREMENTS

 

1.1           Insurance.

 

1.1.1           Insurance Policies.         (a)          Mortgagor shall obtain
and maintain, or cause to be maintained, insurance for Mortgagor and the
Property providing at least the following coverages:

 

(i)          Property insurance against loss or damage by fire, any type of wind
(including named storms), lightning and such other perils as are included in a
standard “special form” or “all-risk” policy), and against loss or damage by all
other risks and hazards covered by a standard extended coverage insurance
policy, with no exclusion for damage or destruction caused by acts of terrorism
(or, subject to Section 1.1.1(i) below, standalone coverage with respect
thereto) riot and civil commotion, vandalism, malicious mischief, burglary and
theft (A) in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost” of the Properties, which for purposes of the Mortgage shall
mean actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation; (B) to be
written on a no coinsurance form or containing an agreed amount endorsement, or
its equivalent, with respect to the Improvements and personal property at the
Property waiving all co-insurance provisions; (C) providing for no deductible in
excess of $250,000, except for windstorm, flood and earthquake, which shall not
exceed 5% of the total insurable value of the affected Properties; and (D)
containing “Ordinance or Law Coverage” if any of the Improvements or the use of
the Property shall at any time constitute legal non-conforming structures or
uses, and compensating for loss to the undamaged portion of the building (with a
limit equal to replacement cost), the costs of demolition and the increased cost
of construction, each in amounts as reasonably required by Mortgagee. In
addition, Mortgagor shall obtain: (y) if any portion of the Improvements or
Personal Property is currently or at any time in the future located in a
federally designated special flood hazard area (“SFHA”), flood hazard insurance
covering all such Improvements and/or Personal Property located in the SFHA in
an amount equal to (1) the maximum amount of such insurance available under the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973
or the National Flood Insurance Reform Act of 1994, as each may be amended plus,
(2) such additional coverage as Lender shall require; and (z) earthquake
insurance in amounts and in form and substance reasonably satisfactory to
Mortgagee, provided that the insurance pursuant to clauses (y) and (z) hereof
shall otherwise be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i);

 

(ii)         commercial general liability insurance, including coverages against
claims for personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, such insurance (A) to be on the so-called
“occurrence” form and containing minimum limits per occurrence of One Million
and No/100 Dollars ($1,000,000.00), with an annual aggregate of not less than
Two Million and No/100 Dollars ($2,000,000.00); (B) to continue at not less than
the aforesaid limit until required to be changed by Mortgagee by reason of
changed economic conditions making such protection inadequate; and (C) to cover
at least the following hazards: (1) premises and operations; (2) products and
completed operations on an “if any” basis; (3) Independent contractors; and (4)
contractual liability for all insured contracts to the extent the same is
available;

 

(iii)        rental loss and/or business income interruption insurance (A) with
loss payable to Lender; (B) covering all risks required to be covered by the
insurance provided for in subsection (i) above, subsection (vi) below and
Section 1.1.1(h) below; (C) covering a period of restoration of eighteen (18)
months and containing an extended period of indemnity endorsement, or its
equivalent, which provides that after the physical loss to the Improvements and
personal property has been repaired, the continued loss of income will be
insured until such income either returns to the same level it was at prior to
the loss, or the expiration of six (6) months from the date that the Property

 

 Sch. I-1 

 

 

is repaired or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period; and
(D) in an amount equal to one hundred percent (100%) of the projected gross
revenue (less non-continuing expenses) from the Property for a period of
eighteen (18) months from the date of physical loss to the Property. The amount
of such business income insurance shall be determined prior to the date hereof
and at least once each year thereafter based on Mortgagor’s reasonable estimate
of the Net Operating Income, plus continuing expenses inclusive of debt service,
real estate taxes, cost of insurance and other continuing expenses, from the
Property for the succeeding eighteen (18) month period. All proceeds payable to
Mortgagee pursuant to this subsection shall be held by Mortgagee and shall be
applied to the Obligations secured by the Loan Documents from time to time due
and payable hereunder and under the Loan Documents; provided, however, that
nothing herein contained shall be deemed to relieve Borrower of its Obligations
to pay the Indebtedness on the respective dates of payment provided for in the
Loan Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;

 

(iv)        at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) owner’s contingent or
protective liability insurance covering claims not covered by or under the terms
or provisions of the above-mentioned commercial general liability insurance
policy; and (B) the insurance provided for in subsection (i) above written in a
so-called builder’s risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to subsection (i) above, (3)
including permission to occupy the Property, and (4) with an agreed amount
endorsement, or its equivalent, waiving co-insurance provisions;

 

(v)         workers’ compensation, subject to the statutory limits of the state
in which the Property is located, and employer’s liability insurance with limits
which are reasonably required from time to time by Mortgagee in respect of any
work or operations on or about the Property, or in connection with the Property
or its operation (if applicable);

 

(vi)        comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Mortgagee on terms consistent with
the commercial property insurance policy required under subsection (i) above;

 

(vii)       umbrella liability insurance in addition to primary coverage in an
amount not less than $100,000,000 per occurrence on terms consistent with the
commercial general liability insurance policy required under subsection (ii)
above and subsection (viii) below;

 

(viii)      motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, with limits which are required from
time to time by Mortgagee (if applicable);

 

(ix)         [reserved]

 

(x)          insurance against employee dishonesty with respect to any employees
of Borrower in an amount acceptable to Mortgagee with a deductible not greater
than Fifty Thousand and No/100 Dollars ($50,000.00); and

 

(xi)         upon sixty (60) days’ notice, such other reasonable insurance and
in such reasonable amounts as Mortgagee from time to time may reasonably request
against such other insurable hazards which at the time are commonly insured
against for properties similar to the Property located in or around the region
in which the Property is located.

 

 Sch. I-2 

 

 

(b)          All insurance provided for in Section 1.1.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”) and shall be subject to the approval of Mortgagee as to
form and substance, including insurance companies, amounts, deductibles, loss
payees and insureds. Mortgagor will provide evidence of renewal coverage prior
to the expiration dates of the Policies theretofore furnished to Mortgagee,
certificates of insurance evidencing the Policies (and, upon the written request
of Mortgagee, copies of such Policies) accompanied by evidence reasonably
satisfactory to Mortgagee of payment of the premiums then due thereunder (the
“Insurance Premiums”), shall be delivered by Mortgagor to Mortgagee at the
address below (or to such other Person as Mortgagee shall designate from time to
time by notice to Mortgagor).

 

(c)          Any blanket insurance Policy shall otherwise provide the same
protection as would a separate Policy insuring only the Property in compliance
with the provisions of Section 1.1.1(a) (any such blanket policy, an “Acceptable
Blanket Policy”); provided further that, with respect to earthquake insurance
required herein, if the properties are insured under a blanket policy, such
earthquake insurance shall be in an amount equal to the aggregate exceedance
probability gross loss estimates for a 475-year return period as indicated by a
portfolio seismic risk analysis of all high risk locations covered by such
earthquake insurance, including the Properties. Such analysis shall be approved
by Lender and secured by the applicable Borrower utilizing the most current RMS
software (or its equivalent) and to include consideration of loss amplification
and business interruption.

 

(d)          All Policies of insurance provided for or contemplated by Section
1.1.1(a) shall name Mortgagor as additional named insured and, with respect to
the Policies of liability insurance, except for the Policies referenced in
Section 1.1.1(a)(v) and (viii), shall name Mortgagee and its successors and/or
assigns as additional insured, as its interests may appear, and in the case of
property insurance, including but not limited to special form/all-risk, boiler
and machinery, terrorism, windstorm, flood and earthquake insurance, shall
contain a standard non-contributing mortgagee clause in favor of Mortgagee
providing that the loss thereunder shall be payable to Mortgagee unless below
the threshold for Mortgagor to handle such claim without Mortgagee intervention
as provided in Section 1.2 below. Additionally, if Mortgagor obtains property
insurance coverage in addition to or in excess of that required by Section
1.1.1(a)(i), then such insurance policies shall also contain a so-called New
York standard non-contributing mortgagee clause in favor of Mortgagee providing
that the loss thereunder shall be payable to Mortgagee.

 

(e)          All Policies of insurance provided for in Section 1.1.1(a) shall:

 

(i)          with respect to the Policies of property insurance, contain clauses
or endorsements to the effect that, (1) no act or negligence of Mortgagor, or
anyone acting for Mortgagor, or of any Tenant under any lease or other occupant,
or failure to comply with the provisions of any Policy, which might otherwise
result in a forfeiture of the insurance or any part thereof, or foreclosure or
similar action, shall in any way affect the validity or enforceability of the
insurance insofar as Mortgagee is concerned, (2) the Policies shall not be
cancelled without at least 30 days’ written notice to Lender, except ten (10)
days’ notice for non-payment of premium and (3) the issuer(s) of the Policies
shall give written notice to Lender if the issuers elect not to renew the
Policies prior to its expiration;

 

(ii)         with respect to all Policies of liability insurance, if obtainable
by Borrower using commercially reasonable efforts, contain clauses or
endorsements to the effect that, (1) the Policy shall not be canceled without at
least thirty (30) days’ written notice to Mortgagee (other than in the case of
non-payment in which case only ten (10) days prior notice, or the shortest time
allowed by applicable law (whichever is longer), will be required) and (2) the
issuers thereof shall give notice to Lender if the issuers elect not to renew
such Policies prior to its expiration. In the event that the issuers are unable
or choose not to provide notice, Mortgagor shall be obligated to provide such
notice; and

 

 Sch. I-3 

 

 

(iii)        not contain any clause or provision that would make Mortgagee
liable for any Insurance Premiums thereon or subject to any assessments
thereunder.

 

(f)          If at any time Mortgagee is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Mortgagee shall
have the right, without notice to Mortgagor, to take such action as Mortgagee
deems necessary to protect its interest in the Property, including the obtaining
of such insurance coverage as Mortgagee in its sole discretion deems appropriate
and all premiums incurred by Mortgagee in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by Mortgagor to
Mortgagee upon demand and until paid shall be secured by the Mortgages and shall
bear interest at the default rate applicable to Base Rate Advances pursuant to
section 2.07(b) of the Loan Agreement.

 

(g)          In the event of foreclosure of the Mortgage or other transfer of
title to the Property in extinguishment in whole or in part of the Obligations,
all right, title and interest of Mortgagor in and to the Policies then in force
concerning the Property and all proceeds payable thereunder with respect to the
Property shall thereupon vest in the purchaser at such foreclosure or Mortgagee
or other transferee in the event of such other transfer of title.

 

(h)          The property insurance, commercial general liability, umbrella
liability insurance and rental loss and/or business interruption insurance
required under Sections 1.1.1(a)(i), (ii), (iii) and (vii) above shall cover
perils of terrorism and acts of terrorism (or at least not specifically exclude
same) and Mortgagor shall maintain property insurance, commercial general
liability, umbrella liability insurance and rental loss and/or business
interruption insurance for loss resulting from perils and acts of terrorism on
terms (including amounts) consistent with those required under Sections
1.1.1(a)(i), (ii), (iii) and (vii) above (or at least not specifically excluding
same) at all times during the term of the Facility.

 

(i)          Notwithstanding anything in subsection 1.1.1(a)(i) or Section
1.1.1(h) above to the contrary, in the event that such coverage with respect to
terrorist acts is not included as part of the “special form” or “all risk”
property policy required by subsection (a)(i) above, Mortgagor shall,
nevertheless be required to obtain coverage for terrorism (as standalone
coverage) in an amount equal to 100% of the “Full Replacement Cost” of the
Property plus the rental loss and/or business interruption coverage under clause
(a)(iii) above; provided that such coverage is available. Mortgagor shall obtain
the coverage required under this clause (i) from a carrier which otherwise
satisfies the rating criteria specified in Section 1.1.2 below (a “Qualified
Carrier”) or in the event that such coverage is not available from a Qualified
Carrier, Mortgagor shall obtain such coverage from the highest rated insurance
company providing such coverage. Notwithstanding the foregoing, with respect to
any such stand-alone policy covering terrorist acts, in the event TRIPRA is no
longer in effect, Mortgagor shall be required to carry terrorism insurance
throughout the term of the Loan as required herein this clause (i), but in such
event Mortgagor shall not be required to pay any Insurance Premiums solely with
respect to such terrorism coverage in excess of the Terrorism Premium Cap
(hereinafter defined); provided that if the Insurance Premiums payable with
respect to such terrorism coverage exceeds the Terrorism Premium Cap, Mortgagee
may, at its option (1) purchase such stand-alone terrorism Policy, with
Mortgagor paying such portion of the Insurance Premiums with respect thereto
equal to the Terrorism Premium Cap and the Mortgagee paying such portion of the
Insurance Premiums in excess of the Terrorism Premium Cap or (2) modify the
deductible amounts, policy limits and other required policy terms to reduce the
Insurance Premiums payable with respect to such stand-alone terrorism Policy to
the Terrorism Premium Cap. As used herein, (i) “Terrorism Premium Cap” means an
amount equal to two times the amount of the insurance premium that is payable in
respect of the Property and business interruption/rental loss insurance required
under the Loan Documents at the time that such terrorism coverage is excluded
from the applicable Policy.

 

1.1.2           Insurance Company. (a) All Policies required pursuant to Section
1.1.1 (i) shall be issued by companies authorized to do business in the state
where the Property is located, with (1) a financial strength and claims paying
ability rating of (x) “A-” or better by S&P, (y) if rated by Moody’s, “A3” or
better

 

 Sch. I-4 

 

 

by Moody’s or (z) if rated by any rating agencies other than S&P or Moody’s,
equivalent ratings (to the ratings specified in the immediately preceding
subclauses (x) and (y)) by all such other rating agencies; provided however,
that if Borrower elects to have its insurance coverage provided by a syndicate
of insurers, then if such syndicate consists of five (5) or more members, (A) at
least sixty percent (60%) of the insurance coverage (or seventy-five percent
(75%) if such syndicate consists of four (4) or fewer members) shall be provided
by insurance companies having a claims paying ability rating of “A-“ or better
by S&P and (B) the remaining forty percent (40%) of the insurance coverage (or
the remaining twenty-five percent (25%) if such syndicate consists of four or
fewer members) shall be provided by insurance companies having a claims paying
ability of “BBB” or better by S&P or (2) a rating of A:X or better in the
current Best’s Insurance Reports; provided, however, that notwithstanding the
above, the earthquake insurers will satisfy Section 1.1.2 provided they maintain
an A.M. Best rating of A-:VIII or better; (ii) shall, with respect to all
property insurance policies and rental loss and/or business interruption
insurance policies, contain a Standard Mortgagee Clause/Lender’s Loss Payable
Endorsement, or their equivalents, naming Mortgagee as the person to whom all
payments made by such insurance company shall be paid; (iii) shall contain a
waiver of subrogation against Mortgagee; (iv) shall contain such provisions as
Mortgagee deems reasonably necessary or desirable to protect its interest
including endorsements, or their equivalents, providing (A) that no Mortgagor,
Mortgagee or any other party shall be a co-insurer under said Policies, (B)
except as otherwise permitted herein, for a deductible per loss acceptable to
Lender but in no event an amount greater than that which is customarily
maintained by prudent owners of properties with a standard of operation and
maintenance comparable to and in the general vicinity of the Property and as is
generally allowed by prudent institutional commercial mortgage lenders
originating comparable mortgage loans; and (v) shall be reasonably satisfactory
in form and substance to Mortgagee and shall be approved by Mortgagee as to
amounts, form, risk coverage, deductibles, loss payees and insureds. For so long
TRIPRA is in effect, Mortgagee shall accept terrorism insurance with coverage
against acts which are “certified” within the meaning of TRIPRA. In addition to
the insurance coverages described in Section 1.1.1 above, Mortgagor shall obtain
such other insurance as may from time to time be reasonably required by
Mortgagee in order to protect its interests. Copies of the Policies shall be
delivered to Mortgagee at the address below (or to such other address or Person
as Mortgagee shall designate from time to time by notice to Mortgagor) within
ten (10) Business Days after Mortgagee’s written request to Mortgagor for such
copies (or a carrier issued binder of insurance if the applicable Policy has not
yet been received from the insurer):

 

Citibank, N.A. ISAOA, ATIMA

c/o KeyCorp Real Estate Markets, Inc.

11501 Outlook, Ste. 300

Overland Park, KS 66211

Attention: Megan Hatfield

Telephone: 913-317-4300

Email: megan_e_hatfield@keybank.com

 

Mortgagor shall pay the Insurance Premiums in advance as the same become due and
payable and shall furnish to Mortgagee evidence of the renewal of each of the
Policies with receipts for the payment of the Insurance Premiums or other
evidence of such payment reasonably satisfactory to Mortgagee. Within thirty
(30) days after request by Mortgagee, Mortgagor shall obtain such increases in
the amounts of coverage required hereunder as may be reasonably requested by
Mortgagee, taking into consideration changes in the value of money over time,
changes in liability laws, changes in prudent customs and practices.

 

Section 1.2.          Casualty and Condemnation. The provisions of this Section
1.2 shall be in addition to those covenants contained in Section 5.01(x) of the
Loan Agreement.

 

1.2.1     Definitions. For purposes of this Section 1.2, the following terms
shall have the following meanings:

 

 Sch. I-5 

 

 

(a)          “Casualty” means the occurrence of damage or destruction to the
Property, or any part thereof, by fire, flood, vandalism, windstorm, hurricane,
earthquake, acts of terrorism or any other casualty.

 

(b)          “Condemnation” means any actual taking or any taking threatened in
writing by any Governmental Authority of the Property or any part thereof
through eminent domain or otherwise (including, without limitation, any transfer
made in lieu of or in anticipation of the exercise of such taking).

 

(c)          “Governmental Authority” means any nation or government, any state
or other political subdivision thereof, and any Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to such government

 

(d)          “Net Proceeds” means insurance proceeds less (i) the cost, if any,
to Agent of recovering the insurance proceeds including, without limitation,
reasonable attorney’s fees and expenses, and adjuster’s fees, and (ii) any
business income insurance proceeds received by Agent, and condemnation proceeds.

 

(e)          “Restoration” means the repair and restoration of the Property as
nearly as possible to the condition the Property was in immediately prior to a
Casualty or Condemnation.

 

(f)          “Restoration Threshold” means 5% of the then most recent Appraised
Value of the Property.

 

1.2.2       Casualty Proceeds - Business Interruption and Rental Loss Insurance.
Provided no Event of Default has occurred and is continuing, Mortgagor has the
right to make, settle and collect upon claims with respect to business
interruption and rental loss insurance, and Mortgagor may utilize any proceeds
received with respect thereto as it determines is appropriate in the operation
of its business. In the event that the insurance company does not disburse such
proceeds directly into the applicable Property Account (as defined in the Cash
Management Agreement), Mortgagor agrees to cause the same to be deposited into
the applicable Property Account promptly upon receipt thereof. Provided no Event
of Default has occurred and is continuing, if Agent shall receive any such
proceeds, Agent shall deposit such proceeds directly into the applicable
Property Account within five (5) Business Days of Agent’s receipt thereof.

 

1.2.3       Insurance Proceeds and Condemnation Awards.

 

(a)          In the event of any loss or damage to any portion of the Property
due to a Casualty, or Condemnation, if the loss or damage is greater than the
Restoration Threshold, the Mortgagor may settle and adjust insurance claims and
condemnation claims and awards only with the consent of Mortgagee (which consent
shall not be unreasonably withheld) and Mortgagee shall have the opportunity to
participate, at Mortgagor’s cost, in any such adjustments. If (A) the loss or
damage is less than the Restoration Threshold or (B) if the Mortgagee has the
right pursuant to this Section 1.2.3 but elects not to settle such claim or
award, then the Mortgagor shall have the right to settle such claim or award
without the consent of the Mortgagee, provided that (1) the Mortgagor shall use
the proceeds of any claim or award to the Restoration to the extent permitted by
applicable law and (2) Mortgagor shall provide the Mortgagee with notice of the
Casualty or Condemnation. So long as the Property remains a Collateral Asset,
Borrower or Mortgagor shall use the insurance proceeds received directly from
the insurance company to the Restoration to the extent permitted by applicable
law. The Mortgagee shall have the right to settle any claim or award that the
Mortgagor has not settled on or before one year after the date of the applicable
Casualty or Condemnation. The Mortgagee shall have the right (but not the
obligation) to collect, retain and apply to the Obligations all Net Proceeds in
the event that an Event of Default has occurred and is continuing. Otherwise,
all proceeds shall be delivered to Mortgagor. Any Net Proceeds remaining after
application to the Obligations shall be paid by Mortgagee to Borrower or the
party then entitled thereto.

 

 Sch. I-6 

 

 

(b)          If the Mortgagee does not elect to (to the extent it has the right
to so elect) or is not entitled to apply Net Proceeds to the Obligations and if
the Mortgagor is not entitled to settle such claims without the consent of
Mortgagee, all as provided under the foregoing subsection (a), the Mortgagee
shall have the right (but not the obligation) to collect and receive such
proceeds, and after deduction of all reasonable out- of-pocket expenses of
collection and settlement, including reasonable attorney and adjusters’ fees and
expenses, to release the same to the Mortgagor periodically as provided herein,
provided that Mortgagor shall:

 

(1)         expeditiously conduct the Restoration of the portion of the Property
resulting from such Casualty or Condemnation; and

 

(2)         if the Net Proceeds are, in the Mortgagee’s reasonable judgment,
insufficient to complete the Restoration of the buildings, structures and other
improvements constituting the Property as aforesaid, then the Mortgagor shall
promptly deposit with the Mortgagee the amount of such deficiency. The amounts
deposited with Mortgagee pursuant to this subsection shall be disbursed for
costs actually incurred in connection with the Restoration of the Property on
the same conditions applicable to the disbursement of the Net Proceeds set forth
below, and until so disbursed pursuant to such provisions shall constitute
additional security for the Obligations.

