Exhibit 10.1

 

LOAN AGREEMENT

 

Dated as of April 28, 2017

 

Among

 

THE ENTITIES LISTED ON SCHEDULE I-A

collectively, as Borrower

 

and

 

THE ENTITIES LISTED ON SCHEDULE I-B,

collectively, as Operating Lessee

 

and

 

DEUTSCHE BANK AG, NEW YORK BRANCH,

 

CITIGROUP GLOBAL MARKETS REALTY CORP., and

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

collectively, as Lender

 

Loan Agreement

 

 

TABLE OF CONTENTS

 

      Page         Article 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1 Section
1.1   Specific Definitions 1 Section 1.2   Index of Other Definitions 41 Section
1.3   Principles of Construction 44         Article 2 THE LOAN 44 Section 2.1  
The Loan 44 2.1.1   Agreement to Lend and Borrow 44 2.1.2   Components of the
Loan 45 2.1.3   Single Disbursement to Borrower 45 2.1.4   The Note 45 2.1.5  
Use of Proceeds 45 Section 2.2   Interest Rate 46 2.2.1   Interest Rate 46 2.2.2
  Default Rate 46 2.2.3   Interest Calculation 46 2.2.4   Usury Savings 47
Section 2.3   Loan Payments 47 2.3.1   Payments 47 2.3.2   Payments Generally 47
2.3.3   Payment on Maturity Date 48 2.3.4   Late Payment Charge 48 2.3.5  
Method and Place of Payment 48 Section 2.4   Prepayments 48 2.4.1   Prepayments
48 2.4.2   Voluntary Prepayments 49 2.4.3   Intentionally Omitted 50 2.4.4  
Mandatory Prepayments; Option to Prepay Balance 50 2.4.5   Prepayments After
Default 52 2.4.6   Prepayment/Repayment Conditions 52 Section 2.5   Release of
Properties 54 2.5.1   Release on Payment in Full 54 2.5.2   Release of
Individual Property 54 2.5.3   Impaired Individual Property Release 58 Section
2.6   Interest Rate Cap Agreement 60 2.6.1   Interest Rate Cap Agreement 60
2.6.2   Pledge and Collateral Assignment of Interest Rate Cap Agreement 60 2.6.3
  Covenants 60 2.6.4   [Reserved] 62 2.6.5   Representations and Warranties 62
2.6.6   [Reserved] 63 2.6.7   Remedies 63 2.6.8   Sales of Rate Cap Collateral
65

 

  -ii-Loan Agreement

 

 

2.6.9   Public Sales Not Possible 65 2.6.10   Receipt of Sale Proceeds 66 2.6.11
  Replacement Interest Rate Cap Agreement 66 Section 2.7   Extension Options 66
2.7.1   Extension Options 66 2.7.2   Intentionally Omitted 68 Section 2.8  
Regulatory Change; Taxes 68 2.8.1   Increased Costs 68 2.8.2   Special Taxes 69
2.8.3   Other Taxes 69 2.8.4   Tax Refund 69 2.8.5   Change of Office 69 Section
2.9   Letters of Credit 70         Article 3 REPRESENTATIONS AND WARRANTIES 70
Section 3.1   Borrower Representations 70 3.1.1   Organization; Special Purpose
71 3.1.2   Proceedings; Enforceability 71 3.1.3   No Conflicts 71 3.1.4  
Litigation 72 3.1.5   Agreements 72 3.1.6   Consents 72 3.1.7   Property; Title
72 3.1.8   ERISA; No Plan Assets 73 3.1.9   Compliance 74 3.1.10   Financial
Information 74 3.1.11   Utilities and Public Access 74 3.1.12   Assignment of
Leases 75 3.1.13   Insurance 75 3.1.14   Flood Zone 75 3.1.15   Physical
Condition 75 3.1.16   Boundaries 75 3.1.17   Leases 76 3.1.18   Tax Filings 76
3.1.19   No Fraudulent Transfer 77 3.1.20   Federal Reserve Regulations 77
3.1.21   Organizational Chart 77 3.1.22   Organizational Status 77 3.1.23  
[Reserved] 78 3.1.24   No Casualty 78 3.1.25   Purchase Options 78 3.1.26  
FIRPTA 78 3.1.27   Investment Company Act 78 3.1.28   Fiscal Year 78 3.1.29  
Other Debt 78 3.1.30   Contracts 78 3.1.31   Full and Accurate Disclosure 79

 

 -iii-Loan Agreement

 

 

3.1.32   Other Obligations and Liabilities 79 3.1.33   Intellectual
Property/Websites 79 3.1.34   Ground Lease 79 3.1.35   Operations Agreement 80
3.1.36   Franchise Agreements 81 3.1.37   Illegal Activity 81 3.1.38   Property
Improvement Plan 81 3.1.39   Operating Lease 81 Section 3.2   Survival of
Representations 81         Article 4 BORROWER COVENANTS 81 Section 4.1   Payment
and Performance of Obligations 82 Section 4.2   Due on Sale and Encumbrance;
Transfers of Interests 82 Section 4.3   Liens 83 Section 4.4   Special Purpose
84 Section 4.5   Existence; Compliance with Legal Requirements 84 Section 4.6  
Taxes and Other Charges; Use and Occupancy Taxes 84 Section 4.7   Litigation 85
Section 4.8   Title to the Property 85 Section 4.9   Financial Reporting 85
4.9.1   Generally 85 4.9.2   Quarterly and Monthly Reports 86 4.9.3   Annual
Reports 87 4.9.4   Other Reports 87 4.9.5   Annual Budget 88 4.9.6   Excess
Operating Expenses 89 4.9.7   Hotel Accounting 89 Section 4.10   Access to
Property 90 Section 4.11   Leases 90 Section 4.12   Repairs; Maintenance and
Compliance; Alterations 91 4.12.1   Repairs; Maintenance and Compliance 91
4.12.2   Alterations 92 Section 4.13   Approval of Major Contracts 93 Section
4.14   Property Management 93 4.14.1   Management Agreements 93 4.14.2  
Prohibition Against Termination or Modification 94 4.14.3   Replacement of
Manager 96 4.14.4   Brand Manager Rights. 96 Section 4.15   Performance by
Borrower; Compliance with Agreements 96 Section 4.16   Licenses; Intellectual
Property; Website 97 4.16.1   Licenses 97 4.16.2   Intellectual Property 97
4.16.3   Website 97 Section 4.17   Further Assurances 97 Section 4.18   Estoppel
Statement 98 Section 4.19   Notice of Default 99 Section 4.20   Cooperate in
Legal Proceedings 99

 

 -iv-Loan Agreement

 

 

Section 4.21   Indebtedness 99 Section 4.22   Business and Operations 99 Section
4.23   Dissolution 99 Section 4.24   Debt Cancellation 100 Section 4.25  
Affiliate Transactions 100 Section 4.26   No Joint Assessment 100 Section 4.27  
Principal Place of Business 100 Section 4.28   Change of Name, Identity or
Structure 100 Section 4.29   Costs and Expenses 101 Section 4.30   Indemnity 102
Section 4.31   ERISA 102 Section 4.32   Patriot Act Compliance 103 Section 4.33
  Ground Leases 104 Section 4.34   Hotel Covenants 108 Section 4.35   Bankruptcy
Related Covenants 111 Section 4.36   Deposits 112 Section 4.37   Non-Conforming
Properties 112         Article 5 INSURANCE, CASUALTY AND CONDEMNATION 112
Section 5.1   Insurance 112 5.1.1   Insurance Policies 112 5.1.2   Insurance
Company 117 Section 5.2   Casualty 118 Section 5.3   Condemnation 119 Section
5.4   Restoration 119         Article 6 CASH MANAGEMENT AND RESERVE FUNDS 124
Section 6.1   Cash Management Arrangements 124 Section 6.2   Required Repairs
Funds 125 6.2.1   Deposit of Required Repairs Funds 125 Section 6.3   Tax Funds
125 6.3.1   Deposits of Tax Funds 125 6.3.2   Release of Tax Funds 126 Section
6.4   Insurance Funds 126 6.4.1   Deposits of Insurance Funds 126 6.4.2  
Release of Insurance Funds 127 Section 6.5   Scheduled PIP Reserve Funds 127
6.5.1   Deposits of Scheduled PIP Reserve Funds 127 6.5.2   Release of Scheduled
PIP Reserve Funds 128 Section 6.6   Intentionally Omitted 128 Section 6.7  
Ground Rent Funds 128 6.7.1   Deposits of Ground Rent Funds 128 6.7.2   Release
of Ground Rent Funds 129 Section 6.8   FF&E Reserve Funds 129 6.8.1   Deposits
of FF&E Reserve Funds 129 6.8.2   Release of FF&E Reserve Funds 130 Section 6.9
  Casualty and Condemnation Account 130

 

 -v-Loan Agreement

 

 

Section 6.10   Cash Collateral Funds 131 Section 6.11   Property Cash Flow
Allocation 132 6.11.1   Order of Priority of Funds in Deposit Account 132 6.11.2
  Failure to Make Payments 133 6.11.3   Application After Event of Default 134
6.11.4   Mezzanine Lender Monthly Debt Service Notice 134 Section 6.12  
Security Interest in Reserve Funds 134 Section 6.13   Account Activation Notices
135 Section 6.14   Appointment of HIT Portfolio I TRS Holdco, LLC as Account
Representative 135 Section 6.15   Environmental Work Reserve 136 6.15.1  
Deposit of Environmental Work Reserve Funds 136 6.15.2   Release of Required
Repairs Funds 136         Article 7 PERMITTED TRANSFERS 136 Section 7.1   Loan
Assumption 136 Section 7.2   Permitted Transfers 145 Section 7.3   Cost and
Expenses; Copies 151 Section 7.4   Replacement Mezzanine Loan 151        
Article 8 DEFAULTS 152 Section 8.1   Events of Default 152 Section 8.2  
Remedies 156 8.2.1   Acceleration 156 8.2.2   Suspension of Lender’s Performance
156 8.2.3   Remedies Cumulative 157 8.2.4   Severance 157 8.2.5   Lender’s Right
to Perform 158         Article 9 SALE AND SECURITIZATION OF MORTGAGE 158 Section
9.1   Sale of Mortgage and Securitization 158 Section 9.2   Securitization
Indemnification 162 Section 9.3   Severance 166 9.3.1   Severance Documentation
166 9.3.2   New Mezzanine Loan Option 167 9.3.3   Cooperation; Execution;
Delivery 167 9.3.4   Uncross of Properties 168 Section 9.4   Costs and Expenses
168 Section 9.5   Confidentiality 169 Section 9.6   Compliance with Required
Loan Restructurings 169         Article 10 MISCELLANEOUS 170 Section 10.1  
Exculpation 170 Section 10.2   Survival; Successors and Assigns 173 Section 10.3
  Lender’s Discretion; Rating Agency Review Waiver 173 Section 10.4   Governing
Law 174 Section 10.5   Modification, Waiver in Writing 175

 

 -vi-Loan Agreement

 

 

Section 10.6   Notices 176 Section 10.7   Waiver of Trial by Jury 177 Section
10.8   Headings, Schedules and Exhibits 178 Section 10.9   Severability 178
Section 10.10   Preferences 178 Section 10.11   Waiver of Notice 178 Section
10.12   Deemed Distributions 178 Section 10.13   Offsets, Counterclaims and
Defenses 179 Section 10.14   No Joint Venture or Partnership; No Third Party
Beneficiaries 179 Section 10.15   Publicity 179 Section 10.16   Waiver of
Marshalling of Assets 179 Section 10.17   Certain Waivers 180 Section 10.18  
Conflict; Construction of Documents; Reliance 180 Section 10.19   Brokers and
Financial Advisors 180 Section 10.20   Prior Agreements 181 Section 10.21  
Servicer 181 Section 10.22   Intentionally Omitted 182 Section 10.23   Joint and
Several Liability 182 10.23.1   Cross Guaranty 182 Section 10.24   Creation of
Security Interest 184 Section 10.25   Assignments and Participations 184 Section
10.26   Counterparts 184 Section 10.27   Set-Off 185 Section 10.28   [Reserved]
185 Section 10.29   Intercreditor Agreement 185 Section 10.30   Note Register;
Participant Register 185 Section 10.31   Borrower Affiliate Lender. 186 Section
10.32   Acknowledgement and Consent to Bail-In of EEA Financial Institutions 187
Section 10.33   Co-Lenders 188

 

 -vii-Loan Agreement

 

 

SCHEDULES AND EXHIBITS

 

Schedules:           Schedule I-A - Borrower Schedule I-B - Operating Lessee
Schedule I - Individual Properties and Allocated Loan Amounts Schedule I-M1 -
Original Mezzanine Allocated Loan Amounts Schedule I-M2 - Approved Mezzanine
Allocated Loan Amounts Schedule II - Required Repairs Schedule III -
Organizational Chart of Borrower and Tax ID Numbers Schedule IV - Exceptions to
Representations and Warranties Schedule V - Definition of Special Purpose
Bankruptcy Remote Entity Schedule VI - Intellectual Property/Websites Schedule
VII - REAs Schedule VIII - Ground Lease Schedule IX - Description of Prior Loans
Schedule X - Scheduled Managers Schedule XI - Rent Roll Schedule XII - Franchise
Agreements Schedule XIII - Property Accounts Schedule XIV - Hotel
Companies/Approved Brands Schedule XV - List of Closing Date Managers Schedule
XVI - Non-Conforming Properties Schedule XVII - Operating Leases Schedule XVIII
- Scheduled PIP Schedule XIX - Divested Properties Schedule XX - Major Contracts
Schedule XXI - Red Zone Properties Schedule XXII - Environmental Work Properties
      Exhibits:           Exhibit A - Form of Tenant Instructions Exhibit B -
Secondary Market Transaction Information

 

 -viii-Loan Agreement

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of April 28, 2017 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), among
DEUTSCHE BANK AG, NEW YORK BRANCH, a branch of Deutsche Bank AG, a German Bank
authorized by the New York Department of Financial Services, having an address
at 60 Wall Street, 10th Floor, New York, New York 10005 (together with its
successors and/or assigns, “DBNY”), CITIGROUP GLOBAL MARKETS REALTY CORP., a New
York corporation, have an address at 390 Greenwich Street, New York, New York
10013 (together with its successors and/or assigns, “Citi”), and JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of
the United States of America, having an address at 383 Madison Avenue, New York,
New York 10179 (together with its successors and assigns, “JPM” and together
with Citi and DBNY and each of their respective successors and/or assigns,
collectively, “Lender”), THE ENTITIES LISTED ON SCHEDULE I-A, each a Delaware
limited liability company (together with each of their respective permitted
successors and assigns, collectively, “Borrower” and each sometimes referred to
herein individually as an “Individual Borrower”) and THE ENTITIES LISTED ON
SCHEDULE I-B, each a Delaware limited liability company (together with each of
their respective permitted successors and assigns, “Operating Lessee”).

 

All capitalized terms used herein shall have the respective meanings set forth
in Article 1 hereof.

 

WITNESSETH:

 

WHEREAS, Borrower desires to obtain the Loan from Lender; and

 

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms and conditions of this Agreement and the other Loan
Documents.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the making of the
Loan by Lender, the covenants, agreements, representations and warranties set
forth in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree, represent and warrant as follows:

 

Article 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1           Specific Definitions.

 

For all purposes of this Agreement, except as otherwise expressly provided:

 

“Acceptable Accounting Method” shall mean (i) GAAP, (ii) a federal income tax
basis of accounting, (iii) the Uniform System of Accounts, or (iv) such other
accounting basis reasonably acceptable to Lender, in each case consistently
applied.

 

 Loan Agreement

 

 

“Acknowledgment” shall mean the Acknowledgment, dated on or about the date
hereof made by Counterparty, or as applicable, Approved Counterparty.

 

“Additional Insolvency Opinion” shall mean any bankruptcy non-consolidation
opinion that would be satisfactory to a prudent lender acting reasonably and is
required to be delivered subsequent to the Closing Date pursuant to, and in
connection with, the Loan Documents.

 

“Adjusted Operating Income” shall mean for any period, total aggregate Operating
Income for such period less the amount of Hotel Taxes included in Operating
Income for such period.

 

“Advance Deposits” shall mean all deposits, advance payments and similar items
for commitments, reservations and agreements (“Advance Booking Agreements”)
regarding the future use of guest rooms, banquet rooms, conference rooms and
other facilities constituting part of an Individual Property.

 

“Affiliate” shall mean, as to any Person, any other Person that either (or both)
(a) is in Control of, is Controlled by or is under common ownership or Control
with such Person or is a director or officer of such Person or of an Affiliate
of such Person, and/or (b) owns directly or indirectly thirty-five percent (35%)
or more of the equity interests in such Person.

 

“Aggregate LTV” shall mean the ratio, in which the numerator is equal to the
Aggregate Principal Balance and the denominator is equal to the Appraised Value
of the Properties.

 

“Aggregate Principal Balance” shall mean the sum of the Outstanding Principal
Balance, plus the Mezzanine Principal Balance.

 

“Allocated Loan Amount” shall mean, for each Individual Property, the amount set
forth on Schedule I attached hereto.

 

“ALTA” shall mean American Land Title Association, or any successor thereto.

 

“Alteration Threshold” shall mean (a) with respect to any Individual Property
undergoing an alteration and/or a Restoration and/or subject to Flagging Costs,
an amount equal to $1,000,000, and (b) with respect to all Individual Properties
undergoing alterations and/or Restorations and/or subject to Flagging Costs, an
aggregate amount equal to five percent (5%) of the Outstanding Principal
Balance, in each case excepting alterations made pursuant to an Approved Annual
Budget, Approved Alterations or as otherwise reasonably approved by the Lender.

 

“Annual Budget” shall mean the operating and capital budget for the Properties,
setting forth, on a month-by-month basis, in reasonable detail, each line item
of Borrower’s good faith estimate of anticipated Operating Income, Operating
Expenses and Capital Expenditures for the Properties for the applicable Fiscal
Year.

 

 -2-Loan Agreement

 

 

“Annual Debt Service” shall mean, as of any date of determination, the Debt
Service payable during the one-year period occurring from and after such date of
determination calculated by assuming that (a) the Outstanding Principal Balance
at all times during such period is equal to the Outstanding Principal Balance as
of the date of determination (taking into account any prepayments that occur on
such date in accordance with this Agreement) and (b) LIBOR at all times during
such period is equal to either (i) in connection with Borrower’s exercise of an
Extension Option hereunder, the Strike Price of the proposed Replacement
Interest Rate Cap Agreement to be entered into by Borrower in connection with
its exercise of such Extension Option or (ii) otherwise, the Strike Price of the
Interest Rate Cap Agreement in place as of such date of determination.

 

“Appraised Value” shall mean the aggregate “as-is” fair market value of the
Properties based on new appraisals obtained by Lender and paid for by Borrower,
which new appraisals shall be (i) dated not more than ninety (90) days prior to
the Approved Mezzanine Closing Date, (ii) signed by a qualified, independent MAI
appraiser selected by Lender, (iii) addressed to and may be relied upon by
Lender and its successors and assigns, (iv) made in compliance with the
requirements of the Federal National Mortgage Association Company or Federal
Home Loan Mortgage Corporation, or any successor thereto, and Title XI of the
Federal Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder and the Uniform Standards of Professional
Appraisal Practice and (v) otherwise satisfactory to Lender in all respects.

 

“Approved Alterations” shall have the meaning set forth in the definition of
“Material Alterations”.

 

“Approved Bank” shall mean a bank or other financial institution, the long-term
unsecured debt rating of which are at least “A” by S&P and Fitch and “A2” by
Moody’s and the short-term unsecured debt ratings of which are at least “A-1” by
S&P, “F1” by Fitch and “P-1” by Moody’s.

 

“Approved Brand” shall mean, for an Individual Property, any of the hotel brands
identified on Schedule XIV or such other brand as is approved by Lender with
respect to such Individual Property, such approval not to be unreasonably
withheld, conditioned or delayed; provided, that in order for a hotel brand to
be deemed an Approved Brand with respect to any Individual Property, such hotel
brand shall also satisfy the Approved Brand Requirements with respect to such
Individual Property (unless expressly exempted from satisfying the Approved
Brand Requirements pursuant to the definition of such term).

 

“Approved Brand Requirements” shall mean, with respect to any Individual
Property that is being reflagged under a new Franchise Agreement pursuant to
Section 4.34(d) or (e), that the hotel brand of the hotel located at such
Individual Property meets or exceeds the STR Chain Scale classification of the
hotel brand that was in place on the Closing Date with respect to such
Individual Property; provided, however, that the Approved Brand Requirements
need not be satisfied with respect to the following: up to an aggregate of 5% of
all Individual Properties as they exist as of the Closing Date, which 5% shall
include, without limitation, hotels reflagged as Red Roof Inn, Red Lion or La
Quinta, (measured by Allocated Loan Amount, i.e., the Approved Brand
Requirements need not be satisfied for an Individual Property if, after such
reflagging, the aggregate of the Allocated Loan Amounts for all Individual
Properties reflagged not in compliance with the Approved Brand Requirements
expressed as a percentage of the aggregate of the Allocated Loan Amounts for all
Individual Properties as they exist as of the Closing Date, is less than or
equal to, but not in excess of, 5%).

 

 -3-Loan Agreement

 

 

“Approved Capital Expenditures” shall mean Capital Expenditures incurred by
Borrower and either (i) included in the Approved Annual Budget or (ii) approved
by Lender, which approval shall not be unreasonably withheld, conditioned or
delayed, provided that any Capital Expenditures included in FF&E Expenses or PIP
Expenses shall not constitute Approved Capital Expenditures.

 

“Approved Counterparty” shall mean a bank or other financial institution which
either (I) has (or provides a guarantor of its obligations that has) (a) a
long-term unsecured debt rating of “A+” or higher by S&P, (b) either (i) a
long-term unsecured debt rating of not less than “A2” by Moody’s and a
short-term senior unsecured debt rating of at least “P1” from Moody’s, or (ii)
if no short-term debt rating exists, a long-term senior unsecured debt rating of
at least “A1” from Moody’s; and (c) if any of the Securities are rated by Fitch
and if the counterparty is rated by Fitch, a long-term unsecured debt rating of
“A” or higher by Fitch (and not on Ratings Watch Negative) and a short-term
unsecured debt rating of not less than “F-1” from Fitch (and not on Ratings
Watch Negative); or (II) is otherwise acceptable to the Rating Agencies, as
evidenced by a Rating Agency Confirmation to the effect that such counterparty
shall not cause a downgrade withdrawal or qualification of the ratings assigned,
or to be assigned, to the Securities or any class thereof in any Securitization;
provided however, that SMBC Capital Markets, Inc. (with an Acceptable SMBC
Credit Support Party as its credit support party) will be an Acceptable
Counterparty so long as the rating of its credit support party (provided such
credit support party shall be an Acceptable SMBC Credit Support Party ) is not
downgraded, withdrawn or qualified by S&P or Moody’s or Fitch (if applicable)
from the long and short term ratings issued by such rating agencies below the
lesser of the above rating (as applicable) or its ratings as of the date hereof.
As used herein, an “Acceptable SMBC Credit Support Party” shall mean (i)
Sumitomo Mitsui Banking Corporation or a replacement guarantor that meets the
foregoing rating requirements and provides a guaranty on substantially the same
form as the guaranty provided by Sumitomo Mitsui Banking Corporation on the
Closing Date and (ii) provided any such credit support party guaranty guaranties
all current and future obligations under the Interest Rate Cap Agreement or
Replacement Interest Rate Cap Agreement, as applicable.

 

“Approved FF&E Expenses” shall mean FF&E Expenses incurred by Borrower and
either (a) included in the Approved Annual Budget or (b) approved by Lender,
which approval shall not be unreasonably withheld, conditioned or delayed;
provided that any FF&E Expenses included in Approved Scheduled PIP Expenses
shall not constitute Approved FF&E Expenses.

 

“Approved Flagging Budget” shall mean a budget of Flagging Costs for any
Individual Property under any Franchise Agreement which has been approved or
deemed approved by Lender, or for which approval is not required, in accordance
with Section 4.34(d) or (e).

 

“Approved Mezzanine Account” shall mean the bank account into which Lender will
deposit amounts payable to Approved Mezzanine Lender hereunder, as specified in
a written notice from Approved Mezzanine Lender to Lender.

 

“Approved Mezzanine Allocated Loan Amount” shall mean, as to any Individual
Property, the product of (a) the maximum stated principal amount of the Approved
Mezzanine Loan, multiplied by (b) a fraction, the numerator of which is the
Allocated Loan Amount for such Individual Property, and the denominator of which
is the sum of the Allocated Loan Amounts for all Individual Properties remaining
as of the Approved Mezzanine Closing Date. The Approved Mezzanine Allocated Loan
Amount for each Individual Property shall be established as of the Approved
Mezzanine Closing Date, and a copy of the schedule setting forth all Approved
Mezzanine Allocated Loan Amounts shall be attached hereto as Schedule I-M2 upon
the Approved Mezzanine Closing Date.

 

 -4-Loan Agreement

 

 

“Approved Mezzanine Closing Date” shall mean the earliest date on which any
portion of the Approved Mezzanine Loan is funded by Approved Mezzanine Lender.

 

“Approved Mezzanine Lender” shall mean a Person who, as of the Approved
Mezzanine Loan Closing Date, is a Qualified Mezzanine Lender (together with its
successors and assigns). If the Approved Mezzanine Loan has two or more
co-lenders, then “Approved Mezzanine Lender” shall mean, individually or
collectively as the context requires, each lender or co-lender under the
Approved Mezzanine Loan.

 

“Approved Mezzanine Loan” shall mean a loan from Approved Mezzanine Lender to
Mezzanine Borrower, which Approved Mezzanine Loan, as of the Approved Mezzanine
Loan Closing Date, satisfies the following conditions: (a) the Original
Mezzanine Loan has been paid in full, including the payment of any Spread
Maintenance Premium, if any; (b) the Approved Mezzanine Loan will be in a
maximum principal amount not to exceed the Original Mezzanine Principal Balance
on the date immediately prior to the date of repayment in full of the Original
Mezzanine Loan; (c) after taking into account the Approved Mezzanine Loan, the
Aggregate LTV shall be equal to or less than the Aggregate LTV on the Closing
Date which the parties agree is 74.4%, (c) after taking into account the
Approved Mezzanine Loan, the Debt Yield shall be equal to or greater than the
Debt Yield immediately prior to the time the Original Mezzanine Loan was repaid
and the Debt Yield (Mortgage Only) shall be equal to or greater than the Debt
Yield (Mortgage Only) immediately prior to the time the Original Mezzanine Loan
was repaid; (d) after taking into account the Approved Mezzanine Loan, the Debt
Service Coverage Ratio shall be equal to or greater than the Debt Service
Coverage Ratio immediately prior to the time the Original Mezzanine Loan was
repaid and the Debt Service Coverage Ratio (Mortgage Only) shall be equal to or
greater than the Debt Service Coverage Ratio (Mortgage Only) immediately prior
to the time the Original Mezzanine Loan was repaid; (e) if the Approved
Mezzanine Loan bears a floating rate of interest, Mezzanine Borrower shall have
obtained an interest rate cap agreement consistent with the requirements of an
Interest Rate Cap Agreement under the Original Mezzanine Loan Agreement and
having a term that expires no earlier than the initial maturity date of the
Approved Mezzanine Loan, the strike price of which shall be set so as to satisfy
the applicable provisions of the Mezzanine Loan Agreement; (f) the Approved
Mezzanine Loan will be secured by an equity pledge encumbering the direct
ownership interests of Mezzanine Borrower in Borrower and such other assets of
Mezzanine Borrower as may be specified in the Approved Mezzanine Loan Documents
(but will not be secured by any collateral securing the Loan); (g) the Approved
Mezzanine Loan will be coterminous with the Loan (including with respect to the
initial maturity date and all extended maturity dates hereunder and thereunder)
or shall be freely prepayable from and after the Initial Stated Maturity Date
and will have monthly payment dates on the same days as the Monthly Payment
Dates hereunder; (h) the material economic terms of the Approved Mezzanine Loan
shall be substantially similar to the economic terms of the Original Mezzanine
Loan or otherwise reasonably acceptable to Lender, (i) Approved Mezzanine Lender
shall enter into an intercreditor agreement with Lender reasonably satisfactory
in all respects to Lender and satisfactory in all respects to any Rating
Agencies, (provided that an intercreditor agreement substantially in the form as
that entered into between Lender and Original Mezzanine Lender with such changes
as are acceptable to Lender and the Rating Agencies shall be deemed reasonably
satisfactory to Lender) which intercreditor agreement shall, among other things,
provide that before Approved Mezzanine Lender (or its designee) may foreclose on
the pledged equity interests or otherwise take control of Borrower, an
acceptable replacement guarantor (which replacement guarantor shall be deemed
acceptable if such replacement guarantor would satisfy the requirements for a
Replacement Guarantor under Section 7.1(a)(xiii) hereof if such guaranty were
being delivered in connection with a Permitted Direct Assumption) shall deliver
replacement guaranties of recourse obligations (in form and substance
substantially the same as the Guaranty) to Lender, (j) the Approved Mezzanine
Loan Documents shall be reasonably satisfactory to Lender (provided that
Approved Mezzanine Loan Documents substantially in the form as the Original
Mezzanine Loan Documents shall be deemed reasonably satisfactory to Lender), (k)
Lender shall have obtained a Rating Agency Confirmation with respect to the
Approved Mezzanine Loan, (l) the Approved Mezzanine Loan shall be interest only,
(m) the Approved Mezzanine Lender shall be a Qualified Mezzanine Lender, and (n)
the Approved Mezzanine Loan shall be structured as no more than two tranches.
All reasonable out-of-pocket costs and expenses incurred by Lender in connection
with any Approved Mezzanine Loan (including, without limitation, reasonable
legal fees) shall be the sole obligation of Borrower.

 

 -5-Loan Agreement

 

 

“Approved Mezzanine Loan Agreement” shall mean the loan agreement to be entered
into between Approved Mezzanine Lender and Mezzanine Borrower in connection with
the origination of the Approved Mezzanine Loan, which loan agreement shall
govern the terms and conditions of the Approved Mezzanine Loan, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Approved Mezzanine Loan Documents” shall mean all documents evidencing,
securing, guaranteeing and/or perfecting the Approved Mezzanine Loan (and all
tranches thereof) and all documents executed and/or delivered in connection
therewith.

 

“Approved Mezzanine Monthly Debt Service Payment Amount” shall mean, for each
Monthly Payment Date, an amount equal to the amount of (i) non-default interest
which is then due on the Approved Mezzanine Loan under the Approved Mezzanine
Loan Documents for the Interest Period during which such Monthly Payment Date
occurs, plus (ii) the amount of any default interest and/or late fees then due
and owing to Approved Mezzanine Lender by Mezzanine Borrower under the Approved
Mezzanine Loan Documents.

 

“Approved Mezzanine Release Amount” shall mean, as to any Individual Property
that is subject to a release and associated partial prepayment of the Loan
pursuant to Section 2.4 and Section 2.5.2, the product of (x) the Release Amount
Percentage multiplied by (y) the Approved Mezzanine Allocated Loan Amount for
such Individual Property.

 

“Approved Operating Expenses” shall mean Operating Expenses incurred by Borrower
or by any Manager on Borrower’s behalf (excluding any Restricted Payments) which
(i) are included in the Approved Annual Budget for the current calendar month,
(ii) are for real estate taxes, insurance premiums, electric, gas, oil, water,
sewer or other utility service to the Properties, (iii) are for Management Fees,
or (iv) have been approved in writing by Lender 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 Borrower provides to Lender a reasonably
detailed explanation of the reasons for and expenditures resulting in Operating
Expenses exceeding the Monthly Operating Expense Amount.

 

 -6-Loan Agreement

 

 

“Approved Scheduled PIP Expenses” shall mean PIP Expenses incurred by Borrower
for Scheduled PIP for any Individual Property in the amount not to exceed the
amount budgeted for PIP Expenses for such Individual Property as set forth on
Schedule XVIII (the foregoing budgets for Scheduled PIP for any Individual
Property, as modified from time to time with the approval of Lender, which
approval shall not be unreasonably withheld, conditioned or delayed, the
“Approved Scheduled PIP Budget” for such Individual Property) and Flagging Costs
that are permitted hereunder.

 

“Assignment of Agreements” shall mean that certain Assignment of Agreements,
Licenses, Permits and Contracts, dated as of the date hereof, from Borrower and
Operating Lessee, as assignor, to Lender, as assignee, as the same may be
amended, restated, replaced, extended, renewed, supplemented or otherwise
modified from time to time.

 

“Assignment of Interest Rate Cap Agreement” shall mean that certain Collateral
Assignment of Interest Rate Cap Agreement dated as of the date hereof, from
Borrower, as assignor, to Lender, as assignee, as the same may be amended,
restated, extended, renewed, supplemented or otherwise modified from time to
time.

 

“Assignment of Leases” shall mean, collectively, those certain first priority
Assignments of Leases, Rents and Hotel Revenues dated as of the date hereof,
from Borrower and Operating Lessee, as assignor, to Lender, as assignee, as the
same may be amended, restated, replaced, extended, renewed, supplemented or
otherwise modified from time to time.

 

“Assignment of Management Agreement” shall mean, collectively, those certain
Assignments of Management Agreement and Subordination of Management Fees dated
as of the date hereof among Borrower, Operating Lessee the applicable Manager
and Lender, as the same may be amended, restated, replaced, extended, renewed,
supplemented or otherwise modified from time to time.

 

“Assumed Note Rate” shall mean, with respect to each Component of the Loan, an
interest rate equal to the sum of 25 basis points plus LIBOR plus the applicable
Component Spread (provided that such 25 basis points shall be increased to 75
basis points if the Assumed Note Rate is applied in connection with a full
prepayment of the Loan).

 

“Assumption” shall mean a Permitted Direct Assumption or a Permitted Indirect
Assumption.

 

“Assumption Fee” shall mean an assumption fee equal to (a) $219,945 if no
material modifications to the Loan Documents are required in connection with the
Assumption or (b) $307,923 if material modifications to the Loan Documents are
required in connection with the Assumption.

 

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation in respect to all or any part of any Individual
Property.

 

 -7-Loan Agreement

 

 

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
or any other federal or state bankruptcy or insolvency law, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’ rights.

 

“Base Management Fees” shall mean the base property management fees (i.e. based
on a fixed percentage of revenues and not on the basis of any override or profit
participation) for property management (as opposed to asset management) services
provided to the Individual Properties and actually payable to Manager under the
Management Agreements, but such fees, for any Manager, shall not, exceed three
percent (3.0%) of the monthly Operating Income for the Individual Properties
managed by such Manager and all such fees payable to all Managers in the
aggregate shall not exceed three percent (3.0%) of the monthly Operating Income
for the Properties.

 

“Birmingham Property” shall mean that certain Individual Property with an
address of 2731 US Highway 280, Birmingham, Alabama 35223.

 

“BK Cap” means the product of (i) the outstanding principal amount of the Loan
plus any interest accrued and unpaid on the Loan multiplied, by (ii) 0.20, plus
Lender’s actual out-of-pocket costs and expenses (including attorneys’ fees).

 

“Borrower” shall have the meaning set forth in the introductory paragraph
hereto, together with their respective successors and permitted assigns.

 

“Borrower Accounts” shall mean collectively the Property Accounts, the Clearing
Accounts and the Disbursement Accounts.

 

“Brand Manager” shall mean collectively, each of Embassy Suites Management LLC,
Hampton Inns Management LLC, Homewood Suites Management LLC, Hilton Worldwide or
any Affiliate of Hilton Worldwide, Marriott International Inc. or any Affiliate
of Marriott International, Inc., Hyatt Hotels Corporation or any Affiliate of
Hyatt Hotels Corporation or Starwood Hotels and Resorts Worldwide, Inc. or any
Affiliate of Starwood Hotels and Resorts Worldwide, Inc.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday on which national banks are not open for general business in (i) the
State of New York, (ii) the State where the corporate trust office of the
Trustee is located or (iii) the State where the servicing offices of the
Servicer are located.

 

“Calculation Date” shall mean the last day of each calendar quarter during the
Term.

 

“Capital Expenditures” shall mean, for any period, the amount incurred for items
capitalized under GAAP and the Uniform System of Accounts (including
expenditures for building improvements or major repairs).

 

“Cash Management Agreement” shall mean that certain Cash Management Agreement of
even date herewith among Lender, Borrower, Operating Lessee and Manager, as the
same may be amended, restated, replaced, extended, renewed, supplemented or
otherwise modified from time to time.

 

 -8-Loan Agreement

 

 

“Change of Control Flagging Costs” shall mean the PIP Expenses for any PIP Work
at an Individual Property required in connection with an Assumption or other
change of Control of Borrower, whether for the applicable Franchisor’s consent
of such transaction, the renewal or extension of the Franchise Agreement for
such Individual Property or the entering into of a new or replacement Franchise
Agreement for such Individual Property, together with any other costs and
expenses of flagging, reflagging, renewal, extension, renovation and otherwise
qualifying and positioning such Individual Property, pursuant to the agreement
required to obtain such Franchisor’s consent or to obtain a new Franchisor.

 

“Clearing Accounts” shall mean the Eligible Accounts maintained at the Clearing
Account Bank by the Individual Borrowers or a TRS Lessee in their respective
names for the benefit of Lender. There shall be one Clearing Account or
subaccount of a Clearing Account for each Property.

 

“Clearing Account Agreements” shall mean those certain Clearing Account Control
Agreements, each dated of even date herewith by and among the applicable
Individual Borrower(s), Operating Lessee, Lender, the applicable Manager and
Clearing Account Bank for each applicable Individual Property or Individual
Properties, as the case may be, in effect from time to time in accordance with
the terms and conditions of the Loan Documents and as the same may be amended,
restated, replaced, extended, renewed, supplemented or otherwise modified from
time to time.

 

“Clearing Account Bank” means Wells Fargo Bank, N.A., or such successor bank
selected by Borrower provided such replacement bank shall be an Eligible
Institution approved by Lender that, prior to succeeding as a Clearing Account
Bank, enters into, with the related Manager or Managers, the respective
Individual Borrowers and Lender, a Clearing Account Agreement approved by
Lender, such approval in each case not to be unreasonably withheld, conditioned
or delayed.

 

“Closing Date” shall mean April 28, 2017.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, and as it may
be further amended from time to time, any successor statutes thereto,
U.S. Department of Treasury regulations issued pursuant thereto in temporary or
final form, and other guidance published by the Internal Revenue Service on
which taxpayers may rely.

 

“Component” shall mean individually or collectively, as the context may require,
any one of Component A, Component B, Component C, Component D, Component E and
Component F, each as more particularly set forth in Section 2.1.2 hereof.

 

“Component Prime Rate Spread” shall mean, in connection with any conversion of
the Loan from a LIBOR Loan to a Prime Rate Loan, with respect to each Component
of the Loan, the difference (expressed as the number of basis points) between
(a) the sum of (i) LIBOR, determined as of the Interest Determination Date for
which LIBOR was last available, plus (ii) the Component Spread applicable to
such Component, minus (b) the Prime Rate as of such Interest Determination Date;
provided, however, that if such difference is a negative number for such
Component, then the Component Prime Rate Spread for such Component shall be
zero.

 

 -9-Loan Agreement

 

 

“Component Spread” shall mean, (a) with respect to Component A, 2.55583850% per
annum; (b) with respect to Component B, 2.55583850% per annum; (c) with respect
to Component C, 2.55583850% per annum; (d) with respect to Component D,
2.55583850% per annum; (e) with respect to Component E, 2.55583850% per annum
and (f) with respect to Component F, 2.55583850% per annum.

 

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

 

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

 

“Contribution Agreement” shall mean that certain Contribution Agreement dated as
of the date hereof by and among each of the Individual Borrowers and Lender, as
the same may be amended, restated, replaced, extended, renewed, supplemented or
otherwise modified from time to time.

 

“Control” shall mean, 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 Party Asset Threshold” shall mean the ownership of total real estate
assets in the United States or Canada (in name or under management) in excess of
$1,000,000,000 and a capital/statutory surplus or shareholder equity in excess
of $400,000,000.

 

“Counterparty” shall mean, with respect to the Interest Rate Cap Agreement, SMBC
Capital Markets, Inc. and with respect to any Replacement Interest Rate Cap
Agreement, any Approved Counterparty thereunder.

 

“Dallas Courtyard Property” shall mean that certain Individual Property with an
address of 2150 Market Center Blvd., Dallas, Texas 75207.

 

“Debt” shall mean the Outstanding Principal Balance together with all interest
accrued and unpaid thereon and all other sums (including any Spread Maintenance
Premium, if applicable) due to Lender from time to time in respect of the Loan
under the Note, this Agreement, the Mortgage, the Environmental Indemnity or any
other Loan Document.

 

“Debt Service” shall mean, with respect to any particular period, the scheduled
interest payments due under the Note in such period.

 

“Debt Service Coverage Ratio” shall mean, as of any date of determination, a
ratio in which:

 

 -10-Loan Agreement

 

 

(a)          the numerator is the Underwritten Net Cash Flow as of such date of
determination; and

 

(b)          the denominator is the sum, as of such date of determination, of
the Annual Debt Service plus the Mezzanine Annual Debt Service.

 

“Debt Service Coverage Ratio (Mortgage Only)” shall mean, as of any date of
determination, a ratio in which:

 

(a)          the numerator is the Underwritten Net Cash Flow as of such date of
determination; and

 

(b)          the denominator is the sum, as of such date of determination, of
the Annual Debt Service.

 

“Debt Yield” shall mean, as of any date of determination, a fraction, expressed
as a percentage (i.e. 0.10 = 10%), which is obtained by dividing:

 

(a)          the Underwritten Net Cash Flow as of such date of determination; by

 

(b)          the Outstanding Principal Balance plus the Mezzanine Loan
Outstanding Principal Balance.

 

“Debt Yield Cure Level” shall mean (a) a Debt Yield of eight and one-quarter
percent (8.25%) and (b) a Debt Yield (Mortgage Only) of 9.38%.

 

“Debt Yield (Mortgage Only)” shall mean, as of any date of determination, a
fraction, expressed as a percentage (i.e. 0.10 = 10%), which is obtained by
dividing:

 

(a)          the Underwritten Net Cash Flow as of such date of determination; by

 

(b)          the Outstanding Principal Balance.

 

“Debt Yield Trigger Level” shall mean (a) a Debt Yield of eight and one-quarter
percent (8.25%) and (b) a Debt Yield (Mortgage Only) of 9.38%.

 

“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would constitute an Event of Default.

 

“Default Rate” shall mean a rate per annum equal to the lesser of (i) the
Maximum Legal Rate or (ii) three percent (3%) above the Interest Rate.

 

“Deposit Account” shall mean an Eligible Account at the Deposit Bank.

 

“Deposit Bank” shall mean the bank or banks selected by Lender to maintain the
Deposit Account. Lender may in its reasonable discretion change the Deposit Bank
from time to time.

 

 -11-Loan Agreement

 

 

“Disbursement Accounts” shall mean one or more Eligible Accounts maintained at
the Disbursement Account Bank by one or more Individual Borrowers, for the
benefit of Lender, which each applicable Manager shall have access to pursuant
to Section 6.1 below.

 

“Disbursement Account Bank” shall mean the bank or banks at which the
Disbursement Accounts are established from time to time, or any such successor
bank selected by Borrower provided such replacement bank shall be an Eligible
Institution approved by Lender, such approval not to be unreasonably withheld,
conditioned or delayed.

 

“Divested Properties” shall mean the real property and improvements listed on
Schedule XIX attached hereto previously owned by Borrower and any other real
property formerly constituting Individual Properties or Divested Properties
which have been condemned by (or transferred in lieu thereof to) a Governmental
Authority (during Borrower’s period of ownership) prior to the Closing Date.
Prior to the Closing Date, all of Borrower’s right, title, interest and estate
in the Divested Properties were transferred and conveyed by Borrower to third
parties. The Divested Properties are not Individual Properties.

 

“Divested Property Liabilities” shall mean any and all actual, out-of-pocket
liabilities, losses, damages, costs and expenses of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Borrower and/or Lender in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not Borrower or Lender
shall be designated a party thereto), that are imposed on, incurred by, or
asserted against Borrower or Lender in any manner relating to or arising out of
(i) Borrower’s and/or Operating Lessee’s ownership, leasing and/or operation of
the Divested Properties; (ii) any accident, injury to or death of persons or
loss of or damage to property occurring in, on or about any Divested Property or
on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (iii) any use, nonuse or condition in, on or about any Divested
Property or on adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (iv) performance of any labor or services or the
furnishing of any materials or other property in respect of any Divested
Property; (v) any failure of any Divested Property to comply with any applicable
Legal Requirement (including any Environmental Laws); (vi) any claim by brokers,
finders or similar persons claiming to be entitled to a commission in connection
with any lease or other transaction involving any Divested Property or any part
thereof, or any liability asserted against Borrower or Lender with respect
thereto; (vii) any claims by any lessee of any portion of any Divested Property
or any Person acting through or under any lessee or otherwise arising under or
as a consequence of any such lease; and (viii) any presence or release of
Hazardous Substances at any Divested Property, in each case of clauses (i)
through (viii) above, with respect to each Divested Property, to the extent such
liability, loss, damage, cost, or expense arises out of any circumstance,
condition, action or event that occurred or existed on or prior to the date on
which such Divested Property was conveyed by Borrower (even to the extent that
the applicable liability, loss, damage, cost, or expense did not occur, or the
occurrence of the applicable circumstance, condition, action or event is not
discovered, until after such date of conveyance).

 

“Due and Payable” shall mean, with respect to Taxes and Other Charges, the date
upon which, if the applicable Taxes or Other Charges are not paid, such Taxes or
Other Charges become delinquent or begin accruing fees, charges, penalties
and/or interest or the payee thereof becomes entitled to exercise any right or
remedies for non-payment thereof.

 

 -12-Loan Agreement

 

 

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (i) an account or accounts
(or subaccounts thereof) maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (ii) a segregated trust account or accounts (or subaccounts
thereof) maintained with the corporate trust department of a federal depository
institution or state chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations §9.10(b), having in either case corporate trust powers, acting in
its fiduciary capacity, and a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal and state
authorities and having a long-term unsecured debt rating of “A” or higher by S&P
and “A2” or higher by Moody’s and a short-term unsecured debt rating of “A-1” or
higher by S&P and “P-1” or higher by Moody’s. An Eligible Account will be a
“deposit account” within the meaning of Section 9-102(a)(29) of the Uniform
Commercial Code of the State of New York and will not be evidenced by a
certificate of deposit, passbook or other instrument.

 

“Eligible Institution” shall mean 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-1 by S&P, P-1
by Moody’s, and F1+ 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 “Aa3” by
Moody’s.

 

“Emergency Expenses” shall mean any capital, operating or other expenses which
the Borrower determines in good faith are necessary in the case of an emergency
at an Individual Property in order to avoid immediate harm to individuals at
such Individual Property or to such Individual Property and of which the
Borrower has given Lender one (1) day’s prior notice (or such shorter or no
notice, but subsequent notice to Lender as soon thereafter as reasonably
possible, to the extent that one (1) day’s prior notice would jeopardize such
Individual Property 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.

 

“Enforcement” shall mean, following the occurrence of (and prior to Lender’s
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 Lender from
exercising remedies.

 

“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement dated as of the date hereof, executed by Borrower, Operating Lessee
and Guarantors in connection with the Loan, for the benefit of Lender, or any
replacement thereof in accordance with the express terms hereof, as the same may
be amended, restated, replaced, extended, renewed, supplemented or otherwise
modified from time to time.

 

“Environmental Work” shall mean (a) with respect to Hampton Inn Peabody and
Homewood Suites Peabody, the work identified in the phase II environmental
report engaged prior to the date hereof with respect to each such Individual
Property and (b) with respect to each other Individual Properties listed on
Schedule XXII, the delivery of a phase II environmental report if recommended by
Lender’s environmental consultant upon completion file review with respect to to
such Individual Property and the performance of any work identified in the phase
II environmental report, if any.

 

 -13-Loan Agreement

 

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
which is a member of the same controlled group of corporations or group of
trades or businesses under common control with Borrower, Operating Lessee or any
Guarantor, or is treated as a single employer together with Borrower, Operating
Lessee or any Guarantor under Section 414 of the Code or Title IV of ERISA.

 

“Excluded Taxes” shall mean (a) Special Taxes imposed on or measured by net
income (however denominated) or net profits (including any branch profits or
franchise taxes) of, or required to be withheld or deducted from any payment to,
Lender or any of its Affiliates, divisions or branches by the jurisdiction (or
any political subdivision thereof) (i) as a result of Lender (or Affiliate,
divisions or branches of Lender) being a resident or deemed to be resident, is
organized, maintains an office, or carries on business or is deemed to carry on
business to which such payment relates, in the jurisdiction imposing such taxes
or (ii) that are Other Connection Taxes; (b) any U.S. federal or state
withholding Special Taxes that are imposed on amounts payable to or for the
account of Lender (or any transferee, successor or assignee thereof, including
any Person that is sold or assigned an interest in the Loan pursuant to Article
IX) under the law in effect at the time Lender (or such transferee, successor or
assignee) becomes a party to this Agreement or changes its lending office, (c)
any backup withholding taxes; (d) Special Taxes imposed on account of Lender not
providing documentation (including documentation regarding direct or indirect
owners) that would have reduced or eliminated such taxes, provided that such
Lender is legally entitled to provide such documentation; (e) Special Taxes
imposed on account of Lender not being eligible for the “portfolio interest
exception” in Section 871(h) or 881(c) of the Code, as set forth in such
Sections as of the date of this Agreement (or any successor provision that is
substantively comparable), and (f) any U.S. federal withholding Special Taxes
imposed under FATCA.

 

“Experience Threshold” shall mean the ownership (including indirect ownership)
and/or management of hospitality properties containing at least 7,500 guest
rooms (exclusive of the Property) with at least 5 years’ experience in the
ownership and/or management of such properties.

 

“Extended Term” shall mean the First Extended Term, the Second Extended Term or
the Third Extended Term, as applicable.

 

“Extension Option” shall mean the First Extension Option, the Second Extension
Option, or the Third Extension Option, as applicable.

 

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

 

 -14-Loan Agreement

 

 

“FF&E” shall mean all fixtures, furnishings, equipment, furniture, and other
items of tangible personal property now or hereafter located on any Individual
Property or used in connection with the use, occupancy, operation and
maintenance of all or any part of the Properties, other than stocks of food and
other supplies held for consumption in normal operation but including, without
limitation, appliances, machinery, equipment, signs, artwork, office furnishings
and equipment, guest room furnishings, and specialized equipment for kitchens,
laundries, bars, restaurants, public rooms, health and recreational facilities,
linens, dishware, all partitions, screens, awnings, shades, blinds, floor
coverings, hall and lobby equipment, heating, lighting, plumbing, ventilating,
refrigerating, incinerating, elevators, escalators, air conditioning and
communication plants or systems with appurtenant fixtures, vacuum cleaning
systems, call or beeper systems, security systems, sprinkler systems and other
fire prevention and extinguishing apparatus and materials; reservation system
computer and related equipment; 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 the Vehicles (as defined in the Uniform System of Accounts for
Hotels, current edition), in each case to the extent constituting the personal
property of Borrower.

 

“FF&E Expense” for any period shall mean the amount expended for FF&E Work in,
at or to the Properties or any Individual Property (including any installation,
delivery or other related cost).

 

“Financial Covenants” shall refer to the certain financial covenants which shall
be included in the Guaranty, and shall require that Guarantors:

 

(a)          maintain an aggregate Net Worth (as defined below) of not less than
$250,000,000 (the “Net Worth Threshold”); and

 

(b)          shall not, at any time while a default in the payment of the
obligations under the Guaranty has occurred and is continuing, either (i) enter
into or effectuate any transaction with any Affiliate of Guarantor that would
reduce any Guarantor’s Net Worth below the Net Worth Threshold (including the
payment of any dividend or distribution to a shareholder, or the redemption,
retirement, purchase or other acquisition for consideration of any stock or
other ownership interest in such guarantor) or (ii) sell, pledge, mortgage or
otherwise transfer to any Affiliate of Guarantor any of any Guarantor’s assets,
or any interest therein that would reduce any Guarantor’s Net Worth below the
Net Worth Threshold.

 

For purposes of the foregoing definition of Financial Covenants “Net Worth”
shall mean, as of a given date, (i) a Person’s total assets as of such date,
including Uncalled Commitments, and for the purposes of determining Net Worth
adding accumulated depreciation and amortization to the value of such assets
(without regard to the Properties or any equity therein) less (ii) such Person’s
total liabilities as of such date, determined in accordance with GAAP, exclusive
of any liability under the Loan Documents, the Mezzanine Loan Documents, and,
for avoidance of doubt, treating the arrangements with Brookfield Strategic Real
Estate Partners II Hospitality REIT II LLC and W2007 Equity Inns Senior Mezz,
LLC as equity and not debt.

 

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the Term.

 

“Fitch” shall mean Fitch, Inc.

 

 -15-Loan Agreement

 

 

“Franchise Agreements” shall mean individually or collectively, as the context
requires, the existing franchise agreements for the Individual Properties
identified on Schedule XII hereto, and any or all franchise, trademark and
license agreements, or similar agreements between one or more of the Individual
Borrowers or Operating Lessee, as applicable, and a hotel franchisor in effect
from time to time during the term of the Loan as the same may be replaced,
amended or modified from time to time in accordance with, and subject to, the
terms and provisions of this Agreement. Each or any of the Franchise Agreements
may sometimes be referred to herein, individually, as a “Franchise Agreement”.

 

“Franchisor” shall mean individually or collectively, as the context requires,
any entity that is a hotel franchisor or licensor pursuant to any Franchise
Agreement affecting any Individual Property.

 

“GAAP” shall mean generally accepted accounting principles as in effect from
time to time and set forth in the Financial Accounting Standards Board
Accounting Standards Codification.

 

“Governmental Authority” shall mean any court, board, agency, commission, office
or authority of any nature whatsoever or any governmental unit (federal, state,
commonwealth, county, district, municipal, city or otherwise) whether now or
hereafter in existence.

 

“Grantor Trust” shall mean a grantor trust under Subpart E of Part 1 of
Subchapter J of the Code.

 

“Gross Revenue” shall mean all revenue derived from the ownership and operation
of the Properties from whatever source, including, without duplication, Hotel
Revenue, Rents and any Insurance Proceeds (whether or not Lender elects to treat
any such Insurance Proceeds as business or rental interruption Insurance
Proceeds pursuant to Section 5.4(f) hereof).

 

“Ground Lease Property” shall mean, individually and collectively, as the
context requires, each Individual Property that is demised by one of the Ground
Leases.

 

“Ground Leases” shall mean those certain ground leases more particularly
described on Schedule VIII attached hereto and made a part hereof as the same
may be amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms of this Agreement. Each or any of the Ground Leases
may be referred to herein individually as a “Ground Lease”.

 

“Ground Lessor” shall mean individually and collectively, as the context
requires, the lessors under each of the Ground Leases.

 

“Ground Lease Purchase Option” shall mean any option, right of first refusal or
right of first offer contained in any Ground Lease and/or granted by any Ground
Lessor to the lessee under the Ground Lease (or any Individual Borrower or
Affiliate thereof) to purchase the related Ground Lease Property.

 

“Ground Rent” shall mean any rent, additional rent or other charge payable by
the tenant under the Ground Leases.

 

 -16-Loan Agreement

 

 

“Guarantors” shall mean Hospitality Trust Operating Partnership, L.P. (“OP
Guarantor”) and Hospitality Investors Trust, Inc. (“REIT Guarantor”), jointly
and severally, and/or any other Person that now or hereafter guarantees any of
Borrower’s obligations under any Loan Document.

 

“Guaranty” shall mean that certain Guaranty of Recourse Obligations of even date
herewith from Guarantors for the benefit of Lender, or any replacement thereof
in accordance with the express terms hereof, as the same may be amended,
restated, replaced, extended, renewed, supplemented or otherwise modified from
time to time.

 

“Hilton Brand Managed Properties” shall mean collectively, each Individual
Property managed by Embassy Suites Management LLC, Hampton Inns Management LLC,
Homewood Suites Management LLC or any Affiliate of Hilton Worldwide.

 

“Hotel Revenue” shall mean all revenues, income, receipts, rents, issues,
profits, proceeds, accounts, termination or surrender fees, penalties, deposits
(including Advance Deposits (net of any associated third party fees and
expenses)), charges for services rendered and all other amounts arising from the
use or enjoyment of all or any portion of the Properties, including without
limitation, all hotel receipts, revenues and credit card receipts collected from
guest rooms, restaurants, bars, and other food and beverage facilities, meeting
rooms, banquet rooms, halls laundry facilities, parking facilities, spas and
recreational facilities, all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or
created out of the sale, lease, sublease, license, concession or other grant of
the right of the use and occupancy of property or rendering of services by
Borrower or any operator or manager of the hotel or the commercial space located
in the Improvements or acquired from others (including, without limitation, from
the rental of any office space, retail space, guest rooms or other space, halls,
stores, and offices, and deposits securing reservations of such space), all
license, lease, sublease and concession fees and rentals, including of
commercial space, retail space, sign space and advertising space, all health
club membership fees, greens fees, food and beverage wholesale and retail sales
(including minibar revenues), vending machine sales, and service charges, and
Insurance Proceeds, if any, from business interruption or other loss of income
insurance, but only to the extent Lender elects to treat such Insurance Proceeds
as business or rental interruption Insurance Proceeds pursuant to Section 5.4(f)
hereof. “Hotel Revenue” does not include Hotel Taxes.

 

“Hotel Taxes” shall mean federal, state and municipal excise, occupancy, sales
and use taxes collected by or on behalf of Borrower or any other Loan Party
directly from patrons or guests of the Properties 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” shall mean the property management fees paid to a
Manager for property management (as opposed to asset management) services
provided to the Individual Properties that are based on an override, profit
participation or other form of incentive for increased revenues or profits
generated by such Individual Properties. Incentive Management Fees shall not
include Base Management Fees, reimbursable expenses paid to a 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 Individual Properties.

 

 -17-Loan Agreement

 

 

“Indebtedness” shall mean, for any Person, without duplication: (i) all
indebtedness or liability of such Person for borrowed money (whether or not
evidenced by bonds, debentures, notes or other instruments) or for the deferred
purchase price of or payment for goods, property or services (including trade
debt and trade payables) or mezzanine debt (except for the Mezzanine Loan), for
which such Person or its assets are liable, (ii) obligations issued for, or
liabilities incurred on account of, such Person, (iii) obligations or
liabilities of such Person arising under or with respect to letters of credit
(including without limitation letter of credit facilities and agreements and for
amounts drawn upon letters of credit), credit facilities or other acceptance
facilities, (iv) all amounts required to be paid by such Person as a guaranteed
payment to partners or a preferred or special dividend, including any mandatory
redemption of shares or interests, (v) all indebtedness guaranteed by such
Person, directly or indirectly, (vi) all obligations under leases that
constitute capital leases for which such Person is liable, (vii) all obligations
of such Person under interest rate swaps, caps, floors, collars and other
interest hedge agreements, in each case for which such Person is liable or its
assets are liable, whether such Person (or its assets) is liable contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person otherwise assures a creditor against loss, and (viii)
all obligations under any PACE Loans.

 

“Indemnified Taxes” means Special Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by Borrower under any Loan Document.

 

“Independent” shall mean, when used with respect to any Person, a Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in Borrower or Operating Lessee or in any Affiliate of
Borrower or Operating Lessee (other than the receipt of fees payable for its
services), (ii) is not connected with Borrower or Operating Lessee or any
Affiliate of Borrower or Operating Lessee as an officer, employee, promoter,
underwriter, trustee, partner, member, manager, creditor, director, supplier,
customer or person performing similar functions and (iii) is not a member of the
immediate family of a Person defined in (i) or (ii) above.

 

“Independent Accountant” shall mean (i) a firm of nationally recognized,
certified public accountants which is Independent and which is selected by
Borrower and reasonably acceptable to Lender or (ii) such other certified public
accountant(s) selected by Borrower, which is Independent and reasonably
acceptable to Lender, it being agreed by Lender that any “Big Four” accounting
firm (including any successor entity thereto) is hereby approved by Lender as
long as such Person continues to be Independent and a nationally recognized
certified public accounting firm.

 

“Individual Borrower” shall have the meaning set forth in the introductory
paragraph hereto.

 

“Individual Property” shall mean, individually, any one of the properties
identified on Schedule I hereto and (and, with respect to each such property,
the Improvements, all Fixtures, all Equipment, all FF&E and all personal
property owned by Borrower and used in connection with or incorporated into such
property), together with all rights pertaining to such property and
Improvements.

 

 -18-Loan Agreement

 

 

“Initial Debt Yield” shall mean 10.80%.

 

“Initial Debt Yield (Mortgage Only)” shall mean 12.28%.

 

“Initial Stated Maturity Date” shall mean May 1, 2019, as the same may be
extended pursuant to Section 2.7 hereof.

 

“Insolvency Opinion” shall mean that certain bankruptcy non-consolidation
opinion letter dated the date hereof delivered by Berger Harris LLP in
connection with the Loan.

 

“Insurance Proceeds” shall mean all proceeds of insurance paid under the
Policies.

 

“Interest Determination Date” shall mean, (A) with respect to the Initial
Interest Period, the date that is two (2) Business Days before the Closing Date
and (B) with respect to any other Interest Period, the date which is two (2)
Business Days prior to the eighth (8th) day of each calendar month; provided,
however, that at the option of Lender in connection with a Securitization, an
additional Interest Determination Date shall occur on the date which is two (2)
Business Days prior to any Securitization Date (which shall adjust the Interest
Rate for the remainder of the then-current Interest Period). When used with
respect to an Interest Determination Date, Business Day shall mean any day on
which banks are open for dealing in foreign currency and exchange in London.

 

“Interest Rate” shall mean, with respect to each Interest Period and with
respect to each Component of the Loan, an interest rate per annum equal to (i)
for a LIBOR Loan, the sum of (a) LIBOR, determined as of the Interest
Determination Date immediately preceding the commencement of such Interest
Period, plus (b) the Component Spread applicable to such Component (or, when
applicable pursuant to this Agreement or any other Loan Document, the applicable
Default Rate), and (ii) for a Prime Rate Loan, the sum of (a) the Prime Rate,
plus (b) the Component Prime Rate Spread applicable to such Component (or, when
applicable pursuant to this Agreement or any other Loan Document, the applicable
Default Rate).

 

“Interest Rate Cap Agreement” shall mean the Confirmation and Agreement
(together with the confirmation and schedules relating thereto), dated on or
about the date hereof, between the Counterparty and Borrower, obtained by
Borrower and collaterally assigned to Lender pursuant to the Assignment of
Interest Rate Cap Agreement. After delivery of a Replacement Interest Rate Cap
Agreement to Lender, 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 or exceed the Outstanding Principal Balance;

 

(b)          the remaining term of the Interest Rate Cap Agreement shall at all
times extend through the end of the Interest Period in which the Maturity Date
occurs as extended from time to time pursuant to this Agreement and the Loan
Documents;

 

(c)          the Interest Rate Cap Agreement shall be issued by the Counterparty
to Borrower and shall be pledged to Lender by Borrower in accordance with the
Assignment of Interest Rate Cap Agreement;

 

 -19-Loan Agreement

 

 

(d)          the Counterparty under the Interest Rate Cap Agreement shall be
obligated to make a stream of payments, directly to the Deposit Account (whether
or not an Event of Default has occurred) 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 LIBOR (including any upward rounding under the
definition of LIBOR) over the Strike Price 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 Monthly Payment Date;

 

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

 

(f)          the Interest Rate Cap Agreement shall impose no material obligation
on the beneficiary thereof (after payment of the acquisition cost) and shall be
in all material respects satisfactory in form and substance to Lender (in
Lender’s reasonable discretion) and shall satisfy applicable Rating Agency
standards and requirements, including, without limitation, provisions satisfying
Rating Agencies standards, requirements and criteria (i) that incorporate
representations by the Counterparty that no withholding taxes shall apply to
payments by the Counterparty as of the date of the Interest Rate Cap Agreement,
and provide for “gross up” payments by the Counterparty for any withholding tax
(except for an Excluded Taxes), (ii) whereby the Counterparty agrees not to file
or join in the filing of any petition against Borrower under the Bankruptcy Code
or any other Federal or state bankruptcy or insolvency law, and (iii) that
incorporate, if the Interest Rate Cap Agreement contemplates collateral posting
by the Counterparty, a credit support annex setting forth the mechanics for
collateral to be calculated and posted that are consistent with Rating Agency
standards, requirements and criteria.

 

“Inventory” shall mean, as defined in the UCC, and including items which would
be entered on a balance sheet under the line items for “Inventories” or “china,
glassware, silver, linen and uniforms” under the Uniform System of Accounts for
Hotels, current edition.

 

“Lease” shall mean any lease, sublease or sub-sublease, letting, license,
concession or other agreement (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 any space in any
Individual Property, and every modification, amendment or other agreement
relating to such lease, sublease, sub-sublease or other agreement entered into
in connection with such lease, sublease, sub-sublease or other agreement and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.

 

“Legal Requirements” shall mean all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting the Loan, any
Secondary Market Transaction with respect to the Loan, Borrower, Operating
Lessee or any Individual Property or any part thereof or the construction, use,
alteration or operation thereof, or any part thereof, whether now or hereafter
enacted and in force, including, without limitation, the Securities Act, the
Exchange Act, Regulation AB, the rules and regulations promulgated pursuant to
the Dodd-Frank Wall Street Reform and Consumer Protection Act, zoning and land
use laws, the Americans with Disabilities Act of 1990, and all permits, licenses
and authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Borrower or Operating Lessee, at any time in force
affecting such Individual Property or any part thereof, including any which may
(i) require repairs, modifications or alterations in or to such Individual
Property or any part thereof, or (ii) in any way limit the use and enjoyment
thereof.

 

 -20-Loan Agreement

 

 

“Lender Documents” shall mean any agreement among Lender, Mezzanine Lender, any
New Mezzanine Lender and/or any participant or any fractional owner of a
beneficial interest in the Loan, the Mezzanine Loan or any New Mezzanine Loan
relating to the administration of the Loan, the Mezzanine Loan, any New
Mezzanine Loan, the Loan Documents, the Mezzanine Loan Documents or any New
Mezzanine Loan Documents, including without limitation, any intercreditor
agreements, co-lender agreements and participation agreements.

 

“Letter of Credit” shall mean an irrevocable, unconditional, transferable
(without payment of any transfer fee by the transferring or transferee
beneficiary thereof), clean sight draft letter of credit acceptable to Lender
(either an evergreen letter of credit or one which does not expire until at
least thirty (30) Business Days after the Stated Maturity Date or, if earlier,
payment of the subject obligation or completion of the subject activity for
which such Letter of Credit was provided) in favor of Lender and entitling
Lender to draw thereon, in whole or in part, in New York, New York or such other
domestic location approved by Lender or pursuant to procedures of the issuing
bank provided that such issuing bank allows for draws (including partial draws
by facsimile), issued by a domestic Approved Bank or the U.S. agency or branch
of a foreign Approved Bank, to an applicant/obligor that is not the Borrower.
Any Letter of Credit delivered to Lender in connection with the Loan shall, in
addition to any other requirements set forth herein, be subject to the terms and
conditions set forth in Section 2.9 hereof.

 

“LIBOR” shall mean, with respect to each Interest Period and each Interest
Determination Date, the rate per annum (rounded to the nearest 1/1,000 of 1%)
calculated by the Lender as set forth below:

 

(a) The rate for deposits in U.S. Dollars for a one-month period that appears on
Reuters Screen LIBOR01 Page (or its equivalent) as of 11:00 a.m., London time,
on such Interest Determination Date.

 

(b) If such rate does not appear on Reuters Screen LIBOR01 Page (or its
equivalent) as of 11:00 a.m., London time, on the applicable Interest
Determination Date, the Lender shall request the principal London office of any
four major reference banks in the London interbank market selected by the Lender
to provide such reference bank’s offered quotation to prime banks in the London
interbank market for deposits in United States dollars for a one-month period as
of 11:00 a.m., London time, on such Interest Determination Date in a principal
amount of not less than $1,000,000 that is representative for a single
transaction in the relevant market at the relevant time. If at least two such
offered quotations are so provided, LIBOR shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, the Lender shall
request any three major banks in New York City selected by the Lender to provide
such bank’s rates for loans in U.S. Dollars to leading European banks for a
one-month period as of 11:00 a.m., New York City time, on such Interest
Determination Date in a principal amount not less than $1,000,000 that is
representative for a single transaction in the relevant market at the relevant
time, and if at least two such rates are so provided, LIBOR shall be the
arithmetic mean of such rates. Promptly upon Borrower’s request, Lender shall
provide Borrower with the basis (in writing) for its determination of LIBOR.
Notwithstanding the foregoing, in no event shall LIBOR be less than zero.

 

 -21-Loan Agreement

 

 

“LIBOR Loan” shall mean the Loan at such time as interest thereon accrues at a
rate of interest based upon LIBOR.

 

“Lien” shall mean any mortgage, deed of trust, lien (statutory or otherwise),
pledge, hypothecation, easement, restrictive covenant, preference, assignment,
security interest, PACE Loan or any other encumbrance, charge or transfer of, or
any agreement to enter into or create any of the foregoing, on or affecting all
or any portion of any Individual Property or any interest therein, or any direct
or indirect interest in Borrower or in any other Loan Party, including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of
any financing statement, and mechanic’s, materialmen’s and other similar liens
and encumbrances.

 

“Liquor License Agreement” shall mean, collectively, Liquor License Agreement
(Kansas) and Liquor License Agreement (Texas).

 

“Liquor License Agreement (Kansas)” shall mean that certain Liquor License
Agreement of even date herewith by and between the Lender, Borrower, HIT
Portfolio I DEKS TRS, LLC and Liquor Subsidiary (Kansas), as the same may be
amended, restated, replaced, extended, renewed, supplemented or otherwise
modified from time to time.

 

“Liquor License Agreement (Texas)” shall mean that certain Liquor License
Agreement of even date herewith by and between the Lender, Borrower, HIT
Portfolio I NTS TRS, LP, HIT Portfolio I TX Holdings, LLC and Liquor Subsidiary
(Texas), as the same may be amended, restated, replaced, extended, renewed,
supplemented or otherwise modified from time to time.

 

“Liquor Subsidiary” shall mean, collectively, Liquor Subsidiary (Kansas) and
Liquor Subsidiary (Texas).

 

“Liquor Subsidiary (Kansas)” shall mean HIT Portfolio I KS TRS, LLC, a Kansas
limited liability company, together with its permitted successors and assigns.

 

“Liquor Subsidiary (Texas)” shall mean HIT Portfolio I TX Beverage Company, LLC,
a Delaware limited liability company, together with its permitted successors and
assigns.

 

“Liquor Subsidiary Pledge” shall mean, collectively, Liquor Subsidiary Pledge
(Kansas) and Liquor Subsidiary Pledge (Texas).

 

“Liquor Subsidiary Pledge (Kansas)” shall mean that certain Pledge and Security
Agreement of even date herewith pursuant to which HIT Portfolio I DEKS TRS, LLC,
a Delaware limited liability company has pledged its ownership interests in
Liquor Subsidiary (Kansas), which pledge has been acknowledged by Liquor
Subsidiary (Kansas), as the same may be amended, restated, replaced, extended,
renewed, supplemented or otherwise modified from time to time.

 

 -22-Loan Agreement

 

 

“Liquor Subsidiary Pledge (Texas)” shall mean that certain Pledge and Security
Agreement of even date herewith pursuant to which HIT Portfolio I TX Holdings,
LLC has pledged its ownership interests in Liquor Subsidiary (Texas), which
pledge has been acknowledged by Liquor Subsidiary (Texas), as the same may be
amended, restated, replaced, extended, renewed, supplemented or otherwise
modified from time to time.

 

“Loan” shall mean the loan in the original principal amount of the Loan Amount
made by Lender to Borrower pursuant to this Agreement.

 

“Loan Amount” shall mean Eight Hundred Five Million and No/100 Dollars
($805,000,000.00).

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases, the Cash Management Agreement, the Clearing
Account Agreements, the Assignment of Agreements, the Assignment of Interest
Rate Cap Agreement, the Environmental Indemnity, the Assignment of Management
Agreement, the Guaranty, the Contribution Agreement, the Liquor Subsidiary
Pledge, the Liquor License Agreement, the Post-Closing Agreement and any other
documents, agreements and instruments now or hereafter evidencing, securing or
delivered to Lender in connection with the Loan, as the same may be (and each of
the foregoing defined terms shall refer to such documents as they may be)
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Loan Party” shall mean, individually or collectively as the context requires,
each Individual Borrower, each Operating Lessee, Liquor Subsidiary, each SPC
Party and each Mezzanine Borrower.

 

“Low Cash Flow Trigger” shall occur if, on any Calculation Date, the Debt Yield
shall be equal to or less than the Debt Yield Trigger Level.

 

“Low Cash Flow Trigger Period” shall commence upon the occurrence of a Low Cash
Flow Trigger and shall end when both the Debt Yield and Debt Yield (Mortgage
Only) shall exceed the applicable Debt Yield Cure Level as of any subsequent
Calculation Date; provided, however, that if Borrower and Mezzanine Borrower
make the prepayments specified in Section 2.4.2(c) (upon at least two (2)
Business Days prior written notice), then such Low Cash Flow Trigger Period
shall cease immediately upon the making of such prepayments without the Debt
Yield and Debt Yield (Mortgage Only) having to exceed the applicable Debt Yield
Cure Level on a subsequent Calculation Date (the “Immediate Low Cash Flow
Trigger Cure”).

 

“Major Contract” shall mean any cleaning, maintenance, service or other contract
or agreement of any kind of a material nature (materiality for these purposes to
mean, contracts (a) which extend beyond one year (unless cancelable on sixty
(60) days or less notice without requiring the payment of termination fees or
payments of any kind) and (b) requiring the payment of more than $250,000 in any
calendar year with respect to an Individual Property), in either case relating
to the ownership, leasing, management, use, operation, maintenance, repair or
restoration of the Properties, or any Individual Property; excepting, however,
the Ground Leases, Franchise Agreements and Management Agreements, none of which
shall constitute Major Contracts for purposes of this Agreement.

 

 -23-Loan Agreement

 

 

“Management Agreements” shall mean the management agreement or management
agreements, as the context requires, entered into by and between Borrower and/or
Operating Lessee and Manager or any replacement management agreement entered
into by and between Borrower and/or Operating Lessee and the applicable Manager
in accordance with the terms of the Loan Documents, in each case, pursuant to
which such Manager is to provide management and other services with respect to
the Properties, or any Individual Property. Each or any of the Management
Agreements may sometimes be referred to herein, individually, as a “Management
Agreement”.

 

“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 Manager, from time to time under the Management
Agreements.

 

“Manager” shall mean, individually or collectively, as the context requires,
each property manager listed on Schedule XV attached hereto as to the Individual
Property(ies) identified on Schedule XV as being managed by such property
manager (for so long as such property manager has not been replaced in
accordance with the terms and conditions of the Loan Documents), or any other
manager engaged in accordance with the terms and conditions of the Loan
Documents.

 

“Manager-Held Reserve” shall mean each reserve fund for payment of Taxes,
Insurance Premiums, FF&E Work or Ground Rent that a Brand Manager is required to
maintain on behalf of and for the benefit of Borrower or Operating Lessee under
the Management Agreement as set forth in the Annual Budget.

 

“Material Alteration” shall mean any alteration affecting structural elements,
utilities, HVAC or the exterior of any Individual Property, the cost of which
(a) exceeds the Alteration Threshold with respect to such Individual Property,
and/or (b) when aggregated with the costs of alterations then affecting
structural elements of all other Individual Properties (to the extent not
covered by security delivered to Lender pursuant to Section 4.12.2) plus any
outstanding Flagging Costs with respect to all Individual Properties that have
not been reserved for with Lender to the extent required under Section 4.34, but
excluding Approved Alterations (defined below)), exceeds the aggregate
Alteration Threshold; provided, however, that in no event shall (i) any Required
Repairs, (ii) any work to be performed in connection with any Emergency
Expenses, (iii) any alterations performed as part of a Restoration, (iv) any
Approved Scheduled PIP Expenses, (v) tenant improvement work or other
alterations performed with respect to any Lease in effect on the Closing Date or
any Lease entered into subsequent to the Closing Date in compliance with the
terms of the Loan Documents, or (vi) decorative work performed in the ordinary
course of business, constitute a Material Alteration (clauses (i) through (vi),
collectively, the “Approved Alterations”).

 

“Maturity Date” shall mean either (a) the Initial Stated Maturity Date; provided
that (i) in the event of the exercise by Borrower of the First Extension Option
pursuant to Section 2.7, the Maturity Date shall be the First Extended Maturity
Date, (ii) in the event of the exercise by Borrower of the Second Extension
Option pursuant to Section 2.7, the Maturity Date shall be the Second Extended
Maturity Date or (iii) in the event of the exercise by Borrower of the Third
Extension Option pursuant to Section 2.7, the Maturity Date shall be the Third
Extended Maturity Date (the Initial Stated Maturity Date or, if and to the
extent the Maturity Date is extended in accordance with Section 2.7 hereof, such
applicable extended date, the “Stated Maturity Date”); or (b) such earlier date
on which the final payment of principal of the Note becomes due and payable as
herein or therein provided, whether at the Stated Maturity Date, by declaration
of acceleration, or otherwise.

 

 -24-Loan Agreement

 

 

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or the other Loan Documents, under the laws of such Governmental
Authority whose laws are held by any court of competent jurisdiction to govern
the interest rate provisions of the Loan.

 

“Maximum Strike Price” shall mean the greater of (i) four percent (4.00%) per
annum and (ii) the per annum rate which would result in a Debt Service Coverage
Ratio (based on unaudited financial statements from the trailing twelve-month
period ending the last day of February of the applicable calendar year) equal to
1.10:1.00 and a Debt Service Coverage Ratio (Mortgage Only) (based on unaudited
financial statements from the trailing twelve-month period ending the last day
of February of the applicable calendar year) equal to 1.42:1.00 as of the
effective date of the applicable Interest Rate Cap Agreement assuming that LIBOR
was equal to such per annum rate at all times during the Initial Term or the
applicable Extended Term.

 

“Mezzanine Account” shall mean, as applicable, (a) with respect to the Original
Mezzanine Loan, the Original Mezzanine Account and (b) with respect to the
Approved Mezzanine Loan, from and after the Approved Mezzanine Closing Date, the
Approved Mezzanine Account.

 

“Mezzanine Annual Debt Service” shall mean, as the context requires, the
Original Mezzanine Annual Debt Service and, from and after the Approved
Mezzanine Closing Date, the Approved Annual Mezzanine Debt Service.

 

“Mezzanine Borrower” shall mean HIT Portfolio I Mezz, LP.

 

“Mezzanine Impaired Individual Property Release Amount” shall mean, as to any
Individual Property, (a) for the Original Mezzanine Loan, the “Impaired
Individual Property Release Amount” (as defined in the Original Mezzanine Loan
Agreement) as to such Individual Property and (b) for the Approved Mezzanine
Loan, from and after the Approved Mezzanine Closing Date, the Approved Mezzanine
Release Amount as to such Individual Property.

 

“Mezzanine Lender” shall mean, individually or collectively as the context
requires, the Original Mezzanine Lender and, from and after the Approved
Mezzanine Closing Date, the Approved Mezzanine Lender.

 

 -25-Loan Agreement

 

 

“Mezzanine Lender Monthly Debt Service Notice Letter” shall mean the written
notice required to be delivered by each Mezzanine Lender pursuant to its
respective Mezzanine Loan Agreement to Lender at least five (5) Business Days
prior to each Monthly Payment Date setting forth (i) the respective Mezzanine
Monthly Debt Service Payment Amount payable by the applicable Mezzanine Borrower
on the first Monthly Payment Date occurring after the date such notice is
delivered (which shall be net of any proceeds received by the applicable
Mezzanine Lender under any interest rate protection agreement covering the
applicable Mezzanine Loan), (ii) the current Mezzanine Account, (iii) wire
instructions for such payment, and (iv) whether or not any Mezzanine Loan
Default has then occurred and is continuing under the related Mezzanine Loan
Documents; provided, however, that any Mezzanine Lender Monthly Debt Service
Notice Letter delivered to Lender shall be applicable with respect to all future
Monthly Payment Dates with respect to the applicable Mezzanine Loan until the
applicable Mezzanine Lender delivers a new Mezzanine Lender Monthly Debt Service
Notice Letter to Lender, it being understood that such Mezzanine Lender will not
be required to deliver a new Mezzanine Lender Monthly Debt Service Notice Letter
to Lender unless and until the information described in clauses (i) through (iv)
above that was set forth in the most recently received Mezzanine Lender Monthly
Debt Service Notice Letter from such Mezzanine Lender is different from the
information that will be applicable to the next Monthly Payment Date, and Lender
shall be permitted to rely on the most recently received Mezzanine Lender
Monthly Debt Service Notice Letter from such Mezzanine Lender until Lender
receives a new Mezzanine Lender Monthly Debt Service Notice Letter from such
Mezzanine Lender.

