Exhibit 10.27


 


EXECUTION
VERSION


	 


 


LOAN AGREEMENT


 


Dated as of February 27, 2015


 


between


 


The Borrowers listed on Schedule II
attached hereto

individually and collectively, as Borrower(s)


 


and


 


LADDER CAPITAL FINANCE LLC


 


and


 


DEUTSCHE BANK AG, NEW YORK BRANCH,


 


individually and collectively, as Lender


 


EQUITY INNS HOTEL PORTFOLIO


 


$227,000,000


 


 




    	 



    	 



    

 


Table
of Contents


 


	 	 	Page
	 	 	 
	Article 1:	DEFINITIONS; PRINCIPLES OF CONSTRUCTION	1
	 	 	 
	Section 1.1	Definitions	1
	 	 	 
	Section 1.2	Principles of Construction	1
	 	 	 
	Article 2:	THE LOAN	1
	 	 	 
	Section 2.1	The Loan	1
	 	 	 
	2.1.1	Agreement to Lend and Borrow	1
	 	 	 
	2.1.2	The Note	2
	 	 	 
	2.1.3	Use of Proceeds	2
	 	 	 
	2.1.4	Origination and Processing Fees	2
	 	 	 
	Section 2.2	Interest Rate	2
	 	 	 
	2.2.1	LIBOR Interest Rate	2
	 	 	 
	2.2.2	Default Rate	2
	 	 	 
	2.2.3	Interest Calculation	2
	 	 	 
	2.2.4	Usury Savings	3
	 	 	 
	Section 2.3	Loan Payments; Term of Loan	3
	 	 	 
	2.3.1	Loan Payments Generally	3
	 	 	 
	2.3.2	Payment on Maturity Date	4
	 	 	 
	2.3.3	Late Payment Charge	4
	 	 	 
	2.3.4	Method and Place of Payment	4
	 	 	 
	Section 2.4	Prepayments	4
	 	 	 
	2.4.1	Voluntary Prepayments	4
	 	 	 
	2.4.2	Mandatory Prepayments	5
	 	 	 
	2.4.3	Prepayments After Default	5
	 	 	 
	2.4.4	Funding Losses; Changes in Law; Etc	5
	 	 	 
	Section 2.5	Intentionally Omitted	8
	 	 	 
	Section 2.6	Loan Taxes	8
	 	 	 
	Section 2.7	Extension of the Maturity Date	9
	 	 	 
	2.7.1	Extension Option	9
	 	 	 
	2.7.2	Maturity Date	11
	 	 	 
	Section 2.8	Interest Rate Protection Agreements	11
	 	 	 
	2.8.1	Interest Rate Protection Agreement	11
	 	 	 
	2.8.2	Execution of Documents	13


 




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of Contents


(continued)





 


	 	 	Page
	 	 	 
	2.8.3	No Obligation of Lender	13
	 	 	 
	2.8.4	Receipts from Interest Rate Protection Agreements	13
	 	 	 
	2.8.5	Downgrade of Counterparty	13
	 	 	 
	Section 2.9	Additional Interest	13
	 	 	 
	Section 2.10	REMIC Test on Property Release	14
	 	 	 
	Article 3:	REPRESENTATIONS AND WARRANTIES	15
	 	 	 
	Section 3.1	Borrower Representations	15
	 	 	 
	3.1.1	Organization	15
	 	 	 
	3.1.2	Proceedings	15
	 	 	 
	3.1.3	No Conflicts	16
	 	 	 
	3.1.4	Litigation	16
	 	 	 
	3.1.5	Agreements	16
	 	 	 
	3.1.6	Consents	16
	 	 	 
	3.1.7	Title	16
	 	 	 
	3.1.8	No Plan Assets	17
	 	 	 
	3.1.9	Compliance	17
	 	 	 
	3.1.10	Financial Information	18
	 	 	 
	3.1.11	Condemnation	18
	 	 	 
	3.1.12	Easements; Utilities and Public Access	18
	 	 	 
	3.1.13	Separate Lots	18
	 	 	 
	3.1.14	Taxes and Assessments	18
	 	 	 
	3.1.15	Enforceability	18
	 	 	 
	3.1.16	Assignment of Leases	19
	 	 	 
	3.1.17	Insurance	19
	 	 	 
	3.1.18	Licenses	19
	 	 	 
	3.1.19	Flood Zone	19
	 	 	 
	3.1.20	Physical Condition	19
	 	 	 
	3.1.21	Boundaries	19
	 	 	 
	3.1.22	Leases	20
	 	 	 
	3.1.23	Filing and Recording Taxes	20
	 	 	 
	3.1.24	Single Purpose	20
	 	 	 
	3.1.25	Tax Filings	20


 




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(continued)


	 	 	Page
	 	 	 
	3.1.26	Solvency	20
	 	 	 
	3.1.27	Federal Reserve Regulations	21
	 	 	 
	3.1.28	Organizational Chart	21
	 	 	 
	3.1.29	Organizational Status	21
	 	 	 
	3.1.30	Bank Holding Company	21
	 	 	 
	3.1.31	No Casualty	21
	 	 	 
	3.1.32	Purchase Options	21
	 	 	 
	3.1.33	FIRPTA	21
	 	 	 
	3.1.34	Illegal Activity	21
	 	 	 
	3.1.35	Investment Company Act	21
	 	 	 
	3.1.36	Use of Property	22
	 	 	 
	3.1.37	Fiscal Year	22
	 	 	 
	3.1.38	No Other Financing	22
	 	 	 
	3.1.39	Contracts	22
	 	 	 
	3.1.40	Full and Accurate Disclosure; No Change in Facts	22
	 	 	 
	3.1.41	Other Obligations and Liabilities	23
	 	 	 
	3.1.42	Operating Lease	23
	 	 	 
	3.1.43	REA	23
	 	 	 
	3.1.44	Bankruptcy Filings	23
	 	 	 
	3.1.45	PIP Plans	24
	 	 	 
	3.1.46	Intermediate Management Agreement	24
	 	 	 
	3.1.47	Property Management Agreement	24
	 	 	 
	3.1.48	Beverage Concession Agreement	24
	 	 	 
	3.1.49	Beverage Management Agreement	24
	 	 	 
	3.1.50	Franchise Agreement	24
	 	 	 
	3.1.51	Personal Property	25
	 	 	 
	3.1.52	Equipment Leases	25
	 	 	 
	3.1.53	Collective Bargaining	25
	 	 	 
	Section 3.2	Survival of Representations; Reliance	25
	 	 	 
	Article 4:	BORROWER COVENANTS	25
	 	 	 
	Section 4.1	Borrower Affirmative Covenants	25
	 	 	 
	4.1.1	Payment and Performance of Obligations	25


 




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(continued)


	 	 	Page
	 	 	 
	4.1.2	Existence; Compliance with Legal Requirements	25
	 	 	 
	4.1.3	Taxes and Other Charges	26
	 	 	 
	4.1.4	Litigation	26
	 	 	 
	4.1.5	Access to Property	26
	 	 	 
	4.1.6	Further Assurances; Supplemental Mortgage Affidavits	27
	 	 	 
	4.1.7	Financial Reporting	27
	 	 	 
	4.1.8	Title to the Property	30
	 	 	 
	4.1.9	Estoppel Statement	30
	 	 	 
	4.1.10	Leases	31
	 	 	 
	4.1.11	Alterations	31
	 	 	 
	4.1.12	Approval of Major Contracts	32
	 	 	 
	4.1.13	After Acquired Property	32
	 	 	 
	4.1.14	Patriot Act	32
	 	 	 
	4.1.15	Special Purpose	32
	 	 	 
	4.1.16	Operating Leases	32
	 	 	 
	4.1.17	Major Contracts; REA	32
	 	 	 
	4.1.18	O&M Program	33
	 	 	 
	4.1.19	PIPs	33
	 	 	 
	4.1.20	Required Repairs	34
	 	 	 
	4.1.21	Cure of Violations	34
	 	 	 
	Section 4.2	Borrower Negative Covenants	34
	 	 	 
	4.2.1	Due on Sale and Encumbrance; Change of Control; Transfers of Interests	34
	 	 	 
	4.2.2	Liens	35
	 	 	 
	4.2.3	Dissolution	35
	 	 	 
	4.2.4	Change in Use	35
	 	 	 
	4.2.5	Debt Cancellation	35
	 	 	 
	4.2.6	Intentionally Omitted	35
	 	 	 
	4.2.7	Zoning	35
	 	 	 
	4.2.8	Intentionally Omitted	35
	 	 	 
	4.2.9	No Joint Assessment	35
	 	 	 
	4.2.10	Principal Place of Business	36


 




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	 	 	Page
	 	 	 
	4.2.11	Change of Name, Identity or Structure	36
	 	 	 
	4.2.12	Intentionally Omitted	36
	 	 	 
	4.2.13	ERISA	36
	 	 	 
	4.2.14	Compliance with Restrictive Covenants, Etc	37
	 	 	 
	4.2.15	REAs	37
	 	 	 
	4.2.16	Embargoed Person	37
	 	 	 
	4.2.17	Matters Concerning Leases	38
	 	 	 
	Article 5:	INSURANCE, CASUALTY AND CONDEMNATION	38
	 	 	 
	Section 5.1	Insurance.	38
	 	 	 
	5.1.1	Insurance Policies	38
	 	 	 
	5.1.2	Insurance Company	43
	 	 	 
	Section 5.2	Casualty and Condemnation	43
	 	 	 
	5.2.1	Casualty	43
	 	 	 
	5.2.2	Condemnation	44
	 	 	 
	5.2.3	Casualty Proceeds	44
	 	 	 
	Section 5.3	Delivery of Net Proceeds	45
	 	 	 
	5.3.1	Minor Casualty or Condemnation	45
	 	 	 
	5.3.2	Major Casualty or Condemnation	45
	 	 	 
	Article 6:	CASH MANAGEMENT AND RESERVE FUNDS	49
	 	 	 
	Section 6.1	Cash Management Arrangements	49
	 	 	 
	Section 6.2	Required Repairs Funds	50
	 	 	 
	6.2.1	Deposit of Required Repairs Funds	50
	 	 	 
	6.2.2	Release of Required Repairs Funds	51
	 	 	 
	Section 6.3	Tax Funds	52
	 	 	 
	6.3.1	Deposits of Tax Funds	52
	 	 	 
	6.3.2	Release of Tax Funds	52
	 	 	 
	Section 6.4	Insurance Funds	52
	 	 	 
	6.4.1	Deposits of Insurance Funds	52
	 	 	 
	6.4.2	Release of Insurance Funds	53
	 	 	 
	6.4.3	Blanket Insurance	53
	 	 	 
	Section 6.5	FF&E Funds	53
	 	 	 
	6.5.1	Deposits of FF&E Funds	53


 




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(continued)


	 	 	Page
	 	 	 
	6.5.2	Release of FF&E Funds	54
	 	 	 
	Section 6.6	PIP Reserve	55
	 	 	 
	6.6.1	Deposit of PIP Reserve Funds	55
	 	 	 
	6.6.2	Release of PIP Reserve Funds	55
	 	 	 
	Section 6.7	Intentionally Omitted	56
	 	 	 
	Section 6.8	Operating Expenses	56
	 	 	 
	Section 6.9	Excess Cash Flow Funds	57
	 	 	 
	Section 6.10	Security Interest in Reserve Funds; Reserve Funds Generally	57
	 	 	 
	6.10.1	Grant of Security Interest	57
	 	 	 
	6.10.2	Interest on Certain Reserve Funds; Income Taxes	57
	 	 	 
	6.10.3	Prohibition Against Further Encumbrance	58
	 	 	 
	Section 6.11	Property Cash Flow Allocation	58
	 	 	 
	6.11.1	Order of Priority of Funds in Cash Management Account	58
	 	 	 
	6.11.2	Failure to Make Payments	60
	 	 	 
	6.11.3	Application After Event of Default	61
	 	 	 
	Article 7:	property MANAGEMENT	61
	 	 	 
	Section 7.1	The Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Beverage Concession Agreement	61
	 	 	 
	7.1.1	Franchise Agreement	61
	 	 	 
	7.1.2	Property Management Agreement; Intermediate Management Agreement	61
	 	 	 
	7.1.3	Beverage Concession Agreement	63
	 	 	 
	7.1.4	Defaults	63
	 	 	 
	Section 7.2	Prohibition Against Termination or Modification of Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Concession Agreement	64
	 	 	 
	7.2.1	Franchise Agreement	64
	 	 	 
	7.2.2	Intermediate Management Agreement; Property Management Agreement	64
	 	 	 
	7.2.3	Beverage Concession Agreement	65
	 	 	 
	Section 7.3	Expiration or Termination of Franchise Agreement, Intermediate Management Agreement and Property Management Agreement	65


 




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	 	 	Page
	 	 	 
	7.3.1	Expiration or Franchisor Termination	66
	 	 	 
	7.3.2	Expiration, or Property Manager or Intermediate Manager Termination	66
	 	 	 
	7.3.3	Lender’s Right to Require Replacement of Franchise Agreement	66
	 	 	 
	7.3.4	Lender’s Right to Require Replacement of Property Management Agreement	67
	 	 	 
	7.3.5	Lender’s Right to Require Replacement of Beverage Concession Agreement	67
	 	 	 
	7.3.6	Actions Following Event of Default	67
	 	 	 
	7.3.7	Assignment of Franchise Agreement	67
	 	 	 
	7.3.8	Assignment of Management Agreement	68
	 	 	 
	Article 8:	TRANSFERS	68
	 	 	 
	Section 8.1	[Reserved]	68
	 	 	 
	Section 8.2	Permitted Transfers of Interest in Restricted Parties	68
	 	 	 
	Section 8.3	Costs and Expenses	76
	 	 	 
	Section 8.4	Compliance with other Covenants	76
	 	 	 
	Article 9:	SALE AND SECURITIZATION OF LOAN	76
	 	 	 
	Section 9.1	Sale of Loan and Securitization	76
	 	 	 
	Section 9.2	Securitization Indemnification	80
	 	 	 
	Section 9.3	Severance Documentation	82
	 	 	 
	Section 9.4	Cross Collateralization	83
	 	 	 
	Section 9.5	Secondary Market Transaction Costs	84
	 	 	 
	Article 10:	DEFAULTS	84
	 	 	 
	Section 10.1	Events of Default	84
	 	 	 
	Section 10.2	Remedies	89
	 	 	 
	Section 10.3	Lender’s Right to Perform	91
	 	 	 
	Section 10.4	Remedies Cumulative	91
	 	 	 
	Article 11:	MISCELLANEOUS	91
	 	 	 
	Section 11.1	Successors and Assigns; Assignments and Participations	91
	 	 	 
	Section 11.2	Lender’s Discretion	91
	 	 	 
	Section 11.3	Governing Law	92
	 	 	 
	Section 11.4	Modification, Waiver in Writing	93
	 	 	 
	Section 11.5	Delay Not a Waiver	93


 




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	 	 	Page
	 	 	 
	Section 11.6	Notices	93
	 	 	 
	Section 11.7	Trial by Jury	95
	 	 	 
	Section 11.8	Headings	95
	 	 	 
	Section 11.9	Severability	95
	 	 	 
	Section 11.10	Preferences	95
	 	 	 
	Section 11.11	Waiver of Notice	95
	 	 	 
	Section 11.12	Remedies of Borrower	96
	 	 	 
	Section 11.13	Expenses; Indemnity	96
	 	 	 
	Section 11.14	Schedules Incorporated	98
	 	 	 
	Section 11.15	Offsets, Counterclaims and Defenses	98
	 	 	 
	Section 11.16	No Joint Venture or Partnership; No Third Party Beneficiaries	98
	 	 	 
	Section 11.17	Publicity	98
	 	 	 
	Section 11.18	Waiver of Marshalling of Assets	99
	 	 	 
	Section 11.19	Waiver of Offsets/Defenses/Counterclaims	100
	 	 	 
	Section 11.20	Conflict; Construction of Documents; Reliance	100
	 	 	 
	Section 11.21	Brokers and Financial Advisors	100
	 	 	 
	Section 11.22	Exculpation	101
	 	 	 
	Section 11.23	Prior Agreements	105
	 	 	 
	Section 11.24	Administrative Agent	105
	 	 	 
	Section 11.25	Servicer	106
	 	 	 
	Section 11.26	Refinancing Loan	107
	 	 	 
	Section 11.27	Joint and Several Liability	108
	 	 	 
	Section 11.28	Creation of Security Interest	109
	 	 	 
	Section 11.29	Counterparts	109
	 	 	 
	Section 11.30	Set-Off	109
	 	 	 
	Section 11.31	Certain Additional Rights of Lender (VCOC)	109


 


 




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SCHEDULES


 


	Schedule I	-	Definitions
	 	 	 
	Schedule II	-	Borrowers
	 	 	 
	Schedule III	-	Single Purpose Provisions
	 	 	 
	Schedule IV	-	Organizational Chart
	 	 	 
	Schedule V	-	Required Repairs
	 	 	 
	Schedule VI	-	Secondary Market Transaction Information
	 	 	 
	Schedule VII 	-	Intentionally Omitted
	 	 	 
	Schedule VIII	 	Closed Property Release Conditions
	 	 	 
	Schedule IX	 	Allocated Loan Amounts
	 	 	 
	Schedule X	 	Franchisors and Franchise Agreements
	 	 	 
	Schedule XI	 	Property Managers 
	 	 	 
	Schedule XII	 	REA
	 	 	 
	Schedule XIII	 	Operating Leases
	 	 	 
	Schedule XIV	 	PIP Reserve Funding Schedule
	 	 	 
	Schedule XV	 	Reserved
	 	 	 
	Schedule XVI	 	O&M Plans
	 	 	 
	Schedule XVII	 	Scheduled Managers
	 	 	 
	Schedule XVIII	 	Assignment of Franchise Agreement
	 	 	 
	Schedule 3.1.11	 	Condemnation Matters
	 	 	 
	Schedule 3.1.17	 	Insurance Claims
	 	 	 
	Schedule 3.1.31	 	Casualty


 


EXHIBITS


 


	
        

        Exhibit A
	-	Form of Smith Travel Research Report


 




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TABLE OF CONTENTS (cont.)


 


	Exhibit B	-	Intentionally Omitted
	 	 	 
	Exhibit C	-	Form of Credit Card Bank Payment Direction Letter
	 	 	 
	Exhibit D	-	Form of Credit Card Company Payment Direction Letter
	 	 	 
	Exhibit P-1	 	PIP Plans
	 	 	 
	Exhibit P-2	 	PIP Budgets
	 	 	 
	Exhibit P-3	 	PIP Timeline


 


 




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LOAN AGREEMENT


 


THIS LOAN AGREEMENT,
dated as of February 27, 2015 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”),
between LADDER CAPITAL FINANCE LLC, a Delaware limited liability company, having an address at 345 Park Avenue, 8th Floor,
New York, New York 10154 (“Ladder”) and DEUTSCHE BANK AG, NEW YORK BRANCH, a branch of Deutsche
Bank AG, a German Bank, having an address at 60 Wall Street, New York, New York 10005 (“DBNY”; together
with their respective successors and assigns, individually or collectively as the context may require, “Lender”)
and the Borrowers listed on Schedule II, each having an address at c/o American Realty Capital, 405 Park Avenue,
New York, New York 10022 (together with their successors and permitted assigns, individually or collectively as the context may
require, “Borrower” or “Borrowers”).


 


WITNESSETH:


 


WHEREAS, Borrowers
desire to obtain the Loan from Lender; and


 


WHEREAS, Lender
is willing to make the Loan to Borrowers, subject to and in accordance with the terms and conditions of the Loan Documents.


 


NOW, THEREFORE,
in consideration of the covenants 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           Definitions.
For all purposes of this Agreement, except as otherwise expressly provided herein, all capitalized terms used in this Agreement
shall have the respective meanings set forth on Schedule I attached hereto.


 


Section 1.2           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 shall refer to this Agreement as a whole and not to any particular provision
of this Agreement and 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 Borrowers
and Borrowers shall accept the Loan from Lender on the Closing Date.


 




    	 



    	 



    

 


2.1.2           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 One Hundred Thirty Six Million Two Hundred Thousand and No/100 Dollars ($136,200,000.00) executed by Borrowers and payable to
the order of Ladder (“Note A-1”), and (b) that certain Promissory Note A-2 of even date herewith in the stated
principal amount of Ninety Million Eight Hundred Thousand and No/100 Dollars ($90,800,000.00) executed by Borrowers and payable
to the order of DBNY (“Note A-2” and together with Note A-1, individually or collectively as the context may
require, as the same may hereafter be amended, supplemented, restated, increased, extended or consolidated from time to time, the
“Note”) and shall be repaid in accordance with the terms of this Agreement and the Note.


 


2.1.3           Use
of Proceeds. Borrowers shall use the proceeds of the Loan to (a) acquire the Properties, (b) pay and discharge any
existing loans, if any, relating to the Properties, (c) pay all past-due Taxes, Insurance Premiums and Other Charges, if any,
in respect of the Properties, (d) make initial deposits of the Reserve Funds, (e) pay costs and expenses incurred in
connection with the closing of the Loan, including, without limitation, those fees more particularly described in Section 2.1.4,
below, as approved by Lender, and (f) fund any working capital requirements of the Properties, as approved by Lender. Any
excess proceeds may be used for any lawful purpose.


 


2.1.4           Origination.
As compensation for Lender’s agreement to make the Loan, Borrowers hereby agree to pay to Lender an origination fee in the
amount of $2,270,000.00 (the “Origination Fee”). The Origination Fee is fully earned and non-refundable.


 


Section 2.2           Interest
Rate.


 


2.2.1           LIBOR
Interest Rate. Subject to the further provisions of this Agreement, including, without limitation, Sections 2.2.2
and 2.2.4 hereof, the Outstanding Principal Balance shall bear interest throughout the Term at a rate per annum equal to
the greater of (i) a floating rate of interest equal to the Applicable Spread plus LIBOR, and (ii) a fixed rate of interest equal
to six and one-quarter percent (6.25%) (in any event, the “LIBOR Interest Rate”).


 


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 and, to the extent permitted by law, overdue interest in respect of the Loan, shall, at Lender’s election, accrue
interest at the Default Rate, calculated from the date the Default occurred which led to such Event of Default, 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.


 


2.2.3           Interest
Calculation. Interest on the Outstanding Principal Balance 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 LIBOR Interest Rate, the Base Rate, or the Default Rate, as then applicable, expressed as an annual rate
divided by 360) by (c) the Outstanding Principal Balance. The


 




    	2



    	 



    

  


accrual period for calculating
interest due on each Monthly Payment Date shall be the Interest Period immediately prior to such Monthly Payment Date.


 


2.2.4           Usury
Savings. The Loan Documents are subject to the express condition that at no time shall Borrowers be required to pay interest
on the principal balance of the Loan 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 the Loan Documents, Borrowers are at any time required or obligated
to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the LIBOR Interest Rate,
the Base Rate or the Default Rate, as the case may be, 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 any Legal Requirements, 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; Term of Loan.


 


2.3.1           Loan
Payments Generally.


 


(a)          Borrower
shall make a payment to Lender of interest only on the Closing Date for the period from the Closing Date through and including
the next succeeding fifth (5th) day of a calendar month, whether such fifth (5th) day shall occur in the
calendar month in which the Closing Date occurs or in the month immediately succeeding the month in which the Closing Date occurs
(unless the Closing Date is the sixth (6th) day of a calendar month, in which case no such separate payment of interest
shall be due). Each interest accrual period (the “Interest Period”) thereafter shall commence on the sixth (6th)
day of each calendar month during the Term and shall end on and include the fifth (5th) day of the next occurring calendar month.


 


(b)          Commencing
on April 6, 2015 and on each Monthly Payment Date throughout the Term, Borrower shall make a payment to Lender monthly in arrears
of interest accruing on the Outstanding Principal Balance during each Interest Period (each such payment, a “Monthly Debt
Service Payment”), which payments shall be applied to accrued and unpaid interest.


 


(c)          Lender
shall have the right from time to time, in its sole discretion, upon not less than thirty (30) days prior written notice to Borrower,
to change the Monthly Payment Date to a different calendar day each month which is not more than five (5) days earlier nor
more than ten (10) days later than the sixth (6th) day of each calendar month; 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 correspondingly.


 




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2.3.2           Payment
on Maturity Date. The Loan shall mature on the Maturity Date. Borrower shall pay to Lender on the Maturity Date the Outstanding
Principal Balance, all accrued and unpaid interest, the Minimum Interest Required Payment, if any, the Additional Interest and
all other amounts due under the Loan Documents.


 


2.3.3           Late
Payment Charge. If any principal, interest or any other sum due under the Loan Documents, other than the payment of principal
due on the Maturity Date, is not paid by Borrower on the date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of four percent (4%) of such unpaid sum or the maximum amount permitted by any Legal Requirements, 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 Security Instruments and the other Loan Documents.


 


2.3.4           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 1:00 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 under any 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 Borrowers under the Loan Documents shall be made irrespective of, and without deduction for, any
setoff, claim, counterclaim or otherwise and shall be made irrespective of any defense thereto.


 


Section 2.4           Prepayments.


 


2.4.1           Voluntary
Prepayments.


 


(a)          Except
as otherwise provided herein, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Stated Maturity
Date.


 


(b)          Borrower
may, at its option and upon not less than thirty (30) days prior notice to Lender, prepay the Outstanding Principal Balance in
whole or in part, subject to this Section 2.4.1(b). Any prepayment received by Lender under this Section 2.4.1(b)
must be accompanied by (i) all interest which would have accrued on the principal amount prepaid through, but not including,
the next occurring Monthly Payment Date (or, if such prepayment occurs on a Monthly Payment Date, through, but not including, such
Monthly Payment Date), (ii) the Minimum Interest Required Payment (if any), (iii) the Additional Interest, (iv) all other
sums due and payable under the Loan Documents, and (v) all reasonable out-of-pocket costs and expenses incurred by Lender
in connection with such prepayment. A notice of prepayment may be revoked by Borrower if written notice of such revocation is delivered
by Borrower to Lender


 




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on or before the date
that is five (5) Business Days prior to the prepayment date set forth in the notice of prepayment. If Borrower delivers to
Lender notice of prepayment and subsequently revokes such notice prior to prepayment, Borrower shall promptly reimburse Lender
for all costs and expenses incurred by Lender (including any attorneys’ fees) due to such revoked notice or otherwise in
connection with the anticipated prepayment.


 


2.4.2           Mandatory
Prepayments. On the next occurring Monthly Payment Date following the date on which Lender actually receives a distribution
of Net Proceeds, if Lender does not make such Net Proceeds available to Borrower for a Restoration, Borrower shall, at Lender’s
option, prepay the Outstanding Principal Balance in an amount equal to one hundred percent (100%) of such Net Proceeds; provided,
however, if an Event of Default has occurred and is continuing, Lender may apply such Net Proceeds to the Debt in any order,
proportion and priority as Lender may determine in its sole and absolute discretion. Any prepayment received by Lender under this
Section 2.4.2 shall be (a) subject to Section 2.4.3 hereof and (b) accompanied by (i) all
interest which would have accrued on the principal amount prepaid through, but not including, such Monthly Payment Date, (ii) all
other sums due and payable under the Loan Documents, including the Additional Interest, and (iii) all reasonable out-of-pocket
costs and expenses incurred by Lender in connection with such prepayment. Provided that no Event of Default shall have occurred
and be continuing, no Minimum Interest Required Payment shall be due in connection with any prepayment made pursuant to this Section 2.4.2.


 


2.4.3           Prepayments
After Default. If, after the occurrence and during the continuance of an Event of Default, prepayment of all or any part of
the Debt is tendered by Borrower (which tender may be rejected by Lender to the extent permitted by applicable Legal Requirements)
or otherwise recovered by Lender (including through application of any Reserve Funds), such tender or recovery shall be deemed
(a) to have been made on the next occurring Monthly Payment Date and such prepayment shall be applied first to the Monthly
Debt Service Payment due on such date and (b) to be a voluntary prepayment by Borrower in violation of the prohibition against
prepayment set forth in Section 2.4.1(a) hereof, and Borrower shall pay, in addition to the Debt, or portion thereof
then being prepaid or satisfied, (i) the Minimum Interest Required Payment, if any, determined as of the date such prepayment
is deemed to have been paid to Lender, (ii) all interest which would have accrued on the principal amount prepaid through,
but not including, such Monthly Payment Date, (iii) if such prepayment occurs prior to the final sale of the Loan in a Secondary
Market Transaction, Hedge Losses, (iv) all other sums due and payable under the Loan Documents, including the Additional Interest
and (v) all reasonable out-of-pocket costs and expenses incurred by Lender in connection with such prepayment.


 


2.4.4           Funding
Losses; Changes in Law; Etc. (a) Borrower hereby agrees to pay to Lender any amount necessary to compensate Lender and any
Funding Party for any losses or costs (including, without limitation, the costs of breaking any “LIBOR” contract, if
applicable, or funding losses determined on the basis of Lender’s reinvestment rate and the interest rate thereon) (collectively,
“Funding Losses”) sustained by any Lender or any Funding Party: (i) if the Loan, or any portion hereof, is repaid
for any reason whatsoever on any date other than a Monthly Payment Date (including, without limitation, from condemnation or insurance
proceeds); (ii) upon the conversion of the interest rate on the Loan to the Base Rate in


 




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accordance with Section 2.4.4(b)
hereof; (iii) upon demand by Lender accompanied by a certificate of Lender stating that such additional amount is being imposed
on similarly situated loans held by Lender, as a consequence of (A) any increased costs that any Lender or any Funding Party may
sustain in maintaining the borrowing evidenced hereby, or (B) the reduction of any amounts received or receivable from Borrower,
in either case, due to the introduction of, or any change in, any law or any applicable regulation or treaty (including the administration
or interpretation thereof), whether or not having the force of law, or due to the compliance by any Lender or the Funding Party,
as the case may be, with any directive, whether or not having the force of law, or request from any central bank or domestic or
foreign governmental authority, agency or instrumentality having jurisdiction; and/or (iv) upon demand by Lender accompanied by
a certificate of Lender stating that such additional amount is being imposed on similarly situated loans held by Lender, any other
set of circumstances not attributable to any Lender’s or a Funding Party’s acts. Payment of Funding Losses hereunder
shall be in addition to any obligation to pay (X) the Additional Interest, or (Y) the Minimum Interest Required Payment.


 


(b)          If
any Lender determines (which determination shall be conclusive and binding upon Borrower, absent manifest error) (i) that U.S.
Dollar deposits in an amount approximately equal to the then Outstanding Principal Balance are not generally available at such
time in the London Interbank Market for deposits in Eurodollars, (ii) that the rate at which such deposits are being offered will
not adequately and fairly reflect the cost to Lender or a Funding Party of maintaining a LIBOR Interest Rate on the Loan (or the
portion of the Loan being funded by such Funding Party), or of funding the same in such market for such Interest Period, due to
circumstances affecting the London Interbank Market generally, (iii) that reasonable means do not exist for ascertaining LIBOR,
or (iv) that the LIBOR Interest Rate would be in excess of the maximum interest rate which Borrower may by law pay, then, in any
such event, Lender shall so notify Borrower and, as of the date of such notification with respect to an event described in clause
(ii) or (iv) above, or as of the expiration of the applicable Interest Period with respect to an event described in
clause (i) or (iii) above, interest shall accrue at the Base Rate (unless the Default Rate shall be applicable) until
such time as the situations described above are no longer in effect, or as otherwise provided herein.