 

(c)          Any request by Mortgagor for a disbursement by Mortgagee of Net
Proceeds pursuant to this Section 1.2.3 and the disbursement thereof shall be
conditioned upon Mortgagor’s compliance with and satisfaction of the following
conditions precedent as determined by Mortgagee in its sole but good faith
discretion:

 

(i)          no Event of Default shall have occurred and be continuing;

 

(ii)         in the event the Net Proceeds are casualty proceeds, less than
thirty percent (30%) of the total floor area of the buildings, structures or
other improvements on the affected Collateral Asset has been damaged, destroyed
or rendered unusable as a result of such Casualty or (2) in the event the Net
Proceeds are condemnation proceeds, less than ten percent (10%) of the land
constituting the Property is taken, and such land is located along the perimeter
or periphery of the Property, and no portion of the buildings, structures or
other improvements is located on such land;

 

(iii)        Mortgagor shall commence the Restoration as soon as reasonably
practicable (but in no event later than one hundred twenty (120) days after such
Casualty or Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion in Mortgagee’s reasonable
discretion;

 

(iv)       Mortgagee shall be reasonably satisfied that any operating deficits,
including all scheduled payments of principal and interest under the Notes,
which will be incurred with respect to the Property as a result of the
occurrence of any such Casualty or Condemnation, whichever the case may be, will
be covered out of (1) the Net Proceeds, (2) the rental loss and/or business
income interruption insurance, if applicable, or (3) by other funds of the Loan
Parties;

 

(v)        Mortgagee shall be reasonably satisfied that the Restoration will be
completed on or before the earliest to occur of (i) the date six (6) months
prior to the Maturity Date, (ii) the earliest date required for such completion
under the terms of any Operating Lease affecting the Property, as the case may
be, (iii) such time as may be required under applicable law or (iv)        four
(4) months prior to the expiration of any rental loss and/or business income
interruption insurance, if applicable;

 

 Sch. I-7 

 

 

(vi)       Mortgagee shall be satisfied that the Restoration will be completed
in accordance with any requirements under any applicable Approved Franchise
Agreement;

 

(vii)      the Property and the use thereof after the Restoration will be in
compliance with and permitted under applicable law;

 

(viii)     the Restoration shall be done and completed by Mortgagor in an
expeditious and diligent fashion and in compliance with applicable law;

 

(ix)        such Casualty or Condemnation, as applicable, does not result in the
permanent loss of access to the Property or the related buildings, structures or
other improvements located thereon;

 

(xi)        Mortgagor shall deliver, or cause to be delivered, to Mortgagee a
signed detailed budget approved in writing by Mortgagor’s architect or engineer
stating the entire cost of completing the Restoration, which budget shall be
reasonably acceptable to Mortgagee; and

 

(xii)       the Net Proceeds together with any cash or cash equivalent deposited
by Mortgagor with Mortgagee are sufficient in Mortgagee’s reasonable discretion
to cover the cost of the Restoration.

 

(d)          Except as otherwise provided herein, the Net Proceeds shall be paid
directly to Mortgagee and held by Mortgagee in an interest-bearing account and,
until disbursed in accordance with the provisions of this Section 1.2.3, shall
constitute additional security for the Obligations. The Net Proceeds shall be
disbursed by Mortgagee to, or as directed by, Mortgagor from time to time during
the course of the Restoration, upon receipt of evidence reasonably satisfactory
to Mortgagee that (A) all requirements set forth in Section 1.2.3 have been
satisfied, (B) all materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested disbursement) in
connection with that portion of the Restoration for which such disbursement was
requested have been paid for in full or will be paid for in full upon receipt of
such funds, and (C) there exist no notices of pendency, stop orders, mechanic’s
or material man’s liens or notices of intention to file same, or any other liens
or encumbrances of any nature whatsoever on the Property arising out of the
Restoration which have not either been fully bonded to the reasonable
satisfaction of Mortgagee and discharged of record or in the alternative fully
insured to the reasonable satisfaction of Mortgagee by the title company issuing
the Mortgage Policy. Notwithstanding the foregoing or anything to the contrary
herein or in any Loan Document, provided no Event of Default has occurred and is
continuing, if any reciprocal easement agreement or Material Lease requires
Mortgagor to restore any portion of the Property or to make available to the
counterparty insurance Proceeds or Condemnation Awards, then Mortgagee shall
release to Mortgagor any such insurance Proceeds or Condemnation Awards received
by it for Mortgagor’s application to such use to the extent expressly required
by the terms of such document.

 

(e)          All plans and specifications required in connection with any
Restoration where the cost of which is reasonably expected to exceed the
Restoration Threshold shall be subject to prior approval of Mortgagee and an
independent consulting engineer/architect selected by Mortgagee (the “Casualty
Consultant”), such approval not to be unreasonably withheld or delayed.
Mortgagor shall assign to Mortgagee the plans and specifications and all
permits, licenses and approvals required or obtained in connection with the
Restoration. The identity of the contractors, subcontractors and material men
engaged in any Restoration the cost of which is reasonably expected to exceed
the Restoration Threshold, as well as the contracts under which they have been
engaged, shall be subject to approval of Mortgagee and the Casualty Consultant,
such approval not to be unreasonably withheld or delayed. All reasonable
out-of-pocket costs and expenses incurred by Mortgagee in connection with
recovering, holding and advancing the Net Proceeds for the Restoration
including, without limitation, reasonable attorneys’ fees and disbursements and
the Casualty Consultant’s fees and disbursements, shall be paid by Mortgagor.

 

 Sch. I-8 

 

 

(f)          In no event shall Mortgagee be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually incurred
from time to time for work in place as part of the Restoration, as certified by
the Casualty Consultant, less the Casualty Retainage. The term “Casualty
Retainage” shall mean, as to each contractor, subcontractor or material man
engaged in the Restoration, an amount equal to ten percent (10%) of the costs
actually incurred for work in place as part of the Restoration, as certified by
the Casualty Consultant, until the Restoration has been completed. The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this Section 1.2.3(f), be less than the amount actually held back
by Mortgagor from contractors, subcontractors and material men engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty
Consultant certifies to Mortgagee that the Restoration has been completed in
accordance with the provisions of this Section 1.2.3 and that all approvals
necessary for the re-occupancy and use of the Property have been obtained from
all appropriate Governmental Authorities, and Mortgagee receives evidence
reasonably satisfactory to Mortgagee that the costs of the Restoration have been
paid in full or will be paid in full out of the Casualty Retainage; provided,
however, that Mortgagee will release the portion of the Casualty Retainage being
held with respect to any contractor, subcontractor or material man engaged in
the Restoration as of the date upon which the Casualty Consultant certifies to
Mortgagee that the contractor, subcontractor or materialman has completed all
work and has supplied all materials in accordance with the provisions of the
contractor’s, subcontractor’s or material man’s contract, the contractor,
subcontractor or materialman delivers the lien waivers and evidence of payment
in full of all sums due to the contractor, subcontractor or materialman as may
be reasonably requested by Mortgagee or by the title company issuing the
Mortgage Policy, and Mortgagee receives an endorsement to the Mortgage Policy
insuring the continued priority of the lien of the Mortgage and evidence of
payment of any premium payable for such endorsement. If required by Mortgagee,
the release of any such portion of the Casualty Retainage shall be approved by
the surety company, if any, which has issued a payment or performance bond with
respect to the contractor, subcontractor or material man.

 

(g)          Mortgagee shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.

 

(h)          If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the reasonable opinion of Mortgagee in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs which
are estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Mortgagor shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Mortgagee before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Mortgagee
shall be held by Mortgagee and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 1.2.3(g) shall constitute additional security for the Obligations.

 

(i)          The excess, if any, of the Net Proceeds and the remaining balance,
if any, of the Net Proceeds Deficiency deposited with Mortgagee after the
Casualty Consultant certifies to Mortgagee that the Restoration has been
completed in accordance with the provisions of this Section 1.2.3(h), and the
receipt by Mortgagee of evidence reasonably satisfactory to Mortgagee that all
costs incurred in connection with the Restoration have been paid in full, shall
be remitted by Mortgagee to Mortgagor, provided no Event of Default shall have
occurred and shall be continuing under any of the Loan Documents.

 

(j)          All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Mortgagor as excess Net Proceeds pursuant
to Section 1.2.3(h) or otherwise pursuant to Section 1.2.3, other than those
which Mortgagor is entitled to receive and/or collect directly in accordance
herewith, may be retained and applied by Mortgagee toward the payment of the
aggregate outstanding principal amount of the Loan, whether or not then due and
payable, in such order, priority and proportions as Mortgagee in its sole
discretion shall deem proper, or, at the discretion of Mortgagee, the same may
be paid, either in whole or in part, to Mortgagor for such purposes as Mortgagee
shall designate; provided, however, for the avoidance of doubt, that if such Net
Proceeds are used to prepay the Loan and no Event of Default is occurring and
then continuing, then no Spread Maintenance or other prepayment premium or
penalty shall be payable.

 

 Sch. I-9 

 

 

EXHIBIT H TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF ASSIGNMENT OF LEASES AND RENTS

 

[Attached.]

 

 Exh. H 

 

 

EXHIBIT H TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF ASSIGNMENT OF LEASES AND RENTS

 

[LESSOR] and [TRS LESSEE], as assignor

 

(collectively, Assignor)

 

to

 

CITIBANK, N.A., in its capacity as Agent, as assignee

 

(Assignee)

 

[AMENDED AND RESTATED] ASSIGNMENT

OF LEASES AND RENTS

 

Dated: As of April 27, 2017 Location: [________]   [________]     County:
[________]

 

PREPARED BY AND UPON
RECORDATION RETURN TO:

 

Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Attn:  Malcolm K. Montgomery, Esq.

 

 

 

 

[AMENDED AND RESTATED] ASSIGNMENT OF LEASES AND RENTS

 

THIS [AMENDED AND RESTATED] ASSIGNMENT OF LEASES AND RENTS (this “Assignment”)
is made as of the 27th day of April, 2017 by [LESSOR], a Delaware [limited
liability company], as assignor, having its principal place of business at c/o
Hospitality Investors Trust Operating Partnership, L.P., 3950 University Drive,
Suite 301, Fairfax, Virginia 22030 (“Landlord”) and [TRS LESSEE], a Delaware
limited liability company, having its principal place of business at c/o
Hospitality Investors Trust Operating Partnership, L.P., 3950 University Drive,
Suite 301, Fairfax, Virginia 22030 (“Operating Lessee”, and together with
Landlord, collectively, “Assignor”) to CITIBANK, N.A., as collateral agent (in
such capacity, “Agent”) for the Secured Parties as defined in the Loan Agreement
(defined below), having an address at 390 Greenwich Street, 7th Floor, New York,
New York 10013 (Agent, together with its successors and/or assigns, “Assignee”).

 

WITNESSETH:

 

A.          Assignee is the present holder of (a) that certain [Amended and
Restated][Deed of Trust/Mortgage], Security Agreement, Assignment of Rents and
Lease and Fixture Filing dated as of even date herewith (as the same may be
amended, modified, restated, supplemented or extended from time to time, the
“Mortgage”) given by Landlord to Agent which encumbers the fee estate of
Landlord in certain premises described in Exhibit A and the buildings,
structures, fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter located thereon
(collectively, the “Property”).

 

B.          The Mortgage secures the payment of certain Indebtedness (as defined
in the Mortgage) owed by Landlord to the Secured Parties identified in that
certain Second Amended and Restated Term Loan Agreement dated as of April 27,
2017, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time (the “Loan Agreement”), among Landlord, and
the other borrowers party thereto (collectively, “Borrower”), as borrower, the
guarantors listed therein, Agent and the other Secured Parties identified
therein. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Loan Agreement.

 

C.          Operating Lessee is the holder of a leasehold estate in the Property
under and pursuant to the provisions of a certain lease agreement dated as of
April 27, 2017 (as the same may be amended, modified, restated, supplemented or
extended from time to time, the “Operating Lease”), between Landlord and
Operating Lessee.

 

D.          [As of [ ], Assignor executed and delivered that certain Assignment
of Rents and Leases, as evidenced by an instrument recorded [ ] as instrument
number [ ] in the Official Records of [ ] County, [ ] (the “Original
Assignment”).

 

E.           Deutsche Bank AG New York Branch (in its capacity as administrative
agent, “DB Agent”) is the assignee under the Original Assignment;

 

F.           Pursuant to the Loan Agreement, Agent is replacing DB Agent as
administrative agent thereunder and is being appointed as collateral agent
thereunder;

 

G.          The parties hereto wish to amend and restate the Original Assignment
in its entirety on the terms and provisions of this Assignment.]1

 

 

1 Insert only for amended and restated ALR.

 

 

 

 

H.          Assignor has agreed to execute and deliver this Assignment to
further secure the payment and performance of all of the agreements, covenants,
conditions, warranties, representations and other obligations of Assignor under
the Loan Agreement and the other Loan Documents to which it is a party
(collectively, the “Obligations”).

 

I.            This Assignment is given pursuant to the Loan Agreement, and
payment, fulfillment, and performance by Assignor of its obligations thereunder
and under the other Loan Documents is secured hereby, and each and every term
and provision of the Loan Agreement, including the rights, remedies,
obligations, covenants, conditions, agreements, indemnities, representations and
warranties therein, are hereby incorporated by reference herein as though set
forth in full and shall be considered a part of this Assignment.

 

NOW THEREFORE, in consideration of the making of the Advances by the Secured
Parties and the covenants, agreements, representations and warranties set forth
in this Assignment[,the parties hereto hereby amend and restate the Original
Assignment in its entirety on the terms and provisions of this Assignment and
agree as follows:]:

 

ARTICLE 1

ASSIGNMENT

 

Section 1.1         Property Assigned. Assignor hereby absolutely and
unconditionally assigns and   grants to Assignee the following property, rights,
interests and estates, now owned or hereafter acquired by Assignor:

 

(a)          Leases. All leases, subleases or subsubleases, lettings, licenses,
concessions or other agreements (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of the Property, and
every modification, amendment or other agreement relating to such leases,
subleases, subsubleases, or other agreements entered into in connection with
such leases, subleases, subsubleases, or other agreements and every guarantee of
the performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto, heretofore or hereafter
entered into, whether before or after the filing by or against Assignor of any
petition for relief under 11 U.S.C. §101 et seq., as the same may be amended
from time to time (the “Bankruptcy Code”) (collectively, the “Leases”), together
with any extension, renewal or replacement of same. This Assignment of existing
and future Leases and other agreements being effective without any further or
supplemental assignment documents.

 

(b)          Rents. All Rents (as defined in the Mortgage), which term shall
include Rents paid or accruing before or after the filing by or against Assignor
of any petition for relief under the Bankruptcy Code.

 

(c)          Bankruptcy Claims. All of Assignor’s claims and rights (the
“Bankruptcy Claims”) to the payment of damages arising from any rejection by a
lessee of any Lease under the Bankruptcy Code.

 

(d)          Lease Guaranties. All of Assignor’s right, title and interest in,
and claims under, any and all lease guaranties, letters of credit and any other
credit support (individually, a “Lease Guaranty”, and collectively, the “Lease
Guaranties”) given by any guarantor in connection with any of the Leases or
leasing commissions (individually, a “Lease Guarantor”, and collectively, the
“Lease Guarantors”) to Assignor.

 

(e)          Proceeds. All proceeds from the sale or other disposition of the
Leases, the Rents, the Lease Guaranties and/or the Bankruptcy Claims.

 

(f)           Other. All rights, powers, privileges, options and other benefits
of Assignor as the lessor under any of the Leases and the beneficiary under any
of the Lease Guaranties, including, without limitation, the immediate and
continuing right to make claims for, and to receive, collect and acknowledge

 

 2 

 

 

receipt for all Rents payable or receivable under the Leases and all sums
payable under the Lease Guaranties or pursuant thereto (and to apply the same to
the payment of the Obligations), and to do all other things which Assignor or
any lessor is or may become entitled to do under any of the Leases or Lease
Guaranties.

 

(g)          Entry. The right, subject to the provisions of the Loan Agreement,
at Assignee’s option, upon revocation of the license granted herein, to enter
upon the Property in person, by agent or by court-appointed receiver, to collect
the Rents.

 

(h)          Power Of Attorney. Assignor’s irrevocable power of attorney,
coupled with an interest, to take any and all of the actions set forth in
Section 3.1 of this Assignment, and, following the occurrence and during the
continuance of an Event of Default, any or all other actions designated by
Assignee for the proper management and preservation of the Property.

 

(i)           Other Rights And Agreements. Any and all other rights of Assignor
in and to the items set forth in subsections (a) through (h) above, and all
amendments, modifications, replacements, renewals and substitutions thereof.

 

ARTICLE 2

TERMS OF ASSIGNMENT

 

Section 2.1          Present Assignment and License Back. It is intended by
Assignor that this Assignment constitute a present, absolute assignment of the
Leases, Rents, Lease Guaranties and Bankruptcy Claims, and not an assignment for
additional security only. Nevertheless, subject to the terms of this Section 2.1
and the terms of the Loan Agreement and the Cash Management Agreement, Assignee
grants to Assignor a revocable license to collect, receive, use, distribute and
enjoy the Rents, as well as any sums due under the Lease Guaranties. Subject to
the terms of the Cash Management Agreement, Assignor shall hold the Rents, as
well as all sums received pursuant to any Lease Guaranty, or a portion thereof
sufficient to discharge all current sums due on the Obligations, in trust for
the benefit of Assignee for use in the payment of such sums.

 

Section 2.2          Notice to Lessees. Assignor hereby authorizes and directs
the lessees named in the Leases, any other future lessees or occupants of the
Property and all Lease Guarantors to pay over to Assignee or to such other party
as Assignee directs all Rents and all sums due under any Lease Guaranties, upon
receipt from Assignee of written notice to the effect that Assignee is then the
holder of this Assignment; provided, however, Assignee may only send such
notices, and take such actions relative to such Rents and sums due under any
Lease Guaranties, as are expressly permitted relative thereto pursuant to the
terms of the Loan Agreement and the Cash Management Agreement. Such Rents shall
be disbursed and/or applied in accordance with the terms of the Loan Agreement
and the Cash Management Agreement.

 

Section 2.3          Incorporation by Reference. All representations,
warranties, covenants, conditions and agreements contained in the Loan Agreement
and the other Loan Documents, as the same may be modified, renewed, substituted
or extended from time to time, are hereby made a part of this Assignment to the
same extent and with the same force as if fully set forth herein.

 

ARTICLE 3

REMEDIES

 

Section 3.1          Remedies of Assignee. Upon or at any time after the
occurrence and during the continuance of an Event of Default, the license
granted to Assignor in Section 2.1 of this Assignment shall automatically be
revoked and Assignee shall immediately be entitled to possession of all Rents
and all sums due under any Lease Guaranties, whether or not Assignee enters upon
or takes control of the Property. In addition, following the occurrence and
during the continuance of an Event of Default, Assignee may, at its option,
without waiving any Event of Default, without regard to the adequacy of the
security for the Obligations, either in person or by agent, nominee or attorney,
with or without bringing any action or

 

 3 

 

 

proceeding, or by a receiver appointed by a court, dispossess Assignor and its
agents and servants from the Property, without liability for trespass, damages
or otherwise and exclude Assignor and its agents or servants wholly therefrom,
and take possession of the Property and all books, records and accounts relating
thereto, and have, hold, manage, lease and operate the Property on such terms
and for such period of time as Assignee may reasonably deem proper and, either
with or without taking possession of the Property, in its own name, demand, sue
for or otherwise collect and receive all Rents and all sums due under all Lease
Guaranties, including, without limitation, those past due and unpaid (with all
such Rents and all sums due under any Lease Guaranties to be deposited into the
Property Account (as defined in the Cash Management Agreement) to the extent and
as required by the terms of the Loan Agreement and the Cash Management
Agreement), with full power to make from time to time all alterations,
renovations, repairs or replacements thereto or thereof as Assignee may
reasonably deem proper. In addition, upon the occurrence and during the
continuance of an Event of Default, Assignee, at its option, may (1) complete
any construction on the Property in such manner and form as Assignee deems
advisable, (2) exercise all rights and powers of Assignor, including, without
limitation, the right to negotiate, execute, cancel, enforce or modify Leases,
obtain and evict tenants, and demand, sue for, collect and receive all Rents
from the Property and all sums due under any Lease Guaranties (with all such
Rents and all sums due under any Lease Guaranties to be deposited into the
Property Account to the extent and as required by the terms of the Loan
Agreement and the Cash Management Agreement), and/or (3) either (i) require
Assignor to pay monthly in advance to Assignee or to any receiver appointed to
collect the Rents the fair and reasonable rental value for the use and occupancy
of such part of the Property as may be in the possession of Assignor, or (ii)
require Assignor to vacate and surrender possession of the Property to Assignee
or to such receiver and, in default thereof, Assignor may be evicted by summary
proceedings or otherwise.

 

Section 3.2          Other Remedies. Nothing contained in this Assignment and no
act done or omitted by Assignee pursuant to the power and rights granted to
Assignee hereunder shall be deemed to be a waiver by Assignee of its rights and
remedies under the Loan Agreement, the Note, the Mortgage or the other Loan
Documents, and this Assignment is made and accepted without prejudice to any of
the rights and remedies possessed by Assignee under the terms thereof. The right
of Assignee to collect the Obligations and to enforce any other security
therefor held by it may be exercised by Assignee either prior to, simultaneously
with, or subsequent to any action taken by it hereunder. Assignor hereby
absolutely, unconditionally and irrevocably waives any and all rights to assert
any setoff, counterclaim or crossclaim (other than any compulsory counterclaim)
of any nature whatsoever with respect to the Obligations of Assignor under this
Assignment, the Loan Agreement, the Note, the other Loan Documents or otherwise
with respect to the Advances in any action or proceeding brought by Assignee to
collect same, or any portion thereof, or to enforce and realize upon the lien
and security interest created by this Assignment, the Loan Agreement, the Note,
the Mortgage or any of the other Loan Documents.

 

Section 3.3          Other Security. Assignee may (i) take or release other
security for the payment and performance of the Obligations, (ii) release any
party primarily or secondarily liable therefor, and/or (iii) apply any other
security held by it to the payment and performance of the Obligations, in each
instance, without prejudice to any of its rights under this Assignment.

 

Section 3.4          Non-Waiver. The exercise by Assignee of the option granted
it in Section 3.1 of this Assignment and the collection of the Rents and the
sums due under the Lease Guaranties and the application thereof as provided in
the Loan Documents shall not be considered a waiver of any Default or Event of
Default by Assignor under the Note, the Loan Agreement, the Mortgage, this
Assignment or the other Loan Documents. The failure of Assignee to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Assignment. Assignor shall not be relieved of Assignor’s
obligations hereunder by reason of (a) the failure of Assignee to comply with
any request of Assignor or any other party to take any action to enforce any of
the provisions hereof or of the Loan Agreement, the Note or the other Loan
Documents, (b) the release, regardless of consideration, of the whole or any
part of the Property, or (c) any agreement or stipulation by Assignee extending
the time of payment or otherwise modifying or supplementing the terms of this
Assignment, the Loan Agreement, the Note or the other Loan Documents. Assignee
may

 

 4 

 

 

resort for the payment and performance of the Obligations to any other security
held by Assignee in such order and manner as Assignee, in its sole discretion,
may elect. Assignee may take any action to recover the Obligations, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Assignee thereafter to enforce its rights under this Assignment. The
rights of Assignee under this Assignment shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No act
of Assignee shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision.