 

“Mezzanine Loan” shall mean individually and collectively, as the context
requires, the Original Mezzanine Loan and, from and after the Approved Mezzanine
Closing Date, the Approved Mezzanine Loan.

 

“Mezzanine Loan Agreement” shall mean individually and collectively, as the
context requires, the Original Mezzanine Loan Agreement and, from and after the
Approved Mezzanine Closing Date, the Approved Mezzanine Loan Agreement.

 

“Mezzanine Loan Default” shall mean an “Event of Default” under a Mezzanine Loan
and as defined in the Mezzanine Loan Documents related to such Mezzanine Loan.

 

“Mezzanine Loan Documents” means, as to each Mezzanine Loan, all documents
evidencing, securing, guaranteeing and/or perfecting such Mezzanine Loan and all
documents executed and/or delivered in connection therewith.

 

“Mezzanine Monthly Debt Service Payment Amount” shall mean individually and
collectively, as the context requires, the Original Mezzanine Monthly Debt
Service Payment Amount and, from and after the Approved Mezzanine Closing Date,
the Approved Mezzanine Monthly Debt Service Payment Amount.

 

“Mezzanine Release Amount” shall mean, as to any Individual Property, (a) for
the Original Mezzanine Loan, the Original Mezzanine Release Amount as to such
Individual Property and (b) for the Approved Mezzanine Loan, from and after the
Approved Mezzanine Closing Date, the Approved Mezzanine Release Amount as to
such Individual Property.

 

“Monthly Debt Service Payment Amount” shall mean, for each Monthly Payment Date,
an amount equal to the amount of interest which is then due on all the
Components of the Loan in the aggregate for the Interest Period during which
such Monthly Payment Date occurs.

 

“Monthly Operating Expense Budgeted Amount” for any calendar month shall mean
the monthly amount set forth in the Approved Annual Budget for Operating
Expenses for such calendar month.

 

“Monthly Payment Date” shall mean the first (1st) day of every calendar month
occurring during the Term, as adjusted pursuant to Section 2.3.2. The first
Monthly Payment Date shall be June 1, 2017.

 

 -26-Loan Agreement

 

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgage” shall mean, with respect to each Individual Property, that certain
first priority Mortgage (or Deed of Trust or Deed to Secure Debt), Assignment of
Leases and Rents and Security Agreement, dated as of the date hereof, executed
and delivered by Borrower and Operating Lessee as security for the Loan and
encumbering such Individual Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Multi-Asset Person” means a (i) Qualified Equityholder or (ii) an entity in
respect of which, at the time the applicable pledge is made, such entity’s pro
rata share of net operating income from the Properties is less than 25% of such
entity’s aggregate net income.

 

“Net Operating Income” shall mean the amount, for any period, obtained by
subtracting Operating Expenses for such period from Operating Income for such
period.

 

“Net Proceeds” shall mean: (i) the net amount of all Insurance Proceeds payable
as a result of a Casualty to any Individual Property, after deduction of
reasonable costs and expenses (including reasonable attorneys’ fees and costs),
if any, in collecting such Insurance Proceeds, or (ii) the net amount of the
Award, after deduction of reasonable costs and expenses (including reasonable
attorneys’ fees and costs), if any, in collecting such Award.

 

“New/Renewal Flagging Costs” shall mean the PIP Expenses at an Individual
Property required under a new or replacement Franchise Agreement for such
Individual Property, or in connection with the renewal or extension hereafter of
an existing Franchise Agreement for such Individual Property, together with and
any other costs and expenses of flagging, reflagging, renewal, extension,
renovation and otherwise qualifying and positioning such Individual Property for
its new or replacement brand, or for the renewal or extension of its existing
brand; provided, however, that “New/Renewal Flagging Costs” shall exclude any
Change of Control Flagging Costs.

 

“Non-Conforming Properties” shall mean those certain Individual Properties set
forth on Schedule XVI.

 

“NRSRO” shall mean any credit rating agency that has elected to be treated as a
nationally recognized statistical rating organization for purposes of
Section 15E of the Exchange Act, without regard to whether or not such credit
rating agency has been engaged by Lender or its designees in connection with, or
in anticipation of, a Securitization.

 

“Obligations” shall mean, collectively, Borrower’s obligations for the payment
of the Debt and the performance of the Other Obligations by Borrower and
Operating Lessee.

 

“OFAC” shall mean the Specially Designated Nationals and Blocked Persons Lists
maintained by the Office of Foreign Assets Control.

 

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by an authorized senior officer of the manager of Borrower (or
the manager of Borrower’s general partner, as applicable).

 

 -27-Loan Agreement

 

 

“Operating Expenses” shall mean, for any period, without duplication, all
expenses actually paid or payable by or on behalf of Borrower or Operating
Lessee during such period in connection with the administration, operation,
management, maintenance, repair and use of the Properties, 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 Lender in accordance with Section 4.9.2 hereof 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
Properties, (v) the cost of utilities, supplies, consumables, inventories and
fixed asset supplies consumed in the operation of the Properties, (vi)
intentionally omitted, (vii) 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 hereunder, (viii) cost of attendance by employees
at training and manpower development programs, (ix) association dues, (x)
computer processing charges, (xi) operational equipment and other lease payments
to the extent constituting operating expenses under GAAP, (xii) Taxes and Other
Charges (other than income taxes or Other Charges in the nature of income
taxes), Hotel Taxes and insurance premiums, (xiii) all reserves required by
Lender hereunder (without duplication) and (xiv) all franchise fees and expenses
incurred in connection with any 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 Individual Property or in
connection with the recovery of Insurance Proceeds or Awards which are applied
to prepay the Note, (4) Capital Expenditures including (without duplication) any
reserves required by Lender 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 Lease, (7) any non-recurring, capitalized or extraordinary
expenses, (8) any expenses that relate to an Individual Property from and after
the release of such Individual Property from the Lien of the applicable Mortgage
in accordance with Section 2.5.2 hereof, (9) Operating Rent and (10) any
Restricted Payments that are not expenses described by any of clauses (i)
through (xiv) 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 Borrower’s constituent owners).

 

“Operating Income” shall mean, for any period, all income of Borrower or
Operating Lessee during such period from the use, ownership or operation of the
Property as follows (without duplication):

 

(a)          all amounts payable to Borrower or Operating Lessee or to Manager
for the account of Borrower or Operating Lessee or any of their Affiliates by
any Person as Rents and/or Hotel Revenue;

 

 -28-Loan Agreement

 

 

(b)          business interruption and loss of “rental value” insurance proceeds
allocable to the applicable reporting period (after deducting thereafter all
costs and expenses incurred in the adjustment and collection thereof);

 

(c)          Hotel Taxes; and

 

(d)          all other amounts which in accordance with GAAP are included in
Borrower’s annual financial statements as operating income attributable to the
Properties.

 

Notwithstanding the foregoing, Operating Income shall not include (i) any Net
Proceeds (other than the types described in clause (b) above), (ii) any proceeds
resulting from the Transfer of all or any portion of the Properties (other than
the types described in clause (a) or proceeds resulting from the disposition of
any equipment and fixtures (which are subsequently replaced) in accordance
Section 4.2), (iii) Security Deposits until forfeited or applied and Advance
Deposits until forfeited or applied or (iv) Operating Rent. Operating Income
shall be calculated on the accrual basis of accounting and, except to the extent
otherwise provided in this definition, in accordance with GAAP.

 

“Operating Lease” shall mean those certain lease agreement, listed on Schedule
XVII, as the same may be amended, modified, supplemented or replaced from time
to time in accordance with the terms thereof.

 

“Operating Rent” shall mean all rent and other amounts due to Borrower under the
Operating Lease.

 

“Operations Agreements” shall mean the REAs and any other covenants,
restrictions, easements, declarations or agreements of record relating to the
construction, operation or use of the Properties.

 

“Original Mezzanine Account” shall mean the “Deposit Account” as defined in the
Original Mezzanine Loan Agreement.

 

“Original Mezzanine Allocated Loan Amount” shall mean, as to any Individual
Property, the “Allocated Loan Amount” (as defined in the Original Mezzanine Loan
Agreement) set forth on Schedule I to the Original Mezzanine Loan Agreement as
to such Individual Property (a copy of which Schedule is attached hereto as
Schedule I-M1).

 

“Original Mezzanine Annual Debt Service” shall mean, as of any date of
determination, the Original Mezzanine Debt Service payable during the one-year
period occurring from and after such date of determination calculated by
assuming that (a) the Original Mezzanine Principal Balance at all times during
such period is equal to the Original Mezzanine Principal Balance as of the date
of determination (taking into account any prepayments that occur on such date in
accordance with this Agreement) and (b) LIBOR at all times during such period is
equal to either (i) in connection with Mezzanine Borrower’s exercise of an
“Extension Option” under the Original Mezzanine Loan Documents, the “Strike
Price” of the proposed “Replacement Interest Rate Cap Agreement” to be entered
into by Mezzanine Borrower under the Original Mezzanine Loan Documents in
connection with its exercise of such “Extension Option” or (ii) otherwise, the
“Strike Price” of the “Interest Rate Cap Agreement” in place under the Original
Mezzanine Loan Documents as of such date of determination.

 

 -29-Loan Agreement

 

 

“Original Mezzanine Lender” shall mean, collectively, Deutsche Bank AG, New York
Branch, a branch of Deutsche Bank AG, a German Bank authorized by the New York
Department of Financial Services, together with its successors and permitted
assigns, Citigroup Global Markets Realty Corp., a New York corporation, together
with its successors and permitted assigns, and JPMorgan Chase Bank, National
Association, a banking association chartered under the laws of the United States
of America, together with its successors and permitted assigns.

 

“Original Mezzanine Loan” shall mean that certain loan in the principal amount
of One Hundred Ten Million and No/100 Dollars ($110,000,000.00) by Original
Mezzanine Lender to Mezzanine Borrower pursuant to the Original Mezzanine Loan
Agreement.

 

“Original Mezzanine Loan Agreement” shall mean that certain Mezzanine Loan
Agreement (Mezzanine) of even date herewith between Original Mezzanine Lender
and Mezzanine Borrower, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Original Mezzanine Loan Documents” means all documents evidencing, securing,
guaranteeing and/or perfecting the Original Mezzanine Loan and all documents
executed and/or delivered in connection therewith.

 

“Original Mezzanine Monthly Debt Service Payment Amount” shall mean, for each
Monthly Payment Date, an amount equal to the amount of (i) non-default interest
which is then due on the Original Mezzanine Loan under the Original Mezzanine
Loan Documents for the Interest Period during which such Monthly Payment Date
occurs, plus (ii) the amount of any default interest and/or late fees then due
and owing to Original Mezzanine Lender by Mezzanine Borrower under the Original
Mezzanine Loan Documents.

 

“Original Mezzanine Principal Balance” shall mean, as of any date, the
outstanding principal balance of the Original Mezzanine Loan.

 

“Original Mezzanine Release Amount” shall mean, as to any Individual Property,
the “Release Amount” (as defined in the Original Mezzanine Loan Agreement) as to
such Individual Property.

 

“Other Charges” shall mean all ground rents, including Ground Rent, 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 Individual Property, now or hereafter levied or assessed or
imposed against such Individual Property or any part thereof.

 

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

 

 -30-Loan Agreement

 

 

“Other Obligations” shall mean (a) the performance of all obligations of
Borrower and Operating Lessee contained herein; (b) the performance of each
obligation of Borrower and Operating Lessee contained in any other Loan
Document; and (c) the performance of each obligation of Borrower and Operating
Lessee contained in any renewal, extension, amendment, modification,
consolidation, change of, or substitution or replacement for, all or any part of
this Agreement, the Note or any other Loan Document.

 

“Outstanding Principal Balance” shall mean, as of any date, the outstanding
principal balance of the Loan.

 

“PACE Loan” shall mean (x) any “Property-Assessed Clean Energy loan” or (y) any
other indebtedness, without regard to the name given to such indebtedness, which
is (i) incurred for improvements to the Property for the purpose of increasing
energy efficiency, increasing use of renewable energy sources, resource
conservation, or a combination of the foregoing, and (ii) repaid through
multi-year assessments against the Property.

 

“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT
ACT) of 2001, as the same may be amended from time to time, and corresponding
provisions of future laws.

 

“Permitted Encumbrances” shall mean, collectively, (i) the Liens and security
interests created by the Loan Documents, the Original Mezzanine Loan Documents
or the Approved Mezzanine Loan Documents, (ii) all Liens, encumbrances and other
matters disclosed in the Title Insurance Policy, (iii) Liens, if any, for Taxes
or Other Charges imposed by any Governmental Authority not yet delinquent or
being contested in good faith and by appropriate proceedings in accordance with
Section 4.6, (iv) any workers’, mechanics’ or other similar Liens on any
Individual Property provided that any such Lien is bonded or discharged within
thirty (30) days after Borrower first receives written notice of such Lien or
which is being contested in good faith in accordance with the requirements of
Section 4.3, (v) Permitted Transfers, (vi) such other title and survey
exceptions as Lender has approved or may approve in writing in Lender’s
reasonable discretion, (vii) covenants, conditions, restrictions on use of real
property and other similar matters entered into in the ordinary course of
business that would not have a material adverse effect on the use, occupancy or
access to the applicable Individual Property, and (viii) any other Liens
expressly permitted pursuant to clauses (ii), (iv) or (v)(2) of Section 4.2(b)
hereof.

 

“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
entity, any Governmental Authority and any fiduciary acting in such capacity on
behalf of any of the foregoing.

 

“Physical Conditions Report” shall mean, with respect to each Individual
Property, one or more reports prepared by companies reasonably satisfactory to
Lender regarding the physical condition of such Individual Property,
satisfactory in form and substance to Lender in its sole discretion, which
report shall, among other things, (i) confirm that such Individual Property and
its use comply, in all material respects, with all applicable Legal Requirements
(including zoning, subdivision and building laws), and (ii) include a copy of a
final certificate of occupancy with respect to all Improvements.

 

“PIP” shall mean any property improvement plan now or subsequently required by
any Franchisor under the applicable Franchise Agreement.

 

 -31-Loan Agreement

 

 

“PIP Expenses” shall mean FF&E Expenses and Capital Expenditures incurred by
Borrower or Operating Lessee for PIP Work.

 

“PIP Work” shall mean the FF&E and other capital improvements required pursuant
to any PIP to be installed and/or completed by Borrower or Operating Lessee.

 

“Post-Closing Agreement” shall mean that certain Post-Closing Agreement dated as
of the Closing Date made by Borrower and Operating Lessee for the benefit of
Lender.

 

“Pre-Approved Control Party” shall mean a Person described in clauses (i), (ii)
or (iii) of the definition of “Qualified Equityholder”.

 

“Prepayment Notice” shall mean a prior written notice to Lender specifying the
proposed Business Day on which a prepayment of the Debt is to be made pursuant
to Section 2.4 hereof, which date must be a Business Day and shall be no earlier
than fifteen (15) days after the date of such Prepayment Notice (other than any
prepayment of the Debt made at the closing and pursuant to the definitive
documentation of any Assumption, in which case such date shall be no earlier
than three (3) days after the date of such Prepayment Notice) and no later than
sixty (60) days after the date of such Prepayment Notice (unless in connection
with an Immediate Low Cash Flow Trigger Cure, in which case, the definition of
Low Cash Flow Trigger Period shall govern). Such Prepayment Notice shall be
revocable at any time and for any reason by Borrower and may be adjourned on a
day-to-day basis on reasonable notice to Lender, but Borrower shall pay Lender’s
actual expenses incurred in connection with such revocation and/or adjournment.

 

“Prime Rate” shall mean the rate of interest published in The Wall Street
Journal from time to time as the “Prime Rate”. If more than one “Prime Rate” is
published in The Wall Street Journal for a day, the average of such “Prime
Rates” will be used, and such average will be rounded up to the nearest 1/100th
of one percent (0.01%). If The Wall Street Journal ceases to publish the “Prime
Rate,” Lender will select an equivalent publication that publishes such “Prime
Rate,” and if such “Prime Rates” are no longer generally published or are
limited, regulated or administered by a governmental or quasi-governmental body,
then Lender will select a comparable interest rate index.

 

“Prime Rate Loan” shall mean the Loan at such time as interest thereon accrues
at a rate of interest based upon the Prime Rate.

 

“Prior Loans” shall mean, collectively, the loans described on Schedule IX.

 

“Prior Loan Documents” shall mean, collectively, the loan documents evidencing
and/or securing the Prior Loans.

 

“Properties” shall mean, collectively, each and every Individual Property which
is subject to this Agreement and has not theretofore been released in accordance
herewith.

 

“Property Accounts” shall mean each of the accounts of Borrower identified on
Schedule XIII hereto, as same may be replaced from time to time with the
approval of Lender, not to be unreasonably withheld, conditioned or delayed.

 

 -32-Loan Agreement

 

 

“Property Account Banks” shall mean each of the banks identified on Schedule
XIII hereto.

 

“Qualified Equityholder” means (i) Guarantor or any successor thereto by merger,
acquisition, initial public offering or similar corporate transaction, (ii)
Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC or any of
its Affiliates, (iii) W2007 Equity Inns Senior Mezz, LLC, provided that such
entity is controlled directly or indirectly by Goldman Sachs Group, Inc., (iv)
any entity approved by each Mezzanine Lender and with respect to which Rating
Agency Confirmation is received (or prior to a Securitization, is approved by
Lender), or (v) a Qualified Transferee that is a Qualified Institution, provided
in each case under this clause (v) that such Qualified Institution (A) has total
assets in the United States or Canada (in name or under management) in excess of
$650,000,000 and a capital/statutory surplus or shareholder equity in excess of
$250,000,000, in each case, exclusive of the Property, and (B) if the applicable
transfer results in a change of Control of Borrower, then following such
transfer Borrower shall be Controlled by a Qualified Institution that is in the
business of regularly investing in or operating hospitality real estate assets
or other commercial properties.

 

“Qualified Institution” shall mean any bank, savings and loan association,
national banking association, investment bank, insurance company, trust company,
commercial credit corporation, pension plan, pension fund, pension trust,
pension account, pension advisory firm, mutual fund, government entity or plan,
real estate company, real estate investment trust, investment fund, money
management firm, or institution substantially similar to any of the foregoing.

 

“Qualified Manager” shall mean (i) each Manager as of the Closing Date with
respect to the Individual Properties managed by such Manager as of the Closing
Date, (ii) any property manager listed on Schedule X hereto (or that is
Controlled by or under common Control with any property management company on
such list), or (iii) any property manager that is reasonably approved by Lender.

 

“Qualified Mezzanine Lender” shall mean (a) any Qualified Institution, provided
that such Qualified Institution, together with any other Qualified Institution
proposing to make a portion of the Approved Mezzanine Loan, and together with
entities Controlled by, Controlling or under common Control with each such
Qualified Institution (i) has total real estate assets or loans (directly or
indirectly, in name or under management) in excess of $1,000,000,000 and (except
with respect to a pension advisory firm or similar fiduciary) capital/statutory
surplus, shareholder’s equity or market capitalization in excess of $400,000,000
and (ii) is regularly engaged in the business of directly or indirectly making
or owning commercial real estate loans or directly or indirectly owning or
operating hotel properties similar to, or better in quality than, the
Properties; (b) any entity Controlled and owned by, Controlling and owning or
under common Control and ownership with, a Qualified Institution described in
clause (a) above; or (c) any other mezzanine lender that has been approved by
Lender in its reasonable discretion and approved by the Rating Agencies.

 

 -33-Loan Agreement

 

 

“Qualified Transferee” shall mean a Person for whom Lender shall have received:
(x) evidence with respect to such Person and with respect to any other Person
who directly or indirectly Controls such Person, that no such Person: (1) if not
a public or widely held company, has ever been convicted of a felony arising
from fraud, financial impropriety or other crimes of moral turpitude (unless
acquitted on all such charges or unless all such charges have been dismissed) or
has ever been convicted of, or pled guilty or no contest to a Patriot Act
Offense (2) is on any government list relating to OFAC and similar matters, and
the Patriot Act, OFAC and KYC searches obtained by Lender shall be satisfactory
to Lender, or (3) has in the past five (5) years been the subject of a voluntary
or involuntary (to the extent the same has not been discharged) bankruptcy
proceeding and (y) if such Person will obtain Control of or obtain a direct or
indirect interest of 10% or more in Borrower or Operating Lessee as a result of
such proposed transfer, acceptable credit, judgment, lien, litigation,
bankruptcy, criminal, watch list, Patriot Act, OFAC, “Know Your Customer” and
anti-money laundering and other similar searches indicating no materially
adverse circumstances (provided, however, that as it relates to lien searches
only, such lien searches shall be deemed to be satisfactory so long as they do
not evidence any security interest in any collateral for the Loan or any
security interest in any direct or indirect equity interest in Borrower or
Operating Lessee).

 

“Rating Agencies” shall mean, prior to a Securitization, any
nationally-recognized statistical rating organization (e.g. Standard & Poor’s
Ratings Services, Moody’s Investor Service, Inc., Fitch, Inc., DBRS, Inc. or any
successor thereto) that has been or will be engaged by Lender or its designees
in connection with, or in anticipation of, a Securitization, and following a
Securitization, each of the Rating Agencies that has issued a credit rating for
the Securities.

 

“Rating Agency Confirmation” shall mean a written affirmation from each of the
Rating Agencies that has issued a credit rating for the Securities that the
credit rating of such Securities by such Rating Agency immediately prior to the
occurrence of the event with respect to which such Rating Agency Confirmation is
sought will not be qualified, downgraded or withdrawn as a result of the
occurrence of such event, which affirmation may be granted or withheld in such
Rating Agency’s sole and absolute discretion.

 

“REAs” shall mean, collectively, those certain agreement(s) more particularly
described on Schedule VII attached hereto and made a part hereof, as the same
may be amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms of this Agreement.

 

“Red Zone Property” shall mean each Individual Property listed on Schedule XXI.

 

“Regulation AB” shall mean Regulation AB under the Securities Act and the
Exchange Act, as such Regulation may be amended from time to time.

 

“Regulatory Change” shall mean any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to
Lender, or any Person Controlling Lender or to a class of banks or companies
Controlling banks of or under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or Governmental Authority
or monetary authority charged with the interpretation or administration thereof.

 

“Related Loan” shall mean a loan to an Affiliate of Borrower, Operating Lessee
or any Guarantor or secured by a Related Property, that is included in a
Securitization with the Loan, and any other loan that is cross-collateralized
with the Loan.

 

 -34-Loan Agreement

 

 

“Related Property” shall mean a parcel of real property, together with
improvements thereon and personal property related thereto, that is “related”
within the meaning of the definition of Significant Obligor, to any Individual
Property.

 

“Release Amount Factor” shall mean the percentage by which the Allocated Loan
Amount is multiplied to determine the Release Amount.

 

“Release Amount” shall mean, as to any Individual Property that is subject to a
release and associated partial prepayment of the Loan pursuant to Section 2.4
and Section 2.5.2, the product of (x) the Release Amount Percentage multiplied
by (y) the Allocated Loan Amount for such Individual Property.

 

“Release Amount Percentage” shall be, with respect to any Individual Property
that is subject to a release and associated partial prepayment of the Loan
pursuant to Section 2.4 and Section 2.5.2:

 

(a) 105% if the Outstanding Principal Balance (after giving effect to the
reduction of the Outstanding Principal Balance by the Release Amount for such
Individual Property, assuming for purposes of this clause (a), a Release Amount
Factor of 105% is used to determine the Release Amount for such Individual
Property) equals or exceeds a floor of $603,750,000 (the “First Floor Balance”);
or

 

(b) 110% if the Outstanding Principal Balance (after giving effect to the
reduction of the Outstanding Principal Balance by the Release Amount for such
Individual Property, assuming for purposes of this clause (b) a Release Amount
Factor of 110% is used to determine the Release Amount for such Individual
Property) is less than the First Floor Balance;

 

provided (this proviso, the “Straddle Proviso”), that if the Outstanding
Principal Balance is above the First Floor Balance prior to prepayment of the
Release Amount for such Individual Property (determined using the Release Amount
Percentage derived by application of the terms of clauses (a)-(b) above and
without giving effect to this Straddle Proviso), and after application of such
Release Amount, the Outstanding Principal Balance would be reduced below the
First Floor Balance (a “Straddle Floor Balance”), the Release Amount Percentage
for such Individual Property then subject to release (the “Straddle Property”)
shall be a pro rata blended percentage, based upon the following:

 

(i) the Allocated Loan Amount for the Straddle Property shall be divided for
calculation purposes pursuant to this Straddle Proviso into two hypothetical
components, the first (the “First Hypothetical Component”) being equal to the
portion of such Allocated Loan Amount which, when multiplied by the Release
Amount Percentage applicable (without giving effect to this Straddle Proviso) if
the Outstanding Principal Balance were higher than the Straddle Floor Balance
(the “Above Straddle Percentage”), would result (upon application of the product
of such multiplication of the First Hypothetical Component by the Above Straddle
Percentage in reduction of the Outstanding Principal Balance) in an Outstanding
Principal Balance equal to the Straddle Floor Balance, and the second (the
“Second Hypothetical Component” being equal to the Allocated Loan Amount for
such Straddle Property less the First Hypothetical Component;

 

 -35-Loan Agreement

 

 

(ii) the Second Hypothetical Component shall be assigned for calculation
purposes pursuant to this Straddle Proviso a Release Amount Percentage equal to
the Release Amount Percentage applicable (without giving effect to this Straddle
Proviso) if the Outstanding Principal Balance were less than the Straddle Floor
Balance (the “Below Straddle Percentage”); and

 

(iii) the Release Amount Percentage for the Straddle Property shall be equal to
the sum of (A) the Above Straddle Percentage multiplied by a fraction, the
numerator of which is the First Hypothetical Component and the denominator of
which is the Allocated Loan Amount for such Straddle Property plus (B) the Below
Straddle Percentage multiplied by a fraction, the numerator of which is the
Second Hypothetical Component and the denominator of which is the Allocated Loan
Amount for such Straddle Property.

 

By way of example of the foregoing, if the Outstanding Principal Balance were
$701,250,000 immediately prior to the release of an Individual Property with an
Allocated Loan Amount of $20,000,000, such Individual Property would be a
Straddle Property, to which this Straddle Proviso applies, and (x) the First
Hypothetical Component would be $15,000,000 (because $15,000,000 multiplied by
an Above Straddle Percentage of 105% equals $15,750,000), which when applied to
reduce the Outstanding Principal Balance results in the Outstanding Principal
Balance equal to the First Floor Balance, which is the Straddle Floor Balance in
this example, (y) the Second Hypothetical Component is $5,000,000 (the
$20,000,000 Allocated Loan Amount minus the First Hypothetical Component) and
the Below Straddle Percentage is 110%, and (z) the Release Amount Percentage is
106.25% (106.25% = (105% X $15,000,000/$20,000,000) + (110% X
$5,000,000/$20,000,000)).

 

“REMIC Opinion” shall mean, as to any matter, an opinion of nationally
recognized REMIC counsel as to the compliance of such matter with applicable
REMIC Requirements (which such opinion shall be, in form and substance and from
a provider, in each case, reasonably acceptable to Lender and acceptable to the
Rating Agencies).

 

“REMIC Requirements” shall mean any applicable legal requirements, as determined
under the Code, the regulations, revenue rulings, revenue procedures (such as
Rev. Proc. 2010-30) and other administrative, legislative and judicial guidance,
relating to the tax treatment of REMIC Trusts, including, without limitation,
the continued treatment of a Loan as a “qualified mortgage,” the continued
qualification of any REMIC Trust as a REMIC, the non-imposition of any tax on
any REMIC Trust, including without limitation the taxes on “prohibited
transactions” and “contributions,” and any other constraints, rules or other
regulations or requirements relating to the servicing, modification or other
similar matters with respect to a REMIC-held mortgage Loan (or any portion
thereof or interest therein) that may exist or be promulgated under the Code.

 

“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the
meaning of Section 860D of the Code that holds the Note.

 

 -36-Loan Agreement

 

 

“Rents” shall mean all rents, rent equivalents, revenues from the rental of
rooms, guest suites, conference and banquet rooms, food and beverage facilities,
health clubs, spas or other amenities, telephone services, laundry, vending,
television and parking, moneys payable as damages or in lieu of rent or rent
equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, Operating Rent
and other consideration of whatever form or nature received by or paid to or for
the account of or benefit of Borrower, Operating Lessee or any of their
respective agents or employees from any and all sources arising from or
attributable to the Properties, all other items of revenue, receipts or other
income as indentified in the Uniform System of Accounts, current edition, and
Insurance Proceeds, if any, from business interruption or other loss of income
insurance, but only to the extent Lender elects to treat such Insurance Proceeds
as business or rental interruption Insurance Proceeds pursuant to Section 5.4(f)
hereof.

 

“Repayment Date” shall mean the date of a prepayment of the Loan pursuant to the
provisions of Section 2.4 hereof.

 

“Replacement Interest Rate Cap Agreement” shall mean 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 2.6.3(c) 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 2.7, the date required in Section 2.7;
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 Lender, and if the Loan
or any portion thereof is included in a Securitization, each of the Rating
Agencies with respect thereto.

 

“Reserve Funds” shall mean, collectively, all funds deposited by Borrower or
Operating Lessee with Lender or Deposit Bank pursuant to Article 6 of this
Agreement, including, but not limited to, the Insurance Funds, the Tax Funds,
the Required Repair Funds, the Casualty and Condemnation Funds, the FF&E Reserve
Funds, the Ground Rent Funds, and the Scheduled PIP Reserve Funds.

 

“Restoration” shall mean the repair and restoration of any Individual Property
after a Casualty or Condemnation as nearly as possible to the condition such
Individual Property was in immediately prior to such Casualty or Condemnation,
with such alterations as may be reasonably approved by Lender.

 

“Restricted Payments” shall mean 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 Manager (that is not an Affiliate of
Borrower or Operating Lessee) pursuant to any Management Agreement that has been
approved by Lender (including approval of any amendments thereto), (ii) any Base
Management Fees that are payable to any Manager that is an Affiliate of Borrower
or Operating Lessee pursuant to any Management Agreement that has been entered
into in accordance with Section 4.14 (including any amendments thereto)
(provided no Event of Default exists) or (iii) any payments required to be made
by the terms of the Loan Documents.

 

 -37-Loan Agreement

 

 

“Routine Capital Expenditures” shall mean routine and ordinary course
maintenance, repairs, alterations and replacements of or to the Properties, 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 Material Alteration.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies.

 

“Securitization Date” shall mean the “startup day,” within the meaning of
Section 860G(a)(9) of the Code, of a “real estate mortgage investment conduit,”
within the meaning of Section 860D of the Code, that holds all or any portion of
the Note.

 

“Securitization Vehicle” means each REMIC Trust or a Grantor Trust into which
all or a portion of the Loan has been transferred.

 

“Security Deposits” shall mean all security (whether cash, letters of credit or
otherwise) given to Borrower or any agent or Person acting on behalf of Borrower
in connection with any Leases.

 

“Significant Obligor” shall have the meaning set forth in Item 1101(k) of
Regulation AB under the Securities Act.

 

“Special Purpose Bankruptcy Remote Entity” shall mean an entity that, at all
relevant times, has complied and will comply with the representations,
warranties and covenants set forth in Schedule V.

 

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

 

“Spread Maintenance Date” shall mean the Monthly Payment Date occurring in
November, 2018.

 

“Spread Maintenance Premium” shall mean, with respect to any payment or
prepayment of the principal of the Loan (or acceleration of the Loan) prior to
and including the Spread Maintenance Date, an amount equal to the product of (i)
the Component Spread; (ii) the portion of the applicable Components of Loan that
are being prepaid or repaid that is subject to the Spread Maintenance Premium;
and (iii) 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 accrual period associated with the Spread Maintenance Date and the
denominator of which is 360.

 

 -38-Loan Agreement

 

 

“Star Report” shall mean the report which is produced by Smith Travel Research
(or, if Smith Travel Research no longer is in existence at any time during the
Term, the substantially similar report of the successor of Smith Travel Research
or such other industry resource that is equally as reputable as Smith Travel
Research will be substituted, in order to obtain substantially the same result
as would be obtained if Smith Travel Research had not ceased to be in existence)
which assesses and compares the performance of hotels within a selected
competitive set and includes comparisons of revenues per available room, average
daily rates and occupancy rates.

 

“State” shall mean New York State.

 

“Strike Price” shall mean the actual “strike price” of the Interest Rate Cap
Agreement or any Replacement Interest Rate Cap Agreement, which shall never
exceed the applicable Maximum Strike Price.

 

“Surveys” shall mean the surveys of each Individual Property prepared by a
surveyor licensed in the state in which each Individual Property is located and
reasonably satisfactory to Lender and the company or companies issuing the
Title Insurance Policy, and containing a certification of such surveyor
reasonably satisfactory to Lender.

 

“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against the Properties, any Individual Property or part thereof, together with
all interest and penalties thereon. For the avoidance of doubt, “Taxes” shall
not include income, branch profits, franchise, sales, hotel room occupancy
taxes, commercial rent or occupancy taxes and other similar charges, taxes or
expenses. In no event shall any PACE Loan be considered a Tax for purposes of
this Agreement.

 

“Tenant” shall mean any Person obligated by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) under any Lease now
or hereafter affecting all or any part of an Individual Property.

 

“Term” shall mean the entire term of this Agreement, which shall expire upon
repayment in full of the Debt.

 

“Title Insurance Policy” shall mean, with respect to each Individual Property,
an ALTA mortgagee title insurance policy in the form acceptable to Lender issued
with respect to such Individual Property and insuring the Lien of the Mortgage
encumbering such Individual Property.

 

“TRIPRA” shall mean the Terrorism Risk Insurance Program Reauthorization Act of
2002 or any extension, renewal or replacement thereof.

 

 -39-Loan Agreement

 

 

“Trigger Period” shall commence upon (i) the occurrence of an Event of Default,
(ii) the occurrence of a Mezzanine Loan Default or (iii) the commencement of a
Low Cash Flow Trigger Period; and shall end if, (A) with respect to a Trigger
Period continuing pursuant to clause (i), the Event of Default commencing the
Trigger Period either (1) was a Qualified Release Property Default and has been
cured by the release of the applicable Individual Property and associated
partial prepayment of the Loan in accordance with, and within the time period
provided in, Section 2.5.2 hereof, or (2) has been waived in writing by Lender
or Lender has accepted a cure of such Event of Default (and no other Event of
Default is then continuing), (B) with respect to a Trigger Period continuing
pursuant to clause (ii), the Mezzanine Loan Default commencing the Trigger
Period either (1) was a “Qualified Release Property Default” under the
applicable Mezzanine Loan Documents and has been cured by the release of the
applicable Individual Property and associated partial prepayment of the
applicable Mezzanine Loan in accordance with, and within the time period
provided in, Section 2.5.2 of the applicable Mezzanine Loan Agreement, or (2)
has been waived in writing by the applicable Mezzanine Lender or Mezzanine
Lender has accepted a cure of such Mezzanine Loan Default, and a copy of such
written waiver or acceptance of cure, as applicable, shall have been delivered
by the applicable Mezzanine Lender to Lender (and no other Mezzanine Loan
Default is then continuing) or (C) with respect to a Trigger Period continuing
due to clause (iii), the Low Cash Flow Trigger Period has ended pursuant to the
terms hereof.

 

“Trustee” shall mean any trustee holding the Loan in a Securitization.

 

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State (with respect to fixtures), the State of New York or the
state in which any of the Cash Management Accounts are located, as the case may
be.

 

“Uncalled Commitments” means, with respect to a Person the capital commitments
of such Person that are unencumbered, have not yet been called and (a) are
eligible to be called (i.e., such Person has the right to call such commitments
under the investment fund constituent documents) without having to comply with
or satisfy any conditions precedent (other than notification that the required
portion of their commitments are being called) and (b) are made by institutional
investors or “Accredited Investors” (as defined under US securities laws) and in
the case of (a) and (b), that (i) are not subject to a proceeding under the
Bankruptcy Code or under federal, state or foreign insolvency law and (ii) are
not in default under a material provision of their respective subscription
agreements.

 

“Underwritten Net Cash Flow” shall mean the aggregate Net Operating Income for
all of the Properties for the twelve (12) month period immediately preceding the
date of determination (including, without duplication, as “Operating Expenses”
during such twelve (12) month period, for the purposes of determining Net
Operating Income, (i) deemed contributions to the FF&E Reserve Account equal to
four percent (4%) of aggregate Adjusted Operating Income (excluding, for the
avoidance of doubt, all Hotel Taxes) for the Properties for such period and (ii)
the greater of (x) three percent (3%) of aggregate Operating Income (excluding,
for the avoidance of doubt, all Hotel Taxes) for the Properties for such period,
notwithstanding the fact that the actual amount paid as Management Fees under
the Management Agreements during such twelve (12) month period may have been
less than that amount, and (y) the actual amount of Management Fees paid under
the Management Agreements during such twelve (12) month period (without
duplication of any expense reimbursements or pass-through expenses that are
already included as Operating Expenses)).

 

“Uniform System of Accounts” shall mean the most recent edition of the Uniform
System of Accounts for Hotels, as adopted by the American Hotel and Motel
Association, as from time to time amended.

 

“U.S. Obligations” shall mean securities evidencing an obligation to timely pay
principal and/or interest in a full and timely manner that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged, and (ii) not subject to prepayment, call or early
redemption.

 

 -40-Loan Agreement

 

 

“Waste” shall mean any material abuse or, other than demolition in connection
with a Restoration or Alteration conducted in accordance with the Loan
Documents, destructive use of any Individual Property.

 

Section 1.2           Index of Other Definitions. the following terms are
defined in the sections or Loan Documents as indicated below:

 

“Account Representative” – 6.14

“Accounts” - 6.1

“Acquired Ground Lease” - Schedule V

“Act” - Schedule V

“ADA Repairs” - 6.2.1

“Advance Booking Agreement” – Section 1.1 - Definition of Advance Deposits

“Affected Property” – 9.3.4

“Agreement” - Introductory Paragraph

“Approved Annual Budget” - 4.9.5

“Approved Excess Operating Expense” - 4.9.6

“Approved Scheduled PIP Budget” – Section 1.1 - Definition of Approved Scheduled
PIP Expenses

“Assumption Agreement” - 7.1(a)

“Available Cash” - 6.11

“Bail-In Action” – 10.32

“Bail-In Legislation” – 10.32

“Borrower’s Recourse Liabilities” - 10.1

“Broker” - 10.19

“Cash Collateral Account” - 6.10

“Cash Collateral Funds” - 6.10

“Cash Management Accounts” - 6.12

“Casualty” - 5.2

“Casualty and Condemnation Account” - 6.9

“Casualty and Condemnation Funds” - 6.9

“Casualty Consultant” - 5.4(b)(iii)

“Casualty Retainage” - 5.4(b)(iv)

“Cause” - Schedule V

“Change of Control Flagging Costs” - 4.34(e)

“Committee” – Schedule V

“Condemnation Proceeds” - 5.4(b)

“Counterparty Opinion” - 2.6.3

“Covered Rating Agency Information” – 9.2

“Debt Service Account” - Cash Management Agreement

“Disclosure Document” - 9.2(a)

“Disposition Conditions” – 4.2

“Due Date” – 6.3.1

“EEA Financial Institution” – 10.32

“EEA Member Country” – 10.32

 

 -41-Loan Agreement

 

 

“EEA Resolution Authority” – 10.32

“Embargoed Person” - 4.32(b)

“Environmental Work Reserve Account” – 6.15

“Environmental Work Reserve Fund” – 6.15

“Equipment” – Mortgage

“ERISA” - 4.31

“EU Bail-In Legislation Schedule” – 10.32

“Event of Default” - 8.1

“Excess Operating Expenses” – 4.9.6

“Exchange Act” - 9.2(a)

“Exchange Act Filing” - 9.1(d)

“Existing Qualified Equityholder” - 7.2(j)

“FF&E Reserve Account” - 6.8.1

“FF&E Reserve Funds” - 6.8.1

“FF&E Work” - 6.8.1

“First Extended Maturity Date” - 2.7.1

“First Extended Term” - 2.7.1

“First Extension Notice” - 2.7.1

“First Extension Option” - 2.7.1

“Fixtures” – Mortgage

“Flagging Costs” - 4.34(e)

“Furnished Information” – 9.5

“Full Replacement Cost” – 5.1.1

“Ground Rent Account” - 6.7.1

“Ground Rent Funds” - 6.7.1

“Holdco” – 4.9.2(a)

“Immediate Low Cash Flow Trigger Cure” – Section 1.1 - Definition of Low Cash
Flow Trigger Period

“Impaired Individual Property” – 2.4.4(b)

“Impaired Individual Property Prepayment” – 2.4.4(b)

“Impaired Individual Property Prepayment Conditions” – 2.4.4(b)

“Impaired Individual Property Prepayment Outside Date” – 2.4.4(b)

“Impaired Individual Property Release Amount” – 2.4.4(b)

“Impaired Individual Property Release Conditions” 2.5.3

“Improvements” – Mortgage

“Increased Costs” - 2.8.1

“Indemnified Liabilities” - 4.30

“Independent Director” - Schedule V

“Independent Manager” – Schedule V

“Indirect Transferee” - 7.1(b)

“Initial Interest Period” - 2.3.1

“Insurance Account” - 6.4.1

“Insurance Funds” - 6.4.1

“Insurance Premiums” - 5.1.1(b)

“Intellectual Property” - 3.1.33

“Interest Period” - 2.3.2

“Interest Shortfall” - 2.4.6

“Lender” - Introductory Paragraph

 

 -42-Loan Agreement

 

 

“Lender Group” - 9.2(b)

“Liabilities” - 9.2(b)

“Licenses” - 3.1.9

“Manager’s Expenses” – 6.1

“Material Action” - Schedule V

“Material Adverse Effect” – 4.2

“Material Lease” – 4.1.11

“Mezzanine Remaining Net Proceeds Amount” – 2.4.4(a)

“Nationally Recognized Service Company” - Schedule V

“Net Impaired Individual Property Release Amount” – 2.4.4(b)

“Net Proceeds” - 5.4(b)

“Net Proceeds Deficiency” - 5.4(b)(vi)

“Net Proceeds Principal Prepayment” – 2.4.4(a)

“Net Remaining Proceeds” – 2.4.4(a)

“New Mezzanine Loan” - 9.3.2

“New Mezzanine Loan Borrower” - 9.3.2

“Note” – 2.1.4

“Note A-1” – 2.1.4

“Note A-2” – 2.1.4

“Notice” - 10.6

“Other Exculpated Party” – 10.1

“Other Taxes” - 2.8.3

“Participant Register” – 10.30(b)

“Permitted Direct Assumption” - 7.1(a)

“Permitted Indirect Assumption” - 7.1(b)

“Permitted Indebtedness” - 4.21

“Permitted Investments” - Cash Management Agreement

“Permitted Transfer” - 7.2

“Policies” - 5.1.1(b)

“Preferred Guaranty” – 7.2(k)(vi)

“QEH Replacement Guarantor” - 7.2(j)(iii)
“QEH Transferee” - 7.2(j)

“Qualified Release Property Default” – 2.5.2

“Rate Cap Collateral” - 2.6.2

“Register” – 10.30(a)

“Release Conditions” – 2.5.2

“Release Property” – 2.5.2

“Replacement Guarantor” - 7.1(a)

“Required Records” - 4.9.7

“Required Repairs Account” - 6.2.1

“Required Repairs Funds” - 6.2.1

“Required Repairs” - 6.2.1

“Resizing” – 9.3.1

“Review Waiver” - 10.3(b)

“Scheduled PIP” – 3.1.38

“Scheduled PIP Reserve Account” – Section 6.5.1

“Scheduled PIP Reserve Funds” – Section 6.5.1

“Second Extended Maturity Date” - 2.7.1

 

 -43-Loan Agreement

 

 

“Second Extended Term” - 2.7.1

“Second Extension Notice” - 2.7.1

“Second Extension Option” - 2.7.1

“Secondary Market Transaction” - 9.1(a)

“Securities” - 9.1(a)

“Securities Act - 9.2(a)

“Securitization” - 9.1(a)

“Servicer” - 10.21

“Servicing Agreement” - 10.21

“Sole Member” – Schedule V

“SPC Party” - Schedule V

“Special Member” - Schedule V

“Springing Recourse Event” - 10.1

“Stated Maturity Date” – Section 1.1 - Definition of Maturity Date

“Substitute Guarantor” - 7.2(h)

“Succeeding Interest Period” - 2.4.6

“Summary Financial Information”

“Tax Account” - 6.3.1

“Tax Funds” - 6.3.1

“Third Extended Maturity Date” - 2.7.1

“Third Extended Term” - 2.7.1

“Third Extension Notice” - 2.7.1

“Third Extension Option” - 2.7.1

“Transfer” - 4.2

“Transferee Borrower” - 7.1(a)

“Underperforming Replacement” – 4.14.2(c)

“Underwriter Group” - 9.2(b)

“Updated Information” - 9.1(b)(i)

“Write-Down and Conversion Powers” – 10.32

 

Section 1.3           Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement or any other
Loan Document shall refer to this Agreement or such other Loan Document as a
whole and not to any particular provision hereof or thereof. When used in this
Agreement or any other Loan Document, the word “including” shall mean “including
but not limited to”. 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.

 

Article 2

THE LOAN

 

Section 2.1           The Loan.

 

2.1.1           Agreement to Lend and Borrow. Subject to and upon the terms and
conditions set forth herein, Lender shall make the Loan to Borrower and Borrower
shall accept the Loan from Lender on the Closing Date.

 

 -44-Loan Agreement

 

 

2.1.2           Components of the Loan. For purposes of the computation of the
interest accrued on the Loan from time to time and certain other computations
set forth herein, the Loan shall be divided into multiple components designated
as “Component A”, “Component B”, “Component C”, “Component D”, “Component E” and
“Component F”. The following table sets forth the initial principal amount of
each such Component.

 

Component   Initial Principal Amount       Component A   $134,166,666.67
Component B   $134,166,666.67 Component C   $134,166,666.67 Component D  
$134,166,666.67 Component E   $134,166,666.66 Component F   $134,166,666.66

 

2.1.3           Single Disbursement to Borrower. Borrower shall receive only one
borrowing hereunder in respect of the Loan and any amount borrowed and repaid
hereunder in respect of the Loan may not be reborrowed.

 

2.1.4           The Note. The Loan shall be evidenced by (a) that certain
Promissory Note A-1 of even date herewith, in the stated principal amount of
Three Hundred Twenty-Two Million and No/100 Dollars ($322,000,000.00) executed
by Borrower and payable to DBNY (as the same may hereafter be amended,
supplemented, restated, increased, extended or consolidated from time to time,
“Note A-1”), (b) that certain Promissory Note A-2 of even date herewith, in the
stated principal amount of Three Hundred Twenty-Two Million and No/100 Dollars
($322,000,000.00) executed by Borrower and payable to Citi (as the same may
hereafter be amended, supplemented, restated, increased, extended or
consolidated from time to time, “Note A-2”) and (c) that certain Promissory Note
A-3 of even date herewith, in the stated principal amount of One Hundred Sixty
One Million and No/100 Dollars ($161,000,000.00) executed by Borrower and
payable to JPM (as the same may hereafter be amended, supplemented, restated,
increased, extended or consolidated from time to time, “Note A-3”; and together
with the Note A-1, and the Note A-2, the “Note”), in the aggregate, in evidence
of the Loan, and shall be repaid in accordance with the terms of this Agreement,
the Note and the other Loan Documents.

 

2.1.5           Use of Proceeds. Borrower shall use proceeds of the Loan to
(i) pay and discharge any existing mortgage and mezzanine loans secured directly
or indirectly by the Properties including, without limitation, the Prior Loans,
(ii) pay all past-due Taxes, Insurance Premiums and Other Charges, if any, in
respect of the Properties, (iii) make initial deposits of the Reserve Funds,
(iv) pay costs and expenses incurred in connection with the closing of the Loan,
and (v) to the extent any proceeds remain after satisfying clauses (i) through
(iv) above, for such lawful purpose as Borrower shall designate.

 

 -45-Loan Agreement

 

 

Section 2.2           Interest Rate.

 

2.2.1           Interest Rate.

 

(a)          Subject to the terms and conditions of this Section, each Component
of the Loan shall accrue interest throughout the Term at the Interest Rate
applicable to such Component during each Interest Period. The total interest
accrued under the Loan shall be the sum of the interest accrued on each of the
Components. Borrower shall pay to Lender on each Monthly Payment Date the
interest accrued or to be accrued on the Loan for the related Interest Period.

 

(b)          Subject to the terms and conditions hereof, the Loan shall be a
LIBOR Loan. In the event that Lender shall have determined (which determination
shall be conclusive and binding upon Borrower absent manifest error) that by
reason of circumstances affecting the interbank Eurodollar market, adequate and
reasonable means do not exist for ascertaining LIBOR, then Lender shall
forthwith give notice by telephone of such determination, confirmed in writing,
to Borrower at least one (1) day prior to the next succeeding Interest
Determination Date. If such notice is given, the Loan shall be converted, as of
the first day of the next succeeding Interest Period, to a Prime Rate Loan.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Borrower have the right to convert a LIBOR Loan to a Prime Rate Loan.

 

(c)          If, pursuant to the terms hereof, the Loan has been converted to a
Prime Rate Loan and Lender shall determine (which determination shall be
conclusive and binding upon Borrower absent manifest error) that the event(s) or
circumstance(s) which resulted in such conversion shall no longer be applicable,
Lender shall give notice by telephone of such determination, confirmed in
writing, to Borrower at least one (1) day prior to the next succeeding Interest
Determination Date. If such notice is given, the Loan shall be converted, as of
the first day of the next succeeding Interest Period, to a LIBOR Loan.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Borrower have the right to convert a Prime Rate Loan to a LIBOR Loan.

 

(d)          If the adoption of any requirement of law or any change therein or
in the interpretation or application thereof, shall hereafter make it unlawful
for Lender to maintain a LIBOR Loan as contemplated hereunder, (i) the
obligation of Lender hereunder to make or maintain a LIBOR Loan or to convert a
Prime Rate Loan to a LIBOR Loan shall be canceled forthwith and (ii) any
outstanding LIBOR Loan shall be converted automatically to a Prime Rate Loan on
the first day of the next succeeding Interest Period, or upon such earlier date
as may required by law.

 

2.2.2           Default Rate. In the event that, and for so long as, any Event
of Default shall have occurred and be continuing, the outstanding principal
balance of each Component and, to the extent not prohibited by applicable law,
all other portions of the Debt, shall accrue interest at the applicable Default
Rate, calculated from the date such payment was due or, if later, such Default
shall have occurred without regard to any grace or cure periods contained
herein. Interest at the Default Rate shall be paid immediately upon demand,
which demand may be made as frequently as Lender shall elect, to the extent not
prohibited by applicable law.

 

2.2.3           Interest Calculation. Interest on the outstanding principal
balance of each Component shall be calculated by multiplying (A) the actual
number of days elapsed in the period for which the calculation is being made by
(B) a daily rate based on a three hundred sixty (360) day year (that is, the
Interest Rate applicable to such Component expressed as an annual rate divided
by 360) by (C) the outstanding principal balance of such Component. The accrual
period for calculating interest due on each Monthly Payment Date shall be the
Interest Period in which such Monthly Payment Date occurs.

 

 -46-Loan Agreement

 

 

2.2.4           Usury Savings. This Agreement and the other Loan Documents are
subject to the express condition that at no time shall Borrower be required to
pay interest on the Outstanding Principal Balance at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
Outstanding Principal Balance at a rate in excess of the Maximum Legal Rate, the
Interest Rate shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be
deemed to have been payments in reduction of principal and not on account of the
interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.

 

Section 2.3           Loan Payments.

 

2.3.1           Payments. On the date hereof, Borrower shall pay interest on the
outstanding principal balance of each Component from and including the Closing
Date through and including May 7, 2017 (the “Initial Interest Period”).  On June
1, 2017 and on each Monthly Payment Date thereafter, up to and including the
Maturity Date, Borrower shall make a payment to Lender of interest equal to the
Monthly Debt Service Payment Amount.  Unless otherwise elected by Lender,
provided no Event of Default then exists, the Monthly Debt Service Payment
Amount shall be applied (A) first, to the payment of interest then due and
payable on Component A, (B) second, to the payment of interest then due and
payable on Component B, (C) Third, to the payment of interest then due and
payable on Component C, (D) fourth, to the payment of interest then due and
payable on Component D, (E) fifth, to the payment of interest then due and
payable on Component E and (F) sixth, to the payment of interest then due and
payable on Component F.  Borrower shall also pay to Lender all amounts required
in respect of Reserve Funds as set forth in Article 6 hereof.

 

2.3.2           Payments Generally. After the Initial Interest Period, each
interest accrual period thereafter (each, an “Interest Period”) shall commence
on the eighth (8th) day of each calendar month during the Term and shall end on
and include the seventh (7th) day of the next occurring calendar month;
provided, that in the event that the Lender elects to reset LIBOR as provided in
the definition of the term “Interest Determination Date,” (i) the Interest
Period then in effect shall end on (and include) the calendar day prior to the
Securitization Date and (ii) a new Interest Period shall commence on the
Securitization Date and shall end on (and include) the next seventh (7th) day of
a calendar month to occur. For purposes of making payments hereunder, but not
for purposes of calculating Interest Periods, if the Monthly Payment Date is not
a Business Day, then amounts due on such date shall be due on the immediately
preceding Business Day. Lender shall have the right from time to time, in its
reasonable discretion, upon not less than ten (10) days prior written notice to
Borrower, to change the Monthly Payment Date to a different calendar day and, if
requested by Lender, Borrower shall promptly execute an amendment to this
Agreement to evidence such change; provided, however, that if Lender shall have
elected to change the Monthly Payment Date as aforesaid, Lender shall have the
option, but not the obligation, to adjust the Interest Period and the Interest
Determination Date accordingly. With respect to payments of principal due on any
Component on the Maturity Date, interest shall be payable at the Interest Rate,
through and including the last day of the Interest Period in which the Maturity
Date occurs. All amounts due pursuant to this Agreement and the other Loan
Documents shall be payable without setoff, counterclaim, defense or any other
deduction whatsoever other than as provided in Section 2.8.

 

 -47-Loan Agreement

 

 

2.3.3           Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the Outstanding Principal Balance, all accrued and unpaid interest
and all other amounts due hereunder and under the Note, the Mortgage and the
other Loan Documents.

 

2.3.4           Late Payment Charge. If any principal, interest or any other sum
due under the Loan Documents (other than the Outstanding Principal Balance due
and payable on the Maturity Date) is not paid by Borrower within three (3) days
of the date on which it is due (or if such third (3rd) day is not a Business
Day, then the immediately preceding Business Day), Borrower shall pay to Lender
upon demand an amount equal to the lesser of three percent (3%) of such unpaid
sum or the maximum amount permitted by applicable law in order to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. Any
such amount shall be secured by the Mortgage and the other Loan Documents to the
extent permitted by law.

 

2.3.5           Method and Place of Payment.

 

(a)          Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not later
than 2:00 p.m., New York City time, on the date when due and shall be made in
lawful money of the United States of America in immediately available funds at
Lender’s office or at such other place as Lender shall from time to time
designate, and any funds received by Lender after such time shall, for all
purposes hereof, be deemed to have been paid on the next succeeding Business
Day.

 

(b)          Whenever any payment to be made hereunder or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be the immediately preceding Business Day.

 

(c)          All payments required to be made by Borrower hereunder or under the
Note or the other Loan Documents shall be made irrespective of, and without
deduction for, any setoff, claim or counterclaim and shall be made irrespective
of any defense thereto.

 

Section 2.4           Prepayments.

 

2.4.1           Prepayments. Borrower shall have the right to prepay the Loan in
whole or in part at any time prior to the Stated Maturity Date, so long as each
such prepayment is made in accordance with the terms of this Agreement.

 

 -48-Loan Agreement

 

 

2.4.2           Voluntary Prepayments.

 

(a)          Borrower may prepay, in accordance with paragraph (d) below, all or
any portion of the Outstanding Principal Balance on any Business Day, provided
that the following conditions are satisfied: (i) no Event of Default shall have
occurred and be continuing (other than in connection with a prepayment made with
respect to a release of an Individual Property subject to a Qualified Release
Property Default); (ii) Borrower shall timely deliver to Lender a Prepayment
Notice; (iii) each Mezzanine Borrower shall concurrently make a prepayment of
all or a portion, as applicable, of the outstanding principal balance of the
applicable Mezzanine Loan, and shall otherwise satisfy the applicable conditions
in the Mezzanine Loan Documents with respect to such prepayment (as evidenced by
an Officer’s Certificate and, and in the case of a prepayment in full or the
release of an Individual Property, the delivery to Lender of a copy of a payoff
letter from the applicable Mezzanine Lender); (iv) Borrower shall comply with
the provisions and pay to Lender the applicable amounts set forth in Section
2.4.6 and (v) if Borrower is prepaying the entire Outstanding Principal Balance,
then Borrower shall also pay to Lender (without duplication of amounts paid
under Section 2.4.6) any and all other amounts outstanding under the Note, this
Agreement, and any of the other Loan Documents. The aggregate amount prepaid by
Borrower under this paragraph (a) and concurrently by Mezzanine Borrowers under
the Mezzanine Loan Documents shall be allocated among the Loan and the Mezzanine
Loans pro rata in accordance with their respective outstanding principal
balances immediately prior to such prepayments.

 

(b)          On any Business Day, Borrower may prepay, in accordance with
paragraph (d) below, the Loan in part in connection with the release of one or
more Individual Properties in accordance with Section 2.5.2 hereof, provided
that the following conditions are satisfied: (i) Borrower shall timely deliver
to Lender a Prepayment Notice, (ii) the release of such Individual Property(ies)
shall occur simultaneously with such prepayment, (iii) the applicable conditions
in the Mezzanine Loan Documents with respect to concurrent prepayments of the
Mezzanine Loans by Mezzanine Borrowers shall have been satisfied (as evidenced
by an Officer’s Certificate and the delivery to Lender of a copy of a payoff
letter from the applicable Mezzanine Lender) and (iv) the Release Conditions
shall have been satisfied in connection therewith.

 

(c)          If (i) a Low Cash Flow Trigger Period exists, (ii) Borrower makes a
prepayment of the Outstanding Principal Balance hereunder in accordance with
paragraph (a) above (other than clause (ii) thereof) (which may be made by using
funds in the Cash Collateral Account), and each Mezzanine Borrower concurrently
makes a prepayment of the applicable Mezzanine Loan in accordance with paragraph
(a) above (which Lender agrees may be made by using funds in the Cash Collateral
Account if such prepayment would cure the Trigger Period), (iii) such
prepayments are made and upon at least two (2) Business Days prior written
notice, and (iv) the aggregate amount prepaid by Borrower under this paragraph
(c) and concurrently by Mezzanine Borrowers under the Mezzanine Loan Documents
is equal to or greater than the amount that is required to increase both the
Debt Yield and Debt Yield (Mortgage Only) to the applicable Debt Yield Cure
Level, then such Low Cash Flow Trigger Period will immediately end.

 

(d)          Prepayments of principal of the Loan made pursuant to this Section
2.4.2 shall be applied to the Loan (i) first, to Component A until the
outstanding principal balance of Component A is reduced to zero, (ii) second, to
Component B until the outstanding principal balance of Component B is reduced to
zero, (iii) third, to Component C until the outstanding principal balance of
Component C is reduced to zero, (iv) fourth, to Component D until the
outstanding principal balance of Component D is reduced to zero, (v) fifth, to
Component E until the outstanding principal balance of Component E is reduced to
zero and (vi) sixth, to Component F until the outstanding principal balance of
Component F is reduced to zero. Notwithstanding the foregoing, the first
$161,000,000.00 of principal of the Loan that is prepaid taking into account any
prepayments pursuant to this Section 2.4.2 and Section 2.4.4 shall be applied to
the Components on a pro rata basis.

 

 -49-Loan Agreement

 

 

(e)          Provided no Event of Default has occurred and is continuing and no
Trigger Period exists, each Mezzanine Borrower may make a voluntary prepayment
of all or any portion of the outstanding principal balance of its Mezzanine Loan
at par in accordance with the applicable Mezzanine Loan Documents without
Borrower making a corresponding payment of the Loan; and any such voluntary
prepayment of the Mezzanine Loans without a corresponding prepayment of the Loan
shall be applied on a pro rata basis among all of the Mezzanine Loans pro rata.

 

(f)          Notwithstanding the foregoing, Borrower shall be permitted to
prepay a portion of the Outstanding Principal Balance, in connection with the
release of Individual Properties or otherwise, in an amount not to exceed, in
the aggregate, twenty percent (20%) of the original principal balance of the
Loan (the “Free Prepayment Amount”), at any time without any Spread Maintenance
Premium or other prepayment penalty, premium or charge, provided (i) there is no
Event of Default continuing as of the date of the applicable prepayment, (ii)
Borrower provides a Prepayment Notice to Lender in the manner specified in
Section 2.4.2, (iv) Borrower pays Lender, in addition to the amount to be
prepaid, (x) all accrued interest as set forth in Section 2.4.6; and (y) all
other sums then due and payable under this Agreement, the Note, and the other
Loan Documents, including, but not limited to, all of Lender’s third party
reasonable costs and expenses (including reasonable attorney’s fees and
disbursements) incurred by Lender in connection with such prepayment, including,
without limitation, any actual Breakage Costs and costs and expenses associated
with any revoked or extended prepayment notice and (v) Borrower makes the
applicable pro rata prepayment of the Mezzanine Loan.

 

2.4.3           Intentionally Omitted.

 

2.4.4           Mandatory Prepayments; Option to Prepay Balance.

 

(a)          If Lender is not obligated to make Net Proceeds available to
Borrower for Restoration, on the next occurring Monthly Payment Date following
the date on which (i) Lender actually receives any Net Proceeds, and (ii) Lender
has determined that such Net Proceeds shall not be made available for
Restoration, Borrower shall apply or authorize Lender to apply (and Lender may
apply notwithstanding any failure by Borrower to provide such authorization) the
full amount of such Net Proceeds in accordance with this Section 2.4.4. Except
during an Event of Default, such Net Proceeds shall be applied by Lender as
follows in the following order of priority: First, to all amounts (other than
principal and interest) then due and payable under the Loan Documents, including
any reasonable, actual, out of pocket costs and expenses of Lender in connection
with such prepayment (but subject to Section 2.4.6(c)); Second; an amount equal
to accrued and unpaid interest at the Interest Rate on the amount prepaid
through the last day of the Interest Period in which the application of Net
Proceeds occurs, notwithstanding that such Interest Period extends beyond the
date of such application; and Third, to principal on the Loan up to the Impaired
Individual Property Release Amount in accordance with Section 2.4.4(c) below
(the portion of the Net Proceeds applied to the principal amount of the Loan,
the “Net Proceeds Principal Prepayment”; any remaining Net Proceeds after the
foregoing applications pursuant to this sentence, the “Remaining Net Proceeds”).
Notwithstanding anything herein to the contrary, so long as no Event of Default
is continuing, no Spread Maintenance Premiums or other prepayment premium,
penalty or fee shall be due in connection with any prepayment made pursuant to
this Section 2.4.4(a). Provided no Event of Default is continuing, Remaining Net
Proceeds shall be disbursed, as deemed equity distributions, to the applicable
Mezzanine Lender(s) for application to the payment of the Mezzanine Impaired
Individual Property Release Amount(s) and the other amounts owing under the
related Mezzanine Loan(s) under the related Mezzanine Loan Agreement(s) in
connection therewith (the “Mezzanine Remaining Net Proceeds Amount” with respect
to each such Mezzanine Loan) first to the holder of any New Mezzanine Loan (if
any) up to the Mezzanine Remaining Net Proceeds Amount for the New Mezzanine
Loan (which if a New Mezzanine Loan is created will be determined in accordance
with provisions that are in the same form as the related provisions in the
Original Mezzanine Loans used to determine the Mezzanine Remaining Net Proceeds
Amounts for the Original Mezzanine Loans) and then to the Mezzanine Lender up to
the Mezzanine Remaining Net Proceeds Amount for the Mezzanine Loan (and if there
is more than one tranche, from most senior tranche to most junior tranche). Any
Remaining Net Proceeds shall then be applied in further reduction of the
outstanding principal balances of the Loan and the Mezzanine Loans, pro rata in
accordance with the outstanding principal balances of the Loan and the Mezzanine
Loans immediately prior to such application, reductions in the Outstanding
Principal Balance to be applied in accordance with Section 2.4.4(c) below. After
the occurrence and during the continuance of an Event of Default, the Net
Proceeds may be applied to the Debt in any order or priority in Lender’s sole
discretion and any application thereof to principal shall not be limited to the
Impaired Individual Property Release Amount and no Remaining Net Proceeds shall
be available for application to any Mezzanine Loan.

 

 -50-Loan Agreement

 

 

(b)          In any instance where (i) the Lender is not obligated to make Net
Proceeds available to Borrower for Restoration of an Individual Property and has
elected to apply such Net Proceeds related to such Impaired Individual Property
to the Debt in accordance with Section 2.4.4(a) or (ii) an Individual Property
is subject to a Casualty or Condemnation of more than 60% of the Individual
Property value based on such Individual Property’s Allocated Loan Amount (such
Individual Property being sometimes referred to herein as an “Impaired
Individual Property”), then Borrower may elect and shall have the right, on or
prior to the second (2nd) Monthly Payment Date following the application of Net
Proceeds in accordance with Section 2.4.4(a) (the “Impaired Individual Property
Prepayment Outside Date”), to prepay the Loan (such prepayment an “Impaired
Individual Property Prepayment”) in an amount (the “Net Impaired Individual
Property Release Amount”) which is equal to (i) the greater of (A) the Release
Amount applicable to the Impaired Individual Property, and (B) the amount
required to be paid under Section 5.4(c) in connection with any partial release
following a Casualty or Condemnation (the “Impaired Individual Property Release
Amount”), less (ii) the amount of the Net Proceeds Principal Prepayment
applicable to such Impaired Individual Property that has been applied to the
principal amount of the Loan in accordance with Section 2.4.4(a) above (or zero
if the amount in clause (ii) is equal to or greater than the amount in clause
(i)); provided each of the following conditions (the “Impaired Individual
Property Prepayment Conditions”) have been satisfied: (1) no Event of Default
(other than a Qualified Release Property Default that is cured by the release of
the Release Property in accordance with Section 2.5.2 hereof) shall have
occurred and be continuing, (2) the Net Proceeds applicable to such Impaired
Individual Property shall have been applied in accordance with Section 2.4.4(a),
(3) Borrower shall have provided to Lender not less than five (5) Business Days
prior written notice of its intention to effect an Impaired Individual Property
Prepayment, and shall satisfy the Impaired Individual Property Prepayment
Conditions on or prior to the Impaired Individual Property Prepayment Outside
Date, (4) all of the conditions and requirements for the release of such
Impaired Individual Property set forth in Section 2.5.3 hereof shall be
satisfied and the release of such Impaired Individual Property shall occur
simultaneously with the Impaired Individual Property Prepayment and in
compliance with all such conditions and requirements set forth in Section 2.5.3,
and (5) Borrower shall comply with the provisions and pay to Lender the amounts
set forth in Section 2.4.6. Any prepayment made pursuant to this Section
2.4.4(b) shall not require a payment of the Spread Maintenance Premium.

 

 -51-Loan Agreement

 

 

(c)          Any prepayment of the principal of the Loan made pursuant to
Section 2.4.4 hereof shall be applied (i) first, to Component A until the
outstanding principal balance of Component A is reduced to zero, (ii) second, to
Component B until the outstanding principal balance of Component B is reduced to
zero, (iii) third, to Component C until the outstanding principal balance of
Component C is reduced to zero, (iv) fourth, to Component D until the
outstanding principal balance of Component D is reduced to zero, (v) fifth, to
Component E until the outstanding principal balance of Component E is reduced to
zero and (vi) sixth, to Component F until the outstanding principal balance of
Component F is reduced to zero. Notwithstanding the foregoing, the first
$161,000,000.00 of principal of the Loan that is prepaid taking into account any
prepayments pursuant to this Section 2.4.4 and Section 2.4.2 shall be applied to
the Components on a pro rata basis shall be applied to the Components on a pro
rata basis.

 

2.4.5           Prepayments After Default.

 

(a)          If, during the continuance of an Event of Default, payment of all
or any part of the Debt is tendered by Borrower (other than with respect to a
Qualified Release Property Default tendered in accordance with the provisions of
Section 2.5.2 or an Event of Default that arises solely as a direct result of
the Casualty or Condemnation in respect of which such Net Proceeds have been
paid) and accepted by Lender or is otherwise recovered by Lender (including
through application of any Reserve Funds), such tender or recovery shall be
deemed to be a voluntary prepayment by Borrower in violation of the requirements
of Section 2.4.1 hereof, and Borrower shall pay, as part of the Debt, all
amounts, if any, due pursuant to Section 2.4.6.

 

(b)          Notwithstanding anything contained herein to the contrary, upon the
occurrence and during the continuance of any Event of Default, any payment of
principal or interest from whatever source may be applied by Lender among the
Components as Lender shall determine in its sole and absolute discretion.

 

2.4.6           Prepayment/Repayment Conditions.

 

(a)          On the date on which a prepayment, voluntary or mandatory, is made
under the Note or as required under this Agreement, which date must be a
Business Day, Borrower shall pay to Lender:

 

(i)          all accrued and unpaid interest calculated at the Interest Rate on
the amount of principal being prepaid through and including the Repayment Date,
and following a Securitization any prepayment of a securitized portion of the
Loan will also be paid together with an amount equal to the interest that would
have accrued at the Interest Rate on the amount of principal being prepaid
through the end of the Interest Period in which such prepayment occurs,
notwithstanding that such Interest Period extends beyond the date of prepayment;

 

 -52-Loan Agreement

 

 

(ii)         following a Securitization, if such prepayment is made during the
period from and including the first day after a Monthly Payment Date through and
including the last day of the Interest Period in which such prepayment occurs,
all interest on the principal amount being prepaid which would have accrued from
the first day of the Interest Period immediately following the Interest Period
in which the prepayment occurs (the “Succeeding Interest Period”) through and
including the end of the Succeeding Interest Period, calculated at (A) the
Interest Rate if such prepayment occurs on or after the Interest Determination
Date for the Succeeding Interest Period or (B) the Assumed Note Rate if such
prepayment occurs before the Interest Determination Date for the Succeeding
Interest Period (the “Interest Shortfall”);

 

(iii)         the Spread Maintenance Premium, if any, applicable thereto;
provided that so long as no Event of Default is continuing (other than an Event
of Default that arises solely as a direct result of the Casualty or Condemnation
in respect of which such Net Proceeds have been paid), no Spread Maintenance
Premium shall be due in connection with a prepayment made pursuant to Section
2.4.4(a); and

 

(iv)        all other sums, then due under the Note, this Agreement, the
Mortgage, and the other Loan Documents.

 

(b)          If the Interest Shortfall was calculated based upon the Assumed
Note Rate, upon determination of LIBOR on the Interest Determination Date for
the Succeeding Interest Period then (i) if the Interest Rate applicable to any
Component for such Succeeding Interest Period is less than the Assumed Note Rate
applicable to such Component, Lender shall promptly refund to Borrower the
amount of the Interest Shortfall paid with respect to such Component, calculated
at a rate equal to the difference between the Assumed Note Rate applicable to
such Component and the Interest Rate applicable to such Component for such
Interest Period, or (ii) if the Interest Rate applicable to any Component is
greater than the Assumed Note Rate applicable to such Component, Borrower shall
promptly (and in no event later than the first (1st) day of the following month)
pay Lender the amount of such additional Interest Shortfall applicable to such
Component calculated at a rate equal to the amount by which the Interest Rate
applicable to such Component exceeds the Assumed Note Rate applicable to such
Component.

 

(c)          Borrower shall pay all actual out of pocket reasonable costs and
expenses of Lender incurred in connection with the repayment or prepayment
(including without limitation, any reasonable, actual, out of pocket costs and
expenses associated with a release of the Lien of the Mortgage as set forth in
Section 2.5 below and reasonable attorneys’ fees and expenses), provided,
however that, notwithstanding anything to the contrary set forth in the Loan
Documents, no LIBOR breakage costs will be payable in connection with any
prepayment (voluntary or mandatory) of the Loan.

 

 -53-Loan Agreement

 

 

Section 2.5           Release of Properties.

 

2.5.1           Release on Payment in Full. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of the Debt in
accordance with the terms and provisions of the Loan Documents, release the
Liens of the Mortgages and cause the trustee under the Mortgages to reconvey the
Properties to Borrower. In connection with the release of the Mortgages,
Borrower shall submit to Lender, not less than thirty (30) days prior to the
Repayment Date (or such shorter time as is acceptable to Lender in its sole
discretion), a release of Lien (and related Loan Documents) for each Individual
Property for execution by Lender. Such release shall be in a form appropriate in
the jurisdiction in which each Individual Property is located and satisfactory
to a prudent lender acting reasonably. In addition, Borrower shall provide all
other documentation Lender reasonably requires to be delivered by Borrower in
connection with such release. Borrower shall pay all reasonable, actual, out of
pocket costs, taxes and expenses associated with the release of the Liens of the
Mortgages, including Lender’s reasonable attorneys’ fees. In lieu of applying
monies as a full repayment of the Debt, and in lieu of releasing the Lien of the
Mortgages and the other Loan Documents, Lender agrees that it shall, in
consideration of an amount equal to that necessary for a full repayment of the
Debt, together with all other amounts due and payable under the Loan Documents
in accordance with the terms and provisions of the Note and this Agreement,
endorse the Note (or split the Note and assign one or more of the resulting
notes, if applicable), and assign the Mortgages (or specified mortgages) and the
other Loan Documents (if the same is so requested), without representation or
warranty by or recourse to Lender (other than representations relating to due
execution and authority), to a lender designated by Borrower, and Lender shall
execute and deliver to Borrower or such lender such instruments and other
documents as shall be reasonably necessary or appropriate, in compliance with
all applicable laws, to evidence any such assignment of the Mortgages and the
Loan, and Borrower shall reimburse Lender for all of its reasonable
out-of-pocket costs, including, but not limited to, reasonable, actual, out of
pocket legal costs and expenses incurred in connection therewith.

 

2.5.2           Release of Individual Property. Borrower may obtain the release
of an Individual Property (the Individual Property to be released is sometimes
referred to herein as the “Release Property”) from the Mortgage thereon (or at
Borrower’s option, an assignment thereof to one or more third parties) and from
the Lien of the related Loan Documents, provided that the following conditions
precedent to such release are satisfied (the “Release Conditions”): (i) Borrower
prepays the Loan in the amount of the applicable Release Amount and the
requirements and conditions of Section 2.4.2(b) are satisfied; (ii) no Event of
Default has occurred and is continuing (other than (A) a non-monetary Event of
Default that is specific to such Release Property (including without limitation,
any breach of a representation or warranty with respect to such Release
Property), (B) a default under a Ground Lease that was not caused by Borrower in
bad faith to circumvent the requirements of Section 2.5.2, so long as Borrower
has demonstrated to Lender that it has diligently in good faith pursued a cure
of such default under the related Ground Lease, or (C) a material default under
a Franchise Agreement that permits the applicable Franchisor thereunder to
terminate the Franchise Agreement and pursuant to which Lender and the
applicable Franchisor have delivered a default notice with respect to such
default provided that such default was not caused by Borrower in bad faith to
circumvent the requirements of Section 2.5.2 and has demonstrated to Lender that
it has diligently in good faith pursued a cure of such default and which Event
of Default or default would be cured as a result of the release of the Release
Property, so long as (x) the Event of Default was not caused by the intentional
act of Borrower, Guarantor or Operating Lessee and Borrower has demonstrated in
good faith to Lender that it has pursued a cure of the Event of Default, (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 release under this Section 2.5.2), Borrower gives notice to
Lender of Borrower’s intent to cure such Event of Default by obtaining the
release of the Release Property and (z) such release occurs within forty-five
(45) days following the occurrence of such Event of Default (a “Qualified
Release Property Default”)); and (iii) the following conditions are satisfied:

 

 -54-Loan Agreement

 

 

(a)          The Release Property shall be transferred and conveyed to a Person
other than Borrower or any other Loan Party, and shall be transferred and
conveyed pursuant to a bona fide all-cash sale of the Release Property to a
third party that is not an Affiliate of Borrower or of any other Loan Party on
arms-length terms and conditions unless the release of the Release Property is
effected in order to cure a Qualified Release Property Default, in which case
the applicable Individual Property may be transferred to an Affiliate of
Borrower if Borrower has delivered an Additional Insolvency Opinion with respect
thereto;

 

(b)          the following amounts shall be paid:

 

(i)          the Outstanding Principal Balance shall be prepaid by an amount
equal to the Release Amount for the applicable Individual Property, and Borrower
shall comply with the provisions and pay to Lender the amounts set forth in
Section 2.4.6 (including with respect to any prepayments made under clause (iii)
below. With respect to a Qualified Release Property Default, the Release Amount
shall be calculated by using the Release Amount Percentage in clause (b) of such
definition regardless of the Outstanding Principal Balance;

 

(ii)         concurrently with the payment of the Release Amount, each Mezzanine
Borrower shall make a partial prepayment of the related Mezzanine Loan equal to
the related Mezzanine Release Amount applicable to such Individual Property,
together with any related interest, fees, prepayment premiums or other amounts
payable under the related Mezzanine Loan Documents, if any, in connection with
such prepayment, including, to the extent required under the applicable
Mezzanine Loan Documents, interest which would have accrued on the outstanding
principal balance of the related Mezzanine Loan pursuant to the related
Mezzanine Loan Documents through the end of the interest period set forth
therein during which such prepayment occurs; and

 

 -55-Loan Agreement

 

 

(iii)        if following the application of the prepayments of the Loan and the
Mezzanine Loans described in clauses (i) and (ii) above, either (A) the Debt
Yield and Debt Yield (Mortgage Only) (calculated based on the financial
statements most recently delivered to Lender) (exclusive of the Release
Property) would be less than the minimum Debt Yield and Debt Yield (Mortgage
Only) required under clauses (d) and (e) below, respectively, and/or (B)
additional prepayments would be required to comply with respect to the REMIC
Requirements pursuant to clause (f) below (with respect to the Loan) and/or the
corresponding section of the applicable Mezzanine Loan Agreement (with respect
to the applicable Mezzanine Loan), then concurrently with and in addition to the
prepayments described in clauses (i) and (ii) above, Borrower and/or the
applicable Mezzanine Borrower(s), as applicable, shall make additional
prepayments of the Loan and/or the Mezzanine Loans, as applicable, in the
aggregate amount(s) required (x) to increase the Debt Yield and Debt Yield
(Mortgage Only) (calculated based on the financial statements most recently
delivered to Lender) (exclusive of the Release Property) to the minimum Debt
Yield and Debt Yield (Mortgage Only) required under clauses (d) and (e) below
and/or (y) to comply with the REMIC Requirements pursuant to clause (f) below
(and the corresponding provisions of the applicable Mezzanine Loan Agreements),
such excess prepayments to be allocated among the Loan and the Mezzanine Loans
first, as required to satisfy the REMIC Requirements for the Loan and/or the
applicable Mezzanine Loan(s), and next pro rata in accordance with their
respective outstanding principal balances immediately prior to such release
(such pro rata application to take into account the foregoing payments already
made to Lender (and/or any Mezzanine Lender) to satisfy the applicable REMIC
Requirements). Notwithstanding the foregoing, in connection with the sale of an
Individual Property to an unaffiliated third-party in an arms’-length
transaction (with no direct or indirect interest in such Individual Property
retained by Borrower, Guarantor, or their respective Affiliates), in the event
that following the prepayment of the Loan and Mezzanine Loan described in
clauses (i) and (ii) above, the Debt Yield and Debt Yield (Mortgage Only) are
less than the Debt Yield and Debt Yield (Mortgage Only) required under clauses
(d) and (e), Borrower shall be permitted to obtain a release of the Lien of the
related Mortgage, provided that (x) Borrower shall satisfy all of the conditions
set forth in Section 2.5.2 (other than this Section 2.5.2(b)(ii)) and (y) (i) in
lieu of paying the applicable Release Amount in connection with such release
pursuant to Section 2.5.2(b), Borrower shall pay to Lender, an amount equal to
the greater of (A) the Release Amount applicable to such Individual Property and
(B) the lesser of (I) the amount of a pro rata prepayment of the Loan and the
Mezzanine Loan in an aggregate amount equal to (x) the gross sales proceeds
actually received by Borrower from such Individual Property net of (y) all
amounts owing to Mezzanine Lender and W2007 Equity Inns Senior Mezz, LLC in
respect of such sale and any reasonable and customary closing costs associated
with the sale of such Individual Property, or (II) the amount of a pro rata
prepayment of the Loan and the Mezzanine Loans that would be necessary to, after
giving effect to the requested release of the applicable Individual Property,
satisfy the applicable Debt Yield and Debt Yield (Mortgage Only) and (ii)
Mezzanine Borrower in lieu of paying the Mezzanine Release Amount shall pay to
Mezzanine Lender, the amount required in accordance with Section 2.5.2(b)(ii) of
the Mezzanine Loan Agreement). Any such prepayment pursuant to this Section
2.5.2(b)(ii) shall be deemed a voluntary prepayment for all purposes hereunder,
including, without limitation, the payment of any applicable Spread Maintenance
Premium;

 

(c)          Borrower shall submit to Lender, not less than five (5) Business
Days prior to the date on which the prepayment will be made, a release or
assignment of the Lien of the Mortgage on the Release Property and release of
the Lien of the related Loan Documents for such Release Property for execution
by Lender. Such release or assignment shall be in a form appropriate in each
jurisdiction in which the Individual Property is located and shall contain
standard provisions satisfactory to a prudent lender acting reasonably. Any
assignments made by Lender shall be without recourse, representation or warranty
by Lender (other than representations relating to lien-free ownership, due
execution and authority) and comply with all applicable law. In addition,
Borrower shall provide all other documentation of a ministerial or
administrative nature that Lender reasonably requires to be delivered by
Borrower in connection with such release or assignment;

 

(d)          After giving effect to such release or assignment, and after the
application of any prepayments by Borrower and Mezzanine Borrowers described in
clause (b) above, except as otherwise permitted under clause (b)(iii) above, the
Debt Yield for the Properties then remaining subject to the Liens of the
Mortgages (calculated based on the financial statements most recently delivered
to Lender) shall be equal to or greater than the greater of (i) the lesser of
(x) the Debt Yield (calculated based on the financial statements most recently
delivered to Lender) (inclusive of the Release Property) immediately prior to
such release or assignment and not taking into account any prepayments described
in clause (b) above and (y) 13% and (ii) 10%; provided further that the
foregoing shall not apply to a release effected to cure a Qualified Release
Property Default;

 

 -56-Loan Agreement

 

 

(e)          After giving effect to such release or assignment, and after the
application of any prepayments by Borrower and Mezzanine Borrowers described in
clause (b) above, except as otherwise permitted under clause (b)(iii) above, the
Debt Yield (Mortgage Only) for the Properties then remaining subject to the
Liens of the Mortgages (calculated based on the financial statements most
recently delivered to Lender) shall be equal to or greater than the greater of
(i) the lesser of (x) the Debt Yield (Mortgage Only) (calculated based on the
financial statements most recently delivered to Lender) (inclusive of the
Release Property) immediately prior to such release or assignment and not taking
into account any prepayments described in clause (b) above and (y) 14.78%; and
(ii) 11.37%; provided further that the foregoing shall not apply to a release
effected to cure a Qualified Release Property Default;

 

(f)          Following such release or assignment, Borrower shall continue to be
a Special Purpose Bankruptcy Remote Entity and to comply with all provisions of
the Loan Documents pertaining to a Special Purpose Bankruptcy Remote Entity;

 

(g)          if the Loan is included in a REMIC Trust and the Aggregate LTV
exceeds or would exceed 125% immediately after giving effect to the release of
the applicable Individual Property, no release will be permitted unless the
principal balance of the Loan is prepaid by an amount not less than the greater
of (i) the Release Amount or (ii) the least of the following amounts: (A) only
if the released Individual Property is sold, the net sales proceeds of an arm’s
length sale of the released Individual Property to an unrelated Person, (B) the
fair market value of the released Individual Property as reasonably determined
by Lender at the time of the release, or (C) an amount such that the Aggregate
LTV (as so determined by Lender in accordance with this Section 2.5.2(g)) after
giving effect to the release of the applicable Individual Property is not
greater than Aggregate LTV immediately prior to such release, unless Lender, for
the benefit of Lender, receives an opinion of counsel that, if this clause (ii)
is applicable but not followed or is no longer applicable at the time of such
release, the Securitization will not fail to maintain its status as a REMIC
Trust as a result of the release of the applicable Individual Property;

 

(h)          To the extent that the Franchisor party to the Franchise Agreement
affecting such Release Property is also a Franchisor under other Franchise
Agreements and/or to the extent that the Franchise Agreement affecting such
Release Property also affects other Properties which will not be released, such
release shall not result in a default under any of such Franchise Agreements or
give the Franchisor thereunder the right to terminate any of such Franchise
Agreements, and all requisite consents to such release shall have been obtained
from the applicable Franchisor and Lender shall have received reasonably
satisfactory evidence of same (which may be demonstrated by an Officer’s
Certificate certifying to the foregoing);

 

(i)          All other conditions to the release of such Individual Property set
forth in the Mezzanine Loan Documents shall been satisfied or waived in
accordance therewith (as evidenced by an Officer’s Certificate and the delivery
to Lender of a copy of a payoff letter from the applicable Mezzanine Lender);

 

(j)          Borrower shall have paid all reasonable third-party costs and
expenses incurred by Lender and/or its Servicer in connection with any such
release or assignment and, in addition, the current reasonable and customary fee
being assessed by Lender and/or its Servicer to effect such release or
assignment, not to exceed (in the aggregate for Lender and its Servicer) $2,500;

 

 -57-Loan Agreement

 

 

(k)          Borrower shall have paid (from Available Cash distributed to
Borrower and/or from proceeds of sale of such Release Property remaining after
the payment of the Release Amount or other contributions, the Mezzanine Release
Amounts and all other amounts payable by Borrower in connection with the release
of such Release Property) to the applicable Manager (or escrowed for such
Manager’s benefit if required under the applicable Management Agreement), any
transition or termination costs or expenses, termination fees, or their
equivalent, to which such Manager is entitled in connection with the sale of
such Individual Property; and

 

(l)          For the avoidance of doubt, any release of a Release Property to
which a Qualified Release Property Default relates that is effected within
forty-five (45) days after the occurrence of such Event of Default and in
accordance with the provisions of this Section 2.5.2, shall concurrently cure
such Event of Default and, if the Loan has been accelerated, the acceleration
shall be automatically rescinded (assuming no other Event of Default shall
thereafter be continuing).