 


(c)          If
the introduction of, or any change in, any law, regulation or treaty, or in the interpretation thereof by any governmental authority
charged with the administration or interpretation thereof, shall make it unlawful for any Lender to maintain the LIBOR Interest
Rate with respect to the Loan, or any portion thereof, or to fund the Loan, or any portion thereof, in Eurodollars in the London
Interbank Market, then, (i) the Loan (or such portion of the Loan) shall thereafter bear interest at the Base Rate (unless the
Default Rate shall be applicable), and (ii) Borrower shall pay to Lender the amount of Funding Losses (if any) incurred in connection
with such conversion. The accrual of interest at the Base Rate shall continue until such Monthly Payment Date, if any, as the situation
described in this Section 2.4.4(c) is no longer in effect.


 


(d)          If
any Lender shall have determined that the applicability of any law, rule, regulation or guideline adopted pursuant to or arising
out of the July 1988 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled “International
Convergence of Capital Measurement and Capital Standards”, or the adoption of any other law, rule, regulation or guideline
(including, but not limited to, any United States law, rule, regulation


 




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or guideline) regarding
capital adequacy, or any change becoming effective in any of the foregoing or in the enforcement or interpretation or administration
of any of the foregoing by any court or any domestic or foreign governmental authority, central bank or comparable agency charged
with the enforcement or interpretation or administration thereof, or compliance by Lender or its holding company, with any request
or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the capital of Lender, Lender’s holding company, to
a level below that which Lender or its holding company could have achieved but for such applicability, adoption, change or compliance
(taking into consideration Lender’s or its holding company’s policies with respect to capital adequacy) (the foregoing
being hereinafter referred to as “Capital Adequacy Events”), then, upon demand by Lender accompanied by a certificate
of Lender stating that such additional amount (prorated as appropriate) is being imposed on similarly situated loans held by Lender
and generally on an industry-wide basis, Borrower shall pay to Lender, from time to time, such additional amount or amounts as
will compensate Lender for any such reduction suffered.


 


(e)          Any
amount payable by Borrower under Section 2.4.4(a) or Section 2.4.4(d) hereof shall be paid to Lender within
five (5) days of receipt by Borrower of a certificate signed by an officer of Lender stating the amount due and the basis for the
determination of such amount, which statement shall be conclusive and binding upon Borrower, absent manifest error. Failure on
the part of Lender to demand payment from Borrower for any such amount attributable to any particular period shall not constitute
a waiver of Lender’s right to demand payment of such amount for any subsequent or prior period. Lender shall use reasonable
efforts to deliver to Borrower prompt notice of any event described in Section 2.4.4(a) or 2.4.4(d) and of the
amount to be paid under this Section 2.4.4 as a result thereof; provided, however, any failure by Lender
to so notify Borrower shall not affect Borrower’s obligation to make the payments to be made under this Section 2.4.4
as a result thereof. All amounts which may become due and payable by Borrower in accordance with the provisions of this Section 2.4.4
shall constitute additional interest hereunder and shall be secured by the Mortgage and the other Loan Documents.


 


(f)          If
any Lender or any Funding Party requests compensation for any losses or costs to be reimbursed pursuant to any one or more of the
provisions of Sections 2.4.4(a)(iii) or Section 2.4.4(d) hereof, or if any event occurs as described in Section 2.4.4(b)
or 2.4.4(c) hereof which would cause the Note no longer to bear interest at the LIBOR Interest Rate then, upon request of
Borrower, Lender or such Funding Party shall use reasonable efforts, in a manner consistent with such institution’s practice
in connection with loans similar to the Loan, to designate a different lending office for funding or booking the Loan or to assign
its rights and obligations under this Agreement to another of its offices, branches or Affiliates if such designation or assignment,
in Lender’s sole but good faith judgment, (i) would eliminate, mitigate or reduce amounts payable by Borrower in connection
with Funding Losses or Capital Adequacy Events or, with respect to an event described in Sections 2.4.4(b) or 2.4.4(c)
hereof, would allow the Loan to continue to bear interest at the LIBOR Interest Rate without additional cost to Lender, and (ii)
would not be otherwise prejudicial to Lender. Borrower hereby agrees to pay all reasonably incurred out-of-pocket costs and expenses
incurred by Lender or any Funding Party in connection with any such designation or assignment.


 




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Section 2.5           Intentionally
Omitted.


 


Section 2.6           Loan
Taxes.


 


(a)          Any
and all payments by Borrower to Lender hereunder and under the other Loan Documents shall, provided that Lender complies with the
requirements of Section 2.6(c) hereof, be made free and clear of, and without deduction for, any and all present or
future taxes, levies, imposts, deductions, charges, withholdings or liabilities with respect thereto, except for the following,
for which Borrower shall not be responsible: (i) taxes imposed on or measured by Lender’s net income or net receipts; or
(ii) franchise taxes imposed on Lender by the jurisdiction in which (A) Lender is organized, (B) Lender is “doing business”
(unless such determination of “doing business” is made solely as a result of Lender’s interest in the Loan and
the security therefor), or (C) Lender’s applicable lending office is located (all such taxes, levies, imposts, deductions,
charges or withholdings and liabilities (except those described in the foregoing clauses (i) and (ii)) being hereinafter
referred to as “Loan Taxes”). If Borrower shall be required by law to deduct or withhold any Loan Taxes from or in
respect of any sum payable hereunder or under any other Loan Document, then (1) any such sum payable hereunder or under any other
Loan Document shall be increased as may be necessary so that after making all required deductions or withholdings (including deductions
applicable to additional sums payable under this Section 2.6), Lender receives an amount equal to the sum it would
have received had no such deductions or withholdings (including deductions applicable to additional sums payable under this Section 2.6)
been made, (2) Borrower shall make such deductions or withholdings, and (3) Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority in accordance with all Legal Requirements. Borrower will indemnify Lender for the full amount
of any Loan Taxes (including, without limitation, any Loan Taxes (as well as taxes described in clauses (i) and (ii)
of the second preceding sentence) imposed by any jurisdiction on any amounts payable under this Section 2.6) paid or
payable by Lender and any liability (including, without limitation, penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Loan Taxes were correctly or legally asserted. A certificate as to the amount of such payment
or liability delivered to Borrower by Lender shall be conclusive absent manifest error. The agreements and obligations of Borrower
contained in this Section 2.6 shall survive the payment in full of principal and interest under this Agreement and
the Note.


 


(b)          Within
thirty (30) days after the date of any payment of Loan Taxes withheld by Borrower in respect of any payment to Lender, Borrower
will furnish to Lender the original or a certified copy of a receipt or other evidence satisfactory to Lender evidencing payment
thereof.


 


(c)          If
Lender is a U.S. Person (other than the lender originally named herein), Lender shall deliver to Borrower, upon request, a Form
W-9 (unless it establishes to the reasonable satisfaction of Borrower that it is otherwise eligible for an exemption from backup
withholding tax or other withholding tax). If Lender is not a U.S. Person, Lender shall deliver to Borrower, upon request, either
(i) a Form W-8BEN which indicates a 0% rate of tax or (ii) a Form W-8ECI. If Lender is not a U.S. Person, Lender further undertakes
to deliver to Borrower additional Forms W-8, 1001, 4224 (or any successor forms) or other manner of certification, as the case
may be, (A) on or before the date that any such form expires or becomes obsolete, (B) after the occurrence of any event requiring
a change in the most recent form previously delivered


 




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by it to Borrower, and
(C) such extensions or renewals thereof as may reasonably be requested by Borrower, certifying that Lender is entitled to receive
payments hereunder without deduction or withholding of any Loan Taxes. However, in the event that any change in law, rule, regulation,
treaty or directive, or in the interpretation or application thereof (a “Law Change”), has occurred prior to the date
on which any delivery pursuant to the preceding sentence would otherwise be required which renders such form inapplicable, or which
would prevent Lender from duly completing and delivering any such form, or if such Law Change results in Lender being unable to
deliver a Form W-9 (or other satisfactory evidence that it is otherwise eligible for an exemption from backup withholding tax or
other withholding tax), Lender shall not be obligated to deliver such forms but shall, promptly following such Law Change, but
in any event prior to the time the next payment hereunder is due following such Law Change, advise Borrower in writing whether
it is capable of receiving payments without any deduction or withholding of Loan Taxes. In the event of such Law Change, Borrower
shall have the obligation to make Lender whole and to “gross-up” under Section 2.6(a) hereof, despite the
failure by Lender to deliver such forms.


 


(d)          If
Lender receives a refund in respect of Loan Taxes paid by Borrower, it shall promptly pay such refund, together with any other
amounts paid by Borrower pursuant to Section 2.6(a) hereof in connection with such refunded Loan Taxes, to Borrower;
provided, however, that Borrower agrees to promptly return such refund to Lender if it receives notice from Lender
that it is required to repay such refund. Nothing contained herein shall be construed to require Lender to seek any refund and
Lender shall have no obligation to Borrower to do so.


 


(e)          All
amounts payable under this Section 2.6 shall constitute additional interest hereunder and shall be secured by the Security
Instruments and the other Loan Documents.


 


(f)          Any
reference under this Section 2.6 to “Lender” shall be deemed to include each Lender and any participant
and any assignees.


 


Section 2.7           Extension
of the Maturity Date.


 


2.7.1           Extension
Option. Upon the satisfaction of the terms and conditions set forth in this Section 2.7.1, Borrower shall have
the option (the “Extension Option”) to extend the Stated Maturity Date and the term of the Loan for one (1)
term of twelve (12) months (the “Extension Period”) to March 6, 2018 (the “Extended Maturity
Date”):


 


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


 


(b)          Lender
shall have received from Borrower all sums then due and payable under the Loan Documents, including all payments of (or reimbursement
of Lender for) any reasonable out of pocket miscellaneous fees or expenses (including, without limitation, any “protective
advances” made by Lender in respect of the Loan);


 


(c)          Borrower
shall notify Lender, in writing, of its irrevocable election to extend the Maturity Date as aforesaid not later than thirty (30)
days prior to the Stated


 




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Maturity Date, which
notice shall be accompanied by payment to Lender of an extension fee equal to one quarter of one percent (0.25%) of the Outstanding
Principal Balance;


 


(d)          The
Debt Service Coverage Ratio as of the date of commencement of the Extension Period shall be no less than 1.60:1.00;


 


(e)          The
Loan-to-Value Ratio as of the date of commencement of the Extension Period shall be no greater than sixty-eight percent (68%);


 


(f)          The
Reserve Accounts, including, without limitation, the PIP Reserve Account, shall be funded by Borrowers in amounts reasonably required
by Lender, including, without limitation, (i) amounts estimated by Lender as sufficient to pay all costs for which the Reserve
Funds were originally established, and (ii) any estimated or outstanding costs of completing all PIP Alterations and other expenditures
required under any existing PIP Plans or other property improvement plans approved by Lender in accordance with the terms hereof,
in the case of each of (i) and (ii), through the Extended Maturity Date;


 


(g)          Guarantors
shall execute and deliver a reaffirmation, in form and substance reasonably satisfactory to Lender, of Guarantors’ respective
obligations under each of the Loan Documents executed and delivered by them;


 


(h)          If
the Interest Rate Protection Trigger Date has occurred prior to the Stated Maturity Date, then on or prior to Stated Maturity Date,
Borrower shall either (i) extend the term of the then-existing Interest Rate Protection Agreement until the Extended Maturity Date
or (ii) enter into a new Interest Rate Protection agreement which expires no earlier than the Extended Maturity Date, which extension
or new agreement is on the same terms as set forth in Section 2.8.1, has the effect of capping LIBOR at three percent
(3.0%) per annum through the Extended Maturity Date, has a notional amount equal to the Outstanding Principal Balance as of the
stated Maturity Date, includes a consent or acknowledgement by the counterparty as described in Section 2.8.1, and
is assigned to Lender pursuant to an Assignment of Interest Rate Protection Agreement as described in Section 2.8.1;


 


(i)          Borrowers
provide an estoppel certificate or so-called “good standing letter” executed by each Franchisor under each Franchise
Agreement not earlier than sixty (60) days prior to commencement of the Extension Period, in form and substance reasonably satisfactory
to Lender, identifying the applicable Franchise Agreement and any amendments thereto, confirming that the applicable Borrower is
not in default of any material obligation under the applicable Franchise Agreement, confirming the status of any PIP and PIP Work,
and confirming that the applicable Franchise Agreement is in full force and effect (provided, however, that any outstanding franchisor
notice relating to any guest satisfaction or similar program shall not be considered a default of a material obligation unless
the condition resulting in such notice constitutes a breach or default by Borrower that, with the passage of time and/or delivery
of notice, permits Franchisor to terminate or cancel the Franchise Agreement);


 


(j)          Borrowers
shall deliver to Lender an Officer’s Certificate stating that all representations and warranties of Borrowers set forth in
Article 3 remain true and correct, subject to any changes in facts or circumstances permitted to have occurred, or not prohibited


 




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from having occurred,
pursuant to the terms of the Loan Documents (in which case such change of facts and circumstances shall be set forth in such Officer’s
Certificate with reference to the applicable representation(s) and warranty(ies)) or setting forth any exceptions to such representations
and warranties, which exceptions shall be satisfactory to Lender;


 


(k)          The
absence of any Governmental Matter which, in Lender’s reasonable business judgment exercised in good faith, could reasonably
be likely to (i) result in a Material Adverse Effect or (ii) subject Lender to material reputational risk; provided, however,
(A) Borrower may satisfy this condition notwithstanding the existence of a Governmental Matter if, prior to the commencement of
the Extension Period, Borrower, Guarantor, Affiliated Manager, any of their respective external corporate advisors (including AR
Capital, LLC) or any of their respective Affiliates, as applicable, acts to suspend, remove or otherwise terminate the power to
control Borrower or Guarantor, directly or indirectly, of the Person(s) subject to such Governmental Matter, and Lender determines
in its reasonable business judgment exercised in good faith that such suspension, removal or termination will prevent any of the
circumstances set forth in clauses (i) and (ii) above from occurring; and (B) the condition in this clause (k)
shall not apply if a Permitted Common Equity Buyout Event has occurred prior to the Stated Maturity Date.


 


(l)          Borrowers
shall deliver to Lender such other certificates, documents or instruments as Lender may reasonably require; and


 


(m)          Reimbursement
to Lender of all of its out-of-pocket costs, including attorneys’ fees, incurred in connection with Borrowers’ exercise
of the Extension Option.


 


2.7.2           Maturity
Date. All references in this Agreement and in the other Loan Documents to the Maturity Date and Stated Maturity Date shall
include the Extended Maturity Date in the event the Extension Option is exercised and Borrower fulfills the conditions set forth
in Section 2.7.1.


 


Section 2.8           Interest
Rate Protection Agreements.


 


2.8.1           Interest
Rate Protection Agreement. Not later than ten (10) Business Days after the occurrence of an Interest Rate Protection Trigger
Date (whether before or after commencement of the Extension Period), Borrower shall enter into, make all payments required under,
and satisfy all conditions precedent to the effectiveness of, an interest rate protection agreement that satisfies all of the following
conditions (such interest rate protection agreement, together with (i) any extension thereof or (ii) any other interest rate protection
agreement entered into pursuant to this Section 2.8 or Section 2.7(h), being referred to herein as an “Interest
Rate Protection Agreement”):


 


(a)          The
Interest Rate Protection Agreement shall be with a financial institution having a long term, unsecured and unsubordinated debt
rating of at least “A+” by S&P and “A1” by Moody’s; have a term ending no earlier than the Stated
Maturity Date; be an interest rate cap in respect of a notional amount of not less than the Outstanding Principal Balance as of
the date that the Interest Rate Cap Agreement is purchased; shall have the effect of


 




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capping LIBOR at three
percent (3.00%) per annum; and shall provide that the only obligation of Borrower thereunder is the making of a single payment
upon the execution and delivery thereof.


 


(b)          Immediately
after issuance of the Interest Rate Protection Agreement (and, if the Extension Option has been exercised, not later than commencement
of the Extension Period), Borrower’s interest in such Interest Rate Protection Agreement shall be assigned to Lender pursuant
to documentation reasonably satisfactory to Lender in form and substance (an “Assignment of Interest Rate Protection Agreement”),
and the counterparty to such Interest Rate Protection Agreement shall execute and deliver to Lender an acknowledgment of such assignment,
which acknowledgment shall be reasonably satisfactory to Lender in form and substance and, without limitation, shall include such
counterparty’s agreement to (i) pay directly into the Clearing Account all sums payable by such counterparty pursuant to
the Interest Rate Protection Agreement and (ii) designate a successor counterparty under the Interest Rate Protection Agreement,
which successor counterparty shall satisfy the criteria set forth in subsection (a) above and this subsection 
(b), not later than ten (10) Business Days after the long term, unsecured and unsubordinated debt rating of such counterparty
is downgraded below “A+” by S&P or “A1” by Moody’s, unless such counterparty deposits with Lender
collateral, in form, value and substance acceptable to Lender in its sole discretion and pursuant to documentation acceptable to
Lender in its sole reasonable discretion.


 


(c)          In
connection with each Interest Rate Protection Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from
counsel for the counterparty (which counsel may be in–house counsel for the counterparty) (upon which Lender and its successors
and assigns and the Rating Agencies may rely) which shall provide, in relevant part, substantially to the effect that:


 


(i)          the
counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or organization
and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate
Protection Agreement;


 


(ii)         the
execution and delivery of the Interest Rate Protection Agreement by the counterparty, and any other agreement which the counterparty
has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized
by all necessary action and do not contravene any provision of its certificate of incorporation or by–laws (or equivalent
organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;


 


(iii)        all
consents, authorizations and approvals required for the execution and delivery by the counterparty of the Interest Rate Protection
Agreement, and any other agreement which the counterparty 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


 




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(iv)        the
Interest Rate Protection Agreement, and any other agreement which the counterparty has executed and delivered pursuant thereto,
has been duly executed and delivered by the counterparty and constitutes the legal, valid and binding obligation of the counterparty,
enforceable against the counterparty 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).


 


2.8.2           Execution
of Documents. Borrower shall promptly execute and deliver to the counterparty of the Interest Rate Protection Agreement such
confirmations and agreements as may be requested by such counterparty in connection with such Interest Rate Protection Agreement.


 


2.8.3           No
Obligation of Lender. Borrower agrees that Lender shall not have any obligation, duty or responsibility to Borrower or any
other Person by reason of, or in connection with, any Interest Rate Protection Agreement (including any duty to provide or arrange
any Interest Rate Protection Agreement, to consent to any mortgage or pledge of the Property or any portion thereof as security
for Borrower’s performance of its obligations under any Interest Rate Protection Agreement, or to provide any credit or financial
support for the obligations of Borrower or any other Person thereunder or with respect thereto). No Interest Rate Protection Agreement
shall alter, impair, restrict, limit or modify in any respect the obligation of Borrower to pay interest on the Loan as and when
the same becomes due and payable in accordance with the provisions of the Loan Documents.


 


2.8.4           Receipts
from Interest Rate Protection Agreements. All payments made by the counterparty to the Interest Rate Protection Agreement shall
be deposited into the Clearing Account and applied in the same manner as all Gross Revenue is applied under Section 6.1.


 


2.8.5           Downgrade
of Counterparty. Borrower shall cause any counterparty under any Interest Rate Protection Agreement to be replaced with a successor
counterparty, which successor counterparty shall satisfy the criteria set forth in Section 2.6.1(a), not later than
ten (10) Business Days after the long term unsecured and unsubordinated debt rating of such counterparty is downgraded below “A+”
by S&P or “A1” by Moody’s.


 


Section 2.9           Additional
Interest.


 


(a)          Subject
only to Section 2.9(d) below, Borrower shall be obligated to pay the Additional Interest to Lender as follows:


 


(i)          Upon
any (and each) application of any Net Proceeds to the Debt in accordance with the terms of this Agreement and the Security Instrument,
one and one-quarter percent (1.25%) of the amount thereof shall be retained by Lender on account of the Additional Interest and
the balance thereof shall be applied in reduction of the Outstanding Principal Balance;


 


(ii)         Other
than as set forth in the foregoing clause (i) and the following clause (iii), upon any (and each) partial prepayment
of the Debt in accordance with the


 




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terms of this Agreement
one and one-quarter percent (1.25%) of the amount thereof shall be retained by Lender or paid to Lender on account of the Additional
Interest prior to the application of the balance of such partial prepayment in reduction of the Outstanding Principal Balance (Borrower
acknowledging that only such amount actually applied in reduction of the Outstanding Principal Balance shall be deemed a prepayment
for all purposes under this Agreement); and


 


(iii)        Upon
repayment in full of the Debt or the acceleration thereof in accordance with the terms of any of the Loan Documents, Borrower shall
pay to Lender the entire Additional Interest, less any amounts on account thereof previously paid to Lender under the foregoing
clauses (i), and/or (ii) of this Section 2.9(a), as applicable, and/or elsewhere under this Agreement.


 


(b)          In
furtherance of the foregoing, Borrower expressly acknowledges and agrees that (i) Lender shall have no obligation to accept any
prepayment of the Loan unless and until Borrower shall have complied with this Section 2.9, and (ii) Lender shall have
no obligation to release any Loan Document or Security Instrument upon payment of the Debt unless and until Lender shall have received
the Additional Interest then due and payable.


 


(c)          Borrower
expressly acknowledges and agrees that the Additional Interest shall constitute additional consideration for the Loan.


 


(d)          Notwithstanding
anything herein or in any other Loan Document to the contrary, if and to the extent that either Ladder or DBNY shall fund a fixed
rate mortgage loan for the purpose of refinancing all of the Properties, then the Additional Interest due to such refinancing Lender
in respect of that portion of the Loan originally financed by such Lender hereunder shall be reduced to one-quarter of one percent
(0.25%) and the remaining portion of the Additional Interest in respect of that portion of the Loan originally financed by such
Lender (i.e., one percent (1%)) shall be waived; provided, however, the balance of Additional Interest due hereunder
to the non-refinancing Lender shall be due and payable, without reduction, in accordance with Section 2.9(a) hereof.


 


Section 2.10         REMIC
Test on Property Release. Notwithstanding anything to the contrary contained herein or in any other Loan Document,
if the Loan is included in a REMIC Trust and (a) any Property or any portion of any Property is sought to be released from
the Lien of any Security Instrument, whether in connection with the release of any individual Property pursuant to the Closed Property
Release Conditions, a Casualty or Condemnation or otherwise, and (b) immediately after any such release the ratio of the unpaid
principal balance of the Loan to the value of the remaining Properties (but, in the case of a Casualty or Condemnation, taking
into account any proposed Restoration of any remaining Property) is greater than one hundred twenty-five percent (125%) (based
solely on real property and excluding any personal property or going concern value) (such value to be determined, in Lender’s
sole discretion, by any commercially reasonable method permitted to a REMIC Trust, it being understood that Lender shall not require
a new or updated appraisal to make such determination so long as there is another commercially reasonable valuation method available
to Lender, which may include a buyer’s purchase price in the case of a contemporaneous arm’s length sale and assumption
of the Loan or a broker’s price opinion so long as such method is a commercially reasonable valuation


 




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method permitted to a
REMIC Trust, as determined in Lender’s sole discretion), the Outstanding Principal Balance must first be paid down by a “qualified
amount” as such term is defined in Internal Revenue Service Revenue Procedure 2010-30, as the same may be modified, supplemented,
superseded or amended from time to time (regardless of whether Borrowers or Lender actually receive or are entitled to receive
any related Net Proceeds in the case of a Casualty or Condemnation), unless Lender receives an opinion of counsel that, if the
foregoing prepayment is not made, the applicable REMIC Trust will neither fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code or be subject to any tax, in either case, as a result
of such release. If and to the extent the release is in connection with a Casualty or Condemnation, and if Borrowers shall have
otherwise satisfied each of the conditions to release of Net Proceeds as set forth in Section 5.3, only such amount
of the Net Proceeds then held or controlled by Lender, if any, in excess of the “qualified amount” required to pay
down the principal balance of the Loan may be released for purposes of Restoration or released as otherwise expressly provided
in Section 5.3. Any prepayment made under this Section 2.7 shall be accompanied by payment of the Additional
Interest and the Minimum Interest Required Payment, except that so long as no Event of Default shall have occurred and be continuing,
no Minimum Interest Required Payment shall be due in connection with any such prepayment made by reason of a release in connection
with a Casualty or Condemnation. Borrowers shall pay or, if Borrower fails to pay, reimburse Lender upon receipt of notice from
Lender, for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred
by Lender in connection with confirming compliance with or enforcing the terms and provisions of this Section 2.7.


 


Article
3: REPRESENTATIONS AND WARRANTIES


 


Section 3.1           Borrower
Representations. Each of the representations and warranties made by Borrower in this Article 3 shall be deemed to be made
separately by each Borrower; provided, however, and subject to the terms of this Agreement, the liability for any inaccuracies
in such representations and warranties shall be joint and several among the Borrowers. Each Borrower represents and warrants to
Lender that:


 


3.1.1           Organization.
Each Borrower 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 in all jurisdictions in which the ownership or lease of its property
or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a Material
Adverse Effect, and each Borrower has taken all necessary action to authorize the execution, delivery and performance of the Loan
Documents by it, and has the power and authority to execute, deliver and perform under the Loan Documents and all the transactions
contemplated by the Loan Documents.


 


3.1.2           Proceedings.
The Loan Documents have been duly authorized, executed and delivered by each Borrower and constitute a legal, valid and binding
obligation of each Borrower, enforceable against each Borrower 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).


 




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3.1.3           No
Conflicts. The execution and delivery of the Loan Documents by each Borrower and the performance of its Obligations under the
Loan Documents will not conflict with any provision of any law or regulation to which Borrower 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 any Borrower’s organizational
documents or any agreement or instrument to which any Borrower 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 any Borrower’s assets or property (other than
pursuant to the Loan Documents).


 


3.1.4           Litigation.
There is no action, suit, proceeding or investigation pending or, to Borrowers’ knowledge, threatened against any Borrower,
any SPC Party, Guarantor, Property Manager, Intermediate Manager or any Property in any court or by or before any other
Governmental Authority which, if adversely determined, might have a Material Adverse Effect.


 


3.1.5           Agreements.
No Borrower is in default with respect to any order or decree of any court or any order, regulation or demand of any Governmental
Authority, which default might have a Material Adverse Effect. No Borrower is in default in any material respect 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 Property is bound.


 


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 any Borrower of, or compliance by such Borrower with, the Loan Documents or the consummation of the transactions
contemplated hereby, other than those which have been obtained by each Borrower.


 


3.1.7           Title.
Each Borrower has good, marketable and insurable fee simple title to the real property comprising part of its respective
Property and good title to the balance of the Property owned by it, free and clear of all Liens whatsoever except the Permitted
Encumbrances. None of the Permitted Encumbrances, individually or in the aggregate, (a) materially interfere with the benefits
of the security intended to be provided by the Loan Documents, (b) materially and adversely affect the value of the Property,
(c) impair the use or operation of the Property, or (d) impair Borrower’s ability to pay its Obligations in a timely
manner. The Security Instruments, 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 interest in the Properties, subject only to Permitted Encumbrances, and (ii) perfected security interests
in and to, and perfected collateral assignments of, all personalty (including the Leases) in which a security interest can be perfected
by filing the Security Instruments and/or a financing statement, all in accordance with the terms thereof, in each case subject
only to the 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 of the Properties which are or may become Liens prior to, or equal or coordinate
with, the Lien of the Security Instruments.


 




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3.1.8           No
Plan Assets. No Borrower is an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title
I of ERISA or Section 4975 of the Code, and none of the assets of Borrower constitutes or will constitute “plan assets”
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. Compliance by each Borrower with the provisions
hereof will not involve any Prohibited Transaction. Neither Guarantor nor any Borrower has any pension, profit sharing, stock option,
insurance or other arrangement or plan for employees covered by Title IV of ERISA, and no “Reportable Event” as defined
in ERISA has occurred and is now continuing with respect to any such plan. The performance by each Borrower of its obligations
under the Loan Documents and each Borrower’s conducting of its operations do not violate any provisions of ERISA. In addition,
(a) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA, (b) transactions
by or with any Borrower are not subject to any state statute or regulation regulating investments of, or fiduciary obligations
with respect to, governmental plans within the meaning of Section 2(32) of ERISA which is similar to the provisions of Section 406
of ERISA or Section 4975 of the Code currently in effect, which prohibit or otherwise restrict the transactions contemplated
by this Agreement, and (c) none of any Borrower, Guarantor or ERISA Affiliate is as of the date hereof, or has been at any
time within the two (2) years preceding the date hereof, an employer required to contribute to any Multiemployer Plan or Multiple
Employer Plan, or a “contributing sponsor” (as such term is defined in Section 4001 of ERISA) in any Multiemployer
Plan or Multiple Employer Plan; and none of any Borrower, Guarantor or any ERISA Affiliate has any contingent liability with respect
to any post-retirement “welfare benefit plan” (as such term is defined in ERISA) except as disclosed to Lender in writing.
For purposes of this Section 3.1.8, Borrowers shall be entitled to assume that no source of funds used to make the Loan
constitutes “plan assets” within the meaning of Section 3(42) of ERISA.


 


3.1.9           Compliance.
To Borrower’s knowledge, except as otherwise disclosed in writing to Lender in the zoning reports prepared by Massey Consulting
Group and delivered to Lender in connection with the closing of the Loan (collectively, the “Zoning Reports”),
Borrowers and the Properties and the use thereof currently comply in all material respects with all applicable Legal Requirements,
including parking, building and zoning and land use laws, ordinances, regulations and codes. No Borrower is in default or violation
of any order, writ, injunction, decree or demand of any Governmental Authority, the violation of which might have a Material Adverse
Effect. There has not been committed by Borrower or, to Borrower’s knowledge, any other Person in occupancy of or involved
with the operation or use of any Property any act or omission which may give any Governmental Authority the right to cause Borrower
to forfeit the Property or any part thereof or any monies paid in performance of Borrowers’ Obligations under any of the
Loan Documents. Except as otherwise disclosed to Lender in the Zoning Reports, 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 existing as of the date
hereof and without the necessity of obtaining any variances or special permits. No legal proceedings are pending or, to the knowledge
of any Borrower, threatened with respect to the zoning of any Property. Neither the zoning nor any other right to construct, use
or operate any Property is in any way dependent upon or related to any property other than such Property. The use being made of
each Property is in conformity with the certificate of occupancy issued for such Property and all other restrictions, covenants
and conditions affecting the Property.


 




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3.1.10         Financial
Information. All financial data, including the statements of cash flow and income and operating expense, that have been delivered
to Lender in respect of Borrowers and the Properties (a) are true, complete and correct in all material respects, (b) accurately
represent the financial condition of each Property as of the date of such reports, and (c) have been prepared in accordance
with sound accounting principles throughout the periods covered. No Borrower has any contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are
known to any Borrower and reasonably likely to have a Material Adverse Effect, 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 any Borrowers or any of the Properties from that set forth in said financial statements.