 

Section 3.5          Bankruptcy.

 

(a)          Upon or at any time after the occurrence and during the continuance
of an Event of Default, Assignee shall have the right to proceed in its own name
or in the name of Assignor in respect of any claim, suit, action or proceeding
relating to the rejection of any Lease, including, without limitation, the right
to file and prosecute, to the exclusion of Assignor, any proofs of claim,
complaints, motions, applications, notices and other documents, in any case in
respect of the lessee under such Lease under the Bankruptcy Code.

 

(b)          If there shall be filed by or against Assignor a petition under the
Bankruptcy Code, and Assignor, as lessor under any Lease, shall determine to
reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then
Assignor shall give Assignee not less than ten (10) days’ prior notice of the
date on which Assignor shall apply to the bankruptcy court for authority to
reject such Lease. Assignee shall have the right, but not the obligation, to
serve upon Assignor within such ten (10) day period a notice stating that (i)
Assignee demands that Assignor assume and assign the Lease to Assignee pursuant
to Section 365 of the Bankruptcy Code, and (ii) Assignee covenants to cure or
provide adequate assurance of future performance under the Lease. If Assignee
serves upon Assignor the notice described in the preceding sentence, Assignor
shall not seek to reject the Lease and shall to the extent not prohibited by law
comply with the demand provided for in clause (i) of the preceding sentence
within thirty (30) days after Assignee’s notice shall have been given, subject
to the performance by Assignee of the covenant provided for in clause (ii) of
the preceding sentence.

 

ARTICLE 4

NO LIABILITY, FURTHER ASSURANCES

 

Section 4.1         No Liability of Assignee. This Assignment shall not be
construed to bind Assignee to the performance of any of the covenants,
conditions or provisions contained in any Lease or Lease Guaranty or otherwise
impose any obligation upon Assignee. Assignee shall not be liable for any loss
sustained by Assignor resulting from Assignee’s failure to let the Property
after an Event of Default or from any other act or omission of Assignee in
managing the Property after an Event of Default unless such loss is caused by
the gross negligence, willful misconduct or bad faith of Assignee or breach by
Assignee of the terms of the Loan Documents. Assignee shall not be obligated to
perform or discharge any obligation, duty or liability under the Leases or any
Lease Guaranties or under or by reason of this Assignment and Assignor shall
indemnify Assignee for, and hold Assignee harmless from, (a) any and all
liability, loss or damage which may or might be incurred under the Leases, any
Lease Guaranties or under or by reason of this Assignment, and (b) any and all
claims and demands whatsoever, including the defense of any such claims or
demands which may be asserted against Assignee by reason of any alleged
obligations and undertakings on its part to perform or discharge any of the
terms, covenants or agreements contained in the Leases or any Lease Guaranties,
unless caused by the gross negligence, willful misconduct or bad faith of
Assignee or breach by Assignee of the terms of the Loan Documents. Should
Assignee incur any such liability, the amount thereof, including costs, out-of-
pocket expenses and reasonable attorneys’ fees and costs, shall be secured by
this Assignment and by the Mortgage and the other Loan Documents and Assignor
shall reimburse Assignee therefor immediately upon demand and upon the failure
of Assignor to do so Assignee may, at its option, declare the Obligations to be
immediately due and payable. In the absence of the taking of active possession
of the Property by Assignee and subject to the foregoing, this Assignment shall
not operate to place any obligation or liability for the control, care,
management or repair of the Property upon Assignee, nor for the carrying out of
any of the terms

 

 5 

 

 

and conditions of the Leases or any Lease Guaranties, nor shall it operate to
make Assignee responsible or liable for any waste committed on the Property by
the tenants or any other parties, or for any dangerous or defective condition of
the Property, including, without limitation, the presence of any Hazardous
Substances (as defined below), or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee or stranger. As used herein, “Hazardous Substances”
shall mean any and all substances (whether solid, liquid or gas) defined, listed
or otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes or words of similar meaning or
regulatory effect under any present or future environmental laws or that may
have a negative impact on human health or the environment, including, but not
limited to, petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives, lead based paint and toxic mold. Notwithstanding
anything to the contrary contained herein, the term “Hazardous Substances” will
not include substances which otherwise would be included in such definition but
which are of kinds and in amounts ordinarily and customarily used or stored in
similar properties, including, without limitation substances used for the
purposes of cleaning, maintenance, or operations, substances typically used in
construction, and typical products used in properties like the Property, and
which are otherwise in compliance with all environmental laws. Furthermore, the
term “Hazardous Substances” will not include substances which otherwise would be
included in such definition but which are of kinds and in amounts ordinarily and
customarily stocked and sold by tenants operating retail businesses of the types
operated by the lessees under the Leases and which are otherwise in compliance
with all environmental laws.

 

Section 4.2         No Mortgagee In Possession. Nothing herein contained shall
be construed as constituting Assignee a “mortgagee in possession” in the absence
of the taking of actual possession of the Property by Assignee. Subject to
Section 4.1, in the exercise of the powers herein granted Assignee, no liability
shall be asserted or enforced against Assignee, all such liability being
expressly waived and released by Assignor.

 

Section 4.3          Liquor and Alcohol Licenses and Permits. Following any
foreclosure of the lien   of the Mortgage or the delivery of a deed-in-lieu
thereof, and subject to applicable law, Assignor shall use commercially
reasonable efforts to do, execute, acknowledge and deliver all and every such
further acts, assignments, notices of assignments, transfers and assurances as
Assignee shall, from time to time, reasonably require in respect of any liquor
or alcohol licenses, permits or leases relating to the Property (the “Liquor
Permits”) that are in the name of Assignor so as to allow for the uninterrupted
continuation of liquor operations at the Property during a period reasonably
required by Assignee or its designee after consummation of such foreclosure or
deed-in-lieu thereof to obtain replacement Liquor Permits for the Property or to
effect the transfer of the existing Liquor Permits to Assignee or its designee,
as Assignee may elect. With respect to any non-transferable Liquor Permit,
Assignor shall use commercially reasonable efforts to (a) cooperate with
Assignee or its designee in obtaining the applicable replacement Liquor Permit
and (b) until all required new Liquor Permits have been issued and become
effective, make the benefits of all existing Liquor Permits available to
Assignee or its designee pursuant to arrangements reasonably acceptable to
Assignee so that liquor operations may continue at the Property uninterrupted
and consistent with past practices, in each case subject to applicable law. This
Section 4.3 shall survive any foreclosure of the lien of the Mortgage or the
delivery of a deed-in-lieu thereof.

 

Section 4.4           Further Assurances. Assignor will, at the cost of
Assignor, and without out-of- pocket expense to Assignee, do, execute,
acknowledge and deliver all and every such further acts, conveyances,
assignments, notices of assignments, transfers and assurances as Assignee shall,
from time to time, reasonably require for the better assuring, conveying,
assigning, transferring and confirming unto Assignee the property and rights
hereby assigned or intended now or hereafter so to be, or which Assignor may be
or may hereafter become bound to convey or assign to Assignee, or for carrying
out the intention or facilitating the performance of the terms of this
Assignment or for filing, registering or recording this Assignment and, on
demand, will execute and deliver, and hereby authorizes Assignee following the

 

 6 

 

 

occurrence and during the continuance of an Event of Default to execute in the
name of Assignor to the extent Assignee may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments, to
evidence more effectively the lien and security interest hereof in and upon the
Leases.

 

ARTICLE 5

MISCELLANEOUS PROVISIONS

 

Section 5.1          Conflict of Terms. In case of any conflict between the
terms of this Assignment and the terms of the Loan Agreement, the terms of the
Loan Agreement shall prevail.

 

Section 5.2          No Oral Change. This Assignment and any provisions hereof
may not be modified, amended, waived, extended, changed, discharged or
terminated orally, or by any act or failure to act on the part of Assignor or
Assignee, but only by an agreement in writing signed by the party(ies) against
whom the enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.

 

Section 5.3          General Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Assignment may be used interchangeably in the singular or plural form and
the word “Assignor” shall mean “each Assignor and any subsequent owner or owners
of the Property or any part thereof or interest therein,” the word “Note” shall
mean “the Note and any other evidence of indebtedness secured by the Loan
Agreement,” the word “Property” shall include any portion of the Property and
any interest therein, and the phrases “attorneys’ fees”, “legal fees” and
“counsel fees” shall include any and all attorneys’, paralegal and law clerk
fees and disbursements, including, but not limited to, fees and disbursements at
the pre-trial, trial and appellate levels, incurred or paid by Assignee in
protecting its interest in the Property, the Leases and/or the Rents and/or in
enforcing its rights hereunder. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms.

 

Section 5.4          Inapplicable Provisions. If any provision of this
Assignment is held to be illegal, invalid or unenforceable under present or
future laws effective during the term of this Assignment, such provision shall
be fully severable and this Assignment shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of
this Assignment, and the remaining provisions of this Assignment shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Assignment, unless such
continued effectiveness of this Assignment, as modified, would be contrary to
the basic understandings and intentions of the parties as expressed herein.

 

Section 5.5          Governing Law; Jurisdiction; Service of Process. WITH
RESPECT TO MATTERS RELATING TO THE CREATION, PERFECTION AND PROCEDURES RELATING
TO THE ENFORCEMENT OF THIS ASSIGNMENT, THIS ASSIGNMENT SHALL BE GOVERNED BY, AND
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, EXCEPT AS EXPRESSLY SET FORTH ABOVE IN THIS
PARAGRAPH AND TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES SHALL
GOVERN ALL MATTERS RELATING TO THIS ASSIGNMENT AND THE OTHER LOAN DOCUMENTS AND
ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. ALL
PROVISIONS OF THE LOAN AGREEMENT INCORPORATED HEREIN BY REFERENCE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, AS AND TO THE EXTENT SET FORTH
IN THE GOVERNING LAW PROVISION OF THE LOAN AGREEMENT.

 

Section 5.6         Termination of Assignment. Upon the termination or
reconveyance of the Mortgage, this Assignment shall become and be void and of no
effect.

 

 7 

 

 

Section 5.7          Notices. Any notice required or permitted to be given under
this Assignment shall be given in accordance with Section 9.02 of the Loan
Agreement.

 

Section 5.8 WAIVER OF TRIAL BY JURY. EACH OF ASSIGNOR AND ASSIGNEE HEREBY AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND FOREVER
WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
NOW OR HEREAFTER EXIST, WITH REGARD TO THIS ASSIGNMENT, THE NOTE, THE MORTGAGE
OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY ASSIGNOR AND ASSIGNEE AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH OF ASSIGNOR AND ASSIGNEE IS HEREBY AUTHORIZED
TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER.

 

Section 5.9          Successors and Assigns. This Assignment shall be binding
upon and shall inure to the benefit of Assignor, Assignee and the other Secured
Parties and their respective successors and permitted assigns forever. Subject
to the terms of the Loan Agreement and the Mortgage, Assignor shall not have the
right to assign or transfer its rights or obligations under this Assignment
without the prior written consent of Assignee and any attempted assignment
without such consent shall be null and void.

 

Section 5.10        Headings, Etc. The headings and captions of the various
paragraphs of this Assignment are for convenience of reference only and are not
to be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.

 

Section 5.11       Recitals. The recitals hereof are a part hereof, form a basis
for this Assignment and shall be considered prima facie evidence of the facts
and documents referred to therein.

 

Section 5.12        Assignee as Agent; Successor Agents.

 

(a)          Agent has been appointed to act as Agent hereunder by the other
Secured Parties. Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action in accordance with and pursuant to the terms of
the Loan Agreement and this Assignment. Assignor and all other Persons shall be
entitled to rely on releases, waivers, consents, approvals, notifications and
other acts of Agent, without inquiry into the existence of required consents or
approvals of the Secured Parties therefor.

 

(b)          Assignee shall at all times be the same Person that is the
Collateral Agent under the Loan Agreement. Resignation or removal of Agent or
the appointment of a successor Agent, shall be in accordance with the terms of
the Loan Agreement.

 

Section 5.13        [No Release or Novation. The Obligations secured by this
Assignment are continuing obligations and nothing contained herein shall be
deemed to release, terminate or subordinate any lien, security interest or
assignment created or evidenced by this Assignment and all such liens, security
interests and assignments and the priority thereof shall relate back to the date
that the Original Assignment was filed as referenced in the recitals above.
Assignor and Assignee intend that this Assignment shall in no way affect the
priority of the Assignment or constitute a novation of the indebtedness secured
thereby.

 

 8 

 

 

Section 5.14        Change of Agent. DB Agent hereby consents to Agent replacing
DB Agent as the assignee under this Assignment and assigns to Agent all of its
interest under the Original Assignment in such capacity.]2

 

ARTICLE 6

LOCAL LAW PROVISIONS

 

[To be provided by local counsel (if any)]

 

[The remainder of this page has been intentionally left blank]

 

 

2 Insert only for amended and restated ALR.

 

 9 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment the day and
year first above written.

 

  ASSIGNOR       LANDLORD:       [Landlord]         By:     Name:   Title:      
OPERATING LESSEE:       [TRS Lessee]         By:     Name:   Title:

 

[Signature Page to ALR]

 

 

 

 

  ASSIGNEE:       CITIBANK, N.A., as Collateral Agent         By:     Name:  
Title:

 

[Signature Page to ALR]

 

 

 

 

For purposes of Section 15.14 only:

 

DB AGENT:       DEUTSCHE BANK AG NEW YORK BRANCH,   as administrative agent    
    By:     Name:   Title:         By:     Name:   Title:  

 

[Signature Page to ALR]

 

 

 

 

ASSIGNOR ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

[Acknowledgement Page to ALR]

 

 

 

 

ASSIGNEE ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

[Acknowledgement Page to ALR]

 

 

 

 

DB AGENT ACKNOWLEDGMENT

 

[Insert state specific form of notary acknowledgement]

 

[Acknowledgement Page to ALR]

 

 

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF PROPERTY

 

[see attached]

 

 Exh. A-1 

 

 

EXHIBIT I TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF ASSIGNMENT OF INTEREST RATE CAP AGREEMENT

 

[Attached.]

 

 Exh. I 

 

 

EXHIBIT I TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF ASSIGNMENT OF INTEREST RATE CAP AGREEMENT

 

COLLATERAL ASSIGNMENT OF
INTEREST RATE PROTECTION AGREEMENT

 

THIS COLLATERAL ASSIGNMENT OF INTEREST RATE PROTECTION AGREEMENT (this

“Assignment”), is made this 27th day of April, 2017 by [HOSPITALITY INVESTORS
TRUST OPERATING PARTNERSHIP, L.P., a Delaware limited partnership],
(“Assignor”), and CITIBANK, N.A., as collateral agent for the Lenders as defined
in the Loan Agreement (together with its successors and assigns, “Assignee”).

 

WITNESSETH:

 

WHEREAS, Assignee and certain indirect subsidiaries of Assignor (collectively,
“Borrower”) are parties to that certain Second Amended and Restated Term Loan
Agreement dated as of April 27, 2017 (as amended, modified, restated,
consolidated or supplemented from time to time, the “Loan Agreement”) pursuant
to which Assignee has made a term loan to Borrower in the principal amount of up
to $310,000,000 (the “Loan”) on the terms and conditions set forth in the Loan
Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed thereto in the Loan Agreement.

 

WHEREAS, the Loan is evidenced by certain Promissory Notes dated as of
[               ], 2017 by Borrower to the Lenders in the aggregate principal
amount of $[               ] (as the same may be amended, modified,
consolidated, split, supplemented, replaced or otherwise modified from time to
time, the “Note”) and secured by, inter alia, certain of the Loan Documents, as
set forth in the Loan Agreement.

 

WHEREAS, Assignor has entered into that certain Cap Agreement with
[               ] (“Counterparty”), a confirmation of which, dated as of the
date hereof, is attached hereto as Exhibit A (as amended, modified and in effect
from time to time, and together with the Guaranty dated as of the date hereof
and made by [               ] in favor of Assignor, the “Cap Agreement”).

 

WHEREAS, as a condition to making the Loan, Assignee has required that Assignor
execute and deliver this Assignment to Assignee as additional security for the
Loan.

 

WHEREAS, Assignor, as an affiliate of Borrower, is receiving a good and valuable
benefit the sufficiency and receipt of which is hereby acknowledged from
Assignee and the Lenders have entered into the Loan Agreement.

 

NOW, THEREFORE, in consideration of Assignee’s agreement to make the Loan to
Borrower and for other good and valuable consideration, the receipt, sufficiency
and adequacy of which are hereby acknowledged, Assignor hereby covenants and
agrees as follows:

 

1.           Assignor hereby grants, transfers and assigns to Assignee all of
Assignor’s right, title, interest, claim and demand in, to and under the Cap
Agreement, together with all right, power and authority of Assignor to amend,
modify or change the terms of the Cap Agreement or to surrender, cancel, or
terminate the same without the prior consent of Assignee except as permitted
pursuant to this Assignment, for the purpose of

 

 1 

 

 

securing the full payment and performance of the Indebtedness under the Loan
Agreement and the other Loan Documents.

 

2.         To protect the security of this Assignment:

 

(a)          Assignor hereby irrevocably authorizes and empowers Assignee, in
its own name or in the name of its nominee or as attorney-in-fact for Assignor,
to exercise any and all rights, powers, and privileges of Assignor under the Cap
Agreement, and, generally, to do any and all acts in the name of Assignor or in
the name of Assignee with the same force and effect as Assignor could do if this
Assignment had not been made; provided, however, that Assignee will not exercise
any of such rights except upon the occurrence of an Event of Default.

 

(b)          Assignor hereby represents and warrants to Assignee that as of the
date hereof (i) the Cap Agreement is in full force and effect; (ii) Assignor has
the full right to assign its interest in the Cap Agreement; (iii) the Cap
Agreement and the Loan Agreement contain all of the agreements between the
respective parties thereto relating to the matters covered by the Cap Agreement;
(iv) there are no defaults under the Cap Agreement on the part of Assignor; and
(v) Assignor, but for this Assignment, has not transferred, assigned or
encumbered in whole or in part the Cap Agreement or any of Assignor’s rights or
interests thereunder.

 

(c)          Assignor shall (i) faithfully perform every material obligation
under the Cap Agreement by Assignor to be performed; (ii) at the sole cost and
expense of Assignor, enforce or secure the performance of every material
obligation of the Cap Agreement by Counterparty to be performed; (iii) promptly
notify Assignee in writing of all defaults or non-performance by all parties
under the Cap Agreement of which it is aware; and (iv) not modify or in any way
amend in any material respect the terms of the Cap Agreement without the prior
consent of Assignee and any attempt on the part of Assignor to exercise any such
right without the prior consent of Assignee shall be null and void and of no
force or effect.

 

(d)          Assignor agrees, at Assignor’s sole cost and expense, to appear in
and defend any action or proceeding related to the Cap Agreement and to pay all
reasonable out-of-pocket costs and expenses of Assignee, including attorney’s
fees and disbursements in a reasonable sum, in any such action or proceeding in
which Assignee may appear.

 

(e)          Assignor agrees to pay immediately upon written demand, together
with supporting invoices, all reasonable out-of-pocket sums expended by Assignee
under the authority hereof together with interest thereon at the applicable
interest rate provided for in the Note.

 

(f)          Assignor shall not, without the prior consent of Assignee, or as
may be otherwise permitted under the Loan Documents, assign or transfer directly
or indirectly, the Cap Agreement or the rights of Assignor thereunder.

 

3.        Assignor further acknowledges and agrees that:

 

(a)          Upon the occurrence of an Event of Default with respect to the
payment or performance of any of the Indebtedness, Assignee may exercise the
rights set forth in the Loan Documents, and without regard to the adequacy or
the security for the indebtedness hereby secured or secured by the Loan
Documents, Assignee shall have the right, but not the obligation, to further
exercise any of the rights of Assignor under the Cap Agreement.

 

(b)          Assignee shall not be obligated to perform or discharge, nor does
it hereby undertake to perform or discharge, any obligation, covenant,
agreement, duty or liability under the Cap Agreement, or under or by reason of
this Assignment, and Assignor shall and does hereby agree to indemnify and to
hold Assignee harmless of and from any and all liability, loss or damage which
Assignee may or might incur under the Cap Agreement or under or by reason of
this Assignment and of and from any and all claims and demands

 

 2 

 

 

whatsoever which may be asserted against Assignee by reason of any alleged
obligations or undertakings on its part to perform or discharge any of the
obligations, covenants, agreements, duties or liability under the Cap Agreement,
or under or by reason of this Assignment other than such claims or demands
arising from Assignee’s gross negligence or willful misconduct; should Assignee
incur any such liability, loss or damage under the Cap Agreement or under or by
reason of this Assignment, or in the defense of any such claims or demands, the
amount thereof, including reasonable out-of-pocket costs and expenses including
attorneys’ fees and disbursements, shall be secured hereby, and Assignor shall
reimburse Assignee therefor immediately upon written demand together with
supporting invoices.

 

4.           Assignor and Assignee agree that (i) Counterparty shall be entitled
to conclusively rely (without any independent investigation) on any notice or
instructions from Assignee in respect of this Assignment, (ii) without
limitation on the immediately preceding clause, in the event of any
inconsistency between any notice or instructions from Assignee and any notice or
instructions from Assignor, Counterparty shall be entitled to conclusively rely
(without any independent investigation) on those from Assignee and (iii)
Counterparty shall be held harmless and shall be fully indemnified by Assignor
from and against any and all claims, other than those ultimately determined to
be caused by the gross negligence or willful misconduct of Counterparty, and
from and against any damages, penalties, judgments, liabilities, losses or
expenses (including reasonable attorneys’ fees and disbursements) reasonably
incurred by Counterparty as a result of the assertion of any claim, by any
person or entity, arising out of, or otherwise related to, any actions taken or
omitted to be taken by Counterparty in reliance upon any such instructions or
notice provided by Assignee.

 

5.           This Assignment is made pursuant to, and shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

6.           No failure or delay on the part of Assignee in exercising any power
or right hereunder shall operate as a waiver thereof or a waiver of any other
term, provision or condition hereof, nor shall any single or partial exercise of
any such right or power preclude any other or further exercise thereof or the
exercise of any other right or power hereunder. All rights and remedies of
Assignee hereunder are cumulative and shall not be deemed exclusive of any other
rights or remedies provided by law.

 

7.           This Assignment embodies the entire agreement and understanding
between the parties relating to the subject matter hereof and may not be
amended, waived or discharged except by an instrument in writing executed by the
parties hereto, except as set forth in Section 15 hereof.

 

8.           This Assignment applies to, inures to the benefit of, and binds the
parties hereto, their successors and assigns.