 

Any release to cure a Qualified Release Property Default and corresponding
prepayment shall be accompanied by the Spread Maintenance Premium, if
applicable. Upon the release of an Individual Property, Lender shall remit to
Borrower all amounts allocated to such Individual Property then contained in the
Accounts.

 

2.5.3           Impaired Individual Property Release. Borrower may obtain the
release of an Impaired Individual Property from the Mortgage thereon (or at
Borrower’s option, an assignment thereof to one or more third parties) and from
the Lien of the related Loan Documents, provided that the following conditions
precedent to such release are satisfied (the “Impaired Individual Property
Release Conditions”): (i) Borrower shall then be entitled to prepay the Loan
subject and pursuant to the provisions of Section 2.4.4(b) and in connection
with and as a condition to completing such release, Borrower prepays the Loan in
the amount of the applicable Impaired Individual Property Release Amount and the
other amounts and the requirements and conditions of Section 2.4.4(b) are
satisfied, and (ii) the following conditions are satisfied:

 

(a)          The Impaired Individual Property shall be transferred and conveyed
to a Person other than Borrower or any other Loan Party, provided that the
transfer may be to an Affiliate of Borrower or of another Loan Party;

 

(b)          the following amounts shall be paid:

 

(i)          the Outstanding Principal Balance shall be prepaid by an amount
equal to the Impaired Individual Property Release Amount for the applicable
Individual Property, and Borrower shall comply with the provisions and pay to
Lender the amounts set forth in Section 2.4.6 (including with respect to any
prepayments made under clause (iii) below); and

 

(ii)         concurrently with the payment of the Impaired Individual Property
Release Amount, each Mezzanine Borrower shall make a partial prepayment of the
related Mezzanine Loan equal to the related Mezzanine Impaired Individual
Property Release Amount applicable to such Impaired Individual Property,
together with any related interest including, to the extent required under the
applicable Mezzanine Loan Documents, interest which would have accrued on the
outstanding principal balance of the related Mezzanine Loan pursuant to the
related Mezzanine Loan Documents through the end of the interest period set
forth therein during which such prepayment occurs; and

 

 -58-Loan Agreement

 

 

(iii)        if following the application of the prepayments of the Loan and the
Mezzanine Loans described in clauses (i) and (ii) above, additional prepayments
would be required in order to comply with the REMIC Requirements pursuant to
clause (e) below and/or the corresponding provisions of the applicable Mezzanine
Loan Agreement(s), then concurrently with and in addition to the prepayments
described in clauses (i) and (ii) above, Borrower and/or the applicable
Mezzanine Borrower(s), as applicable, shall make additional prepayments of the
Loan and/or the applicable Mezzanine Loan(s), as applicable, in the amount(s)
required to comply with the REMIC Requirements pursuant to clause (e) below and
the corresponding provisions of the applicable Mezzanine Loan Agreement(s);

 

(c)          Borrower shall submit to Lender, not less than five (5) Business
Days prior to the date on which the prepayment will be made, a release or
assignment of the Lien of the Mortgage on the applicable Impaired Individual
Property and release of the Lien of the related Loan Documents for such Impaired
Individual Property for execution by Lender. Such release or assignment shall be
in a form appropriate in each jurisdiction in which the Impaired Individual
Property is located and shall contain standard provisions satisfactory to a
prudent lender acting reasonably. Any assignments made by Lender shall be
without recourse, representation or warranty by Lender (other than
representations relating to due execution and authority) and comply with all
applicable law. In addition, Borrower shall provide all other documentation of a
ministerial or administrative nature that Lender reasonably requires to be
delivered by Borrower in connection with such release or assignment;

 

(d)          Following such release or assignment, Borrower shall continue to be
a Special Purpose Bankruptcy Remote Entity and to comply with all provisions of
the Loan Documents pertaining to a Special Purpose Bankruptcy Remote Entity;

 

(e)          if the Loan is included in a REMIC Trust and the Aggregate LTV
exceeds or would exceed 125% immediately after giving effect to the release of
the applicable Individual Property, no release will be permitted unless the
principal balance of the Loan is prepaid by an amount not less than the greater
of (i) the Release Amount or (ii) the least of the following amounts: (A) only
if the released Individual Property is sold, the net sales proceeds of an arm’s
length sale of the released Individual Property to an unrelated Person, (B) the
fair market value of the released Individual Property as reasonably determined
by Lender at the time of the release, or (C) an amount such that the Aggregate
LTV (as so determined by Lender in accordance with this Section 2.5.3(e)) after
giving effect to the release of the applicable Individual Property is not
greater than Aggregate LTV immediately prior to such release, unless Lender, for
the benefit of Lender, receives an opinion of counsel that, if this clause (ii)
is applicable but not followed or is no longer applicable at the time of such
release, the Securitization will not fail to maintain its status as a REMIC
Trust as a result of the release of the applicable Individual Property;

 

 -59-Loan Agreement

 

 

(f)          To the extent that the Franchisor party to the Franchise Agreement
affecting such Impaired Individual Property is also a Franchisor under other
Franchise Agreements and/or to the extent that the Franchise Agreement affecting
such Impaired Individual Property also affects other Properties which will not
be released, such release shall not result in a default under any of such
Franchise Agreements or give the Franchisor thereunder the right to terminate
any of such Franchise Agreements, and all requisite consents to such release
shall have been obtained from the applicable Franchisor and Lender shall have
received reasonably satisfactory evidence of same (which may be demonstrated by
an Officer’s Certificate certifying to the foregoing);

 

(g)          All other conditions to the release of such Impaired Individual
Property set forth in the Mezzanine Loan Documents shall been satisfied or
waived in accordance therewith (as evidenced by an Officer’s Certificate and the
delivery to Lender of a copy of a payoff letter from the applicable Mezzanine
Lender); and

 

(h)          Borrower shall have paid all reasonable third-party costs and
expenses incurred by Lender and/or its Servicer in connection with any such
release or assignment and, in addition, the current reasonable and customary
fee, being assessed by Lender and/or its Servicer to effect such release or
assignment, not to exceed (in the aggregate for Lender and its Servicer) $2,500.

 

Section 2.6           Interest Rate Cap Agreement.

 

2.6.1           Interest Rate Cap Agreement. Prior to or contemporaneously with
the Closing Date, Borrower shall have obtained, and thereafter maintain in
effect (subject to Section 2.6.9), the Interest Rate Cap Agreement, which shall
have a term expiring no earlier than the last day of the Interest Period in
which the Stated Maturity Date occurs and have a notional amount which shall not
at any time be less than the Outstanding Principal Balance. The Interest Rate
Cap Agreement shall have a strike rate equal to the Strike Price.

 

2.6.2           Pledge and Collateral Assignment of Interest Rate Cap Agreement.
As security for the full and punctual payment and performance of the Obligations
when due (whether upon stated maturity, by acceleration, early termination or
otherwise), pursuant to the terms of the Assignment of Interest Rate Cap
Agreement, Borrower has pledged (or is contemporaneously herewith pledging) and
collaterally assigned (or is assigning) to Lender all of the right, title and
interest of Borrower in and to the following (collectively, the “Rate Cap
Collateral”): (i) the Interest Rate Cap Agreement; (ii) all payments,
distributions, disbursements or proceeds due, owing, payable or required to be
delivered to Borrower in respect of the Interest Rate Cap Agreement or arising
out of the Interest Rate Cap Agreement, whether as contractual obligations,
damages or otherwise; and (iii) all of Borrower’s claims, rights, powers,
privileges, authority, options, security interests, liens and remedies, if any,
under or arising out of the Interest Rate Cap Agreement, in each case including
all accessions and additions to, substitutions for and replacements, products
and proceeds of any or all of the foregoing.

 

2.6.3           Covenants.

 

(a)          Borrower shall comply with all of its obligations under the terms
and provisions of the Interest Rate Cap Agreement. All amounts paid by the
Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall
during the continuance of an Event of Default or Trigger Period be deposited
immediately into the Deposit Account. Subject to terms hereof, provided no Event
of Default has occurred and is continuing, Borrower shall be entitled to
exercise all rights, powers and privileges of Borrower under, and to control the
prosecution of all claims with respect to, the Interest Rate Cap Agreement and
the other Rate Cap Collateral. Borrower shall take all actions reasonably
requested by Lender to enforce Borrower’s rights under the 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.

 

 -60-Loan Agreement

 

 

(b)          Borrower shall defend Lender’s right, title and interest in and to
the Rate Cap Collateral pledged by Borrower pursuant to the Assignment of
Interest Rate Cap Agreement or in which it has granted a security interest
against the claims and demands of all other Persons.

 

(c)          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”, Borrower 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 Lender, Servicer or any other Person of such
downgrade, withdrawal or qualification.

 

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

 

(e)          Borrower 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 (other than the assignment made under the Loan
Documents), 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 Lender, shall forthwith be cancelled or satisfied
by an appropriate instrument in writing (except that notwithstanding anything
herein to the contrary, Borrower may sell or otherwise transfer the portion of
the Rate Cap Collateral that reflects a notional balance in excess of the
Outstanding Principal Amount following any prepayment).

 

(f)          Borrower shall not (i) without the prior written consent of Lender,
modify, amend or supplement the terms of the Interest Rate Cap Agreement, (ii)
without the prior written consent of Lender, except in accordance with the terms
of the Interest Rate Cap Agreement, cause the termination of the Interest Rate
Cap Agreement prior to its stated maturity date (other than in accordance with
Section 2.6.3(c) above), (iii) without the prior written consent of Lender,
except as aforesaid, waive or release any obligation of the Counterparty (or any
successor or substitute party to the Interest Rate Cap Agreement) under the
Interest Rate Cap Agreement, (iv) without the prior written consent of Lender,
consent or agree to any act or omission to act on the part of the Counterparty
(or any successor or substitute party to the Interest Rate Cap Agreement) which,
without such consent or agreement, would constitute a default under the Interest
Rate Cap Agreement, (v) fail to exercise promptly and diligently each and every
material right which it may have under the Interest Rate Cap Agreement, (vi)
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 the Interest Rate Cap
Agreement or any defense by the Counterparty (or any successor or substitute
party to the Interest Rate Cap Agreement) to payment or (vii) fail to give
prompt notice to Lender of any notice of default given by or to Borrower under
or with respect to the Interest Rate Cap Agreement, together with a complete
copy of such notice. If Borrower shall have received written notice that the
Securitization shall have occurred, no consent by Lender provided for in this
Section 2.6.3(f) shall be given by Lender unless Lender shall have received a
Rating Agency Confirmation.

 

 -61-Loan Agreement

 

 

(g)          In connection with an Interest Rate Cap Agreement, Borrower shall
obtain and deliver to Lender an opinion of counsel from counsel (which counsel
may be in-house counsel for the Counterparty) for the Counterparty upon which
Lender and its 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: (i) 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 Interest Rate Cap
Agreement; (ii) the execution and delivery of the 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; (iii) all consents, authorizations and
approvals required for the execution and delivery by the issuer of the Interest
Rate Cap Agreement under law or the issuer’s organizational documents, 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 (iv) the 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). If the opinion of counsel from counsel for the
Counterparty obtained and delivered does not comply with the foregoing
requirements, Lender shall have the right to approve the opinion, which approval
shall not be unreasonably withheld, conditioned or delayed.

 

2.6.4           [Reserved]

 

2.6.5           Representations and Warranties. Borrower hereby covenants with,
and represents and warrants to, Lender as follows:

 

(a)          The Interest Rate Cap Agreement constitutes the legal, valid and
binding obligation of Borrower, enforceable against Borrower 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).

 

(b)          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 Borrower has 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.

 

 -62-Loan Agreement

 

 

(c)          The Rate Cap Collateral has been duly and validly pledged pursuant
to the Assignment of Interest Rate Cap Agreement. All consents and approvals
required to be obtained by Borrower for the consummation of the transactions
contemplated by the Assignment of Interest Rate Cap Agreement have been
obtained.

 

(d)          Giving effect to the grant and assignment to Lender pursuant to the
Assignment of Interest Rate Cap Agreement, Lender has, as of the date of this
Agreement, 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 Lender 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.

 

(e)          Except for financing statements filed or to be filed in favor of
Lender as secured party, there are no financing statements under the UCC
covering any or all of the Rate Cap Collateral and Borrower shall not, without
the prior written consent of Lender, until payment in full of all of the
Obligations, execute and file in any public office, 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 Lender as secured party.

 

2.6.6           [Reserved]

 

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

 

(a)          Lender, 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
Lender 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, Borrower hereby
waiving and releasing any and all equity or right of redemption to the fullest
extent permitted by the UCC and applicable law. If all or any of the Rate Cap
Collateral is sold by Lender upon credit or for future delivery, Lender 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, Lender may resell such Rate Cap
Collateral. It is expressly agreed that Lender may exercise its rights under the
Assignment of Interest Rate Cap Agreement 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 Lender’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.

 

(b)          Lender may exercise, either by itself or by its nominee or
designee, in the name of Borrower, all of Lender’s rights, powers and remedies
in respect of the Rate Cap Collateral, under the Assignment of Interest Rate Cap
Agreement and under law.

 

 -63-Loan Agreement

 

 

(c)          Borrower hereby irrevocably, in the name of Borrower or otherwise,
authorizes and empowers Lender and assigns and transfers unto Lender, and
constitutes and appoints Lender its true and lawful attorney-in-fact, and as its
agent, irrevocably, with full power of substitution for Borrower and in the name
of Borrower, (i) to exercise and enforce every right, power, remedy, authority,
option and privilege of Borrower under the Interest Rate Cap Agreement,
including any power to subordinate or modify the Interest Rate Cap Agreement
(but not, unless an Event of Default exists and is continuing, the right to
terminate or cancel the 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 Lender the rights and
remedies provided for herein, to exercise all of the rights, remedies and powers
granted to Lender in this Agreement, and Borrower further authorizes and
empowers Lender, as Borrower’s attorney-in-fact, and as its agent, irrevocably,
with full power of substitution for Borrower and in the name of Borrower, 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 Borrower which in the opinion of Lender may be necessary or
appropriate to be given, furnished, made, exercised or taken under the Interest
Rate Cap Agreement, in order to comply therewith, to perform the conditions
thereof or to prevent or remedy any default by Borrower thereunder or to enforce
any of the rights of Borrower thereunder. These powers-of-attorney are
irrevocable and coupled with an interest, and any similar or dissimilar powers
heretofore given by Borrower in respect of the Rate Cap Collateral to any other
Person are hereby revoked.

 

(d)          Lender may, without notice to, or assent by, Borrower or any other
Person (to the extent permitted by law), but without affecting any of the
Obligations, in the name of Borrower or in the name of Lender, notify the
Counterparty, or if applicable, any other counterparty to the Interest Rate Cap
Agreement, to make payment and performance directly to Lender; 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 Borrower,
or claims of Borrower, under the Interest Rate Cap Agreement; file any claims,
commence, maintain or discontinue any actions, suits or other proceedings deemed
by Lender necessary or advisable for the purpose of collecting upon or enforcing
the Interest Rate Cap Agreement; and execute any instrument and do all other
things deemed necessary and proper by Lender to protect and preserve and realize
upon the Rate Cap Collateral and the other rights contemplated hereby.

 

(e)          Pursuant to the powers-of-attorney provided for above, Lender 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 Lender shall not be permitted to take any action pursuant to said
power-of-attorney that would conflict with any limitation on Lender’s rights
with respect to the Rate Cap Collateral. Without limiting the generality of the
foregoing, Lender, 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 Borrower
representing: (i) any payment of obligations owed pursuant to the Interest Rate
Cap Agreement, (ii) interest accruing on any of the Rate Cap Collateral or (iii)
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 Borrower, 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.

 

 -64-Loan Agreement

 

 

(f)          Lender may exercise all of the rights and remedies of a secured
party under the UCC.

 

(g)          Without limiting any other provision of this Agreement or the
Assignment of Interest Rate Cap Agreement, or any of Borrower’s rights hereunder
under the Assignment of Interest Rate Cap Agreement, and without waiving or
releasing Borrower from any obligation or default hereunder under the Assignment
of Interest Rate Cap Agreement, Lender 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 or the Assignment of Interest Rate Cap Agreement, to cure such Event
of Default or to cause any term, covenant, condition or obligation required
under this Agreement, the Assignment of Interest Rate Cap Agreement or the
Interest Rate Cap Agreement to be performed or observed by Borrower to be
promptly performed or observed on behalf of Borrower. All amounts advanced by,
or on behalf of, Lender in exercising its rights under this Section 2.6.7(g)
(including, but not limited to, 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 Borrower to Lender
upon demand and shall be secured by this Agreement.

 

2.6.8           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 Borrower, shall be required in connection with any sale or
other disposition of all or any part of the Rate Cap Collateral, except that
Lender shall give Borrower at least thirty (30) Business 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
Borrower hereby agrees is reasonable, all other demands, advertisements and
notices being hereby waived. To the extent permitted by law, Lender 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
Lender 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, Lender (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 Borrower, 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
in lieu of cash or any other obligations. In the case of all sales of the Rate
Cap Collateral, public or private, Borrower shall pay all reasonable 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, Lender
shall apply any residue to the payment of the Obligations in the order of
priority as set forth in this Agreement.

 

2.6.9           Public Sales Not Possible. Borrower acknowledges 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, Borrower
agrees that private sales of the Rate Cap Collateral under the Assignment of
Interest Rate Cap Agreement shall not be deemed to have been made in a
commercially unreasonably manner by mere virtue of having been made privately.

 

 -65-Loan Agreement

 

 

2.6.10         Receipt of Sale Proceeds. Upon any sale of the Rate Cap
Collateral by Lender under the Assignment of Interest Rate Cap Agreement
(whether by virtue of the power of sale herein granted, pursuant to judicial
process or otherwise), the receipt by Lender 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 Lender or such officer or be answerable in any way for the
misapplication or non-application thereof.

 

2.6.11         Replacement Interest Rate Cap Agreement. If, in connection with
Borrower’s exercise of any Extension Option pursuant to Section 2.7 hereof,
Borrower delivers a Replacement Interest Rate Cap Agreement, all the provisions
of this Section 2.6 applicable to the Interest Rate Cap Agreement delivered on
the Closing Date shall be applicable to the Replacement Interest Rate Cap
Agreement, and in connection with the delivery of the Replacement Interest Rate
Cap Agreement, Borrower shall enter into a replacement collateral assignment of
such Replacement Interest Rate Cap Agreement, which collateral assignment shall
be in the same form as the Assignment of Interest Rate Cap Agreement.

 

Section 2.7           Extension Options.

 

2.7.1           Extension Options. Subject to the provisions of this Section
2.7, Borrower shall have the option (the “First Extension Option”), by written
notice (the “First Extension Notice”) delivered to Lender no later than ten (10)
days prior to the Initial Stated Maturity Date, to extend the Maturity Date to
May 1, 2020 (the “First Extended Maturity Date”, and such extended term, the
“First Extended Term”). In the event Borrower shall have exercised the First
Extension Option, Borrower shall have the option (the “Second Extension
Option”), by written notice (the “Second Extension Notice”) delivered to Lender
no later than ten (10) days prior to the First Extended Maturity Date, to extend
the First Extended Maturity Date to May 1, 2021 (the “Second Extended Maturity
Date”, and such extended term, the “Second Extended Term”). In the event
Borrower shall have exercised each of the First Extension Option and the Second
Extension Option, Borrower shall have the option (the “Third Extension Option”),
by written notice (the “Third Extension Notice”) delivered to Lender no later
than ten (10) days prior to the Second Extended Maturity Date, to extend the
Second Extended Maturity Date to May 1, 2022 (the “Third Extended Maturity
Date”, and such extended term, the “Third Extended Term”). The First Extension
Notice shall be revocable at any time and for any reason by Borrower prior to
the Initial Stated Maturity Date, the Second Extension Notice shall be revocable
at any time and for any reason by Borrower prior to the then First Extended
Maturity Date and the Third Extension Notice shall be revocable at any time and
for any reason by Borrower prior to the then Second Extended Maturity Date, but
Borrower shall pay Lender’s actual out-of-pocket expenses incurred in connection
with such revocation (excluding breakage costs). Borrower’s right to so extend
the Maturity Date shall be subject to the satisfaction of the following
conditions precedent prior to each extension hereunder:

 

(a)          (i) no Event of Default shall have occurred and be continuing on
the date Borrower delivers the First Extension Notice, the Second Extension
Notice or the Third Extension Notice, as applicable, and (ii) no Event of
Default shall have occurred and be continuing on the Initial Stated Maturity
Date, the First Extended Maturity Date or the Second Extended Maturity Date, as
applicable;

 

 -66-Loan Agreement

 

 

(b)          Borrower shall (i) obtain and deliver to Lender on the first day of
the term of the Loan as extended, one or more Replacement Interest Rate Cap
Agreements from an Approved Counterparty, in a notional amount equal to the
Outstanding Principal Balance as of the first day of the applicable Extended
Term, which Replacement Interest Rate Cap Agreement(s) shall be (A) effective
for the period commencing on the day immediately following the then applicable
Maturity Date (prior to giving effect to the applicable Extension Option) and
ending on the last day of the Interest Period in which the applicable extended
Maturity Date occurs and (B) otherwise on same terms set forth in Section 2.6,
(ii) execute and deliver an Acknowledgement with respect to each such
Replacement Interest Rate Cap Agreement, and (iii) execute and deliver a
collateral assignment of the Replacement Interest Rate Cap Agreement, in the
form of the Assignment of Interest Rate Cap Agreement;

 

(c)          Borrower shall cause a Counterparty Opinion to be delivered with
respect to the Replacement Interest Rate Cap Agreement and the related
Acknowledgment;

 

(d)          all amounts then due and payable (beyond the expiration of any
applicable notice and cure periods) by Borrower pursuant to this Agreement or
the other Loan Documents as of the Initial Stated Maturity Date, the First
Extended Maturity Date or the Second Extended Maturity Date, as applicable, and
all out-of-pocket costs and expenses of Lender, including reasonable fees and
expenses of Lender’s outside counsel, in connection with the applicable
extension of the Term shall have been paid in full;

 

(e)          with respect to the exercise of the Third Extension Option, each
Component Spread or Component Prime Rate Spread, as applicable, shall be
increased by 0.25% commencing on the day immediately following the Second
Extended Maturity Date;

 

(f)          if the Class A Member shall not have acquired the Class B Member’s
Interest (as defined in that certain Second Amendment and Restated Limited
Liability Company Agreement of HIT Portfolio I Holdco, LLC, dated as of the date
hereof (the “Holdco LLC Agreement”)) pursuant to the buy/sell set forth in the
Holdco LLC Agreement, the Class A Member shall have been redeemed in full in
accordance with the terms of the Holdco LLC Agreement; and

 

(g)          Each Mezzanine Borrower whose Mezzanine Loan has not theretofore
been repaid in full shall have (i) timely exercised the extension option to
extend the applicable Mezzanine Loan, and (ii) been entitled pursuant to the
terms of the applicable Mezzanine Loan Documents to exercise such extension
option.

 

If Borrower is unable to satisfy all of the foregoing conditions within the
applicable time frames for each, Lender shall have no obligation to extend the
Maturity Date.

 

 -67-Loan Agreement

 

 

2.7.2           Intentionally Omitted.

 

Section 2.8           Regulatory Change; Taxes.

 

2.8.1           Increased Costs. If as a result of any Regulatory Change or
compliance of Lender therewith, Lender or the company Controlling Lender shall
be subject to (i) Special Taxes (other than (A) Indemnified Taxes, which shall
be solely covered by 2.8.2, (B) Other Taxes, which shall be solely covered by
2.9.3, (C) Connection Income Taxes and (D) Special Taxes described in clauses
(b) through (f) of the definition of Excluded Taxes); or (ii) any reserve,
special deposit or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities, of Lender or any
company Controlling Lender is imposed, modified or deemed applicable; or (iii)
any other condition affecting loans to borrowers subject to LIBOR-based interest
rates is imposed on Lender or any company Controlling Lender and Lender
determines that, by reason thereof, the cost to Lender or any company
Controlling Lender of making, maintaining or extending the Loan to Borrower is
increased, or any amount receivable by Lender or any company Controlling Lender
hereunder in respect of any portion of the Loan to Borrower is reduced, in each
case by an amount deemed by Lender in good faith to be material (such increases
in cost and reductions in amounts receivable being herein called “Increased
Costs”), then Lender shall provide notice thereof to Borrower and Borrower
agrees that it will pay to Lender upon Lender’s written request such additional
amount or amounts as will compensate Lender or any company Controlling Lender
for such Increased Costs to the extent Lender determines that such Increased
Costs are allocable to the Loan. If Lender requests compensation under this
Section 2.8.1, Lender shall, if requested by notice by Borrower to Lender,
furnish to Borrower a statement setting forth the basis for requesting such
compensation and the method for determining the amount thereof. Notwithstanding
anything contained herein to the contrary, Borrower shall not be required to
compensate Lender pursuant to this Section 2.8.1 for any Increased Costs
actually paid by Lender more than one hundred eighty (180) days prior to the
date that Lender notifies Borrower of the change in any applicable Regulatory
Change giving rise to such Increased Costs and of Lender’s intention to claim
compensation or reimbursement therefor. Notwithstanding anything contained in
this Section 2.8.1 to the contrary, Lender shall not be permitted to make a
claim against Borrower under this Section 2.8.1 unless Lender is making similar
claims against other borrowers of Lender to the extent such borrowers are
similarly situated as Borrower after consideration of such factors as Lender
then reasonably determines to be relevant. Notwithstanding anything contained
herein to the contrary, if pursuant to this Section 2.8.1, Increased Costs are
payable, or will be payable, by Borrower, Borrower may, at its option and upon
not less than fifteen (15) days’ prior notice to Lender (which notice shall be
delivered to Lender no later than fifteen (15) days after Lender’s delivery to
Borrower of the above-referenced certificate regarding the payment of such
Increased Costs), prepay the Loan in whole, together with the amount of any such
Increased Costs that have at such time already been incurred by or paid by
Lender, any applicable Spread Maintenance Premium (if such prepayment occurs
prior to or on the Spread Maintenance Date) and all other amounts due and
payable under Section 2.4.6 in connection with such prepayment. Notwithstanding
anything to the contrary herein, no amount shall be payable to a Lender under
this Section 2.8.1 during the period in which the Loan is included in a
Securitization.

 

 -68-Loan Agreement

 

 

2.8.2           Special Taxes. Borrower shall make all payments hereunder free
and clear of and without deduction for Special Taxes, except as required by
applicable law. If Borrower shall be required by law to deduct any Indemnified
Taxes from or in respect of any sum payable hereunder or under any other Loan
Document to Lender, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.8.2) Lender receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law. Notwithstanding anything contained herein to the contrary, if
pursuant to this Section 2.8.2, Borrower is, or will be, required to increase
any payment to Lender on account of Indemnified Taxes, Borrower may, at its
option and upon not less than fifteen (15) days’ prior notice to Lender (which
notice shall be delivered to Lender no later than fifteen (15) days after
Lender’s delivery to Borrower of written notice regarding the increase of
payments to Lender on account of Indemnified Taxes), prepay the Loan in whole,
together with the amount of any such Indemnified Taxes that have at such time
already been incurred by or paid by Lender, any applicable Spread Maintenance
Premium (if such prepayment occurs prior to or on the Spread Maintenance Date)
and all other amounts due and payable under Section 2.4.6 in connection with
such prepayment. Notwithstanding anything to the contrary herein, no amount
shall be payable to a Lender under this Section 2.8.2 during the period in which
the Loan is included in a Securitization.

 

2.8.3           Other Taxes. In addition, Borrower agrees to pay any present or
future stamp or documentary taxes or other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, or the Loan other than such taxes, charges
or levies arising from any transfer by Lender pursuant to Article IX or a change
to the organizational structure of the Loan Parties and/or any of their
Affiliates requested by Lender in connection with the exercise of its rights
pursuant to Article IX (hereinafter referred to as “Other Taxes”).

 

2.8.4           Tax Refund. If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Special Taxes as
to which it has been indemnified pursuant to Section 2.8.2 (including by the
payment of additional amounts pursuant to Section 2.8.2), 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 Special Taxes
giving rise to such refund), net of all out-of-pocket expenses (including
Special 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
Section 2.8.4 (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 Section 2.8.4, in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
Section 2.8.4 the payment of which would place the indemnified party in a less
favorable net after-tax position than the indemnified party would have been in
if the Special 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 Special Tax had never been
paid. This paragraph shall not be construed to require any indemnified party to
make available its Special Tax returns (or any other information relating to its
Special Taxes that it deems confidential) to the indemnifying party or any other
Person.

 

2.8.5           Change of Office. To the extent that changing the jurisdiction
of Lender’s applicable office would have the effect of minimizing Indemnified
Taxes, Other Taxes or Increased Costs, Lender shall at the request of Borrower
use commercially reasonable efforts to make such a change, provided that same
would not otherwise be disadvantageous (as reasonably determined by Lender) or
involve any unreimbursed expense to Lender.

 

 -69-Loan Agreement

 

 

Section 2.9           Letters of Credit.

 

(a)          All Letters of Credit delivered to Lender in connection with this
Loan shall be held as collateral and additional security for the payment of the
Debt. Upon the occurrence and during the continuance of an Event of Default,
Lender shall have the right, at its option, to draw on all or any portion of any
such Letter of Credit and to apply such amount drawn to payment of the Debt in
such order, proportion or priority as Lender may determine. Any such application
to the Debt before or on the Spread Maintenance Date after an Event of Default
shall be subject to the Spread Maintenance Premium, if any, applicable thereto.
On the Maturity Date, if the Debt has not otherwise been paid in full, any or
all of such Letters of Credit may be applied to reduce the Debt.

 

(b)          With respect to any Letter of Credit delivered to Lender in
connection with this Loan, such Letter of Credit must be accompanied by an
instrument reasonably acceptable to Lender whereby the applicant/obligor under
such Letter of Credit shall have waived all rights of subrogation against
Borrower thereunder until the Debt has been paid in full. Borrower shall also
pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in
connection therewith. Neither Borrower nor the applicant/obligor under the
Letter of Credit shall be entitled to draw upon the Letter of Credit.

 

(c)          In addition to any other right Lender may have to draw upon any
Letter of Credit pursuant to the terms and conditions of this Agreement, Lender
shall have the additional rights to draw in full any Letter of Credit: (i) with
respect to any evergreen Letter of Credit, if Lender has received a notice from
the issuing bank that the applicable Letter of Credit will not be renewed and a
substitute Letter of Credit is not provided at least thirty (30) days prior to
the date on which the outstanding Letter of Credit is scheduled to expire; (ii)
with respect to any Letter of Credit with a stated expiration date, if Lender
has not received a notice from the issuing bank that it has renewed the Letter
of Credit at least thirty (30) days prior to the date on which such Letter of
Credit is scheduled to expire and a substitute Letter of Credit is not provided
at least ten (10) Business Days prior to the date on which the outstanding
Letter of Credit is scheduled to expire; (iii) upon receipt of notice from the
issuing bank that the Letter of Credit will be terminated (except if the
termination of such Letter of Credit is permitted pursuant to the terms and
conditions of this Agreement or a substitute Letter of Credit is provided at
least ten (10) Business Days prior to such termination); or (iv) if Lender has
received notice that the bank issuing the Letter of Credit shall cease to be an
Approved Bank and Borrower shall not have replaced such Letter of Credit with a
Letter of Credit issued by an Approved Bank within ten (10) Business Days after
notice thereof. Notwithstanding anything to the contrary contained in the above,
Lender is not obligated to draw any Letter of Credit upon the happening of an
event specified in (i), (ii), (iii) or (iv) above and shall not be liable for
any losses sustained by Borrower or applicable/obligor due to the insolvency of
the bank issuing the Letter of Credit if Lender has not drawn the applicable
Letter of Credit.

 

Article 3

REPRESENTATIONS AND WARRANTIES

 

Section 3.1           Borrower Representations. Borrower and Operating Lessee
each represents and warrants that, except to the extent (if any) disclosed on
Schedule IV hereto with reference to a specific subsection of this Section 3.1:

 

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3.1.1           Organization; Special Purpose. Each of Borrower, Operating
Lessee and each SPC Party is duly organized, validly existing and in good
standing with full power and authority to own its assets and conduct its
business, and is duly qualified and in good standing in all jurisdictions in
which the ownership or lease of its property or the conduct of its business
requires such qualification, and each of Borrower and Operating Lessee has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement and the other Loan Documents by it, and has the power and
authority to execute, deliver and perform under this Agreement, the other Loan
Documents and all the transactions contemplated hereby. Each of Borrower,
Operating Lessee and each SPC Party is, and at all times since the date of its
formation has been (but only to the extent that the applicable requirements set
forth in Schedule V speak of a time prior to the Closing Date), a Special
Purpose Bankruptcy Remote Entity. Borrower has provided Lender with true,
correct and complete copies of Borrower’s, Operating Lessee’s and each SPC
Party’s current (and since the date of its inception) organizational documents.

 

3.1.2           Proceedings; Enforceability. This Agreement and the other Loan
Documents have been duly authorized, executed and delivered by Borrower and
Operating Lessee and constitute a legal, valid and binding obligation of
Borrower and Operating Lessee, enforceable against Borrower and Operating Lessee
in accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by Borrower, Operating
Lessee, any SPC Party or any Guarantor including the defense of usury, nor would
the operation of any of the terms of the Loan Documents, or the exercise of any
right thereunder, render the Loan Documents unenforceable, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally,
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), and none of Borrower,
Operating Lessee, any SPC Party or any Guarantor have asserted any right of
rescission, set-off, counterclaim or defense with respect thereto.

 

3.1.3           No Conflicts. The execution and delivery of this Agreement and
the other Loan Documents by Borrower and Operating Lessee and the performance of
their respective Obligations hereunder and thereunder will not conflict with any
provision of any law or regulation to which Borrower or Operating Lessee is
subject, or conflict with, result in a breach of, or constitute a default under,
any of the terms, conditions or provisions of any of Borrower’s or Operating
Lessee’s organizational documents or any agreement or instrument to which
Borrower or Operating Lessee is a party or by which it is bound, or any order or
decree applicable to Borrower, or result in the creation or imposition of any
Lien on any of Borrower’s or Operating Lessee’s assets or property (other than
pursuant to the Loan Documents) (unless consents from all applicable parties
thereto have been obtained by Borrower and/or Operating Lessee, as applicable).

 

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3.1.4           Litigation. There is no action, suit, proceeding or
investigation pending or, to Borrower’s and Operating Lessee’s knowledge,
threatened in writing against Borrower, Operating Lessee, any SPC Party, any
Guarantor, Manager (but only as it relates to any Individual Property) or any
Individual Property in any court or by or before any other Governmental
Authority which, if adversely determined, is reasonably likely to materially and
adversely affect the condition (financial or otherwise) or business of Borrower
or Operating Lessee (including the ability of Borrower or Operating Lessee to
carry out the transactions contemplated by this Agreement), such SPC Party, any
Guarantor (including the ability of any Guarantor to perform its obligations
under the Guaranty), Manager (but only as it relates to any Individual Property,
including such Manager’s ability to perform its obligations under any Management
Agreement) or the condition or ownership of such Individual Property.

 

3.1.5           Agreements. Neither Borrower nor Operating Lessee is a party to
any agreement or instrument or subject to any restriction which might materially
and adversely affect Borrower, Operating Lessee or any Individual Property, or
Borrower’s or Operating Lessee’s business, properties or assets, operations or
condition, financial or otherwise. Neither Borrower nor Operating Lessee is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Permitted Encumbrance or any other
agreement or instrument to which it is a party or by which it or any Individual
Property is bound, or with respect to any order or decree of any court or any
order, regulation or demand of any Governmental Authority, which default
(individually or when aggregated with any and all such defaults) is reasonably
likely to have consequences that would materially and adversely affect the
condition (financial or other) or operations of Borrower, Operating Lessee or
any Individual Property or is reasonably likely to have consequences that would
materially and adversely affect its performance hereunder.

 

3.1.6           Consents. No consent, approval, authorization or order of any
court or Governmental Authority is required for the execution, delivery and
performance by Borrower or Operating Lessee of this Agreement or the other Loan
Documents or the consummation of the transactions contemplated hereby, other
than those which have been obtained by Borrower or Operating Lessee.

 

3.1.7           Property; Title.

 

(a)          Borrower has good, marketable and insurable fee simple or leasehold
title to the real property comprising part of each Individual Property and good
title to the balance of such Individual Property owned by it, free and clear of
all Liens whatsoever except the Permitted Encumbrances. Each Mortgage, when
properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, first priority, perfected Lien on Borrower’s
and Operating Lessee’s respective interest in the applicable Individual
Property, subject only to Permitted Encumbrances, and (ii) perfected security
interests in and to, and perfected collateral assignments of, all personalty
(including the Leases), all in accordance with the terms thereof, in each case
subject only to the Permitted Encumbrances. Except for Permitted Encumbrances,
there are no mechanics’, materialman’s or other similar Liens or claims which
have been filed for work, labor or materials affecting any Individual Property
which are or may be Liens prior to, or equal or coordinate with, the Lien of the
applicable Mortgage. None of the Permitted Encumbrances, individually or in the
aggregate, (a) materially interfere with the benefits of the security intended
to be provided by each Mortgage and this Agreement, (b) materially and adversely
affect the value of any Individual Property, (c) materially impair the use or
operations of any Individual Property (as currently used), or (d) impair
Borrower’s ability to pay its Obligations in a timely manner.

 

 -72-Loan Agreement

 

 

(b)          All transfer taxes, deed stamps, intangible taxes or other amounts
in the nature of transfer taxes required to be paid under applicable Legal
Requirements in connection with the transfer of Properties to Borrower have been
paid or are being paid simultaneously herewith. All mortgage, mortgage
recording, stamp, intangible or other similar tax required to be paid under
applicable Legal Requirements in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including the Mortgages, have been paid or are being paid
simultaneously herewith. All taxes and governmental assessments due and owing in
respect of the Properties have been paid, or an escrow of funds in an amount
sufficient to cover such payments has been established hereunder or are insured
against by the Title Insurance Policy.

 

(c)          Each Individual Property is comprised of one (1) or more parcels
which constitute separate tax lots and do not constitute a portion of any other
tax lot not a part of such Individual Property.

 

(d)          No Condemnation or other proceeding has been commenced or, to
Borrower’s or Operating Lessee’s knowledge, is contemplated with respect to all
or any portion of such Individual Property or for the relocation of roadways
providing access to any Individual Property.

 

(e)          To Borrower’s and Operating Lessee’s knowledge, there are no
pending or proposed special or other assessments for public improvements or
otherwise affecting any Individual Property, nor are there any contemplated
improvements to any Individual Property that may result in such special or other
assessments.

 

3.1.8           ERISA; No Plan Assets. As of the date hereof and throughout the
Term (i) neither Borrower, Operating Lessee nor any Guarantor nor any ERISA
Affiliate sponsors, or is obligated to contribute to, an “employee benefit
plan,” as defined in Section 3(3) of ERISA, that is subject to Title IV of
ERISA, Section 303 of ERISA or Section 412 of the Code, (ii) none of the assets
of Borrower, Operating Lessee or any Guarantor constitutes or will constitute
“plan assets” within the meaning of 29 C.F.R. Section 2510.3-101 as modified in
operation by Section 3(42) of ERISA, (iii) neither Borrower, Operating Lessee
nor any Guarantor is or will be a “governmental plan” within the meaning of
Section 3(32) of ERISA, and (iv) neither Borrower, Operating Lessee nor any
Guarantor are subject to state statutes regulating investment of, and fiduciary
obligations with respect to, governmental plans. As of the date hereof, neither
Borrower, Operating Lessee, nor any ERISA Affiliate maintains, sponsors or
contributes to or has any obligations with respect to a “defined benefit plan”
(within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan”
(within the meaning of Section 3(37)(A) of ERISA). Neither Borrower nor
Operating Lessee has engaged in any transaction in connection with which it
could be subject to either a material civil penalty assessed pursuant to the
provisions of Section 502 of ERISA or a material tax imposed under the
provisions of Section 4975 of the Code.

 

 -73-Loan Agreement

 

 

3.1.9           Compliance. Except as expressly set forth on Schedule IV hereto,
Borrower, Operating Lessee and each Individual Property (including, but not
limited to the Improvements) and the use thereof comply in all material respects
with all applicable Legal Requirements (except as disclosed in the environmental
reports or zoning reports provided to Lender on or prior to the Closing Date),
including parking, building and zoning and land use laws, ordinances,
regulations and codes, except for de minimis non-compliance that would not
reasonably be likely to have a material adverse effect on the applicable
Individual Property or the use or operation thereof or on Borrower or Operating
Lessee. Borrower, Operating Lessee and to Borrower’s and Operating Lessee’s
knowledge, any other Person in occupancy of or involved with the operation or
use of the Properties has not committed, any act which may give any Governmental
Authority the right to cause Borrower or Operating Lessee to forfeit any
Individual Property or any part thereof or any monies paid in performance of
Borrower’s Obligations under any of the Loan Documents. Each Individual Property
is used exclusively for the operation of a hotel and other appurtenant and
related uses. To Borrower’s and Operating Lessee’s knowledge, in the event that
all or any part of the Improvements are destroyed or damaged, said Improvements
can be legally reconstructed to their condition prior to such damage or
destruction, and thereafter exist for the same use without violating any zoning
or other ordinances applicable thereto and without the necessity of obtaining
any variances or special permits, subject to customary rebuildability statutes
in the applicable jurisdictions. No legal proceedings are pending or, to the
knowledge of Borrower and Operating Lessee, threatened with respect to the
zoning of any Individual Property. Neither the zoning nor any other right to
construct, use or operate each Individual Property is in any way dependent upon
or related to any property other than such Individual Property, other than
pursuant to any REA. To the Borrower’s and Operating Lessee’s knowledge, all
material certifications, permits, licenses and approvals, including without
limitation, certificates of completion, occupancy permits and any applicable
liquor licenses required of Borrower and/or Operating Lessee for the legal use,
occupancy and operation of each Individual Property for its current use
(collectively, the “Licenses”), have been obtained and are in full force and
effect. The use being made of each Individual Property is in conformity with the
certificate of occupancy issued for such individual Property and all other
restrictions, covenants and conditions affecting such Individual Property.

 

3.1.10         Financial Information. All financial data, including the
statements of financial condition and statements of cash flows and income and
operating expense, that have been delivered to Lender connection with the Loan,
(i) are true, complete and correct in all material respects, (ii) accurately
represent the financial condition of each Individual Property as of the date of
such reports (subject to year-end adjustments), and (iii) have been prepared in
accordance with the Uniform System of Accounts and reconciled in accordance with
GAAP (or otherwise in accordance with an Acceptable Accounting Method)
throughout the periods covered. Except for Permitted Encumbrances, neither
Borrower nor Operating Lessee has any material contingent liabilities,
liabilities for delinquent taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known
to Borrower or Operating Lessee and reasonably likely to have a materially
adverse effect on any Individual Property or the operation thereof, except as
referred to or reflected in said financial statements. Since the date of the
financial statements, there has been no material adverse change in the financial
condition, operations or business of Borrower, Operating Lessee or any
Individual Property from that set forth in said financial statements.

 

3.1.11         Utilities and Public Access. Each Individual Property has rights
of access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service such Individual Property for its intended
uses. All public utilities necessary or convenient to the full use and enjoyment
of each Individual Property are located in the public right-of-way abutting such
Individual Property (which utilities are connected so as to serve such
Individual Property without passing over other property) or are in recorded,
irrevocable easements serving such Individual Property and such easements are
set forth in and insured by the Title Insurance Policies. All roads necessary
for the use of each Individual Property for its current purpose have been
completed and dedicated to public use and accepted by all Governmental
Authorities.

 

 -74-Loan Agreement

 

 

3.1.12         Assignment of Leases. The Assignment of Leases creates a valid
assignment of, or a valid security interest in, certain rights under the Leases,
subject only to a license granted to Borrower and Operating Lessee to exercise
certain rights and to perform certain obligations of the lessor under the
Leases, including the right to operate each Individual Property. No Person other
than Lender has any interest in or assignment of the Leases or any portion of
the Rent or other Gross Revenue from the Properties.

 

3.1.13         Insurance. Borrower has obtained and maintains all Policies
reflecting and satisfying the insurance coverages, amounts and other
requirements set forth in this Agreement and has delivered to Lender
certificates evidencing the insurance provided pursuant to the Policies. No
material claims are currently pending, outstanding or otherwise remain
unsatisfied under any Policy which would reasonably be expected to have a
material adverse effect on Borrower or Operating Lessee and neither Borrower,
Operating Lessee nor, to Borrower’s and Operating Lessee’s knowledge, any other
Person has done, by act or omission, anything which would impair the coverage of
any of the Policies.

 

3.1.14         Flood Zone. None of the Improvements on any Individual Property
is located in an area identified by the Federal Emergency Management Agency as a
special flood hazard area, or, if so located the flood insurance required
pursuant to Section 5.1.1(a) hereof is in full force and effect with respect to
such Individual Property.

 

3.1.15         Physical Condition. To Borrower’s and Operating Lessee’s
knowledge, except as may be expressly set forth in the applicable Physical
Conditions Report, each Individual Property, including 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 Borrower’s and Operating Lessee’s knowledge, and
except as expressly disclosed in any Physical Conditions Report, there exists no
structural or other material defects or damages in such Individual Property,
whether latent or otherwise, and neither Borrower nor Operating has received
notice from any insurance company or bonding company of any defects or
inadequacies in such Individual Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or any termination or threatened
termination of any policy of insurance or bond.

 

3.1.16         Boundaries. Except as disclosed on the applicable Surveys, all of
the Improvements which were included in determining the appraised value of each
Individual Property lie wholly within the boundaries and building restriction
lines of such Individual Property, and no improvements on adjoining properties
encroach upon such Individual Property, and no easements or other encumbrances
affecting such Individual Property encroach upon any of the Improvements, so as
(in each of the foregoing cases) to materially and adversely affect the value or
marketability of such Individual Property, except those which are set forth on
the applicable Survey and insured against by the applicable Title Insurance
Policy.

 

 -75-Loan Agreement

 

 

3.1.17         Leases. The rent roll attached hereto as Schedule XI is true,
complete and correct in all material respects and no Individual Property is
subject to any Leases other than the Leases described on Schedule XI. Either
Borrower or Operating Lessee is the owner and lessor of landlord’s interest in
the Leases. No Person has any possessory interest in any Individual Property or
right to occupy the same except under and pursuant to the provisions of the
Leases (other than typical short-term occupancy rights of hotel guests). The
Leases identified on Schedule XI are in full force and effect and there are no
material defaults thereunder by Borrower, Operating Lessee or, to Borrower’s and
Operating Lessee’s knowledge, the other party beyond any applicable notice or
cure period (except as disclosed on Schedule XI), and, to Borrower’s and
Operating Lessee’s knowledge, there are no conditions that, with the passage of
time or the giving of notice, or both, would constitute defaults thereunder. The
copies of the Leases delivered to Lender are true and complete, and there are no
oral agreements with respect thereto. No Rent relating to the Leases (including
security deposits) has been paid more than one (1) month in advance of its due
date. All work to be performed by Borrower or Operating Lessee under each Lease
has been performed as required and has been accepted by the applicable tenant.
Any payments, free rent, partial rent, rebate of rent or other payments,
credits, allowances or abatements required to be given by Borrower or Operating
Lessee to any tenant has already been received by such tenant except as
otherwise set forth on Schedule XI. The tenants under the Leases have accepted
possession of and are in occupancy of all of their respective demised Individual
Property and have commenced the payment of full, unabated rent under the Leases.
Borrower or Operating Lessee has delivered to Lender a true, correct and
complete list of all security deposits made by tenants at the Properties which
have not been applied (including accrued interest thereon), all of which are
held by Borrower or Operating Lessee in accordance with the terms of the
applicable Lease and applicable Legal Requirements. To Borrower’s and Operating
Lessee’s knowledge, each tenant is free from bankruptcy or reorganization
proceedings. No tenant under any Lease (or any sublease) is an Affiliate of
Borrower or Operating Lessee. To Borrower’s and Operating Lessee’s knowledge,
the tenants under the Leases are open for business and paying full, unabated
rent. There are no brokerage fees or commissions due and payable in connection
with the leasing of space at any Individual Property, except as set forth on
Schedule XI. There has been no prior sale, transfer or assignment, hypothecation
or pledge of any Lease or of the Rents relating thereto or other Gross Revenue
received therein which will be outstanding following the funding of the Loan
(other than to Lender). No tenant listed on Schedule XI has assigned its Lease
or sublet all or any portion of the premises demised thereby, no such tenant
holds its leased premises under assignment or sublease, nor, to Borrower’s and
Operating Lessee’s knowledge, does anyone except such tenant and its employees,
guests and invitees occupy such leased premises. No tenant under any Lease has a
right or option pursuant to such Lease or otherwise to purchase all or any part
of the leased premises or the building of which the leased premises are a part.
No tenant under any Lease has any right or option for additional space in the
Improvements, except as disclosed on Schedule XI.

 

3.1.18         Tax Filings. To the extent required by law, each of Borrower and
Operating Lessee have filed (or has obtained effective extensions for filing)
all federal, state, commonwealth, district and local tax returns required to be
filed and has paid or made adequate provision for the payment of all federal,
state, commonwealth, district and local taxes, charges and assessments payable
by Borrower or Operating Lessee. Each of Borrower’s and Operating Lessee’s tax
returns (if any) properly reflect the income and taxes of Borrower and Operating
Lessee for the periods covered thereby, subject only to reasonable adjustments
required by the Internal Revenue Service or other applicable tax authority upon
audit.

 

 -76-Loan Agreement

 

 

3.1.19         No Fraudulent Transfer. Neither Borrower nor Operating Lessee
(i) has entered into the transaction or any Loan Document with the actual intent
to hinder, delay, or defraud any creditor, and (ii) received reasonably
equivalent value in exchange for its Obligations under the Loan Documents.
Giving effect to the Loan, the fair saleable value of each of Borrower’s and
Operating Lessee’s respective assets exceeds and will, immediately following the
making of the Loan, exceed Borrower’s and Operating Lessee’s respective total
liabilities, including subordinated, unliquidated, disputed and contingent
liabilities. The fair saleable value of Borrower’s and Operating Lessee
respective assets is, and immediately following the making of the Loan, will be,
greater than Borrower’s and Operating Lessee’s respective probable liabilities,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured. Borrower’s and Operating Lessee’s respective
assets do not and, immediately following the making of the Loan will not,
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted. Neither Borrower nor Operating Lessee intends to,
and believes that it will, incur Indebtedness and liabilities (including
contingent liabilities and other commitments) beyond its ability to pay such
Indebtedness and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and Operating Lessee and the amounts
to be payable on or in respect of the obligations of Borrower and Operating
Lessee). No petition in bankruptcy has been filed against any Loan Party,
Operating Lessee or any Guarantor, and no Loan Party, Operating Lessee, nor any
Guarantor has ever made an assignment for the benefit of creditors or taken
advantage of any insolvency act for the benefit of debtors. No Loan Party,
Operating Lessee nor any Guarantor 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 its assets or properties, and neither
Borrower nor Operating Lessee has no knowledge of any Person contemplating the
filing of any such petition against it or any other Loan Party, Operating Lessee
or any Guarantor.

 

3.1.20         Federal Reserve Regulations. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

 

3.1.21         Organizational Chart. The organizational chart attached as
Schedule III, relating to Borrower, Operating Lessee and certain Affiliates and
other parties, is true, complete and correct on and as of the date hereof. No
Person other than those Persons shown on Schedule III have any ownership
interest in, or right of control, directly or indirectly, in Borrower or
Operating Lessee. Each of Borrower and Operating Lessee represents and warrants
to Lender that no Manager is an Affiliate of Borrower, Operating Lessee or any
other Loan Party.

 

3.1.22         Organizational Status. Each Individual Borrower’s exact legal
name, organizational type (e.g., corporation, limited liability company), the
jurisdiction of formation or organization, Tax I.D. and Delaware Organizational
I.D. numbers are set forth on Schedule III hereto. Each Operating Lessee’s exact
legal name, organizational type (e.g., corporation, limited liability company),
the jurisdiction of formation or organization, Tax I.D. and Delaware
Organizational I.D. numbers are set forth on Schedule III hereto.

 

 -77-Loan Agreement

 

 

3.1.23         [Reserved].

 

3.1.24         No Casualty. The Improvements have suffered no material casualty
or damage which has not been fully repaired and the cost thereof fully paid.

 

3.1.25         Purchase Options. No Individual Property nor any part thereof is
subject to any purchase options, rights of first refusal, rights of first offer
or other similar rights in favor of third parties (although there exist Ground
Lease Purchase Options in favor of Individual Borrowers).

 

3.1.26         FIRPTA. Neither Borrower nor Operating Lessee is a “foreign
person” within the meaning of Sections 1445 or 7701 of the Code.

 

3.1.27         Investment Company Act. Neither Borrower nor Operating Lessee is
not (i) an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
or (ii) subject to any other United States federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.

 

3.1.28         Fiscal Year. Each fiscal year of Borrower and Operating Lessee
commences on January 1.

 

3.1.29         Other Debt. There is no Indebtedness of Borrower or Operating
Lessee with respect to any Individual Property or any excess cash flow or any
residual interest therein, whether secured or unsecured, other than Permitted
Encumbrances and Permitted Indebtedness.

 

3.1.30         Contracts.

 

(a)          Neither Borrower nor Operating Lessee has entered into, or is bound
by, any Major Contract which continues in existence, except those previously
disclosed in writing to Lender.

 

(b)          Each of the Major Contracts is in full force and effect, there are
no monetary or other material defaults by Borrower or Operating Lessee
thereunder and, to the best knowledge of Borrower and Operating Lessee, there
are no monetary or other material defaults thereunder by any other party
thereto. None of Borrower, Operating Lessee, Manager, or any other Person
authorized to act on Borrower’s or Operating Lessee’s behalf has given or
received any notice of default under any of the Major Contracts that remains
uncured or in dispute.

 

(c)          Borrower or Operating Lessee has delivered true, correct and
complete copies of the Major Contracts (including all amendments and supplements
thereto) to Lender, which Major Contracts are described on Schedule XX attached
hereto.

 

(d)          No Major Contract has as a party an Affiliate of Borrower or
Operating Lessee. All fees and other compensation for services previously
performed under the Management Agreements have been paid in full in accordance
with the terms thereof.

 

 -78-Loan Agreement

 

 

3.1.31         Full and Accurate Disclosure. To Borrower’s and Operating
Lessee’s knowledge, no statement of fact made by Borrower or Operating Lessee in
this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no material
fact presently known to Borrower or Operating Lessee which has not been
disclosed to Lender which materially adversely affects, nor as far as Borrower
or Operating Lessee can foresee, reasonably could be expected to materially
adversely affect, the Properties or the business, operations or condition
(financial or otherwise) of Borrower or Operating Lessee.

 

3.1.32         Other Obligations and Liabilities. Neither Borrower nor Operating
Lessee has any liabilities or other obligations, contingent or otherwise, that
arose or accrued prior to the date hereof that, either individually or in the
aggregate, are reasonably likely to have a material adverse effect on Borrower,
Operating Lessee the Properties, Borrower’s ability to pay the Debt, and/or the
business, operations or condition (financial or otherwise) of Borrower or
Operating Lessee.

 

3.1.33         Intellectual Property/Websites. Other than as set forth on
Schedule VI, none of Borrower, Operating Lessee or any of their respective
Affiliate (i) has or holds any tradenames, trademarks, servicemarks, logos,
copyrights, patents or other intellectual property (collectively, (“Intellectual
Property”) with respect to any Individual Property or the use or operations
thereof or is (ii) is the registered holder of any website with respect to any
Individual Property (other than tenant websites).

 

3.1.34         Ground Lease. Borrower hereby represents and warrants to Lender,
other than set forth on Schedule IV, the following with respect to the Ground
Leases after giving effect to the related estoppels:

 

(a)          Recording; Modification. True, correct and complete copies of each
Ground Lease including all amendments and modifications thereto, have been
provided to Lender. The Ground Leases or a memorandum regarding each Ground
Lease (or any combination thereof) have been duly recorded. The Ground Leases
permit the interest of the applicable Individual Borrower to be encumbered by a
mortgage without the consent of the Ground Lessor or the binding written
approval and consent of the applicable Ground Lessor(s) thereunder has been
obtained. The Ground Leases may not be canceled, surrendered or amended without
the prior written consent of Lender.

 

(b)          No Liens. Except for the Permitted Encumbrances, the applicable
Individual Borrowers’ respective interests in the Ground Leases are not subject
to any Liens or encumbrances superior to, or of equal priority with, the
Mortgage other than the Ground Lessor’s related fee interest. Such Ground Leases
are prior to any mortgage or Lien upon (or benefit from a non-disturbance
agreement in form and substance reasonably satisfactory to Lender from the
holder of any Lien or mortgage upon) each Ground Lessor’s related fee interest.

 

(c)          Ground Lease Assignable. The applicable Individual Borrowers’
respective interests in the Ground Leases are assignable to Lender upon notice
to, but without the consent of, the applicable Ground Lessors (or, if any such
consent is required, it has been obtained prior to the Closing Date). Each
Ground Lease is further assignable by Lender, its successors and assigns without
the consent of the applicable Ground Lessor.

 

 -79-Loan Agreement

 

 

(d)          Default. As of the date hereof, each Ground Lease is in full force
and effect and no default has occurred and is continuing under any Ground Lease
and to Borrower’s knowledge there is no existing condition which, but for the
passage of time and/or the giving of notice, could result in a default under the
terms of any Ground Lease. All rents, additional rents and other sums due and
payable under each Ground Lease have been paid in full. Neither the applicable
Individual Borrower nor the applicable Ground Lessor under any Ground Lease has
commenced any action or given or received any written notice for the purpose of
terminating such Ground Lease.

 

(e)          Notice. Each Ground Lease, or estoppel letters received by Lender
from the Ground Lessor thereunder, requires the ground lessor thereunder to give
notice of any default by the applicable Individual Borrower to Lender. Each
Ground Lease, or estoppel letters received by Lender from the Ground Lessor
thereunder, further provides that notice of termination given under such Ground
Lease is not effective against Lender unless a copy of such notice has been
delivered to Lender in the manner described in such Ground Lease.

 

(f)          Cure. Lender is permitted the opportunity to cure any default under
any Ground Lease which is curable, after the receipt of notice of the default,
before the Ground Lessor thereunder may terminate such Ground Lease.

 

(g)          Term. Each Ground Lease has a term (or a term plus one or more
optional renewal terms, which under all circumstances may be exercised, and will
be enforceable, by the applicable Individual Borrower or Lender) which extends
not less than thirty (30) years beyond the Third Extended Maturity Date.

 

(h)          New Lease. Each Ground Lease requires the Ground Lessor thereunder
to enter into a new lease with Lender upon termination of such Ground Lease for
any reason, including rejection of such Ground Lease in a bankruptcy proceeding.

 

(i)          Insurance Proceeds. Under the terms of each Ground Lease and the
applicable Mortgage, taken together, any related insurance and condemnation
proceeds will be applied either to the repair or restoration of all or part of
the applicable Individual Property, with Lender having the right to hold and
disburse the proceeds as the repair or restoration progresses, or to the payment
of the Outstanding Principal Balance together with any accrued interest thereon.

 

3.1.35         Operations Agreement. Each Operations Agreement is in full force
and effect and neither Borrower nor Operating Lessee nor, to Borrower’s and
Operating Lessee’s knowledge, any other party to any Operations Agreement, is in
material default thereunder, and to Borrower’s and Operating Lessee’s knowledge,
there are no conditions which, with the passage of time or the giving of notice,
or both, would constitute a material default thereunder. Except as described
herein (including the Exhibits and Schedules attached hereto), no Operations
Agreement has been modified, amended or supplemented.

 

 -80-Loan Agreement

 

 

3.1.36         Franchise Agreements.

 

(a)          Each Franchise Agreement, pursuant to which Operating Lessee has
the right to operate the hotel located on the applicable Individual Property
under a name and/or hotel system controlled by the applicable Franchisor, is in
full force and effect and there is no material default, breach or violation
existing thereunder by any party thereto and, to Borrower’s and Operating
Lessee’s knowledge, no event has occurred (other than payments due but not yet
delinquent) that, with the passage of time or the giving of notice, or both,
would constitute a material default, breach or violation by any party thereunder
(except as disclosed on Schedule XII-A, none of which disclose a current
material default). Neither the execution and delivery of the Loan Documents or
Borrower’s or Operating Lessee’s performance thereunder will adversely affect
Borrower’s or Operating Lessee’s rights under any Franchise Agreement. None
Borrower, Operating Lessee or any Franchisor has exercised any termination
option under the applicable Franchise Agreement, neither Borrower nor Operating
Lessee has given any notice to the applicable Franchisor of Borrower’s or
Operating Lessee’s election to terminate such Franchise Agreement effective as
of a date after the date hereof, and neither Borrower nor Operating Lessee has
received from any Franchisor such Franchisor’s notice of its election to
terminate such Franchise Agreement effective as of a date after the date hereof.
Schedule XII contains a true and correct list, by Individual Property, of (x)
each Franchise Agreement under which Operating Lessee has the right to operate
the applicable Individual Property, and (y) the expiration dates of each
Franchise Agreements set forth on Schedule XII.

 

3.1.37         Illegal Activity. No portion of any Individual Property has been
or will be purchased with proceeds of any illegal activity.

 

3.1.38         Property Improvement Plan. There is currently no PIP or similar
requirement imposed under any Franchise Agreement, for calendar year 2017, other
than as set forth on Schedule XVIII (the “Scheduled PIP”) and there is currently
no PIP or similar requirement imposed under any Franchise Agreement other than
Scheduled PIP, other than as set forth on Schedule XVIII.

 

3.1.39         Operating Lease. Borrower is the owner and lessor of landlord’s
interest in the Operating Lease. The current Operating Lease is in full force
and effect and there are no material defaults thereunder by either party and to
Borrower’s and Operating Lessee’s knowledge, there are no conditions that, with
the passage of time or the giving of notice, or both, would constitute defaults
thereunder.

 

Section 3.2           Survival of Representations. The representations and
warranties set forth in Section 3.1 and elsewhere in this Agreement and the
other Loan Documents shall (i) while not re-made, survive until the Obligations
have been paid and performed in full and (ii) be deemed to have been relied upon
by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf. Notwithstanding the foregoing, any representation or
warranty made with respect to an Individual Property shall not survive the
release of such Individual Property from the Lien of the applicable Mortgage in
accordance with Section 2.5.2 and Section 2.5.3.

 

Article 4

BORROWER COVENANTS

 

Until the end of the Term, Borrower and Operating Lessee hereby covenants and
agrees with Lender that:

 

 -81-Loan Agreement

 

 

Section 4.1           Payment and Performance of Obligations. Borrower and
Operating Lessee shall pay and otherwise perform the Obligations in accordance
with the terms of this Agreement and the other Loan Documents.

 

Section 4.2           Due on Sale and Encumbrance; Transfers of Interests

 

(a)          Each of Borrower and Operating Lessee acknowledges that Lender has
examined and relied on the experience of Borrower and Operating Lessee and their
respective stockholders, general partners and members, as applicable, and
principals of Borrower and Operating Lessee in owning and operating properties
such as the Property in agreeing to make the Loan, and will continue to rely on
Borrower’s ownership of the Properties as a means of maintaining the value of
the Properties as security for repayment of the Debt and the performance of the
Other Obligations. Borrower and Operating Lessee each acknowledge that Lender
has a valid interest in maintaining the value of the Properties so as to ensure
that, should Borrower default in the repayment of the Debt or Borrower or
Operating Lessee default in the performance of the Other Obligations, Lender can
recover the Debt by a sale of the Properties. Therefore, without the prior
written consent of Lender, but, in each instance, subject to the express
provisions of Article 7, neither Borrower nor Operating Lessee nor any other
Loan Party nor any other Person having a direct or indirect ownership or
beneficial interest in Borrower, Operating Lessee or in any other Loan Party
shall sell, convey, mortgage, grant, bargain, encumber, pledge, assign or
transfer any Individual Property or any part thereof, or any interest, direct or
indirect, common, preferred or otherwise, in Borrower, Operating Lessee or in
any other Loan Party, or in any Person holding any direct or indirect interest
in Borrower, Operating Lessee or in any other Loan Party, whether voluntarily or
involuntarily or enter into or subject any Individual Property to a PACE Loan (a
“Transfer”). A Transfer within the meaning of this Section 4.2 shall be deemed
to include, but not be limited to, (i) an installment sales agreement wherein
Borrower agrees to sell any Individual Property or any part thereof for a price
to be paid in installments; (ii) an agreement by Borrower or Operating Lessee
for the leasing of all or a substantial part of any Individual Property 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,
Borrower’s right, title and interest in and to any Leases, or any Gross Revenue;
(iii) if Borrower, Operating Lessee or any other Loan Party or any general
partner, managing member or controlling shareholder of Borrower or of any other
Loan Party is a corporation, the voluntary or involuntary sale, conveyance or
transfer of such corporation’s stock (or the stock of any corporation directly
or indirectly controlling such corporation by operation of law or otherwise) or
the creation or issuance of new stock; (iv) if Borrower, Operating Lessee or any
other Loan Party, or any general partner, managing member or controlling
shareholder of Borrower, Operating Lessee, or of any other Loan Party 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 (v) any pledge,
hypothecation, assignment, transfer or other encumbrance of any direct or
indirect ownership interest in Borrower, Operating Lessee or in any other Loan
Party.

 

 -82-Loan Agreement

 

 

(b)          Notwithstanding the foregoing, a Transfer within the meaning of
this Section 4.2 shall not include (i) dispositions of equipment and fixtures in
the ordinary course of Borrower’s or Operating Lessee’s business (including
equipment or fixtures which are being replaced or which are no longer necessary
in connection with the operation of the Property, provided that (1) such
disposition in this parenthetical will not have a material adverse effect on or
materially impair the utility of the applicable Individual Property (a “Material
Adverse Effect”) and (2) any new equipment or fixtures acquired by Borrower or
Operating Lessee (and not so disposed of) shall be subject to the Lien of the
Loan Documents (collectively, the “Disposition Conditions”)), (ii) Leases in
effect on the date hereof or otherwise permitted by this Agreement, (iii)
Permitted Transfers, (iv) easements and rights of way in the ordinary course of
business that would not have a material adverse effect on the use, occupancy or
access to the applicable Individual Property, and (v) subject to Section 5.3
hereof, transfers of portions of Individual Properties to Governmental
Authorities for (1) dedication of such portion to a public use or (2) easements,
restrictions, covenants, reservations and rights of way in the ordinary course
of business for purposes of public access, the placement of water and sewer
lines, telephone and telegraph lines, electric lines or other utilities serving
such Individual Property; provided no such transfers shall have any adverse
effect on the first priority position of the Lien of the applicable Mortgage or
any other Material Adverse Effect. In connection with any event specified in
clause (i) above, Lender shall, from time to time, upon receipt of an officer’s
certificate requesting the same and confirming satisfaction of the Disposition
Conditions, execute a written instrument in form and substance reasonably
satisfactory to Lender to confirm that such equipment or fixtures which are to
be, or have been, sold or disposed of are free from the Lien of the Loan
Documents; provided, Borrower shall reimburse Lender for its or its Servicer’s
reasonable fees and expenses incurred in reviewing such instrument and
Borrower’s request.

 

Section 4.3          Liens. Neither Borrower nor Operating Lessee shall create,
incur, assume, permit or suffer to exist any Lien on any portion of any
Individual Property, except for the Permitted Encumbrances, nor any Lien on any
direct or indirect interest in Borrower, Operating Lessee or any Loan Party,
except for (i) the pledges of the direct or indirect equity interests in
Borrower granted by Mezzanine Borrowers in favor of Mezzanine Lenders and in
Operating Lessee by Leasehold Pledgor pursuant to the Mezzanine Loan Documents
as security for the Mezzanine Loans and (ii) Permitted Transfers, if any.
Subject to the following, Borrower or Operating Lessee shall promptly discharge
any Lien or charge against any of the Individual Properties which is not a
Permitted Encumbrance nor otherwise expressly permitted hereunder. After prior
notice to Lender, Borrower or Operating Lessee, at its own expense, may contest
by appropriate legal proceeding, conducted in good faith and with due diligence,
the amount or validity of any Liens, provided that (i) no Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted under and
be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) no Individual Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, canceled or lost; (iv) Borrower or
Operating Lessee shall promptly upon final determination thereof pay the amount
of any such Liens, together with all costs, interest and penalties which may be
payable in connection therewith; (v) to insure the payment of such Liens
exceeding $1,000,000 in the aggregate at any one time, Borrower shall deliver to
Lender either (A) cash, or other security as may be approved by Lender, in an
amount equal to one hundred twenty-five percent (125%) of the contested amount,
or (B) a payment and performance bond in an amount equal to one hundred percent
(100%) of the contested amount from a surety acceptable to Lender in its
reasonable discretion, (vi) failure to pay such Liens will not subject Lender to
any civil or criminal liability, (vii) such contest shall not affect the
ownership, use or occupancy of any Individual Property, and (viii) Borrower or
Operating Lessee shall, upon request by Lender, give Lender prompt notice of the
status of such proceedings and/or confirmation of the continuing satisfaction of
the conditions set forth in clauses (i) through (vii) of this Section 4.3.
Lender may pay over any such cash or other security held by Lender to the
claimant entitled thereto at any time when, in the reasonable judgment of
Lender, the entitlement of such claimant is established or any Individual
Property (or any part thereof or interest therein) shall be in danger of being
sold, forfeited, terminated, cancelled or lost or there shall be any danger of
the Lien of the applicable Mortgage being primed by any related Lien.

 

 -83-Loan Agreement

 

 

Section 4.4         Special Purpose. Without in any way limiting the provisions
of this Article 4, Borrower and Operating Lessee hereby represent and warrant
to, and covenant with, Lender that since the date of Borrower’s, Operating
Lessee’s and each SPC Party’s formation and at all times on and after the date
hereof and until such time as the Obligations shall be paid and performed in
full, Borrower, Operating Lessee and each SPC Party has at all times been and
shall at all times be a Special Purpose Bankruptcy Remote Entity. None of
Borrower, Operating Lessee or any SPC Party shall directly or indirectly make
any change, amendment or modification to its or such SPC Party’s organizational
documents, or otherwise take any action which could result in Borrower,
Operating Lessee or any SPC Party not being a Special Purpose Bankruptcy Remote
Entity.

 

Section 4.5          Existence; Compliance with Legal Requirements. Each of
Borrower and Operating Lessee and each SPC Party shall do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
existence and all rights, licenses, permits, franchises and all applicable
governmental authorizations necessary for the operation of the Properties and
comply with all Legal Requirements applicable to it and the Properties.

 

Section 4.6          Taxes and Other Charges; Use and Occupancy Taxes.

 

(a)          Borrower or Operating Lessee shall pay all Taxes and Other Charges
now or hereafter levied, assessed or imposed at least five (5) Business Days
before the same become Due and Payable, and shall furnish to Lender receipts for
the payment of the Taxes and the Other Charges prior to the date the same shall
become Due and Payable (provided, however, that provided no Event of Default
shall have occurred and be continuing neither Borrower nor Operating Lessee need
pay Taxes directly nor furnish such receipts for payment of Taxes to the extent
that funds to pay for such Taxes have been deposited into the Tax Account
pursuant to Section 6.3). Borrower or Operating Lessee shall promptly pay for
all utility services provided to the Properties. After prior notice to Lender,
Borrower or Operating Lessee, at its own expense, may contest by appropriate
legal proceeding, conducted in good faith and with due diligence, the amount or
validity of any Taxes or Other Charges, provided that (i) no Default or Event of
Default has occurred and remains uncured; (ii) such proceeding shall be
permitted under and be conducted in accordance with all applicable statutes,
laws and ordinances; (iii) no Individual Property nor any part thereof or
interest therein will be in danger of being sold, forfeited, terminated,
canceled or lost; (iv) Borrower or Operating Lessee shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (v) such proceeding shall suspend the collection of Taxes
or Other Charges from the applicable Individual Property; (vi) to insure the
payment of such Taxes or Other Charges exceeding $1,000,000 in the aggregate at
any one time Borrower shall deposit with Lender cash, or other security as may
be approved by Lender, in an amount equal to one hundred twenty-five percent
(125%) of the contested amount, to insure the payment of any such Taxes or Other
Charges, together with a reasonable estimate of all interest and penalties
thereon, (vii) failure to pay such Taxes or Other Charges will not subject
Lender to any civil or criminal liability, (viii) such contest shall not affect
the ownership, use or occupancy of the Properties, or of any Individual
Property, and (ix) Borrower or Operating Lessee shall, upon request by Lender,
give Lender prompt notice of the status of such proceedings and/or confirmation
of the continuing satisfaction of the conditions set forth in clauses (i)
through (viii) of this Section 4.6. Lender may pay over any such cash or other
security held by Lender to the claimant entitled thereto at any time when, in
the judgment of Lender, the entitlement of such claimant is established or any
Individual Property (or any part thereof or interest therein) shall be in danger
of being sold, forfeited, terminated cancelled or lost or there shall be any
danger of the Lien of the applicable Mortgage being primed by any related Lien.

 

 -84-Loan Agreement

 

 

(b)          Borrower or Operating Lessee shall pay all Hotel Taxes now or
hereafter payable to the applicable Governmental Authority with respect the
Individual Properties, as the same become due and payable. Within forty-five
(45) days following the end of each calendar quarter, Borrower or Operating
Lessee shall provide an Officer’s Certificate setting forth the actual amount of
Hotel Taxes due and the actual amount paid with respect to the Properties for
the calendar quarter immediately preceding the date of such certificate.

 

Section 4.7          Litigation. Borrower or Operating Lessee shall give prompt
notice to Lender of any litigation or governmental proceedings pending or
threatened in writing against any Individual Property, Borrower, Operating
Lessee, Manager (but only as it relates to any Individual Property and only if
Borrower or Operating Lessee has received notice of any such litigation or
governmental proceedings) or any SPC Party which might materially adversely
affect such Individual Property or Borrower’s, Operating Lessee’s, Manager’s or
such SPC Party’s condition financial or otherwise or business (including
Borrower’s or Operating Lessee’s ability to perform its Obligations hereunder or
under the other Loan Documents but, in the case of Manager’s condition or
business, only to the extent Borrower or Operating Lessee has a reasonable
belief that such litigation or proceeding might materially adversely affect
Manager’s condition or business).

 

Section 4.8          Title to the Property. Each of Borrower and Operating
Lessee shall warrant and defend (a) its title to each Individual Property and
every part thereof, subject only to Permitted Encumbrances and (b) the validity
and priority of the Liens of the Mortgage, the Assignment of Leases and this
Agreement on each Individual Property, subject only to Permitted Encumbrances,
in each case against the claims of all Persons whomsoever. Borrower or Operating
Lessee shall reimburse Lender for any losses, costs, damages or expenses
(including reasonable attorneys’ fees and court costs) incurred by Lender if an
interest in any Individual Property, other than as permitted hereunder, is
claimed by another Person.

 

Section 4.9          Financial Reporting.