 


3.1.11         Condemnation.
Except as set forth on Schedule 3.1.11 of this Agreement, no Condemnation or other proceeding has been commenced or, to
Borrowers’ knowledge, is contemplated with respect to all or any portion of any of the Properties or for the relocation of
roadways providing access to any of the Properties.


 


3.1.12         Easements;
Utilities and Public Access. To Borrower’s knowledge, all easements, cross easements, licenses, air rights and rights-of-way
or other similar property interests (collectively, “Easements”), if any, necessary for the full utilization
of the Improvements for their intended purposes have been obtained, are described in the Title Insurance Policy and are in full
force and effect without default thereunder. Each Property has rights of access to public ways and is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service the Property for its intended uses. All public utilities necessary or convenient
to the full use and enjoyment of each Property are, to Borrower’s knowledge, located in the public right-of-way abutting
the Property, and all such utilities are connected so as to serve the Property without passing over other property absent a valid
easement. All roads necessary for the use of each Property for its current purpose have been completed and dedicated to public
use and accepted by all Governmental Authorities.


 


3.1.13         Separate
Lots. To Borrower’s knowledge, each Property is comprised of one or more parcels which constitute separate tax lots and
do not constitute a portion of any other tax lot not a part of such Property.


 


3.1.14         Taxes
and Assessments. All Taxes and governmental assessments owing in respect of each Property have been paid or an escrow of funds
in an amount sufficient to cover such payments has been established hereunder. There are no pending or, to Borrower’s knowledge,
proposed special or other assessments for public improvements or otherwise affecting any Property, nor are there any contemplated
improvements to any Property that may result in such special or other assessments.


 


3.1.15         Enforceability.
The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by any Borrower, 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 (subject to applicable bankruptcy,


 




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insolvency or similar
laws affecting creditor’s rights and principles of equity), and no Borrower has asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.


 


3.1.16         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 to exercise certain rights and to perform certain obligations of the lessor
under the Leases, including the right to operate the Property. No Person other than Lender has any interest in or assignment of
the Leases or any portion of the Rents due and payable or to become due and payable thereunder.


 


3.1.17         Insurance.
Borrower has obtained and delivered, or has caused to be obtained and delivered, to Lender original certificates evidencing all
of the Policies, with all premiums paid as they become due, reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement. Except as set forth on Schedule 3.1.17 of this Agreement, no claims are pending with respect
to any Property under any of the Policies, and no Person, including any Borrower, has done, by act or omission, anything which
would impair the coverage of any of the Policies.


 


3.1.18         Licenses.
All permits and approvals, including without limitation, certificates of occupancy and any applicable liquor license (or interim
beverage agreement) required by any Governmental Authority for the use, occupancy and operation of each Property in the manner
in which such Property is currently being used, occupied and operated have been obtained and are in full force and effect.


 


3.1.19         Flood
Zone. Except as shown on the Survey, none of the Improvements on any of the Properties are located in an area identified by
the Federal Emergency Management Agency as a special flood hazard area.


 


3.1.20         Physical
Condition. To Borrower’s knowledge, and except as disclosed by the physical condition report for such Property prepared
by Nova Consulting Group, Inc., delivered to Lender in connection with the closing of the Loan, each 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; there exists no structural or other material
defects or damages in such Property, whether latent (to Borrower’s knowledge) or otherwise, and no Borrower has received
notice from any insurance company or bonding company of any defects or inadequacies in any 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 of
any termination or threatened termination of any policy of insurance or bond.


 


3.1.21         Boundaries.
Except as shown on the Survey prepared and delivered to Lender in connection with the closing of the Loan, all of the Improvements
which were included in determining the appraised value of the Properties lie wholly within the boundaries and building restriction
lines of each Property, and no improvements on adjoining properties encroach upon any Property, and no easements or other encumbrances
affecting any Property


 




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encroach upon any of
the Improvements, so as to affect the value or marketability of such Property, except those which are insured against by the Title
Insurance Policy or are Permitted Encumbrances with respect to the Property.


 


3.1.22         Leases.
No Property is subject to any Leases other than that certain parking agreement between Global Airport Parking, Inc. and Hampton
Inn Knoxville Airport, dated as of August 8, 2012. No Person has any possessory interest in any Property or right to occupy the
same.


 


3.1.23         Filing
and Recording Taxes. 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 the 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 Security Instruments, have been paid or are being paid simultaneously
herewith. All taxes and governmental assessments due and owing in respect of the Property 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.


 


3.1.24         Single
Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that since each Borrower’s, each SPC
Party’s and each Liquor License Subsidiary’s creation, as of the date hereof and until such time as the Obligations
shall be paid and performed in full, each Borrower, each Liquor License Subsidiary and each SPC Party have complied with, are in
compliance with, and shall comply with the requirements set forth on Schedule III attached hereto.


 


3.1.25         Tax
Filings. To the extent required, each Borrower has 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 any Borrower. Borrower believes that
its tax returns (if any) properly reflect the income and taxes of Borrower for the periods covered thereby, subject only to reasonable
adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.


 


3.1.26         Solvency.
Borrowers have (a)  not entered into the transaction or any Loan Document with the actual intent to hinder, delay, or defraud
any creditor and (b) received reasonably equivalent value in exchange for its Obligations under the Loan Documents. Giving
effect to the Loan, the fair saleable value of Borrowers’ assets exceeds and will, immediately following the making of the
Loan, exceed Borrowers’ total liabilities, including subordinated, unliquidated, disputed and contingent liabilities. The
fair saleable value of Borrowers’ assets is and immediately following the making of the Loan, will be greater than Borrowers’
probable liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and
matured. Borrowers’ 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. Borrowers do not intend to, and does not believe
that it will,


 




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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 Borrowers and the amounts to be payable on
or in respect of the obligations of Borrowers).


 


3.1.27         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 Regulations T, U or X of the Board of Governors of the Federal Reserve System or for any other
purpose which would be inconsistent with such Regulations T, U or X or any other Regulations of such Board of Governors, or for
any purposes prohibited by Legal Requirements or by the terms and conditions of the Loan Documents.


 


3.1.28         Organizational
Chart. The organizational chart attached as Schedule IV hereto, relating to Borrower 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 IV
have any ownership interest in, or right of Control, directly or indirectly, in Borrower or Guarantor.


 


3.1.29         Organizational
Status. Each Borrower’s exact legal name, organizational type, jurisdiction of formation, tax identification number and
organizational identification number are as shown on Schedule II.


 


3.1.30         Bank
Holding Company. No Borrower is a “bank holding company” or a direct subsidiary of a “bank holding company”
as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal
Reserve System.


 


3.1.31         No
Casualty. To Borrower’s knowledge, except as disclosed in the physical condition report for the Property prepared by
Nova Consulting Group, Inc. and the PIP Plans, the Improvements have suffered no material casualty or damage which has not been
fully repaired and the cost thereof fully paid.


 


3.1.32         Purchase
Options. None of the Properties nor any part thereof or interest therein are subject to any purchase options, rights of first
refusal or offer to purchase or other similar rights in favor of third parties.


 


3.1.33         FIRPTA.
No Borrower is a “foreign person” within the meaning of Sections 1445 or 7701 of the Code.


 


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


 


3.1.35         Investment
Company Act. No Borrower is (a) an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, or (b) subject to any other United States
federal or state law or regulation which purports to restrict or regulate its ability to borrow money.


 




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3.1.36         Use
of Property. Each Property consists solely of a hotel and related operations and is used for no other purpose.


 


3.1.37         Fiscal
Year. Each fiscal year of Borrower commences on January 1.


 


3.1.38         No
Other Financing. No Borrower has borrowed any funds which have not heretofore been repaid in full, except for the Loan.


 


3.1.39         Contracts.


 


(a)          No
Borrower has entered into, and is not 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 any Borrower thereunder
and, to the knowledge of Borrowers, there are no monetary or other material defaults thereunder by any other party thereto. None
of any Borrower, Property Manager, Intermediate Manager or any other Person acting on any Borrower’s behalf has given or
received any notice of default under any of the Major Contracts that remains uncured or in dispute.


 


(c)          To
Borrower’s knowledge, Borrower has identified all Major Contracts and delivered to Lender true, correct and complete copies
of the Major Contracts (including all amendments and supplements thereto) requested by Lender.


 


(d)          Except
for the Intermediate Management Agreements, any Property Management Agreement with Crestline Hotels & Resorts, LLC as Property
Manager, and the Beverage Concession Agreement, no Major Contract has as a party an Affiliate of Borrower. All fees and other compensation
for services previously performed under the Intermediate Management Agreements have been paid in full.


 


3.1.40         Full
and Accurate Disclosure; No Change in Facts. All information submitted by or on behalf of Borrower, Guarantor and their respective
Affiliates to Lender and in all financial statements, rent rolls, reports, certificates and other documents submitted in connection
with the Loan or in satisfaction of the terms of the Loan Documents is true, correct and complete in all material respects. No
statement of fact made by Borrower or any Affiliate of any Borrower in any of the Loan Documents or in any written statement or
document furnished by or on behalf of Borrower in connection with the Loan or pursuant to the Loan Documents, including, without
limitation, any documentation submitted to Lender in connection with or pursuant to the Term Sheet, 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 fact presently known to any Borrower which has not been disclosed to Lender which could have a Material Adverse Effect,
other than with regard to market risk inherent in projecting future operations, and there has been no material adverse change in
any condition, fact or circumstance that would make any of the information or statements of fact referenced above inaccurate, incomplete
or otherwise misleading in any material respect or that otherwise could reasonably be expected to have a Material Adverse Effect.


 


 




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3.1.41         Other
Obligations and Liabilities. No Borrower has liabilities or other obligations that arose or accrued prior to the date hereof
that, either individually or in the aggregate, could have a Material Adverse Effect.


 


3.1.42         Operating
Lease. The list of Operating Leases in Schedule XIII is accurate and complete as of the date hereof. Each Operating
Lease is in full force and effect and there is no default by any Borrower thereunder and no event has occurred that with the passage
of time and/or giving of notice, would constitute a default thereunder. Except for the Permitted Encumbrances, each Borrower’s
interest in the Operating Lease is not subject to any liens or encumbrances.


 


3.1.43         REA.
To Borrower’s knowledge, there are no other covenants, restrictions or agreements relating to the construction, operation
or use of the Property other than the REAs. To Borrower’s knowledge, each REA is in full force and effect and neither Borrower
nor any other party to any REA, is in default thereunder, and to the best of Borrower’s knowledge, there are no conditions
which, with the passage of time or the giving of notice, or both, would constitute a default under any REA.


 


3.1.44         Bankruptcy
Filings. No petition in bankruptcy or insolvency has ever been filed or is pending against Borrower, any SPC Party, Guarantor
or any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent
(20%) or more of the legal, beneficial or economic interests in Borrower, any SPC Party or Guarantor or are in Control of
any Borrower, any SPC Party or Guarantor, and none of any Borrower, any SPC Party, Guarantor or any of their respective
shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal,
beneficial or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC
Party or Guarantor, has ever made an assignment for the benefit of creditors or taken advantage of any insolvency laws. None of
any Borrower, any SPC Party, Guarantor or any of their respective shareholders, partners, members or non-member managers that,
directly or indirectly, own twenty percent (20%) or more of the legal, beneficial or economic interests in any Borrower, any SPC
Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor, is contemplating either the filing of a petition
under any federal, state, local or foreign bankruptcy or insolvency laws or the liquidation of all or a material portion of any
Borrower’s, any SPC Party’s or Guarantor’s or such shareholder’s, partner’s, member’s or non-member
manager’s assets or properties, and none of any Borrower, any SPC Party, Guarantor or any of their respective shareholders,
partners, members or non-member managers that, directly or indirectly, own twenty percent (20%) or more of the legal, beneficial
or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any Borrower, any SPC Party or Guarantor,
has any knowledge of any Person contemplating the filing of any such petition against any Borrower, any SPC Party, Guarantor or
any of their respective shareholders, partners, members or non-member managers that, directly or indirectly, own twenty percent
(20%) or more of the legal, beneficial or economic interests in any Borrower, any SPC Party or Guarantor or are in Control of any
Borrower, any SPC Party or Guarantor. Notwithstanding anything herein to the contrary, Borrowers do not make any representation
or warranty herein with respect to any public shareholder of Guarantor owning less than twenty percent (20%) of Guarantor.


  




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3.1.45         PIP
Plans. Each of the PIP Plans attached as Exhibit P-1 and PIP Budgets attached as Exhibit P-2 are true, correct
and complete as of the date hereof. The timelines for completion of the PIP Plans and the PIP Completion Date, each shown on Exhibit
P-3, attached hereto and made a part hereof, is an accurate indication of the timeline and deadline for completing the applicable
PIP Plan as currently required by the applicable Franchisor. Each PIP Plan attached on Exhibit P-1 has been approved by
the applicable Borrower and the applicable Franchisor. Borrower has not received any written notice or demand from any Franchisor
demanding any repair, maintenance, alterations or improvement to any Property other than as specifically identified in a PIP Plan.
To Borrower’s knowledge, each PIP Budget is sufficient to complete the applicable PIP Plan.


 


3.1.46         Intermediate
Management Agreement. Each Intermediate Management Agreement with the applicable Intermediate Manager is in full force and
effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or
giving of notice, would constitute a default thereunder. As of the date hereof, Intermediate Manager’s material obligations
under the Intermediate Management Agreement have been subcontracted to the Property Manager pursuant to one or more Property Management
Agreements.


 


3.1.47         Property
Management Agreement. Each Property Management Agreement with the applicable Property Manager is in full force and effect and
there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or giving of notice,
would constitute a default thereunder. Each Property Management Agreement (exclusive of the Property Management Agreements with
Crestline Hotels & Resorts, LLC) was negotiated on an arms-length basis.


 


3.1.48         Beverage
Concession Agreement. The Beverage Concession Agreement is in full force and effect and there is no default thereunder by any
party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder.


 


3.1.49         Beverage
Management Agreement. The Beverage Management Agreement is in full force and effect and there is no default thereunder by any
party thereto and no event has occurred that, with the passage of time and/or giving of notice, would constitute a default thereunder.


 


3.1.50         Franchise
Agreement. The list of Franchise Agreements in Schedule X is accurate and complete as of the date hereof. Each Franchise
Agreement is in full force and effect, there is no default thereunder by any party thereto and no event has occurred that, with
the passage of time and/or giving of notice, would constitute a default thereunder and none of Borrower, Guarantor, Intermediate
Manager or any of their respective Affiliates has received notice from Franchisor that the hotel (a) has received low quality
or customer satisfaction ratings, surveys or reports, (b) is not in compliance with Franchisor’s brand standards or
(c) has failed any franchise inspection report, or received any similar notice. Each Franchise Agreement was negotiated on
an arms-length basis. All amounts due any franchisor under any franchise agreement that affected the Properties prior to the Closing
Date have been paid in full.


 




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3.1.51         Personal
Property. Upon closing of the Loan, Borrower will own all material personal property necessary to operate the Property in the
manner it is currently operated or will obtain such personal property to do so within ninety (90) days of the Closing Date.


 


3.1.52         Equipment
Leases. To Borrower’s knowledge, Borrower has identified all Material Equipment Leases and Borrowers have delivered to
Lender correct and complete copies of any existing Material Equipment Leases affecting the Property. Borrowers own all of the furniture,
fixtures and equipment necessary to operate the Properties in the manner they are currently operated, other than such furniture,
fixtures and equipment which are subject to Equipment Leases.


 


3.1.53         Collective
Bargaining. To Borrower’s knowledge, except for the Collective Bargaining Agreement, there are no collective bargaining
agreements to which any Borrower is a party or by which any Borrower is or may be bound.  No Borrower has violated in any
material respects any applicable laws, rules and regulations relating to the employment of labor, including those relating to wages,
hours, collective bargaining and the payment and withholding of taxes and other sums as required by appropriate Governmental Authorities.
To Borrower’s knowledge, the outstanding obligations with respect to pending pension obligations is $60,000.00.


 


Section 3.2           Survival
of Representations; Reliance.


 


The representations
and warranties set forth in Section 3.1 shall survive until the Obligations have been paid and performed in full. All
representations, warranties, covenants and agreements made in this Agreement or the other Loan Documents by Borrower or any other
Restricted Party shall be deemed to have been relied upon by Lender regardless of any investigation made by or on behalf of Lender
either prior to or following the date hereof.


 


Article
4: BORROWER COVENANTS


 


Section 4.1           Borrower
Affirmative Covenants. Borrowers hereby covenant and agrees with Lender that throughout the Term:


 


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


 


4.1.2           Existence;
Compliance with Legal Requirements. Each Borrower 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, rights, licenses, permits and franchises and comply with all Legal Requirements
applicable to it and the Properties including, without limitation, completing all applications necessary to cause final issuance
of all such licenses, permits and similar certificates in the name of Borrower or Property Manager. There shall never be committed
by any Borrower, and no Borrower shall permit any other Person in occupancy of or involved with the operation or use of any Property
to commit any act or omission affording any Governmental Authority the right of forfeiture against any Property or any part thereof
or any monies paid in performance of Borrowers’ obligations under the Loan Documents. Borrower covenants and


 




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agrees not to commit,
permit or suffer to exist any act or omission affording such right of forfeiture. Borrower shall at all times maintain, preserve
and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its
business and shall keep the Properties in good working order and repair, and from time to time make, or cause to be made, all reasonably
necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the Loan Documents.


 


4.1.3           Taxes
and Other Charges. Borrower shall pay all Taxes and Other Charges now or hereafter levied, assessed or imposed as 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 delinquent (provided, however, that Borrower need not pay directly Taxes 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
hereof). No Borrower shall permit or suffer, and shall promptly discharge, any Lien or charge against the Property, and shall promptly
pay for all utility services provided to the Property. After prior notice to Lender, Borrower, 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 (a) no Default or Event of Default shall have occurred and be continuing; (b) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other instrument to which any Borrower or Property is
subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable
Legal Requirements; (c) neither the Properties nor any part thereof or interest therein will be in danger of being sold, forfeited,
terminated, canceled or lost; (d) Borrower 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; (e) such proceeding
shall suspend the collection of Taxes or Other Charges from the Properties; and (f) except to the extent funds allocable to such
Taxes and Other Charges are already deposited with Lender pursuant to Section 6.3 of this Agreement and provided such deposits
are not designated for future payment of Taxes and Other Charges, Borrower shall deposit with Lender cash or other security
as may be required in the proceeding, or as may otherwise be reasonably requested by Lender, to ensure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon. 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.


 


4.1.4           Litigation.
Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or threatened against any Borrower,
any SPC Party, Guarantor, Property Manager or Intermediate Manager which, if adversely determined, would reasonably be expected
to have a Material Adverse Effect.


 


4.1.5           Access
to Property. Borrower shall permit agents, representatives, consultants and employees of Lender to inspect any Property or
any part thereof at reasonable hours upon reasonable advance notice (which may be given orally). Lender or its agents, representatives,
consultants and employees as part of any inspection may take soil, air, water, building material and other samples from any Property,
subject to the rights of Tenants under Leases.


 




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4.1.6           Further
Assurances; Supplemental Mortgage Affidavits. Borrower shall, at Borrower’s sole cost and expense:


 


(a)          execute
and deliver 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 liquor licenses with respect to the Property into the name of Lender or its designee after the occurrence of an Event of Default);
and


 


(b)          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 the Loan Documents, as Lender shall reasonably require from time to time.


 


4.1.7           Financial
Reporting.


 


(a)          Borrower
shall keep and maintain or shall cause to be kept and maintained proper and accurate books and records, in accordance with GAAP,
reflecting the financial affairs of Borrower. Lender shall have the right from time to time during normal business hours upon reasonable
notice (which may be given orally) to 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 the occurrence and during the
continuance of an Event of Default, Borrower shall pay any actual, out-of-pocket costs incurred by Lender to examine such books,
records and accounts, as Lender shall determine to be necessary or appropriate in the protection of Lender’s interest.


 


(b)          Borrower
shall furnish Lender annually, within ninety (90) days following the end of each Fiscal Year, (x) a complete copy of Borrower’s
annual financial statements prepared in accordance with GAAP covering the Property, including statements of income and expense
and balance sheets for Borrower and the Property. Such statements shall set forth Gross Revenue, Operating Expenses, Capital Expenditures,
Net Operating Income and Net Cash Flow for the Property on a line-item basis, where applicable, and occupancy statistics for the
Property. Borrower’s annual financial statements shall be accompanied by (i) a current rent roll for the Property (if
applicable) and (ii) an Officer’s Certificate of the Chief Financial Officer of Borrower certifying (A) that such
annual financial statement is true, correct, accurate and complete and fairly presents the financial condition and the results
of operations of Borrower and the Property and (B) whether to the best of Borrower’s knowledge there exists an event
or circumstance which constitutes a Default or Event of Default by Borrower under the Loan Documents and if such Default or Event
of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same, and
(x) consolidated financial statements of Guarantor for such Fiscal Year audited by an independent certified public accountant acceptable
to Lender (Lender hereby approves KPMG as an acceptable auditor); provided, however, Guarantor’s delivery of financial reports
pursuant to the Guaranty shall satisfy Guarantor’s requirements hereunder.


 


(c)          Borrower
shall furnish Lender on or before the forty-fifth (45th) day after the end of each calendar quarter throughout the Term, the following
items,


 




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accompanied by an Officer’s
Certificate of the Chief Financial Officer of Borrower certifying (i) that such items attached to such certificate are true,
correct, accurate and complete and fairly present the financial condition and results of the operations of Borrower and the Property,
and (ii) whether to the best of Borrower’s knowledge there exists an event or circumstance which constitutes a Default
or Event of Default by Borrower under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the
period of time it has existed and the action then being taken to remedy the same:


 


(i)          quarterly
and year-to-date statements of income and expense for such quarter and a balance sheet for Borrower and the Property, prepared
in accordance with GAAP;


 


(ii)         a
comparison of the budgeted income and expenses as set forth in the Approved Annual Budget and the actual income and expenses for
such quarter and year to date for the Property, together with a detailed explanation of any variances of (x) more than ten percent
(10%) between budgeted and actual amounts in respect of any single line item in such Approved Annual Budget, and (y) more than
five percent (5%) between budgeted and actual amounts in respect of aggregate income or expenses, as the case may be, covered in
such Approved Annual Budget, in each case, for such quarter and year to date;


 


(iii)        a
calculation reflecting the Debt Service Coverage Ratio as of the last day of such quarter, for such quarter and the last four (4) quarters;


 


(iv)        a
current rent roll for the Property (if applicable); and


 


(v)         an
occupancy report for the subject quarter, including an average daily rate.


 


(d)          Borrower
shall furnish Lender on or before the thirtieth (30th) day, but in no event later than the forty fifth (45th) day, after
the end of April 2015 and each calendar month thereafter, the following items, accompanied by an Officer’s Certificate of
the Chief Financial Officer of Borrower certifying (i) that such items attached to such certificate are true, correct, accurate
and complete and fairly present the financial condition and results of the operations of Borrower and the Property whether to the
best of Borrower’s knowledge there exists an event or circumstance which constitutes a Default or Event of Default by Borrower
under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same, and (ii) whether to the best of Borrower’s knowledge there exists
an event or circumstance which constitutes a Default or Event of Default by Borrower under the Loan Documents and if such Default
or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the
same:


 


(i)          monthly
and year-to-date statements of income and expense for such month and a balance sheet, each with respect to the Property, prepared
in accordance with GAAP;


 


(ii)         upon
Lender’s request, a comparison of the budgeted income and expenses as set forth in the Approved Annual Budget and the actual
income and


 




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expenses for such month
and year to date for the Property, together with a detailed explanation of any variances of (x) more than ten percent (10%) between
budgeted and actual amounts in respect of any single line item in such Approved Annual Budget, and (y) more than five percent (5%)
between budgeted and actual amounts in respect of the Approved Annual Budget taken as a whole, in each case, for such month and
year to date;


 


(iii)        a
current rent roll for the Property (if applicable); and


 


(iv)        (A) the
most current Smith Travel Research Reports in the form of Exhibit A hereto then available to Borrower reflecting market
penetration and relevant hotel properties competing with the Property, (B) any franchise inspection reports received by Borrower,
Guarantor, Property Manager, Intermediate Manager or any of their respective Affiliates during such month in respect of each Property,
(C) any notice from Franchisor that a hotel constituting a portion of the Property (1) has received low quality or customer
satisfaction ratings, surveys or reports, (2) is not in compliance with Franchisor’s brand standards or (3) has
failed any franchise inspection report, or any similar notice in each case received by Borrower, Guarantor, Property Manager, Intermediate
Manager or any of their respective Affiliates during such month, and (D) an occupancy report for the Property for the subject
month, including an average daily rate.


 


(v)         any
notice received from a Tenant threatening non-payment of Rent or other default, alleging or acknowledging a default by landlord,
requesting a termination of a Lease or a material modification of any Lease or notifying Borrower of the exercise or non-exercise
of any option provided for in such Tenant’s Lease, or any other similar material correspondence received by Borrower from
Tenants during the subject month.


 


(e)          Borrower
shall submit to Lender by December 1 of each year the Annual Budget for the succeeding Fiscal Year. Lender shall have the
right to approve each Annual Budget (which approval shall not be unreasonably withheld or delayed, and shall be subject to Section
4.1.7(g) below) and Annual Budgets approved by Lender shall hereinafter be referred to as an “Approved Annual Budget”.
In the event that Borrower seeks reimbursement from the Operating Expense Funds held by Lender pursuant to Section 6.8
for an extraordinary operating expense or extraordinary capital expenditure that was not set forth in the Approved Annual Budget
then in effect (each an “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably
detailed explanation of such proposed Extraordinary Expense for Lender’s approval. Until such time that any Annual Budget
has been approved by Lender, the prior Approved Annual Budget shall apply for all purposes hereunder, except in connection with
Lender’s determination of Adjusted Operating Expenses for purposes of calculating Underwritten Net Cash Flow; provided
that, such Approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Other Charges, Insurance Premiums and
utility charges, and all other expenses shall be adjusted by the CPI. It is hereby acknowledged and agreed that the 2015 Annual
Budget approved by Lender in connection with the closing of the Loan shall, for purposes hereof, be deemed to constitute an Approved
Annual Budget).


 


(f)          Borrower
shall furnish to Lender, within five (5) Business Days after request (or as soon thereafter as may be reasonably possible),
such further detailed


 




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information with respect
to the operation of the Property and the financial affairs of Borrower as may be reasonably requested by Lender.


 


(g)          Whenever
Lender’s approval is required pursuant to the provisions of Section 4.1.7(e), Lender shall use good faith efforts
to respond within ten (10) Business Days after Lender’s receipt of Borrowers’ written request for such approval. Such
request shall contain a legend clearly marked in not less than fourteen (14) point bold face type, underlined, in all capital letters
stating “FIRST NOTICE: THIS IS A REQUEST FOR APPROVAL UNDER THE LOAN BY LADDER CAPITAL FINANCE LLC AND DEUTSCHE
BANK AG, NEW YORK BRANCH, SECURED BY THE EQUITY INNS PORTFOLIO. FAILURE TO RESPOND TO THIS REQUEST WITHIN TEN (10) BUSINESS DAYS
MAY RESULT IN THE REQUEST BEING DEEMED APPROVED”. If Lender fails to respond to such request within ten (10) Business
Days, and Borrowers send a second request containing a legend clearly marked in not less than fourteen (14) point bold face type,
underlined, in all capital letters stating “SECOND AND FINAL NOTICE: THIS IS A REQUEST FOR APPROVAL UNDER THE LOAN
BY LADDER CAPITAL FINANCE LLC AND DEUTSCHE BANK AG, NEW YORK BRANCH, SECURED BY THE EQUITY INNS PORTFOLIO. IF YOU FAIL TO PROVIDE
A SUBSTANTIVE RESPONSE (E.G., APPROVAL, DENIAL OR REQUEST FOR CLARIFICATION OR MORE INFORMATION) TO THIS REQUEST FOR APPROVAL IN
WRITING WITHIN TEN (10) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GRANTED”, Lender shall be deemed to have approved
such matter if Lender fails to respond to such second written request before the expiration of such second ten (10) Business Day
period.


 


4.1.8           Title
to the Property. Borrower shall warrant and defend the validity and priority of the Liens of the Security Instrument(s) and
the Assignment of Leases on the Property against the claims of all Persons whomsoever, subject only to the Permitted Encumbrances.


 


4.1.9           Estoppel
Statement.


 


(a)          Each
party hereunder shall, within ten (10) Business Days following a request of the other party hereto, furnish a statement, duly
acknowledged and certified, stating (i) the Outstanding Principal Balance of the Note, (ii) the then-current LIBOR Interest
Rate (or the Base Rate, if then applicable), (iii) the date installments of interest and/or principal were last paid, and
(iv) in the case of a statement furnished by Borrower, any offsets or defenses to the payment and performance of the Obligations.


 


(b)          Borrower
shall deliver to Lender, upon request, an estoppel certificate from each Tenant under any Lease in form and substance reasonably
satisfactory to Lender (provided that Borrower shall only be required to use commercially reasonable efforts to obtain an estoppel
certificate from any Tenant not required to provide an estoppel certificate under its Lease); provided that such certificate
may be in the form required under such Lease; and provided, further, that Borrower shall not be required to deliver
such certificates more frequently than two (2) times in any calendar year.


 




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(c)          Borrower
shall deliver to Lender, within thirty (30) days after Lender’s request, estoppel certificates or so-called “good standing
letters” from each party under each Franchise Agreement, each Property Management Agreement and each Intermediate Management
Agreement (to the extent that the applicable Franchise Agreement, Property Management Agreement or Intermediate Management Agreement
entitles Borrower to request an estoppel certificate or “good standing letter”) in form and substance reasonably satisfactory
to Lender; provided, that such certificates and/or letters may be in the form required under the applicable Franchise Agreement,
Property Management Agreement or Intermediate Management Agreement; and provided, further, that Borrower shall not
be required to deliver such certificates and/or letters more than one (1) time in any calendar year unless (i) an Event of Default
shall have occurred and be continuing, or (ii) such certificates and/or letters are required in connection with a Secondary Market
Transaction.


 


(d)          Borrower
shall use commercially reasonable efforts to deliver to Lender, within thirty (30) days after Lender’s request, estoppel
certificates from each party under each REA in form and substance reasonably satisfactory to Lender; provided, that such
certificates may be in the form required under the REA; and provided, further, that Borrower shall not be required
to deliver such certificates more than one (1) time in any calendar year.


 


4.1.10         Leases.
All Leases and all renewals of Leases executed after the date hereof shall require Lender’s prior written consent which consent
shall not be unreasonably withheld, conditioned or delayed for up to one (1) Lease at each Property constituting less than five
percent (5%) of the Gross Revenue of such Property.