 

9.           No right or remedy herein conferred upon or reserved to Assignee is
intended to be exclusive of any other remedy provided for herein, or in any
other Loan Document or by law or by equity provided or permitted, and all such
rights and remedies shall be cumulative and shall be in addition to every other
right and remedy given hereunder, or now or hereafter existing at law or in
equity. If any clause or provision in this Assignment shall be invalid under any
circumstances, that fact shall in no way invalidate this Assignment or any other
provision herein.

 

10.         All notices, demands, or documents which are required or permitted
to be given or served hereunder shall be in writing and shall be deemed
sufficiently given when delivered or mailed in the manner set forth in the Loan
Agreement.

 

11.         Assignor agrees the Obligations of the Loan Parties under the Loan
Documents will be performed strictly in accordance with the terms of the Loan
Documents. The obligations of Assignor under or in respect of this Assignment
are independent of any other obligations of any other Person under or in respect
of the Loan Documents, and a separate action or actions may be brought and
prosecuted against Assignor to enforce this Assignment, irrespective of whether
any action is brought against Borrower or any other Person or

 

 3 

 

 

whether Borrower or any other Person is joined in any such action or actions.
The liability of Assignor under this Assignment shall be irrevocable, absolute
and unconditional irrespective of, and Assignor hereby irrevocably waives any
defenses it may now have or hereafter acquire in any way relating to, any or all
of the following:

 

(a)          any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;

 

(b)          any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Loan Parties under or in
respect of the Loan Documents or any other amendment or waiver of or any consent
to departure from any Loan Document, including, without limitation, any increase
in the Indebtedness resulting from the extension of additional credit to
Borrower or any of Borrower’s Affiliates or otherwise;

 

(c)          any taking, exchange, release or non-perfection of any collateral
secured under the Loan Documents, or any taking, release or amendment or waiver
of, or consent to departure from, any other Loan Document securing any of the
Obligations of the Loan Parties under the Loan Documents;

 

(d)          any manner of application of collateral securing any of the
Obligations of the Loan Parties under the Loan Documents, or any proceeds of
such collateral, to all or any of the Obligations of the Loan Parties under the
Loan Documents, or any manner of sale or other disposition of any other
collateral for all or any obligations of Borrower or its Affiliates under the
Loan Documents or any other assets of Borrower or any of its Affiliates;

 

(e)          any change, restructuring or termination of the corporate structure
or existence of Borrower or any of its Affiliates;

 

(f)           any failure of Assignee or any of the Lenders to disclose to
Borrower or its Affiliates any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
Borrower or its Affiliates now or hereafter known to Assignee or any of the
Lenders (Assignor waiving any duty on the part of Assignee or any of the Lenders
to disclose such information);

 

(g)          the failure of any other Person to execute or deliver any guaranty,
security instrument, or agreement or the release or reduction of liability of
any Person or other surety with respect to the Obligations of the Loan Parties
under the Loan Documents; or

 

(h)          any statute of limitations or any existence of or reliance on any
representation by Assignee or any of the Lenders that might otherwise constitute
a defense available to, or a discharge of, Borrower or any of its Affiliates.

 

This Assignment shall continue to be effective or be reinstated, as the case may
be, if at any time any payment or performance of any of the Obligations of the
Loan Parties under the Loan Documents is rescinded or must otherwise be returned
by Assignee or any of the Lenders or any other Person upon the insolvency,
bankruptcy or reorganization of Borrower or any of its Affiliates or otherwise,
all as though such payment had not been made.

 

12.         Assignor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Obligations of the Loan Parties under the Loan
Documents and this Assignment and any requirement that Assignee or any of the
Lenders protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against Borrower or any other
Person or any other collateral securing the Obligations of the Loan Parties
under the Loan Documents or any part thereof.

 

 4 

 

 

(b)          Assignor hereby unconditionally and irrevocably waives any right to
revoke this Assignment and acknowledges that this Assignment is continuing in
nature and applies to all of the Obligations of the Loan Parties under the Loan
Documents, whether existing now or in the future.

 

(c)          Assignor hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by the Assignee that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of Assignor or other rights of Assignor
to proceed against Borrower or any other Person or any collateral securing any
of the Obligations of the Loan Parties under the Loan Documents and (ii) any
defense based on any right of set-off or counterclaim against or in respect of
the Obligations of the Loan Parties under the Loan Documents.

 

(d)          Assignor hereby unconditionally and irrevocably waives any duty on
the part of Assignee or any of the Lenders to disclose to Assignor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of Borrower or any of its
Affiliates now or hereafter known by Assignee or any of the Lenders.

 

(e)          Assignor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in this Section 12 are knowingly made
in contemplation of such benefits.

 

13.         Assignor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against Borrower
that arise from the existence, payment, performance or enforcement of the
Obligations of the Loan Parties under or in respect of this Assignment or any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Assignee or any of the Lenders against
Borrower or any collateral securing any of the Obligations of the Loan Parties
under the Loan Documents, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without limitation,
the right to take or receive from Borrower, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, except at such times as all of the
Obligations of the Loan Parties under the Loan Documents and all other amounts
then due and payable under this Assignment shall have been paid or performed.

 

14.         Assignor, and by its acceptance of this Assignment, Assignee, on
behalf of the Lenders, hereby confirm that it is the intention of all such
Persons that this Assignment and the Obligations of Assignor hereunder shall not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar foreign, federal or state law, or any case or proceeding under
any such laws, to the extent applicable to this Assignment and the Obligations
of Assignor hereunder. To effectuate the foregoing intention, Assignor, and
Assignee, on behalf of the Lenders, hereby irrevocably agree that,
notwithstanding any provision herein or in the other Loan Documents to the
contrary, the Obligations of Assignor under this Assignment at any time shall be
limited to the maximum amount as will result in the Obligations of Assignor
under this Assignment not constituting a fraudulent transfer or conveyance.

 

15.         This Assignment shall automatically terminate upon the earlier to
occur of (a) the termination or expiration of the Cap Agreement and (b) the
payment in full of the Indebtedness. In such event, Assignee, upon Assignor’s
notice to Assignee and at Assignor’s expense, shall promptly execute appropriate
documentation evidencing the termination of this Assignment.

 

[NO FURTHER TEXT ON THIS PAGE]

 

 5 

 

 

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
instrument the day, month and year first above written.

 

  ASSIGNOR:       [HOSPITALITY INVESTORS TRUST OPERATING PARTNERSHIP, L.P.]    
  By:     Name:     Title:       ASSIGNEE:       CITIBANK, N.A.       By:    
Name:     Title:

 

[Signature Page to Assignment and Acknowledgment of Interest Rate Cap]

 

 

 

 

CONSENT OF COUNTERPARTY

 

[                                          ] (the “Counterparty”) hereby
acknowledges and consents to the foregoing collateral assignment of the Cap
Agreement by Assignor in favor of Assignee, and covenants and agrees that (i)
upon receipt by the undersigned of written notification from Assignee of the
occurrence of a Lockbox Trigger Event (as defined in the Cash Management
Agreement), Assignee, in its own name or in the name of its nominee or as
attorney-in-fact for Assignor, shall be entitled to exercise any and all rights,
powers, and privileges of Assignor under the Cap Agreement, subject to the terms
and provisions of the foregoing Assignment and (ii) the undersigned will pay
directly to Assignee all amounts payable by the undersigned under the Cap
Agreement to the following address (or at such other address as Assignee shall
hereafter notify Counterparty):

 

Name:Citibank, N.A. as agent for the Lenders under that certain Second Amended
and Restated Term Loan Agreement dated [April 27], 2017

Bank Name:Citibank, N.A.

Bank Address:1615 Brett Road, OPS III, New Castle, Delaware 19720

Account Name:Agency/Medium Term Finance

Reference:Hospitality Investors Trust Operating Partnership, L.P.

Account No.:36852248

ABA No.:021000089

 

All notices shall be delivered to Assignee at the following address (or at such
other address as Assignee shall hereafter notify Counterparty):

 

Citibank, N.A.

390 Greenwich Street, 7th Floor New York,
New York 10013
Attn: Ana Rosu Marmann

 

with a copy to:

 

Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Attention: Malcolm K. Montgomery, Esq.

 

[NO FURTHER TEXT ON THIS PAGE]

 

 

 

 

IN WITNESS WHEREOF, Counterparty has executed and delivered this instrument as
of [                             ], 2017.

 

  [                                   ]         By:       Name:     Title:

 

[Signature Page to Consent of Counterparty]

 

 

 

 

EXHIBIT A

 

CONFIRMATION OF CAP AGREEMENT

 

(See Attached)

 

 Exh. A-1 

 

 

EXHIBIT J TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT

 

[Attached.]

 

 Exh. J 

 

 

EXHIBIT J TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF CASH MANAGEMENT AGREEMENT

 

CASH MANAGEMENT AGREEMENT

 

CASH MANAGEMENT AGREEMENT dated as of April 27, 2017 (this “Agreement”) by and
among the entities listed on the signature pages hereof under the heading
“Borrower Parties” (individually and collectively and jointly and severally, the
“Borrowers”), CITIBANK, N.A. (“Citi”), as collateral agent (together with any
successor collateral agent appointed pursuant to Article VIII of the Loan
Agreement, the “Agent”) for the Secured Parties, and HIT SWN TRS, LLC, a
Delaware limited liability company, HIT SWN CRS NTC TRS, LP, a Delaware limited
partnership, and HIT SWN INT NTC TRS, LP, a Delaware limited partnership
(individually and collectively, as the “TRS Lessees”).

 

WHEREAS, pursuant to that certain Second Amended and Restated Term Loan
Agreement dated as of the date hereof (as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time, the “Loan
Agreement”; capitalized terms used herein without being defined having the
meanings ascribed thereto in the Loan Agreement), by and among the Borrowers,
the Agent, the Lenders, and certain other parties thereto, the Lenders have
agreed to provide financing to the Borrowers in the maximum aggregate principal
amount of up to $310,000,000 (the “Loan”) secured by, inter alia, the Collateral
Assets; and

 

WHEREAS, in order to fulfill certain of the Loan Parties’ obligations under the
Loan Agreement, the Borrowers and the TRS Lessees (hereinafter, the “Company
Parties”) have agreed to enter into this Agreement relating to the cash
management of the Collateral Assets.

 

NOW THEREFORE, in consideration of the mutual premises contained herein and for
other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

Section 1.            Defined Terms. As used herein the following capitalized
terms shall have the respective meanings set forth below:

 

“Account Collateral” means: (a) the Accounts and all cash, checks, drafts,
certificates and instruments, if any, from time to time deposited or held in the
Accounts from time to time; (b) any and all amounts deposited or held in the
Accounts invested in Cash Equivalents in accordance with Section 8 hereof; (c)
all interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise payable in respect of, or in exchange for, any
or all of the foregoing; and (d) to the extent not covered by clauses (a)
through (c) above, all “proceeds” (as defined under the UCC) of any or all of
the foregoing.

 

“Account Control Agreement” means an account control agreement with the Lockbox
Bank in form and substance reasonably satisfactory to the Agent pursuant to
which the Lockbox Bank agrees to (i) comply with instructions originated by the
Agent directing the disposition of funds in the Lockbox Account, the Cash
Collateral Account, the PIP Reserve Account and the FF&E Reserve Account in a
manner consistent with the terms and provisions of such account control
agreement and this Agreement without the further consent of any Company Party,
and (ii) waives or subordinates in favor of the Agent all claims of the Lockbox
Bank (but excluding any customary banker’s liens or, with respect to uncleared
funds or dishonored checks, rights of setoff or rights of recoupment in favor of
the Lockbox Bank) to funds in such Accounts.

 

“Accounts” means the Property Accounts, the PIP Reserve Account, the FF&E
Reserve Account, and, if any, the Cash Collateral Account and the Lockbox
Account and the Subaccounts thereof.

 

 

 

 

“Annual Budget” means, with respect to any Collateral Asset for any Fiscal Year,
the operating budget (or operating budgets) delivered to the Agent pursuant to
Section 5.03(f) of the Loan Agreement setting forth the applicable Borrower’s
estimate of Gross Income from Operations, Operating Expenses and FF&E and
Capital Costs for such Fiscal Year for such Collateral Asset.

 

“Annual REIT Distribution Cap” means, in respect of a Distributing Party,
distributions in an aggregate amount, for any period of twelve (12) consecutive
calendar months, not exceeding the lesser of (a) $30,000, or (b) the minimum
distributions necessary in order for such Distributing Party to maintain its
status as a REIT.

 

“Approved Annual Budget” has the meaning specified in Section 5.

 

“Approved Capital Expenditures” shall mean capital expenditures incurred by any
Borrower and either (a) Approved Alterations, (b) included in the Approved
Annual Budget or (c) approved by the Agent, which approval shall not be
unreasonably withheld, conditioned or delayed, provided that any capital
expenditures included in FF&E Expenses or that constitute PIP Work shall not
constitute Approved Capital Expenditures.

 

“Approved Excess Operating Expenses” has the meaning specified in Section 6.

 

“Approved FF&E Expenses” means FF&E Expenses incurred by any Borrower and either
(a) included in the Annual Budget or (b) approved by the Agent, which approval
shall not be unreasonably withheld, conditioned or delayed, provided that any
FF&E Expenses that constitute PIP Work shall not constitute Approved FF&E
Expenses.

 

“Approved Operating Expenses” means Operating Expenses incurred by the Borrowers
or by any Approved Manager on any Borrower’s behalf (excluding any Restricted
Payments) which (a) are included in the Approved Annual Budget for the current
calendar month, (b) are for real estate taxes, insurance premiums, electric,
gas, oil, water, sewer or other utility service to the Collateral Assets, (c)
are for Management Fees, or (d) have been approved in writing by the Agent as
Approved Operating Expenses; provided, however, that Approved Operating Expenses
shall also include, for any calendar month in which Operating Expenses exceed
the Monthly Operating Expense Budgeted Amount, the amount of such excess
Operating Expenses up to and not to exceed ten percent (10%) of the Monthly
Operating Expense Budgeted Amount for such calendar month as to which the
Borrower provide to the Agent a reasonably detailed explanation of the reasons
for and expenditures resulting in Operating Expenses exceeding the Monthly
Operating Expense Budgeted Amount.

 

“Brand Manager” means an Approved Manager of a Collateral Asset that is any of
Hyatt, Hilton, Marriott or Starwood.

 

“Business Day” has the meaning set forth in the Loan Agreement, except that with
respect to any Property Account Bank or Lockbox Bank, any day shall not be
considered a Business Day with respect to such Property Account Bank or Lockbox
Bank if commercial banks in the City in which such Property Account Bank or
Lockbox Bank is located are required or permitted by law to be closed.

 

“Cash Collateral Account” has the meaning specified in Section 2(b).

 

“Cash Collateral Funds” means any funds on deposit in the Cash Collateral
Account from time to time.

 

“Debt Service” has the meaning specified in Section 2(b).

 

“Debt Service Subaccount” has the meaning specified in Section 2(b).

 

 2 

 

 

“Distributing Party” means a direct or indirect member of the Borrowers that is
required by Legal Requirements to make distributions in order to maintain its
status as a REIT.

 

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

 

“Eligible Institution” means a depository institution or trust company insured
by the Federal Deposit Insurance Corporation, the short term unsecured debt
obligations or commercial paper of which are rated at least “A-2” by S&P, “P-2”
by Moody’s, and “F-2+” by Fitch in the case of accounts in which funds are held
for thirty (30) days or less, or, in the case of Letters of Credit or accounts
in which funds are held for more than thirty (30) days, the long term unsecured
debt obligations of which are rated at least “A” by Fitch and S&P and “A2” by
Moody’s.

 

“Enforcement” means, following the occurrence of (and prior to Lenders’
acceptance of a cure of) an Event of Default, the earliest to occur of (a) the
acceleration of the Loan, (b) the initiation of judicial or non-judicial
foreclosure proceeding, proceedings for the appointment of a receiver or any
similar remedy and/or (c) the imposition of a stay, an injunction or a similar
judicially imposed device that has the effect of preventing the Secured Parties
from exercising remedies.

 

“Excess Operating Expenses” has the meaning specified in Section 6. “FF&E
Exception” has the meaning specified in Section 3(d).

 

“FF&E Expense” for any period shall mean the amount expended for FF&E Work in,
at or to the Collateral Assets or any individual Collateral Asset (including any
installation, delivery or other related cost).

 

“FF&E Reserve” means for each Monthly Payment Date, four percent (4.0%) of Gross
Hotel Revenues for the immediately preceding calendar month.

 

“FF&E Reserve Account” means a single account with the Servicer in the name of
the Agent.

 

“FF&E Reserve Funds” has the meaning specified in Section 3(d).

 

“FF&E Work” means the repair and replacement of FF&E and Routine Capital
Expenditures.

 

“Fitch” means Fitch, Inc. or its successor.

 

“Gross Income from Operations” means, with respect to any Collateral Asset for
any period, all Gross Hotel Revenues with respect to such Collateral Asset for
such period. Gross Income from Operations shall not be diminished as a result of
any intervening estate or interest in such Collateral Asset or any part thereof
created after the date such Asset became a Collateral Asset (unless such
intervening estate or interest was approved by the Agent).

 

 3 

 

 

“Hotel Taxes” means federal, state and municipal excise, occupancy, sales and
use taxes collected by or on behalf of any Borrower or any other Loan Party
directly from patrons or guests of the Collateral Assets as part of or based on
the sales price of any goods, services or other items, such as gross receipts,
room, admission, cabaret or equivalent taxes and required to be paid to a
Governmental Authority.

 

“Incentive Management Fees” means the property management fees paid to an
Approved Manager for property management (as opposed to asset management)
services provided to the Collateral Assets that are based on an override, profit
participation or other form of incentive for increased revenues or profits
generated by such Collateral Assets. Incentive Management Fees shall not include
base management fees, reimbursable expenses paid to an Approved Manager, system
service charges, accounting fees, development fees, revenue management fees,
sales and marketing fees, information technology fees, human resources fees,
risk management fees, administration fees or other similar fees, expenses or
reimbursements, in each case, so long as the same are not calculated based on
increases in revenues or profits generated by such Collateral Assets.

 

“Insurance Payments” has the meaning specified in Section 2(b).

 

“Insurance Premiums” means, with respect to any Collateral Asset, all premiums
payable in respect of the insurance required to be maintained pursuant to the
Mortgage and the Loan Agreement with respect to such Collateral Asset.

 

“Insurance Subaccount” has the meaning specified in Section 2(b). “Lockbox
Account” has the meaning specified in Section 2(b).

“Lockbox Bank” means, at the election of the Agent, (a) the Agent or an
Affiliate thereof, (b) the Servicer or (c) an Eligible Institution selected by
the Agent.

 

“Lockbox Period” means each period commencing upon the occurrence of a Lockbox
Trigger Event and ending upon the occurrence of a Lockbox Trigger Event Cure
with respect to such Lockbox Trigger Event (and provided that no other Lockbox
Trigger Event shall have occurred and be continuing (i.e., has not been cured as
provided herein)).

 

“Lockbox Trigger Event” means the occurrence of one or both of the following:
(a) an Event of Default or (ii) the commencement of a Low Debt Yield Period.

 

“Lockbox Trigger Event Cure” means (a) with respect to a Lockbox Trigger Event
in respect of an Event of Default, the Company Parties shall have tendered a
cure of such Event of Default and such cure has been accepted by the Agent (and
no other Event of Default is then continuing), and (b) with respect to a Lockbox
Trigger Event caused by a Low Debt Yield Period, (i) the Low Debt Yield Period
has ended pursuant to the terms hereof, or (ii) the Borrowers have made
prepayments of the Loan in accordance with Section 2.06(a) of the Loan Agreement
in amounts sufficient to satisfy the cause the end of the Low Debt Yield Period
(provided that in the event of such a prepayment, the Lockbox Period related to
such Low Debt Yield Period shall cease immediately upon prepayment of such
amount), in the case of each of clauses (a), (b)(i) and (b)(ii), without any
further notice required to be provided by the Agent to the Borrowers to the
effect that the Lockbox Period has ended.

 

“Low Debt Yield Period” shall commence if, as of any Test Date, the Debt Yield
is less than eight and one-half percent (8.5%) and shall end if the Collateral
Assets have achieved a Debt Yield of at least eight and one-half percent (8.5%)
for two consecutive Test Dates, as calculated by the Borrowers in good faith.

 

 4 

 

 

“Management Fees” shall mean the base management fees, Incentive Management
Fees, reimbursable expenses, system service charges and all other charges, fees
and expenses to be paid to the Approved Managers, from time to time under the
Approved Management Agreements.

 

“Manager” means, for each Collateral Asset, the Approved Manager that is
managing such Collateral Asset in accordance with the terms and provisions of
the Loan Documents.

 

“Monthly Operating Expense Budgeted Amount” for any calendar month means the
monthly amount set forth in the Approved Annual Budget for Operating Expenses
for such calendar month.

 

“Moody’s” means Moody’s Investors Service, Inc. or its successor. “Operator” has
the meaning specified in Section 2(a).

 

“Operating Expenses” means, for any period, without duplication, all expenses
actually paid or payable by or on behalf of any Company Party during such period
in connection with the administration, operation, management, maintenance,
repair and use of the Collateral Assets, determined on an accrual basis, and,
except to the extent otherwise provided in this definition, in accordance with
GAAP. Operating Expenses specifically shall include (i) all operating expenses
incurred in such period based on quarterly financial statements delivered to the
Lenders in accordance with Section 5.03 of the Loan Agreement and prepared in
accordance with the Uniform System of Accounts, (ii) all payments required to be
made pursuant to any Operations Agreements, (iii) Management Fees, (iv)
administrative, payroll, security and general expenses for the Collateral
Assets, (v) the cost of utilities, supplies, consumables, inventories and fixed
asset supplies consumed in the operation of the Collateral Assets, (vi) costs
and fees of independent professionals (including, without limitation, legal,
accounting, consultants and other professional expenses), technical consultants,
operational experts (including quality assurance inspectors) or other third
parties retained to perform services required or permitted under the Loan
Documents, (vii) cost of attendance by employees at training and manpower
development programs, (viii) association dues, (ix) computer processing charges,
(x) operational equipment and other lease payments to the extent constituting
operating expenses under GAAP, (xi) Taxes and Other Charges (other than income
taxes or Other Charges in the nature of income taxes), Hotel Taxes and Insurance
Premiums, (xii) all reserves required by the Agent hereunder (without
duplication) and (xiii) all franchise fees and expenses incurred in connection
with any Approved Franchise Agreement (other than one- time expenses such as
individual consent fees and similar one-time costs). Notwithstanding the
foregoing, Operating Expenses shall not include (1) depreciation or amortization
or other noncash items, (2) income taxes or Other Charges in the nature of
income taxes, (3) any expenses (including legal, accounting and other
professional fees, expenses and disbursements) incurred in connection with the
making of the Loan or the sale, exchange, transfer, financing or refinancing of
all or any portion of any Collateral Asset or in connection with the recovery of
Insurance Proceeds or Awards which are applied to prepay the Loan, (4) capital
expenditures including (without duplication) any reserves required by the Agent
hereunder with respect to capital expenditures, (5) Debt Service, (6) any item
of expense which would otherwise be considered within Operating Expenses
pursuant to the provisions above but is paid directly by any tenant under a
Tenancy Lease, (7) any non-recurring, capitalized or extraordinary expenses, (8)
any expenses that relate to a Collateral Asset from and after the release of
such Collateral Asset from the Lien of the applicable Mortgage in accordance
with Section 9.13 of the Loan Agreement, (9) rent payable under any Operating
Lease and (10) any Restricted Payments that are not expenses described by any of
clauses (i) through (xiii) above (including any Restricted Payments that are
equity distributions or dividends or similar payments that constitute a return
of or a return on capital contributions to any Borrower’s constituent owners).