 

4.9.1       Generally. Borrower and Operating Lessee shall keep and maintain or
will cause to be kept and maintained proper and accurate books and records, in
accordance with GAAP and the requirements of Regulation AB, reflecting the
financial affairs of Borrower and Operating Lessee and all items of income and
expense in connection with the operation of the Properties. Lender shall have
the right from time to time during normal business hours upon reasonable notice
Borrower to examine such books and records at the office of Borrower or other
Person maintaining such books and records and to make such copies or extracts
thereof as Lender shall desire. After an Event of Default, Borrower shall pay
any reasonable and actual costs incurred by Lender to examine such books,
records and accounts, as Lender shall reasonably determine to be necessary or
appropriate in the protection of Lender’s interest.

 

 -85-Loan Agreement

 

 

4.9.2       Quarterly and Monthly Reports.

 

(a)          Not later than forty-five (45) days following the end of the first
three fiscal quarters, and within ninety (90) days after the end of the fourth
fiscal quarter, Borrower shall deliver to Lender unaudited consolidated
financial statements of Borrower and Operating Lessee, internally prepared on an
accrual basis including a consolidated balance sheet as of the end of such
quarter and profit and loss statements for the quarter and year then ended
compared to the corresponding period of the previous Fiscal Year, Individual
Property-level profit and loss statements for the previous twelve (12) months
then ended, and a summary report detailing monthly occupancy, including average
daily rate, made available to Borrower or Operating Lessee for the subject
quarter. Such statements for each quarter shall be accompanied by an Officer’s
Certificate certifying to the best of the signer’s knowledge, (A) that such
statements fairly represent the financial condition and results of operations of
Borrower and Operating Lessee and the Properties on a combined basis as well as
each Individual Property (subject to normal year-end adjustments), (B) that as
of the date of such Officer’s Certificate, no Event of Default exists under this
Agreement, the Note or any other Loan Document or, if so, specifying the nature
and status of each such Event of Default and the action then being taken by
Borrower or proposed to be taken to remedy such Event of Default, (C) that as of
the date of each Officer’s Certificate, no litigation exists involving Borrower,
Operating Lessee or any Individual Property or the Properties in which the
amount involved is $1,000,000 (in the aggregate) or more or in which all or
substantially all of the potential liability is not covered by insurance, or, if
so, specifying such litigation and the actions being taking in relation thereto,
(D) the amount by which actual Operating Expenses were greater than or less than
the Operating Expenses anticipated in the applicable Annual Budget, and (E) a
calculation reflecting the Debt Yield and Debt Yield (Mortgage Only) as of the
last day of such fiscal quarter. Such financial statements shall contain such
other information as shall be reasonably requested by Lender for purposes of
calculations to be made by Lender pursuant to the terms hereof. All calculations
of the Debt Yield and Debt Yield (Mortgage Only) shall be subject to
verification by Lender.

 

(b)          Prior to the occurrence of a Securitization, Borrower shall deliver
to Lender, not later than thirty (30) days following the end of each calendar
month, a consolidated profit and loss statement for Borrower (which, to the
extent required by GAAP, shall separately denote any “non-controlling” or
“minority” interest in the earnings of any subsidiary of Holdco) for the month
and year then ended compared to the corresponding period of the previous Fiscal
Year and for each Individual Property, a profit and loss statement for the
twelve (12) months then ended and a summary report detailing monthly occupancy,
including the daily average rate during the subject month. Such statements for
each month shall be accompanied by an Officer’s Certificate certifying to the
best of the signer’s knowledge that such statements fairly represent the results
of operations of Borrower (taking into account any “non-controlling” or
“minority” interest in the earnings of any subsidiary of Borrower) and the
Properties and a calculation reflecting the Debt Yield and Debt Yield (Mortgage
Only) as of the last day of such calendar month. All calculations of the Debt
Yield and Debt Yield (Mortgage Only) shall be subject to verification by Lender.

 

 -86-Loan Agreement

 

 

4.9.3       Annual Reports. Borrower shall deliver to Lender:

 

(a)          Not later than ninety (90) days after the end of each Fiscal Year
of Borrower’s operations, unaudited consolidated financial statements of
Borrower and Operating Lessee, internally prepared on an accrual basis and
prepared in accordance with the requirements of Regulation AB, covering the
Properties on a combined basis for such Fiscal Year, including a consolidated
balance sheet as of the end of such Fiscal Year and a consolidated statement of
operations. Such annual financial statements shall be accompanied by an
Officer’s Certificate in the form required pursuant to Section 4.9.2(a) above

 

(b)          Not later than one hundred twenty (120) days after the end of each
Fiscal Year of Borrower’s operations, audited consolidated financial statements
of Borrower and Operating Lessee, certified by an Independent Accountant in
accordance with GAAP and prepared in accordance with the requirements of
Regulation AB, covering the Properties on a combined basis for such Fiscal Year,
including a consolidated balance sheet as of the end of such Fiscal Year and a
consolidated statement of operations. Such annual financial statements shall be
accompanied by an Officer’s Certificate in the form required pursuant to Section
4.9.2(a) above; and

 

(c)          Not later than one hundred twenty (120) days after the end of each
Fiscal Year of Borrower’s operations, an annual summary of any and all FF&E
Work, PIP Work and Capital Expenditures made at the Properties on a combined
basis, as well as for each Individual Property where the cost of FF&E Work, PIP
Work and Capital Expenditures at such Individual Property exceeds $500,000,
during the prior twelve (12) month period.

 

4.9.4       Other Reports.

 

(a)          Borrower shall deliver to Lender, within ten (10) Business Days of
Lender’s reasonable request therefor, copies of reports prepared by Manager in
accordance with its obligations under the Management Agreement, including
without limitation, any financial reports, economic and operational trend
analyses, or such other information as Borrower or Operating Lessee is entitled
to request from Manager from time to time.

 

(b)          Borrower and Operating Lessee shall, within ten (10) Business Days
after request by Lender or, if all or part of the Loan is being or has been
included in a Securitization (in which case, at Lender’s expense), by the Rating
Agencies, furnish or cause to be furnished to Lender and, if applicable, the
Rating Agencies, in such manner and in such detail as may be reasonably
requested by Lender or the Rating Agencies, such reasonable additional
information as may be reasonably requested with respect to the Properties as
well as with respect to any Individual Property, including franchise inspection
reports and guest satisfaction scores.

 

(c)          Borrower and Operating Lessee shall submit to Lender the financial
data and financial statements required, and within the time periods required,
under clauses (i), and (ii) of Section 9.1(f), if and when available.

 

 -87-Loan Agreement

 

 

4.9.5       Annual Budget.

 

(a)          Borrower or Operating Lessee shall submit to Lender by December 31
of each year the Annual Budget for the succeeding Fiscal Year; Borrower shall
also submit any updates to such Annual Budget; provided that during the
continuance of any Trigger Period, Borrower shall submit an Annual Budget to
Lender by December 1 of each year. Each Annual Budget shall include Operating
Expenses and Capital Expenditure which are based upon, and consistent with, what
is reasonable and customary for properties similar in size, location and nature
to the Properties. During the continuance of any Trigger Period, the Annual
Budget then currently in place shall be deemed approved, but Lender shall have
the right to approve any amendment thereto and each subsequent Annual Budget
(which approval shall not be unreasonably withheld, conditioned or delayed so
long as no Event of Default is continuing) and shall further have the right to
require Borrower to furnish Lender on a biannual basis for its approval an
update of such Annual Budget (which update shall be subject to Lender’s
approval, such approval not to be unreasonably withheld, conditioned or delayed
so long as no Event of Default is continuing). Annual Budgets and/or updates
thereof submitted to Lender in accordance herewith and, if Lender approval is
then required hereunder, approved or deemed approved by Lender in accordance
with Section 4.9.5(b) hereof, shall hereinafter be referred to as an “Approved
Annual Budget”. During the continuance of a Trigger Period, until such time that
any Annual Budget has been approved by Lender, the prior Approved Annual Budget
shall apply for all purposes hereunder (with adjustments as reasonably
determined by Lender to reflect actual increases in Taxes, Insurance Premiums
and utilities expenses and variable Operating Expenses that directly relate to
increases in revenue). None of Borrower, Operating Lessee, or Manager shall
change or modify an Approved Annual Budget, as it may be updated in accordance
herewith, that has been approved or deemed approved by Lender without the prior
written consent of Lender, not to be unreasonably withheld, conditioned or
delayed so long as there is no Event of Default then continuing (until such time
as the applicable Trigger Period ends, after which unless and until a new
Trigger Period shall begin, no Lender consent shall be required and Borrower may
change or modify an Approved Annual Budget in accordance with the terms of this
Section 4.9.5).

 

(b)          In the event Borrower is required to obtain Lender’s approval of a
proposed Annual Budget (or any proposed modification thereof) pursuant to this
Section 4.9.5, Lender’s approval shall be deemed given by Lender if (I) the
first correspondence from Borrower to Lender 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 Borrower is requesting the Lender’s approval
of the proposed Annual Budget (or the proposed modification thereof) under
Section 4.9.5 of the Loan Agreement and that Lender’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 a copy of
the proposed Annual Budget (or the proposed modification thereof) and all
information and documentation (and in such detail) as is reasonably necessary to
allow Lender to adequately and completely evaluate the request (which
information may be provided electronically in the form of a CD Rom or other
portable electronic media enclosed with such notice), (II) Lender shall fail to
respond to such request within ten (10) Business Days following its receipt of
such request, (III) Borrower shall deliver to Lender 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 Lender’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) Lender
shall fail to respond to such request in the manner contemplated in clause
(III)(B) above within such five (5) Business Day period. In the event Lender
timely objects (stating the basis for its objection in reasonable detail) to a
proposed Annual Budget (or the proposed modification thereof) in accordance with
the foregoing, Borrower shall promptly revise, or cause to be revised, such
Annual Budget (or the proposed modification thereof) and resubmit the same to
Lender. Lender’s approval of a revised Annual Budget (or revised modification
thereof) shall be deemed given by Lender if such revision is submitted to Lender
in accordance with clauses (I) and (III) above and Lender shall fail to respond
in accordance with clauses (II) and (IV) above.

 

 -88-Loan Agreement

 

 

4.9.6       Excess Operating Expenses.

 

(a)          In the event that during a Trigger Period Borrower or Operating
Lessee 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 Borrower from Cash Collateral
Funds pursuant to Section 6.10(b)) (“Excess Operating Expenses”), then Borrower
or Operating Lessee shall promptly deliver to Lender, for Lender’s information,
upon Lender’s request, a reasonably detailed explanation of such Excess
Operating Expenses. During the continuance of any Trigger Period, all Excess
Operating Expenses must be approved by Lender in writing (such expenses, if
approved, or deemed approved in accordance with Section 4.9.6(b) below, 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
Trigger Period, any funds distributed to Borrower for the payment of Approved
Excess Operating Expenses pursuant to Section 6.11.1(a)(xi) shall be used by
Borrower or Operating Lessee only to pay for such Approved Excess Operating
Expenses or to reimburse Borrower or Operating Lessee for such Approved Excess
Operating Expenses, as applicable.

 

(b)          In the event Borrower is required to obtain Lender’s approval of
Excess Operating Expenses pursuant to this Section 4.9.6, Lender’s approval
shall be deemed given by Lender if (I) the first correspondence from Borrower to
Lender 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
Borrower is requesting the Lender’s approval of Excess Operating Expenses under
Section 4.9.6 of the Loan Agreement and that Lender’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 Lender to adequately and completely evaluate the request,
(II) Lender shall fail to respond to such request within ten (10) Business Days
following its receipt of such request, (III) Borrower shall deliver to Lender 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 Lender’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) Lender shall fail to respond to such request in the manner contemplated in
clause (III)(B) above within such five (5) Business Day period.

 

4.9.7       Hotel Accounting. All property level (but not upper-tier or
consolidated) monthly and other operating statements to be delivered by or on
behalf of Borrower or Operating Lessee hereunder shall be (and all accompanying
Officer’s Certificates shall state that they have been) prepared based upon the
Uniform System of Accounts for Hotels, current edition.

 

 -89-Loan Agreement

 

 

Section 4.10      Access to Property. Borrower and Operating Lessee shall permit
agents, representatives, consultants and employees of Lender to inspect any
Individual Property or any part thereof at reasonable hours upon reasonable
advance notice. Lender or its agents, representatives, consultants and employees
as part of any inspection may non-invasively (except as expressly permitted
under the Environmental Indemnity) take soil, air, water, building material and
other samples from such Individual Property, subject to the rights of tenants
under Leases.

 

Section 4.11       Leases. Any Leases in excess of three thousand (3,000) square
feet (each such Lease a “Material Lease”) written after the date hereof shall be
subject to Lender’s prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed. Upon request, Borrower or
Operating Lessee shall furnish Lender with executed copies of all Leases entered
into after the date hereof. All renewals of Leases and all proposed Leases shall
provide for rental rates comparable to existing local market rates. All proposed
Leases shall be on commercially reasonable terms and shall not contain any terms
which would materially adversely affect Lender’s rights under the Loan
Documents. Prior to entering into any Lease or any modification thereof,
Borrower or Operating Lessee shall obtain or cause the tenant to obtain all
licenses, permits, approvals and consents required as a condition to such Lease
and/or to tenant’s operation thereunder, including without limitation any and
all consents and approvals required under any applicable Franchise Agreement,
Ground Lease, Operations Agreement and/or License. All Leases executed after the
date hereof shall provide that they are subordinate to the Mortgage encumbering
the applicable Individual Property and that the lessee agrees to attorn to
Lender or any purchaser at a sale by foreclosure or power of sale. Borrower or
Operating Lessee shall, and shall cause the related Manager to, (i) observe and
perform the obligations imposed upon the lessor under the Leases in a
commercially reasonable manner; (ii) enforce (if and to the extent commercially
reasonable to do so under the circumstances) the terms, covenants and conditions
contained in the Leases upon the part of the lessee thereunder to be observed or
performed in a commercially reasonable manner or terminate or amend such lease,
in either case in a manner not to impair materially the value of the Individual
Property involved except that no termination by Borrower or Operating Lessee or
acceptance of surrender by a tenant of any Material Lease shall be permitted
unless by reason of a tenant default and then only in a commercially reasonable
manner to preserve and protect the Individual Property; provided, however, that
no such termination or surrender of any Material Lease will be permitted without
the written consent of Lender; (iii) not collect any of the Rents relating to
the Leases more than one (1) month in advance (other than security deposits);
(iv) not execute any other assignment of lessor’s interest in the Leases or the
Rents or any other Gross Revenues (except as contemplated by the Loan
Documents); (v) not alter, modify or change the terms of the Leases in a manner
inconsistent with the provisions of the Loan Documents; and (vi) execute and
deliver at the request of Lender all such further assurances, confirmations and
assignments in connection with the Leases as Lender shall from time to time
reasonably require. Notwithstanding anything to the contrary contained herein,
neither Borrower nor Operating Lessee shall enter into a lease of all or
substantially all of any Individual Property (other than the Operating Leases)
without Lender’s prior written consent, which consent maybe withheld in Lender’s
sole and absolute discretion. Lender’s approval of a Material Lease shall be
deemed given by Lender if (I) the first correspondence from Borrower to Lender
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 Borrower or
Operating Lessee is requesting Lender’s approval of a Material Lease under
Section 4.11 of the Loan Agreement and that Lender’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 a copy
of such proposed Material Lease together with an explanation thereof in such
reasonable detail as is necessary to allow Lender to adequately and completely
evaluate the request, (II) Lender shall fail to respond to such request within
ten (10) Business Days following its receipt of such request, (III) Borrower or
Operating Lessee shall deliver to Lender a second written request for approval,
which request is delivered in the same manner as contemplated in clause (I)
above and states that Lender’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) Lender shall fail to respond to such
request in the manner contemplated in clause (III)(B) above within such five (5)
Business Day period.

 

 -90-Loan Agreement

 

 

Section 4.12        Repairs; Maintenance and Compliance; Alterations.

 

4.12.1     Repairs; Maintenance and Compliance. Borrower and Operating Lessee
shall at all times maintain, preserve and protect all franchises and trade
names, and Borrower and Operating Lessee shall cause each Individual Property to
be maintained in a good and safe condition and repair and shall not remove,
demolish or alter the Improvements or Equipment (except for alterations
performed in accordance with Section 4.12.2 below and normal replacement of
Equipment with Equipment of equivalent value and functionality). Borrower shall
promptly comply with all Legal Requirements and immediately cure properly any
violation of a Legal Requirement. Borrower and Operating Lessee shall promptly
notify Lender in writing after Borrower or Operating Lessee first receives
notice of any such non-compliance. Borrower and Operating Lessee shall promptly
repair, replace or rebuild any part of any Individual Property that becomes
damaged, worn or dilapidated (subject to Article V) and shall complete and pay
for any Improvements at any time in the process of construction or repair.
Borrower and Operating Lessee acknowledges and agrees that, with respect to any
Individual Properties that have fewer parking spaces than are required under the
applicable zoning regulations, (a) each such Individual Property could be
brought into compliance with the applicable zoning regulations with respect to
parking count solely by restriping the parking lot(s) and/or parking garage(s)
located at such Individual Property and (b) Borrower and Operating Lessee shall
bring each such Individual Property into compliance with applicable zoning
regulations with respect to parking count promptly following the request by any
Governmental Authority to do so.

 

 -91-Loan Agreement

 

 

4.12.2     Alterations. Borrower and Operating Lessee may, without Lender’s
consent, perform alterations to the Improvements and Equipment which (i) do not
constitute a Material Alteration (or are otherwise approved by Lender), (ii) do
not materially adversely affect Borrower’s or Operating Lessee’s financial
condition or the value or net operating income of the Properties or of any
Individual Property, and (iii) are in the ordinary course of Borrower’s and
Operating Lessee’s business (it being understood that nothing in this clause
(iii) shall prohibit Borrower from carrying out FF&E Work to the extent the same
constitutes an Approved FF&E Expense or PIP Work to the extent the same
constitutes an Approved Scheduled PIP Expense). Neither Borrower nor Operating
Lessee shall perform any Material Alteration without Lender’s prior written
consent not to be unreasonably withheld, conditioned or delayed. Lender may, as
a condition to giving its consent to a Material Alteration with respect to any
one or more Individual Properties, require that Borrower or Operating Lessee
deliver to Lender security for payment of the cost of such Material Alteration
and as additional security for Borrower’s and Operating Lessee’s Obligations
under the Loan Documents, which security may be any of the following: (i) cash,
(ii) a Letter of Credit, (iii) U.S. Obligations, or (iv) other securities
acceptable to Lender, provided that in the case of this clause (iv), Lender
shall have received a Rating Agency Confirmation as to the form and issuer of
same. Such security shall be in an amount equal to the total unpaid amounts
incurred and to be incurred with respect to such alterations to the Improvements
at such Individual Property(ies) (other than such amounts to be paid or
reimbursed by tenants under the Leases) in excess of the Alteration Threshold.
Not more than once per month during the course of the Material Alteration, upon
Borrower’s or Operating Lessee’s written request and provided each of the
conditions below shall have been satisfied, Lender will disburse funds from any
Material Alteration security that is cash to fund (or reimburse Borrower or
Operating Lessee, as applicable, for its funding of) the cost of the Material
Alterations or, to the extent applicable, provide its written consent to the
reduction of any Letter of Credit in consideration of Borrower’s or Operating
Lessee’s funding of the cost of the Material Alterations (such reduction being
in the amount of such funding), in each case, within twenty (20) days following
Lender’s receipt of Borrower’s or Operating Lessee’s written request. Lender’s
obligation to make disbursements hereunder shall be subject to the satisfaction
of each of the following conditions: (x) as of the date of Borrower’s or
Operating Lessee’s request, and as of the date of disbursement, no Event of
Default shall have occurred and be continuing, (y) Borrower’s or Operating
Lessee’s written request shall be accompanied by: (1) copies of all bills and
invoices evidencing such costs (and the same shall be subject to Lender’s
reasonable review), (2) an Officer’s Certificate from Borrower (A) stating that
the items to be funded by the requested disbursement are costs of an approved
Material Alteration, and a description thereof, (B) stating that the portion of
such approved Material Alteration to be funded by the requested disbursement has
been completed in a good and workmanlike manner and in accordance with all
applicable Legal Requirements, (C) stating that the portion of such Material
Alteration to be funded has not been the subject of a previous disbursement and
that all prior releases, disbursement, or returns of security have been applied
by Borrower or Operating Lessee to the costs of such Material Alteration in
accordance with Borrower’s past requests, (3) evidence satisfactory to Lender in
its reasonable discretion that the balance of the cash portion of the Material
Alteration security or the undrawn portion of any Letter of Credit given as
security for such Material Alteration, after giving effect to the requested
disbursement, will be sufficient to cover the remaining cost of such Material
Alteration, (4) evidence that all contracts, subcontractors and materialmen who
provided work materials or services in connection with such portion of the
Material Alterations covered by such disbursement have been paid in full (or
will be paid in full from such disbursement) and have delivered appropriate lien
waivers and/or releases (or will deliver them in connection with such
disbursement); (5) at Lender’s option, but no more frequently than once per
calendar quarter, a title search for the related Individual Property indicating
that such Individual Property is free from all Liens, claims and other
encumbrances not previously approved by Lender and which are not otherwise
Permitted Encumbrances, and (6) such other evidence as Lender shall reasonably
request to demonstrate that the portion of such Material Alteration to be funded
by the requested disbursement has been completed and paid for or will be paid
upon such disbursement to Borrower or Operating Lessee. Upon substantial
completion of any Material Alteration, Borrower or Operating Lessee shall
provide evidence satisfactory to Lender that (i) the Material Alteration was
constructed in accordance with applicable Legal Requirements, (ii) all
contractors, subcontractors, materialmen and professionals who provided work,
materials or services in connection with the Material Alteration have been paid
in full and have delivered unconditional releases of liens, and (iii) all
material licenses and permits necessary for the use, operation and occupancy of
the Material Alteration (other than those which depend on the performance of
tenant improvement work) have been issued. If Borrower or Operating Lessee has
provided cash security, as provided above, except to the extent applied by
Lender to fund such Material Alterations, such cash shall be released by Lender
to fund such Material Alterations, and if Borrower or Operating Lessee has
provided non-cash security, as provided above, except to the extent applied by
Lender to fund such Material Alterations, Lender shall release and return such
security upon Borrower’s satisfaction of the requirements of the preceding
sentence.

 

 -92-Loan Agreement

 

 

Section 4.13        Approval of Major Contracts. Borrower and Operating Lessee
shall be required to obtain Lender’s prior written approval of any and all Major
Contracts affecting any Individual Property, which approval may be granted or
withheld in Lender’s reasonable discretion and which approval shall be deemed
given by Lender if (I) the first correspondence from Borrower to Lender
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 Borrower or
Operating Lessee is requesting the Lender’s approval of a Major Contract under
Section 4.14 of the Loan Agreement and that Lender’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 a copy
of such proposed Major Contract together with an explanation thereof in such
reasonable detail as is necessary to allow Lender to adequately and completely
evaluate the request, (II) Lender shall fail to respond to such request within
ten (10) Business Days following its receipt of such request, (III) Borrower or
Operating Lessee shall deliver to Lender a second written request for approval,
which request is delivered in the same manner as contemplated in clause (I)
above and states that Lender’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) Lender shall fail to respond to such
request in the manner contemplated in clause (III)(B) above within such five (5)
Business Day period.

 

Section 4.14        Property Management.

 

4.14.1     Management Agreements. Borrower and Operating Lessee shall (i) use
commercially reasonable efforts to cause Manager to manage the Properties in
accordance with the applicable Management Agreement and in accordance with all
applicable Legal Requirements, (ii) diligently perform and observe all of the
terms, covenants and conditions of each of the Management Agreements on the part
of Borrower and/or Operating Lessee to be performed and observed, (iii) promptly
notify Lender of any material default (after the expiration of any applicable
cure periods) under any Management Agreement of which it is aware, (iv) in the
event of and upon Lender’s reasonable request from time to time, promptly
deliver to Lender a copy of any financial statements, business plans, capital
expenditures plans, reports and estimates received by it under the Management
Agreements that are so requested by Lender, and (v) promptly enforce the
performance and observance of all of the covenants required to be performed and
observed by Manager under the Management Agreements. If Borrower or Operating
Lessee shall default in the performance or observance of any material term,
covenant or condition of any Management Agreement on the part of Borrower or
Operating Lessee, as applicable, to be performed or observed and such default is
not cured within thirty (30) days of written notice from Lender (or if an Event
of Default exists), then, without limiting Lender’s other rights or remedies
under this Agreement or the other Loan Documents, and without waiving or
releasing Borrower or Operating Lessee from any of its Obligations hereunder or
under the Management Agreements, Lender shall have the right, but shall be under
no obligation, to pay any sums and to perform any act as may be appropriate to
cause all the material terms, covenants and conditions of the Management
Agreements on the part of Borrower to be performed or observed.

 

 -93-Loan Agreement

 

 

4.14.2     Prohibition Against Termination or Modification.

 

(a)          Except as set forth in clause (b) below, neither Borrower nor
Operating Lessee shall (i) surrender, terminate, cancel, materially modify,
renew or extend any Management Agreement (other than a renewal or extension of a
Management Agreement in accordance with its terms), (ii) enter into any other
agreement relating to the management or operation of any Individual Property
with any Manager or any other Person, (iii) consent to the assignment by any
Manager of its interest under the related Management Agreement, or (iv) waive or
release any of its material rights and remedies under any Management Agreement,
in each case without the express consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, with respect
to the appointment of a new manager, such consent may be conditioned upon
Borrower or Operating Lessee delivering to Lender a Rating Agency Confirmation
from each applicable Rating Agency as to such new manager and evidence that such
replacement will not violate or cause a breach or default under any Franchise
Agreement or Ground Lease to the extent such violation, breach or default (with
or without the passage of time) would result in an Event of Default, and that
any approvals required under any Franchise Agreement or Ground Lease to the
replacement of Manager have been obtained. If at any time Lender consents to the
appointment of a new manager, such new manager and Borrower and Operating Lessee
shall, as a condition of Lender’s consent, execute (i) a management agreement in
form and substance reasonably acceptable to Lender, and (ii) a subordination of
management agreement in a form reasonably acceptable to Lender.

 

(b)          Notwithstanding anything to the contrary herein or in the other
Loan Documents (and without limiting Borrower’s and Operating Lessee’s right to
replace a Manager with Lender’s consent pursuant to clause (a) above), Borrower
and Operating Lessee shall have the right to replace one or more Managers with
one or more Qualified Managers without Lender’s consent and without any Rating
Agency Confirmation, provided that each of the following conditions shall have
been satisfied:

 

(i)          Lender shall have received written notice of the intended
replacement(s) not less than fifteen (15) days prior to the date(s) on which
such proposed replacement(s) are to occur;

 

(ii)         As of the date of giving such notice and as of the effective date
of such replacement no Event of Default shall have occurred and be continuing;

 

(iii)        Such notice shall identify the Individual Property as to which
Borrower wishes to replace the Manager and the Qualified Manager with whom
Borrower or Operating Lessee intends to replace the applicable Manager, and as
of the date of giving such notice and as of the effective date of such
replacement, (x) no such Qualified Manager shall be subject to any bankruptcy or
similar insolvency proceeding, and (y) there shall have been no material adverse
change in the condition of any such Qualified Manager, financial and otherwise,
since the Closing Date; provided, however, that the replacement property
management company identified by Borrower shall be a “Qualified Manager” for
purposes of this subsection (b) only if such replacement property company does
not manage more than seventy-five percent (75%) of the total number of keys of
the Individual Properties;

 

 -94-Loan Agreement

 

 

(iv)        Each Qualified Manager identified by Borrower or Operating Lessee
shall enter into one or more new Management Agreements, which agreements shall
(A) not provide for Base Management Fees in excess of three percent (3.0%) of
the monthly Operating Income for the Individual Properties managed by such
Qualified Manager unless otherwise reasonably agreed by Lender in writing, and
not provide for Incentive Management Fees or other compensation in excess of the
market rates for such fees and other compensation, and (B) otherwise be on terms
and conditions approved by Lender (which approval will not be unreasonably
withheld, conditioned or delayed); provided that any new Management Agreement
which satisfies clause (A) above and is in form and substance substantially the
same as any existing Management Agreement by and between a Qualified Manager and
the applicable Individual Borrowers or Operating Lessee that exist as of the
Closing Date shall be deemed to be approved by Lender;

 

(v)         Lender shall have received evidence reasonably satisfactory to it
(which may be in the form of an Officer’s Certificate) that such replacement(s)
of such Manager(s) are not prohibited by and would not permit the applicable
Franchisor or the applicable Ground Lessor to terminate any Franchise Agreement
or Ground Lease, and will not result in or cause any breach or default under any
Franchise Agreement or Ground Lease to the extent such violation, breach or
default (with or without the passage of time) would result in an Event of
Default, and that any approvals required under any Franchise Agreement or Ground
Lease to the replacement of such Manager(s) have been obtained;

 

(vi)        Concurrently with such replacement(s), Borrower or Operating Lessee
shall have paid (or escrowed in accordance with the terms of the Management
Agreement(s) being replaced) any termination or transition costs and expenses,
termination fees or their equivalent, to which any Manager being replaced is
entitled under its Management Agreement; and

 

(vii)       Each such Qualified Manager shall enter into an assignment of
management agreement and subordination of management fees which either is (A) in
form and substance substantially the same as the assignment of management
agreement and subordination of management fees entered into by any Qualified
Manager on the Closing Date or (B) in form and substance approved by Lender
(which approval will not be unreasonably withheld, conditioned or delayed).

 

 -95-Loan Agreement

 

 

4.14.3     Replacement of Manager. In each case to the extent permitted under
the applicable Assignment of Management Agreement, Lender shall have the right
to require Borrower and Operating Lessee to replace any Manager with a Person
chosen by Borrower or Operating Lessee and, unless such replacement is a
Qualified Manager, approved by Lender (provided, that such approval of a Manager
that is not a Qualified Manager may be conditioned upon Borrower or Operating
Lessee delivering a Rating Agency Confirmation as to such new manager and
management agreement) upon the occurrence of any one or more of the following
events: (i)  at any time after the Loan has been accelerated in accordance with
Section 8.2.1, the Maturity Date has occurred, or Lender has commenced a
foreclosure action, applied for the appointment of a receiver or exercised other
similar remedies with respect to an Event of Default, (ii) if such Manager shall
be in material default under the Management Agreement that causes a material
adverse effect (in Lender’s reasonable determination) on Borrower, Operating
Lessee or their respective business, net cash flow, operations or financial
condition or on the Properties then under management pursuant to such Management
Agreement or the use, value, operation or net cash flow thereof or Borrower’s or
Operating Lessee’s interest therein or Lender’s security therein, and such
default is not cured within thirty (30) days after notice thereof from Lender to
Borrower; provided if such default cannot reasonably be cured within such thirty
(30) day period Borrower shall have an additional sixty (60) days in which to
cure such default so long as it is diligently pursuing a cure, (iii) if such
Manager shall become insolvent or a debtor in any bankruptcy or insolvency
proceeding (provided that if such proceeding is involuntary, the same shall not
have been dismissed within ninety (90) days of filing), or (iv) if at any time
such Manager has engaged in gross negligence, fraud, willful misconduct or
misappropriation of funds (unless such gross negligence, fraud, willful
misconduct or misappropriation of funds is the act of any employee of such
Manager other than a senior officer or other individual controlling such Manager
and within thirty (30) days of such Manager’s discovery thereof, such employee
has been terminated by that Manager and that Manager has fully compensated
Borrower or Operating Lessee, as applicable, for any losses suffered as a result
of such gross negligence, fraud, willful misconduct or misappropriation of
funds). Lender shall have the right to replace the applicable Manager with any
Qualified Manager if (A) neither Borrower nor Operating Lessee is diligently
working to replace the Manager and keeping Lender reasonably apprised of its
efforts in connection therewith, and Borrower or Operating Lessee fails to
commence and continue thereafter diligently working to replace the applicable
Manager within ten (10) Business Days after written notice from Lender, or (B)
Borrower or Operating Lessee fails to actually replace the Manager with a
Manager approved by Lender within one hundred twenty (120) days after Lender’s
initial notice to Borrower or Operating Lessee to replace the Manager; provided
that if Borrower or Operating Lessee is unable to replace the Manager within
such one hundred twenty (120) days and Borrower or Operating Lessee continues to
diligently work to do so, then Borrower and Operating Lessee shall have up to an
additional sixty (60) days to replace the Manager.

 

4.14.4     Brand Manager Rights.

 

Lender acknowledges that pursuant to the Management Agreements, the Brand
Managers retain control and discretion over certain matters customarily subject
to Lender approval and have the right to take certain actions that may be
restricted under the Loan Documents (including matters relating to FF&E, leases,
casualty and condemnation, alterations, leasing and budgets). Lender
acknowledges that any restrictions herein or in the other Loan Documents on the
actions of Borrower and Operating Lessee and any approvals Borrower or Operating
Lessee is required to obtain from Lender shall be subject to the rights and
discretion of the applicable Brand Manager with respect to such Individual
Properties pursuant to the terms of the applicable Management Agreements.

 

Section 4.15        Performance by Borrower; Compliance with Agreements.

 

(a)          Each of Borrower and Operating Lessee shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, Borrower and/or
Operating Lessee, and shall not enter into or otherwise suffer or permit any
amendment, waiver, supplement, termination or other modification of any Loan
Document executed and delivered by, or applicable to, Borrower without the prior
consent of Lender.

 

 -96-Loan Agreement

 

 

(b)          Each of Borrower and Operating Lessee shall at all times comply in
all material respects with all Operations Agreements. Each of Borrower and
Operating Lessee agrees that without the prior written consent of Lender,
neither Borrower nor Operating Lessee will amend, modify or terminate any of the
Operations Agreements.

 

Section 4.16        Licenses; Intellectual Property; Website.

 

4.16.1     Licenses. Borrower or Operating Lessee shall (or, as applicable,
shall cause Liquor Subsidiary to) keep and maintain all Licenses necessary for
the operation of each Individual Property as a hotel. Neither Borrower nor
Operating Lessee shall transfer any Licenses required for the operation of each
Individual Property (except in connection with a Permitted Direct Assumption).
Following the occurrence and during the continuation of any Event of Default,
Borrower and Operating Lessee shall upon any request of Lender cooperate with
Lender (and its nominees and successors and assigns) in (i) the transfer to
Lender (or such nominee, successor or assign) of any Licenses (including,
without limitation, liquor licenses) necessary or appropriate for the operation
of any of the Properties; (ii) the obtaining by Lender (or such nominee,
successor or assign) of any Licenses (including, without limitation, liquor
licenses) necessary or appropriate for the operation of any of the Properties;
and (iii) the continuation by Borrower or Operating Lessee or any tenant under
any Lease or by any Manager on behalf of Borrower or Operating Lessee of any
existing licenses and permits (including, without limitation, liquor licenses)
and/or arrangements for liquor sales and service to be conducted by third party
vendors, under catering licenses or otherwise, until new licenses and permits
are obtained.

 

4.16.2     Intellectual Property. Borrower or Operating Lessee shall keep and
maintain all Intellectual Property relating to the use or operation of each
Individual Property and all Intellectual Property shall be held by and (if
applicable) registered in the name of Borrower or Operating Lessee. Neither
Borrower nor Operating Lessee shall Transfer or let lapse any Intellectual
Property without Lender’s prior consent.

 

4.16.3     Website. Any website with respect to any Individual Property (other
than tenant websites) or Borrower or Operating Lessee shall be maintained by or
on behalf of Borrower or Operating Lessee and any such website shall be
registered in the name of Borrower or Operating Lessee. Neither Borrower nor
Operating Lessee shall Transfer any such website without Lender’s prior consent.

 

Section 4.17       Further Assurances. Borrower and Operating Lessee shall, at
Borrower’s or Operating Lessee’s sole cost and expense:

 

(a)          furnish to Lender, to the extent not already furnished to Lender on
or before the Closing Date, all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by Borrower and Operating Lessee pursuant to the terms of the Loan Documents or
which are reasonably requested by Lender in connection therewith;

 

 -97-Loan Agreement

 

 

(b)          cure any defects in the execution and delivery of the Loan
Documents and execute and deliver, or cause to be executed and delivered, to
Lender such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable to evidence, preserve
and/or protect the collateral at any time securing or intended to secure the
Obligations, as Lender may reasonably require including, without limitation, the
execution and delivery of all such writings necessary to transfer any licenses
identified by Lender in the name of Lender or its designee after the occurrence
and during the continuation of an Event of Default; provided that no such cure,
document, instrument, certificate, assignment or other writing reduces the
rights or increases the obligations of Borrower, Operating Lessee or any
Guarantor under the Loan Documents; and

 

(c)          do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
may reasonably require from time to time.

 

Section 4.18        Estoppel Statement.

 

(a)          After request by Lender, Borrower shall within ten (10) Business
Days furnish Lender with a statement, duly acknowledged and certified, stating
(i) the Outstanding Principal Balance of the Loan, (ii) the Interest Rate,
(iii) the date installments of interest and/or principal were last paid,
(iv) any known offsets or defenses to the payment and performance of the
Obligations, if any, and (v) that this Agreement and the other Loan Documents
have not been modified or if modified, giving particulars of such modification.

 

(b)          Borrower and Operating Lessee shall use commercially reasonable
efforts to deliver to Lender, within thirty (30) days of Lender’s request, an
estoppel certificate from each tenant under any Lease in form and substance
reasonably satisfactory to Lender; provided, that neither Borrower nor Operating
Lessee shall be required to deliver such certificates more frequently than the
lesser of (x) two (2) times in any calendar year or (y) the number of requests
permitted to be made under the applicable Lease in any calendar year; provided,
however, that there will be no limit on the number of times Borrower and
Operating Lessee may be required to use commercially reasonable efforts to
obtain such certificates if an Event of Default has occurred and is continuing
(subject to the applicable terms of each Lease).

 

(c)          Borrower and Operating Lessee shall use commercially reasonable
efforts to deliver to Lender, within thirty (30) days of Lender’s request,
estoppel certificates from each party under any Operations Agreement, in form
and substance reasonably satisfactory to Lender; provided, that neither Borrower
nor Operating Lessee shall be required to deliver such certificates more than
three (3) times during the Term and not more frequently than once per calendar
year (or twice during any calendar year in which a Securitization occurs).

 

(d)          Borrower and Operating Lessee shall use commercially reasonable
efforts to deliver to Lender, within thirty (30) days of Lender’s request,
estoppel certificates from the Ground Lessor, in form and substance reasonably
satisfactory to Lender; provided, that neither Borrower nor Operating Lessee
shall be required to deliver such certificates more than three (3) times during
the Term and not more frequently than once per calendar year (or twice during
any calendar year in which a Securitization occurs).

 

(e)          Borrower and Operating Lessee shall use commercially reasonable
efforts to deliver to Lender, within thirty (30) days of Lender’s request,
estoppel certificates from each Franchisor, in form and substance reasonably
satisfactory to Lender; provided, that neither Borrower nor Operating Lessee
shall be required to deliver such certificates more than three (3) times during
the Term and not more frequently than once per calendar year (or twice during
any calendar year in which a Securitization occurs).

 

 -98-Loan Agreement

 

 

Section 4.19       Notice of Default. Borrower shall promptly advise Lender of
the occurrence of any Default or Event of Default of which Borrower or Operating
Lessee has knowledge.

 

Section 4.20       Cooperate in Legal Proceedings. Borrower and Operating Lessee
shall cooperate fully with Lender with respect to any proceedings before any
court, board or other Governmental Authority which may in any way affect the
rights of Lender hereunder or any rights obtained by Lender under any of the
other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.

 

Section 4.21       Indebtedness. Neither Borrower nor Operating Lessee shall
directly or indirectly create, incur or assume any indebtedness other than
(i) the Debt and the Other Obligations, (ii) ordinary course equipment or
personal property financing that is secured only by the financed equipment or
personal property; (iii) unsecured trade payables incurred in the ordinary
course of business relating to the ownership and operation of the Properties,
which in the case of such unsecured trade payables (A) are not evidenced by a
note, (B) do not exceed, at any time, together with amounts payable under clause
(ii), a maximum aggregate amount of four percent (4%) of the original principal
amount of the Loan, and (C) are paid within ninety (90) days of the date
incurred unless such amount is being contested in good faith, (iv) Taxes and
Other Charges not yet Due and Payable, unless contested in good faith, (v)
insurance premiums, Capital Expenditures, obligations to Tenants and customers,
Property expenses and other obligations incurred in accordance with the Loan
Documents, (vi) contractual indemnity obligations entered into in the ordinary
course of business, and (vii) indebtedness secured by Permitted Encumbrances
(collectively, “Permitted Indebtedness”).

 

Section 4.22       Business and Operations. Borrower and Operating Lessee will
continue to engage in the businesses presently conducted by it as and to the
extent the same are necessary for the ownership, maintenance, management and
operation of each Individual Property. Borrower and Operating Lessee will
qualify to do business and will remain in good standing under the laws of each
jurisdiction as and to the extent the same are required for the ownership,
maintenance, management and operation of each Individual Property.

 

Section 4.23       Dissolution. Neither Borrower nor Operating Lessee shall
(i) engage in any dissolution, liquidation or consolidation or merger with or
into any other business entity, (ii) engage in any business activity not related
to the ownership and operation of the Properties, (iii) transfer, lease or sell,
in one transaction or any combination of transactions, all or substantially all
of the property or assets of Borrower or Operating Lessee except to the extent
expressly permitted by the Loan Documents, or (iv) cause, permit or suffer any
SPC Party to (A) dissolve, wind up or liquidate or take any action, or omit to
take any action, as a result of which such SPC Party would be dissolved, wound
up or liquidated in whole or in part, or (B) amend, modify, waive or terminate
the certificate of incorporation, bylaws, certificate of formation or operating
agreement of such SPC Party, in each case without obtaining the prior consent of
Lender.

 

 -99-Loan Agreement

 

 

Section 4.24       Debt Cancellation. Neither Borrower nor Operating Lessee
shall cancel or otherwise forgive or release any claim or debt (other than the
surrender or termination of Leases in accordance herewith) owed to Borrower or
Operating Lessee by any Person, except for adequate consideration and in the
ordinary course of Borrower’s or Operating Lessee’s business.

 

Section 4.25       Affiliate Transactions. Neither Borrower nor Operating Lessee
shall enter into, or be a party to, any transaction with an Affiliate of
Borrower or Operating Lessee or any of the partners, members or shareholders, as
applicable, of Borrower or Operating Lessee except in the ordinary course of
business and on terms which are no less favorable to Borrower, Operating Lessee
or such Affiliate than would be obtained in a comparable arm’s-length
transaction with an unrelated third party.

 

Section 4.26       No Joint Assessment. Neither Borrower nor Operating Lessee
shall suffer, permit or initiate the joint assessment of any Individual Property
(i) with any other real property constituting a tax lot separate from such
Individual Property, and (ii) with any portion of such Individual Property which
may be deemed to constitute personal property, or any other procedure whereby
the Lien of any taxes which may be levied against such personal property shall
be assessed or levied or charged to such Individual Property.

 

Section 4.27       Principal Place of Business. Neither Borrower nor Operating
Lessee shall change its principal place of business from the address set forth
on the first page of this Agreement without first giving Lender thirty (30) days
prior written notice.

 

Section 4.28       Change of Name, Identity or Structure. No Individual Borrower
nor Operating Lessee shall change its respective name, identity (including its
trade name or names) or convert from a limited liability company structure, as
applicable, without notifying Lender of such change in writing at least thirty
(30) days prior to the effective date of such change and without first obtaining
the prior written consent of Lender. Borrower and Operating Lessee shall deliver
to Lender, prior to or contemporaneously with the effective date of any such
change, any financing statement or financing statement change required by Lender
to establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Borrower or Operating Lessee,
as applicable, shall execute a certificate in form reasonably satisfactory to
Lender listing the trade names under which Borrower or Operating Lessee, as
applicable, intends to operate each Individual Property, and representing and
warranting that Borrower or Operating Lessee, as applicable, does business under
no other trade name with respect to such Individual Property.

 

 -100-Loan Agreement

 

 

Section 4.29         Costs and Expenses.

 

(a)          Except as otherwise expressed herein or in any of the other Loan
Documents, Borrower shall pay or, if Borrower fails to pay, reimburse Lender
upon receipt of notice from Lender, for all reasonable costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by Lender in
connection with (i) Borrower’s and Operating Lessee’s ongoing performance of and
compliance with Borrower’s and Operating Lessee’s agreements and covenants
contained in this Agreement and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including confirming
compliance with environmental and insurance requirements; (ii) Lender’s ongoing
performance of and compliance with all agreements and covenants contained in
this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (iii) the negotiation, preparation,
execution and delivery of any consents, amendments, waivers or other
modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower or Operating Lessee; (iv) filing and
recording of any Loan Documents; (v) title insurance, surveys, inspections and
appraisals (A) required in connection with the diligence preceding the Closing
Date or as a condition to the closing of the Loan, even if provided after the
date hereof if ordered in connection with such diligence or closing, or (B)
expressly required at other times in accordance with the terms of this Agreement
or the other Loan Documents; (vi) the creation, perfection or protection of
Lender’s Liens in the Properties and the Accounts (including fees and expenses
for title and lien searches, intangibles taxes, personal property taxes,
mortgage recording taxes, due diligence expenses, travel expenses, accounting
firm fees, costs of appraisals, environmental reports and Lender’s Consultant,
surveys and engineering reports); (vii) enforcing or preserving any rights in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, Operating Lessee, the Loan Documents, the Properties, or any other
security given for the Loan; and (viii) fees charged by Servicer (except to the
extent expressly provided in Section 10.21 or as otherwise expressly limited
hereunder; provided that if another provision of this Agreement requires the
payment of any fee to Lender and/or Servicer with respect to any matter, no
additional fee charged by Servicer shall be payable by Borrower or Operating
Lessee with respect to such matter), and if a Securitization has occurred, by
the Rating Agencies in connection with the Loan or any modification thereof; and
(ix) enforcing any Obligations of or collecting any payments due from Borrower
or Operating Lessee under this Agreement, the other Loan Documents or with
respect to the Properties or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
“work-out” or of any insolvency or bankruptcy proceedings; provided, however,
that neither Borrower nor Operating Lessee shall be liable for the payment of
any such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender.

 

(b)          In addition, in connection with any Rating Agency Confirmation,
Review Waiver or other Rating Agency consent, approval or review requested by
Borrower or Operating Lessee or required hereunder (other than the initial
review of the Loan by the Rating Agencies in connection with a Securitization),
Borrower shall pay all of the reasonable costs and expenses of Lender and the
Servicer and the costs and expenses of each Rating Agency in connection
therewith, and, if applicable, shall pay any fees imposed by any Rating Agency
in connection therewith.

 

(c)          Any costs due and payable to Lender may be paid, at Lender’s
election in its sole discretion, from any amounts in the Deposit Account. Any
costs and expenses due and payable by Borrower or Operating Lessee hereunder
which are not paid by Borrower within ten (10) days after written notice thereof
may be paid from any amounts in the Deposit Account, with notice thereof to
Borrower. The obligations and liabilities of Borrower and Operating Lessee under
this Section 4.29 shall (i) become part of the Obligations, (ii) be secured by
the Loan Documents and (iii) survive the Term and the exercise by Lender of any
of its rights or remedies under the Loan Documents, including the acquisition of
any Individual Property by foreclosure or a conveyance in lieu of foreclosure.

 

 -101-Loan Agreement

 

 

Section 4.30        Indemnity. Borrower shall indemnify, defend and hold
harmless Lender from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), other than breakage costs, that may
be imposed on, incurred by, or asserted against Lender in any manner relating to
or arising out of (i) any breach by Borrower or Operating Lessee of its
Obligations under, or any material misrepresentation by Borrower or Operating
Lessee contained in, this Agreement or the other Loan Documents; (ii) the use or
intended use of the proceeds of the Loan; (iii) any information provided by or
on behalf of Borrower or Operating Lessee, or contained in any documentation
approved by Borrower or Operating Lessee, in either case, to the extent
delivered to Lender pursuant to or in connection with this Agreement or as a
condition to the Loan; (iv) ownership of any Mortgage, any Individual Property
or any interest therein, or receipt of any Gross Revenue (including, subject to
Section 2.8, due to any Increased Costs, Special Taxes (other than Excluded
Taxes) or Other Taxes, excluding interest and penalties on any Tax if such
interest and penalties arose solely as a result of the negligence of Lender);
(v) any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about any Individual Property or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (vi) any
use, nonuse or condition in, on or about any Individual Property or on adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(vii) performance of any labor or services or the furnishing of any materials or
other property in respect of any Individual Property; (viii) any failure of any
Individual Property to comply with any Legal Requirement; (ix) any claim by
brokers, finders or similar persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving any Individual Property
or any part thereof, or any liability asserted against Lender with respect
thereto; (x) the claims of any lessee of any portion of any Individual Property
or any Person acting through or under any lessee or otherwise arising under or
as a consequence of any Lease; (xi) the claims of any Manager or any Person
acting through or under such Manager or otherwise arising under or as a
consequence of any Management Agreement; and (xii) the claims of any Franchisor
or any Person acting through or under any Franchisor or otherwise arising under
or as a consequence of any Franchise Agreement (collectively, the “Indemnified
Liabilities”); provided, however, that Borrower shall not have any obligation to
Lender hereunder to the extent that such Indemnified Liabilities arise from the
active gross negligence, illegal acts, fraud or willful misconduct of Lender. To
the extent that the undertaking to indemnify, defend and hold harmless set forth
in the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Lender; provided, further, that Borrower
shall not have any obligation to Lender hereunder for an Indemnified Liability
if all of the following apply: (a) the Loan is included in a Securitization
Vehicle, (b) the Indemnified Liability is caused by  the  Securitization Vehicle
failing to have, or maintain its, REMIC or Grantor Trust status, as applicable,
and (c) the reason for such failure is other than a breach by Borrower or
Operating Lessee of its Obligations under, or any material misrepresentation by
Borrower or Operating Lessee contained in, this Agreement or the other Loan
Documents.

 

Section 4.31        ERISA.

 

(a)          Neither Borrower nor Operating Lessee shall engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender or any assignee of any of its rights under
the Note, this Agreement or the other Loan Documents) to be a non-exempt (under
a statutory or administrative class exemption) prohibited transaction under the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or Section
4975 of the Code.

 

 -102-Loan Agreement

 

 

(b)          Neither Borrower nor Operating Lessee shall maintain, sponsor,
contribute to or agree to contribute to, or suffer or permit any ERISA Affiliate
of Borrower or Operating Lessee to, maintain, sponsor, contribute to or agree to
contribute to, any “employee benefit plan” (as defined in Section 3(3) of ERISA)
subject to Title IV or Section 302 of ERISA or Section 412 of the Code or permit
the assets of Borrower or Operating Lessee to become “plan assets,” within the
meaning of 29 C.F.R. 2510.3-101, as modified in application by Section 3(42) of
ERISA.

 

(c)          Each of Borrower and Operating Lessee shall deliver to Lender such
certifications or other evidence from time to time throughout the Term, as
requested by Lender in its sole discretion, that (A) none of Borrower, Operating
Lessee or any Guarantor is or maintains an “employee benefit plan” as defined in
Section 3(3) of ERISA, which is subject to Title IV of ERISA, or a “governmental
plan” within the meaning of Section 3(32) of ERISA; (B) none of Borrower,
Operating Lessee or any Guarantor is subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(C) the assets of Borrower, Operating Lessee and Guarantors do not constitute
“plan assets” within the meaning of 29 C.F.R §2510.3-101 as modified in
application by Section 3(42) of ERISA of any “benefit plan investor” as defined
in Section 3(42) of ERISA.

 

Section 4.32        Patriot Act Compliance.

 

(a)          Each of Borrower and Operating Lessee will use its good faith and
commercially reasonable efforts to comply with the Patriot Act and all
applicable requirements of Governmental Authorities having jurisdiction over
Borrower, Operating Lessee and/or any Individual Property, including those
relating to money laundering and terrorism. Lender shall have the right to audit
Borrower’s and Operating Lessee’s compliance with the Patriot Act and all
applicable requirements of Governmental Authorities having jurisdiction over
Borrower, Operating Lessee and/or any Individual Property, including those
relating to money laundering and terrorism. In the event that Borrower or
Operating Lessee fails to comply with the Patriot Act or any such requirements
of Governmental Authorities, then Lender may, at its option, cause Borrower or
Operating Lessee, as applicable, to comply therewith and any and all costs and
expenses incurred by Lender in connection therewith shall be secured by the
Mortgage and the other Loan Documents and shall be immediately due and payable.

 

(b)          None of the funds or other assets of any Borrower, Operating Lessee
or any other Loan Party constitute property of, or are beneficially owned,
directly or indirectly, by any person, entity or government subject to trade
restrictions under United States law, including but not limited to, the Patriot
Act (including anti-terrorism provisions thereof), the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder with the result that the investment in Borrower or any other Loan
Party (whether directly or indirectly), is prohibited by law or the Loan made by
the Lender is in violation of law (“Embargoed Person”).

 

 -103-Loan Agreement

 

 

(c)          None of the funds or other assets of any Borrower, Operating Lessee
or any other Loan Party constitute property of, or are beneficially owned,
directly or indirectly, by any Embargoed Person.

 

(d)          No Embargoed Person has any interest of any nature whatsoever in
Borrower, Operating Lessee or any other Loan Party with the result that the
investment in Borrower, Operating Lessee or any other Loan Party (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law.

 

(e)          None of the funds of Borrower, Operating Lessee or any other Loan
Party have been derived from or are the proceeds of, any unlawful activity with
the result that the investment in Borrower, Operating Lessee or any other Loan
Party (whether directly or indirectly), is prohibited by law or the Loan is in
violation of law.

 

Nothing contained in this Section 4.32 shall apply, and no representation or
warranty is made with respect, to any public equity holder of any Person by
virtue of such public equity holder being a holder of publicly traded shares or
other publicly traded equity interests in any Person which is listed on the New
York Stock Exchange or another nationally or internationally recognized stock
exchange or is quoted on a national quotation system.

 

Section 4.33        Ground Leases.

 

(a)          Borrower shall:

 

(i)          pay all rents, additional rents and other sums required to be paid
by the applicable Individual Borrowers, as tenant under and pursuant to the
provisions of the Ground Leases, as and when such rent or other charge is
payable, subject to applicable grace periods afforded Borrower under the Ground
Lease (but not, for the avoidance of doubt, any additional grace notice, or cure
periods afforded Lender under the Ground Lease or otherwise) and to Borrower’s
right to contest (if expressly permitted under the Ground Lease and then in
strict accordance with the terms of such Ground Lease) the amount claimed by
Lessor to be due;

 

(ii)         diligently perform and observe all of the terms, covenants and
conditions of the Ground Leases on the part of the applicable Individual
Borrowers, as tenant thereunder, to be performed and observed, at least three
(3) days prior to the expiration of any applicable grace period therein
provided; and

 

(iii)        promptly notify Lender of the giving of any written notice by the
lessor under the Ground Leases to Borrower of any default by Borrower in the
performance or observance of any of the terms, covenants or conditions of the
Ground Leases on the part of Borrower, as tenant thereunder, to be performed or
observed, and deliver to Lender a true copy of each such notice.

 

 -104-Loan Agreement

 

 

(b)          Borrower shall not, without the prior consent of Lender (which
consent may be withheld by Lender in its sole and absolute discretion),
surrender or cause or permit the surrender of the leasehold estate created by
any of the Ground Leases or terminate or cancel the Ground Leases or modify,
change, supplement, alter or amend the Ground Leases, in any material respect,
either orally or in writing, and Borrower hereby assigns to Lender, as further
security for the payment and performance of the Obligations and for the
performance and observance of the terms, covenants and conditions of the
Mortgage, this Agreement and the other Loan Documents, all of the rights,
privileges and prerogatives of the applicable Individual Borrowers, as tenants
under the Ground Leases, to surrender the leasehold estate created by the Ground
Lease or to terminate, cancel, modify, change, supplement, alter or amend the
Ground Lease in any material respect, and any such surrender of the leasehold
estate created by the Ground Lease or termination, cancellation, modification,
change, supplement, alteration or amendment of the Ground Lease in any material
respect without the prior consent of Lender shall be void and of no force and
effect.

 

(c)          If any Individual Borrower shall default in the performance or
observance of any material term, covenant or condition of any Ground Lease on
the part of such Individual Borrower, as tenant thereunder, to be performed or
observed, then, without limiting the generality of the other provisions of the
Mortgage, this Agreement and the other Loan Documents, and without waiving or
releasing Borrower from any of its Obligations hereunder, Lender shall have the
right, but shall be under no obligation, to pay any sums and to perform any act
or take any action as may be necessary or appropriate to cause all of the
material terms, covenants and conditions of the Ground Lease on the part of such
Individual Borrower, as tenant thereunder, to be performed or observed or to be
promptly performed or observed on behalf of such Individual Borrower, to the end
that the rights of such Individual Borrower in, to and under the Ground Lease
shall be kept unimpaired as a result thereof and free from default, even though
the existence of such event of default or the nature thereof be questioned or
denied by Borrower or by any party on behalf of Borrower. If Lender shall make
any payment or perform any act or take action in accordance with the preceding
sentence, provided Lender shall not have received any notice of default from the
ground lessor and no Event of Default shall have occurred and be continuing,
Lender will if practicable provide reasonable advance notice, not to exceed five
(5) days, to Borrower prior to, and if not practicable then subsequent to, the
making of any such payment, the performance of any such act or the taking of any
such action. In any such event, subject to the rights of tenants, subtenants and
other occupants under the Leases or of parties to any Operations Agreement,
Lender and any Person designated as Lender’s agent by Lender shall have, and are
hereby granted, the right to enter upon any Individual Property at any
reasonable time, on reasonable notice and from time to time for the purpose of
taking any such action. Lender may pay and expend such sums of money as Lender
reasonably deems necessary for any such purpose and upon so doing shall be
subrogated to any and all rights of the landlord under the Ground Leases.
Borrower hereby agrees to pay to Lender within five (5) days after demand, all
such sums so paid and expended by Lender, together with interest thereon from
the day of such payment at the Default Rate. All sums so paid and expended by
Lender and the interest thereon shall be secured by the legal operation and
effect of the Mortgage.

 

(d)          If any lessor under a Ground Lease shall deliver to Lender a copy
of any notice of default sent by said lessor to an Individual Borrower, as
tenant under such Ground Lease, such notice shall constitute full protection to
Lender for any action taken or omitted to be taken by Lender, in good faith, in
reliance thereon. Borrower shall exercise each individual option, if any, to
extend or renew the term of the Ground Leases upon demand by Lender made at any
time within one (1) year prior to the last day upon which any such option may be
exercised, and if Borrower shall fail to do so, Borrower hereby expressly
authorizes and appoints Lender its attorney-in-fact to exercise any such option
in the name of and upon behalf of the applicable Individual Borrower, which
power of attorney shall be irrevocable and shall be deemed to be coupled with an
interest. Borrower will not subordinate or consent to the subordination of the
Ground Leases to any mortgage, security deed, lease or other interest on or in
the landlord’s interest in all or any part of any Individual Property, unless,
in each such case, the written consent of Lender shall have been first had and
obtained.

 

 -105-Loan Agreement

 

 

(e)          Notwithstanding anything to the contrary contained in this
Agreement with respect to each Ground Lease:

 

(i)          The lien of the related Mortgage attaches to all of the applicable
Individual Borrower’s rights and remedies at any time arising under or pursuant
to Subsection 365(h) of the U.S. Bankruptcy Code, 11 U.S.C. Sections 101 et
seq., including, without limitation, all of such Individual Borrower’s rights,
as debtor, to remain in possession of the related Ground Lease Property.

 

(ii)         No Individual Borrower shall, without Lender’s written consent,
elect to treat any Ground Lease as terminated under Subsection 365(h)(l) of the
U.S. Bankruptcy Code. Any such election made without Lender’s prior written
consent shall be void.

 

(iii)        As security for the Debt, each Individual Borrower unconditionally
assigns, transfers and sets over to Lender all of its claims and rights to the
payment of damages arising from any rejection by the lessor under the Ground
Lease under the U.S. Bankruptcy Code. Lender and Borrower shall proceed jointly
or in the name of such Individual Borrower in respect of any claim, suit, action
or proceeding relating to the rejection of the Ground Lease, including, without
limitation, the right to file and prosecute any proofs of claim, complaints,
motions, applications, notices and other documents in any case in respect of
lessor under the U.S. Bankruptcy Code. This assignment constitutes a present,
irrevocable and unconditional assignment of the foregoing claims, rights and
remedies, and shall continue in effect until all of the Debt shall have been
satisfied and discharged in full. Any amounts received by Lender or any
Individual Borrower as damages arising out of the rejection of a Ground Lease as
aforesaid shall be applied to all costs and expenses of Lender (including,
without limitation, attorney’s fees and costs) incurred in connection with the
exercise of any of its rights or remedies in accordance with the applicable
provisions of this Agreement.

 

(iv)        If, pursuant to subsection 365(h) of the Bankruptcy Code, any
Individual Borrower seeks to offset, against the rent reserved in any Ground
Lease, the amount of any damages caused by the nonperformance by the applicable
Ground Lessor of any of its obligations thereunder after the rejection by such
Ground Lessor of such Ground Lease under the U.S. Bankruptcy Code, then such
Individual Borrower shall not effect any offset of such amounts unless it shall
have provided written notice to Lender of its intent to do so and Lender shall
have consented thereto.

 

(v)         If any action, proceeding, motion or notice shall be commenced or
filed in respect of any lessor of all or any part of any Ground Lease Property
in connection with any case under the U.S. Bankruptcy Code, Lender and Borrower
shall cooperatively conduct and control any such litigation with counsel agreed
upon between Borrower and Lender in connection with such litigation. Borrower
shall, upon demand, pay to Lender all costs and expenses (including reasonable
attorneys’ fees and costs) actually paid or actually incurred by Lender in
connection with the cooperative prosecution or conduct of any such proceedings.
All such costs and expenses shall be secured by the lien of the related
Mortgage.

 

 -106-Loan Agreement

 

 

(vi)        Borrower shall promptly, after obtaining knowledge of such filing
notify Lender orally of any filing by or against the Ground Lessor under such
Ground Lease of a petition under the U.S. Bankruptcy Code. Borrower shall
thereafter promptly give written notice of such filing to Lender, setting forth
any information available to Borrower as to the date of such filing, the court
in which such petition was filed, and the relief sought in such filing. Borrower
shall promptly deliver to Lender any and all notices, summonses, pleadings,
applications and other documents received by Borrower in connection with any
such petition and any proceedings relating to such petition.

 

(f)          Borrower may exercise, or cause or permit the exercise of, any
Ground Lease Purchase Option with respect to any Ground Lease Property without
Lender’s prior written consent; provided each of the following conditions is
satisfied:

 

(i)          No Event of Default shall have occurred and be continuing;

 

(ii)         Lender shall receive not less than forty-five (45) days advance
written notice of the related Individual Borrower’s intention to exercise such
Ground Lease Purchase Option unless such Ground Lease sets forth a shorter time
period within which such Individual Borrower is required to respond in order to
exercise such Ground Lease Purchase Option, in which case the advance notice
period hereunder shall instead be such shorter time period;

 

(iii)        The related Individual Borrower shall comply with all of the terms
and conditions of the related Ground Lease with respect to such Ground Lease
Purchase Option;

 

(iv)        Fee title to the related Ground Lease Property shall be conveyed to
the Individual Borrower who is the ground lessee under such Ground Lease
pursuant a bona fide arms length transaction and for fair consideration and such
acquisition shall not result in a merger of the fee and leasehold estates in
such Ground Lease Property;

 

(v)         Borrower shall not incur any Indebtedness in order to finance the
exercise of such Ground Lease Purchase Option;

 

(vi)        All third party consents or approvals required in order to acquire
fee title to the Ground Lease Property, including without limitation, the
consent of any Franchisor, shall have been obtained (satisfaction of this
condition may be demonstrated by an Officer’s Certificate certifying to the
foregoing);

 

(vii)       Simultaneously with the Individual Borrower’s acquisition of fee
title to the Ground Lease Property, such Individual Borrower shall execute,
acknowledge and deliver to Lender an amendment and spreader agreement to the
applicable Mortgage, or at Lender’s discretion, a new Mortgage, substantially in
the same form as the existing Mortgage, together with such other documents as
Lender may reasonably require for the purpose of granting Lender a first
priority, perfected lien on and security interest in the Individual Borrower’s
fee simple estate in the Individual Property and all related Gross Revenue,
Accounts, Fixtures, Equipment and other personal property, on the same terms and
conditions as the Lien and security interest granted to Lender on the Closing
Date;

 

 -107-Loan Agreement

 

 

(viii)      Lender shall receive a new Title Insurance Policy (or an endorsement
to the existing Title Policy) satisfactory to Lender insuring Lenders’ first
priority, perfected Lien on and security interest in such Individual Borrower’s
fee simple ownership of the related Ground Lease Property;

 

(ix)         The organizational documents of such Individual Borrower shall, if
necessary, be modified to allow the Borrower to hold fee title to such Ground
Lease Property;

 

(x)          If the Loan is included in a REMIC Trust and if required by Lender,
Lender shall have received a REMIC Opinion with respect to the exercise of the
Ground Lease Purchase Option; and

 

(xi)         Lender and/or its Servicer shall be reimbursed for all costs and
expenses, including legal fees, incurred in connection with the exercise of such
Ground Lease Purchase Option;

 

(g)          Borrower shall not cause or permit the exercise of any Ground Lease
Purchase Option by or on behalf of any Affiliate of Borrower or any other Person
over whom Borrower has control other than the Individual Borrower which is the
ground lessee under the related Ground Lease, and then only in compliance with
the preceding Subsection (f).

 

Section 4.34        Hotel Covenants.

 

(a)          Each of Borrower and Operating Lessee shall cause the hotel located
on each Individual Property to be operated pursuant to the applicable Franchise
Agreement.

 

(b)          Each of Borrower and Operating Lessee shall (i) promptly perform
and/or observe all of the covenants and agreements required to be performed and
observed by it under each Franchise Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any default under any Franchise Agreement of which it is aware;
and (iii) promptly enforce the performance and observance of all of the
covenants and agreements required to be performed and/or observed by each
Franchisor under each Franchise Agreement.

 

(c)          Except as expressly set forth in Section 4.34(d) below, neither
Borrower nor Operating Lessee shall, without Lender’s prior written consent
(which consent shall not be unreasonably withheld, conditioned or delayed)
(1) surrender, terminate or cancel any Franchise Agreement; (2) reduce the term
of any Franchise Agreement; (3) increase the amount of any charges under any
Franchise Agreement; or (4) otherwise materially modify, change, supplement,
alter or amend, or waive or release any of its rights and remedies under, any
Franchise Agreement in a manner adverse to Borrower, Operating Lessee or Lender.

 

 -108-Loan Agreement

 

 

(d)          Notwithstanding the foregoing and without limiting Borrower’s and
Operating Lessee’s rights under clause (c) above, from time to time after the
earlier of (1) the date that is six (6) months following the Closing Date and
(2) the final Securitization of the Loan, without the consent of Lender,
Borrower and Operating Lessee may elect to “reflag” one or more Individual
Properties by terminating an existing Franchise Agreement as to an Individual
Property and entering into a replacement Franchise Agreement as to such
Individual Property; so long as: (i) the Franchisor is an Approved Brand, (ii)
during the term of the Loan, not more than forty-three (43) Individual
Properties are replaced pursuant to this paragraph (d)), (iii) Lender shall have
approved the replacement Franchise Agreement (which approval shall not be
unreasonably withheld, conditioned or delayed), except that such approval shall
not be required if the Individual Property is operated under an Approved Brand
and such replacement Franchise Agreement is (x) substantially in the same form
and substance as a Franchise Agreements in effect on the Closing Date or (y)
entered into on an arms’-length basis and otherwise on commercially reasonable
terms, with economic terms and franchise fees comparable to then existing local
market rates and otherwise approved by Lender, such approval not to be
unreasonably withheld, conditioned or delayed (provided that the requirement for
such approval and any other approval requested under this subsection (d) shall
be deemed to have been waived if (I) the correspondence from Borrower to Lender
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 Borrower is
requesting the Lender’s approval of the proposed Franchise Agreement under
Section 4.34(d) hereof and that Lender’s failure to respond to such request
within five (5) Business Days following its receipt of such request shall result
in such request being deemed granted, (C) is accompanied by a copy of the
proposed replacement Franchise Agreement, the PIP and the estimated PIP Expenses
associated with the PIP (which information may be provided electronically in the
form of a CD Rom or other portable electronic media enclosed with such notice)
and (D) is also sent via electronic mail to Lender’s e-mail address provided by
Lender to Borrower from time to time, and (II) Lender shall fail to respond to
such request within five (5) Business Days following its receipt of such
request), (iv) the termination, if applicable, of an existing Franchise
Agreement as to an Individual Property shall not violate or result in the
termination of any other Franchise Agreements with respect to other Individual
Properties (unless such other Franchise Agreements are being terminated in
accordance with this Section 4.34) as evidenced by an Officer’s Certificate, (v)
no Event of Default shall have occurred and be continuing, (vi) such reflagging
shall not violate or be prohibited by any applicable Ground Lease (unless the
consent or waiver of the Ground Lessor thereunder shall have been obtained in
writing), as evidenced by an Officer’s Certificate, (vii) the Franchisor of the
Approved Brand party to such replacement Franchise Agreement shall have
delivered to Lender a comfort letter reasonably satisfactory to Lender (it being
agreed that in the case of a Franchisor that franchises another Individual
Property, the form of comfort letter delivered with respect to such other
Individual Property on the Closing Date shall be deemed reasonably
satisfactory), (viii) the replacement Franchise Agreement shall be with a
franchisor that is in no more than two categories of hotels lower than the
Franchisor being replaced as on the Closing Date, based on the annual STR Chain
Scale classification, (ix) the Approved Brand Requirements shall be satisfied to
the extent required under the definition thereof, unless otherwise reasonably
agreed by Lender, (x) if the replacement franchisor is an Affiliate of Borrower,
Borrower shall deliver an Additional Insolvency Opinion in form and substance
reasonably satisfactory to Lender and satisfactory to the applicable Rating
Agencies and (xi) if and to the extent required under the provisions of
paragraph (e)(ii) below, Borrower shall deliver to Lender, as additional
security for Borrower’s and Operating Lessee’s Obligations under the Loan
Documents, security for payment of any New/Renewal Flagging Costs.

 

 -109-Loan Agreement

 

 

(e)          To the extent not previously provided to and approved by Lender in
the Approved Flagging Budget for an Individual Property, Borrower or Operating
Lessee shall provide to Lender a budget for all New/Renewal Flagging Costs and
Change of Control Flagging Costs (collectively, the “Flagging Costs”). The
budgeting and delivery of security for Flagging Costs shall be governed by the
following principles:

 

(i)          Budget Approval. With respect to any Flagging Costs for a
particular Individual Property, Borrower or Operating Lessee shall provide a
budget therefor for Lender’s approval, which approval shall not be unreasonably
withheld, conditioned or delayed (provided that the requirement for such
approval shall be deemed to have been waived if (I) the correspondence from
Borrower to Lender 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 Borrower or Operating Lessee is requesting the Lender’s approval of
the proposed budget for the Franchise Agreement under Section 4.34(d) or Section
4.34(e) hereof, as applicable, and that Lender’s failure to respond to such
request within five (5) Business Days following its receipt of such request
shall result in such request being deemed granted, (C) is accompanied by a copy
of the proposed budget (which information may be provided electronically in the
form of a CD Rom or other portable electronic media enclosed with such notice)
and (D) is also sent via electronic mail to Lender’s e-mail address provided by
Lender to Borrower from time to time, (II) Lender shall fail to respond to such
request within five (5) Business Days following its receipt of such request,
(III) Borrower shall deliver to Lender 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 Lender’s failure to respond to such request within two
(2) Business Days following its receipt of such second request, shall result in
such request being deemed granted, and (IV) Lender shall fail to respond to such
request within such two (2) Business Day period), and which upon Lender’s
approval thereof, shall constitute the Approved Flagging Budget for such
Flagging Costs for such Individual Property.

 

(ii)         New/Renewal Flagging Costs. Borrower shall post additional security
with Lender if (and only if): (x) the New/Renewal Flagging Costs for such
Individual Property are greater than an amount equal to (A) the Approved
Scheduled PIP Expenses remaining for such Individual Property plus (B) for the
first three Individual Properties subject to New/Renewal Flagging Costs, the
Alteration Threshold applicable to an Individual Property. Any additional
security required to be posted by Borrower pursuant to this paragraph (ii) shall
be posted pursuant to paragraph (iv) below in an amount equal to the total
New/Renewal Flagging Costs for such Individual Property (to the extent exceeding
the Alteration Threshold, in the case of such first three Individual Properties
subject to New/Renewal Flagging Costs).

 

(iii)        Change of Control Flagging Costs. Concurrently with the closing of
an Assumption or any other change of Control of Borrower that results in any
Change of Control Flagging Costs, Borrower shall post additional security with
Lender in an amount equal to the portion of the Change of Control Flagging Costs
required to be incurred by Borrower or Operating Lessee in the 24-month period
immediately following the Assumption or such other change of Control of Borrower
(for the avoidance of doubt, the remaining Change of Control Flagging Costs
shall not be required to be reserved with Lender) without duplication of any
amounts previously reserved pursuant to paragraph (ii) above, but only if (and
only if): (1) the Change of Control Flagging Costs with respect to all
Individual Properties, plus the costs of all alterations then affecting
structural elements of all Individual Properties (to the extent not covered by
security delivered to Lender pursuant to Section 4.12.2) exceed the aggregate
Approved Scheduled PIP Expenses with respect to all Individual Properties by
more than $3,000,000. Any additional security required to be posted by Borrower
pursuant to this paragraph (iii) shall be posted pursuant to paragraph (iv)
below.

 

 -110-Loan Agreement

 

 

(iv)        Posting of Security. Any security delivered by Borrower pursuant to
paragraph (ii) or paragraph (iii) above shall be in cash or the form of security
required for Material Alterations under Section 4.12.2 hereof (and if cash,
shall be deposited into the Scheduled PIP Reserve Account and disbursed in
accordance with Section 6.5.2). If such security is in the form of a Letter of
Credit or other non-cash security permitted under Section 4.12.2, then, in lieu
of disbursements from the Scheduled PIP Reserve Account, Lender shall grant
approved reductions in the amount of such Letter of Credit or other security
upon satisfaction of the same conditions that are applicable to disbursements of
Scheduled PIP Reserve Funds from the Scheduled PIP Reserve Account in accordance
with Section 6.5.2. In no event shall there be any duplication of any reserve or
security requirements by reason of the obligations under Section 6.5.1(a),
paragraph (ii) above and paragraph (iii) above.

 

(f)          Subject to Borrower’s rights under paragraph (d) above, Borrower or
Operating Lessee shall timely exercise each individual option, if any, to extend
or renew the term of any Franchise Agreement.

 

(g)          Borrower or Operating Lessee shall complete and pay for in full any
PIP Work in a good, workmanlike and lien free manner within the time-frame set
forth in the applicable PIP, subject in each case to any extensions permitted by
the applicable Franchisor.

 

(h)          Without in any way limiting the covenants set forth in the Loan
Documents, Borrower and Operating Lessee shall: (i) cause the hotels located on
the Properties to be operated, repaired and maintained in a manner to provide
commercially reasonable amenities, services and facilities, taken as a whole for
each such Individual Property, substantially equivalent or superior in all
material respects to hotels of similar average room rate and targeted market
segment from time to time operating in the same or comparable geographic area of
the Property, taking into consideration the age and location of the hotels
located on the Properties and (ii) maintain Inventory in amounts sufficient to
meet the hotel industry standards in all material respects for hotels of similar
average room rate and targeted market segment from time to time operating in the
same or comparable geographic area of the Property, taking into consideration
the age and location of the hotels located on the Properties.

 

Section 4.35       Bankruptcy Related Covenants. To the extent permitted by
applicable Legal Requirements, neither Borrower nor Operating Lessee shall seek
substantive consolidation into the bankrupt estate of any Guarantor in
connection with a proceeding under the Bankruptcy Code or under federal, state
or foreign insolvency law involving any Guarantor.

 

 -111-Loan Agreement

 

 

(a)          To the extent permitted by applicable Legal Requirements, neither
Borrower nor Operating Lessee shall, nor shall Borrower or Operating Lessee
cause or permit any Mezzanine Borrower, any Guarantor, any other, or any
Affiliate of the foregoing to, contest, oppose or object to any motion made by
Lender to obtain relief from the automatic stay or seek to reinstate the
automatic stay in connection with a proceeding under the Bankruptcy Code or
under any other federal, state or foreign insolvency law involving any
Guarantor.

 

(b)          To the extent permitted by applicable Legal Requirements, neither
Borrower nor Operating Lessee shall, and shall not cause or permit Mezzanine
Borrower or any Guarantor, or any Affiliate of the foregoing to, provide,
originate, acquire an interest in or solicit (in writing) or accept from any
Guarantor or any Affiliate of any Guarantor, any debtor-in-possession financing
on behalf of any Guarantor in the event that any Guarantor is the subject of a
proceeding under the Bankruptcy Code or under federal, state or foreign
insolvency law involving any Guarantor.

 

Section 4.36         Deposits. All Security Deposits and all Advance Deposits,
shall be held in compliance with all applicable Legal Requirements and shall not
be commingled with any other funds of Borrower. During the continuance of an
Event of Default, Borrower and Operating Lessee shall, upon Lender’s request, if
permitted by applicable Legal Requirements, cause all such Security Deposits
(and any interest theretofore earned thereon) and all such Advance Deposits (and
any interest theretofore earned thereon) to be transferred into the Deposit
Account (which shall then be held by Deposit Bank in separate Accounts), which
shall be held by Deposit Bank subject to the terms of the Leases or Advance
Booking Agreement, as the case may be. Any bond or other instrument which
Borrower or Operating Lessee is permitted to hold in lieu of cash security
deposits under any applicable Legal Requirements (i) shall be maintained in full
force and effect in the full amount of such deposits unless replaced by cash
deposits as herein above described, (ii)  shall, if permitted pursuant to any
Legal Requirements, name Lender as payee or mortgagee thereunder (or at Lender’s
option, be fully assignable to Lender), and (iii) shall in all respects comply
with any applicable Legal Requirements. Borrower and Operating Lessee shall,
upon request, provide Lender with evidence reasonably satisfactory to Lender of
Borrower’s and Operating Lessee’s compliance with the foregoing.

 

Section 4.37       Non-Conforming Properties. Borrower shall cause any
Non-Conforming Properties to be classified as “conforming” or “legal
non-conforming” as to parking by the earlier to occur of (a) the Maturity Date
and (b) the date required by any applicable Governmental Authority, which
compliance may be evidenced by delivery of a zoning report stating the same.

 

Article 5

 

INSURANCE, CASUALTY AND CONDEMNATION

 

Section 5.1          Insurance.

 

5.1.1       Insurance Policies.

 

(a)          Borrower, at its sole cost and expense, shall obtain and maintain
during the entire Term, or cause to be maintained, insurance policies for
Borrower and each of the Properties providing at least the following coverages:

 

 -112-Loan Agreement

 

 

(i)          Property insurance against loss or damage by hail, wind (including
named storms), fire, lightning and such other perils as are included in a
standard “special form” policy 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 5.1.1(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 this Agreement 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 with
respect to the Improvements and personal property at the Properties waiving all
co-insurance provisions; (C) providing for no deductible in excess of $250,000,
except for windstorm 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 Properties or any
Individual 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 cost of demolition and the
increased costs of construction, each in amounts as reasonably required by
Lender. In addition, Borrower 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 building and, if
applicable, contents 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 satisfactory to Lender, 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, coverages against claims
for personal injury, bodily injury, death or property damage occurring upon, in
or about each Individual Property, including liquor liability, 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) per location, with
a combined limit per policy year, excluding umbrella coverage, of not less than
Two Million and No/100 Dollars ($2,000,000.00) per location; and (B) 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;

 

 -113-Loan Agreement

 

 

(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 5.1.1(h) below; (C) covering a period of restoration of twenty-four
(24) months and containing an extended period of indemnity endorsement 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 twelve (12) months from the date that the Individual Property 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 Individual Property for a period
of twenty-four (24) months. The amount of such business income insurance shall
be determined prior to the date hereof and at least once each year thereafter
based on Borrower’s reasonable estimate of the Gross Revenue (less
non-continuing expenses) from each Individual Property for the succeeding
twenty-four (24) month period. All proceeds payable to Lender pursuant to this
subsection shall be held by Lender and shall be applied to the Obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained shall be deemed
to relieve Borrower of its Obligations to pay the Debt on the respective dates
of payment provided for in the Note and the other 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 any Improvements, and only if the
property and liability coverage forms do not otherwise apply, (A) commercial
general liability and umbrella liability insurance covering claims related to
the construction, repairs or alterations being made which are not covered by or
under the terms or provisions of the commercial general liability and umbrella
liability insurance policy required herein this Section 5.1.1(a); 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 Individual Property, and (4) with an agreed amount endorsement
waiving co-insurance provisions;

 

(v)         workers’ compensation, subject to the statutory limits of the state
in which each Individual Property is located, and employer’s liability insurance
with limits which are required from time to time by Lender in respect of any
work or operations on or about any Individual Property, or in connection with
the Properties or their operation (if applicable);

 

(vi)        comprehensive boiler and machinery/equipment breakdown insurance, if
applicable, in amounts as shall be reasonably required by Lender 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 One Hundred Million and No/100 Dollars ($100,000,000.00)
per occurrence, per location, 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 and including garage keeper
liability, containing minimum limits per occurrence, including umbrella
coverage, with limits which are reasonably required from time to time by Lender
(if applicable);

 

 -114-Loan Agreement

 

 

(ix)         [reserved];

 

(x)          insurance against employee dishonesty with respect to any employees
of Borrower in an amount acceptable to Lender with a deductible not greater than
Twenty Five Thousand and No/100 Dollars ($25,000.00); and

 

(xi)         upon sixty (60) days’ notice, such other reasonable insurance and
in such commercially reasonable amounts as Lender 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 Properties located in or
around the regions in which the Properties are located.