 


4.1.11         Alterations.
Lender’s prior written approval shall be required in connection with (a) any alterations to any Improvements (i) that
may have a Material Adverse Effect, (ii) that could materially adversely affect any structural component or the exterior of
any Improvements or any utility or HVAC system at the Property, or (iii) the cost of which (including any related alteration,
improvement or replacement) is reasonably anticipated to exceed the Alteration Threshold or (b) any alteration to any Improvements
during the continuance of an Event of Default (any of the foregoing, a “Material Alteration”). If the total
unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements shall at any time exceed the Alteration
Threshold, Borrower shall promptly deliver to Lender as security for the payment of such amounts and as additional security for
Borrower’s Obligations under the Loan Documents any of the following: (1) cash, (2) a Letter of Credit, (3) U.S.
Obligations, or (4) other securities acceptable to Lender, provided that, to the extent applicable, 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 excess of the
total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements (other than such amounts
to be paid or reimbursed by Tenants under the Leases) over the Alteration Threshold. Upon substantial completion of any Material
Alteration, Borrower 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.


 




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4.1.12         Approval
of Major Contracts. Borrower shall be required to obtain Lender’s prior written approval of any and all Major Contracts
affecting the Property, which approval may be granted or withheld in Lender’s reasonable discretion.


 


4.1.13         After
Acquired Property. Borrower shall grant to Lender a first lien security interest in and to all equipment and other personal
property owned by Borrower, whether or not used in the construction, maintenance and/or operation of the Improvements, immediately
upon acquisition of same or any part of same.


 


4.1.14         Patriot
Act. Borrower shall comply with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction
over Borrower and/or the Property, including those relating to money laundering and terrorism. Lender shall have the right to audit
Borrower’s compliance with the Patriot Act and all applicable requirements of Governmental Authorities having jurisdiction
over Borrower and/or the Property, including those relating to money laundering and terrorism. In the event that Borrower fails
to comply with the Patriot Act or any such requirements of Governmental Authorities, then Lender may, at its option, cause Borrower
to comply therewith and any and all costs and expenses incurred by Lender in connection therewith shall be secured by the Security
Instruments and the other Loan Documents and shall be immediately due and payable.


 


4.1.15         Special
Purpose. Borrower, each Liquor License Subsidiary and each SPC Party shall at all times comply with the requirements set forth
on Schedule III attached hereto and shall not take or permit any action that would result in Borrower, any Liquor License
Subsidiary or any SPC Party not being in compliance with the representations, warranties and covenants set forth in Section 3.1.24
and Schedule III attached hereto.


 


4.1.16         Operating
Leases. Each Borrower shall diligently perform and observe in all material respects all of the terms, covenants and conditions
of the applicable Operating Lease on the part of such Borrower, as landlord or tenant thereunder. Borrower shall not, without the
prior written consent of Lender, terminate or cancel any Operating Lease or modify, change, supplement, alter or amend, or waive
any of the terms or provisions of, any Operating Lease, in any material respect, either orally or in writing.


 


4.1.17         Major
Contracts; REA.


 


(a)          Borrower
shall promptly (i) diligently perform and observe in all material respects all of the terms, covenants and conditions to be
performed and observed by it under each Major Contract to which it is a party, and do all things necessary to preserve and keep
unimpaired its rights thereunder, (ii) notify Lender of any material notice of default given by any party under any Major
Contract and deliver to Lender a true copy of each such notice, and (iii) enforce the performance and observance of all of
the terms, covenants and conditions required to be performed and/or observed by the other party to each Major Contract and to which
Borrower is a party in a commercially reasonable manner.


 


(b)          Borrower
shall promptly (i) diligently perform and observe in all material respects all of the terms, covenants and conditions to be
performed and observed by it under each REA to which it is a party, and do all things necessary to preserve and keep


 




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unimpaired its rights
thereunder, (ii) notify Lender of any notice of material default given by any party under any REA and deliver to Lender a
true copy of each such notice, and (iii) enforce the performance and observance of all of the terms, covenants and conditions
required to be performed and/or observed by the other party to each REA and to which Borrower is a party in a commercially reasonable
manner.


 


4.1.18         O&M
Program. Borrower hereby represents and warrants that attached hereto as Schedule XVI is a true and complete copy
of each of the Operations and Maintenance Plans in respect of the properties described therein (collectively, the “O&M
Program”), and Borrower has, as of the date hereof, complied in all material respects with the O&M Program. Borrower
hereby covenants and agrees that, during the Term, including any extension or renewal thereof, Borrower shall comply in all material
respects with the terms and conditions of the O&M Program.


 


4.1.19         PIPs.


 


(a)          Lender’s
consent shall be required in connection with any modification or amendment to any PIP Plan, PIP Budget, or PIP Completion Date,
as set forth on Exhibits P-1, P-2, and P-3, respectively, attached hereto and made a part hereof, provided,
however, that any modification or amendment accepted by the applicable Franchisor shall be deemed approved by Lender so
long as (i) no Event of Default shall have occurred and be continuing, (ii) such modification or amendment shall not serve to increase
any PIP Budget, increase the obligations of any Borrower or accelerate the time limits prescribed therein without Lender approval
and (iii) in all cases, Borrower shall provide prior written notice of all such modifications or amendments. Each Borrower shall
(x) take all necessary action to diligently complete in a manner acceptable to the applicable Franchisor the PIP Alterations applicable
to such Borrower’s Property as contemplated under the applicable PIP Plan and in accordance with the applicable PIP Budget
on or before the PIP Completion Date, as any of the same may have been modified or amended in accordance with the foregoing sentence,
provided, however, in the case of any PIP Plan having a budget in excess of $15,000.00 per room, Lender shall be entitled to inspect
such PIP Alterations for the purpose of determining such completion. Such Borrower shall deliver to Lender within forty–five
(45) days following the completion of the applicable PIP Plan evidence reasonably satisfactory to Lender that the applicable Franchisor
has accepted the PIP Alterations applicable to such Borrower’s Property as complete.


 


(b)          Subject
to Lender’s required approval of any modification to the PIP Budget attached to this Agreement in accordance with clause
(a), above, ninety (90) days prior to Borrower’s commencement of any work related to a PIP Plan at any Property, but
in no event later than ninety (90) days prior to the “PIP Commencement Date” identified in the applicable PIP Plan,
Borrower shall deliver to Lender a detailed PIP Budget showing line-item detail reasonably acceptable to Lender in respect of such
PIP Plan.


 


(c)          In
the event that Lender receives notice from a Franchisor under a Franchise Agreement that a Borrower has failed to complete the
required PIP Alteration Work applicable to such Borrower’s Property by the applicable PIP Completion Date, Lender may (after
notice and a reasonable cure period not to exceed sixty (60) days unless Lender reasonably determines that a shorter period is
necessary to avoid any default or termination of the Franchise


 




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Agreement) elect to complete
such PIP Alteration Work, and Borrower shall reimburse Lender upon demand for all sums expended by Lender in connection with such
completion of the PIP Alteration Work. Any amount expended by Lender to complete any PIP Alteration Work shall be a protective
advance and shall be secured by the Security Instrument.


 


(d)          Borrowers
shall give Lender prompt written notice of any demand from a Franchisor for an amendment to a PIP Plan, and any demand from a Franchisor
for any repairs, maintenance, alterations, or improvements required to comply with a Franchise Agreement.


 


4.1.20         Required
Repairs. Borrower shall perform the repairs and other work at the Property as set forth on Schedule V attached
hereto (such repairs and other work hereinafter referred to as “Required Repairs”) and shall complete each of
the Required Repairs on or before the respective deadline for each repair as set forth on Schedule V.


 


4.1.21         Cure
of Violations. Borrower shall promptly cure and use its commercially reasonable efforts to remove of record all building violations
affecting the Property.


 


Section 4.2           Borrower
Negative Covenants. Borrower covenants and agrees with Lender that throughout the Term:


 


4.2.1           Due
on Sale and Encumbrance; Change of Control; Transfers of Interests. Except for Permitted Encumbrances or to the extent permitted
pursuant to Article 8 hereof, neither Borrower nor any other Restricted Party shall, without the prior written consent
of Lender (a) sell, transfer, convey, mortgage, grant, bargain, encumber, pledge, assign, alienate, lease (except to Tenants
under Leases that are not in violation of Section 4.1.10 hereof), grant any option with respect to or grant any other
interest in the Property or any part thereof or interest therein, including any legal, beneficial, economic or voting interest
in Borrower or any other Restricted Party, whether directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise or (b) permit or suffer any change in Control of such Restricted Party to occur (each of (a) and (b), a “Transfer”).
A Transfer within the meaning of this Section 4.2.1 shall be deemed to include (i) an installment sales agreement
wherein Borrower agrees to sell the Property or any part thereof or interest therein for a price to be paid in installments; (ii) an
agreement by Borrower for the leasing of all or a substantial part of the 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 Rents; (iii) if Borrower or any other Restricted 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 such that
such corporation’s stock shall be vested in a party or parties who are not now stockholders; (iv) if Borrower or any
other Restricted 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, member or non-member manager, the voluntary
or involuntary sale,


 




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conveyance or transfer
of the partnership interest of any general partner, managing partner or limited partner, the creation or issuance of new partnership
interests, the voluntary or involuntary sale, conveyance or transfer of the interest of any joint venturer, member or non-member
manager or the creation or issuance of new membership interests or interests in any non-member manager; (v) if Borrower or
any other Restricted Party is a trust or nominee trust, the voluntary or involuntary sale, conveyance or transfer of the legal
or beneficial interest in such trust or nominee trust or the creation or issuance of new legal or beneficial interests; and (vi) the
change, removal, resignation or addition of any external corporate advisor (other than Property Manager and Intermediate Manager)
of Borrower or any other Controlling Person (provided that this clause (vi) shall not apply following a Permitted Common
Equity Buyout Event).


 


4.2.2           Liens.
Borrower shall not create, incur, assume or permit to exist any Lien on any direct or indirect interest in Borrower or any SPC
Party or any portion of the Property except for (a) Permitted Encumbrances, or (b) Transfers, in the case of this clause (b),
to the extent permitted pursuant to Article 8.


 


4.2.3           Dissolution.
No Borrower shall (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation of the applicable Property, (c) transfer,
lease or sell, in one transaction or any combination of transactions, all or substantially all of the property or assets of any
Borrower except to the extent expressly permitted by the Loan Documents, or (d) cause, permit or suffer any SPC Party to (i) 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 (ii) amend, modify, waive or terminate the certificate of incorporation or bylaws
of such SPC Party, in any manner prohibited by the covenants contained on Schedule III without obtaining the prior written
consent of Lender.


 


4.2.4           Change
in Use. No Borrower shall change the current use of any Property in any material respect.


 


4.2.5           Debt
Cancellation. No Borrower shall cancel or otherwise forgive or release any claim or debt (other than the termination of Leases
in accordance herewith) owed to any Borrower by any Person, except for adequate consideration and in the ordinary course of such
Borrower’s business.


 


4.2.6           Intentionally
Omitted.


 


4.2.7           Zoning.
No Borrower shall initiate or consent to any zoning reclassification of any portion of the Property or seek any variance under
any existing zoning ordinance or use or permit the use of any portion of the Property in any manner that could result in such use
becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the
prior written consent of Lender (such consent not to be unreasonably withheld, conditioned or delayed).


 


4.2.8           Intentionally
Omitted.


 


4.2.9           No
Joint Assessment. No Borrower shall suffer, permit or initiate the joint assessment of any Property (a) with any other
real property constituting a tax lot separate from such Property and (b) with any portion of such Property which may be deemed
to constitute


 




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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 Property.


 


4.2.10         Principal
Place of Business. Borrower shall not 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, provided, however, in connection with the delivery
of any Preferred Equity Change in Control Notice, such change in address may be effected after giving Lender ten (10) Business
Days prior written notice.


 


4.2.11         Change
of Name, Identity or Structure. No Borrower shall change such Borrower’s name, identity (including its trade name or
names) or, if not an individual, Borrower’s corporate, partnership or other structure without notifying Lender of such change
in writing at least thirty (30) days prior to the effective date of such change and, in the case of a change in such Borrower’s
structure, without first obtaining the prior written consent of Lender. Prior to or contemporaneously with the effective date of
any such change such Borrower shall take all action required by Lender, including, without limitation, executing (if necessary)
and delivering to Lender any financing statement or financing statement change in order to establish or maintain the validity,
perfection and priority of the lien and security interest granted herein and in the other Loan Documents. Borrower shall promptly
notify Lender in writing of any change in its organizational identification number. If any Borrower does not now have an organizational
identification number and later obtains one, such Borrower shall promptly notify Lender in writing of such organizational identification
number. At the request of Lender, such Borrower shall execute a certificate in form satisfactory to Lender listing the trade names
under which such Borrower intends to operate the applicable Property, and representing and warranting that such Borrower does business
under no other trade name with respect to the applicable Property.


 


4.2.12         Intentionally
Omitted.


 


4.2.13         ERISA.


 


(a)          For
purposes of this Section 4.2.13, Borrowers shall be entitled to assume that no source of funds used to make the Loan constitutes
“plan assets” within the meaning of Section 3(42) of ERISA.


 


(b)          No
Borrower shall engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Loan Documents) to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA or Section 4975 of the Code.


 


(c)          Borrower
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 (i) each Borrower is not and does not maintain an “employee benefit plan” as defined
in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of
Section 3(3) of ERISA; (ii) each Borrower is not subject to state statutes regulating investments and fiduciary obligations
with respect to governmental plans; and (iii) one or more of the following circumstances is true:


 




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(i)          Equity
interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R §2510.3-101(b)(2);


 


(ii)         Less
than twenty-five percent (25%) of each outstanding class of equity interests in Borrower are held by “benefit plan investors”
within the meaning of 29 C.F.R §2510.3-101(f)(2); or


 


(iii)        Borrower
qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R
§2510.3-101(c) or (e).


 


4.2.14         Compliance
with Restrictive Covenants, Etc. No Borrower shall modify, waive or release in any material respect any easements, restrictive
covenants or other Permitted Encumbrances, or suffer, consent to or permit the foregoing, without Lender’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or delayed.


 


4.2.15         REAs.
Without the prior written consent of Lender (such consent not to be unreasonably withheld, conditioned or delayed), no Borrower
shall (i) modify, amend or supplement, or consent to or suffer any modification, amendment, or supplementation of, or waive
or release any of its material rights and remedies under any REA, (ii) take (and each Borrower hereby assigns to Lender any
right it may have to take) any action to terminate the REA, or (iii) assign (other than to Lender) or encumber (other than
in favor of Lender as security for the Obligations) any of its rights under the REA.


 


4.2.16         Embargoed
Person.


 


(a)          At
all times, throughout the Term, including after giving effect to any Transfers, (i) none of the funds or other assets of Borrower
or Guarantor shall constitute property of, or shall be beneficially owned, directly or indirectly, by any Person subject to trade
restrictions under United States law, including, but not limited to, 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., the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (PATRIOT Act) of 2001 and any Executive
Orders or regulations promulgated thereunder, each as may be amended from time to time, with the result that the investment in
Borrower or Guarantor, as applicable (whether directly or indirectly), would be prohibited by law (each, an “Embargoed
Person”), or the Loan made by Lender would be in violation of law, (ii) no Embargoed Person shall have any interest
of any nature whatsoever in Borrower or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor,
as applicable (whether directly or indirectly), would be prohibited by law or the Loan would be in violation of law, and (iii) none
of the funds of Borrower or Guarantor, as applicable, shall be derived from any unlawful activity with the result that the investment
in Borrower or Guarantor, as applicable (whether directly or indirectly), would be prohibited by law or the Loan would be in violation
of law. Compliance with this provision in respect of Persons owning less than twenty percent (20%) of all beneficial interests
in Borrower or Guarantor may be completed by virtue of actions taken on behalf of Borrower or Guarantor in the ordinary course
of business through licensed broker dealers in accordance with all applicable legal requirements concerning third party investors
and in a manner consistent with previous offerings conducted by Guarantor or its Affiliates to date.


 




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(b)          None
of any Borrower nor, to Borrower’s knowledge, any owner of a direct or indirect interest in any Borrower (i) is listed
on any Government Lists, (ii) is a person who has been determined by competent authority to be subject to the prohibitions
contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the
rules and regulations of the Office of Foreign Assets Control (“OFAC”) or in any enabling legislation or other
Presidential Executive Orders in respect thereof, (iii) has been previously indicted for or convicted of any felony involving
a crime or crimes of moral turpitude or for any Patriot Act Offense, or (iv) is currently under investigation by any Governmental
Authority for alleged criminal activity. For purposes hereof, the term “Patriot Act Offense” means any violation
of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if
committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering
of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against
money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or
(E) the Patriot Act. “Patriot Act Offense” also includes the crimes of conspiracy to commit, or aiding
and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term “Government Lists” means
(1) the Specially Designated Nationals and Blocked Persons Lists maintained by OFAC, (2) any other list of terrorists,
terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC that Lender notified
Borrower in writing is now included in “Government Lists”, or (3) any similar lists maintained by the United
States Department of State, the United States Department of Commerce or any other Government Authority or pursuant to any Executive
Order of the President of the United States of America that Lender notified Borrower in writing is now included in “Government
Lists”.


 


4.2.17         Matters
Concerning Leases. Borrower shall not enter any new Lease that would violate any exclusive use or other restrictions contained
in any existing Leases, or amend or modify any existing Lease to permit any use or occupancy that would violate any exclusive use
or other restrictions contained in any existing Lease.


 


Article
5: INSURANCE, CASUALTY AND CONDEMNATION


 


Section 5.1           Insurance.


 


5.1.1           Insurance
Policies.


 


(a)          Unless
otherwise agreed to by Lender in its sole and absolute discretion, 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 the Property in satisfaction of all requirements
of the Franchise Agreements and providing at least the following coverages:


 


(i)          property
insurance against loss or damage by fire, wind (including named storms), lightning and such other perils as are included in a standard
“all risk” or “special form” policy, including riot and civil commotion, vandalism, terrorist acts (as
defined by then current TRIPRA provided TRIPRA continues to cover foreign and domestic acts), malicious mischief, burglary and
theft, in each case (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost” of the
Property, which for purposes of this


 




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Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) waiving depreciation.
The Full Replacement Cost must be adjusted annually to reflect increased value due to inflation. If this is not provided, Inflation
Guard Coverage shall be required; (B) written on a no co-insurance form or containing an agreed amount endorsement with respect
to the Improvements and, if applicable, personal property at the Property waiving all co-insurance provisions; (C) providing
for no deductible in excess of $50,000.00 (except for deductibles for windstorm and earthquake coverage, which deductibles may
be up to five percent (5%) of the total insurable value of the Property set forth in the Policy); and (D) containing “Ordinance
or Law Coverage” if any of the Improvements or the use of the Property shall at any time constitute legal non-conforming
structures or uses, including coverage for Loss to the Undamaged Portion, Demolition Costs and Increased Cost of Construction,
all in amounts acceptable to Lender. In addition, Borrower shall obtain: (y) if any portion of the Improvements is currently
or at any time in the future located in a federally designated “special flood hazard area”, flood hazard insurance
in an amount equal to the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended or such greater amount
as Lender shall require; and (z) earthquake insurance in amounts and in form and substance satisfactory to Lender (provided
that Lender shall not require earthquake insurance unless the Property is located in an area with a high degree of seismic activity
and a Probable Maximum Loss of greater than 20%), provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance policy required under this subsection (i);


 


(ii)         commercial
general liability insurance, including a broad form comprehensive general liability endorsement and coverages against claims for
personal injury, bodily injury, death or property damage occurring upon, in or about the Property, such insurance (A) to be
on the so-called “occurrence” form and containing minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000.00),
with a combined limit per policy year, excluding umbrella coverage, of not less than Two Million and No/100 Dollars ($2,000,000.00)
applying “per location” if the policy covers more than one location; (B) to continue at not less than the aforesaid
limit until required to be changed by Lender by reason of changed economic conditions making such protection inadequate; and (C) to
cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if
any” basis; (3) independent contractors; (4) contractual liability for all insured contracts; and (5) contractual
liability covering the indemnities contained in Article 8 of each Security Instrument to the extent the same is available;


 


(iii)        rental
loss and/or business income interruption insurance (A) with loss payable to Lender; (B) covering all risks required to
be covered by the insurance provided for in subsection (i) above, subsections (iv) (if applicable),
subsection (vi), subsection (x) and Section 5.1.1(h) below; (C) containing an extended
period of indemnity endorsement which provides the continued loss of income shall 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 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 from the Property,
as reduced to reflect non-continuing expenses, for a period of eighteen (18) months


 




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from the date of the
Casualty. 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 from the Property, as reduced to reflect non-continuing
expenses, for the succeeding eighteen (18) month period. Subject to Section 5.2.3(b), 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 Loan
Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance;


 


(iv)        at
all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only
if the property and liability insurance coverage forms do not otherwise apply, coverage all in form and substance and with limits,
terms and conditions acceptable to Lender including (A) commercial general liability and umbrella 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 policies required in 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,
including coverage for one hundred percent (100%) of the total insurable costs of construction (1) on a non-reporting basis,
(2) against all risks insured against pursuant to subsections (i), (iii), (vi), (x) and
Section 5.1.1(h), (3) including permission to occupy the 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 the 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 the Property, or in
connection with the Property or its operation (if applicable);


 


(vi)        boiler
and machinery/equipment breakdown insurance in amounts as shall be reasonably required by Lender on terms consistent with the commercial
property insurance Policy required under subsection (i) above (if applicable);


 


(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 on terms consistent with the commercial general liability insurance policy required under subsection (ii) and,
if applicable, the Policies required in subsection (v) above and (viii) below;


 


(viii)      commercial
auto liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, with limits which are reasonably required from time to time by Lender (if applicable);


 


(ix)         insurance
against employee dishonesty in an amount not less than one month of Gross Revenue from the Property and with a deductible not greater
than Fifty Thousand and No/100 Dollars ($50,000.00) (if applicable); and


 




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(x)          upon
sixty (60) days’ notice, such other insurance and in such 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 Property located in or
around the region in which the Property is 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 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, certification letters from Borrower and Borrower’s insurance broker attesting to the accuracy of the certificates
of insurance regarding the amounts of insurance, perils insured and applicable deductibles) 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’s approval, which shall not be unreasonably withheld, and shall provide
the same protection as would a separate Policy insuring only the Property in compliance with the provisions of Section 5.1.1(a).
Lender shall have determined based on a review of the schedule of locations and values that the amount of such coverage is sufficient
in light of the other risks and properties insured under the blanket policy. Notwithstanding anything herein to the contrary, following
a change in Control of Pool II Holdco in accordance with the terms of Section 8.2(c) hereof, Borrower shall be permitted
to satisfy compliance with the provisions of Section 5.1.1(a) through the provision of insurance certificates for its blanket
insurance Policy (and upon the written request of Lender, certification letters from Borrower and Borrower’s insurance broker
attesting to the accuracy of the certificates of insurance regarding the amounts of insurance, perils insured and applicable deductibles).


 


(d)          All
Policies of insurance provided for or contemplated by Section 5.1.1(a) shall name Borrower as a named insured and,
in the case of liability coverages (except for the Policies referenced in Sections 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 property
insurance coverages, including but not limited to boiler and machinery, terrorism, flood and earthquake insurance, shall contain
a standard non-contributing mortgagee/lender’s loss payable clause in favor of Lender providing that the loss thereunder
shall be payable to Lender. 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/lender’s
loss payable clause in favor of Lender providing that the loss thereunder shall be payable to Lender.


 


(e)          All
property insurance Policies provided for in Section 5.1.1(a) shall:


 


(i)          provide
that no act or negligence of Borrower or any other insured under the Policy, 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


 




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action, shall in any
way affect the validity or enforceability of the insurance insofar as Lender is concerned;


 


(ii)         provide
that the Policy shall not be canceled without at least thirty (30) days’ written notice to Lender, except ten (10) days’
notice for non-payment of Insurance Premiums and, if obtainable by Borrower using commercially reasonable efforts, shall not be
materially changed (other than to increase the coverage provided thereby) without such a thirty (30) day notice; and


 


(iii)        not
contain any provision that would make Lender liable for any Insurance Premiums thereon or subject to any assessments thereunder,
except that Lender is permitted to make payments to effect the contribution of such Policy upon notice of cancellation due to non-payment
of Insurance Premiums pursuant to the mortgagee clause required herein.


 


(f)          If
at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, or
Borrower shall fail to deliver certificates of insurance and, if requested by Lender, other documentation evidencing the Policies,
evidence of payment and any other information required by Section 5.1.1(b), no less than ten (10) days prior to
the expiration date of any Policies, Lender shall have the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Property, including the obtaining of such insurance coverage as Lender in its sole discretion
deems appropriate and all Insurance 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 Security Instruments
and shall bear interest at the Default Rate. Borrower shall promptly forward to Lender a copy of each written notice received by
Borrower of any modification, reduction or cancellation of any of the Policies or of any of the coverages afforded under any of
the Policies.


 


(g)          In
the event of foreclosure of any of the Security Instruments or other transfer of title to the Property in extinguishment in whole
or in part of the Obligations, all right, title and interest of Borrower in and to the Policies that are not blanket Policies then
in force concerning the 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.


 


(h)          If
any of the all-risk/special form property, rental loss and/or business interruption, commercial general liability or umbrella Policies
include any exclusions for loss, cost, damage or liability caused by “terrorism” or “terrorist acts” (as
defined by then current TRIPRA provided TRIPRA continues to cover foreign and domestic acts), Borrower shall obtain and maintain
terrorism coverage to cover such exclusion(s) from a carrier which otherwise satisfies the rating criteria specified in Section 5.1.2
(a “Qualified Carrier”) or, in the event that such terrorism coverage is not available from a Qualified Carrier,
Borrower shall obtain such terrorism coverage from the highest rated insurance company commercially available providing such terrorism
coverage.


 




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5.1.2           Insurance
Company. All Policies required pursuant to Section 5.1.1(a) (a) shall be issued by companies authorized to
do business in the State with a financial strength and claims paying ability rating of “A” or better by S&P; provided,
however, if the insurance is provided with multiple insurers, no less than 75% will maintain the rating of A or better by
S&P (or its equivalent) with the remaining insurers maintaining no less than BBB+ by S&P (or its equivalent); (b) shall,
with respect to the property, rental loss and/or business interruption, commercial general liability and umbrella Policies, contain
a waiver of subrogation against Lender; (c) shall contain such provisions as Lender deems reasonably necessary or desirable
to protect its interest including endorsements providing that neither Borrower, Lender nor any other party shall be a co-insurer
under said Policies; and (d) 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, such approval not to be unreasonably withheld or delayed. If requested
by Lender, certified copies of the Policies shall be delivered to Lender, at 345 Park Avenue, 8th Floor, New York, New
York 10154, Attention: Pamela McCormack, with respect to all renewal Policies, within thirty (30) days after the effective date
thereof; provided, however, that if certified copies of the current Policies are not available on the date of request,
Borrower shall deliver to Lender documentation acceptable to Lender evidencing such Policies within five (5) days and shall deliver
to Lender certified copies of such Policies within ten (10) days after such Policies are available. Borrower shall pay the
Insurance Premiums 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). In addition to the insurance coverages described in Section 5.1.1(a) above, Borrower
shall obtain such other insurance as may from time to time be reasonably required by Lender in order to protect its interests.
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, and the like.


 


Section 5.2           Casualty
and Condemnation.


 


5.2.1           Casualty.
If the Property shall sustain a Casualty, Borrower shall give prompt notice of such Casualty to Lender and shall promptly commence
and diligently prosecute to completion the repair and restoration of the Property as nearly as possible to the condition the Property
was in immediately prior to such Casualty (a “Restoration”) and otherwise in accordance with Section 5.3,
regardless of whether Insurance Proceeds are available or made available, it being understood, however, that Borrower shall not
be obligated to restore the Property to the precise condition of the Property prior to such Casualty provided the Property is restored,
to the extent practicable, to be of at least equal value and of substantially the same character as prior to the Casualty. Borrower
shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated
to, submit proof of loss if not submitted promptly by Borrower. In the event of a Casualty where the loss does not exceed the Restoration
Threshold, Borrower may settle and adjust such claim; provided that (a) no Event of Default has occurred and is continuing,
and (b) such adjustment is carried out in


 




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a commercially reasonable
and timely manner. In the event of a Casualty where the loss exceeds the Restoration Threshold or if an Event of Default then exists,
Borrower may settle and adjust such claim only with the prior written consent of Lender (which consent shall not be unreasonably
withheld or delayed) and Lender shall have the opportunity to participate, at Borrower’s cost, in any such adjustments; provided,
however, if Borrower fails to settle and adjust such claim within sixty (60) days after the Casualty, Lender shall have
the right to settle and adjust such claim at Borrower’s cost and without Borrower’s consent (provided that if Borrower
has commenced the settlement and adjustment of such claim within the sixty (60) day period after the Casualty and thereafter diligently
pursued the same, Lender shall not exercise such right to settle and adjust the claim until one hundred eighty (180) days after
the Casualty so long as during the entirety of such period no Event of Default shall have occurred and be continuing and Borrower
shall continue to diligently pursue the settlement and adjustment of such claim). Notwithstanding any Casualty, 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.


 


5.2.2           Condemnation.
Borrower shall give Lender prompt notice of any actual or threatened Condemnation by any Governmental Authority of all or any part
of the Property and shall deliver to Lender a copy of any and all papers served in connection with such proceedings. Provided no
Event of Default has occurred and is continuing, in the event of a Condemnation where the amount of the taking does not exceed
the Restoration Threshold, Borrower may settle and compromise such Condemnation; provided that the same is effected in a
commercially reasonable and timely manner. In the event a Condemnation where the amount of the taking exceeds the Restoration Threshold
or if an Event of Default then exists, Borrower may settle and compromise the Condemnation only with the prior written consent
of Lender (which consent shall not be unreasonably withheld or delayed) and Lender shall have the opportunity to participate, at
Borrower’s cost, in any litigation and settlement discussions in respect thereof and Borrower shall from time to time deliver
to Lender all instruments requested by Lender 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 Condemnation, 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. Lender shall not be limited to the interest paid on the Award by any
Governmental Authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the
Note. If the Property or any portion thereof is taken by any Governmental Authority, Borrower shall promptly commence and diligently
prosecute the Restoration of the Property, regardless of whether an Award is available or made available, and otherwise comply
with the provisions of Section 5.3. If the 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.


 


5.2.3           Casualty
Proceeds.


 


(a)          Subject
to Section 5.2.3(b), payments received on account of the business interruption insurance specified in Subsection 5.1.1(a)(iii)
above shall be deposited directly into the Casualty and Condemnation Account. Notwithstanding the last sentence of Section 5.1.1(a)(iii)
above, and provided that no Event of Default shall have occurred and be


 




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continuing, proceeds
received by Lender on account of business or rental interruption or other loss of income insurance specified in Section 5.1.1(a)(iii)
above shall be deposited by Lender into the Cash Management Account (in installments relating to the relevant period) to the extent
such proceeds (or a portion thereof) reflect a replacement for lost Rents for the relevant period, as determined by Lender in good
faith, and such proceeds shall be applied by Lender in accordance with Section 6.11 hereof. All other such proceeds
not reflecting a replacement for lost Rents shall be held by Lender and disbursed in accordance with Section 5.3 hereof.