 

“Operations Agreements” shall mean the reciprocal easement agreements and any
other covenants, restrictions, easements, declarations or agreements of record
relating to the construction, operation or use of the Collateral Assets.

 

“PIP Reserve Account” has the meaning specified in the Loan Agreement.

 

 5 

 

 

“Property Account” has the meaning specified in Section 2(a).

 

“Property Account Bank” means that certain bank or other financial institution
maintaining the Property Account set forth on Schedule I (as such schedule may
hereafter be supplemented, amended or modified from time to time), provided that
such bank or financial institution remains an Eligible Institution, and any
successor Eligible Institution thereto (or such other Eligible Institution in
replacement thereof selected by the applicable Company Party from time to time
which replacement is reasonably acceptable to the Agent).

 

“Property Account Control Agreement” has the meaning specified in Section 2(a).

 

“REIT” means a Person that is qualified to be treated for tax purposes as a real
estate investment trust under Sections 856-860 of the Internal Revenue Code.

 

“Rents” with respect to any Collateral Asset, has the meaning specified in the
Mortgage with respect to such Collateral Asset.

 

“Reserve Exceptions” has the meaning specified in Section 2(c).

 

“Restricted Payments” means any payments to any Guarantor or any of its
respective Affiliates, or any payments of any “override” or “profit
participations”, asset management or incentive-based fees or expenses, or any
transition or termination fees, costs or expenses, or their equivalent;
provided, however, that “Restricted Payments” shall not include (i) any
management fees that are payable to any Approved Manager (that is not an
Affiliate of any Company Party) pursuant to any Approved Management Agreement
that has been approved by the Administrative Agent (including approval of any
amendments thereto), (ii) any base management fees that are payable to any
Approved Manager that is an Affiliate of any Company Party pursuant to any
Approved Management Agreement that has been entered into in accordance with the
Loan Agreement (including any amendments thereto) (provided that no Event of
Default exists) or

(iii) any payments required to be made by the terms of the Loan Documents.

 

“Routine Capital Expenditures” means routine and ordinary course maintenance,
repairs, alterations and replacements of or to the Collateral Assets, such as
exterior and interior painting, resurfacing of walls and floors, replacement of
wall, ceiling or floor coverings, replacement of bathroom fixtures (including
tubs and surrounds), replacement of lighting fixtures, minor wall demolition and
replacement to accommodate guest room or bathroom renovation and/or brand
required changes to lobbies, public spaces, guest rooms or bathrooms,
replacements of doors and frames, replacement of windows and frames, pool and
deck repairs, roof repairs and replacements, landscaping, resurfacing parking
areas and replacing folding walls, in each case that are capitalized under GAAP.
For the avoidance of doubt, “Routine Capital Expenditures” shall not include
expansion or “growth” projects or any alteration or improvement that requires
the Administrative Agent’s consent pursuant to Section 5.02(u) of the Loan
Agreement.

 

“Subaccounts” has the meaning specified in Section 2(b).

 

“Taxes” means, with respect to any Collateral Asset, all real estate taxes and
other ad valorem taxes relating to such Collateral Asset, including any
interest, additions to tax or penalties applicable thereto.

 

“Tax Payments” has the meaning specified in Section 2(b). “Tax Subaccount” has
the meaning specified in Section 2(b).

 

Section 2.           Establishment of the Accounts. (a) Each Company Party that
is the direct lessee of a Collateral Asset (other than the Georgia Tech Hotel)
or, if the Collateral Asset is not subject to an Operating Lease, the direct
owner (or ground lessee, as applicable) of such Collateral Asset (each, an
“Operator”), shall on or prior to the date hereof, (i) establish, or cause to be
established, an account or a

 

 6 

 

 

subaccount with respect to each Collateral Asset (individually and collectively,
the “Property Account”) with a Property Account Bank into which such Operator
shall deposit, or cause to be deposited, all Gross Income from Operations with
respect to such Collateral Asset to the extent the same are not already
deposited directly into such Property Account (including all monthly remittances
to any Company Party from a Manager), and (ii) execute an agreement with the
Agent and the Property Account Bank providing for the control of such Property
Account in favor of the Agent, in form and substance reasonably satisfactory to
the Agent and the Company Parties (as amended from time to time, the “Property
Account Control Agreement”). The Borrowers shall, on or prior to the date
hereof, establish or cause to be established with the Servicer in the name of
the Agent (1) the PIP Reserve Account and (2) the FF&E Reserve Account.

 

(b)          After the occurrence of the first Lockbox Trigger Event, the Agent,
or at the Agent’s election, the Servicer shall establish (i) a single account
with the Lockbox Bank in the name of the Agent (the “Lockbox Account”) and (ii)
a single account with the Lockbox Bank in the name of the Agent (the “Cash
Collateral Account”) which shall, in each case, be subject to an Account Control
Agreement. During any Lockbox Period, the Agent may in accordance with the
Property Account Control Agreement instruct the Property Account Bank to
transfer on each Business Day all sums on deposit in the Property Account into
the Lockbox Account. The Agent shall maintain on a ledger entry basis the
following subaccounts of the Lockbox Account (collectively, the “Subaccounts”):

 

(i)           An account into which the sums required to be deposited hereunder
pursuant to Section 4 for the payment of Taxes with respect to the Collateral
Assets (“Tax Payments”) shall be deposited (the “Tax Subaccount”);

 

(ii)          An account into which the sums required to be deposited hereunder
pursuant to Section 4 for the payment of Insurance Premiums with respect to the
Collateral Assets (“Insurance Payments”) shall be deposited (the “Insurance
Subaccount”); and

 

(iii)         An account into which the sums required to be deposited hereunder
pursuant to Section 4 for the payment of interest accruing on the Advances and
late payment charges and fees, if any, relating to the Loan (“Debt Service”)
shall be deposited (the “Debt Service Subaccount”).

 

(c)          During each Lockbox Period, the applicable Borrower shall deposit
into the Tax Subaccount and the Insurance Subaccount an amount, if any, which
when combined with (x) the amounts to be deposited into such subaccount pursuant
to Section 4 below and (y) any amounts applied by the Operator (or the Manager
on behalf of the Operator) in respect thereof from amounts on deposit in the
applicable Property Accounts in accordance with Section 3(b) below, is
sufficient to pay the Taxes before the same become delinquent (but without
prejudice to any proceeding contesting such Taxes undertaken in accordance with
the terms and provisions of the Loan Agreement) and the Insurance Premiums
before the same become due; provided, however, that Borrowers shall not be
required to make deposits into (i) the Tax Subaccount to the extent that Taxes
are reserved with a Brand Manager or paid directly from Gross Income from
Operations by a Brand Manager, or (ii) the Insurance Subaccount to the extent
that (A) a Collateral Asset is insured pursuant to a blanket policy that
complies with the terms of the Loan Documents or (B) Insurance Premiums are
reserved with a Brand Manager or paid directly from Gross Income from Operations
by a Brand Manager (clauses (i) and (ii) being the “Reserve Exceptions”).

 

(d)          The Borrowers shall, or shall cause the Property Account Bank to,
provide monthly bank statements to the Agent within ten (10) days after the end
of each calendar month with respect to each Property Account for which the
applicable Property Account Bank does not provide (electronically or otherwise)
monthly bank statements directly to the Agent.

 

Section 3.            Deposits into Accounts. (a) Each Operator warrants and
covenants that (i) on or prior to the date hereof such Operator shall send (or
shall cause to be sent) (A) a notice, substantially in

 

 7 

 

 

the form of Exhibit A, to all tenants (expressly excluding hotel guests) under
Tenancy Leases now or hereafter in effect at its Collateral Asset directing such
tenants to pay all Rents and other sums due under such Tenancy Leases into the
Property Account with respect to such Collateral Asset, but only to the extent
such tenants are not already making such payments to such Property Account and
(B) a notice, substantially in the form of Exhibit B, to all material third
party merchants who are consistently obligated to make payments to such Operator
or the applicable Manager for such Collateral Asset, including, but limited to,
credit, charge, debit and comparable card companies and processors (and
expressly excluding tenants and hotel guests), directing them to pay all sums
due under any arrangements to which they are a party with such Operator or
Manager into the Property Account with respect to such Collateral Asset, but
only to the extent such third party payors are not already making such payments
to such Property Account, (ii) such Operator shall, or shall cause the
applicable Manager to, deposit (or cause to be deposited) all accounts
receivable for such Collateral Asset and any Gross Income from Operations
collected by such Operator or such Manager into the Property Account with
respect to such Collateral Asset, and (iii) neither such Operator nor any other
Person shall direct any existing or future third party payors to make payments
in respect of its Collateral Asset in any manner other than as set forth in this
Section 3(a), without the prior written consent of the Agent. During the
continuance of any Lockbox Period, until deposited into the Lockbox Account, any
Gross Income from Operations from the Collateral Assets held by the Company
Parties shall be deemed to be Account Collateral and shall be held in trust by
it for the benefit, and as the property, of the Agent for the benefit of the
Secured Parties subject to the terms and provisions of this Agreement and the
other Loan Documents. The Gross Income from Operations from each of the
Collateral Assets held by the Manager or Company Parties shall not be commingled
by the Manager or the Company Parties with any funds or property of the Manager
or Company Parties which are unrelated to such Collateral Asset.

 

(b)          Upon the occurrence of a Lockbox Trigger Event Cure (provided that
the Loan has not been accelerated, and the Agent or the Required Lenders have
not moved for a receiver or commenced foreclosure proceedings), the Lockbox
Trigger Event shall be deemed cured. In such event and without limitation of
Section 4(c) below, such Lockbox Period shall no longer be outstanding and any
funds contained in the Property Account from time to time shall be distributed
to or at the direction of the applicable Operator (or the Manager on behalf of
the applicable Operator), so long as no Event of Default would result therefrom.

 

(c)          At all times other than during any Lockbox Period, the Property
Account Banks will be permitted to transfer, on each Business Day, all funds on
deposit in the Property Accounts as specified in writing by the Company Parties.

 

(d)          The Borrowers shall deposit or cause to be deposited into the FF&E
Reserve Account on each Monthly Payment Date, an amount equal to the FF&E
Reserve to cover the cost of the FF&E Work that may be incurred following the
date hereof. Amounts deposited from time to time into the FF&E Reserve Account
pursuant to this Section 3(d) are referred to herein as the “FF&E Reserve
Funds”. Notwithstanding the foregoing, no FF&E Reserve Funds shall be required
to be funded in respect of a Collateral Asset so long as an FF&E reserve in
respect of such Collateral Asset with funding requirements at least equal to
funding requirements hereunder in respect of such Collateral Asset is maintained
with a Brand Manager that has granted a security interest in all such FF&E
reserve funds to the Agent pursuant to documentation in form and substance
acceptable to the Agent (the “FF&E Exception”).

 

(e)          Each Company Party warrants and covenants that it shall not
rescind, withdraw or change any notices or instructions required to be sent by
it pursuant to this Section 3 without the Agent’s prior written consent.

 

Section 4.          Disbursements from the Accounts. (a) So long as no Lockbox
Period then exists, all funds in the Property Accounts shall be released to the
Borrowers on each Business Day. During the continuance of a Lockbox Period, on
each Monthly Payment Date, subject to Section 4(c) below, the Lockbox Bank
shall, at the direction of the Agent or the Servicer, disburse the funds in the
Lockbox Account in the following order of priority and in accordance with the
amounts set forth in the Annual Budget

 

 8 

 

 

(or Approved Annual Budget, as applicable) for such calendar month (or in the
case such funds were insufficient to pay all sums for the preceding calendar
months to make such payments for such prior month(s)):

 

(i)          First, subject to the Reserve Exceptions, one-twelfth of the annual
budgeted amount for the payment of Taxes shall be deposited in the Tax
Subaccount;

 

(ii)         Second, subject to the Reserve Exceptions, one-twelfth of the
annual budgeted amount for the payment of Insurance Premiums shall be deposited
in the Insurance Subaccount;

 

(iii)        Third, to the Debt Service Subaccount, all funds necessary to pay
the interest that will be due and payable on the next Monthly Payment Date,
taking into account any payments received pursuant to the Interest Rate Cap
Agreement (provided, however, that amounts allocated to the Debt Service
Subaccount pursuant to this subparagraph (iii) shall be held in the Debt Service
Subaccount until such Monthly Payment Date, at which time, such amounts shall be
applied in accordance with the terms of Section 4(h));

 

(iv)        Fourth, to the Debt Service Subaccount, all funds necessary to pay
any other amounts that will be due and payable under the Loan Documents on or
prior to the next Monthly Payment Date (to the extent ascertainable on such
Business Day) (provided, however, that amounts allocated to the Debt Service
Subaccount pursuant to this subparagraph (iv) shall be held in the Debt Service
Subaccount until such time such amounts are due and payable under the Loan
Documents, at which time, such amounts shall be applied in accordance with the
Loan Documents);

 

(v)         Fifth, to the Borrowers, funds necessary to pay (without
duplication) (A) any Approved Operating Expenses (excluding any Incentive
Management Fees), (B) any Emergency Expenses, (C) any Approved Capital
Expenditures, and (D) any Approved FF&E Expenses, to the extent the then
available FF&E Reserve Funds are insufficient to cover such Approved FF&E
Expenses;

 

(vi)        Sixth, subject to the FF&E Reserve Exception, to the FF&E Reserve
Account, all funds necessary to make the required payments of FF&E Reserve Funds
on the next Monthly Payment Date as required pursuant to Section 3(d);

 

(vii)       Seventh, to the Borrowers, funds necessary to pay Approved Excess
Operating Expenses in accordance with Section 6; and

 

(viii)      Eighth, all amounts remaining after payment of the amounts set forth
in clauses (i) through (vii) above, to the Cash Collateral Account to be held or
disbursed in accordance with Section 4(b).

 

Notwithstanding clauses (i) through (viii) above, the Property Account Bank and
Lockbox Bank are authorized by the Company Parties to deduct their fees and
charges relating to the Accounts from the applicable Accounts. The failure of
sufficient amounts to be deposited into the Lockbox Account in order to be able
to disburse all amounts required under clauses (i) through (iv) and (vi) in full
on the following Monthly Payment Date shall constitute an Event of Default;
provided, however, that if adequate funds are available in the Lockbox Account
and/or the Property Accounts for such payments, the failure by the Lockbox Bank
or the Property Account Bank to allocate such funds into the appropriate
Accounts shall not constitute an Event of Default.

 

(b)          During the continuance of a Lockbox Period, subject to Section 4(c)
below, upon written request of the Borrowers, the Agent shall direct the
Servicer to disburse Cash Collateral Funds for (i) payment of documented
Collateral Asset-level expenses or agreed upon portfolio-level expenses,
including, without limitation, Approved Operating Expenses and Approved Capital
Expenditures pursuant to the

 

 9 

 

 

Approved Annual Budget, to the extent not already paid by an Approved Manager,
(ii) emergency repairs and/or life safety issues at a Collateral Asset to the
extent not already paid by an Approved Manager or required to be reimbursed to
an Approved Manager, (iii) Hotel Taxes to the extent not already paid by an
Approved Manager or required to be reimbursed to an Approved Manager, (iv) costs
incurred in connection with the purchase of any FF&E or any PIP Work to the
extent not already (1) funded from the proceeds in the FF&E Reserve Account or
the PIP Reserve Account or (2) paid by an Approved Manager or required to be
reimbursed to an Approved Manager, (v) costs incurred in connection with the
purchase of any Interest Rate Cap Agreement or Replacement Interest Rate Cap
Agreement required under the Loan Documents, (vi) voluntary prepayment of the
Loan in accordance with Section 2.06 of the Loan Agreement, (vii) legal fees
arising in connection with a Collateral Asset or any Borrower’s ownership and
operation of any Collateral Asset, provided that Cash Collateral Funds shall not
be used for legal fees in connection with (A) the enforcement of any Transaction
Party’s rights under the Loan Documents or (B) any defense of any enforcement by
any Secured Party of its rights under the Loan Documents, (viii) (A) audit,
accounting and tax expenses arising in connection with any Collateral Asset or
any Borrower’s ownership and operation of any Collateral Asset to the extent not
already paid by an Approved Manager or required to be reimbursed to an Approved
Manager, including allocated corporate overhead of the Guarantors, and (B) the
Agent approved portfolio-level expenses referenced in section 4(b)(i) above,
which when aggregated with allocated corporate overhead of the Guarantors shall
not exceed $20,000 annually, (ix) costs of Restoration in excess of available
Net Proceeds, (x) Debt Service, (xi) any fees and costs payable by any Borrower,
including to any Secured Party, subject to and in compliance with the Loan
Documents, (xii) costs associated with existing Tenancy Leases or any new
Tenancy Leases entered into pursuant to the terms of the Loan Agreement,
including costs related to tenant improvement allowances, leasing commissions
and tenant-related capital expenditures, (xiii) payment of shortfalls in the
required deposits into the PIP Reserve Account, the FF&E Reserve Account or any
Subaccount (in each case, to the extent required in the Loan Agreement or this
Agreement), (xiv) payments under the Georgia Tech Ground Lease to the extent not
already paid by an Approved Manager or required to be reimbursed to an Approved
Manager, (xv) management and franchise fees, (xvi) distributions to Distributing
Parties to the minimum extent required for such Distributing Parties to maintain
REIT status in an amount not to exceed the Annual REIT Distribution Cap in
respect of each Distributing Party and without duplication to the extent that a
Distributing Party has a direct or indirect interest in another Distributing
Party, and (xvii) such other items as reasonably approved by the Agent. Any Cash
Collateral Funds on deposit in the Cash Collateral Account not previously
disbursed or applied shall be disbursed to the Borrowers upon the termination of
such Lockbox Period (so long as no other Lockbox Period then exists) free and
clear of any Lien or continuing security interest under the Loan Documents.

 

(c)          Notwithstanding anything to the contrary in Section 3 or 4, upon
the occurrence and during the continuance of an Event of Default, the Agent
shall promptly notify the Lockbox Bank in writing of such Event of Default and,
without notice from the Lockbox Bank or the Agent, (i) the Company Parties shall
have no further right in respect of (including, without limitation, the right to
instruct the Property Account Bank or the Lockbox Bank to transfer from) the
Accounts during the continuance of an Event of Default, (ii) the Agent may
direct the Lockbox Bank to liquidate and transfer any amounts then invested in
Cash Equivalents to the Lockbox Account or reinvest such amounts in other Cash
Equivalents as the Agent may determine is necessary to perfect or protect any
security interest granted or purported to be granted hereby or pursuant to the
other Loan Documents or to enable the Lockbox Bank, as agent for the Agent, or
the Agent to exercise and enforce their rights and remedies hereunder or under
any other Loan Document with respect to any Account or any Account Collateral
(provided that in no event shall the Company Parties be liable for any losses
realized on any such investments directed by the Agent), and (iii) the Agent
shall have all rights and remedies with respect to the Accounts and the amounts
on deposit therein and the Account Collateral as described in this Agreement and
in the Security Agreement, in addition to all of the rights and remedies
available to a secured party under the UCC, and, notwithstanding anything to the
contrary contained in this Agreement or in the Security Agreement, the Agent may
apply the amounts of such Accounts as the Agent determines in its sole
discretion including, but not limited to, payment of the Obligations.

 

 10 

 

 

(d)          Provided no Event of Default is continuing and no Enforcement has
occurred, and subject to the last two sentences of this Section 4(d), the Agent
shall direct the Servicer to disburse FF&E Reserve Funds to the Borrowers out of
the FF&E Reserve Account, within ten (10) days after the delivery by the
Borrowers to the Agent of a request therefor (but not more often than once each
calendar month), in increments of at least $10,000, provided that: (i) such
disbursement is for an Approved FF&E Expense; (ii) the Agent has received
invoices evidencing that the costs for which such disbursements are requested
are due and payable (other than for costs and expenses less than or equal to
$10,000) and are in respect of Approved FF&E Expenses; (iii) the Borrower have
applied any amounts previously received by it in accordance with this Section
4(d) for the Approved FF&E Expenses to which specific draws made hereunder
relate and received any lien waivers or other releases (with respect to any
Approved FF&E Expense greater than $10,000) which would customarily be obtained
with respect to the work in question; and (iv) the request for the disbursement
is accompanied by an officer’s certificate stating that (A) the conditions in
the foregoing clauses (i), (ii) and (iii) have been satisfied, (B) that the
Approved FF&E Expenses to be funded by such disbursement have been completed in
a good and workmanlike manner and in accordance with all applicable Legal
Requirements, (C) that the copies of invoices and evidence of lien waivers (to
the extent required above) attached to such officer’s certificate are true,
complete and correct to the Borrowers’ knowledge, and (D) upon such disbursement
to the Borrowers, the Approved FF&E Expenses to be funded by the requested
disbursement will be paid promptly in accordance with the invoices and lien
waivers (where applicable) presented. The Agent shall not be required to
disburse FF&E Reserve Funds more frequently than once each calendar month, and
the Agent shall not be required to make disbursements from the FF&E Reserve
Account unless such requested disbursement is in an amount greater than $10,000
(or a lesser amount if the total amount in the FF&E Reserve Account is less than
$10,000, in which case only one disbursement of the amount remaining in the
account shall be made). Notwithstanding the foregoing, FF&E PIP Funds shall be
disbursed in accordance with Section 5.01(bb) of the Loan Agreement.

 

(e)          [Intentionally Omitted.]