 

(b)          All insurance provided for in Section 5.1.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy”) and shall be subject to the reasonable approval of
Lender as to form and substance, including insurance companies, amounts,
deductibles, loss payees and insureds. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender, certificates
of insurance evidencing the Policies (and, upon the written request of Lender,
copies of such Policies) accompanied by evidence satisfactory to Lender of
payment of the premiums then due thereunder (the “Insurance Premiums”), shall be
delivered by Borrower to Lender.

 

(c)          Any blanket insurance Policy shall be subject to Lender approval
and shall otherwise provide the same protection as would a separate Policy
insuring only the Properties in compliance with the provisions of Section
5.1.1(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. Borrower shall notify Lender of any material changes to the
blanket policy and associated limits under the policy as of Closing Date or an
aggregation of the insured values covered under the blanket policy, including
the addition of locations subject to the perils of flood, wind/named storm and
earthquake or the reduction of flood, wind/named storm and/or earthquake limits,
and such changes shall be subject Lender’s approval.

 

(d)          All Policies of insurance provided for or contemplated by Section
5.1.1(a) shall name Borrower as a named insured and, with respect to the
Policies of liability insurance, except for the Policies referenced in Section
5.1.1(a)(v) and (viii), shall name Lender and its successors and/or assigns as
the additional insured, as its interests may appear, and in the case of Policies
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 Lender
providing that the loss thereunder shall be payable to Lender unless below the
threshold for Borrower to handle such claim without Lender intervention as
provided in Section 5.2 below. Additionally, if Borrower obtains property
insurance coverage in addition to or in excess of that required by Section
5.1.1(a)(i), then such insurance policies shall also contain a standard
non-contributing mortgagee clause in favor of Lender providing that the loss
thereunder shall be payable to Lender.

 

 -115-Loan Agreement

 

 

(e)          All Policies of insurance provided for in Section 5.1.1(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 Borrower, or
anyone acting for Borrower, or of any Tenant 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 Lender 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 Lender and any other party named
therein as an additional insured (other than in the case of non-payment in which
case only ten days’ prior notice, or the shortest time allowed by applicable
Legal Requirement (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. If the issuers cannot or will not provide
notice, the Borrower shall be obligated to provide such notice; and

 

(iii)        not contain any clause or provision that would make Lender liable
for any Insurance Premiums thereon or subject to any assessments thereunder.

 

(f)          If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right without notice to Borrower, to take such action or obtain such
insurance as Lender reasonably deems necessary to protect its interest in the
Properties as Lender in its sole discretion deems appropriate, and all premiums
incurred by Lender in connection with such action or in obtaining such insurance
and keeping it in effect shall be paid by Borrower to Lender upon demand and
until paid shall be secured by the Mortgage and shall bear interest at the
Default Rate.

 

(g)          In the event of foreclosure of any Mortgage or other transfer of
title to some or all of the Properties in extinguishment in whole or in part of
the Obligations, all right, title and interest of Borrower in and to the
Policies then in force concerning the Properties and all proceeds payable
thereunder with respect to the Properties shall thereupon vest in the purchaser
at such foreclosure or Lender 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 5.1.1(a)(i), (ii), (iii) and (vii) above shall cover
perils of terrorism and acts of terrorism (or at least not specifically exclude
same) and Borrower 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
5.1.1(a)(i), (ii), (iii) and (vii) above (or at least not specifically excluding
same) at all times during the term of the Loan.

 

 -116-Loan Agreement

 

 

(i)          Notwithstanding anything in subsection (a)(i) or (h) above to the
contrary, Borrower shall be required to obtain and maintain coverage in its
property insurance Policy (or by a separate Policy) against loss or damage by
terrorist acts in an amount equal to 100% of the “Full Replacement Cost” of the
Properties plus the rental loss and/or business interruption coverage under
subsection (a)(iii) above; provided that such coverage is commercially
available. In the event that such coverage with respect to terrorist acts is not
included as part of the “all risk” property policy required by subsection (a)(i)
above, Borrower 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 Properties plus the rental loss and/or business interruption
coverage under subsection (a)(iii) above; provided that such coverage is
commercially available. Borrower shall obtain the coverage required under this
clause (i) from a carrier which otherwise satisfies the rating criteria
specified in Section 5.1.2 below (a “Qualified Carrier”) or in the event that
such coverage is not available from a Qualified Carrier, Borrower shall obtain
such coverage from the highest rated insurance company providing such coverage.
For so long TRIPRA is in effect and continues to cover both foreign and domestic
acts, Lender shall accept terrorism insurance with coverage against acts which
are “certified” within the meaning of TRIPRA.

 

5.1.2       Insurance Company. All Policies required pursuant to Section 5.1.1
(i) shall be issued by companies approved to do business in the states where the
Properties are located, with (1) a financial strength and claims paying ability
rating of (x) “A” or better by S&P and (y) “A2” or better by Moody’s, to the
extent Moody’s rates the Securities and rates the applicable insurer (provided,
however for multi-layered policies, (A) if four (4) or fewer insurance companies
issue the Policies, then at least seventy-five percent (75%) of the insurance
coverage represented by the Policies must be provided by insurance companies
with a rating of “A” or better by S&P and “A2” or better by Moody’s, to the
extent Moody’s rates the Securities and rates the applicable insurer, with no
remaining carrier below “BBB” by S&P and “Baa2” or better by Moody’s, to the
extent Moody’s rates the Securities and rates the applicable insurer, or (B) if
five (5) or more insurance companies issue the Policies, then at least sixty
percent (60%) of the insurance coverage represented by the Policies must be
provided by insurance companies with a rating of “A” or better by S&P and “A2”
or better by Moody’s, to the extent Moody’s rates the Securities and rates the
applicable insurer, with no remaining carrier below “BBB” and “Baa2” or better
by Moody’s, to the extent Moody’s rates the Securities and rates the applicable
insurer, and (2) a rating of A:X or better by A.M. Best; (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 Lender as the person to
whom all payments made by such insurance company shall be paid; (iii) shall
contain a waiver of subrogation against Lender; (iv) shall contain such
provisions as Lender deems reasonably necessary or desirable to protect its
interest including endorsements providing (A) that neither Borrower, Lender nor
any other party shall be a co-insurer under said Policies, and (B) except as
otherwise permitted herein, for a deductible per loss acceptable to Lender but
in no event in 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 Properties and as is generally
allowed by prudent institutional commercial mortgage lenders originating
comparable mortgage loans for securitization; and (v) shall be satisfactory in
form and substance to Lender and shall be approved by Lender as to amounts,
form, risk coverage, deductibles, loss payees and insureds. In addition to the
insurance coverages described in Section 5.1.1 above, Borrower shall obtain such
other insurance as may from time to time be required by Lender in order to
protect its interests. Certified copies of the Policies shall be delivered to
Lender at the address below (or to such other address or Person as Lender shall
designate from time to time by notice to Borrower) on the date hereof with
respect to the current Policies and within thirty (30) days after the effective
date thereof with respect to all renewal Policies:

 

 -117-Loan Agreement

 

 

Deutsche Bank AG, New York Branch

60 Wall Street, 10th Floor

New York, NY 10005

Attn: Karen Bernsohn

 

Borrower shall pay the Insurance Premiums annually in advance as the same become
due and payable and shall furnish to Lender 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 Lender (provided, however,
that Borrower shall not be required to pay such Insurance Premiums nor furnish
such evidence of payment to Lender in the event that the amounts required to pay
such Insurance Premiums have been deposited into the Insurance Account pursuant
to Section 6.4 hereof). Within thirty (30) days after request by Lender,
Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices.

 

Section 5.2         Casualty. If any Individual Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a “Casualty”),
Borrower shall give prompt notice thereof to Lender. Following the occurrence of
a Casualty, subject to Borrower’s rights under Section 2.4.4(b) and Section
2.5.3 hereof, Borrower or Operating Lessee, regardless of whether insurance
proceeds are available, shall proceed to restore, repair, replace or rebuild
such Individual Property in accordance with Legal Requirements to be of at least
equal value and of substantially the same character as prior to such damage or
destruction as soon as reasonably practicable (but in no event later than one
hundred twenty (120) days after such Casualty). Lender may, but shall not be
obligated to make proof of loss if not made promptly by Borrower. In addition,
Lender may participate in any settlement discussions with any insurance
companies (and shall approve any final settlement) (i) if an Event of Default is
continuing or (ii) with respect to any Casualty in which the Net Proceeds or the
costs of completing the Restoration are equal to or greater than the Alteration
Threshold with respect to the affected Individual Property, and Borrower shall
deliver to Lender all instruments required by Lender to permit such
participation. Provided no Event of Default is continuing, in the event of a
Casualty where Net Proceeds or the costs of completing the Restoration are two
percent (2%) of the Allocated Loan Amount of any Individual Property or less,
Borrower, notwithstanding Section 5.4, may directly obtain and apply the Net
Proceeds; provided that such Net Proceeds must be used towards the Restoration
in accordance with the terms hereof. Except as set forth in the foregoing
sentence, any Insurance Proceeds in connection with any Casualty (whether or not
Lender elects to settle and adjust the claim or Borrower or Operating Lessee
settles such claim) shall be due and payable solely to Lender and held by Lender
in accordance with the terms of this Agreement. In the event Borrower, Operating
Lessee or any party other than Lender is a payee on any check representing
Insurance Proceeds with respect to any Casualty, Borrower or Operating Lessee,
as applicable, shall immediately endorse, and cause all such third parties to
endorse, such check payable to the order of Lender. Borrower and Operating
Lessee each hereby irrevocably appoints Lender as its attorney-in-fact, coupled
with an interest, to endorse any such check payable to the order of Lender.
Borrower and Operating Lessee each hereby release Lender from any and all
liability with respect to the settlement and adjustment by Lender of any claims
in respect of any Casualty.

 

 -118-Loan Agreement

 

 

Section 5.3         Condemnation. Borrower shall promptly give Lender notice of
the actual or threatened (in writing) commencement of any proceeding for the
Condemnation of all or any portion of any Individual Property and shall deliver
to Lender copies of any and all papers served in connection with such
proceedings. Lender may participate in any such proceedings, and Borrower shall
from time to time deliver to Lender all instruments requested by it to permit
such participation. Borrower shall, at its expense, diligently prosecute any
such proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings.
Notwithstanding any taking by any public or quasi-public authority through
Condemnation or otherwise (including, but not limited to, any transfer made in
lieu of or in anticipation of the exercise of such taking), Borrower shall
continue to pay the Debt at the time and in the manner provided for its payment
in the Note and in this Agreement and the Debt shall not be reduced until any
Award shall have been actually received and applied by Lender, after the
deduction of expenses of collection, to the reduction or discharge of the Debt.
Lender shall not be limited to the interest paid on the Award by the condemning
authority but shall be entitled to receive out of the Award interest at the rate
or rates provided herein or in the Note. Subject to Borrower’s rights under
Section 2.4.4(b) and Section 2.5.3, if any Individual Property or any portion
thereof is taken by a condemning authority, Borrower or Operating Lessee shall
promptly commence and diligently prosecute the Restoration of such Individual
Property and otherwise comply with the provisions of Section 5.4, whether or not
an Award is available to pay the costs of such Restoration. If such Individual
Property is sold, through foreclosure or otherwise, prior to the receipt by
Lender of the Award, Lender shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to receive the
Award, or a portion thereof sufficient to pay the Debt.

 

Section 5.4         Restoration. The following provisions shall apply in
connection with the Restoration of any Individual Property:

 

(a)          If the Net Proceeds shall be less than the Alteration Threshold
with respect to the affected Individual Property, the Net Proceeds will be
disbursed by Lender to Borrower promptly upon receipt, provided that all of the
conditions set forth in Section 5.4(b)(i) are met and Borrower delivers to
Lender a written undertaking to expeditiously commence and to satisfactorily
complete with due diligence the Restoration in accordance with the terms of this
Agreement.

 

(b)          If the Net Proceeds are equal to or greater than the Alteration
Threshold with respect to the affected Individual Property, the Net Proceeds
will be held by Lender and Lender shall make the Net Proceeds available for the
Restoration in accordance with the provisions of this Section 5.4. The term “Net
Proceeds” shall mean: (i) the net amount of all Insurance Proceeds received by
Lender pursuant to Section 5.1.1 (a)(i), (iv), and (vi) and Section 5.1.1(h) as
a result of such damage or destruction, after deduction of its reasonable costs
and expenses, or (ii) the net amount of the Award, after deduction of its
reasonable costs and expenses (including, but not limited to, reasonable counsel
fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case
may be.

 

 -119-Loan Agreement

 

 

(i)          The Net Proceeds shall be made available to Borrower for
Restoration upon the determination of Lender (to be made reasonably) that the
following conditions are met:

 

(A)         no Event of Default shall have occurred and be continuing;

 

(B)         (1) in the event the Net Proceeds are Insurance Proceeds, less than
thirty percent (30%) of the total floor area of the Improvements on the affected
Individual Property has been damaged, destroyed or rendered permanently 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
Individual Property is taken, and such land is located along the perimeter or
periphery of the Individual Property, and no portion of the Improvements is
located on such land;

 

(C)         the Franchise Agreement (subject to the rights of Borrower and
Operating Lessee under Section 4.34(c)), if any, for the affected Individual
Property, shall remain in full force and effect during and after the completion
of the Restoration without a material reduction in any amounts payable to, or a
material increase in any amount payable by, Borrower or Operating Lessee in
connection therewith, and (ii) the Management Agreement for the affected
Individual Property shall remain in full force and effect during and after the
completion of the Restoration without a material reduction in any amount payable
to, or an increase in any amount payable by, Borrower or Operating Lessee in
connection therewith;

 

(D)         Subject to Borrower’s right to prepay a portion of the Loan and
obtain the release of the affected Individual Property as set forth in Section
2.4.4(b) and Section 2.5.3, Borrower or Operating Lessee 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;

 

(E)         Intentionally omitted;

 

(F)         Lender shall be satisfied that the Restoration will be completed on
or before the earliest to occur of (1) the date six (6) months prior to the
Stated Maturity Date, (2) the earliest date required for such completion under
the terms of any Ground Lease, if applicable (3) such time as may be required
under applicable Legal Requirements in order to repair and restore the
applicable Individual Property to the condition it was in immediately prior to
such Casualty or as nearly as possible to the condition it was in immediately
prior to such Condemnation as applicable, or (4) six (6) months prior to the
expiration of the insurance coverage referred to in Section 5.1.1(a)(iii);

 

(G)         the affected Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable Legal
Requirements;

 

 -120-Loan Agreement

 

 

(H)         the Restoration shall be done and completed by Borrower or Operating
Lessee in an expeditious and diligent fashion and in compliance with all
applicable Legal Requirements;

 

(I)         such Casualty or Condemnation, as applicable, does not result in the
loss of access to the affected Individual Property or the related Improvements;

 

(J)         the pro forma Net Operating Income for the applicable Individual
Property following restoration and stabilization is equal to or greater than
seventy-five percent (75%) of the Net Operating Income for the applicable
Individual Property as of the Closing Date;

 

(K)         Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower’s or Operating Lessee’s, as
applicable, architect or engineer estimating the entire cost of completing the
Restoration, which budget shall be reasonably acceptable to Lender; and

 

(L)         the Net Proceeds together with any cash or cash equivalent deposited
by Borrower with Lender are sufficient in Lender’s reasonable determination to
cover the cost of the Restoration, as specified in the budget delivered to
Lender pursuant to clause (K).

 

(ii)         The Net Proceeds shall be held by Lender in the Casualty and
Condemnation Account and, until disbursed in accordance with the provisions of
this Section 5.4(b), shall constitute additional security for the Debt and Other
Obligations under the Loan Documents. The Net Proceeds shall be disbursed
promptly by Lender to, or as directed by, Borrower from time to time during the
course of the Restoration, upon receipt of evidence reasonably satisfactory to
Lender that (A) all materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full, and (B) there exist
no notices of pendency, stop orders, mechanic’s or materialman’s liens or
notices of intention to file same, or any other liens or encumbrances of any
nature whatsoever on the Individual Property which have not either been fully
bonded to the satisfaction of Lender and discharged of record or in the
alternative fully insured to the satisfaction of Lender by the title company
issuing the Title Insurance Policy.

 

(iii)        All plans and specifications required in connection with the
Restoration shall be subject to the prior approval of Lender and an independent
consulting engineer selected by Lender (the “Casualty Consultant”). Lender shall
have the use of the plans and specifications and all permits, licenses and
approvals required or obtained in connection with the Restoration. The identity
of the contractors, subcontractors and materialmen engaged in the Restoration,
as well as the contracts under which they have been engaged, shall be subject to
the reasonable approval of Lender and the Casualty Consultant. All costs and
expenses incurred by Lender 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 Borrower.

 

 -121-Loan Agreement

 

 

(iv)        In no event shall Lender 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 materialman 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; provided, however, that if
any contract pursuant to which such contractor, subcontractor or materialman is
to be engaged provides that the amount which Borrower or Operating Lessee, as
applicable, may retain shall be reduced to five percent (5%) or more (but less
than ten percent (10%) upon fifty percent (50%) completion of the Restoration),
then Borrower may request Lender’s consent to such lower Casualty Retainage and
Lender shall not unreasonably withhold, condition or delay its consent thereto.
The Casualty Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this Section 5.4(b), be less than the amount
actually held back by Borrower or Operating Lessee, as applicable, from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 5.4(b) and that all approvals necessary for the
re-occupancy and use of the Individual Property have been obtained from all
appropriate Governmental Authorities, and Lender receives evidence satisfactory
to Lender 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 Lender will
release the portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which (i) the Casualty Consultant certifies to Lender that such
contractor, subcontractor or materialman has satisfactorily completed all work
and has supplied all materials in accordance with the provisions of such
contractor’s, subcontractor’s or materialman’s contract, (ii) 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 Lender or by the title company issuing the
Title Insurance Policy, and (iii) Lender receives an endorsement to the
Title Insurance 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 Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.

 

(v)         Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.

 

(vi)        If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the opinion of Lender 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, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender (for deposit into the Casualty and
Condemnation Account) before any further disbursement of the Net Proceeds shall
be made. The Net Proceeds Deficiency deposited with Lender shall be deposited by
Lender into the Casualty and Condemnation Account 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 5.4(b) shall constitute additional security
for the Obligations.

 

 -122-Loan Agreement

 

 

(vii)       The excess, if any, of the Net Proceeds and the remaining balance,
if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 5.4(b), and the receipt by Lender
of evidence satisfactory to Lender that all costs incurred in connection with
the Restoration have been paid in full, shall be promptly remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing.

 

(c)          Notwithstanding anything to the contrary set forth in this
Agreement, including the provisions of this Section 5.4, if the Loan is included
in a REMIC Trust, then Lender shall be satisfied that immediately following a
release of any portion of the Lien of any Mortgage following a Casualty or
Condemnation, (i) the Loan will meet the REMIC Requirements after giving effect
to any prepayment under clause (ii), and (ii) taking into account any proposed
Restoration of the remaining Properties, if the ratio of the unpaid principal
balance of the Loan to the value of the remaining Properties is greater than
125% (such value to be determined, in Lender’s reasonable discretion, by any
commercially reasonably method permitted to a REMIC Trust; and which shall
exclude the value of personal property or going concern value, if any, other
than as permitted to be included therein by Treas. Reg. §1.860G-2(a)(4)), the
Outstanding Principal Balance must be paid down by an amount equal to the least
of the following amounts: (x) the net Award (after payment of Lender’s
reasonable costs and expenses and any other fees and expenses that have been
approved by Lender) or the net Insurance Proceeds (after payment of Lender’s
reasonable costs and expenses and any other fees and expenses that have been
approved by Lender), as the case may be, or (y) a “qualified amount” as the term
is defined in the IRS Revenue Procedure 2010-30, as the same may be amended,
replaced, supplemented or modified from time to time, unless Lender receives an
opinion of counsel that if such amount is not paid, the applicable
Securitization will not fail to maintain its status as a REMIC Trust as a result
of the related release of such portion of the Lien of the Mortgage. If and to
the extent the preceding sentence applies, only such amount of the net Award or
net Insurance Proceeds (as applicable), if any, in excess of the amount required
to pay down the principal balance of the Loan may be released for purposes of
Restoration or released to Borrower as otherwise expressly provided in this
Section 5.4.

 

(d)          All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 5.4(b)(vii) may be retained and applied by Lender in accordance with
Section 2.4.4 hereof, or, at the discretion of Lender, the same may be paid,
either in whole or in part, to Borrower for such purposes as Lender shall
approve, in its discretion.

 

(e)          In the event of foreclosure of any Mortgage, or other transfer of
title to any Individual Property in extinguishment in whole or in part of the
Debt all right, title and interest of Borrower or Operating Lessee in and to the
Policies that are not blanket Policies then in force concerning such Individual
Property and all proceeds payable thereunder shall thereupon vest in the
purchaser at such foreclosure or Lender or other transferee in the event of such
other transfer of title.

 

 -123-Loan Agreement

 

 

(f)          Notwithstanding anything to the contrary contained herein, if in
connection with a Casualty any insurance company makes a payment under a
property insurance Policy that Borrower proposes be treated as business or
rental interruption insurance, then, notwithstanding any designation (or lack of
designation) by the insurance company as to the purpose of such payment, as
between Lender and Borrower, such payment shall not be treated as business or
rental interruption Insurance Proceeds unless Borrower has demonstrated to
Lender’s satisfaction that the remaining Net Proceeds that have been received
from the property insurance companies together with any amount reserved with
Lender in respect of a deficiency are sufficient to pay 100% of the cost of the
Restoration or, if such Net Proceeds are to be applied to repay the Obligations
in accordance with the terms hereof, that such remaining Net Proceeds will be
sufficient to satisfy the Obligations in full.

 

Article 6

 

CASH MANAGEMENT AND RESERVE FUNDS

 

Section 6.1         Cash Management Arrangements. Borrower or Operating Lessee,
as applicable, shall deliver irrevocable written instructions to each of the
credit card companies or credit card clearing banks delivering receipts or Hotel
Revenue from any of the Properties, in form and substance reasonably acceptable
to Lender (provided that, absent manifest error, the customary form required by
any particular credit card company or credit card clearing bank shall be deemed
acceptable to Lender with respect to such company or bank, as the case may be),
directing each such credit card company or credit card clearing bank to deliver
all receipts payable to Borrower or Operating Lessee or to Manager on behalf of
or for the account of Borrower or Operating Lessee, with respect to any the
Properties directly to the applicable Clearing Account. Without in any way
limiting the foregoing, if Borrower, Operating Lessee or Manager receives any
Gross Revenue from the Properties or any other amount which would be included in
the Operating Income of the Properties, then (i) such amounts shall be deemed to
be collateral for the Obligations and shall be held in trust for the benefit,
and as the property, of Lender, (ii) such amounts shall not be commingled with
any other funds or property of Borrower, Operating Lessee or Manager, and
(iii) Borrower, Operating Lessee or Manager, as applicable shall deposit such
amounts in the applicable Property Account or, at Borrower’s option, a Clearing
Account on a daily basis. Following the occurrence and during the continuation
of an Event of Default, Lender, at its option may, and Borrower or Operating
Lessee shall at Lender’s direction, and in all events at Borrower’s expense,
deliver the written instructions in the form attached hereto as Exhibit A to
each tenant under any Lease at any of the Properties directing each such tenant
to deliver all Rents payable thereunder directly to the applicable Clearing
Account. Following any cure of such Event of Default, which cure has been
accepted by Lender (except as to any timely and properly consummated Qualified
Release Property Default as to which Lender’s acceptance is not required) or
waiver or other termination of such Event of Default (assuming that no other
Event of Default then exists), Lender shall, at Borrower’s request and at
Borrower’s expense, promptly revoke such written instructions and direct each
such tenant to resume delivering all Rents payable under the Lease directly to
the Borrower or Operating Lessee. Each Property Account shall be subject to a
standing instruction from Borrower requiring that all funds on deposit therein
(other than any Security Deposits or Advance Deposits that are being held in
accordance with the terms of this Agreement, unless and until any such Security
Deposits or Advance Deposits have been forfeited or applied in accordance with
the terms of the applicable Lease or Advance Booking Agreement) shall be swept
to the applicable Clearing Account on a weekly basis. Neither Borrower nor
Operating Lessee nor Managers, on behalf of Borrower or Operating Lessee, shall
have any right to withdraw funds from the Property Accounts (other than any
Security Deposits or Advance Deposits that have been forfeited or applied in
accordance with the terms of the applicable Lease or Advance Booking Agreement).
So long as no Event of Default or Trigger Period then exists, funds deposited
into the Clearing Accounts shall be swept on each Business Day or at such other
frequency as Borrower shall elect by the Clearing Account Banks into one or more
accounts designated by Borrower. Each Property Account and Clearing Account
shall be pledged to Lender as security for the Obligations. Upon the occurrence
of an Event of Default or a Trigger Period and until such time as such Event of
Default or Trigger Period, as applicable, shall be cured or no longer shall
exist, neither Borrower, Operating Lessee, Manager nor any Persons claiming
thereunder shall have any right to withdraw any funds from any Clearing Account
and all funds deposited into the Clearing Accounts shall be swept by the
Clearing Account Bank on a daily basis into the Deposit Account and applied and
disbursed in accordance with this Agreement and the Cash Management Agreement.
Manager shall have access to funds in the Disbursement Account to be applied in
accordance with the Management Agreement. Funds in the Deposit Account shall be
invested in Permitted Investments, as more particularly set forth in the Cash
Management Agreement. To the extent not already in existence, Lender may also
establish subaccounts of the Deposit Account which shall at all times be
Eligible Accounts (subject to the terms of the Cash Management Agreement) (and
may be ledger or book entry accounts and not actual accounts) (such subaccounts
are referred to herein as “Accounts”). The Deposit Account and all other
Accounts will be under the sole control and dominion of Lender, and neither
Borrower nor Operating Lessee nor either Manager on behalf of Borrower or
Operating Lessee shall have any right of withdrawal therefrom; provided, the
foregoing shall not restrict Manager’s access to the Borrower Accounts. Borrower
shall pay for all expenses of opening and maintaining all of the above Accounts
and all of the Borrower Accounts. The Property Accounts may, at Borrower’s
option, be subaccounts of the Clearing Account.

 

 -124-Loan Agreement

 

 

Section 6.2          Required Repairs Funds.

 

6.2.1       Deposit of Required Repairs Funds. Borrower or Operating Lessee
shall perform the repairs and other work at the Properties as set forth on
Schedule II (such repairs and other work hereinafter referred to as “Required
Repairs”) and shall complete each of the Required Repairs on or before April 28,
2018.

 

Section 6.3          Tax Funds.

 

6.3.1       Deposits of Tax Funds.

 

(a)          During the continuance of a Trigger Period or an Event of Default,
Borrower shall deposit with Lender on or before each Monthly Payment Date, an
amount equal to one-twelfth of the Taxes that Lender reasonably estimates will
be payable during the next ensuing twelve (12) months (initially, $1,412,721),
in order to accumulate sufficient funds to pay all such Taxes at least thirty
(30) days prior to the date they respectively become Due and Payable (the “Due
Date” with respect to such applicable Taxes), which amounts shall be transferred
into an Account (the “Tax Account”). Amounts deposited from time to time into
the Tax Account pursuant to this Section 6.3.1 are referred to herein as the
“Tax Funds”. If at any time Lender reasonably determines that the Tax Funds will
not be sufficient to pay the Taxes, assuming subsequent monthly deposits in
accordance herewith, Lender shall notify Borrower of such determination and the
monthly deposits for Taxes shall be increased by the amount that Lender
reasonably estimates is sufficient to make up the deficiency at least ten
(10) days prior to the respective Due Dates for the Taxes; provided, that if
Borrower receives notice of any deficiency after the date that is ten (10) days
prior to the Due Date for such Taxes, Borrower will deposit with or on behalf of
Lender such amount within two (2) Business Days after its receipt of such
notice. For the avoidance of doubt, to the extent that any Individual Property
or Properties has been released from the Lien under the Loan Documents in
accordance with the terms hereof, the funds required to be deposited into the
Tax Account by Borrower shall be appropriately reduced for the remainder of the
Fiscal Year.

 

 -125-Loan Agreement

 

 

(b)          Notwithstanding the foregoing, provided that Borrower and Operating
Lessee are maintaining the applicable Individual Property in accordance with the
requirements of the Management Agreement (as determined by the applicable
Manager) and the Loan Documents (as reasonably determined by Lender), to the
extent Taxes for the applicable Individual Property are reserved for in a
Manager-Held Reserve for Taxes for such period pursuant to and in accordance
with the Management Agreement (and provided that Lender shall have a security
interest in such Manager-Held Reserve), then the amount of the monthly deposit
into the Tax Account shall be reduced on a dollar-for-dollar basis by such
amount so reserved.

 

6.3.2       Release of Tax Funds. Provided no Enforcement has occurred and is
continuing, Lender shall direct Servicer to apply Tax Funds in the Tax Account
to payments of Taxes (subject to Borrower’s right to contest the same in
accordance with Section 4.6). In making any payment relating to Taxes, Lender
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 the Tax Funds shall exceed the amounts due for Taxes and provided that no
Trigger Period exists, Lender shall, in its sole discretion, return any excess
to Borrower or credit such excess against future payments to be made to the Tax
Funds. Any Tax Funds remaining in the Tax Account after the Obligations have
been paid in full or a Trigger Period is no longer continuing shall be returned
to Borrower.

 

Section 6.4          Insurance Funds.

 

6.4.1       Deposits of Insurance Funds.

 

(a)          During the continuance of a Trigger Period or an Event of Default,
Borrower shall deposit with or on behalf of Lender, on or before each Monthly
Payment Date, an amount equal to one-twelfth of the Insurance Premiums that
Lender reasonably estimates based on the most recent bill will be payable for
the renewal of the coverage afforded by the Policies upon the expiration
thereof, in order to accumulate sufficient funds to pay all such Insurance
Premiums on or prior to the earlier of (A) at least thirty (30) days prior to
the date on which such payments are due and payable and (B) the expiration of
the Policies, which amounts shall be transferred into an Account established at
Deposit Bank to hold such funds (the “Insurance Account”). Amounts deposited
from time to time into the Insurance Account pursuant to this Section 6.4.1 are
referred to herein as the “Insurance Funds”. If at any time Lender reasonably
determines that the Insurance Funds will not be sufficient to pay the Insurance
Premiums, assuming subsequent monthly deposits in accordance herewith, Lender
shall notify Borrower of such determination and the monthly deposits for
Insurance Premiums shall be increased by the amount that Lender reasonably
estimates is sufficient to make up the deficiency at least thirty (30) days
prior to expiration of the Policies. For the avoidance of doubt, to the extent
that an Individual Property or Properties has been released from the Lien under
the Loan Documents in accordance with the terms hereof, the funds required to be
deposited into the Insurance Account by Borrower shall be appropriately reduced
for the remainder of the Fiscal Year. The foregoing requirements are hereby
waived with respect to any insurance maintained under a blanket Policy that
satisfies the requirements set forth in Section 5.1.1(c).

 

 -126-Loan Agreement

 

 

(b)          Notwithstanding the foregoing, provided that Borrower and Operating
Lessee are maintaining the applicable Individual Property in accordance with the
requirements of the Management Agreement (as determined by the applicable
Manager) and the Loan Documents (as reasonably determined by Lender), to the
extent Insurance Premiums for the applicable Individual Property are reserved
for in a Manager-Held Reserve for Insurance Premiums for such period pursuant to
and in accordance with the Management Agreement (and provided that Lender shall
have a security interest in such Manager-Held Reserve), then the amount of the
monthly deposit into the Insurance Account shall be reduced on a
dollar-for-dollar basis by such amount so reserved.

 

6.4.2       Release of Insurance Funds. Provided no Enforcement has occurred and
is continuing, Lender shall direct Servicer to apply Insurance Funds in the
Insurance Account to the timely payment of Insurance Premiums, provided Borrower
shall furnish Lender with all bills, invoices and statements for the Insurance
Premiums for which such funds are required at least thirty (30) days prior to
the date on which such charges first become payable. In making any payment
relating to Insurance Premiums, Lender may do so according to any bill,
statement or estimate procured from the insurer or its agent, without inquiry
into the accuracy of such bill, statement or estimate. If the amount of the
Insurance Funds shall exceed the amounts due for Insurance Premiums and provided
that no Trigger Period exists, Lender shall, in its sole discretion, return any
excess to Borrower or credit such excess against future payments to be made to
the Insurance Funds. Any Insurance Funds remaining in the Insurance Account
after the Obligations have been paid in full or a Trigger Period is no longer
continuing shall be returned to Borrower.

 

Section 6.5          Scheduled PIP Reserve Funds.

 

6.5.1       Deposits of Scheduled PIP Reserve Funds. Borrower shall deposit with
or on behalf of Lender (a) on the Closing Date the amount of Thirty Million and
00/100 Dollars ($30,000,000.00) (the “Initial PIP Deposit”) and (b) on or before
each Monthly Payment Date on Schedule XXIII the corresponding amount set forth
on Schedule XXIII next to such Monthly Payment Date (such account, the
“Scheduled PIP Reserve Account” and any such funds therein, the “Scheduled PIP
Reserve Funds”). In lieu of making the Initial PIP Deposit in cash, Borrower
shall be entitled to, at its option, deposit with Lender a Letter of Credit in
the amount of the Initial PIP Deposit. The aggregate amount of Scheduled PIP
Reserve Funds and the notional amount of any such Letter of Credit delivered for
the Initial PIP Deposit shall not exceed the remaining cost of the PIP Work as
reasonably determined by Lender, and any such excess shall be promptly released
to Borrower and any such excess shall be released to Borrower or, in the case of
a Letter of Credit, the amount thereof shall be reduced.

 

 -127-Loan Agreement

 

 

6.5.2       Release of Scheduled PIP Reserve Funds. Provided no Event of Default
is continuing and no Enforcement has occurred, Lender shall direct Servicer to
disburse Scheduled PIP Reserve Funds for payment of Approved Scheduled PIP
Expenses within ten (10) days after the delivery by Borrower to Lender of a
request therefor (but not more often than once each calendar month), provided
that: (i) such disbursement is for Approved Scheduled PIP Expenses; (ii) Lender
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 Scheduled PIP Expenses; (iii)
Borrower has applied any amounts previously received by it in accordance with
this Section for the Approved Scheduled PIP Expenses 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 work in question; (iv) intentionally omitted, and
(v) the request for the disbursement is accompanied by an Officer’s Certificate
from Borrower stating that (A) the conditions in the foregoing clauses (ii) and
(iii) have been satisfied, (B) that the Approved Scheduled PIP 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 in all material
respects, to the Borrower’s knowledge, and (D) upon such disbursement to
Borrower, the Approved Scheduled PIP Expenses to be funded by the requested
disbursement will be paid promptly in accordance with the invoices and lien
waivers (where applicable) presented. Lender shall not be required to disburse
Scheduled PIP Reserve Funds more frequently than once each calendar month.
Provided no Event of Default is continuing, Lender shall direct Servicer to
disburse any remaining Scheduled PIP Reserve Funds to Borrower within ten (10)
days of the earliest to occur of (x) Borrower delivering an Officer’s
Certificate from Borrower stating that all Approved Scheduled PIP Expenses have
been fully paid for and completed in a good, workmanlike and Lien-free manner in
accordance with all Legal Requirements, (y) Borrower delivering an Officer’s
Certificate from Borrower stating the Borrower or Operating Lessee has spent
$125,000,000 or more on Approved Scheduled PIP Expenses, and (z) repayment of
the Loan in full.

 

Section 6.6          Intentionally Omitted.

 

Section 6.7          Ground Rent Funds.

 

6.7.1       Deposits of Ground Rent Funds.

 

(a)          During the continuance of a Trigger Period or an Event of Default
Borrower shall deposit with or on behalf of Lender, on or before each Monthly
Payment Date, an amount equal to the Ground Rents that will be payable under the
Ground Leases for the month in which such Monthly Payment Date occurs, which
amounts shall be transferred into an Account (the “Ground Rent Account”). Such
deposit may be increased from time to time by Lender in such amount as Lender
shall deem to be necessary in its reasonable discretion to reflect any increases
in the Ground Rent. Amounts deposited from time to time into the Ground Rent
Account pursuant to this Section 6.7.1 are referred to herein as the “Ground
Rent Funds”.

 

(b)          Notwithstanding the foregoing, provided that Borrower and Operating
Lessee are maintaining the applicable Individual Property in accordance with the
requirements of the Management Agreement (as determined by the applicable
Manager) and the Loan Documents (as reasonably determined by Lender), to the
extent Ground Rent for the applicable Individual Property is reserved for in a
Manager-Held Reserve for Ground Rent for such period pursuant to and in
accordance with the Management Agreement (and provided that Lender shall have a
security interest in such Manager-Held Reserve), then the amount of the monthly
deposit into the Ground Rent Account shall be reduced on a dollar-for-dollar
basis by such amount so reserved.

 

 -128-Loan Agreement

 

 

6.7.2       Release of Ground Rent Funds. Provided no Enforcement has occurred
and is continuing, Lender shall direct Servicer to disburse Ground Rent Funds on
deposit in the Ground Rent Account to Borrower for payment of Ground Rent within
five (5) days after the delivery of Borrower to Lender of a request therefor
(which request shall be delivered no earlier than ten (10) days prior to the
date on which same is due), provided that Borrower has previously or
concurrently provided Lender with proof satisfactory to Lender that all previous
disbursements of Ground Rent Funds were used solely to pay the Ground Rent for
which such disbursements were made. Notwithstanding the foregoing proviso,
Borrower shall furnish Lender with all bills, invoices and statements for the
Ground Rent promptly after Borrower’s receipt thereof. If the amount of the
Ground Rent Funds shall exceed the amounts due for Ground Rent, Lender shall, in
its sole discretion, either (a) return any excess to Borrower or (b) credit such
excess against future payments to be made to the Ground Rent Funds. Any Ground
Rent Funds remaining after the Obligations have been paid in full or when a
Trigger Period is no longer continuing shall be returned to Borrower. In
addition to the foregoing, to the extent that any Individual Property or
Properties has been released from the Lien under the Loan Documents in
accordance with the terms hereof, the Ground Rent Funds, if any, which relate to
such released Individual Property or Properties shall promptly be released from
the Ground Rent Funds to Borrower.

 

Section 6.8          FF&E Reserve Funds.

 

6.8.1       Deposits of FF&E Reserve Funds.

 

(a)          Borrower shall deposit or cause to be deposited with or on behalf
of Lender on or before each Monthly Payment Date, an amount equal to the greater
of (i) four percent (4.0%) of the Adjusted Operating Income for the Properties
for the calendar month which is two calendar months prior to the calendar month
in which such Monthly Payment Date occurs and (ii) the amounts actually required
(and not waived) by a Franchisor pursuant to a Franchise Agreement, for the
repair and replacement of FF&E and Routine Capital Expenditures (collectively,
the “FF&E Work”), which amounts shall be transferred into an Account established
for such purposes (such account, the “FF&E Reserve Account”). Amounts deposited
from time to time into the FF&E Reserve Account pursuant to this Section 6.8.1
are referred to herein as the “FF&E Reserve Funds”.

 

(b)          Notwithstanding the foregoing, provided that Borrower and Operating
Lessee are maintaining the applicable Individual Property in accordance with the
requirements of the Management Agreement (as determined by the applicable
Manager) and the Loan Documents (as reasonably determined by Lender), to the
extent funds for FF&E Work for the applicable Individual Property are reserved
for in a Manager-Held Reserve for FF&E Work for such period pursuant to and in
accordance with the Management Agreement (and provided that Lender shall have a
security interest in such Manager-Held Reserve), then the amount of the monthly
deposit into the FF&E Reserve Account shall be reduced on a dollar-for-dollar
basis by such amount so reserved.

 

 -129-Loan Agreement

 

 

6.8.2       Release of FF&E Reserve Funds. Provided no Event of Default is
continuing and no Enforcement has occurred, and subject to the last sentence of
this Section 6.8.2, Lender shall direct Servicer to disburse FF&E Reserve Funds
to Borrower out of the FF&E Reserve Account, within ten (10) days after the
delivery by Borrower to Lender 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 or for an Approved
Scheduled PIP Expense; provided that disbursement from the FF&E Reserve Account
for Approved Scheduled PIP Expenses shall be limited to $10,000,000 per annum
(the “Available FF&E Credit”) but shall be without duplication of amounts
disbursed for Schedule PIPs from the Scheduled PIP Reserve Account or the Cash
Collateral Account; (ii) Lender 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) Borrower has applied any amounts previously received by it
in accordance with this Section 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; (iv) intentionally
omitted; and (v) the request for the disbursement is accompanied by an Officer’s
Certificate from Borrower stating that (A) the conditions in the foregoing
clauses (ii), (iii) and (iv) 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 Borrower’s knowledge, and (D) upon such disbursement to Borrower, 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. Lender shall not be required to disburse FF&E Reserve Funds more
frequently than once each calendar month, and Lender 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).

 

Section 6.9         Casualty and Condemnation Account. Borrower shall pay, or
cause to be paid, to Lender all Insurance Proceeds or Awards due to any Casualty
or Condemnation where Net Proceeds or the costs of completing the Restoration of
the affected Individual Property are more than two percent (2%) of the Allocated
Loan Amount for such Individual Property in accordance with the provisions of
Sections 5.2 and 5.3, which amounts shall be transferred into an Account (the
“Casualty and Condemnation Account”). Amounts deposited from time to time into
the Casualty and Condemnation Account pursuant to this Section 6.9 are referred
to herein as the “Casualty and Condemnation Funds”. All Casualty and
Condemnation Funds shall be held, disbursed and/or applied in accordance with
the provisions of Section 5.4 hereof.

 

 -130-Loan Agreement

 

 

Section 6.10        Cash Collateral Funds.

 

(a)          If a Trigger Period shall be continuing, all Available Cash shall
be paid to Lender, which amounts shall be transferred by Lender into an Account
(the “Cash Collateral Account”) to be held by Lender as cash collateral for the
Debt. Amounts on deposit from time to time in the Cash Collateral Account
pursuant to this Section 6.10 are referred to as the “Cash Collateral Funds”.
Any Cash Collateral Funds on deposit in the Cash Collateral Account not
previously disbursed or applied shall be disbursed to Borrower upon the
termination of such Trigger Period free and clear of any Lien or continuing
security interest under the Loan Documents (including under Section 6.12 of this
Agreement); provided, however, if the Loan has been fully repaid and the
Mezzanine Loan has not been fully repaid and a Trigger Period is continuing
under the Mezzanine Loan, then all Cash Collateral Funds on deposit in the Cash
Collateral account not previously disbursed or applied shall be disbursed to
Mezzanine Lender. Notwithstanding the foregoing, Lender shall have the right,
but not the obligation, at any time during the continuance of an Event of
Default, in its sole and absolute discretion to apply any and all Cash
Collateral Funds then on deposit in the Cash Collateral Account to the Debt or
Other Obligations, in such order and in such manner as Lender shall elect in its
sole and absolute discretion, including to make a prepayment of principal
(together with the applicable Spread Maintenance Premium, if any, applicable
thereto) or any other amounts due hereunder.

 

(b)          During a Trigger Period, so long as no Event of Default has
occurred and is continuing, upon written request of Borrower, Lender shall
disburse Cash Collateral Funds for (i) payment of documented Individual
Property-level expenses pursuant to an Approved Annual Budget, including,
without limitation, Operating Expenses and Capital Expenditures pursuant to the
Approved Annual Budget, to the extent not already paid by Manager, (ii)
emergency repairs and/or life safety issues at the Property to the extent not
already paid by Manager or required to be reimbursed to Manager, (iii) Hotel
Taxes to the extent not already paid by Manager or required to be reimbursed to
Manager, (iv) costs incurred in connection with the purchase of any FF&E or PIP
Work to the extent not already paid by Manager or required to be reimbursed to
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 or the Mezzanine Loan Documents, (vi) voluntary prepayment of the Loan
in accordance with Section 2.4.2 hereof and of any Mezzanine Loan in accordance
with Section 2.4.2 of the Mezzanine Loan Agreement provided that any such
prepayment shall be applied pro rata among the Loan and each Mezzanine Loan if
such prepayment would cure the Trigger Period and otherwise shall be applied to
the Loan, (vii) legal fees arising in connection with the Property or Borrower’s
ownership and operation of the Property; provided that Cash Collateral Funds
shall not be used for legal fees in connection with (A) the enforcement of any
Borrower’s or Mezzanine Borrower’s rights under the Loan Documents or the
Mezzanine Loan Documents, as applicable or (B) any defense of any enforcement by
Lender or Mezzanine Lender of its rights under the Loan Documents or Mezzanine
Loan Documents, as applicable, (viii) (A) audit, accounting and tax expenses
arising in connection with the Property or Borrower’s ownership and operation of
the Property to the extent not already paid by Manager or required to be
reimbursed to Manager, including allocated corporate overhead of Guarantor and
(B) Lender approved portfolio-level expenses, which when aggregates with
allocated corporate overhead of Guarantor shall not be in an amount not to
exceed $50,000 annually, (ix) costs of Restoration in excess of available Net
Proceeds, (x) Debt Service, New Mezzanine Loan Debt Service, and Mezzanine Debt
Service, (xi) any fees and costs payable by Borrower or Mezzanine Borrower,
including to Lender or Mezzanine Lender, subject to and in compliance with the
Loan Documents and the Mezzanine Loan Documents, (xii) costs associated with
existing Leases or any new Leases entered into pursuant to the terms of this
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 Reserve Accounts (in each case, to
the extent required in the Loan Agreement, the Mezzanine Loan Agreements, the
New Mezzanine Loan Documents or the Cash Management Agreement), (xiv) payments
under a Ground Lease to the extent not already paid by Manager or required to be
reimbursed to Manager, (xv) management and franchise fees, (xvi) disbursements
to Borrower to be distributed to its equityholders in order to make
distributions required to be paid to enable REIT Guarantor to pay any dividends
with respect to preferred interests that REIT Guarantor issued to satisfy the
“100 shareholders” REIT qualification requirement under Section 856(a)(5) of the
Code in an amount not to exceed $70,000 annually; and (xvii) such other items as
reasonably approved by Lender.

 

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Section 6.11        Property Cash Flow Allocation.

 

6.11.1     Order of Priority of Funds in Deposit Account. On each Business Day
during a Trigger Period, except during the continuance of an Event of Default,
all funds deposited into the Deposit Account shall be applied in the following
amounts and order of priority:

 

(i)          First, to an account maintained by Hilton Manager, as agent for
Operating Lessee relating to the Hilton Brand Managed Properties, funds
necessary to pay any Approved Operating Expenses (excluding any Incentive
Management Fees) and Hotel Taxes relating to the Hilton Brand Managed
Properties;

 

(ii)         Second, to the Tax Account, all funds necessary to make the
required payments of Tax Funds on the next Monthly Payment Date as required
under Section 6.3;

 

(iii)        Third, to the Insurance Account, all funds necessary to make the
required payments of Insurance Funds on the next Monthly Payment Date as
required under Section 6.4;

 

(iv)        Fourth, to the Ground Rent Account, all funds necessary to make the
required payments of Ground Rent Funds on the next Monthly Payment Date as
required under Section 6.7;

 

(v)         Fifth, to the Debt Service Account, all funds necessary to pay the
Monthly Debt Service Payment Amount 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 Account pursuant
to this subparagraph (v) shall be held in the Debt Service Account until such
Monthly Payment Date, at which time, such amounts shall be applied in accordance
with the terms of Section 2.3.1);

 

(vi)        Sixth, to the Debt Service Account, all funds necessary to pay any
other amounts 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 Account pursuant
to this subparagraph (vi) shall be held in the Debt Service Account 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);

 

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(vii)       Seventh, subject to the terms of the Cash Management Agreement, to
Borrower, funds necessary to pay (without duplication) (A) any Approved
Operating Expenses (excluding any Incentive Management Fees) and Hotel Taxes, to
the extent not previously paid by Manager from the application of funds pursuant
to subparagraph (i) above, as applicable), (B) any Emergency Expenses, (C) any
Approved Capital Expenditures, and (D) any Approved FF&E Expenses, to the extent
the Available FF&E Reserve Funds are insufficient to cover such Approved FF&E
Expenses and (E) any Flagging Costs pursuant to an Approved Flagging Budget, to
the extent that amounts contained in the PIP Reserve Account and the Available
FF&E Credit are insufficient to cover such Flagging Costs;

 

(viii)      Eighth, 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 under Section 6.8;

 

(ix)       Ninth, to the Scheduled PIP Reserve Account, all funds necessary to
make the required payments of Scheduled PIP Reserve Funds on the next Monthly
Payment Date as required under Section 6.5;

 

(x)         Tenth, provided no Event of Default has occurred and is continuing
hereunder, to the Mezzanine Debt Service Account, all funds necessary to pay the
Mezzanine Monthly Debt Service Payment Amount on the next Monthly Payment Date
as set forth in the most recently received Mezzanine Lender Monthly Debt Service
Notice Letter from Mezzanine Lender (plus, if applicable, interest at the
Default Rate (as defined in the Mezzanine Loan Agreement) and all other amounts
then due and payable to Mezzanine Lender under the Mezzanine Loan Documents)
(provided, however, that amounts allocated to the Mezzanine Debt Service Account
pursuant to this subparagraph (ix) shall be held in the Mezzanine Debt Service
Account until such next Monthly Payment Date, at which time, such amounts shall
be transferred to the Mezzanine Account; and provided further that if Lender
receives written notice from Mezzanine Lender that the amount paid to the
Mezzanine Account pursuant to the most recently received Mezzanine Lender
Monthly Debt Service Notice Letter was not the correct amount to be paid
pursuant to the Mezzanine Loan Documents, then an adjustment shall be made to
the amount paid to the Mezzanine Account on the immediately succeeding Monthly
Payment Amount in order to correct such error);

 

(xi)          Intentionally omitted;

 

(xii)         Eleventh, subject to the terms of the Cash Management Agreement,
to Borrower, funds necessary to pay Approved Excess Operating Expenses;

 

(xiii)        Twelfth, to an account maintained by Hilton Manager, as agent for
Operating Lessee relating to the Hilton Brand Managed Properties, funds
necessary to pay any Incentive Management Fees relating to the Hilton Brand
Managed Properties;

 

(xiv)       Lastly all amounts remaining after payment of the amounts set forth
in clauses (i) through (xiii) above (the “Available Cash”), to the Cash
Collateral Account to be held or disbursed in accordance with Section 6.10.

 

6.11.2     Failure to Make Payments. The failure of sufficient amounts to be
deposited into the Deposit Account in order to be able to disburse all amounts
required under clauses (i) through (vi) and (viii) of Section 6.11.1 in full on
the following Monthly Payment Date shall, subject to applicable cure periods set
forth in Article VIII, constitute an Event of Default under this Agreement;
provided, however, if adequate funds are available in the Deposit Account for
such payments, the failure by the Deposit Bank to allocate such funds into the
appropriate Accounts shall not constitute an Event of Default.

 

 -133-Loan Agreement

 

 

6.11.3     Application After Event of Default. Notwithstanding anything to the
contrary contained in this Article 6, upon the occurrence and during the
continuance of an Event of Default, Lender, at its option, may apply any Gross
Revenue (other than Security Deposits or Advance Deposits until forfeited or
applied in accordance with the terms of the applicable Lease or Advance Booking
Agreement, as the case may be) then in the possession of Lender, Servicer or
Deposit Bank (including any Reserve Funds on deposit in any Cash Management
Account) to the payment of the Debt in such order, proportion and priority as
Lender may determine in its sole and absolute discretion. Lender’s right to
withdraw and apply any of the foregoing funds shall be in addition to all other
rights and remedies provided to Lender under the Loan Documents; provided,
however, that Lender shall permit the funding of (i) to a Hilton controlled
account Approved Operating Expenses (excluding any Incentive Management Fees)
and Hotel Taxes relating to the Hilton Brand Managed Properties to Hilton
Manager, as agent for Operating Lessee, and (ii) Approved Operating Expenses
relating to the Properties that are managed by Crestline, and if applicable if
applicable, Emergency Expenses, to the extent of Available Cash (as if Section
6.11.1 had been applied with respect to such Gross Revenue) unless and until
(with respect to clause (ii) above) the Loan has been accelerated in accordance
with Section 8.2.1, a bankruptcy proceeding has been filed by or with respect to
Borrower or Operating Lessee, the Maturity Date has occurred or the Lender has
commenced a foreclosure action, or applied for the appointment of receiver, or
exercised other similar remedies with respect to an Event of Default (or, with
respect to clause (i) above, unless and until Lender has terminated the Manager
of the Hilton Brand Managed Properties pursuant to the terms of the applicable
Assignment of Management Agreement). Lender’s right to withdraw and apply any of
the foregoing funds shall be in addition to all other rights and remedies
provided to Lender under the Loan Documents.

 

6.11.4     Mezzanine Lender Monthly Debt Service Notice. Lender agrees to
deliver each Mezzanine Lender Monthly Debt Service Notice Letter and
corresponding disbursement instructions to Deposit Bank within two (2) Business
Days of Lender’s receipt thereof to the extent any Mezzanine Lender is entitled
to a payment pursuant to the terms of Section 6.11.1 above.

 

Section 6.12       Security Interest in Reserve Funds. As security for payment
of the Debt and the performance by Borrower and Operating Lessee of all other
terms, conditions and provisions of the Loan Documents, each of Borrower and
Operating Lessee hereby pledges and assigns to Lender, and grants to Lender a
security interest in, all Borrower’s and Operating Lessee’s right, title and
interest in and to all Gross Revenue and in and to all payments to or monies
held in the Deposit Account and the Accounts required to be established or
maintained, as the case may be, pursuant to this Agreement (collectively, the
“Cash Management Accounts”). Each of Borrower and Operating Lessee hereby grants
to Lender a continuing security interest in, and agrees to hold in trust for the
benefit of Lender, all Gross Revenues in its possession prior to the (i) payment
of such Gross Revenue to Lender or (ii) deposit of such Gross Revenue into the
Deposit Account. Neither Borrower nor Operating Lessee shall, without obtaining
the prior written consent of Lender, further pledge, assign or grant any
security interest in any Cash Management Account, or permit any Lien to attach
thereto, or any levy to be made thereon, or any UCC Financing Statements, except
those naming Lender as the secured party, to be filed with respect thereto. This
Agreement is, among other things, intended by the parties to be a security
agreement for purposes of the UCC. Upon the occurrence and during the
continuance of an Event of Default, Lender may, subject to Section 6.11.3 above,
apply any sums in any Cash Management Account in any order and in any manner as
Lender shall elect in Lender’s discretion without seeking the appointment of a
receiver and without adversely affecting the rights of Lender to foreclose the
Lien of the Mortgage or exercise its other rights under the Loan Documents. Cash
Management Accounts shall not constitute trust funds and may be commingled with
other monies held by Lender. Provided no Event of Default exists, all interest
which accrues on the funds in any Account (other than the Tax Account and the
Insurance Account) shall accrue for the benefit of Borrower and shall be taxable
to Borrower and shall be added to and disbursed in the same manner and under the
same conditions as the principal sum on which said interest accrued. Upon
repayment in full of the Debt, all remaining funds in the Accounts, if any,
shall be promptly (a) deposited in the Mezzanine Account, to be disbursed in
accordance with the terms of the Mezzanine Loan Documents, or (b) if the “Debt”
(as such term is used in the Mezzanine Loan Agreement) is to be simultaneously
repaid with the Debt, paid to the Borrower.

 

 -134-Loan Agreement

 

 

Section 6.13       Account Activation Notices. Lender agrees that unless an
Event of Default or a Trigger Period shall have occurred, Lender shall not be
entitled to deliver any Activation Notice (as defined in the Cash Management
Agreement). Following the cure of any such Event of Default, which cure has been
accepted by Lender (except as to any timely and properly consummated Qualified
Release Property Default as to which Lender’s acceptance is not required) or
waiver of such Event of Default (assuming that no other Event of Default then
exists), and upon the ending of any such Trigger Period, Lender shall promptly
deliver a De-Activation Notice (as defined in the Cash Management Agreement) to
each Clearing Account Bank to which it had previously delivered an Activation
Notice in connection with such Event of Default or Trigger Period, as
applicable.

 

Section 6.14       Appointment of HIT Portfolio I TRS Holdco, LLC as Account
Representative. Each Individual Borrower and Individual Operating Lessee hereby
designates HIT Portfolio I TRS Holdco, LLC, as the owner of all or substantially
all of the limited liability company or limited partnership interests of each
Individual Operating Lessee and agent for Borrower and Operating Lessee
(“Account Representative”), as the contractual representative of the Borrower
and Operating Lessee with respect to the Clearing Accounts and the Deposit
Account in connection with the Clearing Account Agreements and the Cash
Management Agreement. Each Individual Borrower and Individual Operating Lessee
jointly and severally hereby appoints the Account Representative as its agent to
establish or maintain, as the case may be, in its name on behalf of the Borrower
and the Operating Lessee, each Clearing Account, each Disbursement Account and
the Deposit Account, and to receive (i) all Gross Revenues of the Properties
into the applicable Clearing Account, (ii) all disbursements from the Clearing
Accounts to the account designated in accordance with the Clearing Account
Agreements, and (iii) to receive all Gross Revenues of the Properties into the
Deposit Account in accordance with the Cash Management Agreement (and the
Account Control Agreements therein referenced). The Account Representative shall
have and may exercise such powers under the Clearing Account Agreements and the
Cash Management Agreement as are specifically delegated to the Account
Representative by the terms of each thereof, together with such powers as are
reasonably incidental thereto. As security for payment of the Debt and the
performance by Borrower and Operating Lessee of all other terms, conditions and
provisions of the Loan Documents, each of Borrower and Operating Lessee hereby
pledges and assigns to Lender, and grants to Lender a security interest in, all
of Borrower’s and Operating Lessee’s right, title and interest in and to the
Clearing Accounts and all payments to or monies held therein.

 

 -135-Loan Agreement

 

 

Section 6.15        Environmental Work Reserve.

 

6.15.1     Deposit of Environmental Work Reserve Funds. On the Closing Date,
Borrower shall deposit with or on behalf of Lender an amount equal to
$1,000,000, which is the estimated cost to complete Environmental Work required
at the Individual Properties identified on Schedule XXII (the “Environmental
Work Reserve Funds”), which Environmental Work Reserve Funds shall be
transferred by Deposit Bank into an Account (the “Environmental Work Reserve
Account”).

 

6.15.2     Release of Environmental Work Reserve Funds. Provided no Event of
Default is continuing and no Enforcement has occurred, Lender shall direct
Servicer to disburse Environmental Work Reserve Funds to Borrower out of the
Environmental Work Reserve Account to pay for or reimburse Borrower for the
Environmental Work, within ten (10) days after the delivery by Borrower to
Lender of a request therefor (but not more often than once each calendar month),
in increments of at least $10,000 up to an amount equal to $200,000 per
Individual Property, accompanied by the following items an Officer’s Certificate
(which items shall be in form and substance reasonably satisfactory to Lender)
(A) stating that the Environmental Work (or relevant portion thereof) to be
funded by the requested disbursement have been completed in a good and
workmanlike manner and in accordance with all applicable Legal Requirements, (B)
identifying each vendor that supplied materials or labor in connection with the
Environmental Work to be funded by the requested disbursement, (C) stating that
each such vendor has been paid in full or will be paid in full upon such
disbursement, or if such payment is a progress payment, that such payment
represents full payment to such vendor, less any applicable retention amount,
for work completed through the date of the relevant invoice from such vendor,
(D) stating that the Environmental Work (or relevant portion thereof) to be
funded have not been the subject of a previous disbursement, (E) stating that
all previous disbursements of Environmental Work Funds have been used to pay the
previously identified Environmental Work, and (F) stating that all outstanding
trade payables with respect to Environmental Work (other than those to be paid
from the requested disbursement or those constituting Permitted Indebtedness)
have been paid in full other than any applicable retention amount. In addition,
upon completion of all of the Environmental Work at an Individual Property
identified on Schedule XXII, as reasonably determined by Lender, or if no phase
II environmental report is required with respect to an Individual Property
identified on Schedule XXII, Lender shall direct Servicer to disburse to Lender
the difference between $200,000 and amounts previously disbursed to Borrower in
respect of Environmental Work at such Individual Property.

 

Article 7

 

PERMITTED TRANSFERS

 

Section 7.1          Loan Assumption.

 

(a)          Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, from and after the earlier to
occur of (i) ten (10) Business Days after the Securitization of the Loan or (ii)
four (4) months after the Closing Date, Borrower shall have the right to convey
all of the Properties to a new borrower (the “Transferee Borrower”) and have the
Transferee Borrower assume all of Borrower’s obligations under this Agreement
and the Loan Documents, and have one or more Replacement Guarantors assume all
of the obligations of Guarantor under the Loan Documents from and after the date
of such assumption (collectively, a “Permitted Direct Assumption”), provided
that the following conditions are satisfied (either prior to, or
contemporaneously with, the closing of such Permitted Direct Assumption):

 

 -136-Loan Agreement

 

 

(i)          No Event of Default shall be continuing as of the date of the
closing of the Permitted Direct Assumption;

 

(ii)         Borrower shall have provided Lender with not less than thirty (30)
days’ prior written notice of the Permitted Direct Assumption, and if Lender’s
consent and a Rating Agency Confirmation is not required pursuant to clause
(iii) below, such notice shall include information establishing and Borrower and
Transferee Borrower certifying that Transferee Borrower is (A) a Qualified
Transferee, (B) a Person who is Controlled by one or more Qualified
Equityholders that either (x) satisfy the Control Party Asset Threshold and the
Experience Threshold or (y) are Pre-Approved Control Parties, and (C) a Person
in whom no less than thirty-five percent (35%) of the equity interests in the
aggregate are directly or indirectly owned by one or more Qualified
Equityholders;

 

(iii)        Prior to a Securitization, Lender shall have provided its consent
to the Permitted Direct Assumption (not to be unreasonably withheld, conditioned
or delayed if the proposed Transferree Borrower satisfies the Control Party
Asset Threshold and the Experience Threshold) and, from and after a
Securitization, Lender shall have received a Rating Agency Confirmation with
respect to such Permitted Direct Assumption, provided that neither Lender’s
consent nor a Rating Agency Confirmation shall be required with respect to the
identity of the Transferee Borrower so long as the Transferee Borrower (A) is a
Qualified Transferee, (B) a Person who is Controlled by one or more Qualified
Equityholders described in clauses (i), (ii), (iii) or (v) of the definition of
Qualified Equityholder that either (x) satisfy the Control Party Asset Threshold
and the Experience Threshold or (y) are Pre-Approved Control Parties, and (C) a
Person in whom no less than thirty-five percent (35%) of the equity interests in
the aggregate are directly or indirectly owned by one or more Qualified
Equityholders. In the event that a proposed Transferee Borrower does not meet
the test described in the foregoing clauses (B) and (C), and therefore, Lender’s
consent and a Rating Agency Confirmation are required under this clause (iii),
then, for purposes of Lender’s decision whether to grant or withhold its
consent, the failure by the proposed Transferee Borrower to satisfy such test
will not be considered presumptive that such proposed Transferee Borrower is not
qualified to own and operate the Properties; provided, however, that Lender may
consider in deciding whether to consent to such proposed Transferee Borrower,
among other things, the assets, net worth and experience of such proposed
Transferee Borrower, together with its constituent owners and controlling
parties, and any other matters that Lender reasonably deems relevant;

 

(iv)        Transferee Borrower shall have executed and delivered to Lender
customary assumption agreements (the “Assumption Agreement”), whereby it assumes
and agrees to pay the Debt as and when due and shall have assumed the other
Obligations of Borrower under the Loan Documents, subject to the provisions of
Section 10.1, and, prior to or concurrently with the closing of such Permitted
Direct Assignment, Transferee Borrower and its direct constituent partners,
members or shareholders as Lender may reasonably require, shall have executed
and delivered, without any out-of-pocket cost or expense to Lender, such
customary documents, agreements and other customary deliverables as Lender shall
reasonably require to evidence and effectuate said assumption (it being
understood and agreed that none of the documents and agreements described in
this paragraph may expand the liabilities or obligations, or reduce the rights
and remedies, of Transferee Borrower relative to those of Borrower immediately
prior to the closing of the Permitted Direct Assumption);

 

 -137-Loan Agreement

 

 

(v)         Borrower and Transferee Borrower shall have furnished any
information reasonably requested by Lender related to and for the preparation
of, and shall authorize Lender to file, new fixture filings and financing
statements, and fixture filing and financing statement amendments, to the
fullest extent permitted by applicable law;

 

(vi)        Transferee Borrower shall have furnished to Lender customary
documents reasonably satisfactory to Lender evidencing the organization, good
standing, qualification and authority of Transferee Borrower, Replacement
Guarantor and the other parties executing the Assumption Agreement, the
replacement guaranty, the replacement environmental indemnity and/or the other
documents and agreements required to be delivered pursuant to the terms of this
Section 7.1(a), which documents shall include certified copies of all documents
relating to the organization, formation and good standing of Transferee Borrower
and Replacement Guarantor and of the entities, if any, which are constituent and
controlling shareholders, partners or members of Transferee Borrower or
Replacement Guarantor, as applicable;

 

(vii)       where Transferee Borrower has elected to exercise the right to
replace one or more Managers pursuant to Section 4.14.2(b) in connection with
the Permitted Direct Assumption, Transferee Borrower shall have provided one or
more new management agreements with one or more new Managers with respect to the
Individual Properties managed by such replaced Manager(s) in accordance with the
requirements of Section 4.14.2(b) hereof and shall have collaterally assigned to
Lender as additional security and subordinated to the Lien of the Mortgages each
such new management agreement pursuant to an Assignment of Management Agreement
in form and substance substantially similar to the Assignment of Management
Agreement delivered on the Closing Date or otherwise reasonably satisfactory to
Lender; and, in any event, the Individual Properties shall be managed by one or
more Qualified Managers;

 

(viii)      Transferee Borrower shall have delivered to Lender, without any
out-of-pocket cost or expense to Lender, an endorsement to each of Lender’s
Title Insurance Policies, as modified by the Assumption Agreement, insuring the
Lien of the applicable Mortgage as a valid first lien on the Individual
Properties encumbered thereby and naming the Transferee Borrower as owner of
such Individual Properties, which endorsement must insure that, as of the date
of the recording of the Assumption Agreement, such Individual Properties will
not be subject to any additional exceptions or liens other than those contained
in the applicable Title Insurance Policy issued on the Closing Date and the
Permitted Encumbrances, provided that, unless Transferee Borrower so elects, no
such endorsement shall be required to extend the effective date of the
applicable Title Insurance Policy unless such extension is required in the
applicable jurisdiction in order to satisfy the foregoing criteria;

 

 -138-Loan Agreement

 

 

(ix)         Transferee Borrower shall have furnished to Lender, if required by
Lender, (x) if the Loan is included in a REMIC Trust, a REMIC Opinion in form
and substance reasonably satisfactory to Lender, (y) an Additional Insolvency
Opinion, in form and substance reasonably satisfactory to Lender, and (z) one or
more opinions of counsel reasonably satisfactory to Lender (A) that Transferee
Borrower’s formation documents comply with the single purpose and bankruptcy
remote entity requirements set on forth Schedule V, (B) that the assumption of
the Loan has been duly authorized and that the Assumption Agreement and other
loan documents required to be delivered by Transferee Borrower and/or
Replacement Guarantor pursuant to this Section 7.1(a) have been duly authorized,
executed and delivered and are valid, binding and enforceable against Transferee
Borrower or Replacement Guarantor, as applicable, in accordance with their
terms, (C) that Transferee Borrower and Replacement Guarantor and any entity
which is a constituent and controlling stockholder, member or general partner of
Transferee Borrower or Replacement Guarantor, as applicable, have been duly
organized, and are in existence and good standing, (D) as to such other matters
as were required in connection with the origination of the Loan (but instead
with respect to the assumption transaction and documentation) and (E) such other
opinions as are reasonably required by Lender or required by any Rating Agency
and which are customary in connection with the transfer and assumption of
similar loans;

 

(x)          Transferee Borrower shall have delivered to Lender (A) Patriot Act,
OFAC and bankruptcy searches satisfactory to Lender and (B) pending litigation,
judgment, state and federal tax lien and UCC searches reasonably satisfactory to
Lender, with respect to (w) Transferee Borrower, (x) each Replacement Guarantor,
(y) any other Person that Controls Transferee Borrower or owns an equity
interest in Transferee Borrower which equals or exceeds ten percent (10%) that
did not own an equity interest in Borrower which equals or exceeds ten percent
(10%) on the Closing Date, and (z) any other Person reasonably required by
Lender in order for Lender to fulfill its regulatory compliance guidelines
(where such guidelines are of general applicability and are applied without
prejudice); provided, however, that (1) with respect to any bankruptcy search
under clauses (x), (y) or (z) above, such search shall be deemed satisfactory if
it evidences that the Replacement Guarantor or other Person, as applicable, is
not currently the subject of any bankruptcy proceeding and has not been subject
to any voluntary or involuntary bankruptcy proceeding in the past seven (7)
years (other than, in the case of an involuntary proceeding, as may have been
dismissed) and (2) UCC searches shall be deemed to be satisfactory so long as
they do not evidence any security interest in any collateral for the Loan or any
security interest in any direct or indirect equity interest in Transferee
Borrower;

 

(xi)         Transferee Borrower and the Persons that control Transferee
Borrower must be able to satisfy all Special Purpose Bankruptcy Remote Entity
(provided that this requirement will only be applicable to Transferee Borrower
and any Person, if any, that is a general partner or managing member of
Transferee), ERISA and embargoed persons representations, warranties and
covenants in this Agreement, and the Permitted Direct Assumption shall not
result in Borrower or any ERISA Affiliate incurring any liability under Section
4201 of ERISA due to a complete or partial withdrawal, as such terms are defined
in Part I of Subtitle E of Title IV of ERISA, from any Employee Plan that is a
“multiemployer plan,” as such term is defined in Section 4001(a)(3) of ERISA;

 

 -139-Loan Agreement

 

 

(xii)        Transferee Borrower shall have paid Lender the Assumption Fee and
all reasonable, out-of-pocket expenses incurred by Lender in connection with the
Permitted Direct Assumption (whether or not the same is consummated), including
any Rating Agency fees (if applicable), but excluding any servicing or special
servicing fees (other than the Assumption Fee);

 

(xiii)       Lender shall have received a replacement guaranty and environmental
indemnity (in form and substance substantially the same as the Guaranty and
Environmental Indemnity, provided, however, that in the case of a Direct
Assumption, such replacement guaranty shall not include any recourse liability
under Section 10.1(ix) or for breach of the representations and covenants set
forth in Schedule V hereof by the predecessor borrower or any affiliates of such
predecessor borrower) by one or more replacement guarantors and indemnitors (A)
who in the aggregate, satisfy the Financial Covenants and (B) each of whom
satisfies the applicable search criteria described in clause (x) above and (C)
each of whom owns a direct or indirect interest in Transferee Borrower and at
least one of whom Controls Transferee Borrower (collectively, the “Replacement
Guarantor”), where such Replacement Guarantor has undertaken at least the
obligations as set forth in the Guaranty and Environmental Indemnity arising
only from acts, conditions and events occurring from and after the closing date
of the Permitted Direct Assumption;

 

(xiv)      the Permitted Direct Assumption shall not violate or result in a
breach of or default under any Franchise Agreement or Ground Lease where such
breach or default, if not cured prior to the expiration of any applicable cure
period, would make the agreement or lease, as applicable, terminable at the
option of the franchisor or ground lessor thereunder, and all requisite consents
to such conveyance shall have been obtained from the applicable parties to such
Franchise Agreements and Ground Leases and Lender shall have received
satisfactory evidence of the same; provided, however, that Borrower may, on the
closing date of the Permitted Direct Assumption, (A) replace any Franchise
Agreement by a new Franchise Agreement in accordance with Section 4.34 hereof
and/or (B) replace any Franchise Agreement with a new Franchise Agreement with
the same Franchisor under, and in a form and on the terms, in each case, not
materially different than the form and terms of, the replaced Franchise
Agreement if such new Franchise Agreement is required by such Franchisor in
connection with the Permitted Direct Assumption;

 

(xv)       Transferee Borrower shall make any deposits into the Scheduled PIP
Reserve Account as may be required under Section 4.34(e);

 

(xvi)      the assumption documentation, legal opinions and organizational
documents of Transferee Borrower and any other Person that is required to be a
Special Purpose Bankruptcy Remote Entity under this Agreement (but not the
identity of Transferee Borrower or such other Persons other than as required
under clause (iii) above) will be subject to a Rating Agency Confirmation; and

 

 -140-Loan Agreement

 

 

(xvii)     such conveyance is permitted under and consummated in compliance with
the Mezzanine Loan Documents, and Transferee Borrower shall have delivered
evidence reasonably satisfactory to Lender of the same.

 

(b)          Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, from and after the earlier to
occur of (i) ten (10) Business Days after the Securitization of the Loan or (ii)
four (4) months after the Closing Date, a Transfer of more than sixty-five
percent (65%) of the direct or indirect equity interests in the most junior
Mezzanine Borrower to any entity that is not a Pre-Approved Control Party or a
change of Control in Borrower, in each case that is not otherwise permitted
hereunder (such entity, the “Indirect Transferee”), and the assumption by one or
more Replacement Guarantors of all of the obligations of Guarantor under the
Loan Documents from and after the date of such Transfer in connection with such
Transfer (collectively, a “Permitted Indirect Assumption”) shall be permitted
under this Agreement and the Loan Documents, provided that either such
transaction is a Permitted Transfer or otherwise the following conditions are
satisfied (either prior to, or contemporaneously with, the closing of such
Permitted Indirect Assumption):

 

(i)          No Event of Default shall be continuing as of the date of the
closing of the Permitted Indirect Assumption;

 

(ii)         Borrower shall have provided Lender with not less than thirty (30)
days’ prior written notice of the Permitted Indirect Assumption, and if Lender’s
consent and a Rating Agency Confirmation is not required pursuant to clause
(iii) below, such notice shall include information establishing and Borrower and
Indirect Transferee certifying that Indirect Transferee is (A) a Qualified
Transferee, (B) a Person who is Controlled by one or more Qualified
Equityholders that either (x) satisfy the Control Party Asset Threshold and the
Experience Threshold or (y) are Pre-Approved Control Parties, and (C) a Person
in whom no less than thirty-five percent (35%) of the equity interests in the
aggregate are directly or indirectly owned by one or more Qualified
Equityholders;

 

(iii)        Prior to a Securitization, Lender shall have provided its consent
to the Permitted Indirect Assumption (not to be unreasonably withheld,
conditioned or delayed if the proposed Indirect Transferee satisfies the Control
Party Asset Threshold and the Experience Threshold) and, from and after a
Securitization, Lender shall have received a Rating Agency Confirmation with
respect to such Permitted Indirect Assumption, provided that neither Lender’s
consent nor a Rating Agency Confirmation shall be required so long as the
Indirect Transferee is (A) a Qualified Transferee, (B) a Person who is
Controlled by one or more Qualified Equityholders described in clauses (i),
(ii), (iii) or (v) of the definition of Qualified Equityholder that either (x)
satisfy the Control Party Asset Threshold and the Experience Threshold or (y)
are Pre-Approved Control Parties, and (C) a Person in whom no less than
thirty-five percent (35%) of the equity interests in the aggregate are directly
or indirectly owned by one or more Qualified Equityholders. In the event that a
proposed Indirect Transferee does not meet the test described in the foregoing
clause (B), and therefore, Lender’s reasonable consent or a Rating Agency
Confirmation are required under this clause (iii), then, for purposes of
Lender’s decision whether to grant or withhold its consent, the failure by the
proposed Indirect Transferee to satisfy such test will not be considered
presumptive that such proposed Indirect Transferee is not qualified to own a
direct or indirect equity interest in Borrower; provided, however, that Lender
may consider in deciding whether to consent to such proposed Indirect
Transferee, among other things, the assets, net worth and experience of such
proposed Indirect Transferee, together with its constituent owners and
controlling parties, and any other matters that Lender reasonably deems
relevant;

 

 -141-Loan Agreement

 

 

(iv)        Intentionally omitted;

 

(v)         Indirect Transferee shall have furnished to Lender customary
documents reasonably satisfactory to Lender evidencing the organization, good
standing, qualification and authority of Indirect Transferee, Replacement
Guarantor and the other parties executing the replacement guaranty, the
replacement environmental indemnity and/or the other documents and agreements
required to be delivered pursuant to the terms of this Section 7.1(b), which
documents shall include certified copies of all documents relating to the
organization, formation and good standing of Indirect Transferee and Replacement
Guarantor and of the entities, if any, which are constituent and controlling
shareholders, partners or members of Indirect Transferee or Replacement
Guarantor, as applicable;

 

(vi)        where Borrower has elected to exercise the right to replace one or
more Managers pursuant to Section 4.14.2(b) in connection with the Permitted
Indirect Assumption, Borrower shall have provided one or more new management
agreements with one or more new Managers with respect to the Individual
Properties managed by such replaced Manager(s) in accordance with the
requirements of Section 4.14.2(b) hereof and shall have collaterally assigned to
Lender as additional security and subordinated to the Lien of the Mortgages each
such new management agreement pursuant to an Assignment of Management Agreement
in form and substance substantially similar to the Assignment of Management
Agreement delivered on the Closing Date or otherwise reasonably satisfactory to
Lender; and, in any event, the Individual Properties shall be managed by one or
more Qualified Managers;

 

(vii)       Borrower shall have furnished to Lender, (y) an Additional
Insolvency Opinion, in form and substance reasonably satisfactory to Lender, and
(z) one or more opinions of counsel reasonably satisfactory to Lender (A) that
the loan documents, if any, required to be delivered by Borrower, Indirect
Transferee and/or Replacement Guarantor pursuant to this Section 7.1(b) have
been duly authorized, executed and delivered and are valid, binding and
enforceable against Borrower, Indirect Transferee (if applicable) or Replacement
Guarantor, as applicable, in accordance with their terms, (B) that Indirect
Transferee and Replacement Guarantor and any entity which is a constituent and
controlling stockholder, member or general partner of Indirect Transferee or
Replacement Guarantor, as applicable, have been duly organized, and are in
existence and good standing, (C) as to such other matters as were required in
connection with the origination of the Loan with respect to Guarantor and the
direct owner of the most junior Mezzanine Borrower and (D) such other opinions
as are reasonably required by Lender or required by any Rating Agency and which
are customary in connection with the equity transfers of borrowers under similar
loans;

 

 -142-Loan Agreement

 

 

(viii)      Borrower shall have delivered to Lender (A) Patriot Act, OFAC and
bankruptcy searches satisfactory to Lender and (B) pending litigation, judgment,
state and federal tax lien and UCC searches reasonably satisfactory to Lender,
with respect to (w) Indirect Transferee, (x) each Replacement Guarantor, (y) any
other Person that Controls Borrower or owns an equity interest in Borrower which
equals or exceeds ten percent (10%) that did not own an equity interest in
Borrower which equals or exceeds ten percent (10%) on the Closing Date, and (z)
any other Person reasonably required by Lender in order for Lender to fulfill
its regulatory compliance guidelines (where such guidelines are of general
applicability and are applied without prejudice); provided, however, that (1)
with respect to any bankruptcy search under clauses (x), (y) or (z) above, such
search shall be deemed satisfactory if it evidences that the Replacement
Guarantor or other Person, as applicable, is not currently the subject of any
bankruptcy proceeding and has not been subject to any voluntary or involuntary
bankruptcy proceeding in the past seven (7) years (other than, in the case of an
involuntary proceeding, as may have been dismissed) and (2) UCC searches shall
be deemed to be satisfactory so long as they do not evidence any security
interest in any collateral for the Loan or any security interest in any direct
or indirect equity interest in Borrower;

 

(ix)         Borrower must continue to satisfy all Special Purpose Bankruptcy
Remote Entity representations, warranties and covenants in this Agreement, and
Indirect Transferee and the Persons that control Indirect Transferee must be
able to satisfy all ERISA and embargoed persons representations, warranties and
covenants in this Agreement, and the Permitted Indirect Assumption shall not
result in Borrower or any ERISA Affiliate incurring any liability under Section
4201 of ERISA due to a complete or partial withdrawal, as such terms are defined
in Part I of Subtitle E of Title IV of ERISA, from any Employee Plan that is a
“multiemployer plan,” as such term is defined in Section 4001(a)(3) of ERISA;

 

(x)          Borrower shall have paid Lender the Assumption Fee and all
reasonable, out-of-pocket expenses incurred by Lender in connection with the
Permitted Indirect Assumption (whether or not the same is consummated),
including any Rating Agency fees (if applicable), but excluding any servicing or
special servicing fees (other than the foregoing Assumption Fee);

 

(xi)         Lender shall have received a replacement guaranty and environmental
indemnity (in form and substance substantially the same as the Guaranty and
Environmental Indemnity) by one or more Replacement Guarantor(s) (A) who in the
aggregate, satisfy the Financial Covenants, (B) each of whom satisfies the
applicable search criteria described in clause (viii) above and (C) each of whom
owns a direct or indirect interest in Borrower and at least one of whom Controls
Borrower, where such Replacement Guarantor has undertaken at least the
obligations as set forth in the Guaranty and Environmental Indemnity arising
only from acts, conditions and events occurring from and after the closing date
of the Permitted Indirect Assumption; and

 

(xii)        the Permitted Indirect Assumption shall not violate or result in a
breach of or default under any Franchise Agreement or Ground Lease where such
breach or default, if not cured prior to the expiration of any applicable cure
period, would make the agreement or lease, as applicable, terminable at the
option of the franchisor or ground lessor thereunder, and all requisite consents
to such conveyance shall have been obtained from the applicable parties to such
Franchise Agreements and Ground Leases and Lender shall have received
satisfactory evidence of the same; provided, however, that Borrower may, on the
closing date of the Permitted Indirect Assumption, (A) replace any Franchise
Agreement by a new Franchise Agreement in accordance with Section 4.34 hereof
and/or (B) replace any Franchise Agreement with a new Franchise Agreement with
the same Franchisor under, and in a form and on the terms, in each case, not
materially different than the form and terms of, the replaced Franchise
Agreement if such new Franchise Agreement is required by such Franchisor in
connection with the Permitted Indirect Assumption;

 

 -143-Loan Agreement

 

 

(xiii)       Borrower shall make any deposits into the Scheduled PIP Reserve
Account as may be required under Section 4.34(e); and

 

(xiv)      such Transfer is permitted under and consummated in compliance with
the Mezzanine Loan Documents, and Borrower shall have delivered evidence
reasonably satisfactory to Lender of the same.