 


(b)          Notwithstanding
anything to the contrary contained herein, if in connection with a Casualty any insurance carrier 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 carrier 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 will be received from the property insurance carriers are sufficient to pay one hundred percent
(100%) of the cost of fully restoring the Improvements or, if such Net Proceeds are to be applied repay the Loan in accordance
with the terms hereof, that such remaining Net Proceeds will be sufficient to pay off the Debt in full.


 


Section 5.3           Delivery
of Net Proceeds.


 


5.3.1           Minor
Casualty or Condemnation. If a Casualty or Condemnation has occurred to the Property and the Net Proceeds shall be less than
the Restoration Threshold and the costs of completing the Restoration shall be less than the Restoration Threshold, and provided
no Event of Default shall have occurred and be continuing, and that the condition in Section 2.7 hereof has
been satisfied, the Net Proceeds will be disbursed by Lender to Borrower. Promptly after receipt of the Net Proceeds, Borrower
shall commence and satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement. If
any Net Proceeds are received by Borrower and may be retained by Borrower pursuant to the terms hereof, such Net Proceeds shall,
until completion of the Restoration, be held for the benefit of Lender and shall be segregated from other funds of Borrower to
be used to pay for the cost of Restoration in accordance with the terms hereof.


 


5.3.2           Major
Casualty or Condemnation.


 


(a)          If
a Casualty or Condemnation has occurred to the Property and the Net Proceeds are equal to or greater than the Restoration Threshold
or the costs of completing the Restoration is equal to or greater than the Restoration Threshold, Lender shall make the Net Proceeds
available for the Restoration, provided that each of the following conditions precedent are satisfied:


 


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


 


(ii)         (A)
in the event the Net Proceeds consists of Insurance Proceeds received in connection with a Casualty, then (1) less than twenty-five
percent (25%) of the total floor area of the Improvements at the Property has been damaged, destroyed or
rendered unusable as a result of such Casualty and (2) Legal Requirements permit the restoration of the


 




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 damaged, destroyed
or unusable Improvements at the Property to the same configuration and occupancy that existed immediately preceding such Casualty
or (B) in the event the Net Proceeds are an Award received in connection with a Condemnation, then less than ten percent (10%)
of the land constituting the Property is taken, and such land is located along the perimeter or periphery of the Property, and
no portion of the Improvements (other than any parking lot area, provided that without such area the Property will still comply
with all applicable zoning requirements) is the subject of such Condemnation;


 


(iii)        intentionally
omitted;


 


(iv)        the
Franchise Agreement, the Intermediate Management Agreement, the Property Management, the Beverage Concession Agreement
(if applicable), the Beverage Management Agreement (if applicable) and the REA shall remain in full force and effect during and
after completion of the Restoration, notwithstanding the occurrence of such Casualty or Condemnation;


 


(v)         intentionally
omitted;


 


(vi)        Borrower
shall commence the Restoration as soon as reasonably practicable (but in no event later than ninety (90) days after such Casualty
or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion;


 


(vii)       Lender
shall be reasonably satisfied that any operating deficits and all payments of principal and interest under the Note will be paid
during the period required for Restoration from (A) the Net Proceeds, or (B) other funds of Borrower;


 


(viii)      Lender
shall be reasonably satisfied that the Restoration will be completed on or before the earliest to occur of (A) the date six
(6) months prior to the Stated Maturity Date, (B) the earliest date required for such completion under the terms of any
Lease, (C) such time as may be required under applicable Legal Requirements in order to repair and restore the Property to
the condition it was in immediately prior to such Casualty or Condemnation, as applicable, or (D) the expiration of the insurance
coverage referred to in Section 5.1.1(a)(iii), without giving effect to any extended period of indemnity endorsement
in respect of such coverage;


 


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


 


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


 


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


 


(xii)        Borrower
shall deliver to Lender a signed, detailed budget approved in writing by Borrower’s architect or engineer stating the entire
cost of completing the Restoration, which budget shall be acceptable to Lender;


 




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(xiii)       the
Net Proceeds, together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s reasonable
discretion to cover the cost of the Restoration;


 


(xiv)      the
Debt Service Coverage Ratio, after giving effect to the Restoration, shall not be less than 1.35:1.00;


 


(xv)       the
Loan to Value Ratio, after giving effect to the Restoration, shall not be greater than sixty-five percent (65%); and


 


(xvi)      the
condition set forth in Section 2.10 hereof shall have been satisfied.


 


(b)          The
Net Proceeds shall be paid directly to Lender for deposit into the Casualty and Condemnation Account and, until disbursed in accordance
with the provisions of this Section 5.3.2, shall constitute additional security for the Obligations. The Net Proceeds
shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt
of evidence satisfactory to Lender that (i) all requirements set forth in Section 5.3.2(a) have been satisfied,
(ii) 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 (iii) there exist no notices of pendency,
stop orders, mechanics’ or materialman’s liens or notices of intention to file same, or any other liens or encumbrances
of any nature whatsoever on the Property arising out of the Restoration which have not either been fully bonded to the 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.


 


(c)          All
plans and specifications required in connection with the Restoration shall be subject to the prior written approval of Lender (not
to be unreasonably withheld, conditioned or delayed) and an independent architect selected by Lender (the “Casualty Consultant”).
The plans and specifications shall require that the Restoration be completed in a first-class workmanlike manner at least equivalent
to the quality and character of the original work in the Improvements (provided, however, that in the case of a partial
Condemnation, the Restoration shall be done to the extent reasonably practicable after taking into account the consequences of
such partial Condemnation), so that upon completion thereof, the Property shall be at least equal in value and general utility
to the Property prior to the Casualty or Condemnation, as applicable; it being understood, however, that Borrower shall not be
obligated to restore the Property to the precise condition of the Property prior to such Casualty or Condemnation, as applicable,
provided the Property is restored, to the extent practicable, to be of at least equal value and of substantially the same character
as prior to the Casualty or Condemnation, as applicable. Borrower shall restore all Improvements such that when they are fully
restored and/or repaired, such Improvements and their contemplated use fully comply with all applicable material Legal Requirements.
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 approval of Lender (not to be unreasonably withheld, conditioned or delayed) and
the Casualty Consultant. All reasonable, out-of-pocket costs and expenses incurred by Lender in connection with recovering, holding
and advancing the Net


 




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Proceeds for the Restoration,
including reasonable attorneys’ fees and disbursements and the Casualty Consultant’s fees and disbursements, shall
be paid by Borrower.


 


(d)          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. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section 5.3.2(d), be less than the amount actually
held back by Borrower 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 Article 5 and that all approvals necessary for the re-occupancy and use of the 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 shall 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 Security Instruments 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.


 


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


 


(f)          If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in the reasonable 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 5.3.2 shall constitute
additional security for the Obligations.


 




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(g)          Provided
no Event of Default shall have occurred and be continuing, 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 5.3.2, 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 deposited into the Cash Management
Account to be applied in accordance with Section 6.11.1; provided, however, the amount of such excess
so deposited in the case of a Condemnation shall not exceed the amount of Net Proceeds Deficiency deposited by Borrower with the
balance being applied to the Debt in the manner provided for in subsection 5.3.2(h).


 


(h)          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 5.3.2(g) may be retained and applied by Lender toward the payment of the Debt, whether
or not then due and payable, in such order, priority and proportions as Lender in its sole discretion shall deem proper.


 


Article
6: CASH MANAGEMENT AND RESERVE FUNDS


 


Section 6.1           Cash
Management Arrangements. Each Borrower shall cause all Rents and other Gross Revenue (other than payments received on account
of the business interruption insurance specified in Subsection 5.1.1(a)(iii), which shall be governed by Section 5.2.3)
to be transmitted by (a) credit card clearing banks with which Borrower, Property Manager or Intermediate Manager has entered
into agreements for the clearance of credit card receipts (collectively, “Credit Card Banks”) and credit card
companies with which Borrower, Property Manager or Intermediate Manager has entered into merchants agreements (collectively, “Credit
Card Companies”) and (b) any Tenants of the Property, in each case, directly into the applicable Clearing Account
established and maintained by or on behalf of Borrower at a local bank selected by Borrower and reasonably approved by Lender (the
“Clearing Bank”) as more fully described in the Clearing Account Agreement. Without in any way limiting the
foregoing, from and after the date hereof, Borrower shall notify and advise each Tenant under each Lease (whether such Lease is
presently effective or executed after the date hereof) to send directly to the Clearing Account all payments of Rent pursuant to
an instruction letter in the form of Exhibit B attached hereto (a “Tenant Direction Letter”). Without
in any way limiting the foregoing, Borrower shall instruct and shall continuously hereafter instruct each of the Credit Card Banks
and the Credit Card Companies that all credit card receipts with respect to the Property (net of any expenses charged for such
processing) cleared by such Credit Card Banks or Credit Card Companies, as applicable, shall be transferred by such Credit Card
Banks or Credit Card Companies, as applicable, by wire transfer or the ACH System to the Clearing Bank for deposit in the Clearing
Account pursuant to an instruction letter in the form of Exhibit C hereto (a “Credit Card Bank Payment Direction
Letter”) or Exhibit D hereto (a “Credit Card Company Payment Direction Letter”), as applicable.
Borrower hereby represents and warrants that Borrower has delivered or caused to be delivered Credit Card Bank Payment Direction
Letters and Credit Card Payment Direction Letters to each of the Credit Card Banks and Credit Card Companies, as applicable. If,
notwithstanding the provisions of this Section 6.1, Borrower, Property Manager or Intermediate Manager receive any
Gross Revenue from the Property, then (i) such amounts shall be deemed to be collateral for the Obligations and shall be


 




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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,
Property Manager or Intermediate Manager (except in accordance with the Clearing Account Agreement and the Cash Management Agreement),
and (iii) Borrower, Property Manager or Intermediate Manager shall deposit such amounts in the Clearing Account within one
Business Day of receipt; provided, however, so long as the Property Management Agreement relating to the Properties located in
Indianapolis, Indiana, Knoxville, Tennessee and Naperville, Illinois, as applicable, shall have not been terminated, cash receipts
received for Properties located in Indianapolis, Indiana, Knoxville, Tennessee and Naperville, Illinois may be deposited in a Borrower
account established by the applicable Property Manager (as agent for Borrower), so long as such receipts in excess of $1,000.00
for each account are transferred by wire transfer to the Clearing Account no less frequently than each calendar week.


 


Funds deposited into
the Clearing Account shall be swept by the Clearing Bank on a daily basis into an Eligible Account at the Cash Management Bank
controlled by Lender (the “Cash Management Account”) and applied and disbursed in accordance with this Agreement
and the Cash Management Agreement. Funds in the Cash Management Account may be invested in Permitted Investments, as more particularly
set forth in the Cash Management Agreement. As an alternative to establishing each Account required pursuant to the terms of this
Agreement as a separate Eligible Account, Lender may also establish or cause to be established subaccounts of the Cash Management
Account or the other Accounts described herein which shall at all times be Eligible Accounts (and may be ledger or book entry accounts
and not actual accounts) whereupon all provisions of this Agreement referring to (i) any Account shall be deemed to apply
instead to the corresponding subaccount and (ii) to the Accounts generally shall be deemed to apply instead to the Cash Management
Account or any other Account described herein. The Clearing Account, the Cash Management Account and all other Accounts shall be
under the sole control and dominion of Lender, and Borrower shall have no right of withdrawal therefrom. Borrower shall pay for
all expenses of opening and maintaining all of the above accounts. In the event of a resignation by Clearing Bank, Borrower shall,
promptly after receipt of notice of such resignation, designate a successor to Clearing Bank, which successor shall be subject
to the reasonable approval of Lender, cause the execution of a replacement Clearing Account Agreement in form and substance satisfactory
to Lender and deliver Credit Card Bank Payment Direction Letters and Credit Card Company Payment Direction Letters to the Credit
Card Banks and/or Credit Card Companies, as applicable, and Tenant Direction Letters to any Tenants in accordance with the terms
and provisions of this Section 6.1.


 


Section 6.2           Required
Repairs Funds.


 


6.2.1           Deposit
of Required Repairs Funds. Borrower shall perform the repairs and other work at the Property as set forth on Schedule V
attached hereto (such repairs and other work hereinafter referred to as “Required Repairs”) and shall complete
each of the Required Repairs on or before the respective deadline for each repair as set forth on Schedule V. On the
Closing Date, Borrower shall deposit or cause to be deposited with or on behalf of Lender the amount set forth on such Schedule V
to perform the Required Repairs (the “Required Repairs Funds”), which Required Repairs Funds shall be transferred
by or at the direction of Lender into an Account established to hold such funds (the “Required Repairs Account”).


 




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6.2.2           Release
of Required Repairs Funds.


 


(a)          Lender
shall, or shall direct Servicer to, disburse the Required Repairs Funds to Borrower out of the Required Repairs Account upon satisfaction
by Borrower of each of the Reserve Disbursement Conditions with respect to each such disbursement. Lender shall not be required
to disburse Required Repairs Funds more frequently than once each calendar month, and each disbursement of Required Repairs Funds
must be in an amount not less than the Minimum Disbursement Amount (or a lesser amount if the total amount of Required Repairs
Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the account
shall be made). Upon Borrower’s completion of all Required Repairs in accordance with this Section 6.2, Lender
shall, or shall direct Servicer to, deposit any remaining Required Repairs Funds held in the Required Repairs Account into
the Cash Management Account to be applied in accordance with Section 6.11.1.


 


(b)          Nothing
in this Section 6.2.2 shall (i) make Lender responsible for performing or completing any Required Repairs; (ii) require
Lender to expend funds in addition to the Required Repairs Funds to complete any Required Repairs; (iii) obligate Lender to
proceed with any Required Repairs; or (iv) obligate Lender to demand from Borrower additional sums to complete any Required
Repairs.


 


(c)          Borrower
shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect or inspector) or
third parties to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to
inspect the progress of any Required Repairs and all materials being used in connection therewith and to examine all plans and
shop drawings relating to such Required Repairs. Borrower shall cause all contractors and subcontractors to cooperate with Lender
or Lender’s representatives or such other Persons described above in connection with inspections described in this Section 6.2.2(c)).


 


(d)          If
a disbursement of Required Repair Funds will exceed $25,000.00, Lender may require an inspection of the Property at Borrower’s
expense prior to making a disbursement of Required Repairs Funds in order to verify completion of the Required Repairs for which
reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional
selected by Lender and may require a certificate of completion by an independent qualified professional acceptable to Lender prior
to the disbursement of Required Repairs Funds. Borrower shall pay the expense of the inspection as required hereunder, whether
such inspection is conducted by Lender or by an independent qualified professional.


 


(e)          In
addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation
insurance, builder’s risk insurance, public liability insurance and other insurance to the extent required under applicable
law in connection with the Required Repairs. All such policies shall be in form and amount satisfactory to Lender.


 




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Section 6.3           Tax
Funds.


 


6.3.1           Deposits
of Tax Funds. Borrower shall deposit or cause to be deposited with or on behalf of Lender (a) on the Closing Date, the
amount of Two Hundred Forty Nine Thousand Forty Five and 78/100 Dollars ($249,045.78) and (b) on each Monthly Payment Date,
an amount equal to one-twelfth of the Taxes that Lender estimates will be payable during the next ensuing twelve (12) months
in order to accumulate sufficient funds to pay all such Taxes at least ten (10) days prior to their respective due dates,
which amounts shall be transferred by or at the direction of Lender into an Account established to hold such funds (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, Lender shall notify Borrower in writing of such determination and the monthly deposits for Taxes shall be increased
by the amount that Lender 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 written notice of any deficiency after the date that is ten
(10) days prior to the date that Taxes are due, Borrower will deposit with or on behalf of Lender, such amount within two
Business Days after its receipt of such notice.


 


6.3.2           Release
of Tax Funds. Provided no Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer to,
apply the Tax Funds, if any, in the Tax Account to payments of Taxes. 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 at any time the amount of the Tax Funds shall exceed the amounts due for Taxes, Lender shall, or shall
direct Servicer to, deposit such excess (as determined by Lender in its reasonable discretion) into the Cash Management Account
to be applied in accordance with Section 6.11.1 or credit such excess against future payments to be made to the Tax
Funds, such election to be made by Lender in its sole discretion. Any Tax Funds remaining in the Tax Account after the Obligations
have been paid in full shall be returned to Borrower.


 


Section 6.4           Insurance
Funds.


 


6.4.1           Deposits
of Insurance Funds. Subject to Section 6.4.3, Borrower shall deposit or cause to be deposited with or on behalf of Lender on
each Monthly Payment Date, an amount equal to one-twelfth of the Insurance Premiums that Lender estimates 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 at least thirty (30) days prior to the expiration of the Policies, which amounts shall be transferred by
or at the direction of Lender into an Account established 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, Lender shall notify Borrower in writing of such determination and the monthly deposits for Insurance
Premiums shall be increased by the amount that Lender estimates is sufficient to make up the deficiency at least thirty (30) days
prior to expiration of the Policies; provided that if Borrower receives written notice of any deficiency after the date
that is thirty (30) days prior to expiration of the Policies,


 




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Borrower will deposit
with or on behalf of Lender, such amount within two Business Days after its receipt of such notice.


 


6.4.2           Release
of Insurance Funds. Provided no Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer
to, apply the Insurance Funds, if any, in the Insurance Account to payment of Insurance Premiums. 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 at any time the amount of the Insurance Funds shall exceed the
amounts due for Insurance Premiums, Lender shall, or shall direct Servicer to, deposit such excess (as determined by Lender
in its reasonable discretion) into the Cash Management Account to be applied in accordance with Section 6.11.1 or
credit such excess against future payments to be made to the Insurance Funds, such election to be made by Lender in its sole discretion.
Any Insurance Funds remaining in the Insurance Account after the Obligations have been paid in full shall be returned to Borrower.


 


6.4.3           Blanket
Insurance. Lender shall suspend Borrower’s obligations under this Section 6.4 to the extent that Lender is
reasonably satisfied, based on evidence provided by Borrower from time to time, that all of the Property is covered by a blanket
insurance program that provides insurance meeting the requirements of this Agreement and Lender’s other customary requirements
for blanket insurance programs, and that the premiums under such blanket insurance program are being paid when due. Borrower shall,
no less than ten (10) days prior to the annual expiration date of any such blanket insurance program, provide evidence of
the renewal of such program together with such additional evidence as Lender may demand from time to time.


 


Section 6.5           FF&E
Funds.


 


6.5.1           Deposits
of FF&E Funds. Borrower shall deposit or cause to be deposited with or on behalf of Lender on each Monthly Payment Date,
an amount equal to the greater of (i) one-twelfth of four percent (4%) of the greater of (A) the Gross Revenue
generated during the twelve (12) month period ending on the last day of the most recent calendar quarter for which Borrower
has furnished financial statements pursuant to Section 4.1.7(c) hereof and (B) the Gross Revenue projected in the then-effective
Approved Annual Budget for the twelve (12) month period to which such Approved Annual Budget relates; provided, however,
in the event that the Annual Budget has not been approved by Lender under Section 4.1.7(e) for the applicable period
in which Monthly Payment Date occurs and/or Borrower has failed to timely deliver the financial statements required pursuant to
this Agreement, Lender shall determine the amount of Gross Revenue in its sole and absolute discretion, and (ii) the amount,
if any, required to be reserved under the Franchise Agreement, the Intermediate Management Agreement, the Property Management Agreement,
the Beverage Concession Agreement and the Beverage Management Agreement for FF&E Work, which amounts shall be transferred by
or at the direction of Lender into an Account established to hold such funds (the “FF&E Account”). Amounts
deposited from time to time into the FF&E Account pursuant to this Section 6.5.1 are referred to herein as the
“FF&E Funds”. Lender may reassess its estimate of the amount necessary for FF&E Work from time to time,
and may require Borrower to increase the monthly deposits required pursuant to this Section 6.5.1 upon thirty (30)
days’ notice to Borrower if


 




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Lender determines in
its reasonable discretion that an increase is necessary to maintain proper operation of the Property (provided, however, that so
long as no Event of Default then exists, no such increase shall cause the annual payments under this Section 6.5.1 to exceed
an amount equal to five percent (5%) of Gross Revenue in any twelve-month period unless required by any Franchise Agreement.


 


6.5.2           Release
of FF&E Funds.


 


(a)          Lender
shall, or shall direct Servicer to, disburse the FF&E Funds to Borrower out of the FF&E Account provided (i) such
disbursement is for (A) FF&E Work incurred in connection with an Approved FF&E Expense or (B) PIP Alterations contemplated
by the applicable PIP Plans and (ii) Borrower shall have satisfied each of the Reserve Disbursement Conditions with respect
to each such disbursement. Lender shall not be required to disburse FF&E Funds more frequently than once each calendar month,
and each disbursement of FF&E Funds must be in an amount not less than the Minimum Disbursement Amount (or a lesser amount
if the total amount of FF&E Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the
amount remaining in the account shall be made). Lender shall not be obligated to make disbursements of FF&E Funds to reimburse
Borrower for the costs of routine maintenance to the Property, replacements of inventory or for costs which are to be reimbursed
from the Required Repair Funds.


 


(b)          Nothing
in this Section 6.5.2 shall (i) make Lender responsible for performing or completing any FF&E Work; (ii) require
Lender to expend funds in addition to the FF&E Funds to complete any FF&E Work; (iii) obligate Lender to proceed with
any FF&E Work; or (iv) obligate Lender to demand from Borrower additional sums to complete any FF&E Work.


 


(c)          Borrower
shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect or inspector) or
third parties to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to
inspect the progress of any FF&E Work and all materials being used in connection therewith and to examine all plans and shop
drawings relating to such FF&E Work. Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other Persons described above in connection with inspections described in Section 6.5.2(d).


 


(d)          If
a disbursement of FF&E Funds will exceed $25,000.00, Lender may require an inspection of the Property at Borrower’s expense
prior to making a disbursement of FF&E Funds in order to verify completion of the FF&E Work for which reimbursement is
sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender
and may require a certificate of completion by an independent qualified professional acceptable to Lender prior to the disbursement
of FF&E Funds. Borrower shall pay the actual and reasonable out-of-pocket expense of the inspection as required hereunder,
whether such inspection is conducted by Lender or by an independent qualified professional.


 


(e)          In
addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation
insurance, builder’s


 




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risk, public liability
insurance and other insurance to the extent required under applicable law in connection with FF&E Work. All such policies shall
be in form and amount satisfactory to Lender.


 


Section 6.6           PIP
Reserve.


 


6.6.1           Deposit
of PIP Reserve Funds. (a) Borrowers shall deposit or cause to be deposited with or on behalf of Lender funds at the times
and in the amounts specified in the PIP Reserve Funding Schedule attached hereto as Schedule XIV; (b) Borrower shall
deposit or cause to be deposited with or on behalf of Lender such additional amounts as Lender from time to time reasonably determines
is necessary to cover any increases in a PIP Budget, any additional PIP Alterations required by a Franchisor under a PIP Plan or
any modification to a PIP Plan or to cover PIP Alterations contemplated by any new PIP plan imposed by a Franchisor, and the cost
of any repairs, maintenance, alterations, or improvements demanded by a Franchisor pursuant to a Franchise Agreement; and (c) all
amounts to be deposited in the PIP Reserve Account during a Cash Sweep Event Period pursuant to Section 6.11.1(a)(viii)
shall be deposited directly by or at the direction of Lender, into an Account established to hold such funds (the “PIP
Reserve Account”). Amounts deposited from time to time in the PIP Reserve Account pursuant to this Section 6.6.1
are referred to herein as the “PIP Reserve Funds” and shall be disbursed to fund PIP Alterations at the Properties
from time to time in accordance with the PIP Plans and the terms and provisions of Section 6.6.2 hereof.


 


6.6.2           Release
of PIP Reserve Funds.


 


(a)          Lender
shall, or shall direct Servicer to, disburse the PIP Reserve Funds to Borrowers out of the PIP Reserve Account provided that (i)
such disbursement is for PIP Alterations contemplated by the applicable PIP Plans; (ii) the applicable Borrower for whom such disbursement
is made shall have satisfied each of the Reserve Disbursement Conditions with respect to such disbursement; (iii) Lender shall
not be required to disburse PIP Reserve Funds more frequently than once each calendar month; (iv) each disbursement of PIP Reserve
Funds must be in an amount not less than the Minimum Disbursement Amount (or a lesser amount if the total amount of PIP Reserve
Funds is less than the Minimum Disbursement Amount, in which case only one disbursement of the amount remaining in the PIP Reserve
Account shall be made); (v) each request for PIP Reserve Funds to be disbursed to Borrowers shall include a statement as to which
PIP Budget line items are to be funded and what portion of the applicable PIP Budget remains unfunded, and (vi) in no event shall
such PIP Reserve Funds be requisitioned or disbursed in connection with the PIP Plan and/or PIP Alterations related to the Property
located in Stratford, Connecticut.


 


(b)          Nothing
in this Section 6.6.2 shall (i) make Lender responsible for performing or completing any PIP Alterations; (ii) require
Lender to expend funds in addition to the PIP Reserve Funds to complete any PIP Alterations; (iii) obligate Lender to proceed with
any PIP Alterations; or (iv) obligate Lender to demand from Borrowers additional sums to complete any PIP Alterations.


 


(c)          Each
Borrower shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect or inspector)
to enter onto Borrower’s


 




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Property during normal
business hours upon reasonable notice (subject to the rights of guests or invitees of such Property) to inspect the progress of
any PIP Alterations and all materials being used in connection therewith and to examine all plans and shop drawings relating to
such PIP Alterations. Each Borrower shall cause all applicable contractors and subcontractors to cooperate with Lender or Lender’s
agents or representatives described above in connection with inspections described in this Section 6.6.2(c)).


 


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


 


Section 6.7           Intentionally
Omitted.


 


Section 6.8           Operating
Expenses.


 


6.8.1           Hilton
Brand Managed Properties. On each Monthly Payment Date, an amount sufficient to pay the Monthly Operating Expense Budgeted
Amount in respect of all Hilton Brand Managed Properties (together with additional funds, if any, for monthly Approved Operating
Expenses not set forth in the Approved Annual Budget as requested by Borrower pursuant to the definition of Approved Operating
Expenses, as well as monthly Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the terms hereof)
(but without duplication for any expenses to be funded with amounts deposited to the other Reserve Funds) shall be transferred
by or at the direction of Lender into an Account established to hold such funds (the “Hilton Brand Operating Expense Account”).
Amounts deposited from time to time into the Hilton Brand Operating Expense Account pursuant to this Section 6.8.1
are referred to herein as the “Hilton Brand Operating Expense Funds”. At all times, without regard of whether
an Event of Default shall have occurred and be continuing, Lender shall, or shall direct Servicer to, disburse Hilton Brand Operating
Expense Funds to the Property Manager in respect of such Hilton Brand Managed Properties out of the Hilton Brand Operating Expense
Account promptly following each Monthly Payment Date for the payment of Approved Operating Expenses at such Hilton Brand Managed
Properties and any Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the terms hereof, in
each case for the applicable monthly period.


 


6.8.2           Other
Properties. On each Monthly Payment Date, an amount sufficient to pay the Monthly Operating Expense Budgeted Amount in respect
of all Properties, exclusive of any Hilton Brand Managed Properties (together with additional funds, if any, for monthly Approved
Operating Expenses not set forth in the Approved Annual Budget as requested by Borrower pursuant to the definition of Approved
Operating Expenses, as well as monthly Extraordinary Expenses requested by Borrower and approved by Lender in accordance with the
terms hereof) (but without duplication for any expenses to be funded with amounts deposited to the other Reserve Funds) shall be
transferred by or at the direction of Lender into an Account established to hold such funds (the “Non Hilton Operating
Expense Account”; and the Hilton Brand Operating Expense Account together with the Non Hilton Operating Expense Account,
collectively, the “Operating Expense Account”) to the extent there are amounts


 




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remaining in the Cash
Management Account after deposits for items (a)(i) through (a)(v) of Section 6.11.1. Amounts deposited
from time to time into the Non Hilton Operating Expense Account pursuant to this Section 6.8.2 are referred to herein
as the “Non Hilton Operating Expense Funds”; and the Hilton Brand Operating Expense Funds, together with the
Non Hilton Operating Expense Funds, collectively, the “Operating Expense Funds”). Provided no Event of Default
shall have occurred and be continuing, Lender shall, or shall direct Servicer to, disburse Non Hilton Operating Expense Funds to
Borrower out of the Operating Expense Account promptly following each Monthly Payment Date for the payment of Approved Operating
Expenses at such Properties, exclusive of the Hilton Brand Managed Properties, and any Extraordinary Expenses requested by Borrower
and approved by Lender in accordance with the terms hereof, in each case for the applicable monthly period.


 


Section 6.9           Excess
Cash Flow Funds. Subject to any deposits required to be made to the PIP Reserve Account pursuant to Section 6.11.1(a)(viii),
during the continuance of a Cash Sweep Event Period, Borrower shall deposit or cause to be deposited with or on behalf of Lender
all Excess Cash Flow, which amounts shall be transferred by the Cash Management Bank into an Account established to hold such funds
(the “Excess Cash Flow Account”) and held as additional security for the Loan; provided, however,
that to the extent that a Cash Sweep Event is caused solely by occurrences of events described in clause (iv) in the
definition of “Cash Sweep Event” with respect to less than all the Properties (i.e., a particular Property or particular
Properties) (a “Franchise Agreement Cash Sweep Event”), Borrower’s obligation to deposit Excess Cash Flow
into the Excess Cash Flow Account shall not exceed the sum of the Franchise Cash Sweep Event Caps for each such Property or Properties.
Amounts deposited from time to time into the Excess Cash Flow Account pursuant to this Section 6.9 are referred to
herein as the “Excess Cash Flow Funds”. Provided no Event of Default shall have occurred and be continuing,
any Excess Cash Flow Funds remaining in the Excess Cash Flow Account upon the occurrence of a Cash Sweep Event Cure shall be deposited
into the Cash Management Account to be applied in accordance with Section 6.11.1.


 


Section 6.10         Security
Interest in Reserve Funds; Reserve Funds Generally.


 


6.10.1         Grant
of Security Interest. Borrower hereby pledges, assigns and grants a security interest to Lender, as security for the payment
and performance of the Obligations, in all of Borrower’s right, title and interest in and to any and all monies, checks,
notes, bonds, money orders, letters of credit, other instruments and other investment property now or hereafter deposited or held
in the Reserve Funds. The Reserve Funds shall be under the sole dominion and control of Lender. The Reserve Funds shall not constitute
a trust fund and may be commingled with other monies held by Lender.