 

(f)           Notwithstanding anything to the contrary, herein during a Lockbox
Period and prior to the occurrence and continuance of an Event of Default, the
Agent shall cause the Tax Payments to be made as and when due. In making any
payment relating to Taxes, the Agent may do so according to any bill, statement
or estimate procured from the appropriate public office (with respect to Taxes)
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof. If the amount of funds available for Tax Payments shall exceed
the amounts due for Taxes, the Agent shall credit such excess against future
payments to be made to the Tax Subaccount. Notwithstanding anything to the
contrary herein, the Borrowers shall be entitled to pay Taxes directly and the
Agent shall, at the request of the Borrowers, direct the Lockbox Bank to
disburse to the Borrowers amounts from the Tax Subaccount (if any) in order for
the Borrowers to pay such Taxes not more than fifteen (15) days before the date
such Taxes are due and payable, provided that (i) no Event of Default has
occurred and is continuing, (ii) the Borrowers have provided to Agent receipts
(the “Prior Tax Receipts”) for all Taxes required to be paid by the Borrowers
from prior disbursements under this Section 4(f) and (iii) the Borrowers have
provided the Agent with a receipt (the “Current Tax Receipts”) for such Taxes so
paid by the Borrowers not later than thirty (30) days after the date such Taxes
were due and payable. Notwithstanding any failure by the Borrowers to satisfy
the condition set forth in clause (ii) above with respect to any requested
disbursement for Taxes under this Section 4(f), the Agent shall disburse such
amount to the Borrowers provided that the Borrowers deliver to Agent an
officer’s certificate certifying that the Taxes for which the Agent has not
received Prior Tax Receipts have been paid in full (such receipts, the
“Outstanding Tax Receipts”). The Borrowers shall deliver to Agent the
Outstanding Tax Receipts within the time period set forth in clause (iii) above
for delivery of the Current Tax Receipts with respect to such disbursement. The
foregoing shall be performed by the Lockbox Bank based solely on the
instructions received from the Agent.

 

(g)          Notwithstanding anything to the contrary herein, during a Lockbox
Period and prior to the occurrence and continuance of an Event of Default, the
Agent shall cause the Insurance Payments to be made as and when due. In making
any payment relating to Insurance Premiums, the Agent may do so

 

 11 

 

 

according to any bill, statement or estimate procured from the insurer or its
agent (with respect to Insurance Premiums) without inquiry into the accuracy of
such bill, statement or estimate or into the validity of any premium, fee, cost
or expense thereof. If the amount of the funds available for the Insurance
Premiums shall exceed the amounts due for the Insurance Premiums, the Agent
shall credit such excess against future payments to be made to the Insurance
Subaccount. Notwithstanding anything to the contrary herein, the Borrowers shall
be entitled to pay the Insurance Premiums directly and the Agent shall, at the
request of the Borrowers, direct the Lockbox Bank to disburse to the Borrowers
amounts from the Insurance Subaccount (if any) in order for the Borrowers to pay
such Insurance Premiums not more than fifteen (15) days before the date such
Insurance Premiums are due and payable, provided that (i) no Event of Default
has occurred and is continuing, (ii) the Borrowers have provided to the Agent
evidence of renewal of any insurance policies (and, if so requested by the
Agent, evidence of payment of Insurance Premiums) (such receipts and evidence of
renewal, the “Prior Insurance Receipts”) with respect to which the Borrowers
were required to pay Insurance Premiums from prior disbursements under this
Section 4(g) and (iii) the Borrowers have provided the Agent with evidence of
payment of such Insurance Premiums promptly upon request and provides evidence
of renewal of the insurance policies (such receipts and evidence of renewal, the
“Current Insurance Receipts”) not later than five (5) Business Days prior to the
date of expiration of such insurance policies. Notwithstanding any failure by
the Borrowers to satisfy the condition set forth in clause (ii) above with
respect to any requested disbursement for Insurance Premiums under this Section
4(g), the Agent shall disburse such amount to the Borrowers provided that the
Borrowers deliver to the Agent an officer’s certificate certifying that the
Insurance Premiums for which the Agent has not received evidence of payment have
been paid in full and that the insurance policies with respect to which the
Agent has not received evidence of renewal were renewed and are in full force
and effect (such receipts and evidence of renewal, the “Outstanding Insurance
Receipts”). The Borrowers shall deliver to the Agent the Outstanding Insurance
Receipts within the time period set forth in clause (iii) above for delivery of
the Current Insurance Receipts with respect to such disbursement. The foregoing
shall be performed by the Lockbox Bank based solely on the instructions received
from Agent.

 

(h)          Notwithstanding anything to the contrary herein, during a Lockbox
Period, the Agent shall have the right to direct the withdrawal of amounts from
the Debt Service Subaccount to pay any Debt Service as and when due and to
direct the payment of default interest and late charges, if any.

 

(i)          Notwithstanding anything to the contrary herein, the Company
Parties agree that they are responsible for monitoring the sufficiency of funds
deposited in the Accounts and that the Company Parties are liable for any
deficiency in available funds, irrespective of whether any Company Party has
received any account statement, notice or demand from the Agent.

 

Section 5.          Annual Budgets. During the continuance of a Lockbox Period,
the Agent shall have the right to approve each Annual Budget submitted by the
Borrowers pursuant to Section 5.03(f) of the Loan Agreement (including each
Annual Budget in effect at such time, if any, as a Lockbox Trigger Event occurs)
(each Annual Budget so approved by the Agent pursuant to this Section 5 being
referred to as an “Approved Annual Budget”). To the extent that the Agent has
the right to approve an Annual Budget hereunder, until such time as the Agent
shall approve such Annual Budget, the most recent Annual Budget (or Approved
Annual Budget, as applicable) shall remain in effect (with such adjustments as
reasonably determined by the Agent to reflect actual increases in Taxes,
Insurance Premiums and utilities expenses and other variable Operating
Expenses).

 

Section 6.          Approved Excess Operating Expenses. In the event that during
a Lockbox Period any Company Party incurs any Operating Expenses in excess of
Approved Operating Expenses (excluding any Restricted Payments and any Incentive
Management Fees, and excluding amounts permitted to be remitted to the Borrowers
from Cash Collateral Funds pursuant to Section 4(b)) (“Excess Operating
Expenses”), then such Company Party shall promptly deliver to the Agent after a
request from the Agent, for the Agent’s information, a reasonably detailed
explanation of such Excess Operating Expenses. During the continuance of any
Lockbox Period, all Excess Operating Expenses must be approved by the Agent in
writing

 

 12 

 

 

(such expenses, if approved, or deemed approved in accordance with this Section
6, the “Approved Excess Operating Expenses”) prior to the disbursement of any
funds therefor, such approval not to be unreasonably withheld, conditioned or
delayed provided no Event of Default shall then exist. During the continuance of
any Lockbox Period, any funds distributed to any Company Party for the payment
of Approved Excess Operating Expenses pursuant to Section 4(a)(viii) shall be
used by such Company Party only to pay for such Approved Excess Operating
Expenses or to reimburse such Company Party for such Approved Excess Operating
Expenses, as applicable. In the event any Company Party is required to obtain
the Agent’s approval of Excess Operating Expenses pursuant to this Section 6,
the Agent’s approval shall be deemed given by the Agent if (I) the first
correspondence from such Company Party to the Agent requesting such approval (A)
is enclosed in an envelope marked “PRIORITY”, (B) contains a legend, prominently
displayed at the top of each page thereof, in bold, all caps and fourteen (14)
point or larger font stating that such Company Party is requesting the Agent’s
approval of Excess Operating Expenses under Section 6 of the Cash Management
Agreement and that the Agent’s failure to respond to such request within ten
(10) Business Days following its receipt of such request may result in such
request being deemed granted, and (C) is accompanied by an explanation of such
Excess Operating Expenses in reasonable detail as is necessary to allow the
Agent to adequately and completely evaluate the request, (II) the Agent shall
fail to respond to such request within ten (10) Business Days following its
receipt of such request, (III) such Company Party shall deliver to the Agent a
second written request for approval, which request is delivered in the same form
and manner as contemplated in clause (I) above and states that the Agent’s
failure to respond to such request within five (5) Business Days following its
receipt of such second request, shall result in such request being deemed
granted, and (IV) the Agent shall fail to respond to such request in the manner
contemplated in clause (III)(B) above within such five (5) Business Day period.

 

Section 7.          Eligible Accounts. Each Company Party shall, and each
Company Party shall cause the applicable Eligible Institution holding an Account
to, maintain each Account as an Eligible Account. If any Eligible Institution
holding any Account shall cease to be an Eligible Institution, the parties shall
enter into a new Property Account Control Agreement or Account Control
Agreement, as applicable, with the successor Eligible Institution (in accordance
with the defined term thereof).

 

Section 8.          Permitted Investments. Sums on deposit in the Cash
Collateral Account, the Lockbox Account, the FF&E Reserve Account and the PIP
Reserve Account may be invested in Cash Equivalents if directed by the Company
Parties, provided that (a) such investments are then regularly offered by the
Lockbox Bank for accounts of this size, category and type, (b) such investments
are permitted by applicable laws, rules, regulations and orders, (c) the
maturity date of the Cash Equivalent is not later than the date on which sums in
the applicable Account are anticipated by the Agent to be required for payment
of an obligation for which such Account was created, and (d) no Event of Default
shall have occurred and be continuing. All income earned from Cash Equivalents
shall be the property of the Company Parties subject to the security interest of
the Agent created hereunder. The Company Parties hereby irrevocably authorize
and direct the Lockbox Bank to hold any income earned from Cash Equivalents
relating to all such other Accounts as part of such Account. The Company Parties
shall be responsible for payment of any federal, state or local income or other
tax applicable to income earned from Cash Equivalents. No other investments of
the sums on deposit in the Accounts shall be permitted except as set forth in
this Section 8. None of the Agent or the Secured Parties shall be liable for any
loss sustained on the investment of any funds deposited in the any Account,
other than losses due to the gross negligence or willful misconduct of the Agent
or such Secured Party, as the case may be.

 

Section 9.          Account Collateral. (a) As security for full and timely
payment and performance of the Obligations, each Company Party hereby pledges,
transfers and assigns to the Agent, for the benefit of the Secured Parties, and
grants to the Agent a continuing security interest in and to the Account
Collateral, which security interest is prior to all other Liens (other than such
customary Liens in favor of any Lockbox Bank and Property Account Banks under
the terms of the Account Control Agreements and the Property Account Control
Agreements, respectively). Each Company Party agrees to execute, acknowledge,
deliver, file or do, at its sole cost and expense, all other acts, assignments,
notices, agreements (including

 

 13 

 

 

account control agreements on such terms which do not conflict with the terms
hereof) or other instruments as the Agent may reasonably require in order to
perfect the foregoing security interest, pledge and assignment or otherwise to
fully effectuate the rights granted to the Agent by this Section 9. Other than
in connection with the Loan and the Loan Documents, no Company Party has
transferred or encumbered the Accounts. Each of the Property Accounts
constitutes a “deposit account” within the meaning of the UCC. Any other Account
will constitute a “deposit account” to the extent that funds are credited to
such Account and will constitute a “securities account” to the extent that
financial assets are credited to such Account, in each case within the meaning
of the UCC.

 

(b)          The Company Parties hereby authorize the Agent to file a financing
statement or statements under the UCC in connection with any of the Accounts and
the Account Collateral with respect thereto in the form required to properly
perfect the security interest of the Secured Parties therein. The Borrowers and
each Operator agrees that at any time and from time to time, at the expense of
the Borrowers, they will promptly execute and deliver (i) all further
instruments and documents, and (ii) take all further reasonable action, that may
be necessary or desirable, or that the Agent may reasonably request, in order to
(A) perfect and protect any security interest granted or purported to be granted
hereby or under an Account Control Agreement or Property Account Control
Agreement (including, without limitation, any security interest in and to any
permitted investments) or (B) enable the Agent to exercise and enforce its
rights and remedies hereunder with respect to any Account Collateral.

 

(c)          Each Company Party represents, covenants and agrees that:

 

(i)          This Agreement and, when entered into, the Property Account Control
Agreements and the Account Control Agreements, taken together, will create a
valid and continuing security interest in the Accounts, in favor of the Secured
Parties, which security interest shall be prior to all other Liens and are
enforceable as such against creditors of and purchasers from the Company
Parties;

 

(ii)         The applicable Company Party owns and has good and marketable title
to its Accounts, free and clear of any Lien or claim of any Person (other than
the Agent);

 

(iii)        The Property Accounts are not in the name of any Person other than
a Company Party (or an Approved Manager or an Approved Franchisor on behalf of a
Company Party) or a Company Party for the benefit of the Agent; and

 

(vi)        Except as expressly provided in the first sentence of Section 4(a)
hereof, no Company Party has authorized (or will authorize) any Property Account
Bank or Lockbox to comply with instructions of any Person with respect to the
Accounts other than the Agent during the continuance of any Lockbox Period.

 

Section 10.         Fees and Expenses. The Company Parties acknowledge and agree
that they solely shall be, and shall at all times remain, liable for all third
party fees, charges, costs and expenses actually incurred in connection with the
Accounts, this Agreement and the enforcement hereof. To the extent that the
Agent or any Secured Party pays any third party fees, charges, costs and
expenses actually incurred in connection with the Accounts, this Agreement and
the enforcement hereof, at the election of the Agent, the Borrowers shall
reimburse the Agent and the Secured Parties for such amounts within ten (10)
days after a written demand from the Agent.

 

Section 11.         Termination. This Agreement shall terminate upon the latest
to occur of the repayment in full of the Obligations of the Loan Parties under
the Loan Documents and the termination of the Commitments. Upon any such
termination, the funds remaining in the Accounts shall be disbursed to the
Borrowers after first deducting all amounts then currently due and owing to the
Agent or the Secured Parties under the Loan Documents. With respect to a
Collateral Asset that no longer constitutes a Collateral Asset in accordance
with the Loan Agreement, provided no Event of Default then exists, the security
interest granted

 

 14 

 

 

herein in the applicable Property Account for such Collateral Asset shall
automatically terminate and the funds therein shall be disbursed to the
applicable Borrower after first deducting all amounts then currently due and
owing to the Agent or Secured Parties under the Loan Documents.

 

Section 12.         Notices. All notices and other communications under this
Agreement will be made in writing and given in accordance with Section 9.02 of
the Loan Agreement.

 

Section 13.         Amendment. This Agreement may be amended from time to time
in accordance with Section 9.01 of the Loan Agreement.

 

Section 14.         Obligations Not Affected. The insufficiency of funds on
deposit in the Accounts shall not absolve any Loan Party of its obligation to
make any payments, as and when due pursuant to this Agreement and the other Loan
Documents, and such obligations shall be separate and independent, and not
conditioned on any event or circumstance whatsoever.

 

Section 15.         Limitation on Liability. None of the Agent or the Secured
Parties shall be liable for any acts, omissions, errors in judgment or mistakes
of fact or law, including, without limitation, acts, omissions, errors or
mistakes with respect to the Account Collateral, except for those arising as a
result of the gross negligence or willful misconduct of the Agent or the Secured
Parties. Without limiting the generality of the foregoing, except as otherwise
expressly provided for herein or as required by applicable laws, rules,
regulations and orders, none of the Agent or the Secured Parties shall have any
duty as to any Account Collateral, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Account Collateral, whether or not the Agent or any Secured
Party has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against any parties or any other right
pertaining to any Account Collateral. The Agent is hereby authorized by the
Company Parties to act on any written instruction believed by the Agent in good
faith to have been given or sent by a Company Party.

 

Section 16.         Mortgagee-in-Possession. Each Company Party hereby confirms
and agrees that notwithstanding the provisions of this Agreement, prior to any
foreclosure by the Agent on behalf of the Secured Parties of the related
Mortgage (or other action in lieu thereof), each Operator shall retain sole
control of the operation and maintenance of each Collateral Asset, as
applicable, subject to the obligations of the Company Parties under the Loan
Agreement, the Mortgages and the other Loan Documents, and neither the Agent nor
the Secured Parties are not and shall not be deemed to be a
mortgagee-in-possession.

 

Section 17.         Cash Management Agreement Supplement. Each Additional
Borrower and any lessee of the Collateral Asset or Collateral Assets owned by
such Additional Borrower pursuant to one or more Operating Leases shall execute
and deliver a Cash Management Agreement Supplement substantially in the form
attached hereto as Exhibit C.

 

Section 18.         Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 19.         Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier or email (in PDF format) shall be effective as delivery of an
original executed counterpart of this Agreement.

 

Section 20.         Joint and Several Liability. The liability of the Company
Parties hereunder shall be joint and several.

 

[No Further Text on This Page; Signature Pages Follow]

 

 15 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in several
counterparts (each of which shall be deemed an original) as of the date first
above written.

 

  BORROWER PARTIES:       HIT NBL HYP SCHIL OWNER, LLC   HIT NBL CY CBSOH OWNER,
LLC   HIT NBL HH ATLGA OWNER, LLC   HIT SMT CY FLGAZ OWNER, LLC   HIT SMT
BTRLA001 OWNER, LLC   HIT SMT FIS BTRLA OWNER, LLC   HIT SMT FTWIN001 OWNER, LLC
  HIT SMT MDFOR001 OWNER, LLC   HIT SMT RI FTWIN OWNER, LLC   HIT SMT SHS FLGAZ
OWNER, LLC   HIT SMT SHS BTRLA OWNER, LLC   HIT SMT TPS BTRLA OWNER, LLC   HIT
SMT FIS DENCO OWNER, LLC   HIT SMT FIS BELWA OWNER, LLC   HIT SMT FIS SPKWA
OWNER, LLC   HIT SMT FTCCO001 OWNER, LLC   HIT SMT FTCCO002 OWNER, LLC   HIT SMT
SHS DENCO OWNER, LLC   HIT SMT CY GRMTN OWNER, LLC   HIT SMT CY JKSMS OWNER, LLC
  HIT SMT FIS GRMTN OWNER, LLC   HIT SMT RDGMS001 OWNER, LLC   HIT SMT RI JKSMS
OWNER, LLC   HIT SMT RI GRMTN OWNER, LLC   HIT SMT RDGMS002 OWNER, LLC   HIT GA
TECH HOLDING, LLC   HIT TRS GA TECH HOLDING, LLC,   each a Delaware limited
liability company

 

  By:       Name:     Title:

 

  HIT NBL MNTCA001 OWNER, LP, a Delaware limited partnership

 

  By: HIT NBL NTC Owner GP, LLC, a Delaware limited liability company, its
general partner

 

  By:       Name:     Title:

 

[signatures continue on the next page]

 

[Signature Page to HIT Cash Management Agreement]

 

 

  HIT SMT ELPTX001 OWNER, LP, a Delaware limited partnership

 

  By: HIT SMT NTC Owner GP, LLC, a Delaware limited liability company, its
general partner

 

  By:       Name:     Title:

 

  TRS LESSEES:       HIT SWN TRS, LLC, a Delaware limited liability company    
    By:     Name:   Title:

 

  HIT SWN INT NTC TRS, LP, a Delaware limited partnership       By: HIT SWN NTC
TRS GP, LLC, a Delaware limited liability company, as its general partner

 

  By:       Name:     Title:

 

HIT SWN CRS NTC TRS, LP,   a Delaware limited partnership       By: HIT SWN NTC
TRS GP, LLC, a Delaware limited liability company, its general partner

 

  By:       Name:     Title:

 

[signatures continue on the next page]

 

[Signature Page to HIT Cash Management Agreement]

 

 

  AGENT:       CITIBANK, N.A., as collateral agent         By:     Name:  
Title:

 

[Signature Page to HIT Cash Management Agreement]

 

 

SCHEDULE I

 

PROPERTY ACCOUNT BANKS AS OF THE DATE HEREOF

 

EIN # Full Name on
Bank Account Bank
Name Bank
Account
Type
(Operating,
Depository,
FF&E,
Travel
Agent, GM,
etc.) Bank Account
Number WIRE ABA
/ Routing
Number ACH ABA
/ Routing
Number 47-4448105 ARC Hospitality Wells Depository 4264639709 121000248
121000248   SWN TRS, Fargo           LLCCourtyard Bank           Memphis        
    Germantown           47-4448105 ARC Hospitality Wells Depository 4264639717
121000248 121000248   SWN TRS, Fargo           LLCFairfield Inn Bank           &
Suites             Germatown           47-4448105 ARC Hospitality Wells
Depository 4264639774 121000248 121000248   SWN TRS, Fargo          
LLCResidence Bank           Inn Memphis             Germantown          
47-4448105 ARC Hospitality Wells Depository 4264639782 121000248 121000248   SWN
TRS, Fargo           LLCCourtyard Bank           Jackson             Ridgeland  
        47-4448105 ARC Hospitality Wells Depository 4264639790 121000248
121000248   SWN TRS, Fargo           LLCHomewood Bank           Suites Jackson  
          Ridgeland           47-4448105 ARC Hospitality Wells Depository
4264639840 121000248 121000248   SWN TRS, Fargo           LLCResidence Bank    
      Inn Jackson             Ridgeland           47-4448105 ARC Hospitality
Wells Depository 4264639857 121000248 121000248   SWN TRS, Fargo          
LLCStaybridge Bank           Suites Jackson           47-4448105 HIT SWN TRS,
Wells Depository 4392328159 121000248 121000248   LLC Courtyard Fargo          
Flagstaff Bank           Depository             Account          

 

 Sch. I - 1 

 

 

47-4448105 HIT SWN TRS, Wells Depository 4392328167 121000248 121000248   LLC
DoubleTree Fargo           by Hilton Hotel Bank           Baton Rouge          
  Depository             Account           47-4448105 HIT SWN TRS, Wells
Depository 4392328175 121000248 121000248   LLC Fairfield Fargo           Inn &
Suites Bank           Baton Rouge             South Depository            
Account           47-4448105 HIT SWN TRS, Wells Depository 4392328183 121000248
121000248   LLC Hampton Fargo           Inn Ft. Wayne Bank           Southwest  
          Depository             Account           47-4448105 HIT SWN TRS, Wells
Depository 4392328191 121000248 121000248   LLC Hampton Fargo           Inn
Medford Bank           Depository             Account           47-4448105 HIT
SWN TRS, Wells Depository 4392328209 121000248 121000248   LLC Residence Fargo  
        Inn Ft. Wayne Bank           Southwest             Depository          
  Account           47-4448105 HIT SWN TRS, Wells Depository 4392328217
121000248 121000248   LLC Springhill Fargo           Suites Baton Bank          
Rouge South             Depository             Account           47-4448105 HIT
SWN TRS, Wells Depository 4392328225 121000248 121000248   LLC Springhill Fargo
          Suites Flagstaff Bank           Depository             Account        
  47-4448105 HIT SWN TRS, Wells Depository 4392328233 121000248 121000248   LLC
TownPlace Fargo           Suites Baton Bank           Rouge South            
Depository             Account           47-4448105 HIT SWN TRS, Wells
Depository 4392328241 121000248 121000248   LLC Courtyard Fargo          
Columbus Bank           Downtown             Depository             Account    
     

 

 Sch. I - 2 

 

 

47-4448105 HIT SWN TRS, Wells Depository 4393318092 121000248 121000248   LLC
Hyatt Fargo           House Atlanta Bank           Cobb Galleria            
Depository             Account           47-4448105 HIT SWN TRS, Wells
Depository   121000248 121000248   LLC Hyatt Place Fargo   4393318100      
Chicago Bank           Schaumburg             Depository             Account    
      47-4448105 HIT SWN Wells Depository 4393318118 121000248 121000248  
TRS,LLCFairfiel Fargo           d Inn & Suites Bank           Spokane          
  Depository             Account           47-4448105 HIT SWN Wells Depository
4393318126 121000248 121000248   TRS,LLCFairfiel Fargo           d Inn & Suites
Bank           Denver             Depository             Account          
47-4448105 HIT SWN Wells Depository 4393318134 121000248 121000248  
TRS,LLCFairfiel Fargo           d Inn & Suites Bank           Bellevue          
  Depository             Account           47-4448105   Wells Depository
4393318142 121000248 121000248   HIT SWN Fargo           TRS,LLCHampt Bank      
    on Inn Ft.             Collins             Depository             Account  
        47-4448105   Wells Depository 4393318159 121000248 121000248     Fargo  
        HIT SWN Bank           TRS,LLCHilton             Garden Inn Ft.        
    Collins             Depository             Account           47-4448105 HIT
SWN Wells Depository 4393318167 121000248 121000248   TRS,LLCSpring Fargo      
    Hill Suites Bank           Denver             Depository             Account
         

 

 Sch. I - 3 

 

 

47-4469281 HIT SWN CRS
NTC TRS, LP
Hilton Garden
Inn Monterey
Depository
Account Wells Fargo Bank Depository 4393318175 121000248 121000248 47-4461286
ARC Hospitality Wells Depository 4393318183 121000248 121000248   SWN INT NTC
Fargo           TRS, LP Bank           Hampton Inn &             Suites El Paso
            Depository             Account          

 

 Sch. I - 4 

 

 

EXHIBIT A

 

FORM OF TENANT DIRECTION LETTER

 

[COMPANY PARTY LETTERHEAD]

 

______________, 20__

 

[Addressee]

 

[Lease dated________between_________________,

as Landlord, and_______________, as Tenant,]

concerning premises known as_____________________

 

Gentlemen:

 

This letter shall constitute notice to you that the undersigned has granted a
security interest in the captioned lease and all rents, additional rent and all
other monetary obligations to landlord thereunder (collectively, the “Rent”) in
favor of CITIBANK, N.A., as collateral agent (the “Agent”) for certain lenders
(collectively, the “Lenders”), to secure certain of the undersigned’s
obligations to the Lenders. The undersigned hereby irrevocably instructs and
authorizes you to disregard any and all previous notices sent to you in
connection with the Rent and hereafter to deliver all Rent to the following
address:

 

[Company Party Name]

c/o [Account Address]

Attention: ________________

 

The instructions set forth herein are irrevocable and are not subject to
modification in any manner, except that the Agent, or any successor agent so
identified by the Agent, may by written notice to you rescind or modify the
instructions contained herein.