 

(c)          Upon the closing of any Permitted Direct Assumption and
satisfaction of the requirements set forth above in Section 7.1(a), Borrower
shall be forever released from any further liability under this Agreement and
the other Loan Documents for acts or circumstances that first arise from and
after the date of the closing of the Permitted Direct Assumption, other than
those arising out of the acts of Borrower or its Affiliates.

 

(d)          Upon the provision of a replacement Guaranty and Environmental
Indemnity by a Replacement Guarantor and closing of any Assumption permitted by
this Section 7.1, Guarantor shall be forever released from any further liability
under the Guaranty and Environmental Indemnity on the terms set forth in the
Guaranty and Environmental Indemnity, respectively.

 

(e)          If following an Assumption permitted by this Section 7.1, all or
any portion of the equity interests in Borrower or Transferee Borrower, as
applicable, will be owned, directly or indirectly, by a real estate investment
trust (within the meaning of Section 856(a) of the Code), then concurrently with
such Assumption, Borrower or Transferee Borrower, as applicable, shall have the
right to enter into one or more subordinate or replacement operating leases of
the Properties that will produce “rents from real property” for purposes of
Section 856(d) of the Code and/or “real property rents” for purposes of Section
7704 of the Code with one or more newly-formed Special Purpose Bankruptcy Remote
Entity(ies) (with appropriate changes to Schedule V with respect to such entity
to account for each such entity’s form of organization, assets, purpose and
business, provided that each such entity shall be a Delaware limited
partnership, a Delaware limited liability company or a Delaware corporation)
that will be under common ownership and Control with Borrower and will elect to
be treated as a “taxable REIT subsidiary” under Section 856(l) of the Code (a
“TRS Lessee”). In connection with Borrower or Transferee Borrower, as
applicable, entering into such subordinate or replacement operating lease(s) of
the Properties with a TRS Lessee, Borrower or Transferee Borrower, as
applicable, may elect notwithstanding any provisions of the Loan Documents to
the contrary, to transfer any applicable Franchise Agreement(s), Management
Agreement(s) and other contracts, agreements, licenses, permits, instruments or
other assets or obligations of the Borrower, as appropriate, to the TRS Lessee
(without creating a breach or default thereunder), or, to the extent such
agreements are not transferrable, to cause the TRS Lessee to enter into
replacement Franchise Agreements(s) and/or Management Agreement(s) (with the
same third-parties under, and in a form and on the terms, in each case, not
materially different than the form and terms of, the replaced agreements, except
to the extent expressly permitted hereunder), or other agreements (subject to
the other terms of this Agreement). Borrower’s or Transferee Borrower’s, as
applicable, exercise of the rights set forth in this paragraph (e) shall be
subject to and conditioned upon (i) delivery to Lender of (A) an unconditional
subordination of each operating lease executed by Borrower or Transferee
Borrower, as applicable, and TRS Lessee, (B) a joinder executed by TRS Lessee
with respect to the Loan Documents (other than the Note and the Guaranty), (C)
documents, instruments and certificates with respect to TRS Lessee of the same
type (with appropriate changes to account for such entity’s form of
organization, assets, purpose and business, provided that each such entity shall
be a Delaware limited partnership, a Delaware limited liability company or a
Delaware corporation) as are required to be delivered to Lender with respect to
a Transferee Borrower pursuant to Section 7.1(a) above and (D) such additional
documents, instruments and certificates customary for a similar transaction
involving a “taxable subsidiary” both as Lender may reasonably request and in
form and substance reasonably satisfactory to Lender and subject to a Rating
Agency Confirmation, and (ii) payment to Lender of its reasonable out-of-pocket
costs and expenses incurred in connection with the foregoing. The parties to
each operating lease shall have the right, from time to time, to amend the
percentage rent due thereunder.

 

 -144-Loan Agreement

 

 

(f)          In connection with any Assumption permitted by this Section 7.1,
upon Borrower’s written request, Lender shall provide a statement running to the
benefit of the Transferee Borrower or the Indirect Transferee, as applicable,
and their successors and assigns, duly acknowledged and certified, setting forth
(i) the Outstanding Principal Balance, (ii) the nondefault interest rate, (iii)
any amounts due or owing and unpaid under the Loan Documents, (iv) each date
installments of interest and/or principal or any other amounts accruing under
the Loan Documents were last paid, as well as a list of any installments of
interest or other amounts accruing under the Loan Documents paid with respect to
any period in which the date of the Assumption falls, (v) any offsets or
defenses to the payment and performance of the Obligations, if any, actually
known to Lender and (vi) that this Agreement and the other Loan Documents have
not been modified or if modified, giving particulars of such modification.
Except with respect to Lender’s statements relating to clauses (i), (ii) and
(iv) above, which statements may be relied upon by Transferee Borrower or the
Indirect Transferee, as applicable, and their successors and assigns, compliance
by Lender with the requirements of this paragraph shall be for informational
purposes only and shall not be deemed to be an estoppel by Lender or a waiver of
any rights or remedies of Lender hereunder or under any other Loan Document.

 

Section 7.2         Permitted Transfers. Notwithstanding anything to the
contrary contained in Section 4.2 or elsewhere in this Agreement or any of the
other Loan Documents, the following Transfers (herein, the “Permitted
Transfers”) shall be permitted hereunder without Lender’s consent and without a
Rating Agency Confirmation (provided that, for the avoidance of doubt, and
notwithstanding anything to the contrary contained herein, except in connection
with the origination of the Mezzanine Loans and the foreclosure of any Mezzanine
Loan, the direct Transfer of an equity interests in any Person that constitutes
collateral for a Mezzanine Loan shall not be a Permitted Transfer):

 

(a)          a Lease entered into in accordance with the Loan Documents;

 

(b)          an Assumption in accordance with Section 7.1;

 

(c)          a Permitted Encumbrance;

 

 -145-Loan Agreement

 

 

(d)          any listing of equity interests in any Guarantor or Qualified
Equityholder on the New York Stock Exchange, the Toronto Stock Exchange, NASDAQ
Global Select Market or any other nationally recognized stock exchange or
market, and any sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment or transfer of publicly traded shares or other publicly traded
interests in any Guarantor or any indirect equity owner of any Guarantor;

 

(e)          a Transfer (but not a mortgage, pledge, hypothecation, encumbrance
or grant of a security interest, except as permitted under clause (g)) or
issuance of a direct or indirect interest in any Qualified Equityholder provided
that:

 

(i)          after giving effect to such Transfer, one or more Pre-Approved
Control Parties (and, after a Permitted Direct Assumption or Permitted Indirect
Assumption, one or more Qualified Equityholders that acquired their interest in
Borrower through such Permitted Direct Assumption or Permitted Indirect
Assumption) shall continue to own at least thirty-five percent (35%) of all
equity interests (direct or indirect) of Borrower, Operating Lessee and each SPC
Party and Control Borrower, Operating Lessee and each SPC Party; and

 

(ii)         if such Transfer would cause any Person (other than any
Pre-Approved Control Party), together with its Affiliates, to increase its
direct or indirect interest in Borrower, Operating Lessee or any SPC Party to an
amount which equals or exceeds ten percent (10%) that did not own, together with
its Affiliates, an equity interest in Borrower which equals or exceeds ten
percent (10%) prior to such Transfer, then such transferee is a Qualified
Transferee and Lender shall receive not less than fifteen (15) days advance
written notice of such Transfer;

 

(f)          provided that no Event of Default shall then exist, a Transfer (but
not a mortgage, pledge, hypothecation, encumbrance or grant of a security
interest, except as permitted under clause (g)) of Control of Borrower,
Operating Lessee or any SPC Party or of a direct or indirect interest in the
most junior Mezzanine Borrower provided that:

 

(i)          after giving effect to such Transfer, one or more Qualified
Equityholders shall collectively own at least thirty-five percent (35%) of all
equity interests (direct or indirect) of Borrower, Operating Lessee and each SPC
Party;

 

(ii)         after giving effect to such Transfer, one or more Pre-Approved
Control Parties shall collectively Control Borrower, Operating Lessee and each
SPC Party;

 

(iii)        each of Borrower, Operating Lessee and each SPC Party shall
continue to be a Special Purpose Bankruptcy Remote Entity;

 

(iv)        if such Transfer would cause the transferee (other than any
Pre-Approved Control Party), together with its Affiliates, to increase its
direct or indirect interest in Borrower, Operating Lessee or any SPC Party to an
amount which equals or exceeds ten percent (10%) that did not own, together with
its Affiliates, an equity interest in Borrower which equals or exceeds ten
percent (10%) prior to such Transfer, then such transferee is a Qualified
Transferee and Lender shall receive not less than thirty (30) days advance
written notice of such Transfer;

 

 -146-Loan Agreement

 

 

(v)         such Transfer is not prohibited by and would not permit the
Franchisor or Ground Lessor to terminate any Franchise Agreement or Ground
Lease, and will not result in or cause any breach or default under any Franchise
Agreement or Ground Lease to the extent such violation, breach or default (with
or without the passage of time) would result in an Event of Default (in each
case unless the approval of such Franchisor or Ground Lessor has been obtained),
and any approvals required under any Franchise Agreement or Ground Lease to the
Transfer have been obtained;

 

(vi)        intentionally omitted;

 

(vii)       if such Transfer results in any Person acquiring more than 49% of
the direct or indirect equity interest in Borrower or Operating Lessee and such
Person did not together with its Affiliates own more than 49% of the direct or
indirect equity interest in Borrower or Operating Lessee prior to such Transfer,
Borrower shall have delivered to Lender with respect to such Person an
Additional Insolvency Opinion in form and substance reasonably satisfactory to
Lender and shall satisfy all then applicable Rating Agency criteria; and

 

(viii)      Borrower shall reimburse Lender for any and all reasonable out of
pocket legal expenses incurred by it in connection with such Transfer;

 

(g)          (i) any pledge of an indirect equity interest in the junior-most
Mezzanine Borrower by a Multi-Asset Person to secure an upper tier corporate or
similar loan facility that is secured by all or a substantial portion of such
Multi-Asset Person’s assets; and (ii) any pledge of a direct or indirect equity
interest in a Multi-Asset Person;

 

(h)          provided no Event of Default shall then exist (unless the
Substitute Guarantor arises in connection with a Permitted Transfer among
Pre-Approved Control Parties (or their respective wholly-owned subsidiaries)
pursuant to Section 7.2(i)), a Guarantor or a Replacement Guarantor may be
replaced by a Person (the “Substitute Guarantor”), whereupon such Substitute
Guarantor shall be a Replacement Guarantor hereunder, provided that:

 

(i)          there shall be no change of Control of Borrower, Operating Lessee
or SPC Party as a result of such replacement (unless such Change in Control is
otherwise a Permitted Transfer);

 

(ii)         such Substitute Guarantor already has an indirect equity interest
in the most junior Mezzanine Borrower, or acquires an indirect equity interest
in the most junior Mezzanine Borrower pursuant to a Permitted Transfer;

 

(iii)        such Substitute Guarantor is a Pre-Approved Control Party or a
Qualified Transferee;

 

(iv)        such Substitute Guarantor, together with the remaining Guarantors
after such Transfer, satisfy the Financial Covenants as demonstrated to Lender’s
reasonable satisfaction (with such supporting evidence as Lender may reasonable
require), and the Guarantors (and Pre-Approved Control Parties or the related
Qualified Equityholder with respect to an Assumption (or Qualified
Equityholders, if there is more than one acquiring Qualified Equityholder at the
time of such Assumption)) continue to own at least thirty-five (35%) percent,
and Control Borrower, Operating Lessee and each SPC Party;

 

 -147-Loan Agreement

 

 

(v)         such Substitute Guarantor executes and delivers to Lender a
replacement guaranty and environmental indemnity (in form and substance
substantially the same as the Guaranty and Environmental Indemnity, and
additionally including the joinder, agreement and reaffirmation of the
Substitute Guarantor and remaining Guarantors of the joint and several liability
of the Substitute Guarantor and the remaining Guarantors thereunder and under
the Guaranty and Environmental Indemnity to which they are party), where such
Substitute Guarantor has undertaken at least the obligations as set forth in the
Guaranty and Environmental Indemnity arising only from acts, conditions and
events occurring from and after the date of the replacement;

 

(vi)        Lender shall have received one or more opinions of counsel to the
Substitute Guarantor and remaining Guarantors in form and substance reasonably
satisfactory to Lender (A) that the replacement guaranty and environmental
indemnity have been duly authorized, executed and delivered and are valid,
binding and enforceable against each such Substitute Guarantor and remaining
Guarantors, in accordance with their terms, and (B) that such Substitute
Guarantor and each remaining Guarantor and any entity which is a constituent and
controlling stockholder, member or general partner of such Substitute Guarantor
and each remaining Guarantor, as applicable, have been duly organized, and are
in existence and good standing;

 

(vii)       Lender shall have received an Additional Insolvency Opinion with
respect to such Transfer (if one has occurred), replacement and replacement
guaranty and environmental indemnity, in form and substance reasonably
satisfactory to Lender and shall satisfy all then applicable Rating Agency
criteria; and

 

(viii)      Borrower shall reimburse Lender for any and all reasonable out of
pocket legal expenses incurred by it in connection with such Transfer (if one
has occurred) and such replacement, including any Rating Agency fees;

 

Upon the execution and delivery of a replacement guaranty and environmental
indemnity by a Substitute Guarantor permitted by this Section 7.2(h), the
Guarantor(s) who have been replaced by the Substitute Guarantor shall be forever
released from any further liability under the Guaranty and Environmental
Indemnity arising from any circumstance, condition, action or event first
occurring after the effective date of such replacement to the extent the same is
not caused by such replaced Guarantor(s); provided, however, that such replaced
Guarantor(s) shall remain liable under the Guaranty and Environmental Indemnity
for any obligations thereunder arising from any action or event occurring prior
to the effective date of such replacement.

 

(i)          any Transfer of direct or indirect equity interests in, and/or
Control of, Borrower, Operating Lessee and/or any SPC Party among the
Pre-Approved Control Parties (including any Transfer through one or more of
their respective wholly-owned and Controlled subsidiaries) provided that:

 

 -148-Loan Agreement

 

 

(i)          after giving effect to such Transfer, one or more Pre-Approved
Control Parties shall collectively Control Borrower, Operating Lessee and each
SPC Party;

 

(ii)         each of Borrower, Operating Lessee and each SPC Party shall
continue to be a Special Purpose Bankruptcy Remote Entity;

 

(iii)        intentionally omitted;

 

(iv)        such Transfer is not prohibited by and would not permit the
Franchisor or Ground Lessor to terminate any Franchise Agreement or Ground
Lease, and will not result in or cause any breach or default under any Franchise
Agreement or Ground Lease to the extent such violation, breach or default (with
or without the passage of time) would result in an Event of Default (in each
case unless the approval of such Franchisor or Ground Lessor has been obtained),
and any approvals required under any Franchise Agreement or Ground Lease to the
Transfer have been obtained;

 

(v)         if such Transfer results in any Person acquiring more than 49% of
the direct or indirect equity interest in Borrower or Operating Lessee and such
Person did not own more than 49% of the direct or indirect equity interest in
Borrower or Operating Lessee on the Closing Date, Borrower shall have delivered
to Lender with respect to such Person an Additional Insolvency Opinion in form
and substance reasonably satisfactory to Lender and shall satisfy all then
applicable Rating Agency criteria;

 

(vi)        Guarantor (or Substitute Guarantor) shall continue to have an
indirect equity interest in the most junior Mezzanine Borrower;

 

(vii)       The Guarantors (and/or on or more Substitute Guarantors) after such
Transfer, shall continue to satisfy the Financial Covenants as demonstrated to
Lender’s reasonable satisfaction (with such supporting evidence as Lender may
reasonable require), and the Pre-Approved Control Parties (which for purposes of
this clause (vii) shall include Qualified Equityholders that acquired their
interest in Borrower as a result of a Permitted Direct Assumption or a Permitted
Indirect Assumption) continue to own at least thirty-five (35%) percent, and
Control Borrower, Operating Lessee and each SPC Party; and

 

(viii)      Borrower shall reimburse Lender for any and all reasonable out of
pocket legal expenses incurred by it in connection with such Transfer;

 

(j)          following an Assumption resulting in two or more Qualified
Equityholders, in the aggregate, indirectly owning thirty-five percent (35%) or
more of and Controlling Borrower and Operating Lessee (each, an “Existing
Qualified Equityholder”), a Transfer (but not a mortgage, pledge, hypothecation,
encumbrance or grant of a security interest) of a direct or indirect interest in
the most junior Mezzanine Borrower from one Existing Qualified Equityholder to
another Existing Qualified Equityholder (the “QEH Transferee”) that results in
the QEH Transferee owning indirectly thirty-five percent (35%) or more of
Borrower and Operating Lessee, and/or results in a change of Control of Borrower
and Operating Lessee or any SPC Party, shall be permitted without Lender’s
consent provided that:

 

 -149-Loan Agreement

 

 

(i)          Intentionally omitted;

 

(ii)         such Transfer is not prohibited by and would not permit the
Franchisor or Ground Lessor to terminate any Franchise Agreement or Ground
Lease, and will not result in or cause any breach or default under any Franchise
Agreement or Ground Lease to the extent such violation, breach or default (with
or without the passage of time) would result in an Event of Default (in each
case unless the approval of such Franchisor or Ground Lessor has been obtained),
and that any approvals required under any Franchise Agreement or Ground Lease to
the Transfer have been obtained;

 

(iii)        If such Transfer results in no Guarantor Controlling Borrower and
Operating Lessee or Guarantors not owning, directly or indirectly, in the
aggregate, at least thirty-five percent (35%) of the equity interests in
Borrower and Operating Lessee, then Lender shall have received not less than
fifteen (15) days’ notice of such Transfer and a replacement guaranty and
environmental indemnity (in form and substance substantially the same as the
Guaranty and Environmental Indemnity) by one or more replacement guarantors and
indemnitors (A) who in the aggregate, satisfy the Financial Covenants and (B)
each of whom satisfies the applicable search criteria described in clause (iv)
below and (C) each of whom owns a direct or indirect interest in Transferee
Borrower and at least one of whom Controls Transferee Borrower (collectively,
the “QEH Replacement Guarantor”), where such QEH Replacement Guarantor has
undertaken at least the obligations as set forth in the Guaranty and
Environmental Indemnity arising only from acts, conditions and events occurring
from and after the closing date of the Transfer;

 

(iv)        Lender shall have received (A) Patriot Act, OFAC and bankruptcy
searches satisfactory to Lender and (B) pending litigation, judgment, state and
federal tax lien and UCC searches reasonably satisfactory to Lender, with
respect to each QEH Replacement Guarantor; provided, however, that (1) with
respect to any bankruptcy search, such search shall be deemed satisfactory if it
evidences that the QEH Replacement Guarantor, if any, is not currently the
subject of any bankruptcy proceeding and has not been subject to any voluntary
or involuntary bankruptcy proceeding in the past seven (7) years (other than, in
the case of an involuntary proceeding, as may have been dismissed) and (2) UCC
searches shall be deemed to be satisfactory so long as they do not evidence any
security interest in any collateral for the Loan or any security interest in any
direct or indirect equity interest in Borrower;

 

(v)         If a QEH Replacement Guarantor is required under paragraph (iii)
above, Lender shall have received an opinion of counsel in form and substance
reasonably satisfactory to Lender (A) that the replacement guaranty and
environmental indemnity have been duly authorized, executed and delivered and
are valid, binding and enforceable against QEH Replacement Guarantor, in
accordance with their terms, and (B) that QEH Replacement Guarantor and any
entity which is a constituent and controlling stockholder, member or general
partner of QEH Replacement Guarantor, as applicable, have been duly organized,
and are in existence and good standing;

 

(vi)        If such Transfer results in any Person acquiring more than 49% of
the direct or indirect equity interests in Borrower or Operating Lessee and such
Person did not own more than 49% of the direct or indirect equity interests in
Borrower or Operating Lessee prior to such Transfer, Lender shall have received
an Additional Insolvency Opinion with respect to the Transfer, in form and
substance reasonably satisfactory to Lender and shall satisfy all then
applicable Rating Agency criteria;

 

 -150-Loan Agreement

 

 

(vii)       Borrower shall reimburse Lender for any and all reasonable out of
pocket legal expenses incurred by it in connection with such Transfer including
any Rating Agency fees; and

 

Upon the execution and delivery of a replacement guaranty and environmental
indemnity by a QEH Replacement Guarantor required by this Section 7.2(j), the
Guarantor(s) who have been replaced by the QEH Replacement Guarantor shall be
forever released from any further liability under the Guaranty and Environmental
Indemnity arising from any circumstance, condition, action or event first
occurring after the closing date of the Transfer to the extent the same is not
caused by such replaced Guarantor(s); provided, however, that such replaced
Guarantor(s) shall remain liable under the Guaranty and Environmental Indemnity
for any obligations thereunder arising from any action or event occurring prior
to the closing date of the Transfer.

 

Section 7.3          Cost and Expenses; Copies.

 

(a)          Borrower shall pay all reasonable costs and expenses of Lender in
connection with any Transfer, including, without limitation, all reasonable fees
and expenses of Lender’s counsel, whether internal or outside, and the
reasonable cost of any required counsel opinions related to REMIC (if the Loan
is included in a REMIC Trust) or other securitization (if the Loan is otherwise
included in a Securitization) or tax issues and any Rating Agency fees (in the
case of any Transfer requiring Rating Agency Confirmation).

 

(b)          Borrower shall provide Lender with copies of all organizational
documents relating to any Permitted Transfer to the extent expressly required
hereunder.

 

Section 7.4         Replacement Mezzanine Loan. Mezzanine Borrower shall have a
one-time right to enter into not more than one tranche of mezzanine financing (a
“Replacement Mezzanine Financing”) and Mezzanine Borrower may pledge to the
Approved Mezzanine Lender under such Replacement Mezzanine Financing the direct
or indirect equity interests in each Borrower as collateral for any such
Replacement Mezzanine Financing; provided that the Replacement Mezzanine
Financing is an Approved Mezzanine Loan.

 

 -151-Loan Agreement

 

 

Article 8

 

DEFAULTS

 

Section 8.1          Events of Default. Each of the following events shall
constitute an event of default hereunder (an “Event of Default”):

 

(i)          if (A) the Obligations are not paid in full on the Maturity Date,
(B) any regularly scheduled monthly payment of interest, and, if applicable,
principal due under the Note is not paid in full within three (3) calendar days
following the applicable Monthly Payment Date, (C) any prepayment of principal
due under this Agreement or the Note is not paid when due, (D)  the Spread
Maintenance Premium is not paid when due or (E) any deposit to the Reserve Funds
is not made within three (3) calendar days following the required deposit date
therefor (provided that it shall not be an Event of Default under clause (B) or
(E) if as of the applicable due date for the payment of such amounts there are
sufficient funds remaining in the Deposit Account (other than funds previously
allocated to the various Accounts) to pay such amounts when due and Lender’s
access to such funds has not been inhibited in any manner whatsoever due to
circumstances or events which are directly related to Borrower or Operating
Lessee and no other monetary Event of Default is then continuing);

 

(ii)         if any other amount payable pursuant to this Agreement, the Note or
any other Loan Document (other than as set forth in the foregoing clause (i)) is
not paid in full when due and payable in accordance with the provisions of the
applicable Loan Document, with such failure continuing for ten (10) Business
Days after Lender delivers written notice thereof to Borrower (provided that it
shall not be an Event of Default under this clause (ii) if as of the applicable
due date for the payment of such amounts there are sufficient funds remaining in
the Deposit Account (other than funds previously allocated to the various
Accounts), after the application of such funds pursuant to Sections
6.11.1(a)(i), (ii), (iii) and (iv) hereof, to pay such amounts when due and
Lender’s access to such funds has not been inhibited in any manner whatsoever
due to circumstances or events which are directly related to Borrower or
Operating Lessee and no other monetary Event of Default is then continuing);

 

(iii)        subject to Borrower’s right to contest as set forth in Section 4.6,
if any of the Taxes or Other Charges are not paid when Due and Payable (provided
that it shall not be an Event of Default if there are sufficient funds in the
Tax Account to pay such amounts when due, no other monetary Event of Default is
then continuing and Servicer fails to make such payment in violation of this
Agreement) and such default is not remedied within ten (10) Business Days;

 

(iv)        if Borrower fails to maintain in full force and effect Policies
reflecting and satisfying the insurance coverages, amounts and other
requirements set forth in this Agreement, of if certificates evidencing the
insurance provided pursuant to the Policies are not delivered to Lender within
five (5) days of Lender’s written request (provided that it shall not be an
Event of Default if (x) such failure results from the failure to timely pay any
premium and there are then sufficient funds in the Insurance Account to pay such
premiums when due, no other monetary Event of Default is then continuing and (y)
Servicer fails to make such payment in violation of this Agreement);

 

(v)         a voluntary Transfer other than a Permitted Transfer occurs, or any
other Transfer which is not a Permitted Transfer, and to which no other clause
of this Section 8.1(a) applies, occurs and is not cured within thirty (30) days
following Borrower’s receipt of written notice of such impermissible Transfer
from Lender;

 

 -152-Loan Agreement

 

 

(vi)        if any certification, representation or warranty made by any
Individual Borrower, Operating Lessee or any Guarantor herein or in any other
Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date such representation or
warranty was made; provided, however, that as to any such false or misleading
representation or warranty which (a) was unintentionally made to Lender and (b)
which can be made true and correct by action of Borrower or Operating Lessee,
Borrower and Operating Lessee shall have a period of thirty (30) days following
written notice thereof to Borrower to undertake and complete all action
necessary to make such representation or warranty, true and correct in all
material respects; provided, further, that if the same cannot be cured within
such thirty (30) day period, if Borrower or Operating Lessee commences to take
action to cure such breach within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, Borrower shall have such
additional time as is reasonably necessary to effect such cure, but in no event
in excess of an additional ninety (90) days;

 

(vii)       if any Individual Borrower, Operating Lessee, any SPC Party or any
Guarantor shall make an assignment for the benefit of creditors;

 

(viii)      if a receiver, liquidator or trustee shall be appointed for any
Individual Borrower, Operating Lessee, any SPC Party or any Guarantor, or if any
Individual Borrower, Operating Lessee, any SPC Party or any Guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, any Individual Borrower, Operating Lessee, any SPC Party or any Guarantor
or if any proceeding for the dissolution or liquidation of any Individual
Borrower, Operating Lessee, any SPC Party or any Guarantor, shall be instituted,
or if Borrower or Operating Lessee is substantively consolidated with any other
Person; provided, however, if such appointment, adjudication, petition,
proceeding or consolidation was involuntary and not consented to by any
Individual Borrower, Operating Lessee, such SPC Party or any Guarantor, upon the
same not being discharged, stayed or dismissed within ninety (90) days following
its filing;

 

(ix)         if any Individual Borrower or Operating Lessee attempts to assign
its rights under this Agreement or any of the other Loan Documents or any
interest herein or therein in contravention of the Loan Documents;

 

(x)          if any of the assumptions contained in the Insolvency Opinion, or
in any other non-consolidation opinion delivered to Lender in connection with
the Loan, or in any other non-consolidation opinion delivered subsequent to the
closing of the Loan, is or shall become untrue in any material respect, subject
to the cure periods set forth in clause (xi);

 

(xi)         a breach of the covenants set forth in Sections 4.4; provided,
however, such violation or breach shall not constitute an Event of Default in
the event that (1) such violation or breach is not intentional, (2) such
violation or breach is immaterial, (3) such violation or breach shall be
remedied in a timely and expedient manner and in any event within not more than
60 days, and (4) within fifteen (15) Business Days following the request of
Lender, but not prior to the date on which such violation or breach shall have
been remedied in accordance with the immediately foregoing clause (3), Borrower
delivers to Lender a substantive non-consolidation opinion, or a modification of
the Insolvency Opinion, to the effect that such breach or violation shall not in
any way impair, negate or adversely change the opinions rendered in the
Insolvency Opinion, which opinion or modification and any counsel delivering
such opinion or modification shall be acceptable to Lender in its reasonable
discretion;

 

 -153-Loan Agreement

 

 

(xii)        a breach by Liquor Subsidiary of the covenants set forth in Section
4 of the Liquor Subsidiary Pledge or Section 4 of the Liquor License Agreement;
provided, however, such violation or breach shall not constitute an Event of
Default in the event that (1) such violation or breach is not intentional, (2)
such violation or breach is immaterial, (3) such violation or breach shall be
remedied in a timely and expedient manner and in any event within not more than
60 days, and (4) within fifteen (15) Business Days following the request of
Lender, but not prior to the date on which such violation or breach shall have
been remedied in accordance with the immediately foregoing clause (3), Borrower
delivers to Lender a substantive non-consolidation opinion, or a modification of
the Insolvency Opinion, to the effect that such breach or violation shall not in
any way impair, negate or adversely change the opinions rendered in the
Insolvency Opinion, which opinion or modification and any counsel delivering
such opinion or modification shall be acceptable to Lender in its reasonable
discretion;

 

(xiii)       a breach of the covenants set forth in Sections 4.31 or 4.23
hereof;

 

(xiv)      subject to Borrower’s right to contest set forth in Section 4.3 of
this Agreement, if any Individual Property becomes subject to any mechanic’s,
materialman’s or other Lien except a Permitted Encumbrance that is not bonded
over or otherwise removed or paid within ten (10) Business Days following notice
of such breach;

 

(xv)       the alteration, improvement, demolition or removal of any material
portion of the Improvements without the prior written consent of Lender, other
than in accordance with this Agreement and the Leases at the Individual
Properties entered into in accordance with the Loan Documents;

 

(xvi)      if, without Lender’s prior written consent, other than in accordance
with Section 4.14, (i) any Management Agreement is terminated, or (ii) there is
a material change in any Management Agreement;

 

(xvii)     a breach of any representation, warranty or covenant contained
Section 3.1.18 hereof that is not remedied within the thirty (30) days following
notice of such breach;

 

(xviii)    if any Individual Borrower or Operating Lessee breaches any covenant
contained in Section 4.9 hereof and such breach continues for ten (10) Business
Days following Lender’s delivery of notice of such breach;

 

 -154-Loan Agreement

 

 

(xix)       if (A) any Individual Borrower shall fail in the payment of any
rent, additional rent or other charge mentioned in or made payable by any Ground
Lease as and when such rent or other charge is payable (after the expiration of
any grace periods afforded Borrower under such Ground Lease (but not, for the
avoidance of doubt, any grace, notice or cure periods afforded to Lender under
the Ground Lease or otherwise)) (unless waived by the Ground Lessor), (B) there
shall occur any default (beyond any applicable cure periods afforded Borrower
under such Ground Lease (but not, for the avoidance of doubt, any grace, notice
or cure periods afforded to Lender under the Ground Lease or otherwise)) by an
Individual Borrower, as tenant under any Ground Lease, in the observance or
performance of any term, covenant or condition of a Ground Lease on the part of
an Individual Borrower, as the tenant thereunder to be observed or performed
(unless (a) waived by the Ground Lessor or (b) of an immaterial nature and for
which notice from Ground Lessor is required and has not been given), (C) if any
one or more of the events referred to in a Ground Lease shall occur which would
cause such Ground Lease to terminate without notice or action by the landlord
under such Ground Lease or which would entitle the Ground Lessor to terminate
such Ground Lease and the term thereof by giving notice to the applicable
Individual Borrower, as tenant thereunder (unless waived by the Ground Lessor),
(D) if the leasehold estate created by the Ground Lease shall be surrendered or
the Ground Lease shall be terminated or canceled for any reason or under any
circumstances whatsoever, or (E) if any of the terms, covenants or conditions of
the Ground Lease shall in any manner be modified, changed, supplemented, altered
or amended without the consent of Lender except as otherwise permitted by this
Agreement;

 

(xx)        if without Lender’s prior consent, there is any material change in
any Franchise Agreement (or any replacement Franchise Agreement), or a Franchise
Agreement shall be terminated or cancelled, unless Borrower or Operating Lessee
shall then be entitled to and shall have replaced such Franchise Agreement in
accordance with the terms of Section 4.34(d) within ninety (90) days;

 

(xxi)       if a default has occurred and continues beyond any applicable cure
period under any Franchise Agreement if such default permits the applicable
Franchisor to terminate or cancel such Franchise Agreement, unless Borrower or
Operating Lessee shall then be entitled under Section 4.34(d) to replace such
Franchise Agreement and within ninety (90) days after such default shall replace
such Franchise Agreement in accordance with the terms of Section 4.34(d);

 

(xxii)      if there shall be a default under any of the other Loan Documents
beyond any applicable cure periods contained therein, whether as to any
Individual Borrower, Operating Lessee, any Guarantor, or any Individual
Property, or if any other such event shall occur or condition shall exist, if
the effect of such event or condition is to accelerate the maturity of any
portion of the Obligations or to permit Lender to accelerate the maturity of all
or any portion of the Obligations;

 

(xxiii)     if any Individual Borrower or Operating Lessee shall fail to comply
with any of the terms, covenants or conditions of Section 9.3 hereof and such
failure shall continue for ten (10) Business Day after notice thereof from
Lender to Borrower.

 

(xxiv)    if Borrower fails to obtain or maintain an Interest Rate Cap Agreement
or replacement thereof in accordance with Section 2.6 and/or Section 2.7 hereof;
provided that with respect to a failure under Section 2.6 only, no Event of
Default shall occur under this clause (xxiv) unless such failures continues for
five (5) Business Days after Lender delivers notice to Borrower thereof (it
being agreed that such cure period shall not apply with respect to Borrower’s
delivery of a Replacement Interest Rate Cap Agreement in connection with its
exercise of an Extension Option under Section 2.7);

 

 -155-Loan Agreement

 

 

(xxv)     if Guarantors breach the Financial Covenants, if any, under the
Guaranty and a Substitute Guarantor that satisfies the Financial Covenants, does
not assume the obligations of Guarantors under the Guaranty and the
Environmental Indemnity; or

 

(xxvi)    if any Individual Borrower or Operating Lessee shall continue to be in
Default under any of the other terms, covenants or conditions of this Agreement
or any other Loan Document not specified in subsections (i) to (xxv) above, for
thirty (30) days after notice to Borrower from Lender; provided, however, that
if such Default is a Default which cannot be cured by the payment of a sum of
money and is otherwise susceptible of cure but cannot reasonably be cured within
such 30-day period, and provided further that Borrower shall have commenced to
cure such Default within such 30-day period and shall thereafter diligently and
expeditiously proceed to cure the same, such 30-day period shall be extended for
such time as is reasonably necessary for Borrower in the exercise of due
diligence to cure such Default, such additional period not to exceed ninety
(90) days; provided, however that such additional ninety (90) period shall be
extended for an additional thirty (30) days provided that Borrower shall have
continuously diligently and expeditiously proceeded to cure the applicable
Default and that notwithstanding the foregoing, such Default has not been cured
and;provided further that Borrower continues to diligently and expeditiously
proceed to cure the same and it is reasonably likely that such Default shall be
cured in such additional 30-day period.

 

Section 8.2          Remedies.

 

8.2.1       Acceleration. Upon the occurrence of an Event of Default (other than
an Event of Default described in clauses (vii), (viii) or (ix) of Section 8.1
above) and at any time thereafter, Lender may, in addition to any other rights
or remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity, take such action, without notice or demand
(and Borrower hereby expressly waives any such notice or demand), that Lender
deems advisable to protect and enforce its rights against Borrower and/or
Operating Lessee and in and to the Properties, including declaring the
Obligations to be immediately due and payable, and Lender may enforce or avail
itself of any or all rights or remedies provided in the Loan Documents against
Borrower and/or Operating Lessee and the Properties, including all rights or
remedies available at law or in equity; and upon any Event of Default described
in clauses (vii), (viii) or (ix) of Section 8.1 above, the Obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable in full, without notice or demand, and each
of Borrower and Operating Lessee hereby expressly waives any such notice or
demand, anything contained herein or in any other Loan Document to the contrary
notwithstanding. Notwithstanding the foregoing provisions of this Section 8.2.1,
if Borrower has cured a Qualified Release Property Default in accordance with
Section 2.5.2, an acceleration of the Loan arising from such Qualified Release
Property Default shall be rescinded (assuming no other Event of Default shall
then or thereafter be continuing).

 

8.2.2       Suspension of Lender’s Performance. Upon the occurrence of an Event
of Default, in addition to any other rights or remedies available to Lender
pursuant to this Agreement and the other Loan Documents or at law or in equity,
Lender may, at its option, cease or suspend any and all performance required of
Lender under the Loan Documents.

 

 -156-Loan Agreement

 

 

8.2.3       Remedies Cumulative. During the continuance of an Event of Default,
all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower or Operating Lessee under this Agreement or
any of the other Loan Documents executed and delivered by, or applicable to,
Borrower or Operating Lessee or at law or in equity may be exercised by Lender
at any time and from time to time, whether or not all or any of the Obligations
shall be declared due and payable, and whether or not Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to the
Properties. The rights, powers and remedies of Lender under this Agreement shall
be cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower or Operating Lessee pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued independently, singly, successively,
together or otherwise, at such time and in such order as Lender may determine in
its sole discretion, to the fullest extent permitted by law, without impairing
or otherwise affecting the other rights and remedies of Lender permitted by law
or contract or as set forth herein or in the other Loan Documents or by equity.
Without limiting the generality of the foregoing, if an Event of Default is
continuing (i) Lender shall not be subject to any “one action” or “election of
remedies” law or rule, and (ii) all Liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender
has exhausted all of its remedies against the Properties and the Mortgage has
been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Obligations or the Obligations have been paid in full. No delay or omission to
exercise any remedy, right or power accruing upon an Event of Default shall
impair any such remedy, right or power or shall be construed as a waiver
thereof, but any such remedy, right or power may be exercised from time to time
and as often as may be deemed expedient. A waiver of one Default or Event of
Default with respect to Borrower or Operating Lessee shall not be construed to
be a waiver of any subsequent Default or Event of Default by Borrower or
Operating Lessee or to impair any remedy, right or power consequent thereon.

 

8.2.4       Severance.

 

(a)          During the continuance of an Event of Default, Lender shall have
the right from time to time to partially foreclose the Mortgages in any manner
and for any amounts secured by the Mortgages then due and payable as determined
by Lender in its sole discretion, including the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment of
one or more scheduled payments of principal and interest, Lender may foreclose
one or more of the Mortgages to recover such delinquent payments, or (ii) in the
event Lender elects to accelerate less than the entire Outstanding Principal
Balance, Lender may foreclose one or more of the Mortgages to recover so much of
the principal balance of the Loan as Lender may accelerate and such other sums
secured by one or more of the Mortgages as Lender may elect. Notwithstanding one
or more partial foreclosures, the Properties shall remain subject to the
Mortgages to secure payment of the sums secured by the Mortgages and not
previously recovered.

 

 -157-Loan Agreement

 

 

(b)          During the continuance of an Event of Default, Lender shall have
the right from time to time to sever the Note and the other Loan Documents into
one or more separate notes, mortgages and other security documents in such
denominations as Lender shall determine in its sole discretion for purposes of
evidencing and enforcing its rights and remedies provided hereunder. Borrower
and Operating Lessee shall execute and deliver to Lender from time to time,
promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance described in
the preceding sentence, all in form and substance reasonably satisfactory to
Lender. Borrower and Operating Lessee each hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect the aforesaid severance, Borrower and Operating Lessee each ratifying all
that its said attorney shall do by virtue thereof; provided, however, Lender
shall not make or execute any such documents under such power until three
(3) days after notice has been given to Borrower by Lender of Lender’s intent to
exercise its rights under such power.

 

(c)          Any amounts recovered from the Properties or any other collateral
for the Loan after an Event of Default may be applied by Lender toward the
payment of any interest and/or principal of the Loan and/or any other amounts
due under the Loan Documents, in such order, priority and proportions as Lender
in its sole discretion shall determine.

 

8.2.5       Lender’s Right to Perform. If Borrower or Operating Lessee fails to
perform any covenant or obligation contained herein and such failure shall
continue for a period of five (5) Business Days after Borrower’s receipt of
written notice thereof from Lender, without in any way limiting Lender’s right
to exercise any of its rights, powers or remedies as provided hereunder, or
under any of the other Loan Documents, Lender may, but shall have no obligation
to, perform, or cause the performance of, such covenant or obligation, and all
costs, expenses, liabilities, penalties and fines of Lender incurred or paid in
connection therewith shall be payable by Borrower to Lender upon demand and if
not paid shall be added to the Obligations (and to the extent permitted under
applicable laws, secured by the Mortgage and the other Loan Documents) and shall
bear interest thereafter at the Default Rate. Notwithstanding the foregoing,
Lender shall have no obligation to send notice to Borrower of any such failure
(provided that if Lender elects to exercise its right in the preceding sentence
it shall notify Borrower of such exercise; provided, that Lender’s failure to so
notify Borrower shall not invalidate such action or give rise to any liability
on the part of Lender or defense, effect or counterclaim on the part of
Borrower).

 

Article 9

SALE AND SECURITIZATION OF MORTGAGE

 

Section 9.1          Sale of Mortgage and Securitization.

 

(a)          Lender shall have the right, at Lender’s cost and without the
consent of Borrower, any Guarantor or any Affiliate of Borrower or any
Guarantor, (i) to sell or otherwise transfer the Loan or any portion thereof as
a whole loan, (ii) to sell participation interests in the Loan, or (iii) to
securitize the Loan or any portion thereof in a single asset securitization or a
pooled loan securitization. The transactions referred to in clauses (i), (ii)
and (iii) are each hereinafter referred to as a “Secondary Market Transaction”
and the transactions referred to in clause (iii) shall hereinafter be referred
to as a “Securitization”. Any certificates, notes or other securities issued in
connection with a Secondary Market Transaction are hereinafter referred to as
“Securities”). At Lender’s election, each note and/or component comprising the
Loan may be subject to one or more Secondary Market Transactions.

 

 -158-Loan Agreement

 

 

(b)          If requested by Lender, Borrower and Operating Lessee shall use
commercially reasonable efforts to and shall cause Guarantors to use
commercially reasonable efforts to assist Lender, at Lender’s expense, in
satisfying the market standards to which Lender customarily adheres or which may
be required by prospective investors, the Rating Agencies, applicable Legal
Requirements and/or otherwise in the marketplace in connection with any
Secondary Market Transactions, and shall in any event upon Lender’s request, at
Lender’s expense:

 

(i)          (A) provide updated financial and other customary information with
respect to the Properties, the business operated at the Properties, Borrower,
Operating Lessee and each Manager, including, without limitation, the
information set forth on Exhibit B attached hereto, (B) provide updated budgets
and rent rolls (including itemized percentage of floor area occupied and
percentage of aggregate base rent for each tenant) relating to the Properties,
and (C) provide updated appraisals, market studies, property condition reports
and other due diligence investigations of the Properties (the “Updated
Information”), together, if customary, with appropriate verification of the
Updated Information through letters of auditors or opinions of counsel
acceptable to Lender and the Rating Agencies;

 

(ii)         cause counsel to provide legal opinions of counsel, which may be
relied upon by Lender, trustee in any Securitization, underwriters, NRSROs and
their respective counsel, agents and representatives, as to non-consolidation,
matters of Delaware and federal bankruptcy law relating to limited partners
and/or limited liability companies, any other matters covered in the opinions
delivered to Lender at Closing or as required by the Rating Agencies with
respect to the Properties, the Loan Documents, and Borrower and Operating Lessee
and their respective Affiliates, which counsel and opinions shall be reasonably
satisfactory to Lender and satisfactory to the Rating Agencies; and

 

(iii)        execute amendments to the Loan Documents and Borrower’s and
Operating Lessee’s organizational documents requested by Lender; provided,
however, that Borrower shall not be required to modify or amend any Loan
Document if such modification or amendment would (A) cause the initial weighted
average of the interest rates for all Components in the aggregate immediately
after the effective date of such modification to exceed the weighted average
interest rate of the original Components in the aggregate immediately prior to
such modification, (B) cause the outstanding principal balance of all Components
in the aggregate immediately after the effective date of such modification to
exceed the outstanding principal balance of all Components in the aggregate
immediately prior to such modification, (C) require Borrower to make or remake
any representations or warranties, (D) require principal amortization of the
Loan (other than repayment in full on the Maturity Date), (E) change any Stated
Maturity Date or (F) otherwise increase the obligations or reduce the rights of
Borrower or any Guarantor under the Loan Documents other than to a de minimis
extent.

 

(c)          If, at the time a Disclosure Document is being prepared for a
Securitization, Lender expects that Borrower alone or Borrower and one or more
Affiliates of Borrower (including any guarantor or other Person that is directly
or indirectly committed by contract or otherwise to make payments on all or a
part of the Loan) collectively, or the Properties alone or the Properties and
Related Properties collectively, will be a Significant Obligor, Borrower shall,
at Lender’s expense, furnish to Lender upon reasonable request the following
financial information:

 

 -159-Loan Agreement

 

 

(i)          if Lender reasonably expects that the principal amount of the Loan
together with any Related Loans, as of the cut-off date for such Securitization,
may equal or exceed ten percent (10%) (but less than twenty percent (20%)) of
the aggregate principal amount of all mortgage loans included or expected to be
included in the Securitization, net operating income for the Properties and the
Related Properties for the most recent Fiscal Year and interim period as
required under Item 1112(b)(1) of Regulation AB (or, if the Loan is not treated
as a non-recourse loan under Instruction 3 for Item 1101(k) of Regulation AB,
selected financial data meeting the requirements and covering the time periods
specified in Item 301 of Regulation S-K and Item 1112(b)(1) of Regulation AB),
or

 

(ii)         if Lender reasonably expects that the principal amount of the Loan
together with any Related Loans, as of the cut-off date for such Securitization,
may equal or exceed twenty percent (20%) of the aggregate principal amount of
all mortgage loans included or expected to be included in the Securitization,
the financial statements in respect of the Properties required under
Item 1112(b)(2) of Regulation AB (which includes, but may not be limited to, a
balance sheet with respect to the entity that Lender reasonably determines to be
a Significant Obligor) for the two most recent Fiscal Years and applicable
interim periods, meeting the requirements of Rule 3-01 of Regulation S-X, and
statements of income and statements of cash flows with respect to the Properties
for the three most recent Fiscal Years and applicable interim periods, meeting
the requirements of Rule 3-02 of Regulation S-X.

 

(d)          Further, if reasonably requested by Lender, Borrower shall,
promptly at Lender’s expense, furnish to Lender financial data or financial
statements meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB,
as specified by Lender, for any tenant of any Individual Property (if available
and not subject to requirements of confidentiality under the terms of the
applicable Lease) if, in connection with a Securitization, Lender expects there
to be, as of the cutoff date for such Securitization, a concentration with
respect to such tenant or group of Affiliated tenants within all of the mortgage
loans included or expected to be included in the Securitization such that such
tenant or group of Affiliated tenants would constitute a Significant Obligor.
Borrower shall, at Lender’s expense, use commercially reasonable efforts to
furnish to Lender, in connection with the preparation of the Disclosure
Documents and on an ongoing basis, financial data and/or financial statements
with respect to such tenants meeting (if available and not subject to
requirements of confidentiality under the terms of the applicable Lease) the
requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender,
but only for so long as such entity or entities are a Significant Obligor and
either (x) filings pursuant to the Exchange Act in connection with or relating
to the Securitization (an “Exchange Act Filing”) are required to be made under
applicable Legal Requirements or (y) comparable information is required to
otherwise be “available” to holders of the Securities under Regulation AB or
applicable Legal Requirements.

 

(e)          If Lender reasonably determines in good faith that Borrower alone
or Borrower and one or more Affiliates of Borrower collectively, or the
Properties alone or the Properties and Related Properties collectively, are a
Significant Obligor, then Borrower shall, at Lender’s expense, furnish to
Lender, on an ongoing basis, selected financial data or financial statements
meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as
specified by Lender, but only for so long as such entity or entities are a
Significant Obligor and either (x) Exchange Act Filings are required to be made
under applicable Legal Requirements or (y) comparable information is required to
otherwise be “available” to holders of the Securities under Regulation AB or
applicable Legal Requirements.

 

 -160-Loan Agreement

 

 

(f)          Any financial data or financial statements provided pursuant to
this Section 9.1 shall be furnished at Lender’s expense to Lender within the
following time periods:

 

(i)          with respect to information requested in connection with the
preparation of Disclosure Documents for a Securitization, within ten
(10) Business Days after notice from Lender; and

 

(ii)         with respect to ongoing information required under Section 9.1(d)
and (e) above, (1) not later than thirty (30) days after the end of each fiscal
quarter of Borrower and (2) not later than seventy-five (75) days after the end
of each Fiscal Year of Borrower.

 

(g)          If reasonably requested by Lender, Borrower shall, at Lender’s
expense, provide Lender, promptly following Lender’s reasonable request
therefor, with any other or additional financial statements, or financial,
statistical or operating information, as Lender shall reasonably determine to be
required pursuant to Regulation S-K or Regulation S-X, as applicable, Regulation
AB, or any amendment, modification or replacement thereto or other Legal
Requirements identified by Lender and relating to a Securitization or as shall
otherwise be reasonably requested by Lender or, in the case of a private
securitization such statements or information as Lender shall reasonably
determine to be necessary to be included.

 

(h)          If requested by Lender, whether in connection with a Securitization
or at any time thereafter during which the Loan and any Related Loans are
included in a Securitization, Borrower shall provide Lender, promptly upon
request, a list of tenants (including all affiliates of such tenants) that in
the aggregate (1) occupy 10% or more (but less than 20%) of the total floor area
of the improvements or represent 10% or more (but less than 20%) of aggregate
base rent, and (2) occupy 20% or more of the total floor area of the
improvements or represent 20% or more of aggregate base rent.

 

(i)          All financial statements provided by Borrower or Operating Lessee
pursuant to this Section 9.1(c), (d), (e) or (f) shall be prepared in accordance
with the Uniform System of Accounts and reconciled in accordance with GAAP (or
otherwise in accordance with an Acceptable Accounting Method) and shall meet the
applicable requirements of Regulation S-K or Regulation S-X, as applicable,
Regulation AB, and other applicable Legal Requirements. All financial statements
provided by Borrower pursuant to clause (c) or (d) relating to a Fiscal Year
shall be audited by Independent Accountants in accordance with GAAP, Regulation
S-X or Regulation S-K, as applicable, Regulation AB, and all other applicable
Legal Requirements, shall be accompanied by the manually executed report of the
Independent Accountants thereon, which report shall meet the requirements of
Regulation S-K or Regulation S-X, as applicable, Regulation AB, and all other
applicable Legal Requirements, and shall be further accompanied by a manually
executed written consent of the Independent Accountants, in form and substance
acceptable to Lender, to the inclusion of such financial statements in any
Disclosure Document and any Exchange Act Filing and to the use of the name of
such Independent Accountants and the reference to such Independent Accountants
as “experts” in any Disclosure Document and Exchange Act Filing (or comparable
information is required to otherwise be available to holders of the Securities
under Regulation AB or applicable Legal Requirements), all of which shall be
provided at the same time as the related financial statements are required to be
provided. All other financial statements of the Borrower shall be certified by
the chief financial officer of Borrower, which certification shall state that
such financial statements meet the requirements set forth in the first sentence
of this paragraph.

 

 -161-Loan Agreement

 

 

(j)          If reasonably requested by Lender, Borrower shall review any
information regarding the Properties, tenants, Borrower, Operating Lessee and
Guarantors which is contained in any Disclosure Document (including any interim
drafts thereof and any amendments or supplements thereto) in order to confirm
that to its knowledge, no such Disclosure Document contains any untrue statement
of a material fact or omits any material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading, and to the extent any such Disclosure Document contains any such
material misstatements or omissions to correct any such material misstatements
or omissions within five (5) Business Days following Borrower’s receipt thereof.
Borrower shall not be liable hereunder for any material misstatement or omission
contained in the Disclosure Document due to Lender’s failure to incorporate
Borrower’s requested changes or modifications.

 

(k)          For all purposes under this Agreement, if any Securities are
offered pursuant to a “private” Securitization pursuant to an exemption under
Rule 144A or Regulation D under the Securities Act, the provisions of Regulation
AB, Regulation S-K, Regulation S-X and any other disclosure provisions of the
Securities Act and/or Exchange Act, as applicable, shall be deemed to apply to
such “private” Securitization as if such offering of Securities were being
conducted pursuant to a registered public offering under the Securities Act.

 

Section 9.2          Securitization Indemnification.

 

(a)          Borrower understands that information about the Borrower, Operating
Lessee and the Properties, tenants, Managers and Guarantors provided to Lender
by Borrower or Operating Lessee and their agents, counsel and representatives
may be included in preliminary and final disclosure documents in connection with
a Securitization, including an offering circular, any free writing prospectus, a
prospectus, prospectus supplement, private placement memorandum or other
offering document (each, a “Disclosure Document”) and may also be included in
filings with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and may be made available to investors
or prospective investors in the Securities, investment banking firms, NRSROs,
accounting firms, law firms and other third-party advisory and service providers
relating to a Securitization. Borrower also understands that the findings and
conclusions of any third-party due diligence report obtained by Lender, the
Issuer or the Securitization placement agent or underwriter may be made publicly
available if required, and in the manner prescribed, by Section 15E(s)(4)(A) of
the Exchange Act and any rules promulgated thereunder.

 

 -162-Loan Agreement

 

 

(b)          Borrower hereby agrees to indemnify Lender (and for purposes of
this Section 9.2, Lender shall include the initial lender, its successors and
assigns, and their respective officers and directors) and each Person who
controls the Lender within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively, the “Lender Group”), the issuer of
the Securities (the “Issuer” and for purposes of this Section 9.2, Issuer shall
include its officers, director and each Person who controls the Issuer within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act), and any placement agent or underwriter with respect to the Securitization,
each of their respective officers and directors and each Person who controls the
placement agent or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the “Underwriter
Group”) for any actual losses (i.e., non-consequential), claims, damages or
liabilities (collectively, the “Liabilities”) to which Lender, the Lender Group,
the Issuer or the Underwriter Group may become subject insofar as the
Liabilities arise out of, or are based upon, (A) any untrue statement or alleged
untrue statement of any material fact contained in the information about the
Borrower, Operating Lessee, the Properties, Guarantors, tenants and Managers
provided to Lender by Borrower and its agents, counsel and representatives (it
being agreed that no Manager is an agent or representative of Borrower for the
purpose of this sentence), (B) the omission or alleged omission to state therein
a material fact required to be stated in such information or necessary in order
to make the statements in such information, in light of the circumstances under
which they were made, not misleading, or (C) a breach of the representations and
warranties made by Borrower or Operating Lessee in Section 3.1.31 of this
Agreement (Full and Accurate Disclosure). Borrower also agrees to reimburse
Lender, the Lender Group, the Issuer and/or the Underwriter Group for any legal
or other expenses reasonably incurred by Lender, the Lender Group, the Issuer
and/or the Underwriter Group in connection with investigating or defending the
Liabilities. Borrower’s liability under this paragraph will be limited to
Liability that arises out of, or is based upon, an untrue statement or omission
made in reliance upon, and in conformity with, information furnished to Lender
by or on behalf of Borrower or Operating Lessee in connection with the
preparation of the Disclosure Document or in connection with the underwriting or
closing of the Loan, including financial statements of Borrower and Operating
Lessee, operating statements and rent rolls with respect to the Properties,
provided Borrower is given the opportunity to review and ensure the accuracy of
any information in the Disclosure Document provided by or on behalf of Borrower
or Operating Lessee in connection with the preparation of the Disclosure
Document and provided, further, that Borrower shall not have any liability
hereunder as a result of any untrue statement or alleged untrue statement or
omission or alleged omission contained in the Disclosure Document due to
Lender’s failure to incorporate therein Borrower’s requested changes or
modifications (in each case excluding (x) any underwritten financial
information, (y) any information (including financial information or forecasted
information) contained in any third party report commissioned by Lender, such as
appraisals, property condition reports and environmental reports, and (z) any
projections or forecasts). This indemnification provision will be in addition to
any liability which Borrower may otherwise have. Borrower acknowledges and
agrees that any Person that is included in the Lender Group, the Issuer and/or
the Underwriter Group that is not a direct party to this Agreement shall be
deemed to be a third-party beneficiary to this Agreement with respect to this
Section 9.2(b). Within five (5) Business Days after Lender’s written request,
Borrower shall execute and deliver to Lender a separate indemnification and
reimbursement agreement in favor of the Lender Group, the Issuer and the
Underwriter Group in form and substance consistent with the indemnification and
reimbursement obligations of Borrower under this Section 9.2(b).

 

 -163-Loan Agreement

 

 

(c)          In connection with any Exchange Act Filing or other reports
containing comparable information that is required to be made “available” to
holders of the Securities under Regulation AB or applicable Legal Requirements,
Borrower agrees to (i) indemnify Lender, the Lender Group, the Issuer and the
Underwriter Group for Liabilities to which Lender, the Lender Group, the Issuer
and/or the Underwriter Group may become subject insofar as the Liabilities arise
out of, or are based upon, an alleged untrue statement or alleged omission or an
untrue statement or omission made in reliance upon, and in conformity with,
information furnished to Lender by or on behalf of Borrower or Operating Lessee
in connection with the preparation of the Disclosure Document or in connection
with the underwriting or closing of the Loan, including financial statements of
Borrower and Operating Lessee, operating statements and rent rolls with respect
to the Properties, provided Borrower is given the opportunity to review and
ensure the accuracy of any information in the Disclosure Document provided by or
on behalf of Borrower in connection with the preparation of the Disclosure
Document and (ii) reimburse Lender, the Lender Group, the Issuer and/or the
Underwriter Group for any out-of-pocket legal or other expenses reasonably
incurred by Lender, the Lender Group, the Issuer and/or the Underwriter Group in
connection with defending or investigating the Liabilities.

 

(d)          Promptly after receipt by an indemnified party under this Section
9.2 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 9.2, notify the indemnifying party in writing of the commencement
thereof, but the failure to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party under Sections 9.2(b) and 9.2(c) hereof except to the
extent that failure to notify causes prejudice to the indemnifying party. If any
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party pursuant to the immediately preceding sentence of this
Section 9.2(d), such indemnifying party shall pay for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, or the indemnifying party shall have
failed to designate within a reasonable period of time counsel reasonably
satisfactory to the indemnified party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party at the cost of the indemnifying party. The indemnifying party
shall not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to the indemnifying party. Without the prior written consent of Lender
(which consent shall not be unreasonably withheld or delayed), no indemnifying
party shall settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action, suit or proceeding) unless
the indemnifying party shall have given Lender reasonable prior written notice
thereof and shall have obtained an unconditional release of each indemnified
party hereunder from all liability arising out of such claim, action, suit or
proceedings, and such settlement requires no statement as to, or an admission
of, fault, culpability or a failure to act, by or on behalf of the indemnified
party.

 

 -164-Loan Agreement

 

 

(e)          In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.2(b) or
(c) is for any reason held to be unenforceable as to an indemnified party or
insufficient in respect of any Liabilities (or action in respect thereof)
referred to therein which would otherwise be indemnifiable under Section 9.2(b)
or (c), the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such Liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) the Issuer’s and Borrower’s relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances. Lender and
Borrower hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.

 

(f)          The liabilities and obligations of both Borrower and Lender under
this Section 9.2 shall survive the termination of this Agreement and the
satisfaction and discharge of the Debt.

 

(g)          Borrower shall jointly and severally indemnify Lender and its
officers, directors, partners, employees, representatives, agents and Affiliates
against any Losses to which Lender or its officers, directors, partners,
employees, representatives, agents and Affiliates, may become subject in
connection with any indemnification to the Rating Agencies in connection with
issuing, monitoring or maintaining the Securities insofar as the Losses arise
out of or are based upon any untrue statement of any material fact in any
information provided by or on behalf of Borrower to the Rating Agencies (the
“Covered Rating Agency Information”) or arise out of or are based upon the
omission to state a material fact in the Covered Rating Agency Information
required to be stated therein or necessary in order to make the statements in
Covered Rating Agency Information, in light of the circumstances under which
they were made, not misleading.

 

 -165-Loan Agreement

 

 

Section 9.3          Severance.

 

9.3.1       Severance Documentation. Lender, without in any way limiting
Lender’s other rights hereunder, in its sole and absolute discretion, shall have
the right, at any time (whether prior to or after any sale, participation or
other Secondary Market Transaction with respect to all or any portion of the
Loan), to require Borrower or Operating Lessee (at Lender’s expense) to execute
and deliver (i) “component” notes (including certificating existing
uncertificated “component” notes) and/or modify the Loan or the existing
“component note” structure in order to create one or more senior and subordinate
notes (i.e., an A/B or A/B/C structure) and/or one or more additional components
of the Note or Notes (including the implementation of one or more New Mezzanine
Loans (in accordance with Section 9.3.2 below))), or make any other change to
the Loan, the Note or Components including but not limited to: reducing the
number of Components of the Note or Notes, revising the interest rate for each
Component, reallocating the principal balances of the Notes and/or the
Components, increasing or decreasing the monthly debt service payments for each
Component or eliminating the Component structure and/or the multiple note
structure of the Loan (including the elimination of the related allocations of
principal and interest payments), and/or (ii) in conjunction with, and with the
corresponding agreement of, the applicable Mezzanine Lenders, “resize” the Loan
and the Original Mezzanine Loan to revise the interest rates for the Loan and
the Original Mezzanine Loan, reallocate the principal balances of the Loan and
the Original Mezzanine Loan and/or increasing or decreasing the monthly debt
service payments for the Loan and the Original Mezzanine Loan (such resizing
under this clause (ii), a “Resizing”), provided that, subject to Section 9.3.2,
(A) the outstanding principal balance of all Components (together with, in the
case of a Resizing, the outstanding principal balance of the Original Mezzanine
Loan subject to such Resizing) in the aggregate immediately after the effective
date of such modification equals the outstanding principal balance (when
aggregated, in the case of a Resizing, with the outstanding principal balance of
the Original Mezzanine Loan subject to such Resizing) immediately prior to such
modification, (B) the initial weighted average of the interest rates for all
Components in the aggregate (when aggregated, in the case of a Resizing, with
the interest rates of the Original Mezzanine Loan subject to such Resizing)
immediately after the effective date of such modification equals the interest
rate of the original Note (when aggregated, in the case of a Resizing, on a
weighted average basis with the interest rate of the Original Mezzanine Loan
subject to such Resizing) immediately prior to such modification, except that
the weighted average interest rate may subsequently change as a result of (I)
any voluntary prepayment that Borrower applies to the Mezzanine Loan, (II) any
prepayment resulting from an Event of Default, Casualty or Condemnation, and
(III) any voluntary prepayment of any portion of the Loan, (C) no principal
amortization of the Loan (or any Components thereof) or the Original Mezzanine
Loan shall be required (other than repayment in full on the Maturity Date), (D)
there shall be no change to any Stated Maturity Date and (E) Borrower, Operating
Lessee and Guarantors shall not be required to amend any Loan Documents that
would otherwise increase the obligations or reduce the rights of Borrower,
Operating Lessee or any Guarantor under the Loan Documents other than to a di
minimis extent, and provided, further, that in all events the aggregate
principal balance of the Loan and the Original Mezzanine Loan following a
Resizing may not exceed the aggregate principal balance of the Loan and the
Original Mezzanine Loan immediately prior to the Resizing, and the initial
weighted average interest rate of the Loan and the Original Mezzanine Loan, on a
combined basis, following a Resizing may not exceed the weighted average
interest rate of the Loan and the Original Mezzanine Loan, on a combined basis,
immediately before the Resizing. At Lender’s election, each note comprising the
Loan may be subject to one or more Secondary Market Transactions. Lender shall
have the right to modify the Note and/or Notes and any Components in accordance
with this Section 9.3 and, provided that such modification shall comply with the
terms of this Section 9.3, it shall become immediately effective. The provisions
of this Section 9.3 shall not be applicable to any Approved Mezzanine Loan.

 

 -166-Loan Agreement

 

 

9.3.2       New Mezzanine Loan Option. Lender, without in any way limiting
Lender’s other rights hereunder, in its sole and absolute discretion, shall have
the right, at any time (whether prior to or after any Secondary Market
Transaction), to create one more mezzanine loan (each, a “New Mezzanine Loan”)
(it being agreed that there shall be no more than two Mezzanine Loans) to
establish different interest rates and to reallocate the Outstanding Principal
Balance and Monthly Debt Service Payment of the Loan to the Loan and such New
Mezzanine Loan(s) and to require the payment of the Loan and any New Mezzanine
Loan(s) in such order of priority as may be designated by Lender (including in
priority senior to all other Mezzanine Loans, with corresponding adjustments to
each reference to the other Mezzanine Loans to include the New Mezzanine Loan(s)
and any payments or prepayments of principal and interest thereon prior to the
other Mezzanine Loans); provided, that (A) the outstanding principal balance of
the Loan and such New Mezzanine Loan(s) immediately after the effective date of
the creation of such New Mezzanine Loan(s) equals the Outstanding Principal
Balance immediately prior to such modification, (B) the initial weighted average
of the interest rates for the Components and such New Mezzanine Loan(s) in the
aggregate immediately after the effective date of the creation of such New
Mezzanine Loan(s) equals the interest rate of the original Components in the
aggregate immediately prior to such modification (C) no principal amortization
of the Loan, any New Mezzanine Loan(s) or any Mezzanine Loan shall be required
(other than repayment in full on the Maturity Date), (D) there shall be no
change to any Stated Maturity Date and (E) Borrower and Guarantors shall not be
required to amend any Loan Documents (or enter into new documents with respect
to the New Mezzanine Loan) that would otherwise increase the obligations or
reduce the rights of Borrower or any Guarantor pursuant to the Loan Documents
other than to a di minimis extent. Borrower shall cause (at Lender’s expense)
the formation of one special purpose, bankruptcy remote entity as required by
Lender in order to serve as the borrower under any New Mezzanine Loan (each, a
“New Mezzanine Loan Borrower”) and the applicable organizational documents of
Borrower shall be amended and modified as necessary or required in the formation
of any New Mezzanine Loan Borrower.

 

9.3.3       Cooperation; Execution; Delivery. Borrower and Operating Lessee
shall use reasonable efforts to cooperate (at Lender’s expense) with all
reasonable requests of Lender in connection with this Section 9.3. Subject to
Section 9.3.2, if reasonably requested by Lender, Borrower and Operating Lessee
shall promptly execute and deliver such documents as shall be required by Lender
and any Rating Agency in connection with any modification or New Mezzanine Loan
pursuant to this Section 9.3, all in form and substance reasonably satisfactory
to Lender and satisfactory to any applicable Rating Agency, including, the
severance of security documents if requested and/or, in connection with the
creation of any New Mezzanine Loan: (i) execution and delivery of a promissory
note and loan documents necessary to evidence such New Mezzanine Loan,
(ii) execution and delivery of such amendments to the Loan Documents as are
necessary in connection with the creation of such New Mezzanine Loan,
(iii) delivery of opinions of legal counsel with respect to due execution,
authority and enforceability of any modification documents or documents
evidencing or securing any New Mezzanine Loan, as applicable and (iv) with
respect to any New Mezzanine Loan, delivery of an additional Insolvency Opinion
for the Loan and a substantive non-consolidation opinion; each as reasonably
acceptable to Lender, prospective investors and/or the Rating Agencies. In the
event Borrower and/or Operating Lessee fails to execute and deliver such
documents to Lender within five (5) Business Days following such request by
Lender, Borrower and Operating Lessee each hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect such transactions, Borrower and Operating Lessee each hereby ratifying
all that such attorney shall do by virtue thereof.

 

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9.3.4       Uncross of Properties. If at any time following the Closing Date,
Lender or its designee shall elect to remove any Individual Property from a
Securitization (the “Affected Property”), Lender shall have the right to
(i) sever or divide the Note and the other Loan Documents in order to allocate
to such Affected Property a new note and other loan documents (collectively, the
“New Note”), evidencing a separate loan in the amount of the Allocated Loan
Amount applicable to such Affected Property, including, the transfer of the
applicable portion of each of the Reserve Funds relating to the Affected
Property, and (ii) release any cross-default and/or cross-collateralization
provisions applicable to such Affected Property; provided, that (1) such New
Note secured by such Affected Property, together with the Loan Documents secured
by the remaining Properties, shall not (A) increase (I) any monetary obligation
of Borrower under the Loan Documents, including without limitation, the initial
weighted average interest rate payable under the Note, (x) the stated maturity
of the Note, (y) the aggregate amortization of principal of the Note, (z) any
other economic term of the Loan, as any existed prior to the creation of the New
Note and splitting of the Loan; or (II) any other obligation of Borrower under
the Loan Documents, including without limitation, not decreasing the time
periods during which the Borrower and the Loan Parties are permitted to perform
their obligations under the Loan Documents, or (B) waive, impair, reduce or
release any right of Borrower under the Loan Documents, and (2) subject to the
requirements of the foregoing clause (1), the New Note and related loan
documents shall be in substantially the same form as the Loan Documents. In
connection with the removal of any such Affected Property as provided for in
this Section 9.3.4, the Loan shall be reduced by an amount equal to the
Allocated Loan Amount applicable to such Affected Property and the new loan
secured by such Affected Property and evidenced by the New Note shall be in an
amount equal to such Allocated Loan Amount. Subsequent to the release of the
Affected Property from the lien of the Loan pursuant to this Section 9.3.4, the
balance of the Loan shall be the same as it would have been had a prepayment
occurred in an amount equal to the Allocated Loan Amount of the Affected
Property. The New Note shall have (w) the same initial weighted average interest
rate payable under the Note, (x) the same stated maturity of the Note, and
(y) no amortization of principal. At the request of Lender, Borrower shall
otherwise cooperate with Lender’s reasonable requests in Lender’s attempt to
satisfy the requirements necessary in order for Lender to obtain Rating Agency
Confirmation with respect to such removal of the Affected Property from the
Securitization and splitting of the Loan, which requirements shall include,
without limitation: (A) delivery of evidence that would be reasonably
satisfactory to a prudent lender that the single purpose nature and bankruptcy
remoteness of the Individual Borrowers owning Properties other than the Affected
Property following such removal have not been adversely affected and are
compliant with the terms and provisions of this Agreement (which evidence may
include a “bring-down” of the Insolvency Opinion with respect to additions to or
other changes to any vertical pairings addressed by the Insolvency Opinion
delivered on the date hereof, together with any additional qualifications that
may need to be included as a result of the structural changes required pursuant
to this Section 9.3.4); and (B) if the same would be required by a prudent
lender in such circumstances, an opinion of counsel that the release of the
Affected Property will not be a “significant modification” of the Loan within
the meaning of Section 1.1001-3 of the regulations of the United States
Department of the Treasury, nor cause a Securitization Vehicle to fail to
qualify as a REMIC Trust or Grantor Trust or a tax to be imposed on a
Securitization Vehicle. Lender shall cause all costs and expenses incurred by
Borrower (and the Mezzanine Borrower under Section 9.3.4 of the Original
Mezzanine Loan Agreement) in connection with this Section 9.3.4 (including,
without limitation, any costs and expenses incurred from time to time by
Borrower or any other Loan Parties in connection with the transfer of the
Affected Property to a Special Purpose Bankruptcy-Remote Entity, the formation,
maintenance and operation of such Special Purpose Bankruptcy-Remote Entity and
attorneys’ fees and costs) to be paid by Lender or its designee pursuant to
Section 9.4 below.

 

Section 9.4          Costs and Expenses. Notwithstanding anything to the
contrary contained in this Article 9, no Loan Party shall be required to incur
(and Lender shall be required to pay and/or reimburse) any out-of-pocket costs
or expenses in the performance of its obligations under Sections 9.1 or 9.2
(excluding the indemnity obligations set forth therein) or Section 9.3 above,
including, without limitation, any transfer taxes incurred as a result of any
required restructuring.

 

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Section 9.5          Confidentiality.

 

(a)          Borrower and Operating Lessee each agrees for itself and on behalf
of Guarantors that except as expressly provided below, any reports, statements
or other information required to be delivered or provided under this Agreement
or any of the other Loan Documents and furnished at any time and from time to
time by Borrower, Operating Lessee or Guarantors and relating to any Guarantor
(“Furnished Information”) may be included in any Disclosure Document and may be
forwarded by Lender to any actual or prospective investor in the Loan or any
Mezzanine Loan, any actual or prospective assignee of the Loan or any Mezzanine
Loan, or beneficial interests in the Loan or any Mezzanine Loan, including
investors in Securities, any actual or prospective participant in the Loan or
any Mezzanine Loan, any Rating Agency rating any participations in the Loan
and/or Securities, any NRSRO, any underwriter, any organization maintaining
databases on the underwriting and performance of commercial mortgage loans, any
of Lender’s Affiliates involved from time to time in the transactions
contemplated by this Agreement and/or in any Securitization and/or in any
assignment of all or any portion of the Mezzanine Loans, any of Lender or such
Affiliates’ respective employees, directors, agents, attorneys, accountants, or
other professional advisors, any servicers of the Loan, and/or any Governmental
Authorities, in all cases as Lender determines necessary or desirable in its
sole discretion.  Borrower and Operating Lessee each irrevocably waives any and
all rights it may have under any applicable Legal Requirements to prohibit such
disclosure, including but not limited to any right of privacy.

 

Section 9.6          Compliance with Required Loan Restructurings.
Notwithstanding anything to the contrary set forth in the Loan Documents (a)
each Mezzanine Borrower may comply in all respects with any requirements to
restructure the applicable Mezzanine Loan pursuant to Article 9 of the
applicable Mezzanine Loan Agreement (or any other similar provision in the
applicable Mezzanine Loan Documents), (b) any borrower under any future
mezzanine loan that is made or created in accordance with this Article 9 or in
accordance with Article 9 of any Mezzanine Loan Agreement may comply in all
respects with any requirements to restructure such mezzanine loan as required
under its respective mezzanine loan documents, and (c) no actions taken by any
Mezzanine Borrower or any such future mezzanine borrower in furtherance of the
foregoing, including without limitation, any transfers, pledges or amendments to
organizational documents, shall constitute a breach of any provisions of the
Loan Documents, or result in a Default or Event of Default hereunder.

 

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Article 10

 

MISCELLANEOUS

 

Section 10.1        Exculpation. Subject to the qualifications below, Lender
shall not enforce the liability and obligation of Borrower or Operating Lessee
to perform and observe the Obligations contained in the Note, this Agreement,
the Mortgage or the other Loan Documents by any action or proceeding wherein a
money judgment shall be sought against Borrower, Operating Lessee or against any
SPC Party, any Mezzanine Borrower, any Guarantor, any Affiliates of the
foregoing or any of their respective direct or indirect principals, directors,
officers, employees, beneficiaries, shareholders, partners, members, trustees or
agents (each, exclusive of the Borrower and Operating Lessee, an “Other
Exculpated Party”), except that (1) any Other Exculpated Party that is party to
any Loan Document or any other separate written guaranty, indemnity or other
agreement given by such Other Exculpated Party in connection with the Loan
(including, without limitation, the Assignment of Management Agreement or any
other Loan Document to which such Other Exculpated Party is a party) shall
remain fully liable therefor and the foregoing provisions shall not operate to
limit or impair the liabilities and obligations of such Other Exculpated Party
thereunder, and (2) Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon its interest under the Note, this Agreement,
the Mortgage and the other Loan Documents, or in the Properties, the Gross
Revenue, or any other collateral given to Lender pursuant to the Loan Documents;
provided, however, that, except as specifically provided herein, any judgment in
any such action or proceeding shall be enforceable against Borrower or Operating
Lessee only to the extent of Borrower’s and Operating Lessee’s interest in the
Properties, in the Gross Revenue and in any other collateral given to Lender,
and Lender, by accepting the Note, this Agreement, the Mortgage and the other
Loan Documents, shall not 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 Note, this Agreement, the
Mortgage or the other Loan Documents. The provisions of this Section 10.1 shall
not, however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of
Lender to name Borrower or Operating Lessee as a party defendant in any action
or suit for foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of any of the Loan Documents or any guaranty made in connection
with the Loan or any of the rights and remedies of Lender thereunder; (d) impair
the right of Lender to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment of Leases; (f) impair the enforcement of the
Environmental Indemnity; (g) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower or Operating Lessee in order to fully
realize the security granted by the Mortgage or to commence any other
appropriate action or proceeding in order for Lender to exercise its remedies
against the Properties; (i) waive or impair the liability of any Other
Exculpated Party under any Loan Document or any other separate written guaranty,
indemnity or other agreement to which such Other Exculpated Party is a party
(including, without limitation, the Assignment of Management Agreement or any
other Loan Document to which such Other Exculpated Party is a party); or
(i) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower or Operating Lessee, by money judgment or otherwise, to
the extent of any actual loss, damage, out-of-pocket cost or expense, liability,
claim or other obligation incurred by Lender (including reasonable outside
attorneys’ fees and costs reasonably incurred) arising out of or in connection
with the following (all such liability and obligation of Borrower or Operating
Lessee for any or all of the following being referred to herein as “Borrower’s
Recourse Liabilities”):

 

(i)          fraud or intentional material misrepresentation committed by
Borrower, Operating Lessee, any Guarantor or any Affiliate of Borrower,
Operating Lessee or any Guarantor in connection with the Loan;

 

(ii)         Borrower or Operating Lessee incurs 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 debt was permitted when incurred
but was not repaid due to the Property’s failure to generate sufficient cash
flow or the failure of Lender to release funds from the Accounts);

 

(iii)        Borrower or Operating Lessee fails to obtain Lender’s prior consent
to (a) any Transfer of any Individual Property or (b) any Transfer of a direct
or indirect interest in Borrower, in each case not otherwise set forth in clause
(ii) in the definition of “Springing Recourse Event” below;

 

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(iv)        removal of personal property from the Properties during an Event of
Default by Borrower or Operating Lessee or on behalf of Borrower or Operating
Lessee by any Guarantor or any Affiliate of Borrower, Operating Lessee or any
Guarantor, 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 at any Individual Property
committed by Borrower or Operating Lessee or on behalf of Borrower or Operating
Lessee by any Guarantor or any Affiliate of Borrower, Operating Lessee or any
Guarantor;

 

(vi)        the material misappropriation by Borrower or Operating Lessee or on
behalf of Borrower or Operating Lessee by any Guarantor or any Affiliate of
Borrower, Operating Lessee or any Guarantor of (A) any Insurance Proceeds paid
by reason of any Casualty to any Individual Property, (B) any Awards in
connection with the Condemnation of any Individual Property and (C) any Gross
Revenues after (or that results in) a Trigger Period or an Event of Default, in
each case, in violation of the Loan Documents;

 

(vii)       any defaults under the Franchise Agreement for failure to complete
any PIP, which results in the termination or cancellation of the applicable
Franchise Agreement or any other termination or cancellation of a Franchise
Agreement; provided, there shall not be Borrower’s Recourse Liability if
Borrower or Operating Lessee delivers a replacement Franchise Agreement in
compliance with the Section 4.34(d) within 90 days of such termination or
cancellation or if the Allocated Loan Amount for the Individual Property subject
to such terminated Franchise Agreement together with the Allocated Loan Amount
for all other Individual Properties that have had their Franchise Agreements
terminated accounts for less than five percent (5%) of the aggregate Allocated
Loan Amounts of all of the Properties; provided that with respect to the Red
Zone Properties any default under the Franchise Agreement with respect to such
Red Zone Property shall result in Borrower’s Recourse Liability notwithstanding
that less than five percent (5%) of the aggregate Allocated Loan Amount have
been terminated until such time as such Red Zone Property ceases to be
classified as a “Red” or “Progress” property by the applicable Franchisor;

 

(viii)      any breach of any provision of Section 4.4 or Schedule V of this
Agreement (other than with respect to clause (d) of Schedule V (with respect to
trade payables only), clause (f) of Schedule V, clause (j) of Schedule V, clause
(o) of Schedule V (with respect to trade payables only), clause (v) of Schedule
V and clause (w) of Schedule V) that does not result in the substantive
consolidation of the assets and liabilities of Borrower with any other Person
(other than another Individual Borrower, Individual Operating Lessee or the
Liquor Subsidiary) as a result of such breach;

 

(ix)         any and all Divested Property Liabilities;

 

 -171-Loan Agreement

 

 

(x)          the modification or termination of any Ground Lease if such
modification or termination is prohibited under this Agreement or under any
Mortgage; and/or

 

(xi)         any matters identified in that certain estoppel certificate from
the Ground Lessor with respect to the Birmingham Property that was not disclosed
in any drafts heretofore reviewed by Lender; provided that with respect to this
clause (xi) Borrower shall no longer have liability hereunder from and after the
date Borrower delivers an estoppel certificate from Ground Lessor reasonably
acceptable to Lender.