 


6.10.2         Interest
on Certain Reserve Funds; Income Taxes. All Reserve Funds may be invested in Permitted Investments as directed by Lender in
accordance with the terms of the Cash Management Agreement. Borrower acknowledges and agrees that the availability of and return
on certain Permitted Investments depends, in part, upon the availability of Permitted Investments to the Cash Management Bank,
the size of the balance of the applicable Reserve Funds and/or the frequency of deposits into and withdrawals from the Reserve
Funds and that certain Permitted Investments may be or become unavailable from time to time with respect to the Reserve Funds for
a variety of reasons, including, without limitation, any of the foregoing


 




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factors. Borrower acknowledges
and agrees that the interest or income received on the Reserve Funds may not be the highest return available on cash-based investments
and further acknowledges and agrees that none of Lender, any Servicer of the Loan, the Cash Management Bank or any of their respective
agents or representatives shall be obligated to seek the highest return available on cash-based investments and none of Lender,
any Servicer of the Loan, the Cash Management Bank or any of their respective agents or representatives shall be liable for any
loss sustained on the investment of any funds constituting the Reserve Funds. Borrower shall deposit with Lender an amount equal
to any actual losses sustained on the investment of any funds constituting the Reserve Funds within two Business Days of Lender’s
notice. All earnings or interest on each of the Reserve Funds (other than the Tax Funds and the Insurance Funds) shall be and become
part of the respective Reserve Fund and shall be disbursed as provided in the paragraph(s) of this Agreement applicable to each
such Reserve Fund. All earnings and interest on the Tax Funds and the Insurance Funds shall be the sole property of and paid to
Lender. Borrower shall report on its federal, state, commonwealth, district and local income tax returns all interest or income
accrued on the Reserve Funds (other than the Tax Funds and the Insurance Funds).


 


6.10.3         Prohibition
Against Further Encumbrance. No Borrower shall, without the prior written consent of Lender, further pledge, assign or grant
any security interest in the Reserve Funds or permit any Lien or encumbrance to attach thereto, or any levy to be made thereon,
or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.


 


Section 6.11         Property
Cash Flow Allocation.


 


6.11.1         Order
of Priority of Funds in Cash Management Account.


 


(a)          Subject
to the other provisions of the Loan Documents, on each Monthly Payment Date during the Term, except during the continuance of an
Event of Default, all funds deposited into the Cash Management Account during the immediately preceding Interest Period shall be
applied on such Monthly Payment Date in the following order of priority:


 


(i)          First,
to make the required payments of Hilton Brand Operating Expense Funds into the Hilton Brand Operating Expense Account, as required
under Section 6.8.1 (taking into account any funds that were previously deposited into the Hilton Brand Operating Expense
Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(i) below);


 


(ii)         then,
to make the required payments of Tax Funds into the Tax Account as required under Section 6.3 (taking into account
any funds that were previously deposited into the Tax Account for application on such Monthly Payment Date pursuant to Section
6.11.1(b)(ii) below);


 


(iii)        then,
to make the required payments of Insurance Funds into the Insurance Account as required under Section 6.4 (taking into
account any funds that were previously deposited into the Insurance Account for application on such Monthly Payment Date pursuant
to Section 6.11.1(b)(iii) below);


 




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(iv)        then,
funds sufficient to pay the Monthly Debt Service Payment into an Account established for such purpose (taking into account any
funds that were previously deposited into an Account established for such purpose for application on such Monthly Payment Date
pursuant to Section 6.11.1(b)(iv) below);


 


(v)         then,
funds sufficient to pay any interest accruing at the Default Rate, late payment charges and all other amounts, other than those
described under other clauses of this Section 6.11.1, then due to Lender and/or any Indemnified Party under the
Loan Documents into an Account established for such purpose (taking into account any funds that were previously deposited into
an Account established for such purpose for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(v) below);


 


(vi)        then,
to make the required payments of Non Hilton Operating Expense Funds into the Non Hilton Operating Expense Account as required under
Section 6.8.2 (taking into account any funds that were previously deposited into the Non Hilton Brand Operating Expense
Account for application on such Monthly Payment Date pursuant to Section 6.11.1(b)(vi) below);


 


(vii)       then,
to make the required payments of FF&E Funds into the FF&E Account as required under Section 6.5 (taking into
account any funds that were previously deposited into the FF&E Account for application on such Monthly Payment Date pursuant
to Section 6.11.1(b)(vii) below);


 


(viii)      then,
during the continuance of a Cash Sweep Event Period triggered by the occurrence of clause (v) in the definition of “Cash
Sweep Event”, to the PIP Reserve Account as required under Section 6.6.1 until such time as the Cash Sweep Event Cure
related to such Cash Sweep Event shall have been satisfied;


 


(ix)         then,
during the continuance of a Cash Sweep Event Period, all amounts remaining in the Cash Management Account after deposits for items
(a)(i) through (a)(viii) above (the “Excess Cash Flow”) into the Excess Cash Flow Account as required
under Section 6.9 (provided that for so long as the Cash Sweep Event Period is caused solely by a Franchise Agreement
Cash Sweep Event, Excess Cash Flow shall be deposited into the Excess Cash Flow Account only to the extent required by Section 6.9);
and


 


(x)          Lastly,
provided no Cash Sweep Event Period shall then be in effect, payments to, or as directed by, Borrowers of all Excess Cash Flow.


 


(b)          In
addition to the foregoing, subject to the other provisions of the Loan Documents (permitting disbursements from Accounts
other than during a Sweep Event Period), on March 20, 2015 and thereafter on the fifteenth (15th) day following each Monthly Payment
Date during the Term (or on the succeeding Business Day if such fifteenth (15th) day is not a Business Day) (the “Interim
Disbursement Date”), and only if no Event of Default has occurred and is then continuing and no Cash Sweep Period is
then continuing, all funds deposited into the Deposit Account since the last Monthly Payment Date shall be applied on such Interim
Disbursement Date in the following order of priority:


 




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(i)          First,
to make a deposit into the Hilton Brand Operating Expense Account in an amount equal to the payment of Hilton Brand Operating Expenses
that will be required to be made under Section 6.8.1 on the next Monthly Payment Date;


 


(ii)         then,
to make a deposit into the Tax Account in an amount equal to the payment of Tax Funds that will be required to made under Section 6.3
on the next Monthly Payment Date (provided, that the foregoing deposit shall not be made on March 20, 2015 because the payment
of Tax Funds that will be required to be made on the next Monthly Payment Date (which is the First Monthly Payment Date) was delivered
to Lender on the Closing Date);


 


(iii)        then,
to make a deposit into the Insurance Account in an amount equal to the payment of Insurance Funds that will be required to made
under Section 6.4 on the next Monthly Payment Date;


 


(iv)        then,
to make a deposit into an Account established for such purpose in an amount equal to the Monthly Debt Service Payment that Lender
reasonably determines will be due and payable on the next Monthly Payment Date;


 


(v)         then,
funds sufficient to pay any interest accruing at the Default Rate, late payment charges and all other amounts, other than those
described under other clauses of this Section 6.11.1(b), then due to Lender and/or any Indemnified Party under
the Loan Documents into an Account established for such purpose;


 


(vi)        then,
to make a deposit into the Non Hilton Brand Operating Expense Account in an amount equal to the payment of Non Hilton Brand Operating
Expenses that will be required to be made under Section 6.8.2 on the next Monthly Payment Date;


 


(vii)       then,
to make a deposit into the FF&E Account in an amount equal to the payment of FF&E Funds that will be required to made under
Section 6.5 on the next Monthly Payment Date; and


 


(viii)      lastly,
payment of all amounts remaining in the Deposit Account after the applications contemplated by items (b)(i) through
(b)(vii) above to Borrower as Excess Cash Flow.


 


6.11.2         Failure
to Make Payments. The failure of Borrower to make all of the payments required under clauses (a)(ii) through
clause (a)(v) and clause (a)(vii) of Section 6.11.1 in full on each Monthly Payment Date shall constitute
an Event of Default under this Agreement; provided, however, if adequate funds are available in the Cash Management
Account for such payments, and an Event of Default is not otherwise in existence, the failure by the Cash Management Bank to allocate
such funds into the appropriate Accounts shall not constitute an Event of Default. The insufficiency of funds on deposit in the
Cash Management Account shall not relieve Borrower from the obligation to make any payments, as and when due pursuant to the Loan
Documents.


 




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6.11.3         Application
After Event of Default. Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, upon
the occurrence and during the continuance of an Event of Default, Lender, at its option, may apply any Gross Revenue then in the
possession of Lender, Servicer or Cash Management 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;
provided, however, that Lender shall fund Approved Operating Expenses (including, upon Borrower’s request pursuant
to the definition of Approved Operating Expenses, funds for excess Operating Expenses in an amount up to, but not exceeding 10%
of the Monthly Operating Expense Budgeted Amount) relating to the Hilton Brand Managed Properties, together with any Taxes and
Insurance Premiums relating to Hilton Brand Managed Properties, if any are held on reserve (and are therefore not otherwise released
as part of the Approved Operating Expenses relating to the Hilton Brand Managed Properties), unless and until Lender has terminated
the Property 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.


 


Article
7: property MANAGEMENT


 


Section 7.1  The
Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Beverage Concession Agreement. 


 


7.1.1           Franchise
Agreement. Borrower shall (a)  diligently perform and observe all of the terms, covenants and conditions of the Franchise
Agreement on the part of Borrower to be performed and observed, (b) promptly notify Lender of any default under the
Franchise Agreement beyond all applicable notice and cure periods of which it is aware, (c) promptly deliver to Lender
a copy of each financial statement, business plan, property improvement plan, capital expenditures plan and each material notice,
report and survey received by it or any Affiliate of Borrower under the Franchise Agreement, and (d) promptly enforce in accordance
with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed
by Franchisor under the Franchise Agreement.


 


7.1.2           Property
Management Agreement; Intermediate Management Agreement.


 


(a)          Borrower
shall at all times cause each Property to be managed by a Property Manager pursuant to a Property Management Agreement; provided
that to the extent such Property Manager shall have been retained by an Intermediate Manager, the applicable Property Manager shall
have entered into an agreement reasonably acceptable to Lender whereby such Property Manager agrees to attorn to Lender notwithstanding
the termination of the applicable Intermediate Management Agreement (which agreement if contained in an Assignment of Property
Management Agreement is hereby accepted by Lender) or any foreclosure of the Security Instruments. Borrower hereby agrees that
the fee paid to Property Manager and Intermediate Manager, if applicable, collectively, in compensation for Property Manager’s
and Intermediate Manager’s services conducted in connection with the management of the Property shall not exceed, in the
aggregate, four percent (4.0%) of Gross Revenue


 




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(excluding the receipt
of commercially reasonable incentive fees so long as such fees are fully subordinated to payment of the Loan).


 


(b)          Borrower
shall (i) to the extent that Borrower shall have entered into an Intermediate Management Agreement, cause Intermediate Manager
to cause Property Manager to, or (ii) directly cause Property Manager to, (A) manage the Property in accordance with the Property
Management Agreement and the Franchise Agreement, (B) diligently perform and observe all of the material terms, covenants and conditions
of the Property Management Agreement and the Franchise Agreement on the part of the Borrower or Property Manager, as appropriate,
to be performed and observed, (C) promptly notify Lender of any default under the Property Management Agreement or the Franchise
Agreement beyond all applicable notice and cure periods of which it is aware, (D) promptly deliver to Lender a copy of each financial
statement, business plan, capital expenditures plan, property improvement plan, material report, material survey and each material
notice received by it or any Affiliate of Borrower under the Property Management Agreement or the Franchise Agreement, and (E)
promptly enforce in accordance with commercially reasonable practices the performance and observance of all of the covenants required
to be performed and observed by Property Manager under the Property Management Agreement and Franchisor under the Franchise Agreement.


 


(c)          To
the extent that Borrower shall have entered into an Intermediate Management Agreement, Borrower shall (i) diligently perform and
observe in all material respects all of the terms, covenants and conditions of the Intermediate Management Agreement on the part
of Borrower to be performed and observed, (ii) promptly notify Lender of any default under the Intermediate Management Agreement
beyond all applicable notice and cure periods of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement,
business plan, capital expenditures plan, property improvement plan, material report, material survey and each material notice
received by it or any Affiliate of Borrower under the Intermediate Management Agreement, and (iv) promptly enforce in accordance
with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed
by Intermediate Manager under the Intermediate Management Agreement, including, without limitation, payment of all fees and expenses
due any Property Manager.


 


(d)          To
the extent that Borrower shall have entered into a Property Management Agreement, Borrower shall (i) diligently perform and observe
in all material respects all of the terms, covenants and conditions of the Property Management Agreement on the part of Borrower
to be performed and observed, (ii) promptly notify Lender of any default under the Property Management Agreement beyond all applicable
notice and cure periods of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement, business plan,
capital expenditures plan, property improvement plan, material report, material survey and each material notice received by it
or any Affiliate of Borrower under the Property Management Agreement, and (iv) promptly enforce in accordance with commercially
reasonable practices the performance and observance of all of the covenants required to be performed and observed by Property Manager
under the Property Management Agreement, including, without limitation, payment of all fees and expenses due any Property Manager.


 


(e)          To
the extent that Borrower shall have entered into an Intermediate Management Agreement and caused Intermediate Manager to enter
into a Property Management


 




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Agreement with Property
Manager, Borrower shall cause Intermediate Manager to (i) diligently perform and observe in all material respects all of the terms,
covenants and conditions of the Property Management Agreement on the part of such Intermediate Manager to be performed and observed,
(ii) promptly notify Lender of any default under the Property Management Agreement beyond all applicable notice and cure periods
of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures
plan, property improvement plan, material report, material survey and each material notice received by it or any Affiliate of such
Intermediate Manager under the Property Management Agreement, and (iv) promptly enforce in accordance with commercially reasonable
practices the performance and observance of all of the covenants required to be performed and observed by Property Manager under
the Property Management Agreement, including, without limitation, payment of all fees and expenses due any Property Manager.


 


7.1.3           Beverage
Concession Agreement. Borrower shall (a) cause Beverage Concessionaire to manage in a commercially reasonable manner
the serving and selling of alcoholic beverages and related items to customers at the Courtyard Houston Property in accordance with
the Beverage Concession Agreement, (b) diligently perform and observe in all material respects all of the terms, covenants
and conditions of the Beverage Concession Agreement on the part of Borrower to be performed and observed, (c) promptly notify
Lender of any material default under the Beverage Concession Agreement beyond all applicable notice and cure periods of which it
is aware, (d) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, property
improvement plan, material report, material survey and each material notice received by it or any Affiliate of Borrower under the
Beverage Concession Agreement to the extent any of the same is of a material nature, and (e) promptly enforce in accordance
with commercially reasonable practices the performance and observance of all of the covenants required to be performed and observed
by Beverage Concessionaire under the Beverage Concession Agreement.


 


7.1.4           Defaults.


 


(a)          If
Borrower or any Intermediate Manager shall default in the performance or observance of any material term, covenant or condition
of any Intermediate Management Agreement or any Property Management Agreement on the part of Borrower or any Intermediate Manager
to be performed or observed, then, without limiting Lender’s other rights or remedies under the Loan Documents, and without
waiving or releasing Borrower or Intermediate Manager from any of its Obligations hereunder or under any Intermediate Management
Agreement or any Property Management Agreement, Lender shall have the right in the manner provided pursuant to an Assignment of
Property Management Agreement, but shall be under no obligation, to pay any sums or to perform any act as may be appropriate to
cause all of the material terms, covenants and conditions of such Property Management Agreement on the part of the Borrower or
Intermediate Manager, as applicable, to be performed or observed.


 


(b)          If
Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement
or the Beverage Concession Agreement on the part of Borrower to be performed or observed, then, without limiting Lender’s
other rights or remedies under the Loan Documents, and without waiving or releasing Borrower from any of its Obligations hereunder
or under any Franchise Agreement or the Beverage Concession Agreement, as applicable, Lender shall have the right in the manner
provided pursuant to an Assignment of Franchise Agreement and the Assignment of Beverage


 




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Concession Agreement,
as applicable, but shall be under no obligation, to pay any sums or to perform any act as may be appropriate to cause all of the
material terms, covenants and conditions of such Franchise Agreement or the Beverage Concession Agreement on the part of the Borrower
to be performed or observed.


 


Section 7.2           Prohibition
Against Termination or Modification of Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and
Concession Agreement.


 


7.2.1           Franchise
Agreement. Borrower shall not, without Lender’s prior written consent, (a) surrender, terminate, cancel, modify,
renew, amend or extend any Franchise Agreement (other than a renewal or extension provided for in such Franchise Agreement), (b)
except as permitted under item (a) above, enter into any new or other agreement relating to the flagging of the Property
with Franchisor or any other Person, (c) consent to the assignment by Franchisor of its obligations under any Franchise Agreement,
(d) permit or suffer any Transfer of the ownership, management or Control of an Affiliated Franchisor to occur, or (e) waive
or release any of its rights and remedies under any Franchise Agreement in any material respect. Notwithstanding the foregoing,
Lender shall not unreasonably withhold its consent to any modification, amendment, renewal or extension of the Franchise Agreement
that Lender reasonably determines enhances the value of one or more Properties or does not decrease the value of or otherwise have
a Material Adverse Effect on one or more Properties.


 


7.2.2           Intermediate
Management Agreement; Property Management Agreement


 


(a)          Borrower
shall not, without the prior written consent of Lender, (i) surrender, terminate, cancel, modify in any material respect, renew
or extend any Intermediate Management Agreement (other than a renewal or extension provided for in such Intermediate Management
Agreement); provided, that so long as no Event of Default shall have occurred and be continuing or would occur as a result of such
replacement, Borrower may replace Intermediate Manager with a Qualified Manager pursuant to a Replacement Management Agreement,
(ii) except as permitted under item (i) above, enter into any new or other agreement relating to the management or operation
of the Property with Intermediate Manager or any other Person, (iii) consent to the further assignment by Intermediate Manager
or Property Manager, as the case may be, of its interest under any Intermediate Management Agreement or any Property Management
Agreement, as applicable, (iv) subject to the terms and provisions of Section 8.2(k) and Section 8.2(l), permit or
suffer any transfer of the ownership, management or control of Intermediate Manager or any other Affiliated Manager, as the case
may be, to occur, or (v) waive or release any of its rights and remedies under any Intermediate Management Agreement in any material
respect. Notwithstanding anything herein to the contrary, during the thirty (30) days following any change in Control of Pool II
Holdco to the Preferred Equity Investors, Lender consent shall not be required in connection with the termination of any Intermediate
Manager and any Intermediate Management Agreement so long as a Qualified Manager (including any Scheduled Manager) shall be engaged
pursuant to a direct Property Management Agreement in


 




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respect of each Property
affected and Borrower shall have satisfied the conditions set forth in Section 7.3.8 hereof.


 


(b)          In
connection with any Property Management Agreement, Borrower shall not, nor shall Borrower permit any Intermediate Manager, without
the prior written consent of Lender, to (i) surrender, terminate, cancel, modify in any material respect, renew or extend any Property
Management Agreement (other than a renewal or extension provided for in such Property Management Agreement); provided, that so
long as no Event of Default shall have occurred and be continuing or would occur as a result of such replacement, Borrower may
and shall permit Intermediate Manager to replace a Property Manager with a Qualified Manager pursuant to a Replacement Management
Agreement, (ii) except as permitted under item (i) above, enter into any new or other agreement relating to the management
or operation of the Property with Property Manager or any other Person, (iii) consent to the assignment by Property Manager of
its interest under any Property Management Agreement, (iv) permit or suffer any transfer of the ownership, management or control
of any Affiliated Manager to occur, or (v) waive or release any of its rights and remedies under any Property Management Agreement
in any material respect. Notwithstanding anything herein to the contrary, during the thirty (30) days following any change in Control
of Pool II Holdco to the Preferred Equity Investors, Lender consent shall not be required in connection with the termination of
any Property Manager and the associated Property Management Agreement and the engagement of a Scheduled Manager as a Property Manager
pursuant to a new Property Management Agreement in respect of each Property affected and Borrower’s satisfaction of the conditions
set forth in Section 7.3.8 hereof.


 


7.2.3           Beverage
Agreements. Borrower shall not, without the prior written consent of Lender, (i) surrender, terminate, cancel, modify
in any material respect, renew or extend the Beverage Management Agreement or Beverage Concession Agreement (other than a renewal
or extension provided for in such agreement), (ii) (except as permitted under item (i) above) enter into any new or
other agreement relating to the serving and selling of alcoholic beverages and related items to customers at the Courtyard Houston
Property with Beverage Manager, Beverage Concessionaire or any other Person, (iii) consent to the assignment by Beverage
Manager or Beverage Concessionaire of its interest under the Beverage Management Agreement or Beverage Concession Agreement, as
appropriate, (d) permit or suffer any Transfer of the ownership, management or Control of Beverage Manager or Beverage Concessionaire
to occur, or (e) waive or release any of its rights and remedies under the Beverage Management Agreement or Beverage Concession
Agreement in any material respect. Notwithstanding anything to the contrary, during the thirty (30) days following any change in
Control of Pool II Holdco to the Preferred Equity Investors, Lender consent shall not be required on connection with the termination
of Beverage Concessionaire and/or Beverage Manager and the associated Beverage Management Agreement or Beverage Concession Agreement,
as appropriate, and the engagement of a Scheduled Manager (or its Affiliate) as Beverage Manager or Beverage Concessionaire pursuant
to a new Beverage Management Agreement or Beverage Concession Agreement, respectively.


 


Section 7.3           Expiration
or Termination of Franchise Agreement, Intermediate Management Agreement and Property Management Agreement.


 




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7.3.1           Expiration
or Franchisor Termination. In the event that any Franchise Agreement expires or is surrendered, terminated or canceled (without
limiting any obligation of Borrower to obtain Lender’s consent under Section 7.2.1 hereof), Borrower shall enter into
a Replacement Franchise Agreement with a Qualified Franchisor contemporaneously with such expiration, surrender, termination or
cancellation.


 


7.3.2           Expiration,
or Property Manager or Intermediate Manager Termination.


 


(a)          In
the event that any Intermediate Management Agreement expires or is surrendered, terminated or canceled (without limiting any obligation
of Borrower to obtain Lender’s consent under Section 7.2.2(a) hereof), Borrower shall either assume such Intermediate
Manager’s Property Management Agreement with Property Manager or enter into a Replacement Management Agreement with a Qualified
Manager contemporaneously with such expiration, surrender, termination or cancellation.


 


(b)          In
the event any Property Management Agreement expires or is surrendered, terminated or canceled (without limiting any obligation
of Borrower and Intermediate Manager to obtain Lender’s consent under Section 7.2.2(b) hereof), Borrower shall or
shall cause Intermediate Manager to enter into a Replacement Management Agreement with a Qualified Manager contemporaneously with
such expiration, surrender, termination or cancellation.


 


(c)          In
the event any Beverage Concession Agreement expires or is surrendered, terminated or canceled (without limiting any obligation
of Borrower to obtain Lender’s consent under Section 7.2.3 hereof), Borrower shall or shall cause Beverage Concessionaire
to enter into a replacement beverage concession arrangement with a Person reasonably approved by Lender contemporaneously with
such expiration, surrender, termination or cancellation.


 


7.3.3           Lender’s
Right to Require Replacement of Franchise Agreement. Lender shall have the right to require Borrower to replace any Franchisor
with a Qualified Franchisor chosen by Borrower which is not an Affiliate of Borrower, any SPC Party or Guarantor to flag the Property
pursuant to a Replacement Franchise Agreement upon the occurrence of any one or more of the following events: (a) at any time following
the occurrence of an Event of Default, (b) if any Franchisor shall be in default under any Franchise Agreement beyond any
applicable notice and cure period, (c) if any Franchisor shall become insolvent or a debtor in any Bankruptcy Action, or (d) if
at any time any Franchisor has engaged in gross negligence, fraud or willful misconduct, in each case to the extent that Borrower
has the right to so terminate the applicable Franchise Agreement upon the occurrence of any such event. Lender’s rights under
this Section 7.3.3 shall be in addition to, and shall not be deemed to waive, qualify or otherwise limit any rights
available to Lender under any Assignment of Franchise Agreement or any other comfort letter/tri-party agreement/non-disturbance
agreement/assignment of franchise agreement and subordination of franchise fees or similar agreement delivered pursuant to the
terms of this Agreement.


 




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7.3.4           Lender’s
Right to Require Replacement of Property Management Agreement. Lender shall have the right to require Borrower to terminate
any Intermediate Management Agreement, any Property Management Agreement and/or replace the Intermediate Manager or Property Manager
with a Qualified Manager chosen by Borrower which is not an Affiliate of Borrower, any SPC Party or Guarantor to manage the Property
pursuant to a Replacement Management Agreement upon the occurrence of any one or more the following events: (a) at any time following
the occurrence of an Event of Default, (b) with respect to any Property managed by an Affiliated Manager, if at any time the Debt
Service Coverage Ratio falls below 1.05:1.00, (c) if such Intermediate Manager or such Property Manger shall be in default under
the applicable Intermediate Management Agreement and/or Property Management Agreement, respectively, beyond any applicable notice
and cure period, (d) if such Intermediate Manager or such Property Manager shall become insolvent or a debtor in any Bankruptcy
Action, or (e) if at any time such Intermediate Manager or such Property Manager has engaged in gross negligence, fraud or willful
misconduct. Lender’s rights under this Section 7.3.4 shall be in addition to, and shall not be deemed to waive, qualify
or otherwise limit any rights available to Lender under any Assignment of Property Management Agreement or similar agreement/assignment
delivered pursuant to the terms of this Agreement.


 


7.3.5           Lender’s
Right to Require Replacement of Beverage Concession Agreement. Lender shall have the right to require Borrower to terminate
the Beverage Concession Agreement and/or replace the Beverage Concessionaire with a beverage concessionaire chosen by Borrower
and approved by Lender which is not an Affiliate of Borrower, any SPC Party or Guarantor to manage the serving and selling of alcoholic
beverages and related items to customers at the Courtyard Houston Property pursuant to a replacement beverage concession agreement
substantially in the same form and substance as the Beverage Concession Agreement upon the occurrence of any one or more the following
events: (a) at any time following the occurrence of an Event of Default, (b) if Beverage Concessionaire shall be in default under
the Beverage Concessionaire Agreement  beyond any applicable notice and cure period, (c) if Beverage Concessionaire shall
become insolvent or a debtor in any Bankruptcy Action, or (d) if at any time Beverage Concessionaire has engaged in gross negligence,
fraud or willful misconduct.  Lender’s rights under this Section 7.3.5 shall be in addition to, and shall not
be deemed to waive, qualify or otherwise limit any rights available to Lender under the Assignment of Beverage Concession Agreement
or similar agreement/assignment delivered pursuant to the terms of this Agreement.


 


7.3.6           Actions
Following Event of Default. Upon the occurrence and during the continuance of an Event of Default, (i) Borrower shall not exercise
any rights, make any decisions, grant any approvals or otherwise take any action under any Intermediate Management Agreement, any
Property Management Agreement, any Franchise Agreement or the Beverage Concession Agreement without the prior written consent of
Lender, and (ii) Borrower shall cause Intermediate Manager to not exercise any rights, make any decisions, grant any approvals
or otherwise take any action under any Property Management Agreement without the prior written consent of Lender.


 


7.3.7           Assignment
of Franchise Agreement. If at any time Lender consents to the appointment of a new franchisor and/or the execution of a franchise
agreement under this Agreement, such franchisor and, if necessary, Borrower shall, as a condition of Lender’s consent,


 




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execute a comfort
letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise fees or similar
agreement in form and substance reasonably satisfactory to Lender.


 


7.3.8           Assignment
of Management Agreement. Upon any appointment of a new manager and/or the execution of any new management agreement (whether
intermediate, prime or sub in nature) and regardless of whether or not Lender’s consent shall be a condition to such appointment
pursuant to the provisions of this Agreement, Borrower shall execute and cause such new manager to execute an assignment of management
agreement and subordination of management fees containing customary attornment provisions in favor of Lender and otherwise substantially
in the form of the Assignment of Property Management Agreement (or such other form reasonably satisfactory to Lender).


 


7.3.9           Assignment
of Beverage Concession Agreement. Upon any appointment of a new beverage concessionaire and/or the execution of any new beverage
concession agreement and regardless of whether or not Lender’s consent shall be a condition to such appointment pursuant
to the provisions of this Agreement, Borrower shall execute and cause such new beverage concessionaire to execute an assignment
of beverage concession agreement and subordination of fees containing customary attornment provisions in favor of Lender and otherwise
substantially in the form of the Assignment of Beverage Concession Agreement (or such other form reasonably satisfactory to Lender).


 


Article
8: TRANSFERS


 


Section 8.1           [Reserved]


 


Section 8.2           Permitted
Transfers of Interest in Restricted Parties. Subject to the terms and provisions of Section 7 and this Section
8, the following Transfers shall be permitted hereunder:


 


(a)          One
Transfer or a series of Transfers of the direct or indirect ownership interests in any Restricted Party provided that (i) no
Default or Event of Default shall have occurred and be continuing or would occur as a result of such Transfer, (ii) such Transfer
shall not cause a change in Control of any of the Borrowers, any SPC Party or Guarantor, (iii) the Property shall continue
to be managed by a Property Manager pursuant to the Property Management Agreement or another Qualified Manager pursuant to a Replacement
Management Agreement, (iv) after giving effect to such Transfer, (A) ARCHOP shall continue to own, directly or indirectly,
at least  fifty-one percent (51%) of all legal, beneficial and economic interests in all Borrowers, and shall continue to
Control Borrowers and (B) Guarantor shall continue to own, directly or indirectly, at least fifty-one percent (51%) of all
legal, beneficial and economic interests in ARCHOP and shall continue to Control ARCHOP and Borrowers, (v) in connection with
any Transfer subject to the requirements of Section 8.2(m), hereof, Borrowers shall give Lender notice of such Transfer
together with copies of all instruments effecting such Transfer and the organizational documents of the transferee and its constituent
parties reasonably required by Lender not less than ten (10) days prior to the date of such Transfer, (vi) the legal
and financial structure of Borrowers and their members or partners, as applicable, and the single purpose nature and bankruptcy
remoteness of Borrowers and their members or partners, as


 




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applicable, after such
Transfer, shall satisfy the requirements set forth herein, (vii) Borrower shall have obtained the consent of the Preferred Equity
Investors to such Transfer if required pursuant to the Pool II Holdco Operating Agreement, and (viii) such Transfer shall
be permitted under each Franchise Agreement, each Property Management Agreement, each Operating Lease, each REA and/or
the applicable Borrowers shall obtain any consents required from Franchisor, each Property Manager, each Borrower that serves as
the lessor under the applicable Operating Lease and the REA counterparty in connection with such Transfer and deliver the
same to Lender.