 

  Sincerely,       [COMPANY PARTY]

 

 Exh. A - 1 

 

 

ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned acknowledges notice of the security interest of the Lenders and
hereby confirms that the undersigned has received no notice of any other pledge
or assignment of the Rent and will honor the above instructions.

 

[Tenant]

 

By:       Name:     Its:  

 

Dated as of:_________________, 20__

 

 Exh. A - 2 

 

 

EXHIBIT B

 

FORM OF MATERIAL THIRD PARTY MERCHANT DIRECTION LETTER

 

[COMPANY PARTY LETTERHEAD]

 

________________, 20__

 

[Addressee]

 

[Insert brief description of contract],

concerning premises known as______________________

 

Gentlemen:

 

This letter shall constitute notice to you that the undersigned has granted a
security interest in all proceeds and revenues payable to the undersigned
(collectively, the “Revenue”) in favor of CITIBANK, N.A., as collateral agent
(the “Agent”) for certain lenders (collectively, the “Lenders”), to secure
certain of the undersigned’s obligations to the Lenders. The undersigned hereby
irrevocably instructs and authorizes you to disregard any and all previous
notices sent to you in connection with the Revenue and hereafter to deliver all
Revenue to the following address:

 

[Company Party Name]

c/o [Account Address]

Attention:________________

 

The instructions set forth herein are irrevocable and are not subject to
modification in any manner, except that the Agent, or any successor agent so
identified by the Agent, may by written notice to you rescind or modify the
instructions contained herein.

 

  Sincerely,       [COMPANY PARTY]

 

 Exh. B - 1 

 

 

ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned acknowledges notice of the security interest of the Lenders and
hereby confirms that the undersigned has received no notice of any other pledge
or assignment of the Revenue and will honor the above instructions.

 

[Merchant]

 

By:       Name:     Its:  

 

Dated as of:________________, 20__

 

 Exh. B - 2 

 

 

EXHIBIT C

 

FORM OF CASH MANAGEMENT AGREEMENT SUPPLEMENT

 

[Date of Supplement]

 

To: CITIBANK, N.A.,   as Collateral Agent

 

HOSPITALITY INVESTORS TRUST, INC.

Term Loan Facility

 

Ladies and Gentlemen:

 

Reference is made to (i) the Second Amended and Restated Term Loan Agreement
dated as of April 27, 2017 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among the borrowers
party thereto (individually and collectively and jointly and severally, the
“Borrowers”), Hospitality Investors Trust Operating Partnership, L.P., and
Hospitality Investors Trust, Inc., collectively as Guarantors, the Lender
Parties party thereto, Citibank, N.A., as Agent for the Secured Parties
(together with any successor Agent appointed pursuant to Article VIII of the
Loan Agreement, the “Agent”), and (ii) the Cash Management Agreement dated as of
April 27, 2017 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Cash Management Agreement”) among the Borrowers
and the other Company Parties and the Agent. Terms defined in the Loan Agreement
or the Cash Management Agreement and not otherwise defined herein are used
herein as defined in the Loan Agreement or the Cash Management Agreement, as
applicable.

 

SECTION 1. Grant of Security. The undersigned hereby grants to the Agent, for
the ratable benefit of the Secured Parties, a security interest in, all of its
right, title and interest in and to all of the Account Collateral of the
undersigned, whether now owned or hereafter acquired by the undersigned,
wherever located and whether now or hereafter existing or arising but in all
events subject to the terms and provisions of the Cash Management Agreement
(including, without limitation, Section 10 thereof).

 

SECTION 2. Security for Obligations. The grant of a security interest in the
Account Collateral by the undersigned under this Cash Management Agreement
Supplement and the Cash Management Agreement secures the payment of all
Obligations of the undersigned now or hereafter existing under or in respect of
the Loan Documents, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest, premiums, penalties,
fees, indemnifications, contract causes of action, costs, expenses or otherwise.

 

SECTION 3. Supplements to Cash Management Agreement Schedules. The undersigned
has attached hereto a supplemental Schedule I to the Cash Management Agreement
updated to the date first above written, and the undersigned hereby certifies,
as of the date first above written, that such supplemental schedule has been
prepared by the undersigned in substantially the form of the equivalent schedule
to the Cash Management Agreement and is complete and correct.

 

SECTION 4. Representations and Warranties. The undersigned hereby makes as to
itself and with respect to its Property Account each representation and warranty
set forth in Section 8(c) of the Cash Management Agreement as of the date
hereof.

 

 Exh. C - 1 

 

 

SECTION 5. Obligations Under the Cash Management Agreement. The undersigned
hereby agrees, as of the date first above written, to be bound as a Company
Party by all of the terms and provisions of the Cash Management Agreement to the
same extent as each of the other Company Parties. The undersigned further
agrees, as of the date first above written, that each reference in the Cash
Management Agreement to a “Borrower”, an “Additional Borrower” or a “TRS Lessee”
shall also mean and be a reference to the undersigned, as applicable.

 

SECTION 6. Governing Law. This Security Agreement Supplement shall be governed
by, and construed in accordance with, the laws of the State of New York.

 

SECTION 7. Jurisdiction, Etc. (a) The undersigned hereby irrevocably and
unconditionally agrees that it will not commence any action, litigation or other
proceeding of any kind or description, whether in law or equity, whether in
contract or in tort or otherwise, arising out of or relating to this Security
Agreement Supplement in any forum other than the courts of the State of New York
sitting in New York County, and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof and the
undersigned irrevocably and unconditionally submits to the jurisdiction of such
courts, and the undersigned hereby irrevocably and unconditionally agrees that
all claims in respect of any such action, litigation or proceeding may be heard
and determined in any such New York State court or, to the extent permitted or
required by law, in such Federal court. The undersigned agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this agreement shall affect any right that the
undersigned may otherwise have to bring any action or proceeding relating to
this Security Agreement Supplement in the courts of any jurisdiction.

 

(b)          The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any litigation, action or
proceeding arising out of or relating to this Security Agreement Supplement in
any New York State or Federal court. The undersigned irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

SECTION 8. WAIVER OF JURY TRIAL. THE UNDERSIGNED IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT SUPPLEMENT.

 

[No Further Text on This Page; Signature Pages Follow]

 

  Very truly yours,       [NAME OF ADDITIONAL BORROWER]       By     Title:

 

  Address for notices:                    

 

 Exh. C - 2 

 

 

  [NAME OF TRS LESSEE]         By     Title:

 

  Address for notices:                    

 

 Exh. C - 3 

 

 

EXHIBIT K TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

INTENTIONALLY OMITTED

 

Exh. K 

 

 

EXHIBIT L-1 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF SECTION 2.12(g) U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Second Amended and Restated Term Loan Agreement
dated as of April 27, 2017 (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among the borrowers party thereto,
collectively as borrower, Citibank, N.A., as administrative agent and the other
parties party thereto.

 

Pursuant to the provisions of Section 2.12 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Advance(s) (as well as any Note(s) evidencing such Advance(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 Internal Revenue Code, (iii) it is not a
ten percent shareholder of the Borrower within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code, and (iv) it is not a controlled
foreign corporation related to the Borrower as described in Section 881(c)(3)(C)
of the Internal Revenue Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or Form W-8BEN-E.
By executing this certificate, the undersigned agrees that if the information
provided on this certificate changes, the undersigned shall promptly so inform
the Borrower and the Administrative Agent.

 

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF LENDER]

 

By:       Name:     Title:         Date: ______________, 20[ ]  

 

Exh. L-1-1 

 

 

EXHIBIT L-2 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF SECTION 2.12(g) U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Second Amended and Restated Term Loan Agreement
dated as of April 27, 2017 (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among the borrowers party thereto,
collectively as borrower, Citibank, N.A., as administrative agent and the other
parties party thereto.

 

Pursuant to the provisions of Section 2.12 of the Loan 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 Internal
Revenue Code, (iii) it is not a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, and (iv) it is
not a controlled foreign corporation related to the Borrower as described in
Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on Internal Revenue Service Form W-8BEN or Form 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 Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF PARTICIPANT]

 

By:       Name:     Title:         Date: __________________, 20[ ]  

 

Exh. L-2-1 

 

 

EXHIBIT L-3 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF SECTION 2.12(g) U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Second Amended and Restated Term Loan Agreement
dated as of April 27, 2017 (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among the borrowers party thereto,
collectively as borrower, Citibank, N.A., as administrative agent and the other
parties party thereto.

 

Pursuant to the provisions of Section 2.12 of the Loan 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 to 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 Internal Revenue
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
Internal Revenue 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 Internal Revenue Code.

 

The undersigned has furnished its participating Lender with Internal Revenue
Service Form W-8IMY accompanied by one of the following forms from each its
partners/members that is claiming the portfolio interest exemption: (i) an
Internal Revenue Service Form W-8BEN or Form W-8BEN-E or (ii) an Internal
Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form
W-8BEN or Form 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 Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF PARTICIPANT]

 

By:       Name:     Title:         Date: ________________, 20[ ]  

 

Exh. L-3-1 

 

 

EXHIBIT L-4 TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF SECTION 2.12(g) U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Second Amended and Restated Term Loan Agreement
dated as of April 27, 2017 (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”), among the borrowers party thereto,
collectively as borrower, Citibank, N.A., as administrative agent and the other
parties party thereto.

 

Pursuant to the provisions of Section 2.12 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Advance(s) (as well as any Note(s) evidencing such Advance(s)) in respect
of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such Advance(s) (as well as
any Note(s) evidencing such Advance(s)); (iii) with respect to the extension of
credit pursuant to this Loan 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 Internal Revenue 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 Internal Revenue 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 Internal Revenue Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with
Internal Revenue Service Form W-8IMY accompanied by one of the following forms
from each its partners/members that is claiming the portfolio interest
exemption: (i) an Internal Revenue Service Form W-8BEN or Form W- 8BEN-E or (ii)
an Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue
Service Form W-8BEN or Form 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 Administrative Agent, and (2) the undersigned shall have at
all times furnished the Borrower and the Administrative 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 Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[NAME OF LENDER]

 

By:       Name:     Title:         Date: _________________, 20[ ]  

 

Exh. L-4-1 

 

 

EXHIBIT M TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF AMENDED AND RESTATED ASSIGNMENT OF MANAGEMENT

AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES

 

[Attached.]

 

Exh. M 

 

 

EXHIBIT M TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF ASSIGNMENT OF MANAGEMENT AGREEMENT

AND SUBORDINATION OF MANAGEMENT FEES

 

ASSIGNMENT OF MANAGEMENT AGREEMENT

AND SUBORDINATION OF MANAGEMENT FEES

 

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES
(this “Assignment”) is made as of the 27th day of April, 2017, by and among the
owners listed in Schedule 1 attached hereto, each a Delaware limited liability
company, having its principal place of business at c/o Hospitality Investors
Trust Operating Partnership, L.P., 3950 University Drive, Suite 301, Fairfax,
Virginia 22030 (individually and collectively as the context may require,
“Owner”) and the operating lessees listed in Schedule 1 attached hereto, each a
Delaware limited liability company, having its principal place of business at
c/o Hospitality Investors Trust Operating Partnership, L.P., 3950 University
Drive, Suite 301, Fairfax, Virginia 22030 (individually and collectively as the
context may require, “Operating Lessee”) to CITIBANK, N.A., a national
association, as collateral agent (in such capacity, “Agent”) for the Secured
Parties as defined in the Loan Agreement (defined below), having an address at
390 Greenwich Street, 7th Floor, New York, New York 10013 (Agent, together with
its successors and assigns, “Lender”), and is consented and agreed to by
[__________], a [_________], having its principal place of business at
[______________] (“Manager”).

 

RECITALS:

 

A.           Owner holds title to a fee simple interest in and to the Real
Property, as defined in that certain Second Amended and Restated Term Loan
Agreement dated as of [April 27], 2017 (as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”; capitalized terms used but not otherwise defined herein shall have
the meanings set forth in the Loan Agreement), among Owner, the Guarantors party
thereto, Citibank, N.A., as the issuing bank and the administrative agent, Agent
and the other Secured Parties identified therein, constituting the hotel
facilities listed on Schedule 1 attached hereto (together with all easements,
rights of way and other property rights appurtenant thereto, all equipment,
fixtures, furniture and other personal property attached to, located at or
otherwise used in connection with the foregoing and owned by Owner, individually
and collectively as the context may require, the “Property”).

 

B.           Pursuant to the terms of the Loan Agreement, the Secured Parties
have agreed to make loans and extend credit (collectively, the “Loan”) to Owner
and the other Loan Parties have agreed to guaranty payment of the Loan.

 

C.           Pursuant to the terms of each lease agreement (all such lease
agreements as amended, modified or supplemented and in effect from time to time,
collectively, the “Lease”) between the applicable Owner, as landlord, and the
applicable Operating Lessee, as tenant, Owner has leased the applicable Property
to the applicable Operating Lessee;

 

D.           Manager has agreed to manage the Property on behalf of Operating
Lessee pursuant to that certain Management Agreement, dated as of October 15,
2015, by and among ARC Hospitality SWN TRS, LLC, ARC Hospitality SWN CRS NTC
TRS, LP, and American Realty Capital Hospitality Properties, LLC (“Asset
Manager”), as modified by that certain Assignment and Amendment of Crestline SWN
Management Agreement, dated as of March 30, 2017, by and among Manager, Asset
Manager and Operating Lessee (as further amended, modified or supplemented and
in effect from time to time, the “Management Agreement”) and the Manager is
entitled to certain management fees (the “Management Fees”) and

 

 

 

 

reimbursable expenses thereunder. A true, correct and complete copy of the
Management Agreement (and any amendments, modifications or supplements thereto)
is attached hereto as Exhibit A.

 

E.           Lender requires that Operating Lessee assign the Management
Agreement and that Manager subordinate its interest under the Management
Agreement in lien and payment to the Loan Agreement and the other Loan Documents
as set forth below.

 

AGREEMENT

 

For good and valuable consideration the parties hereto agree as follows:

 

1.          Assignment and Subordination of Management Agreement.

 

(a)          As additional collateral security for the Loan, and subject to the
terms and conditions of this Assignment, Operating Lessee hereby conditionally
transfers, sets over and assigns to Lender all of Operating Lessee’s right,
title and interest in and to the Management Agreement, said transfer and
assignment to automatically become a present, unconditional assignment, at
Lender’s option, upon the occurrence and during the continuance of an Event of
Default under the Loan Agreement or any of the other Loan Documents.

 

(b)          The Management Agreement and any and all liens, rights and
interests (whether choate or inchoate and including, without limitation, all
mechanic’s and materialmen’s liens under applicable law) owed, claimed or held,
by Manager in and to the Property, are and shall be in all respects subordinate
and inferior to the liens and security interests created, or to be created, for
the benefit of the Secured Parties, and securing the repayment of the
Obligations of the Loan Parties under the Loan Documents, and all renewals,
extensions, increases, supplements, amendments, modifications or replacements
thereof.

 

2.          Subordination of Management Fees. Subject to the terms hereof and
the Loan Agreement and the Cash Management Agreement, the Management Fees and
all rights and privileges of Manager to the Management Fees are hereby, and
shall at all times continue to be, subject and unconditionally subordinate in
all respects in lien and payment to the lien and payment of the Mortgage, the
Note, the Loan Agreement and the other Loan Documents and to any renewals,
extensions, modifications, assignments, replacements or consolidations thereof
and the rights, privileges and powers of the Secured Parties thereunder.

 

3.          Termination. At such time as the Loan is paid in full and/or the
Mortgage affecting the Property is released or assigned of record, this
Assignment and all of the Secured Parties’ right, title and interest hereunder
shall terminate and shall be of no further force and effect.

 

4.          Estoppel. Manager represents and warrants that (a) the Management
Agreement is in full force and effect and has not been modified, amended or
assigned other than pursuant to this Assignment, (b) neither Manager nor
Operating Lessee is in default under any of the terms, covenants or provisions
of the Management Agreement and Manager knows of no event which, but for the
passage of time or the giving of notice or both, would constitute an event of
default under the Management Agreement, (c) neither Manager nor Operating Lessee
has commenced any action or given or received any notice for the purpose of
terminating the Management Agreement and (d) the Management Fees and all other
sums due and payable to the Manager under the Management Agreement as of the
date hereof have been paid in full.

 

5.          Lender’s Right to Terminate Management Agreement. Upon (1) the
acceleration of the Debt evidenced by the Notes or the commencement of any
action by Lender to enforce any of its rights or remedies to realize upon any of
the Collateral, following the occurrence and during the continuance of an Event
of Default, in accordance with the terms of the Loan Documents (including,
without being limited to, the commencement of any foreclosure action (by
judicial action or power of sale), the making of any application for the
appointment of a receiver or Lender exercising any right to take possession or
control of the Property in

 

 -2- 

 

 

accordance with the terms of the Loan Documents or (2) the occurrence and
continuation of the commission by Manager of any material act which would permit
termination of the Management Agreement in accordance with the express terms
thereof (subject to any applicable notice, grace and cure periods provided in
the Management Agreement), Lender shall have the right to terminate the
Management Agreement by giving Operating Lessee and Manager at least thirty (30)
days’ prior written notice; provided, however, that if Lender succeeds to
ownership of the Property, Lender’s right to terminate the Management Agreement
shall expire 120 days after the date on which Lender takes ownership of the
Property. Manager agrees not to look to Lender for payment of any accrued but
unpaid fees or other amounts due to Manager under the Management Agreement, or
any fees or other amounts due to Manager under the Management Agreement in
connection with, or for the period from and after the effective date of, any
termination.

 

6.           Agreement by Owner, Operating Lessee and Manager. Owner, Operating
Lessee and Manager hereby agree that upon the occurrence of an Event of Default
under the Loan Documents during the term of this Assignment or upon the
occurrence of any event which would entitle Lender to terminate, or cause the
termination of, the Management Agreement in accordance with the terms of the
Loan Documents (a) Manager shall, at the request of Lender, upon Lender’s
assumption of the Management Agreement, or other confirmation of its agreement
to comply with the terms thereof, continue to perform all of Manager’s
obligations under the terms of the Management Agreement with respect to the
Property or (b) at the option of Lender by delivery of written notice to Owner,
Operating Lessee and Manager, Operating Lessee and Manager shall terminate the
Management Agreement and Manager shall transfer its responsibility for the
management of the Property to a manager selected by Lender and take such
measures as set forth in the Management Agreement to achieve an orderly
transition of hotel operations to the new manager of the Property, including
delivery of all books, records, and documents relating to the Property and its
management in a manner consistent with the terms of the Management Agreement.
Nothing contained in this Assignment shall in any way limit the rights or
remedies of Manager against Operating Lessee or Owner as a result of such
termination.