 

Notwithstanding anything to the contrary in this Agreement or any of the other
Loan Documents, (A) Lender shall not be deemed to have waived any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of
the Bankruptcy Code 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 Lender in accordance with the Loan Documents, and (B) the Obligations
shall be fully recourse to 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) Borrower or Operating Lessee fails to obtain Lender’s
prior consent to any financing for borrowed money secured by any Individual
Property, or any voluntary conveyance of a mortgage, deed of trust, security
deed, security agreement or similar grant by Borrower or Operating Lessee of a
voluntary Lien upon any Individual Property, or Borrower or Operating Lessee
fails to obtain Lender’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 Individual Borrower, Operating Lessee, any SPC
Party or any Mezzanine Borrower, 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 or Mezzanine Loan Documents securing the Loan or any
Mezzanine Loan), in each case under this clause (i) that is not permitted under
the Loan Documents or otherwise cured; (ii) Borrower fails to obtain Lender’s
prior consent to (a) any voluntary transfer of fee (or ground leasehold) title
to any Individual Property that is not permitted under the Loan Documents or
otherwise cured, or (b) any voluntary transfer of a direct or indirect interest
in Borrower that results in a change of Control of Borrower, Operating Lessee or
Mezzanine Borrower that is not permitted under the Loan Documents or otherwise
cured (specifically excluding from this clause (ii), any transfer of the direct
ownership interests in any Individual Borrower, any SPC Party, or any Mezzanine
Borrower to any Mezzanine Lender or its designee as result of any foreclosure
upon such ownership interests (or transfer-in-lieu of foreclosure of the
ownership interests that are the collateral for the applicable Mezzanine Loan);
(iii) Borrower, Operating Lessee, any SPC Party, and/or any Mezzanine Borrower,
files a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law, subject to a maximum aggregate liability
equal to the BK Cap; (iv) the filing of an involuntary petition against
Borrower, Operating Lessee, any SPC Party, and/or any Mezzanine Borrower under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law
by any other Person in which Borrower, Operating Lessee, any SPC Party, and/or
any Mezzanine Borrower colludes with or otherwise assists such Person, and/or
Borrower, Operating Lessee, any SPC Party, and/or any Mezzanine Borrower
solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower, Operating Lessee, any SPC Party and/or any Mezzanine
Borrower by any Person, subject to a maximum aggregate liability equal to the BK
Cap; (v) Borrower, Operating Lessee, any SPC Party and/or any Mezzanine Borrower
files an answer consenting to, or joining in, any involuntary petition filed
against it by any other Person under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law (except to the extent required by applicable
law), subject to a maximum aggregate liability equal to the BK Cap;
(vi) Borrower, Operating Lessee, or any Mezzanine Borrower or any Affiliate,
officer, director or representative which controls Borrower, Operating Lessee,
or such Mezzanine Borrower, as the case may be, consents to, or joins in, an
application for the appointment of a custodian, receiver, trustee or examiner
for Borrower, Operating Lessee, and/or any portion of any Individual Property,
or such Mezzanine Borrower, as the case may be, subject to a maximum aggregate
liability equal to the BK Cap; (vii) Borrower, Operating Lessee, any SPC Party
and/or any Mezzanine Borrower 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), subject to a maximum aggregate liability equal to the BK Cap;
(viii) Borrower or Operating Lessee fails to comply with the provisions of
Section 4.4 or Schedule V of this Agreement (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
Individual Borrowers or Operating Lessee with any other Person (other than
another Individual Borrower or the Liquor Subsidiary) in a bankruptcy or similar
proceeding under the Bankruptcy Code or any other federal or state bankruptcy or
insolvency law, subject to a maximum liability equal to the BK Cap (for
avoidance of doubt, the BK Cap applies to clauses (iii) through (viii)
collectively, such that the aggregate liability of Borrower under such clauses
is the BK Cap); or (ix) in the event that the leasehold estate created by the
Ground Lease with respect to the Dallas Courtyard Property shall be surrendered
by or on behalf of Borrower of such Ground Lease shall be terminated or
cancelled or otherwise rendered ineffective, in either case, as a result of the
applicable Individual Borrower’s rejection of such Ground Lease in a bankruptcy
proceeding; provided that liability pursuant to this clause (ix) shall not
exceed the Allocated Loan Amount for the Dallas Courtyard Property.

 

 -172-Loan Agreement

 

 

Section 10.2         Survival; Successors and Assigns. This Agreement and all
covenants, agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loan and the execution and delivery to Lender of the Note, and shall continue in
full force and effect so long as all or any of the Obligations are outstanding
and unpaid unless a longer period is expressly set forth herein or in the other
Loan Documents. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the legal representatives,
successors and assigns of such party. All covenants, promises and agreements in
this Agreement, by or on behalf of Borrower, shall inure to the benefit of the
legal representatives, successors and assigns of Lender.

 

Section 10.3         Lender’s Discretion; Rating Agency Review Waiver.

 

(a)          Whenever pursuant to this Agreement Lender exercises any right
given to it to approve or disapprove any matter, or any arrangement or term is
to be satisfactory to Lender, the decision of Lender to approve or disapprove
such matter or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Lender and shall be final and conclusive. Prior to a
Securitization, whenever pursuant to this Agreement the Rating Agencies are
given any right to approve or disapprove any matter, or any arrangement or term
is to be satisfactory to the Rating Agencies, the reasonable decision of Lender
to approve or disapprove such matter or to decide whether arrangements or terms
are satisfactory or not satisfactory, based upon Lender’s determination of
Rating Agency criteria, shall be substituted therefor except as otherwise
specifically herein provided.

 

 -173-Loan Agreement

 

 

(b)          Whenever, pursuant to this Agreement or any other Loan Documents, a
Rating Agency Confirmation is required from each applicable Rating Agency, in
the event that any applicable Rating Agency “declines review”, “waives review”
or otherwise indicates in writing or otherwise to Lender’s or Servicer’s
satisfaction that no Rating Agency Confirmation will or needs to be issued with
respect to the matter in question (each, a “Review Waiver”), then the Rating
Agency Confirmation requirement shall be deemed to be satisfied with respect to
such matter. It is expressly agreed and understood, however, that receipt of a
Review Waiver (i) from any one Rating Agency shall not be binding or apply with
respect to any other Rating Agency and (ii) with respect to one matter shall not
apply or be deemed to apply to any subsequent matter for which Rating Agency
Confirmation is required.

 

Section 10.4         Governing Law.

 

(a)          THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
LENDER AND ACCEPTED BY BORROWER AND OPERATING LESSEE IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTE 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 AND THE OBLIGATIONS
ARISING HEREUNDER 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 CONFLICT 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 LIEN AND SECURITY INTEREST CREATED
PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY,
AND CONSTRUED ACCORDING TO, THE LAW OF THE STATE, COMMONWEALTH OR DISTRICT, AS
APPLICABLE, IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
COMMONWEALTH OR DISTRICT, AS APPLICABLE, 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, BORROWER AND LENDER EACH HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE 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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(b)          ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER OR
OPERATING LESSEE ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND BORROWER AND OPERATING LESSEE EACH WAIVES ANY OBJECTIONS
WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF
ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
DOES HEREBY DESIGNATE AND APPOINT:

 

Corporation Service company
1180 Avenue of the Americas
suite 210
new york, new york 10036-8401

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND BORROWER AND OPERATING
LESSEE EACH AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON BORROWER OR OPERATING LESSEE IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE
STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGE
IN THE ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM
TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK,
NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON
AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW
YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

 

Section 10.5         Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement or of any other Loan Document, nor consent to any departure by
Borrower or Operating Lessee therefrom, shall in any event be effective unless
the same shall be in a writing signed by the party or parties against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower or
Operating Lessee, shall entitle Borrower or Operating Lessee to any other or
future notice or demand in the same, similar or other circumstances. Neither any
failure nor any delay on the part of Lender in insisting upon strict performance
of any term, condition, covenant or agreement, or exercising any right, power,
remedy or privilege hereunder or under any other Loan Document, shall operate as
or constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under this Agreement or any
other Loan Document, Lender shall not be deemed to have waived any right either
to require prompt payment when due of all other amounts due under this Agreement
or the other Loan Documents, or to declare a default for failure to effect
prompt payment of any such other amount. Lender shall have the right to waive or
reduce any time periods that Lender is entitled to under the Loan Documents in
its sole and absolute discretion.

 

 -175-Loan Agreement

 

 

Section 10.6         Notices. All notices, demands, requests, consents,
approvals or other communications (any of the foregoing, a “Notice”) required,
permitted or desired to be given hereunder shall be in writing and shall be sent
by facsimile (with answer back acknowledged) or by registered or certified mail,
postage prepaid, return receipt requested, or delivered by hand or by reputable
overnight courier, addressed to the party to be so notified at its address
hereinafter set forth, or to such other address as such party may hereafter,
from time to time, specify in accordance with the provisions of this Section
10.6. Any Notice shall be deemed to have been received: (a) three (3) days after
the date such Notice is mailed, (b) on the date of sending by facsimile if sent
during business hours on a Business Day (otherwise on the next Business Day),
(c) on the date of delivery by hand if delivered during business hours on a
Business Day (otherwise on the next Business Day), and (d) on the next Business
Day if sent by an overnight commercial courier, in each case addressed to the
parties as follows:

 

If to Lender:Deutsche Bank AG, New York Branch
60 Wall Street, 10th Floor
New York, NY 10005
Attention: General Counsel
Facsimile No. (646) 736-5721

 

and to:Deutsche Bank AG, New York Branch
60 Wall Street, 10th Floor
New York, NY 10005
Attention: Robert W. Pettinato, Jr.
Facsimile No. (212) 797-4489

 

and to:Citigroup Global Markets Realty Corp.

390 Greenwich Street

7th Floor

New York, New York 10013

Attention: Ana Rosu Marmann

Facsimile No.: (646) 328-2938

 

and to:JPMorgan Chase Bank, National Association

383 Madison Avenue

New York, New York 10179

Attention: Thomas N. Cassino

Facsimile No.: (212) 834-6029

 

 -176-Loan Agreement

 

 

with a copy to:JPMorgan Chase Bank, National Association

383 Madison Avenue

New York, New York 10179

Attention: Nancy Alto

Facsimile No.: (917) 546-2564

 

with a copy to:Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York
Attention: William P. McInerney, Esq.
Facsimile No. (212) 504-6666

 

with a copy to: KeyCorp Real Estate Capital Markets, Inc.
11501 Outlook, Suite 300
Overland Park, Kansas 66211
Attention: Brent Kivett
Facsimile: (877) 379-1625

 

If to Borrower:c/o Hospitality Investors Trust, Inc.
3950 University Drive
Fairfax, Virginia
Attention: General Counsel
Facsimile No.: [_______________]

 

with a copy to:Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
Attention: Michael Weinberger, Esq.
Facsimile No. (212) 693-9649

 

Any party may change the address to which any such Notice is to be delivered by
furnishing ten (10) days written notice of such change to the other parties in
accordance with the provisions of this Section 10.6. Notices shall be deemed to
have been given on the date as set forth above, even if there is an inability to
actually deliver any such Notice because of a changed address of which no Notice
was given, or there is a rejection or refusal to accept any Notice offered for
delivery. Notice for any party may be given by its respective counsel.
Additionally, Notice from Lender may also be given by Servicer and Lender hereby
acknowledges and agrees that Borrower shall be entitled to rely on any Notice
given by Servicer as if it had been sent by Lender.

 

Section 10.7         Waiver of Trial by Jury. BORROWER, OPERATING LESSEE AND
LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE 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 BORROWER,
OPERATING LESSEE AND LENDER 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

 

 -177-Loan Agreement

 

 

Section 10.8      Headings, Schedules and Exhibits. The Article and/or Section
headings and the Table of Contents in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose. The Schedules and Exhibits annexed hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.

 

Section 10.9     Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

Section 10.10   Preferences. Lender shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments by Borrower or
Operating Lessee to any portion of the Obligations of Borrower hereunder. To the
extent Borrower or Operating Lessee makes a payment or payments to Lender, which
payment or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds received, the Obligations hereunder or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.

 

Section 10.11   Waiver of Notice. Neither Borrower nor Operating Lessee shall be
entitled to any notices of any nature whatsoever from Lender except with respect
to matters for which this Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by Lender to Borrower or Operating
Lessee and except with respect to matters for which Borrower and Operating
Lessee are not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower and Operating Lessee each hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
this Agreement or the other Loan Documents do not specifically and expressly
provide for the giving of notice by Lender to Borrower.

 

Section 10.12   Deemed Distributions Borrower represents that any transfer by
Lender of Borrower’s funds (whether pursuant to Section 2.4.4, Section 6.11 or
otherwise) to any Mezzanine Lender pursuant to this Agreement or any other Loan
Document is intended by Borrower to constitute, and Borrower represents that
such transfers shall constitute, distributions from Borrower to Mezzanine
Borrower, and shall be treated as such on the books and records of Borrower and
Mezzanine Borrower. Borrower agrees that all such distributions shall comply
with the requirements of Section 18-607 of the Delaware Limited Liability
Company Act. Borrower agrees that no provision herein or in any other Loan
Document is intended by Borrower to, nor shall any such provision be construed
to create, a debtor-creditor relationship between Borrower and Mezzanine
Borrower.

 

 -178-Loan Agreement

 

 

Section 10.13   Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement and the other Loan Documents shall take the
same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower or Operating Lessee may otherwise
have against any assignor of such documents, and no such unrelated counterclaim
(other than a counterclaim which can only be asserted in the suit, action or
proceeding by such assignee on this Agreement, the Note, the Mortgage and any
Loan Document and cannot be maintained in a separate action) or defense shall be
interposed or asserted by Borrower in any action or proceeding brought by any
such assignee upon such documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by Borrower and Operating Lessee.

 

Section 10.14    No Joint Venture or Partnership; No Third Party Beneficiaries.

 

(a)        Borrower, Operating Lessee and Lender intend that the relationships
created hereunder and under the other Loan Documents be solely that of borrower
and lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common or joint tenancy relationship among Borrower,
Operating Lessee and Lender nor to grant Lender any interest in any Individual
Property other than that of mortgagee, beneficiary or lender.

 

(b)        The Loan Documents are solely for the benefit of Lender, Operating
Lessee and Borrower (and the Lender Group, the Issuer and the Underwriter Group
with respect to Section 9.2(b)) and nothing contained in any Loan Document shall
be deemed to confer upon anyone other than Lender, Operating Lessee and Borrower
any right to insist upon or to enforce the performance or observance of any of
the obligations contained therein.

 

Section 10.15   Publicity. All news releases, publicity or advertising by
Borrower, Operating Lessee or their respective Affiliates through any media
intended to reach the general public which refers to the Loan Documents or the
financing evidenced by the Loan Documents, to Lender, the Affiliate of Lender
that acts as the issuer with respect to a Securitization or any of their other
Affiliates shall be subject to the prior written approval of Lender.

 

Section 10.16    Waiver of Marshalling of Assets.

 

(a)        Borrower acknowledge that Lender has made the Loan to Borrower upon,
among other things, the security of its collective interest in the Properties
and in reliance upon the aggregate of the Properties taken together being of
greater value as collateral security than the sum of each Individual Property
taken separately. Borrower agrees that the Mortgages are and will be
cross-collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Mortgages shall constitute an Event of Default under
each of the other Mortgages; (ii) an Event of Default under the Note or this
Agreement shall constitute an Event of Default under each Mortgage; and (iii)
each Mortgage shall constitute security for the Note and the Loan as if a single
blanket lien were placed on all of the Properties as security for the Note and
the Loan (except where such Mortgage explicitly states a maximum principal
amount to be secured by such Mortgage).

 

(b)        To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s members or partners, as applicable, and others with
interests in Borrower, and of the Properties, and shall not assert any right
under any laws pertaining to the marshalling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the right
of Lender under the Loan Documents to a sale of any Individual Property for the
collection of the Obligations without any prior or different resort for
collection, or of the right of Lender to the payment of the Obligations out of
the net proceeds of any Individual Property in preference to every other
claimant whatsoever.

 

 -179-Loan Agreement

 

 

(c)        In addition, Borrower, for itself and its successors and assigns,
waives in the event of foreclosure of any or all of the Mortgages, any equitable
right otherwise available to Borrower which would require the separate sale of
the Properties or require Lender to exhaust its remedies against any Individual
Property or any combination of the Properties before proceeding against any
other Individual Property or combination of Properties; and further in the event
of such foreclosure Borrower does hereby expressly consents to and authorizes,
at the option of Lender, the foreclosure and sale either separately or together
of any combination of the Properties.

 

Section 10.17   Certain Waivers. Borrower and Operating Lessee each hereby
waives the right to assert a counterclaim, other than a compulsory counterclaim,
in any action or proceeding brought against it by Lender or its agents or
otherwise to offset any obligations to make the payments required by the Loan
Documents. No failure by Lender to perform any of its obligations hereunder
shall be a valid defense to, or result in any offset against, any payments which
Borrower is obligated to make under any of the Loan Documents. Without limiting
any of the other provisions contained herein, Borrower hereby unconditionally
and irrevocably waives, to the maximum extent not prohibited by applicable law,
any rights it may have to claim or recover against Lender in any legal action or
proceeding any special, exemplary, punitive or consequential damages.

 

Section 10.18    Conflict; Construction of Documents; Reliance. In the event of
any conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan, without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or affiliate of Lender of any
equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender’s exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.

 

Section 10.19   Brokers and Financial Advisors. Borrower hereby represents that
it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by
this Agreement. Borrower shall indemnify, defend and hold Lender harmless from
and against any and all claims, liabilities, losses, costs and expenses of any
kind (including Lender’s reasonable attorneys’ fees and expenses) in any way
relating to or arising out of a claim by any Person that such Person acted on
behalf of Borrower or Lender in connection with the transactions contemplated
herein. The provisions of this Section 10.19 shall survive the expiration and
termination of this Agreement and the payment of the Obligations.

 

 -180-Loan Agreement

 

 

Section 10.20    Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto and their
respective affiliates in respect of the transactions contemplated hereby and
thereby, and all prior agreements among or between such parties, including any
confidentiality agreements or any similar agreements between or among any such
parties, whether oral or written, are superseded by the terms of this Agreement
and the other Loan Documents.

 

Section 10.21    Servicer.

 

(a)        At the option of Lender, the Loan may be serviced by a master
servicer, primary servicer, special servicer and/or trustee (any such master
servicer, primary servicer, special servicer and trustee, together with its
agents, nominees or designees, are collectively referred to as the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing Agreement”) between
Lender and Servicer. Borrower shall not be responsible for any set-up fees or
any other initial costs relating to or arising under the Servicing Agreement.
Borrower shall not be responsible for payment of the annual master servicing fee
due to the Servicer under the Servicing Agreement.

 

(b)        Notwithstanding the foregoing, following a Securitization, Borrower
shall reimburse Lender on demand for (a) all actual out-of-pocket reasonable
costs and expenses, liquidation fees, workout fees or special servicing fees as
a result of an Event of Default under the Loan Documents or the Loan becoming
specially serviced, or any enforcement, refinancing or restructuring of the
credit arrangements provided for under the Loan Documents in the nature of a
“work-out” of the Loan Documents or any insolvency or bankruptcy of Borrower, in
each case without duplication, to the extent default interest paid by Borrower
under the Loan Documents is insufficient to pay the same (after payment of
interest payable on advances made by the Servicer) (provided that in any event
annual special servicing fees shall not exceed 0.1875% of the then Outstanding
Principal Balance amount per annum, workout fees shall not exceed 0.375% of each
collection of interest and principal collections of the Loan, and liquidation
fees shall not exceed the amount, if any, by which 0.375% of liquidation
proceeds exceeds amount previously paid in respect of workout fees) and (b)
during the continuance of an Event of Default or at any time the Loan is
specially serviced, the reasonable costs of all customary property inspections
and/or appraisals of the Properties (or updates to any existing inspection or
appraisal) that Servicer may be required to obtain pursuant to the applicable
trust and servicing or pooling and servicing agreement (other than the cost of
regular annual inspections required to be borne by Servicer under such servicing
agreement). Additionally, Borrower shall pay all reasonable out-of-pocket costs
and expenses (but not any additional servicing fee) in connection with any
consent requests made by Borrower during the term of the Loan. For avoidance of
doubt, no modification fee or other amount (other than Lender’s reasonable
out-of-pocket costs) shall be payable in connection with (i) any transaction for
which a workout fee is paid, or (ii) any assumption of the Loan, except as
expressly provided in Section 7.1. To the extent late charges and default
interest under the Loan Documents paid by Borrower are insufficient to pay the
same (and all actual out-of-pocket reasonable costs and expenses, liquidation
fees, workout fees or special servicing fees as a result of an Event of Default
under the Loan Documents or the Loan becoming specially serviced, or any
enforcement, refinancing or restructuring of the credit arrangements provided
for under the Loan Documents in the nature of a “work-out” of the Loan Documents
or any insolvency or bankruptcy of Borrower, subject to the caps specified
herein), Borrower shall pay the interest payable on advances made by Servicer or
the trustee with respect to any delinquent debt service payments and any
protective advances.

 

 -181-Loan Agreement

 

 

Section 10.22    Intentionally Omitted.

 

Section 10.23   Joint and Several Liability. The representations, covenants,
warranties and obligations of Borrower hereunder are joint and several
representations, covenants, warranties and obligations of each and every
Individual Borrower. Each Individual Borrower hereby jointly and severally
waives presentment, demand, notice, protest and all other suretyship defenses
generally and agrees that (i) any renewal, extension or postponement of the time
of payment or any other indulgence, (ii) any modification, supplement or
alteration of any of the obligations of any Individual Borrower hereunder, or
(iii) any substitution, exchange or release of collateral or the addition or
release of any Person primarily or secondarily liable hereunder, may be effected
without notice to any Individual Borrower, and without releasing any Individual
Borrower from any liability hereunder. The parties hereto acknowledge that the
defined term “Borrower” has been defined to collectively include each Individual
Borrower. It is the intent of the parties hereto in determining whether (a) a
breach of a representation or a covenant has occurred, (b) there has occurred a
Default or Event of Default, or (c) an event has occurred which would create
recourse obligations under Section 10.1 of this Agreement, that any such breach,
occurrence or event with respect to any Individual Borrower shall be deemed to
be such a breach, occurrence or event with respect to all Individual Borrowers
and that all Individual Borrowers need not have been involved with such breach,
occurrence or event in order for the same to be deemed such a breach, occurrence
or event with respect to every Individual Borrower.

 

10.23.1         Cross Guaranty. In order to induce Lender to extend credit to
the Individual Borrowers comprising Borrower hereunder, each Individual Borrower
hereby irrevocably and unconditionally guarantees, as a primary obligor and not
merely as a surety, the payment when and as due of the Obligations of such other
Individual Borrowers. Each Individual Borrower further agrees that the due and
punctual payment of such Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound
upon its guarantee hereunder notwithstanding any such extension or renewal of
any such Obligation.

 

 -182-Loan Agreement

 

 

(a)        Each Individual Borrower waives presentment to, demand of payment
from and protest to any Individual Borrower of any of the Obligations, and also
waives notice of acceptance of its obligations and notice of protest for
nonpayment. The obligations of each Individual Borrower hereunder shall not be
affected by (a) the failure of Lender to assert any claim or demand or to
enforce any right or remedy against any Individual Borrower under the provisions
of this Agreement, any other Loan Document or otherwise; (b) any extension or
renewal of any of the Obligations; (c) any rescission, waiver, amendment or
modification of, or release from, any of the terms or provisions of this
Agreement, or any other Loan Document or agreement; (d) any default, failure or
delay, willful or otherwise, in the performance of any of the Obligations; (e)
the failure of Lender take any steps to perfect and maintain any security
interest in, or to preserve any rights to, any security or collateral for the
Obligations, if any; (f) any change in the corporate, partnership or other
existence, structure or ownership of any Individual Borrower or any other
guarantor of any of the Obligations; (g) the enforceability or validity of the
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to any collateral securing the
Obligations or any part thereof, or any other invalidity or unenforceability
relating to or against any Individual Borrower or any other guarantor of any of
the Obligations, for any reason related to this Agreement, any other Loan
Document, or any provision of applicable law, decree, order or regulation of any
jurisdiction purporting to prohibit the payment by such Individual Borrower or
any other guarantor of the Obligations, of any of the Obligations or otherwise
affecting any term of any of the Obligations; or (h) any other act, omission or
delay to do any other act which may or might in any manner or to any extent vary
the risk of such Individual Borrower or otherwise operate as a discharge of a
guarantor as a matter of law or equity or which would impair or eliminate any
right of such Individual Borrower to subrogation.

 

(b)        Each Individual Borrower further agrees that its agreement hereunder
constitutes a guarantee of payment when due (whether or not any bankruptcy or
similar proceeding shall have stayed the accrual or collection of any of the
Obligations or operated as a discharge thereof) and not merely of collection,
and waives any right to require that any resort be had by Lender to any balance
of any deposit account or credit on the books of Lender in favor of any
Individual Borrower or any other Person.

 

(c)        The obligations of each Individual Borrower hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
and shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of any of the Obligations, any impossibility in the performance
of any of the Obligations or otherwise.

 

(d)        Each Individual Borrower further agrees that its obligations
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by Lender upon the bankruptcy or reorganization of
any Individual Borrower or otherwise.

 

(e)        In furtherance of the foregoing and not in limitation of any other
right which Lender may have at law or in equity against any Individual Borrower
by virtue hereof, upon the failure of any other Borrower to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Individual Borrower hereby
promises to and will, upon receipt of written demand by Lender, forthwith pay,
or cause to be paid, to Lender in cash an amount equal to the unpaid principal
amount of such Obligations then due, together with accrued and unpaid interest
thereon.

 

(f)         Each Individual Borrower (i) agrees that it shall have no right of
subrogation with respect to the obligations of the other Individual Borrowers;
(ii) waives any right to enforce any remedy that Lender now has or may hereafter
have against any of the other Individual Borrowers any endorser or any guarantor
of all or any part of such obligations or any other person; and (iii) waives any
benefit of, and any right to participate in, any security or collateral given to
Lender to secure the payment or performance of all or any part of such
obligations or any other liability of the other parties to Lender.

 

 -183-Loan Agreement

 

 

(g)        Each Individual Borrower agrees that any and all claims that it may
have against any of the other Individual Borrowers, any endorser or any other
guarantor of all or any part of the obligations of the other Individual
Borrowers, or against any of their respective properties, shall be subordinate
and subject in right of payment to the prior payment in full of all obligations
secured hereby. Notwithstanding any right of any Individual Borrower to ask,
demand, sue for, take or receive any payment from the other Individual
Borrowers, all rights, liens and security interests of an Individual Borrower,
whether now or hereafter arising and howsoever existing, in any assets of any of
the other Individual Borrowers (whether constituting part of the security or
collateral given to Lender to secure payment of all or any part of the
obligations of the other Individual Borrowers or otherwise) shall be and hereby
are subordinated to the rights of Lender in those assets.

 

(h)        Other than as expressly set forth in the Loan Documents, nothing
shall discharge or satisfy the liability of any Individual Borrower hereunder
except the full performance and payment of the Obligations.

 

Section 10.24    Creation of Security Interest. Notwithstanding any other
provision set forth in this Agreement, the Note, the Mortgage or any of the
other Loan Documents, Lender may at any time create a security interest in all
or any portion of its rights under this Agreement, the Note, the Mortgage and
any other Loan Document (including the advances owing to it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.

 

Section 10.25   Assignments and Participations. In addition to any other rights
of Lender hereunder, the Loan, the Note, the Loan Documents and/or Lender’s
rights, title, obligations and interests therein may be sold, assigned,
participated or otherwise transferred by Lender and any of its successors and
assigns to any Person at any time in its sole and absolute discretion, in whole
or in part, whether by operation of law (pursuant to a merger or other successor
in interest) or otherwise without notice to or consent from Borrower or any
other Person. Upon such assignment, all references to Lender in this Agreement
and in any Loan Document (or to an individual assigning co-lender in the event
an individual co-lender make such assignment rather than an assignment in whole
by Lender) shall be deemed to refer to such assignee or successor in interest
and such assignee or successor in interest shall thereafter stand in the place
of Lender (or in the case of an individual assigning co-lender in the event an
individual co-lender make such assignment rather than an assignment in whole by
Lender, such assignee of or successor in interest to such co-lender) in all
respects. Except as expressly permitted herein, neither Borrower nor Operating
Lessee may assign its rights, title, interests or obligations under this
Agreement or under any of the Loan Documents. In the event that the Loan is
syndicated to five (5) or more co-lenders, then such co-lenders shall appoint an
administrative agent or lead lender to act on behalf of such co-lenders and to
serve as Borrower’s single point of contact with respect to the Loan Documents.

 

Section 10.26   Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.

 

 -184-Loan Agreement

 

 

Section 10.27   Set-Off. In addition to any rights and remedies of Lender
provided by this Agreement and by law, Lender shall have the right in its sole
discretion, without prior notice to Borrower, any such notice being expressly
waived by Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by Borrower hereunder (whether at the stated maturity,
by acceleration or otherwise), to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by Lender or any Affiliate
thereof to or for the credit or the account of Borrower; provided however,
Lender may only exercise such right during the continuance of an Event of
Default. Lender agrees promptly to notify Borrower after any such set-off and
application made by Lender; provided that the failure to give such notice shall
not affect the validity of such set-off and application.

 

Section 10.28    [Reserved].

 

Section 10.29   Intercreditor Agreement. Lender and Mezzanine Lender are or will
be parties to a certain intercreditor agreement (the “Intercreditor Agreement”)
memorializing their relative rights and obligations with respect to the Loan,
the Mezzanine Loan, Borrower, Operating Lessee, Mezzanine Borrower, the
Properties and the “Collateral” (as defined in the Mezzanine Loan Agreement).
Borrower hereby acknowledges and agrees that (i) such Intercreditor Agreement is
intended solely for the benefit of Lender and Mezzanine Lender and (ii) none of
Borrower, Operating Lessee nor Mezzanine Borrower are intended third-party
beneficiaries of any of the provisions therein and shall not be entitled to rely
on any of the provisions contained therein. Lender and Mezzanine Lender shall
have no obligation to disclose to Borrower the contents of the Intercreditor
Agreement. Borrower’s obligations hereunder are independent of such
Intercreditor Agreement and remain unmodified by the terms and provisions
thereof.

 

Section 10.30    Note Register; Participant Register.

 

(a)        Servicer, as non-fiduciary agent of Borrower, or if there is no
Servicer, the administrative agent or lead lender, as non-fiduciary agent of
Borrower, or if there is no administrative agent or lead lender, Borrower (or in
the case of assignments to participants, the applicable Lender pursuant to
paragraph (b) below), shall maintain a record within the meaning of U.S.
Treasury Regulation 5f.103-1(c) that identifies each owner (including
successors, assignees and participants) of an interest in the Loan, including
the name and address of the owner, and each owner’s rights to principal and
stated interest (the “Register”) and shall record all transfers of an interest
in the Loan, including each assignment and participation, in the Register.  The
entries in the Register shall be conclusive absent manifest error, and Borrower,
Lender and Servicer may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement.  The parties intend for the Loan to be in registered form for tax
purposes and to the extent of any conflict with this Section 10.30, this Section
10.30 shall be construed in accordance with that intent. The Register shall be
available for inspection by Borrower and any Lender at any reasonable time and
from time to time upon reasonable prior notice. Failure to make any such
recordation, or any error in such recordation, however, shall not affect
Borrower’s obligations in respect of the Loan. Borrower acknowledges that the
Notes are in registered form and may not be transferred except by register.

 

 -185-Loan Agreement

 

 

(b)        Each Lender that sells a participation hereunder shall, acting solely
for this purpose as an agent of Borrower, maintain a register on which it enters
the name and address of each participant and the principal amounts (and stated
interest) of each participant’s interest  in  the  Loan  or  other  obligations 
under  the  Loan  Documents  (the  “Participant Register”); provided, however,
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 obligations under any
Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that such obligation is in registered form under U.S.
Treasury Regulation 5f.103-1(c).  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, Servicer shall have no responsibility
for maintaining a Participant Register.

 

Section 10.31    Borrower Affiliate Lender. Lender agrees that the Lender
Documents shall not prohibit or restrict Affiliates of Borrower from purchasing
or otherwise acquiring and owning (a) beneficial interests in the Loan as
evidenced by any single or multi class non-voting Securities in respect of any
private or public securitization of the Loan or (b) any direct or indirect
interests in any Mezzanine Loan or any of the New Mezzanine Loans (or otherwise
impose additional restrictions or requirements on a transfer to such Affiliate
of Borrower), provided, however, that the Lender Documents may include customary
restrictions on the exercise of the rights and remedies by such Affiliates of
Borrower under the Loan, any Mezzanine Loan and any New Mezzanine Loan
including, without limitation, (i) restrictions on any such Affiliate having the
right to, or exercising, directly or indirectly, any control, decision-making
power, voting rights, notice and cure rights, or other rights that would
otherwise benefit a holder by virtue of its ownership or control of any interest
with respect to the Loan, any Mezzanine Loan or any New Mezzanine Loan, (ii)
restrictions on any such Affiliate’s approval and consent rights under any
intercreditor agreement, co-lender agreement or similar agreement, (iii)
restrictions on such Affiliate’s initiation of enforcement actions against
equity collateral, (iv) restrictions on the making of protective advances, (v)
restrictions on such Affiliate from making or bringing any claim, in its
capacity as a holder of any direct or indirect interest in the Loan, any
Mezzanine Loan or any New Mezzanine Loan, against Lender, any Mezzanine Lender
or any New Mezzanine Lender or any agent of any of the foregoing with respect to
the duties and obligations of such Person under the Loan Documents, any
Mezzanine Loan Documents, or any New Mezzanine Loan Documents, any intercreditor
agreement or any applicable co-lender agreement or similar agreement and (vi)
restrictions on such Affiliate’s access to any electronic platform for the
distribution of materials or information among the Lenders and any New Mezzanine
Lender, “asset status reports” or any correspondence or materials or notices of
or participation in any discussions, meetings or conference calls (among Lenders
and any New Mezzanine Lender, any of their respective co-Lender or participants,
or otherwise) regarding or relating to any workout discussions or litigation or
foreclosure strategy (or potential litigation strategy) involving the Loan, any
Mezzanine Loan or any New Mezzanine Loan, other than in its capacity as
Borrower, Mezzanine Borrower or a New Mezzanine Borrower to the extent
discussions and negotiations are being conducted with Borrower, Mezzanine
Borrower or such New Mezzanine Borrower (as distinct from internal discussions
and negotiations among the various creditors).

 

 -186-Loan Agreement

 

 

Section 10.32    Acknowledgement and Consent to Bail-In of EEA Financial
Institutions.

 

(a)        Notwithstanding anything to the contrary in any Loan Document or in
any other agreement, arrangement or understanding among the respective parties
thereto, 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:

 

(i)          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

 

(ii)         the effects of any Bail-In Action on any such liability, including,
if applicable:

 

(A)         a reduction in full or in part or cancellation of any such
liability;

 

(B)         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

 

(C)         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.

 

(b)        As used in this Section 10.32 the following terms have the following
meanings ascribed thereto: (i) “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; (ii)“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; (iii) “EEA
Financial Institution” means (x) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority; (y) any entity established in an EEA Member Country
which is a parent of an institution described in clause (x) of this definition,
or (x) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (x) or (y) of this definition
and is subject to consolidated supervision with its parent; (iv) “EEA Member
Country” means any of the member states of the European Union, Iceland,
Liechtenstein, and Norway or any other member state of the European Economic
Area; (v) “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; (vi) “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; and (vii) “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.

 

 -187-Loan Agreement

 

 

Section 10.33    Co-Lenders.

 

(a)        Borrower and Lender hereby acknowledge and agree that notwithstanding
the fact that the Loan may be serviced by Servicer, prior to a Securitization of
the entire Loan, all requests for approval and consents hereunder and in every
instance in which Lender’s consent or approval is required, Borrower shall,
except with respect to those item set forth on Schedule 10.33 hereof, only be
required to obtain the consent and approval of German American Capital
Corporation (or its successors or assigns) and all copies of documents, reports,
requests and other delivery obligations of Borrower required hereunder shall be
delivered by Borrower to German American Capital Corporation (or its successors
or assigns).

 

(b)        Following the Closing Date (i) the liabilities of Lender shall be
several and not joint, (ii) neither Co-Lender shall be responsible for the
obligations of the other Co-Lender, and (iii) each Co-Lender shall be liable to
Borrower only for their respective Ratable Share of the Loan. Notwithstanding
anything to the contrary herein, all indemnities by Borrower and obligations for
costs, expenses, damages or advances set forth herein shall run to and benefit
each Co-Lender in accordance with its Ratable Share.

 

(c)        Each Co-Lender agrees that it has, independently and without reliance
on the other Co-Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of Borrower and its Affiliates
and decision to enter into this Agreement and that it will, independently and
without reliance upon the other Co-Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other Loan Document.

 

[No Further Text On This Page]

 

 -188-Loan Agreement

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.

 

  BORROWER:       HIT PORTFOLIO I OWNER, LLC   HIT PORTFOLIO I BHGL OWNER, LLC  
HIT PORTFOLIO I PXGL OWNER, LLC   HIT PORTFOLIO I GBGL OWNER, LLC   HIT
PORTFOLIO I NFGL OWNER, LLC   HIT PORTFOLIO I MBGL 950 OWNER, LLC,   each a
Delaware limited liability company           By:  /s/ Paul C. Hughes     Name:
Title: Paul C. Hughes
General Counsel and Secretary                   HIT PORTFOLIO I NTC OWNER, LP,
a Delaware limited partnership           By: HIT Portfolio I NTC Owner GP, LLC,
its general partner                   By: /s/ Paul C. Hughes     Name:
Title: Paul C. Hughes
General Counsel and Secretary                   HIT PORTFOLIO I DLGL OWNER, LP,
a Delaware limited partnership           By: HIT Portfolio I NTC Owner GP, LLC,
its general partner                   By: /s/ Paul C. Hughes     Name:
Title: Paul C. Hughes
General Counsel and Secretary

 

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

 Loan Agreement

 

 

 

  OPERATING LESSEE:       HIT PORTFOLIO I TRS, LLC   HIT PORTFOLIO I HIL TRS,
LLC   HIT PORTFOLIO I MCK TRS, LLC   HIT PORTFOLIO I MISC TRS, LLC   HIT
PORTFOLIO I DEKS TRS, LLC,   each a Delaware limited liability company          
By:  /s/ Paul C. Hughes     Name:
Title: Paul C. Hughes
General Counsel and Secretary                   HIT PORTFOLIO I NTC HIL TRS, LP,
a Delaware limited partnership           By: HIT Portfolio I NTC TRS GP, LLC,
its general partner                   By: /s/ Paul C. Hughes     Name:
Title: Paul C. Hughes
General Counsel and Secretary                   HIT PORTFOLIO I NTC TRS, LP,
a Delaware limited partnership           By: HIT Portfolio I NTC TRS GP, LLC,
its general partner                   By: /s/ Paul C. Hughes     Name:
Title: Paul C. Hughes
General Counsel and Secretary

 

 SIGNATURE PAGELoan Agreement

 

 

  LENDER:       DEUTSCHE BANK AG, NEW YORK BRANCH           By:  /s/ David
Goodman     Name:
Title: David Goodman
Managing Director                   By: /s/ Lisa Paterson     Name:
Title: Lisa Paterson
Managing Director

 

 SIGNATURE PAGELoan Agreement

 

 

  LENDER:       CITIGROUP GLOBAL MARKETS REALTY CORP.,
a New York corporation           By:  /s/ Harry Kramer     Name:
Title: Harry Kramer
Vice President

 

 SIGNATURE PAGELoan Agreement

 

 

  LENDER:       JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
a banking association chartered under the laws of the United States of America  
        By:  /s/ Anthony Shaskus     Name:
Title: Anthony Shaskus
Vice President

 

 SIGNATURE PAGELoan Agreement

 

 

SCHEDULE I-A

 

BORROWER

 

1.HIT Portfolio I Owner, LLC

2.HIT Portfolio I GBGL Owner, LLC

3.HIT Portfolio I MBGL 950 Owner, LLC

4.HIT Portfolio I PXGL Owner, LLC

5.HIT Portfolio I NFGL Owner, LLC

6.HIT Portfolio I BHGL Owner, LLC

7.HIT Portfolio I DLGL Owner, LP

8.HIT Portfolio I NTC Owner, LP

 

 Schedule I-A-1Loan Agreement

 

 

SCHEDULE I-B

 

OPERATING LESSEE

 

1.HIT Portfolio I TRS, LLC

2.HIT Portfolio I HIL TRS, LLC

3.HIT Portfolio I MCK TRS, LLC

4.HIT Portfolio I MISC TRS, LLC

5.HIT Portfolio I DEKS TRS, LLC

6.HIT Portfolio I NTC TRS, LP

7.HIT Portfolio I NTC HIL TRS, LP

 

 Schedule I-B-1Loan Agreement

 

 

SCHEDULE I

INDIVIDUAL PROPERTIES AND ALLOCATED LOAN AMOUNTS

 

Individual Property Name  Allocated Loan Amount        Homewood Suites by Hilton
Chicago  $42,860,068  Residence Inn by Marriott LA El Segundo  $33,175,341 
Residence Inn by Marriott Portland  $29,672,355  Embassy Suites by Hilton
Orlando  $25,757,253  Courtyard by Marriott Louisville  $23,284,556  Hampton Inn
& Suites by Hilton Boynton Beach  $19,534,033  SpringHill Suites by Marriott San
Diego  $16,623,332  Residence Inn by Marriott San Diego  $16,299,921  Hampton
Inn & Suites by Hilton Franklin  $15,135,641  Hyatt Place Las Vegas 
$14,424,137  Hampton by Hilton Palm Beach Gardens  $12,871,763  Homewood Suites
by Hilton Phoenix  $12,548,352  Hampton by Hilton Albany  $12,418,988  Courtyard
by Marriott Dallas  $12,030,894  Hyatt Place Albuquerque  $12,030,894  Hyatt
Place Indianapolis  $11,901,530  Hyatt Place Tampa  $11,772,165  Hyatt Place
Franklin  $11,319,390  Hyatt Place Miami  $11,125,343  Hampton by Hilton West
Palm Beach  $10,737,250  Residence Inn by Marriott Sabal Park  $10,737,250 
Courtyard by Marriott Asheville  $10,672,567  Courtyard by Marriott Orlando 
$10,607,885  Residence Inn by Marriott Boise  $10,413,839  Hampton by Hilton
Peabody  $10,155,110  Hampton by Hilton Beckley  $9,637,652  Courtyard by
Marriott Tallahassee North I 10 Capital Circle  $9,508,287  Courtyard by
Marriott Gainesville  $9,314,241  Fairfield Inn & Suites by Marriott Dallas 
$9,120,194  Hyatt Place Minneapolis  $9,120,194  Hampton by Hilton Grand Rapids 
$8,926,147  Hampton by Hilton Boca Raton  $8,861,465  Hampton Inn by Hilton
State College  $8,796,783  Courtyard by Marriott Sarasota  $8,667,418  Hampton
by Hilton Madison Heights  $8,602,736  Courtyard by Marriott Lexington 
$8,214,643  Hampton by Hilton Kansas City  $8,214,643  Residence Inn by Marriott
Chattanooga  $8,149,961 

 

 Schedule I-1Loan Agreement

 

 

Individual Property Name  Allocated Loan Amount        Residence Inn by Marriott
Sarasota  $8,149,961  SpringHill Suites by Marriott Grand Rapids  $8,149,961 
SpringHill Suites by Marriott Lexington  $8,149,961  Hampton by Hilton Memphis 
$7,955,914  Hampton by Hilton Gastonia  $7,697,185  Hyatt Place Linthicum
Heights  $7,697,185  Residence Inn by Marriott Lexington  $7,632,503  Courtyard
by Marriott Athens  $7,503,138  Hyatt Place Memphis  $7,503,138  Hampton by
Hilton Maryland Heights  $7,244,409  Homewood Suites by Hilton Windsor Locks 
$7,179,727  Residence Inn by Marriott Fort Myers  $7,179,727  Residence Inn by
Marriott Tampa North  $6,985,681  Hyatt Place Glen Allen  $6,856,316  Hyatt
Place Baton Rouge  $6,726,952  Residence Inn by Marriott Tallahassee 
$6,662,269  Residence Inn by Marriott Savannah  $6,597,587  Courtyard by
Marriott Bowling Green  $6,468,223  Hampton by Hilton Morgantown  $6,274,176 
Hilton Garden Inn Round Rock  $6,274,176  Residence Inn by Marriott Knoxville 
$6,209,494  Hampton by Hilton Dublin  $6,144,812  Hampton by Hilton Gurnee 
$6,144,812  Hampton by Hilton Westlake  $6,144,812  Hampton by Hilton Addison 
$5,886,083  Hampton Inn by Hilton Scranton  $5,886,083  Holiday Inn Express
Kendall East  $5,886,083  Hampton by Hilton Deerfield Beach  $5,692,036  Hampton
by Hilton Northville  $5,627,354  Homewood Suites by Hilton San Antonio 
$5,562,672  Hyatt Place Columbus  $5,562,672  Courtyard by Marriott Knoxville 
$5,303,943  Hampton by Hilton West Columbia  $5,239,260  Homewood Suites by
Hilton Peabody  $5,239,260  Courtyard by Marriott Elmhurst  $5,174,578  Hampton
by Hilton Overland Park  $4,915,849  Courtyard by Marriott Jacksonville 
$4,786,485  Hampton by Hilton Birmingham  $4,721,803  SpringHill Suites by
Marriott Round Rock  $4,721,803  Hyatt Place Blue Ash  $4,592,438  Homewood
Suites by Hilton Germantown  $4,398,391  Residence Inn by Marriott Macon 
$4,398,391  Hampton by Hilton Glen Burnie  $3,751,569  Hyatt Place Birmingham 
$3,298,794 

 

 Schedule I-2Loan Agreement

 

 

Individual Property Name  Allocated Loan Amount        Hyatt Place Overland
Park  $3,234,111  Residence Inn by Marriott Mobile  $2,975,382  SpringHill
Suites by Marriott Houston  $2,199,196  Hampton by Hilton Pickwick  $1,681,738 
Hampton by Hilton Norfolk  $1,487,691 

 

 

 Schedule I-3Loan Agreement

 

 

SCHEDULE I-M1

 

ORIGINAL MEZZANINE LOAN ALLOCATED LOAN AMOUNTS

 

Individual Property Name  Allocated Loan Amount        Homewood Suites by Hilton
Chicago  $5,856,655  Residence Inn by Marriott LA El Segundo  $4,533,276 
Residence Inn by Marriott Portland  $4,054,608  Embassy Suites by Hilton
Orlando  $3,519,625  Courtyard by Marriott Louisville  $3,181,741  Hampton Inn &
Suites by Hilton Boynton Beach  $2,669,247  SpringHill Suites by Marriott San
Diego  $2,271,511  Residence Inn by Marriott San Diego  $2,227,318  Hampton Inn
& Suites by Hilton Franklin  $2,068,224  Hyatt Place Las Vegas  $1,971,000 
Hampton by Hilton Palm Beach Gardens  $1,758,874  Homewood Suites by Hilton
Phoenix  $1,714,682  Hampton by Hilton Albany  $1,697,005  Courtyard by Marriott
Dallas  $1,643,973  Hyatt Place Albuquerque  $1,643,973  Hyatt Place
Indianapolis  $1,626,296  Hyatt Place Tampa  $1,608,619  Hyatt Place Franklin 
$1,546,749  Hyatt Place Miami  $1,520,233  Hampton by Hilton West Palm Beach 
$1,467,202  Residence Inn by Marriott Sabal Park  $1,467,202  Courtyard by
Marriott Asheville  $1,458,363  Courtyard by Marriott Orlando  $1,449,525 
Residence Inn by Marriott Boise  $1,423,009  Hampton by Hilton Peabody 
$1,387,655  Hampton by Hilton Beckley  $1,316,946  Courtyard by Marriott
Tallahassee North I 10 Capital Circle  $1,299,269  Courtyard by Marriott
Gainesville  $1,272,753  Fairfield Inn & Suites by Marriott Dallas  $1,246,238 
Hyatt Place Minneapolis  $1,246,238  Hampton by Hilton Grand Rapids  $1,219,722 
Hampton by Hilton Boca Raton  $1,210,883  Hampton Inn by Hilton State College 
$1,202,045  Courtyard by Marriott Sarasota  $1,184,368  Hampton by Hilton
Madison Heights  $1,175,529  Courtyard by Marriott Lexington  $1,122,498 
Hampton by Hilton Kansas City  $1,122,498  Residence Inn by Marriott
Chattanooga  $1,113,659 

 

 Schedule I-M1-1Loan Agreement

 

 

Individual Property Name  Allocated Loan Amount        Residence Inn by Marriott
Sarasota  $1,113,659  SpringHill Suites by Marriott Grand Rapids  $1,113,659 
SpringHill Suites by Marriott Lexington  $1,113,659  Hampton by Hilton Memphis 
$1,087,144  Hampton by Hilton Gastonia  $1,051,789  Hyatt Place Linthicum
Heights  $1,051,789  Residence Inn by Marriott Lexington  $1,042,951  Courtyard
by Marriott Athens  $1,025,274  Hyatt Place Memphis  $1,025,274  Hampton by
Hilton Maryland Heights  $989,919  Homewood Suites by Hilton Windsor Locks 
$981,081  Residence Inn by Marriott Fort Myers  $981,081  Residence Inn by
Marriott Tampa North  $954,565  Hyatt Place Glen Allen  $936,888  Hyatt Place
Baton Rouge  $919,211  Residence Inn by Marriott Tallahassee  $910,372 
Residence Inn by Marriott Savannah  $901,534  Courtyard by Marriott Bowling
Green  $883,857  Hampton by Hilton Morgantown  $857,341  Hilton Garden Inn Round
Rock  $857,341  Residence Inn by Marriott Knoxville  $848,502  Hampton by Hilton
Dublin  $839,664  Hampton by Hilton Gurnee  $839,664  Hampton by Hilton
Westlake  $839,664  Hampton by Hilton Addison  $804,309  Hampton Inn by Hilton
Scranton  $804,309  Holiday Inn Express Kendall East  $804,309  Hampton by
Hilton Deerfield Beach  $777,794  Hampton by Hilton Northville  $768,955 
Homewood Suites by Hilton San Antonio  $760,117  Hyatt Place Columbus  $760,117 
Courtyard by Marriott Knoxville  $724,762  Hampton by Hilton West Columbia 
$715,924  Homewood Suites by Hilton Peabody  $715,924  Courtyard by Marriott
Elmhurst  $707,085  Hampton by Hilton Overland Park  $671,731  Courtyard by
Marriott Jacksonville  $654,054  Hampton by Hilton Birmingham  $645,215 
SpringHill Suites by Marriott Round Rock  $645,215  Hyatt Place Blue Ash 
$627,538  Homewood Suites by Hilton Germantown  $601,022  Residence Inn by
Marriott Macon  $601,022  Hampton by Hilton Glen Burnie  $512,637  Hyatt Place
Birmingham  $450,767 

 

 Schedule I-M1-2Loan Agreement

 

 

Individual Property Name  Allocated Loan Amount        Hyatt Place Overland
Park  $441,928  Residence Inn by Marriott Mobile  $406,574  SpringHill Suites by
Marriott Houston  $300,511  Hampton by Hilton Pickwick  $229,803  Hampton by
Hilton Norfolk  $203,287 

 

 Schedule I-M1-3Loan Agreement

 

 

SCHEDULE II

REQUIRED REPAIRS

 

 

Hyatt Place Baton Rouge

CMU wall cracks observed in the northeast stair tower on several levels as well
as the adjacent linen storage rooms     Hampton Inn Pickwick Holes in the EIFS
were observed. Existing damage must be remedied

 

Hampton Inn Birmingham  Add signage indicating Accessible Parking  $450  Hyatt
Place Birmingham  Construct concrete curb cut. Add listening kits.  $4,250 
Homewood Suites Phoenix  Add signage indicating Accessible Parking. Elevator
two-way communication system  $6,300  Residence Inn LA El Segundo  Add listening
kits  $1,500  Homewood Suites Windsor Locks   Front reception desk install a
lowered counter section. Convert room to standard ADA accessible room  $6,500 
Courtyard Jacksonville  Add van-accessible parking space with sign. Add hearing
kits  $2,700  Courtyard Tallahassee North I 10 Capital Circle  Add
van-accessible parking space. Add listening kit  $4,200  Courtyard Gainesville 
Add van-accessible parking space. Add ADA guestroom. Add listening kits  $6,200 
Courtyard Orlando  Add van-accessible parking spaces. Provide assistive
listening kits.  $1,200  Embassy Suites Orlando  Add van-accessible parking
space with sign  $900  Hyatt Place Miami  Add van-accessible parking space. Add
listening kits  $3,450  Holiday Inn Express Kendall East  Add van-accessible
parking space. Provide assistive listening kits. Add ADA grab bar and blocking 
$3,150  Hampton Inn Palm Beach Gardens  Convert standard hotel room to
accessible  $5,000  Hampton Inn West Palm Beach  Add van-accessible parking
space. Convert standard hotel room to accessible.  $5,450  Hampton Inn & Suites
Boynton Beach  Add van-accessible parking space  $450 

 

 Schedule II-1Loan Agreement

 

 

Hampton Inn Boca Raton  Add van-accessible parking space  $450  Hampton Inn
Deerfield Beach  Add van-accessible parking space. Convert standard hotel room
to accessible. Provide assistive listening kits  $8,450  Hyatt Place Tampa 
Provide ADA compliant elevator call buttons  $3,000  Residence Inn Sabal Park 
Add van-accessible parking space. Convert standard hotel room to accessible. 
$5,450  Residence Inn Tampa North  Add van-accessible parking space. Provide
assistive listening kits. Convert standard hotel room to accessible.  $7,700 
Residence Inn Fort Myers  Add van-accessible parking space with sign  $450 
Courtyard Sarasota  Add van-accessible parking space with sign. Provide
assistive listening kits.  $6,450  Residence Inn Sarasota  Add van-accessible
parking space with sign  $450  Courtyard Athens  Add signage indicating Van
parking. Restripe van access aisle. Add guestroom listening kits. Wrap drain
pipes below accessible lavatory  $4,250  Residence Inn Macon  Provide assistive
listening kits  $1,500  Residence Inn Savannah  Add van-accessible parking space
with sign  $450  Hyatt Place Indianapolis  Add signage indicating Accessible
Parking. Provide assistive listening kits.  $3,900  Hyatt Place Overland Park 
Add signage indicating Accessible Parking. Add accessible route from parking
area to entrance. Construct concrete curb cut. Add listening kit. Provide.
Replace toilet partitions  $9,850  Courtyard Louisville  Add accessible parking
spaces. Add signage indicating Accessible Parking. Add accessible guestroom.
Provide assistive listening kits.  $11,100  Springhill Suites Lexington  Convert
standard hotel room to accessible with roll-in shower. Provide assistive
listening kits.  $20,250  Courtyard Lexington  Add signage indicating Accessible
Parking. Wrap drain pipes below accessible lavatories.  $1,050 

 

 Schedule II-2Loan Agreement

 

 

Residence Inn Lexington  Provide assistive listening kits. Convert standard
hotel room to accessible.  $7,250  Courtyard Bowling Green  Provide assistive
listening kits. Wrap drain pipes below accessible lavatory  $3,525  Hyatt Place
Baton Rouge  Add listening Kits.  $1,500  Hampton Inn Peabody  Construct
concrete curb cut. Modify accessible route.  $5,000  Homewood Suites Peabody 
Add access aisle at parking space.  $200  Hampton Inn Glenn Burnie  Convert
standard bathtub to roll-in shower.  $2,500  Hampton Inn Madison Heights 
Convert standard hotel room to accessible. Provide assisted listening kits. 
$6,500  Hampton Inn Grand Rapids  Convert standard hotel room to accessible.
Provide assisted listening kits. Provide ADA strobe fire alarm device  $6,750 
Springhill Suites Grand Rapids  Provide assisted listening kits.  $2,250  Hyatt
Place Minneapolis  Add van-accessible parking space. Add ADA listening kit 
$9,450  Hampton Inn Maryland Heights  Add van-accessible parking space. Add
signage indicating Accessible Parking. Install ADA compliant portable
communication kits  $1,600  Hampton Inn Kansas City  Provide assistive listening
kits. Elevator two-way communication system  $13,500  Hampton Inn Gastonia 
Provide assistive listening kits  $4,500  Courtyard Asheville  Add listening
kit.  $3,000  Hyatt Place Albuquerque  Add accessible route from parking area to
entrance  $1,500  Hyatt Place Las Vegas  Add accessible parking space. Provide
assistive listening kits  $9,400  Hampton Inn Albany  Add listening kit. 
$4,500  Hampton Inn Dublin   Construct concrete curb cut  $2,000  Hyatt Place
Columbus  Provide assistive listening kits  $2,250  Residence Inn Portland  Add
van-accessible parking space  $450  Hampton Inn State College  Provide assistive
listening kits.  $2,250  Hampton Inn West Columbia  Construct concrete curb cut.
Add listening kit. Add roll in shower. Modify front desk  $10,000  Hampton Inn &
Suites Franklin  Wrap drain pipes below accessible lavatory  $525  Hyatt Place
Franklin  Provide assistive listening kits. Convert standard bathtub to roll-in
shower. Provide ADA compliant elevator buttons  $7,000 

 

 Schedule II-3Loan Agreement

 

 

Residence Inn Chattanooga  Add ADA Guest Room Standard.  $5,000  Courtyard
Knoxville  Add signage indicating Accessible Parking. Add van-accessible parking
space  $1,050  Residence Inn Knoxville  Construct concrete curb cut. Convert
standard hotel room to accessible. Provide assistive listening kits. Wrap drain
pipes  $13,150  Hampton Inn Memphis  Install lower desk section  $1,500  Hyatt
Place Memphis  Add signage indicating Van-Accessible Parking. Add assistive
listening kits. Convert standard hotel room to accessible. Elevator two-way
communication system  $15,650  Homewood Suites Germantown  Install ADA compliant
two-way communication system  $6,000  Hampton Inn Pickwick  Add van-accessible
parking space. Add signage indicating Accessible Parking  $750  Hampton Inn
Addison  Add accessible parking space with sign. Construct concrete curb cut.
Convert standard hotel room to accessible  $7,800  Courtyard Dallas  Add
accessible parking space. Add listening kit. Replace toilet partitions  $3,400 
Fairfield Inn & Suites Dallas  Convert standard hotel room to accessible. Wrap
drain pipes below accessible lavatory  $2,575  Homewood Suites San Antonio  Add
signage indicating Accessible Parking. Add van-accessible parking space. Add
listening kits. Wrap drain pipes below accessible lavatory  $9,900  Hilton
Garden Inn Round Rock  Wrap drain pipes below accessible lavatory  $450 
Springhill Suites Round Rock  Wrap drain pipes below accessible lavatory  $75 
Hyatt Place Glen Allen   Provide assistive listening kits  $6,000  Hampton Inn
Norfolk  Add accessible parking space. Convert standard hotel room to
accessible.  $5,400  Hampton Inn Beckley  Add listening kit. Provide ADA
compliant elevator buttons. Provide ADA strobe fire alarm device  $8,500 
Hampton Inn Morgantown  Add listening kit. Provide ADA strobe fire alarm device 
$4,750 

 

 Schedule II-4Loan Agreement

 

 

SCHEDULE III

ORGANIZATIONAL CHART AND TAX ID NUMBERS

 

(ATTACHED)

 

 Schedule III-1Loan Agreement

 

 

SCHEDULE IV

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

Intellectual Property

 

As noted in Section 3.1.33, applicable exceptions are set forth on Schedule VI.

 

Ground Leases

 

No.   Description of Applicable Exception(s) to
Representations and Warranties in Section 3.1.34 (and
Section Reference)   Ground Leased Property(ies) to Which the
Applicable Exception Applies           1.   3.1.34(a) — last sentence:1 The
lessor under the Ground Lease may cancel, amend or surrender the Ground Lease
without the consent of Lender.   1. Hampton Inn Baltimore
2. Residence Inn Mobile           2.   3.1.34(c) — last sentence:2 There is no
express right of Lender to further assign the Ground Lease without the consent
of the Ground Lessor.   1. Hampton Inn Baltimore
2. Residence Inn Mobile           3.   3.1.34(c) — last sentence: The Ground
Lessor’s consent is required for a further assignment by Lender, but Ground
Lessor will not unreasonably withhold its consent to an assignment provided: (a)
Ground Lessee is not then in default (or Lender has cured any default on behalf
of Ground Lessee), (b) if assignee is a corporation other than a publicly held
corporation, the beneficial owner shall execute and deliver to Ground Lessor an
indemnification agreement as to fraud or milking of the premises satisfactory to
Ground Lessor, and (c) Ground Lessee shall reimburse Ground Lessor for all costs
and expenses in connection with the assignment.   Hampton Inn Norfolk          
4.   3.1.34(c) — last sentence: The Ground Lessor’s consent is required for
further assignments by Lender that do not meet the transfer restrictions set
forth in the applicable Ground Lease.   Courtyard Dallas           5.  
3.1.34(g):3 The Ground Lease has a term that expires December 31, 2029.  
Hampton Inn Baltimore

 

 

1 The Ground Leases may not be canceled, surrendered or amended without the
prior written consent of Lender.

 

2 Each Ground Lease is further assignable by Lender, its successors and assigns
without the consent of the applicable Ground Lessor.

 

3 Each Ground Lease has a term (or a term plus one or more optional renewal
terms, which under all circumstances may be exercised, and will be enforceable,
by the applicable Individual Borrower or Lender) which extends not less than
twenty (20) years beyond the Third Extended Maturity Date.

 

 Schedule IV-1Loan Agreement

 

 

No.   Description of Applicable Exception(s) to
Representations and Warranties in Section 3.1.34 (and
Section Reference)   Ground Leased Property(ies) to Which the
Applicable Exception Applies               3.1.34(h): The New Lease provision is
limited as follows: Ground Lessor is required to enter into a New Lease with
Leasehold Mortgagee only if the Ground Lease is terminated on account of a
default by Ground Lessee, which is not reasonably susceptible of being cured by
Leasehold Mortgagee.   Courtyard Dallas           6.   3.1.34(i):4 The Ground
Lease provides that the Ground Lessee is not entitled to condemnation proceeds;
if insurance proceeds from a casualty are $50,000 or greater, they are to be
payable to a depository and applied to the cost of restoration.   Hampton Inn
Baltimore           7.   3.1.34(i): The Ground Lease provides that Ground Lessor
controls proceeds, shall use them to pay for repairs and then for rent, with the
remainder to be released to lessee.   Courtyard Dallas           8.   3.1.34(i):
Lender is not entitled to hold the proceeds, but Ground. Lessee must rebuild or
discharge the mortgage.   Homewood Suites Phoenix           9.   3.1.34(i): The
Ground Lease is silent with respect to application of insurance and condemnation
proceeds.   Hampton Inn Birmingham

          10. 3.1.34(i): Lender may be added to the “loss payable endorsement”
of any insurance policies required under the Ground Lease on the condition that
any insurance proceeds shall be applied in accordance with the terms of the
Ground Lease. Lender may act as escrow agent to hold the insurance proceeds if
it is an institutional lender.   Hampton Inn Norfolk

 

Operations Agreements

 

Please see Schedule B of Title Insurance Policies for applicable exceptions to
the Representations and Warranties in Section 3.1.35.

 

Property Improvement Plan

 

As noted in Section 3.1.38, applicable exceptions are set forth in Schedule
XVIII and XXI.

 

 

4 Under the terms of each Ground Lease and the applicable Mortgage, taken
together, any related insurance and condemnation proceeds will be applied either
to the repair or restoration of all or part of the applicable Individual
Property, with Lender having the right to hold and disburse the proceeds as the
repair or restoration progresses, or to the payment of the Outstanding Principal
Balance together with any accrued interest thereon.

 

 Schedule IV-2Loan Agreement

 

 

SCHEDULE V

DEFINITION OF SPECIAL PURPOSE BANKRUPTCY REMOTE ENTITY

 

Each Individual Borrower and Individual Operating Lessee hereby represents and
warrants to, and covenants with, Lender that since the date of its formation and
at all times on and after the date hereof and until such time as the Obligations
shall be paid and performed in full:

 

(a)          Such Individual Borrower or Individual Operating Lessee (i) has
been, is, and will be organized solely for the purpose of (A) with respect to
each Individual Borrower, acquiring, developing, owning, holding, financing,
selling, leasing, transferring, exchanging, managing and operating such
Individual Borrower’s Individual Properties (and the Divested Properties, and
any Ground Lease Property acquired after the Closing Date pursuant to the
exercise of a Ground Lease Purchase Option in accordance with Section 4.33(f) of
this Agreement (each such Ground Lease Property, an “Acquired Ground Lease”)),
(B) with respect to each Operating Lessee, leasing, managing and operating the
related Individual Properties pursuant to the Operating Lease and managing or
owning, directly or indirectly, its wholly owned Liquor Subsidiary, where
applicable, whose sole purpose is to hold liquor licenses used in the operation
of the related Individual Properties, (C) with respect to each Individual
Borrower and Individual Operating Lessee, entering into this Agreement with
Lender, (D) with respect to each Individual Borrower, refinancing such
Individual Borrower’s Individual Properties in connection with a permitted
repayment of the Loan, and (E) with respect to each Individual Borrower and
Individual Operating Lessee, transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing, and (ii) has not owned,
does not own, and will not own any asset or property other than (A) with respect
to each Individual Borrower, such Individual Borrower’s Individual Properties,
the Divested Properties, the Acquired Ground Leases and incidental personal
property necessary for the ownership or operation of such Individual Borrower’s
Individual, and (B) with respect to Individual Operating Lessees, such
Individual Operating Lessee’s interests in the Operating Lease and incidental
personal property necessary for the ownership or operation of such interests.
Borrower previously owned, and Operating Lessee previously owned interests in
the Operating Lease with respect to, the Divested Properties, which ownership
shall not be deemed to be a violation of this paragraph (a). Prior to the
Closing Date, all right, title, interest and estate in the Divested Properties
were transferred and conveyed by Borrower and Operating Lessee to third parties
and/or Affiliates of Borrower. Such Individual Borrower or Individual Operating
Lessee is duly formed, validly existing and in good standing in the state in
which it was formed and in any other jurisdictions where it is qualified to do
business.

 

(b)          Neither such Individual Borrower nor Individual Operating Lessee
has engaged (other than with respect to the applicable Individual Borrower or
Individual Operating Lessee, the Divested Properties) and will not (other than
with respect to the Acquired Ground Leases) engage in any business other than
the ownership, management and operation of such Individual Borrower’s Individual
Properties or Individual Operating Lessee’s Operating Lease, such Individual
Operating Lessee’s Liquor Subsidiary and business incidental thereto. Borrower
and Operating Lessee previously engaged in the business of owning, managing and
operating the Divested Properties, which ownership, management and operation
shall not be deemed to be a violation of this paragraph (b). Prior to the
Closing Date, all right, title, interest and estate in the Divested Properties
were transferred and conveyed by Borrower and Operating Lessee to third parties
and/or Affiliates of Borrower.

 

 Schedule V-1Loan Agreement

 

 

(c)          Except for capital contributions and capital distributions
permitted under the terms and conditions of its organizational documents and
properly reflected on its books and records, neither such Individual Borrower
nor Individual Operating Lessee has nor will enter into any contract or
agreement with any Affiliate of such Individual Borrower or Individual Operating
Lessee, 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, other than
with respect to the Divested Properties set forth as items (1) through (8) on
Schedule XIX (the “8-Pack Properties”) which 8-Pack Properties were transferred
through a distribution and conveyed to Affiliates of the respective Individual
Borrowers that owned such 8-Pack Properties without consideration.

 

(d)          Neither such Individual Borrower nor Individual Operating Lessee
has incurred (except for the Prior Loans of such Individual Borrower, which have
been fully repaid, from which the Properties, each Individual Borrower,
Individual Operating Lessee and SPC Party have been fully released, and for
which neither any Individual Borrower, Individual Operating Lessee nor SPC Party
shall have any continuing liability, actual or contingent (other than contingent
liabilities of such Individual Borrower with respect to indemnity obligations
for potential future liabilities under the Prior Loan Documents which pursuant
to the terms thereof survive the payment in full of the Prior Loans, but
provided that such Individual Borrower does not believe that such contingent
liabilities are reasonably expected to have a Material Adverse Effect), upon the
closing of the Loan, and in connection with which no recourse whatsoever against
any portion of the Properties shall be available under any circumstances) and
does not have and will not incur any Indebtedness other than Permitted
Indebtedness, provided that it shall not be a breach of this subsection (d) to
the extent that Borrower has (or had) sufficient cash flow (without giving
effect to any Trigger Period) to pay any Indebtedness constituting trade
payables but such funds are (or were) not made available to Borrower during a
Trigger Period or during the continuance of an Event of Default (or during
similar periods under the documentation for the Prior Loans). No Indebtedness
other than the Debt may be secured (senior, subordinate or pari passu) by any
Individual Property, other than Permitted Encumbrances.

 

(e)          Except with respect to each Individual Borrower as contemplated in
this Agreement and the other Loan Documents with respect to each other
Individual Borrower (or in the documentation for the Prior Loans that have been
repaid in full), neither such Individual Borrower or Individual Operating Lessee
has made nor will make any loans or advances to any third party (including any
Affiliate, any Loan Party or any Guarantor), and has not and shall not acquire
obligations or securities of its Affiliates.

 

 Schedule V-2Loan Agreement

 

 

(f)          Each of such Individual Borrower and Individual Operating Lessee is
and intends to remain solvent and such Individual Borrower and Individual
Operating Lessee has paid and will pay its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its assets; provided
that the foregoing shall not require any direct or indirect member, partner or
shareholder of such Individual Borrower or Individual Operating Lessee to make
any additional capital contributions to such Individual Borrower or Individual
Operating Lessee; and provided further that it shall not be a breach of this
subsection (f) to the extent that (i) Borrower has (or had) sufficient cash flow
(without giving effect to any Trigger Period) to pay such debts and liabilities
but such funds are (or were) not made available to Borrower during a Trigger
Period or during the continuance of an Event of Default (or during similar
periods under the documentation for the Prior Loans), (ii) any Individual
Borrower compensates from its own funds or assets consultants and agents for
services provided to or obligations incurred by any other Individual Borrower or
Liquor Subsidiary or (iii) Borrower does (or did) not pay such debts or
liabilities because it does not have (or did not have) sufficient cash flow.

 

(g)          Each of such Individual Borrower and Individual Operating Lessee
has done or caused to be done, and will do, all things necessary to observe
organizational formalities and preserve its existence, and such Individual
Borrower and such Individual Operating Lessee has not and will not, nor will
such Individual Borrower or Individual Operating Lessee permit its SPC Party to,
(i) terminate or fail to comply with the Special Purpose Provisions (as defined
in its Operating Agreement), or (ii) from and after the date hereof only, unless
(A) Lender has consented and (B) following a Securitization of the Loan, the
applicable Rating Agencies have issued a Rating Agency Confirmation in
connection therewith, amend, modify or otherwise change its partnership
certificate, partnership agreement, articles of incorporation and bylaws,
operating agreement, trust or other organizational documents in any manner which
affects its status as Special Purpose Bankruptcy Remote Entity or might
otherwise cause it not to satisfy the requirements of this Schedule V.

 

(h)          Each of such Individual Borrower and Individual Operating Lessee
has maintained and will maintain all of its books, records, financial statements
and bank accounts separate from those of its Affiliates (other than any other
Individual Borrower or Liquor Subsidiary and except as required by or expressly
permitted under the Loan Documents) and any other Person. Each of such
Individual Borrower’s and Individual Operating Lessee’s assets will not be
listed as assets on the financial statement of any other Person, provided,
however, that such Individual Borrower’s or Individual Operating Lessee’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 such Individual Borrower or
Individual Operating Lessee and such Affiliates and to indicate that such
Individual Borrower’s or Individual Operating Lessee’s assets and credit are not
available to satisfy the debts and other obligations of such Affiliates or any
other Person, and (ii) such assets shall be listed on such Individual Borrower’s
or Individual Operating Lessee’s own separate balance sheet. Each of such
Individual Borrower and Individual Operating Lessee will file its own tax
returns (to the extent such Individual Borrower or Individual Operating Lessee
is required to file any such tax returns) and will not file a consolidated
federal income tax return with any other Person (for the avoidance of doubt, the
inclusion of the results of operations, income, profits, losses or other tax
attributes of a Person that is a disregarded entity for federal or state income
tax purposes in the federal or state income tax returns of the beneficial owner
of such Person shall not constitute the filing of an income tax return by such
Person), except to the extent that such Individual Borrower or Individual
Operating Lessee is (i) required to file consolidated tax returns by law or (ii)
is treated as a “disregarded entity” for tax purposes and is not required to
file tax returns under applicable law. Such Individual Borrower and Individual
Operating Lessee has maintained and shall maintain its books, records,
resolutions and agreements in accordance with this Agreement.

 

 Schedule V-3Loan Agreement

 

 

(i)          Each of such Individual Borrower and Individual Operating Lessee
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 (including
any Affiliate of such Individual Borrower or Individual Operating Lessee or any
Loan Party or any Guarantor (recognizing that such Individual Borrower 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 maintain and utilize
separate stationery, invoices and checks bearing its own name.

 

(j)          Each of such Individual Borrower and Individual Operating Lessee
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 that nothing in this clause (j) shall
be interpreted to require the partners, members or other principals of such
Individual Borrower or Individual Operating Lessee to make any capital
contributions or loans to such entity or arrange for any such capital
contribution or loan by any third party.

 

(k)          None of such Individual Borrower, Individual Operating Lessee, any
Affiliate Controlling such Individual Borrower or Individual Operating Lessee or
any Loan Party, any Guarantor or any other Person holding any direct or
Controlling indirect interest in such Individual Borrower or Individual
Operating Lessee, has sought or intends to seek or effect the liquidation,
dissolution, winding up, consolidation or merger, in whole or in part, of such
Individual Borrower or Individual Operating Lessee, other than in connection
with and following a potential Permitted Direct Assumption, Permitted Indirect
Assumption or repayment of the Debt.

 

(l)          Except with respect to each Individual Borrower as contemplated in
this Agreement and the other Loan Documents with respect to each other
Individual Borrower (or in the documentation for the Prior Loans that have been
paid in full), neither such Individual Borrower nor Individual Operating Lessee
has nor will commingle the funds and other assets of such Individual Borrower or
Individual Operating Lessee with those of any Affiliate (other than any
Individual Borrower or Liquor Subsidiary (or subsidiaries of a Liquor
Subsidiary)) or any Loan Party, any Guarantor or any other Person, and has held
and will hold all of its assets in its own name.

 

(m)          Except with respect to each Individual Borrower as contemplated in
this Agreement and the other Loan Documents with respect to each other
Individual Borrower (or in the documentation for the Prior Loans that have been
repaid in full), each of such Individual Borrower and Individual Operating
Lessee 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, any Loan Party, any Guarantor or any other Person.

 

 Schedule V-4Loan Agreement

 

 

(n)          Except with respect to each Individual Borrower as contemplated in
this Agreement and the other Loan Documents with respect to each other
Individual Borrower (or in the documentation for the Prior Loans that have been
repaid in full), neither such Individual Borrower nor Individual Operating
Lessee has nor will 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)          Each Individual Borrower and Individual Operating Lessee has been
and shall be a Delaware limited liability company or a Delaware limited
partnership, and with respect to those Individual Borrowers and Individual
Operating Lessees organized as limited partnerships (each, an “LP Party”), such
Individual Borrower’s general partner (“SPC Party”) has been and shall be a
Delaware limited liability company or a Delaware corporation, and SPC Party
(i) has caused and will cause such Individual Borrower or Individual Operating
Lessee to be a Special Purpose Bankruptcy Remote Entity; (ii) has complied and
will at all times comply with each of the representations, warranties and
covenants contained on this Schedule V (other than subsections (a), (b) and
(d)) as if such representation, warranty or covenant was made directly by SPC
Party; (iii) has not engaged and will not engage in any business or activity
other than owning an interest in such Individual Borrower, Individual Operating
Lessee or the owner(s) or operating lessee(s) of the Divested Properties;
(iv) has not acquired or owned and will not acquire or own any assets other than
its partnership interest in such Individual Borrower, Individual Operating
Lessee or the owner(s) or operating lessee(s) of the Divested Properties;
(v) has not incurred and will not incur any debt, secured or unsecured, direct
or contingent (including guaranteeing any obligation) other than unsecured trade
payables incurred in the ordinary course of business related to the ownership of
an interest in such Individual Borrower that (A) do not exceed at any one time
$50,000.00, and (B) are paid within ninety (90) days after the date incurred;
provided that it shall not be a breach of this subsection (o) to the extent that
Borrower has (or had) sufficient cash flow (without giving effect to any Trigger
Period) to make distributions to SPC Party for the payment of unsecured trade
payables but such cash flow is (or was) not made available to Borrower for
distribution during a Trigger Period or during the continuance of an Event of
Default (or during similar periods under the documentation for the Prior Loans);
and (vi) has no contingent or actual obligations not related to the ownership
and operation of such Individual Borrower’s Individual Properties, such
Individual Operating Lessee’s Operating Lease and Divested Properties. Upon the
withdrawal or the disassociation of SPC Party from such Individual Borrower,
such Individual Borrower shall immediately appoint a new SPC Party whose
articles or certificate of formation or incorporation are substantially similar
to those of SPC Party and deliver a new non-consolidation opinion to the Rating
Agency or Rating Agencies, as applicable, with respect to the new SPC Party and
its equity owners.

 

(p)          The organizational documents of each Individual Borrower,
Individual Operating Lessee and SPC Party organized as a limited liability
company (each, an “LLC Party”) shall provide that at all times there shall be
(and such LLC Party shall at all times cause there to be) at least two (2) duly
appointed Independent Directors or Independent Managers. In addition, the
organizational documents of each LLC Party shall provide that no Independent
Director or Independent Manager (as applicable) of each LLC Party may be removed
or replaced without Cause and unless LLC Party, as applicable, provides Lender
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).

 

 Schedule V-5Loan Agreement

 

 

(q)          The organizational documents of such LLC Party shall also provide
an express acknowledgment that Lender is an intended third-party beneficiary of
the “special purpose” provisions of such organizational documents.