 


(b)          One
Transfer or a series of Transfers of direct or indirect ownership interests in ARCHOP provided that (i) no Default or Event
of Default shall have occurred and be continuing or would occur as a result of such Transfer, (ii) the Property shall continue
to be managed by a Property Manager pursuant to the Property Management Agreement or another Qualified Manager pursuant to a Replacement
Management Agreement, (iii) after giving effect to such Transfer, (A) ARCHOP (or its permitted successor) shall continue to
own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in all Borrowers,
and shall continue to Control Borrowers and (B) one or more Qualified Equity Holders shall own, directly or indirectly, at
least fifty-one percent (51%) of all legal, beneficial and economic interests in and shall Control ARCHOP (or its permitted successor)
and Borrowers, (iv) Borrowers shall give Lender notice of such Transfer together with copies of all instruments effecting
such Transfer and the organizational documents of the transferee and its constituent parties reasonably required by Lender not
less than ten (10) days prior to the date of such Transfer, (v) the legal and financial structure of Borrowers and their
members or partners, as applicable, and the single purpose nature and bankruptcy remoteness of Borrowers and their members or partners,
as applicable, after such Transfer, shall satisfy Lender’s requirements as set forth herein, (vi) such Transfer shall
be permitted under each Franchise Agreement, each Property Management Agreement, each Operating Lease and each REA and/or
Borrowers shall obtain any consents required from each Franchisor, each Property Manager, each Borrower that serves as the lessor
under the applicable Operating Lease and the REA counterparty in connection with such Transfer and deliver the same to Lender,
(vii) if required by Lender, Borrowers provide a Satisfactory Replacement Guarantor that satisfies the Satisfactory Guarantor Substitution
Conditions, (viii) Borrower shall have obtained the consent of the Preferred Equity Investors to such Transfer if required pursuant
to the Pool II Holdco Operating Agreement, and (ix) Borrowers shall pay Lender a fee of $10,000. An Event of Default arising from
a Transfer of direct or indirect ownership interests in ARCHOP without complying with the conditions of this Section 8.2(b)
shall be deemed cured (and shall not give rise to liability under the Guaranty) if and when (A) such Transfer occurs after a Permitted
Preferred Equity Changeover Event, and (B) a Permitted Common Equity Buyout Event is thereafter completed.


 


(c)          A
change in Control of Pool II Holdco pursuant to a “Changeover Event” as described in Section 3.3 of the Pool II Holdco
Operating Agreement, provided that all of the following conditions are satisfied:


 


(i)          After
giving effect to such change in Control, Pool II Holdco shall be Controlled by the Preferred Equity Investors pursuant to rights
granted to Preferred Equity Investors in the organizational documents of Pool II Holdco;


 




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(ii)         Whitehall
shall own, directly or indirectly, not less than ninety-seven percent (97%) of each Preferred Equity Investor and not less than
ninety seven percent (97%) of all Preferred Equity Interests (or, in each case, such lesser amount as may be permitted under Section
8.2(f));


 


(iii)        Whitehall
shall, directly or indirectly, retain sole and exclusive Control over the exercise of all rights granted to the Preferred Equity
Investors pursuant to the organizational documents of Pool II Holdco (without the need to obtain anyone else’s consent).
Without limiting the foregoing, Whitehall shall indirectly Control each of Pool II Holdco’s direct and indirect subsidiaries,
including each Borrower;


 


(iv)        Preferred
Equity Investors shall acquire Control of Pool II Holdco in accordance with the terms of the organizational documents of Pool II
Holdco;


 


(v)         Preferred
Equity Investors shall provide Lender written notice (a “Preferred Equity Change in Control Notice”) of such
change in Control no less than ten (10) Business Days prior to the consummation of such change in Control;


 


(vi)        Preferred
Equity Investors shall affirm, in a written instrument reasonably acceptable to Lender, effective concurrently with the change
in Control, that the Recognition Agreement continues to be binding on Preferred Equity Investors, is unmodified, and remains in
full force and effect. Such written instrument shall include a reaffirmation, as of the date thereof, of all of the representations
and warranties in the Recognition Agreement;


 


(vii)       The
change in Control is not prohibited by or constitute a default (or an event that with notice, passage of time, or both would ripen
into a default) under any Franchise Agreement or Operating Lease, and would not permit any Franchisor or party to an Operating
Lease to terminate same, and any consents or approvals required under any Franchise Agreement or Operating Lease shall have been
obtained;


 


(viii)      As
of the date of delivery of the Preferred Equity Change in Control Notice and as of the date of consummation of the change in Control
neither Whitehall nor any Preferred Equity Investor shall be the subject of any proceeding under the Bankruptcy Code or any insolvency
proceeding under the laws of any state, federal, or foreign jurisdiction;


 


(ix)         Whitehall
shall have executed and delivered a Replacement Guaranty and Replacement Environmental Indemnity, pursuant to which Whitehall shall
undertake the obligations as set forth in the Replacement Guaranty and Replacement Environmental Indemnity, but only to the extent
arising from events, facts, or circumstances occurring from and after the effective date of the change in Control;


 


(x)          If
required by Lender or the Rating Agencies, Borrower or the Preferred Equity Investor shall deliver to Lender an opinion from counsel,
and in form and substance reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion stating,
among other things, that (A) Whitehall is duly formed and validly existing, (B) delivery of the replacement guaranty and environmental
indemnity has been duly authorized, (C) that the replacement guaranty and environmental indemnity are enforceable against Whitehall
in


 




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accordance with their
terms, and (D) any REMIC trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate
mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to tax as a result of such change
in Control and such delivery;


 


(xi)         If
required by Lender or the Rating Agencies and if an Insolvency Opinion has previously been delivered in connection with the Loan,
Borrower or the Preferred Equity Investors shall deliver to Lender a new Insolvency Opinion;


 


(xii)        Lender
shall receive evidence, reasonably satisfactory to Lender, that as of the effective date of the change in Control, Whitehall satisfies
the Replacement Guaranty Financial Covenants (such evidence may be in the form of an officer’s certificate signed by a duly
authorized representative of Whitehall);


 


(xiii)       Each
of the Properties will continue to be managed by Property Manager or will be managed by a Scheduled Manager after the change in
Control;


 


(xiv)      Borrower
or Preferred Equity Investor shall pay Lender a fee of $10,000; and


 


(xv)       Preferred
Equity Investors shall have satisfied the Lender Transfer Requirements no more than ten (10) Business Days prior to the consummation
of such change in Control.


 


Upon the execution and
delivery of a Replacement Guaranty and Replacement Environmental Indemnity by Whitehall and satisfaction of all of the foregoing
conditions of this Section 8.2(c), the Guarantor that has been replaced by Whitehall shall (subject to Section 8.2(e))
be forever released from any further liability under the Guaranty and the 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; provided, however, that such replaced Guarantor 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.


 


(d)          A
Permitted Common Equity Buyout Event; provided that Lender receives prior or concurrent written notice of the occurrence of such
event, and such notice is accompanied by an Officer’s Certificate with an updated organizational chart confirming that, after
giving effect to such event, neither ARCHOP nor any of its Affiliates shall have any right, title, or interest, direct or indirect,
in Borrower (other than interests any of such Persons may directly or indirectly hold in Whitehall).


 


(e)          Following
or concurrently with a Permitted Preferred Equity Changeover Event, the Transfer to the Common Equity Member of the Interests in
Pool II Holdco held by the Preferred Equity Investors provided that such Transfer is made in accordance with the terms of Section
3.4 of the Pool II Holdco Operating Agreement, and provided further that all of the following conditions are satisfied:


 


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


 




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(ii)         After
giving effect to such Transfer, Pool II Holdco shall be Controlled by Common Equity Member pursuant to rights granted to Common
Equity Member in the organizational documents of Pool II Holdco;


 


(iii)        (A)
ARCHOP shall continue to own, directly or indirectly, at least  fifty-one percent (51%) of all legal, beneficial and economic
interests in all Borrowers, and shall continue to Control Borrowers and (B) Guarantor shall continue to own, directly or indirectly,
at least fifty-one percent (51%) of all legal, beneficial and economic interests in ARCHOP and shall continue to Control ARCHOP
and Borrowers;


 


(iv)        Guarantor
shall, directly or indirectly, retain sole and exclusive Control over the exercise of all rights granted to the Common Equity Investor
pursuant to the organizational documents of Pool II Holdco (without the need to obtain anyone else’s consent). Without limiting
the foregoing, Guarantor shall indirectly Control each of Pool II Holdco’s direct and indirect subsidiaries, including each
Borrower;


 


(v)         Common
Equity Investor shall acquire Control of Pool II Holdco in accordance with the terms of the organizational documents of Pool II
Holdco;


 


(vi)        Preferred
Equity Investors shall provide Lender written notice (a “Common Equity Change in Control Notice”) of such Transfer
to the Common Equity Member of the Interests in Pool II Holdco held by the Preferred Equity Investors no less than ten (10) Business
Days prior to the consummation of such Transfer;


 


(vii)       The
Transfer is not prohibited by or constitute a default (or an event that with notice, passage of time, or both would ripen into
a default) under any Franchise Agreement or Operating Lease and would not permit any Franchisor or party to an Operating Lease
to terminate same, and any consents or approvals required under any Franchise Agreement or Operating Lease shall have been obtained;


 


(viii)      Each
of the Properties will continue to be managed by Property Manager or will be managed by a Qualified Manager after the change in
Control;


 


(ix)         As
of the date of delivery of the Common Equity Change in Control Notice and as of the date of consummation of the Transfer neither
Guarantor nor any Pool II Common Equity Investor shall be the subject of any proceeding under the Bankruptcy Code or any insolvency
proceeding under the laws of any state, federal, or foreign jurisdiction;


 


(x)          Pursuant
to documentation acceptable to Lender, Guarantor shall reaffirm (and rescind any prior cancellation or release of), the Guaranty
and Environmental Indemnity;


 


(xi)         If
required by Lender or the Rating Agencies, Borrower shall deliver to Lender an opinion from counsel, and in form and substance
reasonably acceptable to Lender and acceptable to the Rating Agencies in their sole discretion stating, among other things, that
(A) Guarantor is duly formed and validly existing, (B) delivery of the reaffirmation of the Guaranty and Environmental Indemnity
has been duly authorized, (C) that such Guaranty and Environmental Indemnity are enforceable against Guarantor in accordance


 




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with their terms, and
(D) any REMIC trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment
conduit” within the meaning of Section 860D of the Code or be subject to tax as a result of such Transfer and such delivery;


 


(xii)        If
required by Lender or the Rating Agencies and if an Insolvency Opinion has previously been delivered in connection with the Loan,
Borrower shall deliver to Lender a new Insolvency Opinion;


 


(xiii)       Lender
shall receive evidence, reasonably satisfactory to Lender, that as of the effective date of the Transfer, Guarantor satisfies the
Financial Covenants;


 


(xiv)      Lender
shall receive evidence reasonably satisfactory to Lender that each of the Properties will continue to be managed by Manager or
will be managed by a Scheduled Manager after the Transfer;


 


(xv)       Borrower
shall pay Lender a fee of $10,000; and


 


(xvi)      Common
Equity Investor shall have satisfied the Lender Transfer Requirements no more than ten (10) Business Days prior to the consummation
of such Transfer.


 


Upon the execution and
delivery of a satisfactory reaffirmation of the Guaranty and Environmental Indemnity by Guarantor under clause (x), any
replacement guarantor provided by Whitehall pursuant to Section 8.2(c) shall be forever released from any further liability
under the Replacement Guaranty and the Replacement Environmental Indemnity arising from any circumstance, condition, action or
event first occurring after the effective date of such reaffirmation to the extent the same is not caused by such replacement guarantor;
provided, however, that such replacement guarantor shall remain liable under its Replacement Guaranty and Replacement Environmental
Indemnity for any obligations thereunder arising from any action or event occurring prior to the effective date of such reaffirmation.


 


For clarification, each
reference to “Guarantor” under this Section 8.2(e) is intended to refer to American Realty Capital Hospitality Trust,
Inc., and not to a guarantor under a Replacement Guaranty.


 


(f)          One
Transfer or a series of Transfers of the Preferred Equity Interests or of direct or indirect ownership interests in a Preferred
Equity Investor, provided that all of the following conditions are satisfied:


 


(i)          After
giving effect to such Transfer or series of Transfers, Whitehall shall own, directly or indirectly, not less than fifty one percent
(51%) of each Preferred Equity Investor and not less than fifty one percent (51%) of all Preferred Equity Interests.


 


(ii)         Whitehall
shall, directly or indirectly, retain sole and exclusive Control over each Preferred Equity Investor and the exercise of all rights
granted to the Preferred Equity Investor pursuant to the organizational documents of Pool II Holdco (without the need to obtain
anyone else’s consent).


 




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(iii)        If
a change in Control permitted by Section 8.2(c) has occurred, Whitehall shall continue to directly or indirectly Control
Pool II Holdco and each of its then direct and indirect subsidiaries and, without limiting the foregoing, shall indirectly Control
each Borrower.


 


(iv)        With
respect to a direct Transfer of Preferred Equity Interests or a transaction subject to Section 8.2(m), Lender shall receive not
less than thirty (30) days advance written notice of such Transfer.


 


(v)         With
respect to a direct Transfer of Preferred Equity Interests, the transferee shall join or assume, as applicable, the Recognition
Agreement by an instrument in form and substance reasonably satisfactory to Lender, dated as of the date of the Transfer. Such
written instrument shall include an affirmation, as of the date thereof, of all of the representations and warranties in the Recognition
Agreement (as may be reasonably modified to take into account differences in the identity of the transferee from the transferor,
assuming the balance of the conditions of this Section 8.2(f) are otherwise met).


 


(vi)        The
Transfer(s) are not prohibited by or constitute a default (or an event that with notice, passage of time, or both would ripen into
a default) under each Franchise Agreement, and each Operating Lease and would not permit any Franchisor or party to an Operating
Lease to terminate same, and that any consents or approvals required under any Franchise Agreement or Operating Lease have been
obtained.


 


(g)          The
sale, transfer or issuance of shares of stock in Guarantor or, following any change in Control of Pool II Holdco to the Preferred
Equity Investors, American Realty Capital Hospitality Trust, Inc., provided either (i) such shares of stock are listed on the New
York Stock Exchange, NASDAQ Global Select Market or another nationally recognized stock exchange or (ii) such shares of stock are
sold, transferred or issued in the ordinary course of business through licensed broker dealers in accordance with all applicable
legal requirements to third party investors in a manner consistent with previous offerings conducted by Guarantor or, following
any change in Control of Pool II Holdco to the Preferred Equity Investors, American Realty Capital Hospitality Trust, Inc. or any
of their Affiliates to date. For the avoidance of doubt, any listing of the shares of stock in Guarantor on the New York Stock
Exchange, NASDAQ Global Select Market or another nationally recognized stock exchange shall not be a prohibited Transfer hereunder.


 


(h)          One
Transfer or a series of Transfers of the direct or indirect interests in Whitehall.


 


(i)          One
Transfer or a series of Transfers of preferred stock issued by W2007 Grace Acquisition I, Inc., a Tennessee corporation (“Grace
Acquisition I”); provided that, after giving effect to such Transfer or Transfers, with respect to each class of
securities issued by Grace Acquisition I, The Goldman Sachs Group, Inc. (together with its Affiliates) continues to own at least
fifty one percent (51%) of the securities that are owned by the Goldman Sachs Group, Inc. and its Affiliates on the date hereof.


 




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(j)          A
merger or other combination of Grace Acquisition I with or into another Person provided that, after giving effect to such merger
or combination, the successor company is Controlled by Whitehall, and at least fifty one percent (51%) of the direct or indirect
interests in the successor company is owned by Whitehall.


 


(k)          One
Transfer or a series of Transfers of direct or indirect ownership interests in Crestline Hotels & Resorts, LLC or any other
any Affiliated Manager provided that (i) no Default or Event of Default shall have occurred and be continuing or would occur as
a result of such Transfer, (ii)  after giving effect to such Transfer, one or more Qualified Affiliated Manager Equity Holders
shall own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in and shall
Control such Affiliated Manager, and (iii) Borrowers shall give Lender notice of such Transfer together with copies of all instruments
effecting such Transfer and the organizational documents of the transferee and its constituent parties reasonably required by Lender
not less than ten (10) days prior to the date of such Transfer.


 


(l)          a
Qualified IPO of Crestline Hotels & Resorts, LLC or any other Affiliated Manager and subsequent to the closing of such Qualified
IPO, the sale, transfer or issuance of the equity of the Affiliated Manager on the New York Stock Exchange, NASDAQ Global Select
Market or another nationally recognized stock exchange. 


 


(m)          Notwithstanding
anything in this Section 8.2 to the contrary, and without limiting any of the foregoing requirements of this Section
8.2, if after giving effect to any Transfer permitted by this Section 8.2 (other than a Transfer permitted by Section
8.2(g), (h), (i), or (j) or other Transfers of securities listed on the New York Stock Exchange, NASDAQ Global Select Market
or another nationally recognized stock exchange), (i) twenty percent (20%) or more in the aggregate of the direct or indirect ownership
interests (or any class of ownership interests) in any Borrower, any SPC Party, Guarantor, or Pool II Holdco would be owned by
a Person (together with its Affiliates) which did not own twenty percent (20%) or more of the direct or indirect ownership interests
(or any class of ownership interests) in such Borrower, SPC Party, Guarantor, Preferred Equity Investor or Pool II Holdco, as applicable,
on the Closing Date or as a result of other Transfers previously made in accordance with the terms and provisions of this Agreement,
or if any change in Control of any Borrower, any SPC Party, Guarantor, Preferred Equity Investor or Pool I Holdco occurs, then,
as a condition to any such Transfer or change in Control being permitted hereunder, the transferee or Person acquiring Control
(together with its Affiliates) shall satisfy the Lender Transfer Requirements prior to the date of such Transfer or change in Control
or, in the case of a Transfer or change in Control triggered by the death or incapacity of an individual, within thirty (30) days
after the date of such Transfer or change in Control, and/or (ii) forty-nine percent (49%) or more in the aggregate of the direct
or indirect ownership interests in any Borrower or any SPC Party would be owned by a Person (together with its Affiliates) which
did not own forty-nine percent (49%) or more of the direct or indirect ownership interests in such Borrower or any SPC Party on
the Closing Date or as a result of other Transfers previously made in accordance with the terms and provisions of this Agreement,
then, as a condition to any such Transfer being permitted hereunder, Borrower (or, at the election of the Preferred Equity Holder,
the Preferred Equity Holder) shall deliver to Lender a new Insolvency Opinion, in each case prior to the date of such Transfer
or, in the case of a


 




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Transfer triggered by
the death or incapacity of an individual, within thirty (30) days after the date of such Transfer.


 


Section 8.3           Costs
and Expenses. Borrower shall pay all costs and expenses of Lender in connection with any Transfer, assumption, and/or replacement
of any Guarantor, including, without limitation, the cost of any Rating Agency Confirmation and all reasonable fees and expenses
of Lender’s counsel, and the cost of any required counsel opinions, including, without limitation, Insolvency Opinions and
opinions related to REMIC Trusts or other securitization or tax issues.


 


Section 8.4           Compliance
with other Covenants. The foregoing provisions of this Article 8 shall not be deemed to waive, qualify or otherwise
limit Borrower’s obligation to comply (or cause the compliance with) the other covenants set forth in this Agreement and
the other Loan Documents (including, without limitation, those covenants relating to OFAC and ERISA matters).


 


Article
9: SALE AND SECURITIZATION OF LOAN


 


Section 9.1           Sale
of Loan and Securitization.


 


(a)          Lender
shall have the right (i) to sell, assign, pledge or otherwise transfer the Loan or any portion thereof or interest therein
to any Person, (ii) to sell participation interests in the Loan to any Person, or (iii) to securitize the Loan or any
portion thereof or interest therein in one or more private or public single asset or pooled loan securitizations. (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 Securitization
are hereinafter referred to as “Securities”).


 


(b)          If
requested by Lender, Borrower shall assist Lender in satisfying the market standards to which Lender customarily adheres or which
may be reasonably required in the marketplace or by the Rating Agencies or applicable Legal Requirements in connection with any
Secondary Market Transactions, including to:


 


(i)          (A)
provide updated financial and other information with respect to the Property, the business operated at the Property, Borrower,
Guarantor, any Affiliate of Borrower or Guarantor, Property Manager and Intermediate Manager, including, without limitation, the
information set forth on Schedule VI 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 Property, and (C) provide
updated appraisals, market studies, environmental reviews (Phase I’s and, if appropriate, Phase II’s), property condition
reports and other due diligence investigations of the Property (the information referred to in clauses (A), (B) and
(C) shall hereinafter be referred to collectively as “Updated Information”), together, if customary,
with appropriate verification of the Updated Information through letters of auditors, certificates of third party service providers
or opinions of counsel acceptable to Lender and the Rating Agencies;


 




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(ii)         provide
opinions of counsel, which may be relied upon by Lender and the NRSROs, and their respective counsel, agents and representatives,
as to bankruptcy non-consolidation, fraudulent conveyance and true sale, or any other opinion customary in Secondary Market Transactions
or required by the Rating Agencies with respect to the Property, Borrower, Guarantor and any Affiliate of Borrower or Guarantor,
which counsel and opinions shall be reasonably satisfactory to Lender and satisfactory to the Rating Agencies in their sole discretion;


 


(iii)        provide
updated (as of the closing date of any Secondary Market Transaction) representations and warranties made in the Loan Documents
and such additional representations and warranties as Lender may reasonably require as a result of industry standard and commercially
reasonable requirements of investors in Secondary Market Transactions, or the Rating Agencies may require;


 


(iv)        subject
to Section 9.3, execute modifications and amendments to the Loan Documents and Borrower’s organizational documents
as Lender may reasonably require or the Rating Agencies may require, including, without limitation, the addition of one or more
Independent Directors pursuant to the terms and provisions of Schedule III attached hereto;


 


(v)         provide
access to, and conduct tours of, the Property; and


 


(vi)        provide
certifications or other evidence of reliance acceptable to Lender and the Rating Agencies with respect to third party reports and
other information obtained in connection with the origination of the Loan or any Updated Information.


 


(c)          Borrower
agrees that (i) Lender may disclose any information relating to Property, the business operated at the Property, Borrower,
Guarantor, any Affiliate of Borrower or Guarantor, Property Manager, Intermediate Manager, the Loan (including information provided
by or on behalf of Borrower or any of its Affiliates to Lender) to any Person (including, but not limited to, investors or prospective
investors in the Securities, the NRSROs, investment banking firms, accounting firms, law firms and other third-party advisory and
service providers relating to a Securitization) actually or potentially involved in or related to any Secondary Market Transaction
or any other Person reasonably requesting such information in connection with a Secondary Market Transaction and (ii) the
findings and conclusions of any third-party due diligence report obtained by Lender or other Indemnified Persons may be made publicly
available if required, and in the manner prescribed, by applicable Legal Requirements.


 


(d)          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 Property alone or the Property and Related Properties
collectively, will be a Significant Obligor, Borrower shall furnish to Lender, upon request the following financial information:


 


(i)          if
Lender 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


 




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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 Property 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 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 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 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 Property for the three most recent Fiscal Years and applicable interim periods,
meeting the requirements of Rule 3-02 of Regulation S-X (or if Lender determines that the Property is the Significant Obligor and
the Property (other than properties that are hotels, nursing homes, or other properties that would be deemed to constitute a business
and not real estate under Regulation S-X or other Legal Requirements) was acquired from an unaffiliated third party and the other
conditions set forth in Rule 3-14 of Regulation S-X have been met, the financial statements required by Rule 3-14 of Regulation
S-X)).


 


(e)          Further,
if requested by Lender, Borrower shall, promptly upon Lender’s request, 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 the Property
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
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 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 (i) Exchange
Act Filings are required to be made under applicable Legal Requirements or (ii) comparable information is required to otherwise
be “available” to holders of the Securities under Regulation AB or applicable Legal Requirements.


 


(f)          If
Lender determines that Borrower alone or Borrower and one or more Affiliates of Borrower collectively, or the Property alone or
the Property and Related Properties collectively, are a Significant Obligor, then Borrower shall 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 (i) Exchange
Act Filings are required to be made under applicable Legal Requirements or (ii) comparable information is required to


 




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otherwise be “available”
to holders of the Securities under Regulation AB or applicable Legal Requirements.


 


(g)          Any
financial data or financial statements provided pursuant to this Section 9.1 shall be furnished 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(e) and (f) 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.


 


(h)          If
requested by Lender, Borrower shall provide Lender, promptly, and in any event within three (3) Business Days following Lender’s
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 relating to a Securitization or as shall otherwise be reasonably
requested by Lender.


 


(i)          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 ten percent (10%) or more (but less than twenty percent (20%))
of the total floor area of the improvements or represent ten percent (10%) or more (but less than twenty percent (20%)) of aggregate
base rent, and (2) occupy twenty percent (20%) or more of the total floor area of the improvements or represent twenty percent
(20%) or more of aggregate base rent.


 


(j)          All
financial statements provided by Borrower pursuant to Section 9.1(d), (e), (f) or (g) shall
be prepared in accordance with GAAP, and shall meet the requirements of Regulation S-K or Regulation S-X, as applicable, Regulation
AB, and other applicable Legal Requirements. All financial statements relating to a Fiscal Year shall, if necessary in order to
satisfy the requirements of such regulations, be audited by independent accountants of Borrower acceptable to Lender in accordance
with generally accepted auditing standards, 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


 




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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 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.


 


Section 9.2           Securitization
Indemnification.


 


(a)          Borrower
understands and agrees that information provided to Lender by Borrower or its agents, counsel and representatives may be included
in Disclosure Documents in connection with a Securitization 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 and
Exchange Act of 1934, as amended (the “Exchange Act”), and may be made available to investors or prospective
investors in the Securities, the NRSROs, investment banking firms, accounting firms, law firms and other third-party advisory and
service providers relating to a Securitization.


 


(b)          Borrower
hereby agrees (i) to indemnify Lender, any Affiliate of Lender that has filed any registration statement relating to a Securitization
or has acted as the issuer, sponsor, depositor or seller in connection with a Securitization, any Affiliate of Lender that acts
as an underwriter, placement agent or initial purchaser of Securities issued in connection with a Securitization, any other issuers,
depositors, underwriters, placement agents or initial purchasers of Securities issued in connection with a Securitization, and
each of their respective officers, directors, partners, employees, representatives, agents and Affiliates, and each Person that
controls any such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively,
the “Indemnified Persons”) for any losses, liabilities, obligations, claims, damages, penalties, actions, judgments,
suits, costs and expenses (collectively, the “Liabilities”) to which any Indemnified Person 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 provided to Lender by Borrower, any Affiliate of Borrower or any of their respective agents,
counsel or representatives, (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 and/or (C) a breach of the representations and warranties made by Borrower in Section 3.1.40
of this Agreement and (ii) to reimburse each Indemnified Person for any out-of-pocket legal or other expenses actually incurred
by such Indemnified Person in connection with investigating or defending the Liabilities; provided, however, that
Borrower will be liable in any such case under clauses (i) or (ii) above only to the extent that any
such Liability arises out of, or is based upon, an untrue statement, alleged untrue statement, omission or alleged omission made
in reliance upon and in conformity with (x) information furnished by or on behalf of Borrower (1) in connection with
the preparation of the Disclosure Documents or (2) in connection with the underwriting or closing of the Loan or (y) any
of the reports, statements or other information furnished by or on behalf of Borrower pursuant to the terms of this Agreement,
including, without limitation, financial statements of Borrower and operating statements and rent rolls with respect to the Property.
This indemnity will be in addition to any liability which Borrower may otherwise have.


 




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(c)          In
connection with any Exchange Act Filing or other reports containing comparable information that are required to be made available
to holders of the Securities under Regulation AB or other applicable Legal Requirements, Borrower shall (i) indemnify the
Indemnified Persons for Liabilities to which any Indemnified Person may become subject insofar as the Liabilities arise out of
or are based upon an untrue statement, alleged untrue statement, omission or alleged omission made in reliance upon and in conformity
with (x) information furnished by or on behalf of Borrower (1) in connection with the preparation of the Disclosure Documents
or (2) in connection with the underwriting or closing of the Loan or (y) any of the reports, statements or other information
furnished by or on behalf of Borrower pursuant to the terms of this Agreement, including, without limitation, financial statements
of Borrower and operating statements and rent rolls with respect to the Property, and (ii) reimburse each Indemnified Person
for any legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending the
Liabilities.


 


(d)          Promptly
after receipt by an Indemnified Person of notice of a claim or the commencement of any action, such Indemnified Person will, if
a claim in respect thereof is to be made against Borrower, notify Borrower in writing of the commencement thereof, but the omission
to so notify Borrower will not relieve Borrower from any liability which it may have to any Indemnified Person under this Section 9.2
except to the extent that failure to notify materially prejudices Borrower. In the event that any action is brought against any
Indemnified Person, and it notifies Borrower of the commencement thereof, Borrower will be entitled to participate therein and,
to the extent that it may elect by written notice delivered to the Indemnified Person promptly after receiving the aforesaid notice
from such Indemnified Person, to assume the defense thereof with counsel satisfactory to such Indemnified Person. After notice
from Borrower to such Indemnified Person of Borrower’s election to assume the defense of such action, such Indemnified Person
shall pay for any legal or other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof
other than reasonable costs of investigation; provided, however, if the defendants in any such action include both
Indemnified Person and Borrower and the Indemnified Person shall have reasonably concluded that there are legal defenses available
to it and/or other Indemnified Persons that are different from or additional to those available to Borrower, the Indemnified Person
or Persons 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 Person or Persons at the cost of Borrower. Borrower shall not be liable for the expenses
of more than one separate counsel (in addition to local counsel) unless an Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it that are different from or additional to those available to another Indemnified Person.


 


(e)          In
order to provide for just and equitable contribution in circumstances in which any indemnification or reimbursement under this
Section 9.2 is for any reason held to be unenforceable as to an Indemnified Person in respect of any Liabilities (or
action in respect thereof) referred to herein which would otherwise be indemnifiable under this Section 9.2, Borrower
shall contribute to the amount paid or payable by the Indemnified Person 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


 




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entitled, the following
factors shall be considered: (i) Lender’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)          Without
limiting the generality of this Section 9.2, Borrower hereby agrees (i) to indemnify the Indemnified Persons against
any Liabilities to which any Indemnified Persons may become subject in connection with any indemnification to the NRSROs in connection
with issuing, monitoring or maintaining the Securities 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 provided to Lender or one or more of the
NRSROs by Borrower, any Affiliate of Borrower or any of their respective agents, counsel or representatives, (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 and/or (C) a breach
of the representations and warranties made by Borrower in Section 3.1.40 of this Agreement and (ii) to reimburse
each Indemnified Person for any out-of-pocket legal or other expenses actually incurred by such Indemnified Person in connection
with investigating or defending such Liabilities; provided, however, that, other than in connection with information provided by
Borrower, any Affiliate of Borrower or any of their respective agents, counsel or representatives directly to one or more of the
NRSROs, Borrower will be liable in any such case under clauses (i) or (ii) above only to the extent
that any such Liability arises out of, or is based upon, an untrue statement, alleged untrue statement, omission or alleged omission
made in reliance upon and in conformity with (x) information furnished by or on behalf of Borrower (1) in connection
with the issuance, monitoring or maintenance of the Securities or (2) in connection with the underwriting or closing of the
Loan or (y) any of the reports, statements or other information furnished by or on behalf of Borrower pursuant to the terms
of this Agreement, including, without limitation, financial statements of Borrower and operating statements and rent rolls with
respect to the Property. This indemnity will be in addition to any liability which Borrower may otherwise have.


 


(g)          For
the avoidance of doubt, and without limiting the generality of the foregoing, “Indemnified Persons” shall include the
initial named Lender hereunder and each other Lender that has held an interest in the Loan at any time during the Term, including
prior to the occurrence of the act or omission giving rise to the applicable Liabilities.