 

7.           Receipt of Management Fees. Owner, Operating Lessee and Manager
hereby agree that Manager shall not be entitled to receive any Management Fees
or other fee, commission, expense reimbursement or other amount otherwise
payable to Manager under the Management Agreement (collectively, “Manager
Payment Obligations”) for and during any period of time that any Event of
Default has occurred and is continuing; provided, however, that notwithstanding
anything to the contrary contained in this Assignment, (a) Manager shall not be
obligated to return or refund to Lender any Manager Payment Obligations already
received by Manager prior to the occurrence of the Event of Default, and to
which Manager was entitled under this Assignment and (b) in the event Owner or
Operating Lessee loses possession of the Property in connection with exercise by
Lender of its rights or remedies pursuant to the Mortgage or the other Loan
Documents, Manager shall be entitled to collect any Manager Payment Obligations
accrued but unpaid prior to the occurrence of the Event of Default, and to which
Manager was entitled under this Assignment. Nothing set forth in this Assignment
shall limit the right of Manager to terminate the Management Agreement in the
event that Manager shall fail to receive the fees and reimbursements provided
for therein, as and when the same are due and payable. Notwithstanding anything
to the contrary contained in this Assignment, Manager shall have no obligation
to continue to perform any services under the Management Agreement if any
Manager Payment Obligation (including without limitation any expense
reimbursement) remains unpaid for a period of more than ten (10) days after the
same became due and owing to Manager pursuant to the Management Agreement.
Furthermore, and notwithstanding anything to the contrary contained in this
Assignment but subject to the last sentence of this Section 7, in the event that
Owner or Manager is entitled to retain cash for the payment of Operating
Expenses (as defined in the Cash Management Agreement) or Lender distributes
cash for the payment of Operating Expenses to Owner or Manager after the
occurrence of a Lockbox Period (as defined in the Cash Management Agreement) or
an Event of Default, Manager or Owner, as applicable, may use such cash to pay
Operating Expenses that are then due and payable and that are included within
the Approved Budget (as defined in the Cash Management Agreement) in any order
or priority as Manager or Owner may determine.

 

 -3- 

 

 

8.           Consent and Agreement by Manager. Manager hereby acknowledges and
consents to this Assignment. Manager agrees that it will act in conformity with
the provisions of this Assignment and Lender’s rights hereunder or otherwise
related to the Management Agreement. In the event that the responsibility for
the management of the Property is transferred from Manager in accordance with
the provisions hereof, Manager shall, and hereby agrees to, fully cooperate in
transferring its responsibility to a new management company and effectuate such
transfer no later than thirty (30) days from the date the Management Agreement
is terminated. Further, Manager hereby agrees (a) not to contest or impede the
exercise by Lender of any right it has under or in connection with this
Assignment; (b) that it shall, in the manner provided for in this Assignment,
give at least thirty (30) days prior written notice to Lender of its intention
to terminate the Management Agreement or otherwise discontinue its management of
the Property and (c) not amend any of the terms or provisions of the Management
Agreement without the prior consent of Lender, provided, that, Manager shall be
required to give only ten (10) days prior written notice of its intention to
terminate the Management Agreement or discontinue its management of the Property
in the event of non- payment of any fees or reimbursements provided for in the
Management Agreement.

 

9.           Lender’s Agreement. So long as an Event of Default has not occurred
and is continuing, Lender agrees to permit any sums due to Manager under the
Management Agreement to be paid directly to Manager.

 

10.         Further Assurances. Manager further agrees to (a) execute such
affidavits and certificates as Lender shall reasonably require to further
evidence the agreements herein contained, (b) on request from Lender, furnish
Lender with copies of such information as Manager is entitled to receive under
the Management Agreement and (c) cooperate with Lender’s representative in any
inspection of all or any portion of the Property (such inspection only to occur
upon prior notice and during normal business hours). Manager hereby acknowledges
that some, or all, permits, licenses and authorizations necessary for the use,
operation and maintenance of the Property (collectively, the “Permits”) may be
held by, or on behalf of, the Manager. By executing this Assignment, Manager (i)
agrees that it is holding or providing all such Permits for the benefit of
Manager and/or Operating Lessee and (ii) agrees that as security for the
repayment of the Obligations of the Loan Parties under the Loan Documents, to
the extent permitted by applicable law, Manager hereby grants to Lender a
security interest in and to the Permits. Moreover, Manager hereby agrees that,
upon an Event of Default, it will assign the Permits to Lender if such Permits
are assignable or otherwise continue to hold such Permits for the benefit of
Lender until such time as Lender can obtain such Permits in its own name or the
name of a nominee.

 

11.         Assignment of Proceeds. Manager acknowledges that, as further
security for the Loan, (a) Owner and Operating Lessee have executed and
delivered to Lender an Assignment of Leases and Rents, dated as of the date
hereof (as the same may be amended, restated, replaced, supplemented, or
otherwise modified from time to time, the “Assignment of Leases”), assigning to
Lender, among other things, all of Owner’s and Operating Lessee’s right, title
and interest in and to all of the revenues of the Property and (b) Owner,
Operating Lessee and Lender, among others, have entered into that certain Cash
Management Agreement of even date herewith (as the same may be amended,
restated, replaced, supplemented, or otherwise modified from time to time, the
“Cash Management Agreement”), pursuant to which Owner and Operating Lessee have
agreed that any Rents, and other income and proceeds from the Property are to be
deposited, upon the occurrence of a Lockbox Trigger Event (as defined in the
Cash Management Agreement) directly into an account of the Lender established
pursuant to the Cash Management Agreement and this Assignment.

 

12.         Manager Not Entitled to Rents. Manager acknowledges and agrees that
it is collecting and processing the Rents solely as the agent for the Owner and
Operating Lessee and Manager has no right to, or title in, the Rents.
Notwithstanding anything to the contrary in the Management Agreement, the
Manager acknowledges and agrees that the Rents are the sole property of the
Owner and Operating Lessee, encumbered by the lien of the Mortgage and other
Loan Documents in favor of the Secured Parties. In any bankruptcy, insolvency or
similar proceeding the Manager, or any trustee acting on behalf of the Manager,

 

 -4- 

 

  

waives any claim to the Rents other than as such Rents may be used to pay the
Manager Payment Obligations pursuant to the terms and conditions of the
Management Agreement and this Assignment.

 

13.         Governing Law. This Assignment shall be governed by, construed,
applied and enforced in accordance with the laws of the State of New York.

 

14.         Notices. All notices, consents, approvals and requests required or
permitted hereunder shall be delivered in accordance with Section 9.02 of the
Loan Agreement and the following:

 

If to Manager:                      [                              ]

 

With a copy to:                    [                              ]

 

15.         SPE. Manager agrees that it shall not perform its duties under the
Management Agreement or otherwise act in a manner that would result in Owner’s
or Operating Lessee’s failure to comply with the Borrower SPE Requirements.

 

16.         Cash Management. Manager hereby agrees that, notwithstanding any
provision to the contrary set forth herein or in the Management Agreement, (i)
Manager shall comply, to the extent applicable, with Sections 5.01(v), 5.02(a),
5.02(f), 5.02(o) and 5.02(p) of the Loan Agreement and the Cash Management
Agreement, copies of which Manager acknowledges receiving, and (ii) in the event
of a conflict between the terms hereof and/or of the Management Agreement, on
the one hand, and the applicable terms of the Loan Agreement and/or the Cash
Management Agreement, on the other hand, the applicable terms of the Loan
Agreement and/or the Cash Management Agreement shall govern.

 

17.         No Oral Change. This Assignment may not be modified, amended,
waived, extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Owner, Operating Lessee, Lender or Manager, but
only by an agreement in writing signed by the parties hereto.

 

18.         Liability. This Assignment shall be binding upon and inure to the
benefit of Owner, Operating Lessee, Manager and the Secured Parties and their
respective successors and assigns forever. Any assignee or transferee of Lender
shall be entitled to all the benefits afforded to Lender under this Assignment.
None of Owner, Operating Lessee or Manager shall have the right to assign or
transfer its rights or obligations under this Assignment without the prior
written consent of Lender and any attempted assignment without such consent
shall be null and void.

 

19.         Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.

 

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

 

21.         Duplicate Originals, Counterparts. This Assignment may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Assignment may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Assignment. The failure of any party hereto
to execute this Assignment, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder. Delivery of an executed
counterpart of a signature page to this Assignment by telecopier or email shall
be effective as delivery of an original executed counterpart of this Assignment.

 

 -5- 

 

  

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

 

23.         Indemnity. Subject to the provisions of the Loan Agreement, Owner
shall indemnify, defend and hold Lender harmless against and from all liability,
loss damage and expense (including, without limitation, reasonable attorney’s
fees and disbursements), which Lender may or shall incur or be subject to by
reason of this Assignment, or by reason of any action taken in good faith by
Lender hereunder, and against and from any and all claims and demands whatsoever
which may be asserted against Lender by reason of any alleged obligation or
undertaking on its part to perform or discharge any of the terms, covenants and
conditions contained in the Management Agreement except to the extent arising
from the bad faith, fraud, gross negligence or willful misconduct by Lender. In
the event Lender incurs any such liability, loss, damage or expense, the amount
thereof, together with interest thereon at the rate of interest applicable from
time to time under the Note, shall be payable by Owner to Lender within five (5)
days after written demand.

 

24.         Expenses. If any suit or other proceeding is instituted by Lender to
enforce this Assignment (or any portion hereof), Owner shall pay, within five
(5) days after written demand all of the reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender in connection therewith, together with
interest at the interest rate applicable to Base Rate Advances under Section
2.07(a) of the Loan Agreement. The obligations of Owner under this Section 24
shall survive the expiration or termination of this Assignment.

 

25.         Miscellaneous.

 

(a)          Wherever pursuant to this Assignment (i) Lender exercises any right
given to it to approve or disapprove, (ii) any arrangement or term is to be
satisfactory to Lender or (iii) any other decision or determination is to be
made by Lender, the decision of Lender to approve or disapprove, all decisions
that arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Lender, shall be in the sole and absolute
discretion of Lender and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.

 

(b)          Wherever pursuant to this Assignment it is provided that Owner,
Operating Lessee or Manager shall pay any costs and expenses, such costs and
expenses shall include, but not be limited to, reasonable out-of-pocket legal
fees and disbursements of Lender.

 

(c)          Without limiting the generality of any other provisions contained
herein or in the other Loan Documents, no failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder or under any of the
other Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right preclude any other or further exercise thereof or
the exercise of any other right. The rights and remedies of the Lender provided
herein and in the other Loan Documents are cumulative and are in addition to,
and are not exclusive of, any rights or remedies provided by law or in equity.

 

[NO FURTHER TEXT ON THIS PAGE]

 

 -6- 

 

  

IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the date
and year first written above.

 

  OWNER:         [                                                  ]   a
Delaware limited liability company         By:     Name:     Title:  

 

[Signatures continued on next page]

 

[Signature page to Subordination of Management Agreement]

 

 

 

  

  OPERATING LESSEE:       [TRS LESSEE]   a Delaware limited [liability
company][partnership]         By:       Name:     Title:

 

[Signatures continued on next page]

 

[Signature page to Subordination of Management Agreement]

 

 

 

  

  LENDER:       CITIBANK, N.A.,   as collateral agent,         By:       Name:  
  Title:

 

[Signatures continued on next page]

 

[Signature page to Subordination of Management Agreement] 

 

 

 

  

  MANAGER:       [                                             ]         By:    
  Name:     Title:

 

[Signature page to Subordination of Management Agreement]

 

 

 

  

SCHEDULE 1

 

Property

 

HOTEL NAME   ADDRESS   CITY/STATE/ZIP   OWNER   OPERATING LESSEE                
 

 

 Schedule 1 

 

  

EXHIBIT A

 

Management Agreement

 

(Attached)

 

 Exh. A 

 

  

EXHIBIT N TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF GUARANTOR CONSENT

 

[Attached.]

 

 Exh. N 

 

  

EXHIBIT N TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF GUARANTOR CONSENT

 

GUARANTOR CONSENT

 

April 27, 2017

 

Citibank, N.A.,

  as Administrative Agent

  under the Loan Agreement

  referred to below

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

Ladies and Gentlemen:

 

The undersigned, [                              ], a Delaware [limited liability
company], and [                      ], a Delaware [limited liability company],
refer to the Second Amended and Restated Term Loan Agreement dated as of April
27, 2017 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Loan Agreement”; capitalized terms not otherwise defined
herein shall have their respective meanings set forth in the Loan Agreement),
among the borrowers party thereto, Hospitality Investors Trust Operating
Partnership, L.P., Hospitality Investors Trust, Inc., certain other parties
party thereto, the Lenders party thereto, and Citibank, N.A., as Administrative
Agent and Collateral Agent for the Lenders, and the Arrangers party thereto, and
hereby consent to the extension of the Maturity Date and agree that the Loan
Agreement and each of the other Loan Documents are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed.

 

Delivery of an executed counterpart of this Guarantor Consent by telecopier or
e-mail (which e-mail shall include an attachment in PDF format or similar format
containing the legible signature of the undersigned) shall be effective as
delivery of an original executed counterpart of this Guarantor Consent.

 

[Signature page follows]

 

 Exh. N-1 

 

  

  [                                                       ],   a Delaware
[limited liability company]         By:     Name:     Title:          
[                                                       ],   a Delaware [limited
liability company]         By:     Name:     Title:  

 

[Signature Page to Citi-HIT Guarantor Consent]

 

 

 

  

EXHIBIT O TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF GUARANTOR SUPPLEMENT

 

[Attached.]

 

 Exh. O 

 

  

EXHIBIT O TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF GUARANTY SUPPLEMENT

 

GUARANTY SUPPLEMENT

April 27, 201

 

Citibank, N.A.,

  as Administrative Agent

  under the Loan Agreement

  referred to below

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

Second Amended and Restated Term Loan Agreement dated as of [April 27], 2017 (as
in effect on the date hereof and as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”), among the borrowers party thereto, collectively, as Borrower, the
Guarantors party thereto, Citibank, N.A., as Administrative Agent and Collateral
Agent, and the other Secured Parties identified therein.

 

Ladies and Gentlemen:

 

Reference is made to the above-captioned Loan Agreement and to the Guaranty set
forth in Article VII thereof (such Guaranty, as in effect on the date hereof and
as it may hereafter be amended, supplemented or otherwise modified from time to
time, together with this Guaranty Supplement, being the “Guaranty”). The
capitalized terms defined in the Loan Agreement and not otherwise defined herein
are used herein as therein defined.

 

Section 1.           Guaranty; Limitation of Liability. (a) The undersigned
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of the
Borrowers (x) pursuant to clause (ii) of Section 9.04(b) of the Loan Agreement
and (y) for which the Borrowers are personally liable pursuant to Section 10.02
of the Loan Agreement (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any Lender in enforcing any rights under this Guaranty Supplement, the
Guaranty, the Loan Agreement or any other Loan Document. Without limiting the
generality of the foregoing, the undersigned’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to the Administrative Agent or any Lender under or in
respect of the Loan Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party. This Guaranty is and constitutes a
guaranty of payment and not merely of collection.

 

(b)          The undersigned, and by its acceptance of the benefits of this
Guaranty Supplement, each of the Administrative Agent and each Lender, hereby
confirms that it is the intention of all such Persons that this Guaranty
Supplement, the Guaranty and the Obligations of the undersigned hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent

 

 Exh. O-1 

 

  

Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Guaranty Supplement, the
Guaranty and the Obligations of the undersigned hereunder and thereunder. To
effectuate the foregoing intention, the Administrative Agent, the Lenders and
the undersigned hereby irrevocably agree that the Obligations of the undersigned
under this Guaranty Supplement and the Guaranty at any time shall be limited to
the maximum amount as will result in the Obligations of the undersigned under
this Guaranty Supplement and the Guaranty not constituting a fraudulent transfer
or conveyance.

 

(c)          The undersigned hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to the Administrative
Agent or any Lender under this Guaranty Supplement, the Guaranty or any other
guaranty, the undersigned will contribute, to the maximum extent permitted by
law, such amounts to each other Guarantor and each other guarantor so as to
maximize the aggregate amount paid to the Administrative Agent and the Lenders
under or in respect of the Loan Documents.

 

Section 2.           Obligations Under the Guaranty. The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Loan Agreement and the Guaranty to the same
extent as each of the other Guarantors thereunder (including, without
limitation, Section 7.02 through and including Section 7.08 thereof). The
undersigned further agrees, as of the date first above written, that each
reference in the Loan Agreement and any other Loan Document to a “Guarantor” or
a “Loan Party” shall also mean and be a reference to the undersigned.

 

Section 3.           Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 4.01 of the Loan
Agreement to the same extent as each other Guarantor.

 

Section 4.           Delivery by Telecopier. Delivery of an executed counterpart
of a signature page to this Guaranty Supplement by telecopier or e-mail (which
e-mail shall include an attachment in PDF format or similar format containing
the legible signature of the undersigned) shall be effective as delivery of an
original executed counterpart of this Guaranty Supplement.

 

Section 5.           Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a)
This Guaranty Supplement shall be governed by, and construed in accordance with,
the law of the State of New York.

 

(b)          The undersigned hereby irrevocably and unconditionally agrees that
it will not commence any action, litigation or other proceeding of any kind or
description, whether in law or equity, whether in contract or in tort or
otherwise, arising out of or relating to this Guaranty Supplement, against any
of the other parties to the Loan Documents in any forum other than the courts of
the State of New York sitting in New York County, and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof and the undersigned hereby irrevocably and unconditionally
submits to the jurisdiction of such courts, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action, litigation or proceeding may be heard and determined in any such New
York State court or, to the extent permitted or required by law, in such Federal
court. The undersigned hereby agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
agreement shall affect any right that any Agent, any Lender Party or any other
Indemnified Party may otherwise have to bring any action or proceeding relating
to this Agreement or any of the other Loan Documents to which it is a party in
the courts of any jurisdiction in connection with the exercise of any rights
under any Loan Document or against any Collateral or the enforcement of any
judgment, and each Loan Party hereby submits to the jurisdiction of, and
consents to venue in, any such court.

 

(c)          The undersigned hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of

 

 Exh. O-2 

 

  

any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Loan Documents to which it is a party in any New York State or
Federal court sitting in City, County and State of New York. The undersigned
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

(d)          THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES, OR THE ACTIONS OF THE AGENTS OR ANY LENDER PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

  Very truly yours,       [NAME OF ADDITIONAL GUARANTOR]         By     Name:  
Title:

 

 Exh. O-3 

 

  

EXHIBIT P TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF BORROWER ACCESSION AGREEMENT

 

[Attached.]

 

 Exh. P 

 

  

EXHIBIT P TO THE SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

 

FORM OF BORROWER ACCESSION AGREEMENT

 

BORROWER ACCESSION AGREEMENT

 

Citibank, N.A.,

  as Administrative Agent

  under the Loan Agreement

  referred to below

390 Greenwich Street, 7th Floor

New York, New York 10013

Attn: Ana Rosu Marmann

 

Second Amended and Restated Term Loan Agreement dated as of April 27, 2017 (as
in effect on the date hereof and as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”), among the borrowers party thereto, collectively, as Borrower, the
Guarantors party thereto, Citibank, N.A., as Administrative Agent and Collateral
Agent, and the other Secured Parties identified therein.

 

Ladies and Gentlemen:

 

Reference is made to the above-captioned Loan Agreement. The capitalized terms
defined in the Loan Agreement and not otherwise defined herein are used herein
as therein defined.

 

Section 1.           Accession. By its execution of this Borrower Accession
Agreement (the “Accession Agreement”), the undersigned (“Additional Borrower”)
absolutely, unconditionally and irrevocably undertakes to and agrees to observe
and be bound by the terms and provisions of the Loan Agreement and other Loan
Documents and all of the Obligations and Guaranteed Obligations set forth
therein (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing Obligations
and Guaranteed Obligations) as if it were an original party thereto as an
initial Borrower and Guarantor.

 

Section 2.           Obligations under the Loan Documents. The undersigned
Additional Borrower hereby agrees, as of the date first above written, to be
bound as a Borrower and Guarantor by all of the terms and conditions of the Loan
Agreement and the other Loan Documents to the same extent as each of the other
Borrowers and Guarantors thereunder. The undersigned Additional Borrower further
agrees, as of the date first above written, that each reference in the Loan
Agreement and the other Loan Documents to an “Additional Borrower”, a “Borrower”
or a “Loan Party” shall also mean and be a reference to the undersigned
Additional Borrower.

 

Section 3.           Consent of Loan Parties. The existing Loan Parties hereby
consent to the accession of the undersigned Additional Borrower to the Loan
Documents on the terms of Sections 1 and 2 of this Accession Agreement and agree
that the Loan Documents shall hereinafter be read and construed as if the
undersigned Additional Borrower had been an original party in the capacity of an
initial Borrower and Guarantor.

 

 Exh. C-1 

 

  

Section 4.           Representations and Warranties. As of the date hereof, the
undersigned Additional Borrower hereby makes each representation and warranty
set forth in Section 4.01 of the Loan Agreement to the same extent as each other
Borrower.

 

Section 5.           Delivery by Facsimile. Delivery of an executed counterpart
of a signature page to this Accession Agreement by facsimile or e-mail (which
e-mail shall include an attachment in PDF format or similar format containing
the legible signature of the undersigned) shall be effective as delivery of an
original executed counterpart of this Accession Agreement.

 

Section 6.           Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a)
This Accession Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.

 

(b)          The undersigned Additional Borrower hereby irrevocably and
unconditionally agrees that it will not commence any action, litigation or other
proceeding of any kind or description, whether in law or equity, whether in
contract or in tort or otherwise, arising out of or relating to this Accession
Agreement or any of the other Loan Documents to which it is a party, against any
of the other parties to the Loan Documents in any forum other than the courts of
the State of New York sitting in New York County, and of the United States
District Court of the Southern District of New York, and any appellate court
thereof and the undersigned Additional Borrower irrevocably and unconditionally
submits to the jurisdiction of such courts, and hereby irrevocably and
unconditionally agrees that all claims in respect of any such action, litigation
or proceeding may be heard and determined in any such New York State court or,
to the extent permitted or required by law, in such Federal court. The
undersigned Additional Borrower agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Accession Agreement, the Loan Agreement or any other Loan Document shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Accession Agreement, the Loan Agreement or any of the other
Loan Documents to which it is or is to be a party in the courts of any other
jurisdiction.

 

(c)          The undersigned Additional Borrower irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
litigation, action or proceeding arising out of or relating to this Accession
Agreement or any of the other Loan Documents to which it is a party in any New
York State or Federal court. The undersigned Additional Borrower hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

(d)          THE UNDERSIGNED ADDITIONAL BORROWER HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES, OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

(Signature Pages Follow)

 

 Exh. C-2 

 

  

  Very truly yours,       ADDITIONAL BORROWER:        
[                                                ],   a
[                                             ]         By:       Name:    
Title:

 

 Exh. C-3 

 

  

Approved this          day

of                           ,            

 

BORROWERS:

 

[                                                             ],

a [                                                          ]

 

By:       Name:     Title:  

 

GUARANTORS:

 

HOSPITALITY INVESTORS TRUST OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership

 

By: HOSPITALITY INVESTORS TRUST, INC., a Maryland corporation, its general
partner

 

  By:         Name:       Title:  

 

HOSPITALITY INVESTORS TRUST, INC.,

a Maryland corporation

 

By:     Name:   Title:  

 

 Exh. C-4