 

(r)          The organizational documents of each LLC Party shall provide that
such Person shall not take any action which, under the terms of any certificate
of incorporation, by-laws or any voting trust agreement with respect to any
common stock, requires a unanimous vote of (A) the sole member of such LLC
Party, as applicable (each, a “Sole Member”), (B) the board of directors of such
LLC Party, as applicable, or (C) the committee of managers of such LLC Party, as
applicable, designated to manage the business affairs of such LLC Party, as
applicable (each, a “Committee”), unless at the time of such action there shall
be at least two (2) duly appointed Independent Directors or Independent Managers
and all such Independent Directors or Independent Managers (as applicable) have
participated in such vote. The organizational documents of each LLC Party shall
provide that actions requiring such unanimous written consent, including the
Independent Directors or Independent Managers (as applicable), shall include
each of the following with respect to SPC Party, each Individual Operating
Lessee and each Individual Borrower (each, a “Material Action”): (i) filing or
consenting to the filing of any petition, either voluntary or involuntary, to
take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, (ii) seeking or consenting to the appointment of a
receiver, liquidator or any similar official of such Individual Borrower or
Operating Lessee or a substantial part of its business, (iii)  making an
assignment for the benefit of creditors, (iv) admitting in writing its inability
to pay debts generally as they become due, or (v) taking any action in
furtherance of the foregoing. In addition, the organizational documents of each
Individual Borrower, Individual Operating Lessee and SPC Party shall provide
that, when voting with respect to any matters set forth in the immediately
preceding sentence of this clause (r), the Independent Directors or Independent
Managers (as applicable) shall consider only the interests of the applicable
Individual Borrower, Individual Operating Lessee or SPC Party including its
creditors. No Individual Borrower, Individual Operating Lessee or SPC Party
shall take any of the foregoing actions without the unanimous written consent of
its board of directors, its member(s) or the Committee, as applicable, including
(or together with) all Independent Directors or Independent Managers, as
applicable. 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 applicable Individual Borrower or Individual Operating Lessee
(including duties to the applicable Individual Borrower’s or Individual
Operating Lessee’s equity holders solely to the extent of their respective
economic interests in such Individual Borrower or Individual Operating Lessee
and to such Individual Borrower’s or Individual Operating Lessee’s creditors as
set forth in the immediately preceding sentence), such Independent Directors or
Independent Managers (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) SPC Party or such Individual
Borrower’s or Individual Operating Lessee’s other equity holders, (ii) other
Affiliates of such Individual Borrower or Individual Operating Lessee, or (iii)
any group of Affiliates of which such Individual Borrower or Individual
Operating Lessee is a part); provided, however, the foregoing shall not
eliminate the implied contractual covenant of good faith and fair dealing.

 

 Schedule V-6Loan Agreement

 

 

(s)          Notwithstanding anything herein to the contrary, each LLC Party may
be a Delaware single-member limited liability company provided that:

 

(i)          the organizational documents of each LLC Party shall provide that,
as long as any portion of the Obligations remains outstanding, upon the
occurrence of any event that causes the Sole Member of such LLC Party, as
applicable, to cease to be a member of such LLC Party, as applicable, (other
than (i) upon an assignment by Sole Member of all of its limited liability
company interest in such LLC Party, as applicable, and the admission of the
transferee, if permitted pursuant to the organizational documents of such LLC
Party, as applicable, and the Loan Documents, or (ii) the resignation of Sole
Member and the admission of an additional member of such LLC Party, as
applicable, if permitted pursuant to the organizational documents of such LLC
Party, as applicable, and the Loan Documents), each of the persons acting as an
Independent Director or Independent Manager (as applicable) of such LLC Party,
as applicable, shall, without any action of any Person and simultaneously with
Sole Member ceasing to be a member of such LLC Party, as applicable,
automatically be admitted as members of such LLC Party, as applicable (in each
case, individually, a “Special Member” and collectively, the “Special Members”)
and shall preserve and continue the existence of such LLC Party, as applicable,
without dissolution. The organizational documents of such LLC Party, as
applicable, shall further provide that for so long as any portion of the
Obligations is outstanding, no Special Member may resign or transfer its rights
as Special Member unless (i) a successor Special Member has been admitted to
such LLC Party, as applicable, as a Special Member, and (ii) such successor
Special Member has also accepted its appointment as an Independent Director or
Independent Manager (as applicable);

 

(ii)         the organizational documents of such LLC Party, as applicable,
shall provide that, as long as any portion of the Obligations remains
outstanding, except as expressly permitted pursuant to the terms of this
Agreement, (i) Sole Member may not resign, and (ii) no additional member shall
be admitted to such LLC Party, as applicable; and

 

 Schedule V-7Loan Agreement

 

 

(iii)        the organizational documents of each LLC Party, as applicable,
shall provide that, as long as any portion of the Obligations remains
outstanding: (i) such LLC Party, as applicable, 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 of such
LLC Party, as applicable, or the occurrence of any other event which terminates
the continued membership of the last remaining member of such LLC Party, as
applicable, in such LLC Party, as applicable, unless the business of such LLC
Party, as applicable, is continued in a manner permitted by its operating
agreement or the Delaware Limited Liability Company Act (the “Act”), or (B) the
entry of a decree of judicial dissolution under Section 18-802 of the Act;
(ii) upon the occurrence of any event that causes the last remaining member of
such LLC Party, as applicable, to cease to be a member of such LLC Party, as
applicable, or that causes Sole Member to cease to be a member of such LLC
Party, as applicable (other than (A) upon an assignment by Sole Member of all of
its limited liability company interest in such LLC Party, as applicable, and the
admission of the transferee, if permitted pursuant to the organizational
documents of such LLC Party, as applicable, and the Loan Documents, or (B) the
resignation of Sole Member and the admission of an additional member of such LLC
Party, as applicable, if permitted pursuant to the organizational documents of
such LLC Party, as applicable, and the Loan Documents), to the fullest extent
permitted by law, the personal representative of such last remaining member
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 such LLC
Party, as applicable, agree in writing (I) to continue the existence of such LLC
Party, as applicable, and (II) to the admission of the personal representative
or its nominee or designee, as the case may be, as a substitute member of such
LLC Party, as applicable, effective as of the occurrence of the event that
terminated the continued membership of such member in such LLC Party, as
applicable; (iii) the bankruptcy of Sole Member or a Special Member shall not
cause such Sole Member or Special Member, respectively, to cease to be a member
of such LLC Party, as applicable, and upon the occurrence of such an event, the
business of such LLC Party, as applicable, shall continue without dissolution;
(iv) in the event of the dissolution of such LLC Party, as applicable, such LLC
Party, as applicable, shall conduct only such activities as are necessary to
wind up its affairs (including the sale of the assets of such LLC Party, as
applicable, in an orderly manner), and the assets of such LLC Party, as
applicable, shall be applied in the manner, and in the order of priority, set
forth in Section 18-804 of the Act; and (v) to the fullest extent permitted by
law, each of Sole Member and the Special Members shall irrevocably waive any
right or power that they might have to cause such LLC Party, as applicable, or
any of its assets to be partitioned, to cause the appointment of a receiver for
all or any portion of the assets of such LLC Party, as applicable, to compel any
sale of all or any portion of the assets of such LLC Party, as applicable,
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 such LLC Party, as applicable.

 

(t)          Each of such Individual Borrower and Individual Operating Lessee
has conducted and shall conduct its business so that the assumptions made with
respect to such Individual Borrower and Individual Operating Lessee in the
Insolvency Opinion shall be true and correct. In connection with the foregoing,
each Individual Borrower and Individual Operating Lessee hereby covenants and
agrees that it will comply with or cause the compliance with, (i) all of the
facts and assumptions (whether regarding such Individual Borrower and Individual
Operating Lessee or any other Person) set forth in the Insolvency Opinion,
(ii) all of the representations, warranties and covenants in this Schedule V,
and (iii) all of the Special Purpose Provisions of the organizational documents
of such Individual Borrower or Individual Operating Lessee.

 

(u)          Except with respect to each Individual Borrower as contemplated in
this Agreement and the other Loan Documents with respect to each other
Individual Borrower (or in the documentation for the Prior Loans that have been
repaid in full), neither such Individual Borrower nor Individual Operating
Lessee has permitted nor will permit any Affiliate (other than an Affiliate
Manager engaged in accordance with Section 4.14) or any Loan Party, any
Guarantor or any other Person holding any direct or indirect interest in such
Individual Borrower or Individual Operating Lessee, independent access to its
bank accounts.

 

 Schedule V-8Loan Agreement

 

 

(v)         Except with respect to each Individual Borrower as contemplated in
this Agreement and the other Loan Documents with respect to each other
Individual Borrower (or in the documentation for the Prior Loans that have been
repaid in full), each of such Individual Borrower and Individual Operating
Lessee has paid and shall pay its own liabilities and expenses, including the
salaries of its own employees (if any) from its own funds; provided that the
foregoing shall not require any direct or indirect member, partner or
shareholder of each Individual Borrower or Individual Operating Lessee to make
any additional capital contributions to such Individual Borrower or Individual
Operating Lessee; provided further that it shall not be a breach of this
subsection (v) to the extent that (i) Borrower or Operating Lessee has (or had)
sufficient cash flow (without giving effect to any Trigger Period) to pay its
own liabilities and expenses but such cash flow is (or was) not made available
to Borrower for distribution during a Trigger Period or during the continuance
of an Event of Default (or during similar periods under the documentation for
the Prior Loans), (ii) any Individual Borrower or Operating Lessee makes a
payment from its funds of the liabilities and expenses of any other Individual
Borrower, Operating Lessee or Liquor Subsidiary or (iii) Borrower or Operating
Lessee does (or did) not pay such liabilities or expenses because it does not
have (or did not have) sufficient cash flow.

 

(w)          Except as contemplated in this Agreement and the other Loan
Documents (or in the documentation for the Prior Loans), each of such Individual
Borrower and Individual Operating Lessee has compensated and shall compensate
each of its consultants and agents from its own funds for services provided to
it and pay from its own assets all obligations of any kind incurred; provided
that it shall not be a breach of this subsection (w) to the extent that (i)
Borrower or Operating Lessee has (or had) sufficient cash flow (without giving
effect to any Trigger Period) to pay such amounts but such cash flow is (or was)
not made available to Borrower for distribution during a Trigger Period or
during the continuance of an Event of Default (or during similar periods under
the documentation for the Prior Loans), (ii) any Individual Borrower or
Individual Operating Lessee compensates from its own funds or assets consultants
and agents for services provided to or obligations incurred by any other
Individual Borrower, Individual Operating Lessee or Liquor Subsidiary or (iii)
Borrower or Operating Lessee does (or did) not compensate such consultants or
agents or pay such obligations because it does not have (or did not have)
sufficient cash flow.

 

(x)          Neither such Individual Borrower nor Individual Operating Lessee
has, nor without the unanimous consent of all of its directors and members
(including all Independent Directors), as applicable, will (i) file a
bankruptcy, insolvency or reorganization petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws relating to
the relief from debts or the protection of debtors generally, (ii) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such entity or for all or
any portion of such Individual Borrower’s or Operating Lessee’s properties,
(iii) make any assignment for the benefit of such Individual Borrower’s or
Individual Operating Lessee’s creditors, or (iv) take any action in furtherance
of the foregoing.

 

(y)          Intentionally omitted.

 

 Schedule V-9Loan Agreement

 

 

(z)          Each of such Individual Borrower and Individual Operating Lessee
has allocated and will allocate fairly and reasonably any overhead expenses that
are shared with any Affiliate, including shared office space.

 

(aa)         Except in connection with the Loan, neither such Individual
Borrower nor Individual Operating Lessee has pledged (except in connection with
the Prior Loans of such Individual Borrower, which have been fully repaid, from
which the Properties, each Individual Borrower, Individual Operating Lessee and
SPC Party have been fully released, and for which neither any Individual
Borrower, Individual Operating Lessee nor SPC Party shall have any continuing
liability, actual or contingent (other than contingent liabilities of such
Individual Borrower with respect to indemnity obligations for potential future
liabilities under the Prior Loan Documents which pursuant to the terms thereof
survive the payment in full of the Prior Loans, but provided that such
Individual Borrower does not believe that such contingent liabilities are
reasonably expected to have a Material Adverse Effect), upon the closing of the
Loan, and in connection with which no recourse whatsoever against any portion of
the Properties shall be available under any circumstances) and will not pledge
its assets for the benefit of any other Person.

 

(bb)         Each of such Individual Borrower and Individual Operating Lessee
has and will have no obligation to indemnify its officers, directors, members or
partners, as the case may be, or has such an obligation that is fully
subordinated to the Debt and will not constitute a claim against it if cash flow
in excess of the amount required to pay the Debt is insufficient to pay such
obligation.

 

(cc)         if such Individual Borrower or Individual Operating Lessee is (i) a
limited liability company, has articles of organization, a certificate of
formation and/or an operating agreement, as applicable, (ii) a limited
partnership, has a limited partnership agreement, or (iii) a corporation, has a
certificate of incorporation or articles that, in each case, provide that such
entity will not without the consent of Lender: (A) dissolve, merge, liquidate,
consolidate; (B) sell, transfer, dispose, or encumber (in each case, in
accordance with the other provisions of the Loan Documents) all or substantially
all of its assets or acquire all or substantially all of the assets of any
Person; or (C) engage in any other business activity, or amend its
organizational documents with respect to the matters set forth on this Schedule
V (in each case, except in connection with taking any of the actions described
in the foregoing clause (B) to the extent such actions are taken in accordance
with the other provisions of the Loan Documents).

 

(dd)         The Independent Directors or Independent Manager (as applicable)
will consider only the interests of such Individual Borrower or Individual
Operating Lessee, including its creditors, in connection with any Material
Action. Without limiting the generality of the foregoing to the greatest extent
permitted by law, except for duties to such Individual Borrower or Individual
Operating Lessee (including duties to such Individual Borrower’s or Individual
Operating Lessee’s equity holders solely to the extent of their respective
economic interests in such Individual Borrower or Individual Operating Lessee
and to such Individual Borrower’s or Individual Operating Lessee’s creditors as
set forth in the immediately preceding sentence), such Independent Directors
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 SPC Party, such Individual Operating Lessee’s or such
Individual Borrower’s other equity holders, (ii) other Affiliates of such
Individual Borrower or Individual Operating Lessee, or (iii) any group of
Affiliates of which such Individual Borrower or Individual Operating Lessee is a
part); provided, however, the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing.

 

 Schedule V-10Loan Agreement

 

 

(ee)         Except the Guaranty, the guarantees of Borrower’s obligations under
certain of the Franchise Agreements specified on Schedule XII, the guarantees of
Borrower’s obligations under certain of the Ground Leases specified on Schedule
VII and the Obligations which are joint and several amongst the Individual
Borrowers, each Individual Borrower and Individual Operating Lessee has not,
does not, and will not have any of its obligations guaranteed by an any
Affiliate (other than in connection with the Prior Loans, which guarantees have
been either released or discharged, or will be discharged as result of the
closing of the Loan).

 

(ff)         Any amendment or restatement of any organizational document of each
Individual Borrower that is a limited liability company, each Individual
Operating Lessee that is a limited liability company and each general partner of
each Individual Borrower or Individual Operating Lessee that is a limited
partnership has been accomplished in accordance with, and was permitted by, the
relevant provisions of said document prior to its amendment or restatement from
time to time.

 

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 systematic and persistent or willful
disregard of such Independent Director’s or Independent Manager’s, as
applicable, duties, (ii) such Independent Director or Independent Manager, as
applicable, has been indicted or convicted for any crime or crimes of moral
turpitude or dishonesty or for any violation of any Legal Requirements, (iii)
such Independent Director or Independent Manager is unable to perform his or her
duties as Independent Director or Independent Manager due to death, disability
or incapacity, or (iv) such Independent Director or Independent Manager no
longer meets the definition of “Independent Director” or “Independent Manager”.

 

“Independent Director” or “Independent Manager” shall mean a natural person
selected by the applicable Individual Borrower (a) with prior experience as an
independent director, independent manager or independent member, (b) with at
least three (3) years of employment experience, (c) who is provided by a
Nationally Recognized Service Company, (d) 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 Borrower’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 Borrower ceasing to be a
member of Borrower) and shall not have been at any time during the preceding
five (5) years, any of the following:

 

 Schedule V-11Loan Agreement

 

 

(i)a stockholder, director, manager (other than as an Independent Director or an
Individual Borrower or an Affiliate of an Individual Borrower that does not own
a direct or indirect interest in an Individual Borrower and that in required by
a creditor to be a “special purpose entity”), officer, employee, partner,
attorney or counsel of such Individual Borrower, any Affiliate of such
Individual Borrower or any direct or indirect parent of such Individual
Borrower;

 

(ii)a customer, supplier (other than 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 business) or other Person who derives any of its purchases or revenues
from its activities with such Individual Borrower or any Affiliate of such
Individual Borrower;

 

(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 such Individual Borrower
that does not own a direct or indirect ownership interest in such Individual
Borrower shall be qualified to serve as an Independent Director or Independent
Manager of such Individual Borrower, provided that the fees that such individual
earns from serving as Independent Director or Independent Manager of affiliates
of such Individual Borrower 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 Borrower 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, Stewart Management Company, 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
Lender, in each case that is not an Affiliate of such Individual Borrower and
that provides professional independent directors and other corporate services in
the ordinary course of its business.

 

 Schedule V-12Loan Agreement

 

 

SCHEDULE VI

INTELLECTUAL PROPERTY/WEBSITES

 

Asset   Domain   Domain
expiration Embassy Orlando   embassy-idrive.com   Jul-18 Embassy Orlando  
embassyidrive.com   Jul-18 Embassy Orlando   embassy-idrive.net   Jul-18 Embassy
Orlando   embassy-idrive.org   Jul-18 Embassy Orlando   embassy-idrive.info  
Jul-18 Embassy Orlando   orlandoembassy.com   Jul-18 Embassy Orlando  
orlandoembassy.net   Jul-18 Embassy Orlando   orlandoembassy.co   Jul-18 Embassy
Orlando   orlandoembassy.info   Jul-18 Embassy Orlando   embassyidrive.net  
Jul-18 Embassy Orlando   embassyidrive.co   Jul-18 Embassy Orlando  
embassyidrive.info   Jul-18 Embassy Orlando   orlando-embassy.com   Jul-18
Embassy Orlando   orlando-embassy.net   Jul-18 Embassy Orlando  
orlando-embassy.org   Jul-18 Embassy Orlando   orlando-embassy.info   Jul-18
Embassy Orlando   hiltonorlandohotels.com   Jul-17 Embassy Orlando  
hiltonorlandohotels.net   Jul-17 Embassy Orlando   hiltonorlandohotels.info  
Jul-17 Embassy Orlando   hiltonorlandohotels.org   Jul-17 Embassy Orlando  
hiltonorlandohotels.com   Jul-17 GA Tech   GATechHotel.com   Aug-17

 

 Schedule VI-1Loan Agreement

 

 

SCHEDULE VIII

 

GROUND LEASES

 

Property   Description of Ground Lease       Hampton Inn, Birmingham, AL   That
Ground Lease Agreement by and between Hampton Inns, Inc. and Fitts J.
Smitherman, Rosemary Smitherman, Byrd Companies, Inc., Ormond Sommerville and
Martha Sommerville dated September 16, 1986.           Recorded by Memorandum of
Lease between Hampton Inns., Inc. and Fitts J. Smitherman, Rosemary Smitherman,
Byrd Companies, Inc., Ormond Sommerville and Martha Sommerville dated as of
April 2, 1987, and recorded in Real Volume 3157, Page 143 in the land records of
Jefferson County, Alabama.           Amended on December 17, 1987 by Hampton
Inns, Inc. and Fitts J. Smitherman, Rosemary Smitherman, Byrd Companies, Inc.,
Ormond Sommerville and Martha Sommerville.           Assigned on December 21,
1987 from Hampton Inns, Inc. to Hampton/GHI Associates No.1, a California
general partnership.           Amended on July 30, 1997 by Hampton/GHI
Associates No.1, a California partnership and Ann S. Sanders, Ormond Sommerville
and the Byrd Companies, Inc.           Assigned on August 1, 1997 from
Hampton/GHI Associates No.1, a California general partnership, to Equity Inns
Partnership, L.P. Assigned November 6, 2000 from Equity Inns Partnership, L.P.
to EQI Financing Partnership III, L.P. (which entity merged with and into W2007
Equity Inns Realty, LLC) and guaranteed by Equity Inns, Inc. (which entity
merged with and into W2007 Grace Acquisition I, Inc.).           Consent of
Landlord by S&S Associates LLC and New Owners, Vestavia LLC as Tenants in
Common.           Assignment and Assumption of Ground Lease, dated February 27,
2015, by W2007 Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I
BHGL Owner, LLC.           Unconditional & Irrevocable Guaranty, by American
Realty Capital Hospitality Trust, Inc. in favor of S&S Associates LLC and New
Owners, Vestavia LLC as Tenants in Common.

 

 Schedule VIII-1Loan Agreement

 

 

Property   Description of Ground Lease       Homewood Suites, Phoenix, AZ  
Lease, dated as of January 20, 1987, a memorandum of which was recorded on
February 6, 1987 as Document No. 87 076480 in the real estate records of
Maricopa County, State of Arizona (the “Official Records”);           as
assigned by the instrument recorded as Recording No. 95-0093449 in the Official
Records, to Embassy Suites, Inc., a Delaware corporation (Embassy Suites, Inc.
changed its name to Harrah’s Operating Company, Inc. by Certificate of Amendment
of Restated Certificate of Incorporation dated June 30, 1995);           as
assigned by the instrument recorded October 24, 1996 as Recording No. 96-0754084
in the Official Records, to Promus Hotels, Inc., a Delaware corporation;        
  as assigned by the instrument recorded November 6, 1996 as Recording No.
96-0788013 in the Official Records, to Equity Inns Partnership, L.P., a
Tennessee limited partnership;           as assigned by the instrument recorded
as Recording No. 99-0618156 in the Official Records, to EQI Financing
Partnership II, L.P., a Tennessee limited partnership;           as amended by
the Ground Lease Estoppel and Agreement, dated October 25, 2007, between
Camelback Properties Trust Number One, as landlord, and EQI Financing
Partnership II, LP, a Tennessee limited partnership, as tenant.          
Assignment and Assumption of Ground Lease, dated February 27, 2015, by W2007
Equity Inns Realty, LLC in favor of ARC Hospitality Portfolio I PXGL Owner, LLC.
      Hampton Inn, Norfolk, VA   Lease Agreement, dated June 27, 1989 (the
“Ground Lease”), by and among S.L. Nusbaum Realty Co., as Landlord, and V.A.
Zodda and John R. Lawson, collectively, as Tenant, a memorandum of which, dated
November 27, 1989, was recorded December 11, 1989, in the Clerk’s Office,
Circuit Court, City of Norfolk, Virginia, in Deed Book 2227, page 21, as amended
by those certain letter agreements, dated June 26, 1989, August 22, 1989 and
July 5, 1990, and as supplemented by that certain Memorandum of and Supplement
to Assignment of Lease and Assumption Agreement, dated March 4, 1997, recorded
in Deed Book 2877, page 121, in the aforesaid records.           Tenant’s
interests were assigned pursuant to that certain Assignment and Assumption
Agreement, dated November 29, 1989, by and between V.A. Zodda and John R.
Lawson, as Assignor, and Z&L, Ltd., as Assignee.

 

 Schedule VIII-2Loan Agreement

 

 

Property   Description of Ground Lease           Tenant’s interests were
assigned pursuant to that certain Assignment of Lease, dated March 5, 1997, by
and among Z&L, Ltd., as Assignor, and Equity Inns Partnership, L.P., as
Assignee, recorded March 6, 1997 in Deed Book 2877, page 126, in the aforesaid
records.           Tenant’s interest were further assigned pursuant to that
certain Assignment of Lease, dated November 6, 2000, by and between Equity Inns
Partnership, L.P., as Assignor, to EQI Financing Partnership IV, L.P. (“EQI”),
as Assignee, recorded November 16, 2000 in Instrument No. 000027119, in the
aforesaid records.           EQI merged into W2007 Equity Inns Realty, LLC, the
current Tenant under the Lease as of the date of this Agreement.          
Ground Lease Consent to Assignment and Sublease and Estoppel, dated as of
January 21, 2015, between Glenwood Square Shopping Center Associates, L.L.C. and
ARC Hospitality Portfolio I NFGL Owner, LLC.           Assignment and Assumption
of Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LLC in
favor of ARC Hospitality Portfolio I NFGL Owner, LLC.           Guaranty of
Lease, made as of the [27th day of February 2015], by American Realty Capital
Hospitality Operating Partnership, L.P., in favor of Glenwood Square Shopping
Center Associates, L.L.C.       Courtyard, Dallas, TX   Ground Lease, dated as
of February 21, 1989, by and among Industrial Properties Corporation (“IPC”), as
Landlord, and Marriott Corporation, Inc. (“Marriott”), as Tenant.          
Assignment of Lease and Assumption of Obligations, dated as of
February 21, 1989, by and between Marriott, as Assignor, and Marriott
International, Inc. (“MII”), as Assignee and recorded September 23, 1994 in
Volume 94184, Page 04158, in the Real Property Records of Dallas County, Texas.
          First Amendment to Ground Lease, dated as of February 2, 1995 by and
between IPC, as Landlord and MIL as Tenant recorded on February 6, 1995 in
Volume 95024, Page 00984, in the aforesaid records.           Letter Agreement
dated May 25, 1995 from IPC to Brent Andrus, Andrus Enterprises, Inc. and BA
Dallas Market Center I Limited Partnership (“BA Dallas”).

 

 Schedule VIII-3Loan Agreement

 

 

Property   Description of Ground Lease           Second Amendment to Ground
Lease, dated as of May 26, 1995 by and between IPC, as Landlord and BA Dallas,
as Tenant, recorded June 2, 1995 in Volume 95107, Page 01584, in the aforesaid
records.           Assignment and Assumption of Lease, dated as of May 26, 1995,
by and between MII, as Assignor, BA Dallas, as Assignee, and IPC, as Landlord,
recorded June 02, 1995 in Volume 95107, Page 01571, in the aforesaid records.  
        Certificate of Commencement dated June 1, 1995 between BA Dallas and IPC
recorded June 7, 1997 in Volume 95110, Page 00078, in the aforesaid records.    
      Section 1 of that certain Landlord Estoppel Certificate dated
August 28, 2007 (the “2007 Estoppel Certificate”), subject to satisfaction by
Tenant of the conditions specified therein. Only the terms and conditions of
such Section 1 (and not Section 2) of the 2007 Estoppel Certificate modified the
terms of the Lease.           Guaranty dated as of August   , 2007 by Equity
Inns, Inc., in favor of Landlord.           Assignment and Assumption of Lease
Agreement and Special Warranty Deed, dated as of August 29, 2007, between BA
Dallas and EQI Market C Dallas Partnership, L.P. (“EQI”) recorded August 31,
2007 in the Official Public Records of Dallas County, Texas as Instrument No.
20070316021.           Consent to Assignment, Sublease, Management Agreement,
Sub-Management Agreement, Concession Agreement and Alcohol Services Agreement
and Amendment to Ground Lease, dated as of [February 27, 2015] by Istar Dallas
GL LLP, W2007 Equity Inns Realty, LP, ARC Hospitality Portfolio I DLGL Owner,
LP, American Realty Capital Hospitality Grace Portfolio, LLC, Crestline Hotels &
Resorts, LLC and ARC Hospitality Portfolio I TX Beverage Company, LLC.          
Guaranty of Lease dated February 27, 2015 by American Realty Capital Hospitality
Trust, Inc. to Istar Dallas GL LLP.           Assignment and Assumption of
Ground Lease, dated February 27, 2015, by W2007 Equity Inns Realty, LP in favor
of ARC Hospitality Portfolio I DLGL Owner, LP.       Residence Inn, Mobile, AL  
Lease and Agreement, dated as of August 1, 1963 (the “Original Lease”), by and
among Charles E. Weisenburgh, Anne Weisenburgh, Phillip A. Weisenburgh, and
Louise V. Weisenburgh, collectively, as Landlord, and Carr Company, Inc., as
Tenant, recorded on September 4, 1963 in Real Property 447, Page 927, in the
real estate records of Mobile County, State of Alabama.

 

 Schedule VIII-4Loan Agreement

 

 

Property   Description of Ground Lease           Tenant’s interests were
assigned pursuant to that certain Warranty Deed of Exchange, dated as of
November 9, 1994, by and between Delaney Investments, Inc. (successor by merger
to Carr Company, Inc.), as Grantor, and McKibbon Brothers, Inc., as Grantee,
recorded on November 16, 1994 in Deed Book 4212, Page 1599, in the aforesaid
records, as further affected by that certain Estoppel and Non Disturbance
Agreement, dated as of October 2, 1997, by and between Weisenburgh Co., Inc. (as
successor to Charles E. Weisenburgh, Anne Weisenburgh, Phillip A. Weisenburgh,
and Louise V. Weisenburgh), First Union National Bank and McKibbon Brothers,
Inc., recorded on October 6, 1997, in Real Property 4511, Page 213, in the
aforesaid records.           Tenant’s interests were further assigned pursuant
to that certain Assignment and Assumption of Ground Lease and Sublease, dated as
of April 24, 2006, by and between McKibbon Brothers, Inc., as Assignor, and
Equity Inns Partnership, L.P., as Assignee, recorded on June 19, 2006, in Book
5989, Page 607, in the aforesaid records.           Ground Lease Estoppel and
Agreement, dated December 14, 2007 (the “Amendment” together with the Original
Lease, the “Ground Lease”), between Weisenburgh Co., Inc., as Landlord, and
W2007 Equity Inns Realty, LLC, as Tenant, recorded on December 14, 2007 in Real
Property Book 6344, Page 880, in the aforesaid records.           Assignment and
Assumption of Ground Lease, dated February 27, 2015, by W2007 Equity Inns
Realty, LLC in favor of ARC Hospitality Portfolio I MGBL 950 Owner, LLC.      
Hampton Inn, Baltimore, MD   Lease Agreement dated as of March 9, 1998 between
Governor Plaza Associates, a Pennsylvania partnership in which Federal Realty
Investment Trust is the general partner, and Krisch American Inns, Inc.
(“Krisch”).           Addendum to Lease Agreement dated July 19, 1988.          
Second Addendum to Lease Agreement dated December 21, 1989 between Landlord and
Krisch.           Lease Assignment dated August 12, 1992 among Krisch and First
Hotel Investment Corporation (“First Hotel”) (unrecorded).           Lease
Assignment dated May 12, 1993 among Krisch, First Hotel and Renthotel, Maryland,
LLC, a Maryland limited liability company (“Renthotel”), recorded in Land
Records of Anne Arundel County, MD in Liber 6045, Folio 882.

 

 Schedule VIII-5Loan Agreement

 

 

Property   Description of Ground Lease           Letter Agreement dated December
14, 1993.           Lease Assignment, Assumption and Modification Agreement
dated March 11, 1996 (“1996 Modification”) between Renhotel Maryland, L.L.C., as
assignor, Equity Inns Partnership, L.P., as assignee, and City Hotels, S.A. and
City Hotels USA, Inc. (together, as guarantors), recorded in in Land Records of
Anne Arundel County, MD in Liber 7355, Folio 410.           Assignment of Lease
dated November 6, 2000 between Equity Inns Partnership, L.P., as assignor, and
EQI Financing Partnership IV, L.P., as assignee, recorded November 22, 2000 in
in Land Records of Anne Arundel County, MD in Liber 10053, Folio 365.          
Letter Agreement dated September 23, 2005.           Ground Lease Estoppel and
Agreement dated October 25, 2007, between Governor Plaza Associate and EQI
Financing Partnership IV, L.P.           Lease Assignment and Assumption
Agreement, dated January 29, 2015, by Governor Plaza Associates, Federal Realty
Investment Trust, W2007 Equity Inns Realty, LLC, ARC Hospitality Portfolio I
GBGL Owner, LLC, ARC Hospitality Portfolio I HIL TRS, LLC, and American Realty
Capital Hospitality Trust, Inc.           Assignment and Assumption of Ground
Lease, dated February 24, 2015, by W2007 Equity Inns Realty, LLC in favor of ARC
Hospitality Portfolio I GBGL Owner, LLC.           Guaranty, dated as of
February 27, 2015, by American Realty Capital Hospitality Trust, Inc. in favor
of Governor Plaza Associates and Federal Realty Investment Trust.

 

 Schedule VIII-6Loan Agreement

 

 

SCHEDULE IX

DESCRIPTION OF PRIOR LOANS

 

1.          That certain loan in the aggregate original principal amount of
$865,000,000 made by German American Capital Corporation, a Maryland
corporation, to W2007 Equity Inns Realty, LLC and W2007 Equity Inns Realty,
L.P., dated as of April 11, 2014, as amended by that certain first amendment to
that certain loan, dated as of June 18, 2014 (the “Loan”).

 

2.          That certain mezzanine loan in the aggregate original principal
amount of $111,000,000 made by German American Capital Corporation, a Maryland
corporation, to WNT MEZZ I, LLC, dated as of April 11, 2014, as amended by that
certain first amendment to that certain loan, dated as of June 18, 2014 (the
“Mezzanine Loan”).

 

3.          That certain assumption and assignment of the Loan, from W2007
Equity Inns Realty, LLC and W2007 Equity Inns Realty, L.P. to ARC Hospitality
Portfolio I Owner, LLC, ARC Hospitality Portfolio I BHGL Owner, LLC, ARC
Hospitality Portfolio I PXGL Owner, LLC, ARC Hospitality Portfolio I GBGL Owner,
LLC, ARC Hospitality Portfolio I NFGL Owner, LLC, ARC Hospitality Portfolio I
MBGL 1000 Owner, LLC, ARC Hospitality Portfolio I MBGL 950 Owner, LLC, ARC
Hospitality Portfolio I NTC Owner, LP, ARC Hospitality Portfolio I DLGL Owner,
LP, and ARC Hospitality Portfolio I SAGL Owner, LP, dated as of February 27,
2015.

 

4.          That certain assumption and assignment of the Mezzanine Loan from
WNT MEZZ I, LLC to ARC Hospitality Portfolio I Mezz, LP, dated as of February
27, 2015.

 

 Schedule IX-1Loan Agreement

 

 

SCHEDULE X

LIST OF SCHEDULED MANAGERS

 

1.Aimbridge

2.Concord Hospitality

3.Crescent

4.First Hospitality

5.Hersha

6.Highgate

7.Hilton

8.Intercontinental Hotel Group

9.Interstate

10.McKibbon Hotels

11.Noble

12.Pyramid

13.Pillar Hotels & Resorts

14.Sage

15.Westmont

16.White Lodging

17.Island Hospitality

18.Inn Ventures

19.Huntington

20.Lingate

21.Musselman

22.Crestline

23.Marriott

24.Hyatt

25.Northwood Hospitality

26.HEI

27.LBA

28.Dimension Development

 

 Schedule X-1Loan Agreement

 

 

SCHEDULE XI

RENT ROLL

 

HIT Rent Roll

 

Asset   PMC   Lease   In or
Noticed
of
Default   Annual Amount Residence Inn El Segundo   Crestline   ATM   NO   $400
Embassy Suites Orlando   Crestline   Avis   NO   $61,000 Courtyard Louisville  
Crestline   Riverside Parking   NO   $327,000 Fairfield Vinings   Crestline  
Cell Tower       Immaterial Hampton Inn Baltimore   Hilton   Cell Tower      
Immaterial Hyatt Place Las Vegas   Crestline   Cell Tower       Immaterial Hyatt
Place Tampa   Crestline   Cell Tower       Immaterial SpringHill Suites San
Diego   Crestline   Cell Tower       Immaterial Courtyard Dallas   Crestline  
Liquor Concession Agreement   NO   42% of Monthly Gross Sales for year Hilton
Garden Inn Round Rock   Crestline   Liquor Concession Agreement   NO   42% of
Monthly Gross Sales for year Springhill Suites Round Rock   Crestline   Liquor
Concession Agreement   NO   42% of Monthly Gross Sales for year Springhill
Suites Houston   Crestline   Liquor Concession Agreement   NO   42% of Monthly
Gross Sales for year Hyatt Place Overland Park   Crestline   Liquor Lease   NO  
$15,996

 

 Schedule XI-1Loan Agreement

 

 

SCHEDULE XII

FRANCHISE AGREEMENTS

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
1.   Courtyard   Courtyard Asheville
One Buckstone Place
Asheville, NC 28805   Marriott International, Inc.   2/27/2030 2.   Courtyard  
Courtyard Athens Downtown
166 North Finley Street
Athens, GA 30601   Marriott International, Inc.   2/27/2030 3.   Courtyard  
Courtyard Bowling Green Convention Center
1010 Wilkinson Trace
Bowling Green, KY 42103   Marriott International, Inc.   2/27/2030 4.  
Courtyard   Courtyard Chicago Elmhurst/Oakbrook Area
370 North IL Route 83
Elmhurst, IL 60126   Marriott International, Inc.   2/27/2030 5.   Courtyard  
Courtyard Dallas Medical/Market Center
2150 Market Center Blvd.
Dallas, TX 75207   Marriott International, Inc.   2/27/2030 6.   Courtyard  
Courtyard Gainesville
3700 SW 42nd Street
Gainesville, FL 32608   Marriott International, Inc.   2/27/2030 7.   Courtyard
  Courtyard Jacksonville Airport Northeast
14668 Duval Road
Jacksonville, FL 32218   Marriott International, Inc.   2/27/2030 8.   Courtyard
  Courtyard Knoxville Cedar Bluff
216 Langley Place
Knoxville, TN 37922   Marriott International, Inc.   2/27/2030 9.   Courtyard  
Courtyard Lexington South/Hamburg Place
1951 Pleasant Ridge
Lexington, KY 40509   Marriott International, Inc.   2/27/2030 10.   Courtyard  
Courtyard Louisville Downtown
100 South Second Street
Louisville, KY40202   Marriott International, Inc.   2/27/2030

 

 Schedule XII-1Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
11.   Courtyard   Courtyard Orlando Altamonte Springs/Maitland
1750 Pembrook Drive
Orlando, FL 32810   Marriott International, Inc.   2/27/2030 12.   Courtyard  
Courtyard Sarasota Bradenton Airport
850 University Parkway
Sarasota, FL 34234   Marriott International, Inc.   2/27/2030 13.   Courtyard  
Courtyard Tallahassee North/I-10 Capital Circle
1972 Raymond Diehl Road
Tallahassee, FL 32308   Marriott International, Inc.   2/27/2030 14.   Embassy
Suites   Embassy Suites Orlando International
Drive/Jamaican Court
8250 Jamaican Court
Orlando, FL 32819   Embassy Suites Franchise LLC   2/27/2030 15.   Fairfield Inn
& Suites   Fairfield Inn & Suites Dallas Medical/Market Center
2110 Market Center Boulevard at Stemmons Dallas, TX 75207   Marriott
International, Inc.   2/27/2030 16.   Hampton Inn & Suites   Hampton Inn &
Suites Boynton Beach l475
West Gateway Boulevard
Boynton Beach, FL 33426   Hampton Inns Franchise LLC   2/27/2030 17.   Hampton
Inn & Suites   Hampton Inn & Suites Nashville/Franklin (Cool
Springs)
7141 South Springs Drive
Franklin, TN 37067   Hampton Inns Franchise LLC   2/27/2030 18.   Hampton Inn  
Hampton Inn Albany-Wolf Road (Airport)
10 Ulenski Drive
Albany, NY 12005   Hampton Inns Franchise LLC   2/27/2030 19.   Hampton Inn  
Hampton Inn Baltimore/Glen Burnie
6617 Ritchie Highway
Glen Burnie, MD 21061   Hampton Inns Franchise LLC   2/27/2030 20.   Hampton Inn
  Hampton Inn Beckley
110 Harper Park Drive
Beckley, WV 25801   Hampton Inns Franchise LLC   2/27/2030

 

 Schedule XII-2Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
21.   Hampton Inn   Hampton Inn Birmingham/Mountain Brook
2731 US Highway 280
Birmingham, AL 35223   Hampton Inns Franchise LLC   2/27/2030 22.   Hampton Inn
  Hampton Inn Boca Raton
1455 Yamato Road
Boca Raton, FL 33431   Hampton Inns Franchise LLC   2/27/2030 23.   Hampton Inn
  Hampton Inn Boca Raton — Deerfield Beach
660 West Hillsboro Boulevard
Deerfield Beach, FL 33441   Hampton Inns Franchise LLC   2/27/2030 24.   Hampton
Inn   Hampton Inn Boston/Peabody
59 Newbury Street Route 1 North
Peabody, MA 01960   Hampton Inns Franchise LLC   2/27/2030 25.   Hampton Inn  
Hampton Inn Charlotte/Gastonia
1859 Remount Road
Gastonia, NC 28054   Hampton Inns Franchise LLC   2/27/2030 26.   Hampton Inn  
Hampton Inn Chicago/Gurnee
5550 Grand Avenue
Gurnee, IL 60031   Hampton Inns Franchise LLC   2/27/2030 27.   Hampton Inn  
Hampton Inn Cleveland/Westlake
29690 Detroit Road
Westlake, OH 44145   Hampton Inns Franchise LLC   2/27/2030 28.   Hampton Inn  
Hampton Inn Columbia - 1-26 Airport
1094 Chris Drive
West Columbia, SC 29169   Hampton Inns Franchise LLC   2/27/2030 29.   Hampton
Inn   Hampton Inn Columbus/Dublin
3920 Tuller Road
Dublin, OH 43017   Hampton Inns Franchise LLC   2/27/2030 30.   Hampton Inn  
Hampton Inn Dallas -Addison
4505 Beltway Drive
Addison, TX 75001   Hampton Inns Franchise LLC   2/27/2030 31.   Hampton Inn  
Hampton Inn Detroit/Madison Heights/South
Troy
32420 Stephenson Highway
Madison Heights, MI 48071   Hampton Inns Franchise LLC   2/27/2030 32.   Hampton
Inn   Hampton Inn Detroit/Northville
20600 Haggerty Road
Northville, MI 48167   Hampton Inns Franchise LLC   2/27/2030

 

 Schedule XII-3Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
33.   Hampton Inn   Hampton Inn Grand Rapids-North
500 Center Drive
Grand Rapids, MI 49544   Hampton Inns Franchise LLC
    2/27/2030 34.   Hampton Inn   Hampton Inn Kansas City/Overland Park
10591 Metcalf Frontage Road
Overland Park, KS 66212   Hampton Inns Franchise LLC   2/27/2030 35.   Hampton
Inn   Hampton Inn Kansas City-Airport
11212 North Newark Circle
Kansas City, MO 64153   Hampton Inns Franchise LLC   2/27/2030 36.   Hampton Inn
  Hampton Inn Memphis-Poplar
5320 Poplar Avenue
Memphis, TN 38119   Hampton Inns Franchise LLC   2/27/2030 37.   Hampton Inn  
Hampton Inn Morgantown
1053 Van Voorhis Road
Morgantown, WV 26505   Hampton Inns Franchise LLC   2/27/2030 38.   Hampton Inn
  Hampton Inn Norfolk-Naval Base
8501 Hampton Boulevard
Norfolk, VA 23505   Hampton Inns Franchise LLC   2/27/2030 39.   Hampton Inn  
Hampton Inn Palm Beach Gardens
4001 RCA Boulevard
Palm Beach Gardens, FL 33410   Hampton Inns Franchise LLC   2/27/2030 40.  
Hampton Inn   Hampton Inn Pickwick Dam - at Shiloh Falls
90 Old South Road
Counce, TN 38326   Hampton Inns Franchise LLC   2/27/2030 41.   Hampton Inn  
Hampton Inn Scranton at Montage Mountain
22 Montage Mountain Road
Scranton, PA 18507   Hampton Inns Franchise LLC   2/27/2030 42.   Hampton Inn  
Hampton Inn St. Louis/Westport
2454 Old Dorsett Road
Maryland Heights, MO 63043   Hampton Inns Franchise LLC   2/27/2030 43.  
Hampton Inn   Hampton Inn State College
101 East College Avenue
State College, PA 16801   Hampton Inns Franchise LLC   2/27/2030

 

 Schedule XII-4Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
44.   Hampton Inn   Hampton Inn West Palm Beach Florida Turnpike
2025 Vista Parkway
West Palm Beach, FL 33411   Hampton Inns Franchise LLC   2/27/2030 45.   Hilton
Garden Inn   Hilton Garden Inn Austin/Round Rock
2310 North IH35
Round Rock, TX 78681   Hilton Garden Inns Franchise LLC   2/27/2030 46.  
Holiday Inn Express and Suites   Holiday Inn Express and Suites: Kendall
East-Miami
11520 SW 88th Street
Miami, FL 33176   Holiday Hospitality
Franchising, LLC   2/27/2030 47.   Homewood Suites by Hilton   Homewood Suites
by Hilton Boston-Peabody
57 Newbury Street
Boston, MA 01960   Homewood Suites Franchise LLC   2/27/2030 48.   Homewood
Suites by Hilton   Homewood Suites by Hilton Chicago-Downtown
40 East Grand Avenue
Chicago, IL 60611   Homewood Suites Franchise LLC   2/27/2030 49.   Homewood
Suites by Hilton   Homewood Suites by Hilton Hartford/Windsor
Locks
65 Ella Grasso Turnpike
Windsor Locks, CT 06096   Homewood Suites Franchise LLC   2/27/2030 50.  
Homewood Suites by Hilton   Homewood Suites by Hilton Memphis- Germantown
7855 Wolf River Boulevard
Germantown, TN 38138   Homewood Suites Franchise LLC   2/27/2030 51.   Homewood
Suites by Hilton   Homewood Suites by Hilton Phoenix-Biltmore
2001 East Highland Avenue
Phoenix, AZ 85016   Homewood Suites Franchise LLC   2/27/2030 52.   Homewood
Suites by Hilton   Homewood Suites by Hilton San Antonio-Northwest
4323 Spectrum One
San Antonio, TX 78230   Homewood Suites Franchise LLC   2/27/2030 53.   Hyatt
Place   Hyatt Place Albuquerque/Uptown
6901 Arvada North East
Albuquerque, NM 87110   Hyatt Place Franchising, L.L.C.   2/27/2035

 

 Schedule XII-5Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
54.   Hyatt Place   Hyatt Place Baltimore/BWI Airport
940 International Drive
Linthicum Heights, MD 21090   Hyatt Place Franchising, L.L.C.   2/27/2035 55.  
Hyatt Place   Hyatt Place Baton Rouge/I-10
6080 Bluebonnet Boulevard
Baton Rouge, LA 70809   Hyatt Place Franchising, L.L.C.   2/27/2035 56.   Hyatt
Place   Hyatt Place Birmingham/Hoover
2980 John Hawkins Parkway
Birmingham, AL 35244   Hyatt Place Franchising, L.L.C.   2/27/2035 57.   Hyatt
Place   Hyatt Place Cincinnati Blue Ash
11435 Reed Hartman Highway
Blue Ash, OH 45241   Hyatt Place Franchising, L.L.C.   2/27/2035 58.   Hyatt
Place   Hyatt Place Columbus/Worthington
7490 Vantage Drive
Columbus, OH 43235   Hyatt Place Franchising, L.L.C.   2/27/2035 59.   Hyatt
Place   Hyatt Place Indianapolis/Keystone
9104 Keystone Crossing
Indianapolis, IN 46240   Hyatt Place Franchising, L.L.C.   2/27/2035 60.   Hyatt
Place   Hyatt Place Kansas City/Overland Park/Metcalf
6801 West 112th Street
Overland Park, KS 66211   Hyatt Place Franchising, L.L.C.   2/27/2035 61.  
Hyatt Place   Hyatt Place Las Vegas
4520 Paradise Road
Las Vegas, NV 89109   Hyatt Place Franchising, L.L.C.   2/27/2035 62.   Hyatt
Place   Hyatt Place Memphis/Wolfchase Galleria
7905 Giacosa Place
Memphis, TN 38133   Hyatt Place Franchising, L.L.C.   2/27/2035 63.   Hyatt
Place   Hyatt Place Miami Airport - West/Doral
3655 NW 82nd Avenue
Miami, FL 33166   Hyatt Place Franchising, L.L.C.   2/27/2035 64.   Hyatt Place
  Hyatt Place Minneapolis Airport-South
7800 International Drive
Bloomington, MN 55425   Hyatt Place Franchising, L.L.C.   2/27/2035

 

 Schedule XII-6Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
65.   Hyatt Place   Hyatt Place Nashville/Franklin/Cool Springs
650 Bakers Bridge Avenue
Franklin, TN 37067   Hyatt Place Franchising, L.L.C.   2/27/2035 66.   Hyatt
Place   Hyatt Place Richmond/Innsbrook
4100 Cox Road
Glen Allen, VA 23060   Hyatt Place Franchising, L.L.C.   2/27/2035 67.   Hyatt
Place   Hyatt Place Tampa Airport/Westshore
4811 West Main Street
Tampa Airport/Westshore, FL 33607   Hyatt Place Franchising, L.L.C.   2/27/2035
68.   Residence Inn   Residence Inn Boise Downtown
1401 Lusk Avenue
Boise, ID 83706   Marriott International, Inc.   12/22/2022 69.   Residence Inn
  Residence Inn Chattanooga Downtown
215 Chestnut Street
Chattanooga, TN 37402   Marriott International, Inc.   2/27/2030 70.   Residence
Inn   Residence Inn Fort Myers
2960 Colonial Boulevard
Fort Myers, FL 33912   Marriott International, Inc.   2/27/2030 71.   Residence
Inn   Residence Inn Knoxville Cedar Bluff
215 Langley Place at North Peters Road
Knoxville, TN 37922   Marriott International, Inc.   2/27/2030 72.   Residence
Inn   Residence Inn Lexington South/Hamburg Place
2688 Pink Pigeon Parkway
Lexington, KY 40509   Marriott International, Inc.   2/27/2030 73.   Residence
Inn   Residence Inn Los Angeles LAX/E1 Segundo
2135 East El Segundo Boulevard
El Segundo, CA 90245   MIF, L.L.C.   2/27/2030 74.   Residence Inn   Residence
Inn Macon
3900 Sheraton Drive
Macon, GA 31210   Marriott International, Inc.   2/27/2030 75.   Residence Inn  
Residence Inn Mobile
950 West 1-65 Service Road S.
Mobile , AL 36609   Marriott International, Inc.   2/27/2030

 

 Schedule XII-7Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
76.   Residence Inn   Residence Inn Portland Downtown/Lloyd Center
1710 NE Multnomah Street
Portland, OR 97232   Marriott International, Inc.   12/22/2022 77.   Residence
Inn   Residence Inn San Diego Rancho Bernardo/Scripps Poway
12011 Scripps Highlands Drive
San Diego, CA 92131   MIF, L.L.C.   2/27/2030 78.   Residence Inn   Residence
Inn Sarasota Bradenton
1040 University Parkway
Sarasota, FL 34234   Marriott International, Inc.   2/27/2030 79.   Residence
Inn   Residence Inn Savannah Midtown
5710 White Bluff Road
Savannah, GA 31405   Marriott International, Inc.   2/27/2030 80.   Residence
Inn   Residence Inn Tallahassee North/I-10 Capital
Circle
1880 Raymond Diehl Road
Tallahassee, FL 32308   Marriott International, Inc.   2/27/2030 81.   Residence
Inn   Residence Inn Tampa North/I-75 Fletcher
13420 North Telecom Parkway
Tampa, FL 33637   Marriott International, Inc.   2/27/2030 82.   Residence Inn  
Residence Inn Tampa Sabal Park/Brandon
9719 Princess Palm Avenue
Tampa, FL 33619   Marriott International, Inc.   2/27/2030 83.   SpringHill
Suites   SpringHill Suites Austin Round Rock
2960 Hoppe Trail
Round Rock, TX 78681   Marriott International, Inc.   2/27/2030 84.   SpringHill
Suites   SpringHill Suites Grand Rapids North
450 Center Drive
Grand Rapids, MI 49544   Marriott International, Inc.   2/27/2030 85.  
SpringHill Suites   SpringHill Suites Houston Hobby Airport
7922 Mosley Road
Houston, TX 77061   Marriott International, Inc.   2/27/2030

 

 Schedule XII-8Loan Agreement

 

 

No.   Brand   Asset Name and Address   Franchisor   Expiration                  
86.   SpringHill Suites   SpringHill Suites Lexington Near the University of
Kentucky
863 S. Broadway
Lexington, KY 40504   Marriott International, Inc.   2/27/2030 87.   SpringHill
Suites   SpringHill Suites San Diego Rancho
Bernardo/Scripps Poway
12032 Scripps Highlands Drive
San Diego, CA 92131   MIF, L.L.C.   2/27/2030

 

 Schedule XII-9Loan Agreement

 

 

SCHEDULE XIII

PROPERTY ACCOUNTS AND PROPERTY ACCOUNT BANKS

 

Property Accounts and Property Account Banks

 

Property Name   Bank   Name on Account   Account
Number   Management
Company                   Hyatt Place
Indianapolis/Keystone   PNC Bank, N.A.   ARC Hospitality Portfolio I TRS, LLC
dba Hyatt Place Indianapolis/Keystone   5303574215   Crestline Hotels and
Resorts, LLC                   Courtyard Lexington South/Hamburg Place   Branch
Banking and Trust Company   ARC Hospitality Portfolio I MISC TRS, LLC dba
Courtyard Lexington South/ Hamburg Place   0000254326941   Crestline Hotels and
Resorts, LLC                   Courtyard Louisville Downtown   Branch Banking
and Trust Company   ARC Hospitality Portfolio I MISC TRS, LLC dba Courtyard
Louisville Downtown   0000254327743   Crestline Hotels and
Resorts, LLC                   Residence Inn
Lexington South/Hamburg Place   Branch Banking and Trust Company   ARC
Hospitality Portfolio I MISC TRS, LLC dba Residence Inn Lexington South/ Hamburg
Place   0000254327727   Crestline Hotels and
Resorts, LLC                   SpringHill Suites Lexington Near the University
of Kentucky   Branch Banking and Trust Company   ARC Hospitality Portfolio I
MISC TRS, LLC dba Springhill Suites Lexington Near the University of Kentucky  
0000254327735   Crestline Hotels and
Resorts, LLC                   Homewood Suites by Hilton Hartford/Windsor Locks
  Bank of America, N.A.   ARC Hospitality Portfolio I TRS Holdco, LLC (HIL)
Homewood Suites Hartford   1291859235   Homewood Suites
Management LLC                   Hampton Inn Detroit/Madison Heights/South Troy
  Bank of America, N.A.   ARC Hospitality Portfolio I TRS Holdco, LLC (HIL)
Hampton Inn Detroit/Madison Heights   1291063571   Hampton Inns Management
LLC

 

 Schedule XIII-1Loan Agreement

 

 

Property Name   Bank   Name on Account   Account
Number   Management
Company                   Hampton Inn Detroit/Northville   JPMorgan Chase Bank,
N.A.   ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn
Detroit/Northville   689055015   Hampton Inns Management
LLC                   Hampton Inn St. Louis/Westport   Bank of America, N.A.  
ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn St. Louis/Westport
  1291063576   Hampton Inns Management
LLC                   Hampton Inn Albany- Wolf Road (Airport)   Bank of America,
N.A.   ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Albany  
1291063590   Hampton Inns Management
LLC                   Hampton Inn Cleveland/Westlake   JPMorgan Chase Bank, N.A.
  ARC Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn
Cleveland/Westlake   689053986   Hampton Inns Management
LLC                   Hampton Inn Dublin   JPMorgan Chase Bank, N.A.   ARC
Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Columbus/Dublin  
689053978   Hampton Inns Management
LLC                   Hampton Inn State College   PNC Bank, N.A.   ARC
Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn State College  
5303575111   Hampton Inns Management
LLC                   Hampton Inn Pickwick
Dam - at Shiloh Falls   Hardin County Bank   ARC Hospitality Portfolio I TRS
Holdco, LLC (HIL) Hampton Inn Pickwick   50009540   Hampton Inns Management
LLC                   Hampton Inn Beckley   JPMorgan Chase Bank, N.A.   ARC
Hospitality Portfolio I TRS Holdco, LLC (HIL) Hampton Inn Beckley   689055007  
Hampton Inns Management
LLC                   Hampton Inn
Morgantown   PNC Bank, N.A.   ARC Hospitality Portfolio I TRS Holdco, LLC (HIL)
Hampton Inn Morgantown   5303575103   Hampton Inns Management
LLC

 

 Schedule XIII-2Loan Agreement

 

 

Property Name   Bank   Name on Account   Account
Number   Management
Company                   Courtyard Knoxville Cedar Bluff   SunTrust Bank, N.A.
  ARC Hospitality Portfolio I TRS Holdco LLC dba Courtyard Knoxville  
1000176350899   Mckibbon Hotel
Management, Inc                   Residence Inn Knoxville Cedar Bluff   SunTrust
Bank, N.A.   ARC Hospitality Portfolio I TRS Holdco LLC dba Residence Inn
Knoxville   1000176350881   Mckibbon Hotel
Management, Inc                   Courtyard Bowling Green Convention Center  
Branch Banking and Trust Company   ARC Hospitality Portfolio I TRS, LLC dba
Courtyard Bowling Green Convention Center FBO Berkadia   0000254326380  
Crestline Hotels and
Resorts, LLC                   Residence Inn Chattanooga Downtown   Suntrust
Bank, N.A.   ARC Hospitality Portfolio I TRS, LLC dba Residence Inn Chattanooga
Downtown   1000164293101   Mckibbon Hotel Management, Inc

 

 Schedule XIII-3Loan Agreement

 

 

SCHEDULE XIV

HOTEL COMPANIES/APPROVED BRANDS

 

Brands within the following hotel companies, subject to the definition of
Approved Brand as set forth in the Loan Agreement:

 

1.Hilton

2.Marriott

3.IHG

4.Hyatt

5.Choice

6.Carlson

7.Wyndham

8.La Quinta

9.Red Lion

10.Red Roof Inn

 Schedule XIV-1Loan Agreement

 

 

SCHEDULE XV

CLOSING DATE MANAGERS

 

Property Name   Property Manager Homewood Suites Chicago   Crestline Residence
Inn Portland   Innventures Residence Inn LA El Segundo   Crestline Embassy
Suites Orlando   Crestline Courtyard Louisville   Crestline Hampton Inn and
Suites Boynton Beach   Hilton Springhill Suites San Diego   Crestline Hampton
Inn & Suites Franklin   Crestline Residence Inn San Diego   Crestline Hampton
Inn Albany   Hilton Courtyard Dallas   Crestline Hampton Inn Palm Beach Gardens
  Hilton Hyatt Place Las Vegas   Crestline Residence Inn Sabal Park   McKibbon
Courtyard Asheville   McKibbon Hampton Inn Peabody   Crestline Hampton Inn West
Palm Beach   Hilton Hampton Inn State College   Hilton Hyatt Place Albuquerque  
Crestline Residence Inn Boise   Innventures Hyatt Place Indianapolis   Crestline
Homewood Suites Phoenix   Hilton Hampton Inn Memphis   Hilton Courtyard
Tallahassee North I 10 Capital Circle   McKibbon Hampton Inn Beckley   Hilton
Residence Inn Sarasota   McKibbon Courtyard Gainesville   McKibbon

 

 Schedule XV-1Loan Agreement

 

 

Hyatt Place Franklin   Crestline Hampton Inn Madison Heights   Hilton Courtyard
Orlando   McKibbon Springhill Suites Lexington   Crestline Fairfield Inn &
Suites Dallas   Crestline Hampton Inn Gastonia   Hilton Courtyard Sarasota  
McKibbon Hyatt Place Tampa   Crestline Residence Inn Chattanooga   McKibbon
Courtyard Athens   McKibbon Hampton Inn Grand Rapids   Crestline Hampton Inn
Addison   Hilton Hyatt Place Miami   Crestline Hampton Inn Kansas City   Hilton
Courtyard Lexington   Crestline Residence Inn Tampa North   McKibbon Hyatt Place
Memphis   Crestline Homewood Suites Windsor Locks   Hilton Hyatt Place
Minneapolis   Crestline Springhill Suites Grand Rapids   Crestline Residence Inn
Fort Myers   McKibbon Hampton Inn Deerfield Beach   Hilton Hampton Inn
Morgantown   Hilton Hampton Inn Northville   Hilton Hampton Inn Westlake  
Hilton Courtyard Elmhurst   Crestline Hampton Inn Maryland Heights   Hilton
Residence Inn Lexington   Crestline Hyatt Place Baton Rouge   Crestline
Residence Inn Tallahassee   McKibbon Hampton Inn Scranton   Hilton Hampton Inn
Overland Park   Hilton

 

 Schedule XV-2Loan Agreement

 

 

Residence Inn Knoxville   McKibbon Residence Inn Savannah   McKibbon Hampton Inn
Birmingham   Hilton Hyatt Place Glen Allen   Crestline Hyatt Place Linthicum
Heights   Crestline Courtyard Bowling Green   Crestline Holiday Inn Express
Kendall East   McKibbon Hampton Inn Gurnee   Hilton Hampton Inn Dublin   Hilton
Springhill Suites Round Rock   Crestline Hampton Inn Boca Raton   Hilton Hilton
Garden Inn Round Rock   Crestline Courtyard Knoxville   McKibbon Homewood Suites
San Antonio   Hilton Hampton Inn Glenn Burnie   Hilton Homewood Suites
Germantown   Hilton Hampton Inn West Columbia   Hilton Hyatt Place Blue Ash  
Crestline Hyatt Place Columbus   Crestline Courtyard Jacksonville   Crestline
Residence Inn Macon   McKibbon Homewood Suites Peabody   Crestline Residence Inn
Mobile   McKibbon Hampton Inn Pickwick   Hilton Springhill Suites Houston  
Crestline Hyatt Place Birmingham   Crestline Hyatt Place Overland Park  
Crestline Hampton Inn Norfolk   Hilton

 

 Schedule XV-3Loan Agreement

 

 

SCHEDULE XVI

NON-CONFORMING PROPERTIES

 

1.Courtyard, Orlando, FL

2.Hampton Inn, Boca Raton, FL

3.Residence Inn, Fort Myers, FL

4.SpringHill Suites, Grand Rapids, MI

5.Hampton Inn & Suites, Memphis, TN

6.Hampton Inn, Addison, TX

 

 Schedule XVI-1Loan Agreement

 

 

SCHEDULE XVII

OPERATING LEASES

 

Each as amended by that certain Omnibus Amendment to Operating Leases by and
among Borrower and Operating Lessee, dated as of the date hereof:

 

1.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Athens).

 

2.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Asheville).

 

3.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Courtyard
Bowling Green).

 

4.Lease Agreement between HIT Portfolio I DLGL Owner, LP (f/k/a ARC Hospitality
Portfolio I DLGL Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Dallas).

 

5.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Elmhurst).

 

6.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Gainesville).

 

7.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Jacksonville).

 

8.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Knoxville).

 

9.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Lexington).

 

 Schedule XVII-1Loan Agreement

 

 

10.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Louisville).

 

11.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Orlando).

 

12.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Sarasota).

 

13.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Courtyard Tallahassee North).

 

14.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Embassy
Suites Orlando).

 

15.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Fairfield Inn & Suites Dallas).

 

16.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LP (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn & Suites Boynton Beach).

  

17.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn & Suites Franklin).

 

18.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC HIL TRS, LP (f/k/a
ARC Hospitality Portfolio I NTC HIL TRS, LP) as Lessee, dated February 27, 2015
(Hampton Inn Addison).

 

19.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Albany).

 

 Schedule XVII-2Loan Agreement

 

 

20.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Beckley).

 

21.Lease Agreement between HIT Portfolio I BHGL Owner, LLC (f/k/a ARC
Hospitality Portfolio I BHGL Owner, LLC) as Lessor and HIT Portfolio I HIL TRS,
LLC (f/k/a ARC Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February
27, 2015 (Hampton Inn Birmingham).

 

22.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Boca Raton).

 

23.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Deerfield Beach).

 

24.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Dublin).

 

25.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC HIL TRS, LP (f/k/a
ARC Hospitality Portfolio I NTC HIL TRS, LP) as Lessee, dated February 27, 2015
(Hampton Inn Gastonia).

 

26.Lease Agreement between HIT Portfolio I GBGL Owner, LLC (f/k/a ARC
Hospitality Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC
(f/k/a ARC Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27,
2015 (Hampton Inn Glen Burnie).

 

27.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Grand Rapids).

 

28.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Gurnee).

 

29.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Kansas City).

 

 Schedule XVII-3Loan Agreement

 

 

30.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Madison Heights).

 

31.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Maryland Heights).

 

32.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Memphis).

 

33.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Morgantown).

 

34.Lease Agreement between HIT Portfolio I NFGL Owner, LLC (f/k/a ARC
Hospitality Portfolio I NFGL Owner, LLC) as Lessor and HIT Portfolio I HIL TRS,
LLC (f/k/a ARC Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February
27, 2015 (Hampton Inn Norfolk).

 

35.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Northville).

 

36.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Overland Park)

 

37.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Palm Beach).

 

38.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Peabody).

 

 Schedule XVII-4Loan Agreement

 

 

39.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Pickwick).

 

40.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Scranton).

 

41.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn State College).

 

42.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn West Columbia).

 

43.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn West Palm Beach).

 

44.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27, 2015
(Hampton Inn Westlake).

 

45.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LP) as Lessee, dated February 27, 2015 (Hilton
Garden Inn Round Rock).

 

46.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Holiday Inn Express Kendall East-Miami).

 

47.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Homewood
Suites Chicago).

 

48.Lease Agreement between HIT Portfolio I Owner, LLC as Lessor and HIT
Portfolio I HIL TRS, LLC as Lessee, dated as of the date hereof (Homewood Suites
Germantown).

 

49.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Homewood Suites Peabody).

 

 Schedule XVII-5Loan Agreement

 

 

50.Lease Agreement between HIT Portfolio I PXGL Owner, LLC (f/k/a ARC
Hospitality Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC
(f/k/a ARC Hospitality Portfolio I HIL TRS, LLC) as Lessee, dated February 27,
2015 (Homewood Suites Phoenix).

 

51.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC HIL TRS, LP (f/k/a
ARC Hospitality Portfolio I NTC HIL TRS, LP) as Lessee, dated February 27, 2015
(Homewood Suites San Antonio).

 

52.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I HIL TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Homewood
Suites Windsor Locks).

 

53.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Albuquerque).

 

54.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Baton Rouge).

 

55.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Birmingham).

 

56.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Blue Ash).

 

57.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Columbus).

 

58.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Franklin).

 

59.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Glen Allen).

 

 Schedule XVII-6Loan Agreement

 

 

60.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Indianapolis).

 

61.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Las Vegas).

 

62.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Linthicum Heights).

 

63.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Memphis).

 

64.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Miami).

 

65.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Minneapolis).

 

66.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I DEKS TRS, LLC (f/k/a ARC
Hospitality Portfolio I DEKS TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Overland Park).

 

67.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I TRS, LLC (f/k/a ARC
Hospitality Portfolio I TRS, LLC) as Lessee, dated February 27, 2015 (Hyatt
Place Tampa).

 

68.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Boise).

 

69.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Chattanooga).

 

70.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Fort Myers).

 

 Schedule XVII-7Loan Agreement

 

 

71.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Knoxville).

 

72.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn LA El Segundo).

 

73.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Lexington).

 

74.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MCK TRS, LLC (f/k/a ARC
Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Macon).

 

75.Lease Agreement between HIT Portfolio I MBGL 950 Owner, LLC (f/k/a ARC
Hospitality Portfolio I MBGL 950 Owner, LLC) as Lessor and HIT Portfolio I MCK
TRS, LLC (f/k/a ARC Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated
February 27, 2015 (Residence Inn Mobile).

 

76.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn Portland).

 

77.Lease Agreement between HIT Portfolio I MBGL 950 Owner, LLC (f/k/a ARC
Hospitality Portfolio I MBGL 950 Owner, LLC) as Lessor and HIT Portfolio I MCK
TRS, LLC (f/k/a ARC Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated
February 27, 2015 (Residence Inn Sabal Park).

 

78.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Residence Inn San Diego).

 

79.Lease Agreement between HIT Portfolio I MBGL 950 Owner, LLC (f/k/a ARC
Hospitality Portfolio I MBGL 950 Owner, LLC) as Lessor and HIT Portfolio I MCK
TRS, LLC (f/k/a ARC Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated
February 27, 2015 (Residence Inn Sarasota).

 

 Schedule XVII-8Loan Agreement

 

 

80.Lease Agreement between HIT Portfolio I MBGL 950 Owner, LLC (f/k/a ARC
Hospitality Portfolio I MBGL 950 Owner, LLC) as Lessor and HIT Portfolio I MCK
TRS, LLC (f/k/a ARC Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated
February 27, 2015 (Residence Inn Savannah).

 

81.Lease Agreement between HIT Portfolio I MBGL 950 Owner, LLC (f/k/a ARC
Hospitality Portfolio I MBGL 950 Owner, LLC) as Lessor and HIT Portfolio I MCK
TRS, LLC (f/k/a ARC Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated
February 27, 2015 (Residence Inn Tallahassee).

 

82.Lease Agreement between HIT Portfolio I MBGL 950 Owner, LLC (f/k/a ARC
Hospitality Portfolio I MBGL 950 Owner, LLC) as Lessor and HIT Portfolio I MCK
TRS, LLC (f/k/a ARC Hospitality Portfolio I MCK TRS, LLC) as Lessee, dated
February 27, 2015 (Residence Inn Tampa North).

 

83.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Springhill Suites Grand Rapids).

 

84.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Springhill Suites Houston).

 

85.Lease Agreement between HIT Portfolio I Owner, LLC (f/k/a ARC Hospitality
Portfolio I Owner, LLC) as Lessor and HIT Portfolio I MISC TRS, LLC (f/k/a ARC
Hospitality Portfolio I MISC TRS, LLC) as Lessee, dated February 27, 2015
(Springhill Suites Lexington).

 

86.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Springhill Suites Round Rock).

 

87.Lease Agreement between HIT Portfolio I NTC Owner, LP (f/k/a ARC Hospitality
Portfolio I NTC Owner, LP) as Lessor and HIT Portfolio I NTC TRS, LP (f/k/a ARC
Hospitality Portfolio I NTC TRS, LLC) as Lessee, dated February 27, 2015
(Springhill Suites San Diego).

 

 Schedule XVII-9Loan Agreement

 

 

SCHEDULE XVIII

SCHEDULED PIP

 

ID  Hotel  Remaining PIP Spend   Anticipated PIP
Completion Year  CY Asheville  Courtyard Asheville  $1,129,455    2017  CY
Athens  Courtyard Athens   1,220,600    2018  CY Bowling Green  Courtyard
Bowling Green   2,929,500    2018  CY Elmhurst  Courtyard Elmhurst   1,344,100  
 2020  CY Lexington  Courtyard Lexington   838,588    2020  CY Louisville 
Courtyard Louisville   477,400    2019  CY Orlando  Courtyard Orlando 
 404,800    2019  CY Sarasota  Courtyard Sarasota   880,035    2017  CY
Tallahassee  Courtyard Tallahassee North I 10 Capital Circle   164,600    2019 
FFIS Dallas  Fairfield Inn & Suites Dallas   273,600    2019  HI Addison 
Hampton Inn Addison   5,000,000    2019  HI Albany  Hampton Inn Albany 
 4,683,341    2018  HI Beckley  Hampton Inn Beckley   1,808,382    2018  HI
Birmingham  Hampton Inn Birmingham   2,118,607    2019  HI Columbia  Hampton Inn
West Columbia   2,368,667    2018  HI Deerfield  Hampton Inn Deerfield Beach 
 4,319,036    2019  HI Dublin  Hampton Inn Dublin   1,994,497    2020  HI Grand
Rapids  Hampton Inn Grand Rapids   2,640,484    2018  HI Gurnee  Hampton Inn
Gurnee   2,047,572    2018  HI Kansas City  Hampton Inn Kansas City 
 1,845,017    2018  HI Madison Heights  Hampton Inn Madison Heights 
 2,116,860    2019  HI Maryland Heights  Hampton Inn Maryland Heights 
 1,742,904    2018  HI Memphis  Hampton Inn Memphis   2,917,172    2018  HI
Morgantown  Hampton Inn Morgantown   1,933,320    2018  HI Northville  Hampton
Inn Northville   2,115,761    2018  HI Overland Park  Hampton Inn Overland Park 
 2,259,000    2018 

 

 Schedule XVIII-1Loan Agreement

 

 

HI Palm Beach  Hampton Inn Palm Beach Gardens   1,778,630    2018  HI Peabody 
Hampton Inn Peabody   1,395,000    2018  HI Pickwick  Hampton Inn Pickwick 
 1,385,168    2020  HI Scranton  Hampton Inn Scranton   2,500,000    2019  HI
State College  Hampton Inn State College   3,840,401    2018  HI Westlake 
Hampton Inn Westlake   1,916,942    2019  HI WPB  Hampton Inn West Palm Beach 
 3,386,389    2019  HIE Miami  Holiday Inn Express Kendall East   3,073,427  
 2018  HIS Boynton Beach  Hampton Inn & Suites Boynton Beach   3,543,522  
 2018  HIS Franklin  Hampton Inn & Suites Franklin   2,100,000    2019  HP
Birmingham  Hyatt Place Birmingham   1,959,760    2018  HP Columbus  Hyatt Place
Columbus   1,744,314    2018  HP Memphis  Hyatt Place Memphis   1,843,002  
 2018  HP Miami  Hyatt Place Miami   1,103,911    2017  HWS Windsor Locks 
Homewood Suites Windsor Locks   3,725,700    2018  RI Boise  Residence Inn
Boise   781,291    2017  RI Ft Myers  Residence Inn Fort Myers   1,017,284  
 2017  RI Knoxville  Residence Inn Knoxville   1,357,435    2017  RI Mobile 
Residence Inn Mobile   446,800    2019  RI Portland  Residence Inn Portland 
 5,702,091    2019  RI Sabal Park  Residence Inn Sabal Park   3,600,000    2018 
RI San Diego  Residence Inn San Diego   1,000,000    2018  RI Sarasota 
Residence Inn Sarasota   2,700,000    2018  RI Savannah  Residence Inn Savannah 
 59,400    2017  RI Tampa North  Residence Inn Tampa North   2,700,000    2018 
SHS Grand Rapids  Springhill Suites Grand Rapids   1,760,759    2017  SHS
Houston  Springhill Suites Houston   3,843,000    2018  SHS Lexington 
Springhill Suites Lexington   1,980,000    2018  SHS Round Rock  Springhill
Suites Round Rock   2,563,920    2018  SHS San Diego  Springhill Suites San
Diego   3,082,500    2018  Total     $119,463,942      

 

 Schedule XVIII-2Loan Agreement

 

 

SCHEDULE XIX

DIVESTED PROPERTIES

 

Asset Courtyard Mobile, Mobile, AL Fairfield Inn & Suites Atlanta Vinings,
Atlanta, GA Hampton Inn Chattanooga-Airport/I-75, Chattanooga, TN Hampton Inn
and Suites Colorado Springs Air Force Academy, I-25 North, Colorado Springs, CO
Hampton Inn Columbus-Airport, Columbus, GA Hampton Inn
Charleston-Airport/Coliseum, Charleston, SC Red Lion Fayetteville I-95,
Fayetteville, NC SpringHill Suites San Antonio Medical Center/Northwest, San
Antonio, TX Holiday Inn Charleston Mt. Pleasant, Mount Pleasant, SC

 

 Schedule XIX-1Loan Agreement

 

 

SCHEDULE XX

MAJOR CONTRACTS

 

None.

 

 Schedule XX-1Loan Agreement

 

 

SCHEDULE XXI

RED ZONE PROPERTIES

 

No.   Description of Applicable Exception(s) to Representations
and Warranties in Section [3.1.16] (and Section Reference)   Real Propertv(ies)
to Which the
Applicable
Exception Applies           1.   General manager of hotel must create an action
plan to improve the hotel’s performance in certain aspects of Marriott’s QA
Program. Marriott has agreed to forbear from taking action until June, 2017.    

Portland Downtown/Lloyd Center Residence Inn

1710 NE Multnomah Street,

Portland, OR 97232

          2.   Hotel has entered the Red Zone under Marriott’s QA Program.  If
the hotel enters the Red Zone during any of the next four tracking periods,
Marriott may terminate the Franchise Agreement.  

Orlando Altamonte Springs/Maitland Courtyard

1750 Pembrook Drive

Orland, FL 32810

          3.   Hotel has entered the Red Zone under Marriott’s QA Program.  If
the hotel enters the Red Zone during any of the next four tracking periods,
Marriott may terminate the Franchise Agreement.  

Grand Rapid North SpringHill Suites

450 Center Drive

Grand Rapids, MI 49544

          4.   Hotel has entered the Red Zone under Marriott’s QA Program.  If
the hotel enters the Red Zone during any of the next four tracking periods,
Marriott may terminate the Franchise Agreement.  

Athens Downtown Courtyard

166 North Finley Street

Athens, GA 30601

          5.   Failed most recent quality assurance inspection  

Hampton Inn Beckley

110 Harper Park Drive

Beckley, WV 25801

          6.   Failed most recent quality assurance inspection  

Hampton Inn Gastonia

1859 Remount Road

Gastonia, NC 28054

          7.   Failed most recent quality assurance inspection  

Homewood Suites Germantown

7855 Wolf River Boulevard

Germantown, TN 38138

 

 

 Schedule XXI-1Loan Agreement

 

 

SCHEDULE XXII

ENVIRONMENTAL WORK PROPERTIES

 

Hampton Inn Peabody

Homewood Suites Peabody

Courtyard Louisville

Hampton Inn Madison Heights

Hampton Inn Northville

Courtyard Dallas

Fairfield Inn & Suites Dallas

 

 Schedule XXII-1Loan Agreement

 

 

SCHEDULE XXIII

PIP RESERVE FUNDING SCHEDULE

 

6/1/2017  $2,951,333   6/1/2018  $500,000   6/1/2019  $1,625,000  7/1/2017 
$2,951,333   7/1/2018  $500,000   7/1/2019  $1,625,000  8/1/2017  $2,951,333  
8/1/2018  $500,000   8/1/2019  $1,625,000  9/1/2017  $2,951,333   9/1/2018 
$500,000   9/1/2019  $1,625,000  10/1/2017  $2,951,333   10/1/2018  $500,000  
10/1/2019  $1,625,000  11/1/2017  $2,951,333   11/1/2018  $500,000   11/1/2019 
$1,625,000  12/1/2017  $760,500   12/1/2018  $500,000   12/1/2019  $500,000 
1/1/2018  $760,500   1/1/2019  $500,000   1/1/2020  $500,000  2/1/2018 
$760,500   2/1/2019  $500,000   2/1/2020  $500,000  3/1/2018  $760,500  
3/1/2019  $500,000   3/1/2020  $500,000  4/1/2018  $1,625,000   4/1/2019 
$500,000   4/1/2020  $1,625,000  5/1/2018  $1,625,000   5/1/2019  $500,000  
5/1/2020  $1,625,000 

 

 Schedule XXIII-1Loan Agreement

 

 

EXHIBIT A

FORM OF TENANT INSTRUCTIONS

 

[INDIVIDUAL BORROWER LETTERHEAD]

 

 

____________, 201_

 

Certified Mail
Return receipt requested

 

[Name and Address of Tenant]

 

Re:Lease of Space at _________________ (the “Hotel”)

 

Ladies and Gentlemen:

 

By this letter, you are hereby authorized and directed from and after the date
hereof (the “Effective Date”) to forward all rents and all other sums payable
under the terms of your Lease to be made payable to [insert name of applicable
Individual Borrower] per the following wire instructions:

 

By Wire Transfer/ACH:

 

Bank:     Account:     Account Number:     ABA Number:    

 

We kindly request that rental payments are remitted via wire, however, if you
choose to send your rent, and other sums which are payable, by mail, please use
the following address:

 

By Mail:

 

To:     At:                

 

Via Overnight Courier:

 

To:                       Attn:    

 

 A-1Loan Agreement

 

 

The foregoing direction is irrevocable, except with the written consent of our
mortgagee, [LENDER] (or its successors or assigns), notwithstanding any future
contrary request or direction from the undersigned or any other person (other
than [LENDER] (or its successors or assigns)). Thank you for your cooperation.

  

Very truly yours,

 

 

 

BORROWER:

 

 A-2Loan Agreement

 

 

EXHIBIT B

Secondary Market Transaction Information

 

(A)Any proposed program for the renovation, improvement or development of any
Individual Property, or any part thereof, including the estimated cost thereof
and the method of financing to be used.

 

(B)Management of the Properties.

 

(C)Occupancy rate expressed as a percentage, revenues per available room and
average daily rates for each of the last five years prior to the Closing Date.

 

(D)Schedule of the lease expirations for (i) if in connection with a public
offering of Securities, each of the ten years starting with the year in which
the registration statement is filed (or the year in which the prospectus
supplement is dated, as applicable), and (ii) if in connection with a private
offering of Securities, each of the five years starting with the year in which
the Closing Date occurs, in each case stating:

 

(1)The number of tenants whose leases will expire.

 

(2)The total area in square feet covered by such leases.

 

(3)The annual rental represented by such leases.

 

(4)The percentage of gross annual rental represented by such leases.

 

 B-1Loan Agreement