 


(h)          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 Obligations.


 


Section 9.3           Severance
Documentation. Lender shall have the right, at any time (whether prior to or after any Secondary Market Transaction in
respect of all or any portion of the Loan), to modify, split and/or sever the Loan one or more times in order to (a) create
(i) one or more new loans (including first and second mortgage loans), (ii) one or more new notes (including senior and
junior notes (i.e., A/B and A/B/C structure)), (iii) multiple components of


 




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the Note or Notes and/or
(iv) one or more mezzanine loans (a “New Mezzanine Loan”) (including amending Borrower’s organizational
structure and the organizational documents of Borrower and its direct and indirect shareholders, partners, members and non-member
managers to provide for one or more mezzanine borrowers), (b) reduce the number of loans, notes and/or components, (c) revise
the interest rates of the loans, notes and/or components, (d) allocate and reallocate the principal balances of the loans,
notes and/or components, (e) increase or decrease the monthly debt service payments for the loans, notes and/or components,
(f) eliminate the multiple loan, note and/or component structure (including the elimination of the related allocations of
principal and interest payments) or (g) otherwise achieve the optimum execution for a Secondary Market Transaction; provided,
however, that in modifying, splitting and/or severing the Loan as provided above (1) Borrower shall not be required
to modify the Stated Maturity Date, (2) the aggregate principal amount of all such loans, notes and/or components shall, on
the date created, equal the Outstanding Principal Balance immediately prior to the creation of such loans, notes and/or components,
(3) the weighted average interest rate of all such loans, notes and/or components shall, on the date created, equal the interest
rate applicable to the Loan immediately prior to the creation of such loans, notes and/or components (except that the weighted
average interest rate may subsequently increase as a result of prepayments made in accordance with Section 2.10 hereof
or following a Casualty, Condemnation or Event of Default), and (4) the scheduled debt service payments on all such loans,
notes and/or components shall, on the date created, equal the scheduled debt service payments under the Loan immediately prior
to the creation of such loans, notes and/or components. 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, split and/or sever the Loan in accordance
with this Section 9.3 and, provided that such modification, split and/or severance shall comply with the terms of this
Section 9.3, it shall become immediately effective. If requested by Lender, Borrower shall promptly execute an amendment
to the Loan Documents to evidence any such modification, split and/or severance including, without limitation, an amendment to
the Cash Management Agreement to reflect the newly created loans, notes and/or components. Borrower 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 and modification, split and/or severance as described in this Section 9.3, Borrower
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.


 


Section 9.4           Cross
Collateralization. Borrower agrees that at any time Lender shall have the unilateral right to elect to remove the cross-collateralization
of the Liens of the Security Instruments encumbering any one (1) or more of the Properties (individually or collectively, as the
context may require, the “Affected Property”). In furtherance thereof, Lender shall have the right to (a) sever
or divide the Note and the other Loan Documents in order to allocate to such Affected Property the Allocated Loan Amount with respect
to such Property evidenced by one (1) or more new notes and secured by such other loan documents (individually or collectively,
as the context may require, the “New Note”) having a principal amount equal to the Allocated Loan Amount applicable
to such Affected Property, (b) segregate the applicable portion of each of the Reserve Funds relating to the Affected Property,
(c) release any cross-default and/or cross-collateralization provisions applicable to such Affected Property, and (d) take such
additional action consistent therewith; provided, that such New Note secured by such Affected Property,


 




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together with the Loan
Documents secured by the remaining Properties, shall not increase in the aggregate (i) any monetary obligation of Borrower under
the Loan Documents or (ii) any other obligation of Borrower under the Loan Documents in any material respect. In connection with
the transfer of any such Affected Property as provided for in this Section 9.4, the Loan shall be reduced by an amount
equal to amount of the New Note 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 9.4, the balances of the components of the Loan shall be the same as
they would have been had a prepayment occurred in an amount equal to the Allocated Loan Amount of the Affected Property. At the
request of Lender, Borrower shall otherwise reasonably cooperate with Lender in its attempt to satisfy all requirements necessary
in order for Lender to obtain a Rating Agency Confirmation from the Approved Rating Agencies with respect to such transfer of the
Affected Property from the Securitization and splitting of the Loan, which requirements shall include, without limitation: (A)
delivery of evidence that the single purpose nature and bankruptcy remoteness of Borrowers owning Properties other than the Affected
Property following such release have not been adversely affected and are in accordance with the terms and provisions of this Agreement
(which evidence may include a “bring-down” of the Insolvency Opinion); and (B) the execution of such documents and
instruments and delivery by Lender of such opinions of counsel as are typical for similar transactions, including, an opinion of
counsel that the release of the Affected Property will not be a “significant modification” of this Loan within the
meaning of Section 1.1001-3 of the regulations of the United States Department of the Treasury and that all other requirements
applicable, if any, to a REMIC Trust, have been satisfied or have not otherwise been violated.


 


Section 9.5           Secondary
Market Transaction Costs.


 


All costs and expenses
incurred by Borrower, Guarantor, Property Manager, Intermediate Manager, Lender and their respective Affiliates in connection with
Sections 9.1, 9.3 and 9.4 (including, without limitation, the fees and expenses of the Rating Agencies)
shall be paid by Borrower; provided that such costs and expenses shall not exceed $50,000 (and Lender shall reimburse Borrower
for all reasonable third party costs and expenses incurred by Borrower, Guarantor, Property Manager, Intermediate Manager and their
respective Affiliates in connection with Borrower’s compliance with Sections 9.1, 9.3 and 9.4 (including,
without limitation, the fees and expenses of the Rating Agencies) in excess of $50,000).


 


Article
10: DEFAULTS


 


Section 10.1         Events
of Default.


 


(a)          Each
of the following events shall constitute an event of default hereunder (each, an “Event of Default”):


 


(i)          if
any monthly installment of principal and/or interest due under the Note or any payment of Reserve Funds due under this Agreement
(other than deposits required under Section 6.6.1(a) pursuant to the PIP Reserve Funding Schedule which shall not, for any
purpose, constitute an Event of Default hereunder) or the payment of the Obligations due on the Maturity Date is not paid when
due (provided, however, that if no other Event of Default


 




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shall have occurred and
be continuing and adequate funds have been allocated pursuant to Section 6.11.1 for payment of any required monthly installment
of principal, interest and required deposit of Reserve Funds, the failure by Cash Management Bank to disburse any payments due
to Lender and/or allocate such funds to the appropriate Reserve Account in violation of the Loan Documents shall not constitute
an Event of Default);


 


(ii)         if
any other portion of the Obligations (other than as set forth in the foregoing clause (i)) is not paid when due and
such non-payment continues for five (5) days following written notice to Borrower that the same is due and payable;


 


(iii)        if
any of the Taxes or Other Charges are not paid when due (provided, however, that if no other Event of Default shall have occurred
and be continuing and adequate funds are on deposit in the Tax Account for payment of any required Taxes or Other Charges then
due and payable, the failure by Lender or its agent to cause such payments to be made shall not constitute an Event of Default);


 


(iv)        if
the Policies are not (A) delivered to Lender in accordance with the terms of this Agreement, or (B) kept in full force
and effect, each in accordance with the terms and conditions hereof;


 


(v)         subject
to the provisions of Article 8 hereof, if Borrower breaches or permits or suffers a breach of the provisions of Section 4.2.1;
provided, however, that any such breach shall not be an Event of Default if such breach (A) is not intentional, (B)
shall not have had a Material Adverse Effect, and (C) relates solely to a failure to deliver any notice required to be delivered
pursuant to the terms and provisions of Article 8;


 


(vi)        if
any representation or warranty made by Borrower or Guarantor in any 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 any such breach shall not be an Event
of Default if such breach (A) is not intentional, (B) shall not have had a Material Adverse Effect, and (C) can be made true and
correct by action of Borrower, Borrower 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 commences to take action to
cure such breach within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, Borrower
shall have such time as is reasonably necessary to effect such cure, but in no event in excess of an additional ninety (90) days;


 


(vii)       (A)
if Borrower or any SPC Party shall make an assignment for the benefit of creditors or (B) upon the declaration by Lender in
its sole and absolute discretion that the same constitutes an Event of Default, if Guarantor shall make an assignment for the benefit
of creditors;


 


(viii)      (A)
if a receiver, liquidator or trustee shall be appointed for Borrower or any SPC Party or if Borrower or any SPC Party shall
be adjudicated a bankrupt or


 




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insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal, state, local or foreign bankruptcy law, or any similar
federal, state, local or foreign law, shall be filed by or against, consented to, or acquiesced in by, Borrower or any SPC Party,
or if any proceeding for the dissolution or liquidation of Borrower or any SPC Party shall be instituted; provided, however,
if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower or such SPC Party, upon
the same not being discharged, stayed or dismissed within sixty (60) days or (B) upon the declaration by Lender in its sole
and absolute discretion that the same constitutes an Event of Default, if a receiver, liquidator or trustee shall be appointed
for Guarantor or if Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization
or arrangement pursuant to federal, state, local or foreign bankruptcy law, or any similar federal, state, local or foreign law,
shall be filed by or against, consented to, or acquiesced in by, Guarantor, or if any proceeding for the dissolution or liquidation
of Guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by the applicable Guarantor, upon the same not being discharged, stayed or dismissed within sixty
(60) days;


 


(ix)         if
Borrower attempts to assign its rights or delegate its duties under any of the Loan Documents or any interest herein or therein
in contravention of the Loan Documents;


 


(x)          if
any of the assumptions contained in any Insolvency Opinion is or shall become untrue in any material respect;


 


(xi)         if
Borrower, any Liquor License Subsidiary or any SPC Party breaches any representation, warranty or covenant contained in
Sections 3.1.24 or 4.1.15 hereof or on Schedule III attached hereto; provided, however,
such violation or breach shall not constitute an Event of Default in the event that (A) such violation or breach is not intentional,
(B) such violation or breach is immaterial, (C) such violation or breach shall be remedied in a timely and expedient manner and
in any event within not more than sixty (60) days, and (D) 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
(C), 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;


 


(xii)        if
Borrower shall be in default beyond any applicable notice and cure period under any mortgage or security agreement covering any
part of the Property whether it be superior or junior in Lien to the Security Instruments;


 


(xiii)       subject
to Borrower’s right to contest as provided in Section 3.6 of each Security Instruments, if the Property becomes subject
to any mechanic’s, materialman’s or other Lien except a Lien for Taxes not then due and payable (excluding Liens associated
with any so-called property-assessed clean energy or similar loans);


 




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(xiv)      except
as permitted herein, the alteration, improvement, demolition or removal of any of the Improvements without the prior written consent
of Lender;


 


(xv)       if,
without Lender’s prior written consent (as provided in Section 7.2.1 of this Agreement), (A) any Franchise
Agreement is surrendered, terminated, canceled, modified, renewed, extended or otherwise allowed to expire (other than, in the
case of a renewal or extension, a renewal or extension provided for in such Franchise Agreement), (B) the ownership, management
or Control of an Affiliated Franchisor is Transferred other than in accordance with the terms hereof, (C) any Borrower defaults
under any Franchise Agreement beyond the expiration of any applicable notice and/or cure periods thereunder, which default permits
a Franchisor to terminate or cancel such Franchise Agreement or (D) any Borrower waives or releases any of its right or remedies
under any Franchise Agreement in any material respect, unless in the case of an expiration or a termination or cancellation by
the applicable Franchisor (other than any such termination or cancellation by an Affiliate Franchisor or that Borrower, Guarantor,
any Affiliate of Borrower or Guarantor or any of their respective agents or representatives has consented to, solicited, requested
or otherwise colluded with any Franchisor with respect to), the applicable Borrower, contemporaneously with such expiration, termination
or cancellation, enters into a Replacement Franchise Agreement with a Qualified Franchisor in accordance with the applicable terms
and conditions of this Agreement;


 


(xvi)      except
as otherwise expressly permitted under the terms of the Loan Documents, if, without Lender’s prior written consent (as provided
in Section 7.2.2(a) of this Agreement), (A) any Intermediate Management Agreement is surrendered, terminated,
canceled, modified in any material respect, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal
or extension, a renewal or extension provided for in such Intermediate Management Agreement), (B) the ownership, management
or Control of an Affiliated Manager is Transferred other than in accordance with the terms hereof, (C) any Borrower defaults
under any Intermediate Management Agreement beyond the expiration of any applicable notice and/or cure periods thereunder, which
default permits an Intermediate Manager to terminate or cancel such Intermediate Management Agreement or (D) any Borrower
waives or releases any of its right or remedies under any Intermediate Management Agreement in any material respect, unless in
the case of an expiration or a termination or cancellation by the applicable Intermediate Manager (other than any such termination
or cancellation by an Affiliate Manager or that Borrower, Guarantor, any Affiliate of Borrower or Guarantor or any of their respective
agents or representatives has consented to, solicited, requested or otherwise colluded with Intermediate Manager with respect to),
the applicable Borrower, contemporaneously with such expiration, termination or cancellation, enters into a Replacement Management
Agreement with a Qualified Manager in accordance with the applicable terms and conditions of this Agreement;


 


(xvii)     except
as otherwise expressly permitted under the terms of the Loan Documents, if, without Lender’s prior written consent (as provided
in Section 7.2.2(b) of this Agreement), (A) any Property Management Agreement is surrendered, terminated, canceled,
modified, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension, a renewal or extension
provided for in such Property Management Agreement), (B) any Borrower or any Intermediate Manager, as the case may be, defaults
under any Property Management Agreement beyond the expiration of any applicable notice and/or cure


 




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periods thereunder, which
default permits Property Manager to terminate or cancel the Property Management Agreement or (C) any Borrower or any Intermediate
Manager, as the case may be, waives or releases any of its right or remedies under any Property Management Agreement in any material
respect, unless in the case of an expiration or a termination or cancellation by the applicable Property Manager (other than any
such termination or cancellation by an Affiliate Manager or that Borrower, Manager, Guarantor, any Affiliate of Borrower or Guarantor
or any of their respective agents or representatives has consented to, solicited, requested or otherwise colluded with Property
Manager with respect to), the applicable Borrower, contemporaneously with such expiration, termination or cancellation, enters
into a Replacement Management Agreement with a Qualified Manager in accordance with the applicable terms and conditions of this
Agreement;


 


(xviii)    except
as otherwise expressly permitted under the terms of the Loan Documents, if, without Lender’s prior written consent (as provided
in Section 7.2.3 of this Agreement), (A) the Beverage Concession Agreement is surrendered, terminated, canceled,
modified in any material respect, renewed, extended or otherwise allowed to expire (other than, in the case of a renewal or extension,
a renewal or extension provided for in the Beverage Concession Agreement), (B) the ownership, management or Control of Beverage
Concessionaire is Transferred other than in accordance with the terms hereof, (C) Borrower defaults under the Beverage Concession
Agreement beyond the expiration of any applicable notice and/or cure periods thereunder, which default permits Beverage Concessionaire
to terminate or cancel the Beverage Concession Agreement or (D) Borrower waives or releases any of its right or remedies under
the Beverage Concession Agreement in any material respect;


 


(xix)       if
Borrower ceases to continuously operate any Property or any material portion thereof as a hotel for any reason whatsoever (other
than temporary cessation in connection with any alteration, repair, renovation or restoration thereof undertaken with the prior
written consent of Lender, and cessations of operations on portions of the Property permanently taken by condemnation) and Borrower
fails to re-commence such continuous operations or satisfy each of the Closed Property Release Conditions within twenty (20) days
of such cessation of continuous operations;


 


(xx)        if
Borrower fails to replace Guarantor with a Satisfactory Replacement Guarantor upon the death or incapacity of Guarantor in accordance
with the terms and provisions of Section 8.3 hereof;


 


(xxi)       a
breach of the covenants set forth in Article XII of this Agreement, as applicable;


 


(xxii)      intentionally
omitted;


 


(xxiii)     intentionally
omitted;


 


(xxiv)    if
Borrower shall continue to be in Default under any of the other terms, covenants or conditions of this Agreement not specified
in subsections (i) to (xxi) above, (A) for ten (10) days after notice to Borrower from Lender, in
the case of any Default which can be cured by the payment of a sum of money, or (B) for thirty (30) days after the


 




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earlier of (1) Borrower’s
knowledge thereof and (2) notice to Borrower from Lender, in the case of any other Default; provided, however,
that if such non-monetary Default is susceptible of cure but cannot reasonably be cured within such 30-day period; and provided,
further, that Borrower shall have commenced to cure such 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 additional 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;
or


 


(xxv)     if
there shall be a default under any of the other Loan Documents beyond any applicable notice and/or cure periods contained in such
Loan Documents, whether as to Borrower, Guarantor, Property Manager, Intermediate Manager, the Property or any other Person (other
than Lender), or if any other such event shall occur or condition shall exist, and 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.


 


(b)          Upon
the occurrence and during the continuance of an Event of Default (other than an Event of Default described in clauses (vii),
(viii) or (ix) above) and at any time thereafter Lender may, in addition to any other rights or remedies
available to it pursuant to the Loan Documents or at law or in equity, take such action, without notice or demand, that Lender
deems advisable to protect and enforce its rights against Borrower and in and to the Property, 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 the Property, including all rights or remedies available at law or in equity; and upon and during
the continuance of any Event of Default described in clauses (vii), (viii) or (ix) above, the
Debt and all other Obligations of Borrower under the Loan Documents, including, without limitation, the Additional Interest and
the Minimum Interest Required Payment, if applicable, shall immediately and automatically become due and payable, without notice
or demand, and Borrower hereby expressly waives any such notice or demand, anything contained in any Loan Document to the contrary
notwithstanding.


 


Section 10.2         Remedies.


 


(a)          Upon
the occurrence and 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 under the Loan Documents executed and delivered by, or applicable to, Borrower
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 Property. Any such actions taken
by Lender shall be cumulative and concurrent and 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, equity or contract or as set forth in the Loan
Documents. 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


 




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privileges provided to
Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Property and the Security
Instrument(s) has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Obligations or the Obligations have
been paid in full.


 


(b)          Upon
the occurrence and during the continuance of an Event of Default, Lender shall have the right from time to time to partially foreclose
the Security Instrument(s) in any manner and for any amounts secured by the Security Instrument(s) 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 the Security Instrument(s)
to recover such delinquent payments, or (ii) in the event Lender elects to accelerate less than the entire Outstanding Principal
Balance, Lender may foreclose the Security Instrument(s) to recover so much of the principal balance of the Loan as Lender may
accelerate and such other sums secured by the Security Instrument(s) as Lender may elect. Notwithstanding one or more partial foreclosures,
the Property shall remain subject to the Security Instrument(s) to secure payment of the sums secured by the Security Instrument(s)
and not previously recovered.


 


(c)          Upon
the occurrence and 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 (the “Severed Loan
Documents”) in such denominations as Lender shall determine in its sole discretion for purposes of evidencing and enforcing
its rights and remedies provided hereunder. In such event, Borrower 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 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 ratifying all that its said attorney shall do
by virtue thereof; provided, however, that Lender shall not make or execute any such documents under such power until five (5)
Business Days after written notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such
power. Borrower shall be obligated to pay all costs and expenses incurred in connection with the preparation, execution, recording
and filing of the Severed Loan Documents. The Severed Loan Documents shall not contain any representations, warranties or covenants
not contained in the Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.


 


(d)          Any
amounts recovered from the Property 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, including, without
limitation, the Additional Interest and the Minimum Interest Required Payment, if applicable, in such order, priority and proportions
as Lender in its sole discretion shall determine.


 




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Section 10.3         Lender’s
Right to Perform. If Borrower fails to perform any covenant or obligation contained in the Loan Documents, without in any
way limiting Lender’s right to exercise any of its rights, powers or remedies as provided under any of the Loan Documents
or releasing Borrower from any covenant or obligation under the Loan Documents, Lender may, but shall have no obligation to, perform,
or cause the performance of, such covenant or obligation, and all out-of-pocket 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 Security Instrument(s) and the other
Loan Documents) and shall bear interest at the Default Rate. Lender shall have no obligation to send notice to Borrower of any
such failure.


 


Section 10.4         Remedies
Cumulative. 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 pursuant to the Loan Documents, or existing at law or in equity
or otherwise. Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in
such order as Lender may determine in Lender’s sole discretion. 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 shall not be construed to be a waiver of any subsequent Default or Event of Default
by Borrower or to impair any remedy, right or power consequent thereon. Nothing contained herein or in the other Loan Documents
shall be construed to grant Borrower any right to cure an Event of Default and each Event of Default shall continue unless and
until the same is waived by Lender in writing in its sole and absolute discretion in accordance with the terms and provisions of
the Loan Documents.


 


Article
11: MISCELLANEOUS


 


Section 11.1         Successors
and Assigns; Assignments and Participations. Except as expressly permitted under Section 8.1, Borrower may
not assign, transfer or delegate its rights or obligations under the Loan Documents without Lender’s prior written consent,
and any attempted assignment, transfer or delegation without such consent shall be null and void. Lender may assign, pledge, participate,
transfer or delegate, as applicable, to one or more Persons, all or a portion of its rights and obligations under the Loan Documents.
The assigning Lender shall have no further obligations under the Loan Documents from and after the date of any such assignment
or transfer. In connection with any such assignment, pledge, participation, transfer or delegation, Lender may disclose to the
assignee, pledgee, participant, transferee or delegee or proposed assignee, pledgee, participant, transferee or delegee, as the
case may be, any information relating to Borrower or any of its Affiliates or to any aspect of the Loan that has been furnished
to Lender by or on behalf of Borrower or any of its Affiliates. 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 11.2         Lender’s
Discretion. Whenever pursuant to this Agreement (a) Lender exercises any right given to it to approve or disapprove any
matter, (b) any arrangement or term is to be satisfactory to Lender, or (c) Lender is given the right to exercise judgment as to
a


 




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particular matter, arrangement
or term, the decision of Lender to approve or disapprove such matter, to decide whether such arrangement or term is satisfactory
or not satisfactory or Lender’s exercise of judgment with respect to such matter, arrangement or term shall (except as is
otherwise specifically herein provided) be in the sole and absolute 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 decision of Lender to approve or disapprove such matter,
or to decide whether arrangements or terms are satisfactory or not satisfactory, shall be substituted therefor, which such decision
shall be based upon Lender’s determination of Rating Agency criteria (unless Lender has an independent approval right in
respect of the matter at issue pursuant to the terms of this Agreement, in which case the discretion afforded to Lender in connection
with such independent approval right shall apply instead).


 


Section 11.3         Governing
Law.


 


(A)         THIS
AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND DELIVERED TO LENDER BY BORROWER 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.
TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER 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.


 


(B)         ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER 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 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. BORROWER DOES HEREBY DESIGNATE AND APPOINT:


 




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American Realty Capital Hospitality
Trust, Inc.

405 Park Avenue

New York, New York 10022


 


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 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, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (i) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED 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 11.4         Modification,
Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of any Loan
Document, nor consent to any departure by Borrower 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 specific purpose, for which given. Except as otherwise expressly provided herein, no notice to,
or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.


 


Section 11.5         Delay
Not a Waiver. 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 under any 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 any 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 the 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.


 


Section 11.6         Notices.


 


(a)          All
notices, demands, requests, consents, approvals or other communications (any of the foregoing, a “Notice”) required,
permitted or desired to be given


 




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hereunder shall be in
writing and shall be sent 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 specify in accordance with the provisions of this Section 11.6. Any Notice shall be deemed
to have been received: (i) three (3) days after the date such Notice is mailed, if sent by registered or certified mail,
(ii) on the date of delivery by hand, if delivered during business hours on a Business Day (otherwise on the next Business
Day), and (iii) on the next Business Day, if sent by an overnight commercial courier, in each case addressed to the parties
as follows:


 


	If to Lender:	
        Ladder Capital Finance LLC

        345 Park Avenue, 8th Floor

        New York, New York 10154

        Attention: Pamela McCormack

         

	with a copy to	
        Deutsche Bank AG, New York Branch

        60 Wall Street

        New York, New York 10005

        Attention: Robert Pettinato

         

	with a copy to	
        DLA Piper LLP (US)

        1251 Avenue of the Americas

        New York, New York 10020

        Attention: Jeffrey B. Steiner, Esq.

         

	 	Situs Servicing
	 	4065 Westheimer
	 	Suite 700E
	 	Houston, TX 77056
	 	Attention: Ladder Portfolio Manager
	 	 
	and with a copy to:	Situs Asset Management
	 	Six Concourse Parkway
	 	Suite 1500
	 	Atlanta, GA 30328
	 	Attention: Ladder Portfolio Manager
	 	 
	If to Borrowers:	
        c/o American Realty Capital Hospitality Trust, Inc.

        405 Park Avenue

        New York, New York 10022

        Attention: Chief Executive Officer

         

	with a copy to:	
        c/o American Realty Capital Hospitality Trust, Inc.

        405 Park Avenue

        New York, New York 10022

        Attention: General Counsel



 




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(b)          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 11.6. 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 11.7         Trial
by Jury. BORROWER 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 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.


 


Section 11.8         Headings.
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.


 


Section 11.9         Severability.
Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under any
Legal Requirements, 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 11.10       Preferences.
Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion
of the Obligations of Borrower hereunder. To the extent Borrower 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, federal, state, local or foreign 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 11.11      Waiver
of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters
for which the Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with
respect to matters for which Borrower is not, pursuant to applicable Legal Requirements,


 




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permitted to waive the
giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which
the Loan Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.


 


Section 11.12      Remedies
of Borrower. In the event that a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably
delayed acting in any case where, by law or under the Loan Documents, Lender or such agent, as the case may be, has an obligation
to act reasonably or promptly, neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole
remedy shall be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.


 


Section 11.13      Expenses;
Indemnity.


 


(a)          Borrower
shall pay or, if Borrower fails to pay, reimburse Lender upon receipt of notice from Lender, for all actual, reasonable, out-of-pocket
costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with (i) Borrower’s
ongoing performance of and compliance with Borrower’s agreements and covenants contained in the Loan Documents on its part
to be performed or complied with after the Closing Date, including, without limitation, confirming compliance with environmental
and insurance requirements; (ii) Lender’s ongoing performance of and compliance with all agreements and covenants contained
in the Loan Documents on its part to be performed or complied with after the Closing Date; (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or other modifications to the Loan Documents and any
other documents or matters requested by Borrower or Guarantor; (iv) the filing and recording fees and expenses, title insurance
and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred,
in creating and perfecting the Liens in favor of Lender pursuant to the Loan Documents; (v) 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, the Loan Documents, the Property or any other security given for the Loan; (vi) enforcing
any Obligations of or collecting any payments due from Borrower or Guarantor under the Loan Documents or with respect to
the Property 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 Bankruptcy Action; and (vii) protecting Lender’s interest in the Property
or any other security given for the Loan; (viii) any assignment of or franchisor/manager consent or approval relating to any
comfort letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise
fees or similar agreement in connection with an assignment, pledge, participation or transfer of the Loan; provided, however,
that Borrower shall not 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, as determined by a final non-appealable judgment of a court
of competent jurisdiction. Any costs due and payable to Lender may be paid, at Lender’s election in its sole discretion,
from any amounts in the Cash Management Account.


 




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(b)          Borrower
shall indemnify, defend and hold harmless the Lender Indemnified Parties 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, without limitation, the reasonable fees and disbursements of counsel for any Lender Indemnified Party in connection
with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Lender Indemnified Party
shall be designated a party thereto), that may be imposed on, incurred by, or asserted against any Lender Indemnified Party in
any manner relating to or arising out of (i) any default or breach by Borrower of its Obligations under, or any material misrepresentation
by Borrower contained in, the Loan Documents; (ii) the use or intended use of the proceeds of the Loan; (iii) any materials
or information provided by or on behalf of Borrower, or contained in any documentation approved by Borrower; (iv) ownership
of the Security Instruments, the Property or any interest therein, or receipt of any Rents; (v) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the 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 the 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 the Property; (viii) any failure of the 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 the Property or any part thereof, or any liability asserted against
such Lender Indemnified Party with respect thereto; and (x) the claims of any lessee of any portion of the Property or any
Person acting through or under any lessee or otherwise arising under or as a consequence of any Lease (collectively, the “Indemnified
Liabilities”); provided, however, that Borrower shall not have any obligation to the Lender Indemnified
Parties hereunder to the extent that such Indemnified Liabilities arise (i) from the gross negligence, illegal acts, fraud or willful
misconduct of the Lender Indemnified Parties, as determined by a final non-appealable judgment of a court of competent jurisdiction
or (ii) after a foreclosure or Lender’s acceptance of a deed in lieu of foreclosure in respect of all of the Properties securing
the Loan, so long as such Indemnified Liabilities do not result from (x) any act or circumstance occurring prior to such foreclosure
or Lender’s acceptance of a deed in lieu of foreclosure, as applicable, or (y) any act of Borrower or any of its agents,
Affiliates or employees. 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 the Lender Indemnified
Parties. The provisions of Section 11.13(a) and this Section 11.13(b) shall survive any payment or prepayment
of the Loan and any foreclosure or satisfaction of the Security Instruments.


 


(c)          Borrower
hereby agrees to pay for or, if Borrower’s fails to pay, to reimburse Lender for, any fees imposed, and costs and expenses
incurred, by any Rating Agency in connection with any Rating Agency review of the Loan or any consent, approval, waiver or confirmation
obtained from such Rating Agency pursuant to the terms and conditions of the Loan Documents, and Lender shall be entitled to require
payment of such fees, costs and expenses as a condition precedent to obtaining any such consent, approval, waiver or confirmation.


 




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Section 11.14      Schedules
Incorporated. 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 11.15      Offsets,
Counterclaims and Defenses. Any assignee of Lender’s interest in and to the Loan Documents shall take the same free
and clear of all offsets, counterclaims and defenses which are unrelated to such documents which Borrower may otherwise have against
any assignor of such documents, and no such unrelated counterclaim 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.


 


Section 11.16       No
Joint Venture or Partnership; No Third Party Beneficiaries.


 


(a)          Borrower
and Lender intend that the relationships created under the 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 between Borrower
and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.


 


(b)          The
Loan Documents are solely for the benefit of Lender and nothing contained in the Loan Documents shall be deemed to confer upon
anyone other than Lender any right to insist upon or to enforce the performance or observance of any of the Obligations contained
herein or therein. All conditions to the obligations of Lender to make the Loan (and disburse Reserve Funds) hereunder are imposed
solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions
in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan (or make any disbursement of Reserve
Funds) in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed
to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s
sole discretion, Lender deems it advisable or desirable to do so.


 


Section 11.17       Publicity
and Confidentiality.


 


(a)           All
news releases, publicity or advertising by any Borrower or their 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 any Lender, the Affiliate of any 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; provided, however, that notwithstanding the foregoing, Borrower shall be entitled without Lender’s
consent, to make disclosures necessary in order to comply with Legal Requirements applicable to Borrower, Guarantor or any of their
Affiliates. Lender shall be permitted to share any information provided by Whitehall hereunder with the investment banking firms,
lenders, investors, assignees of the Loan, Rating Agencies, accounting firms, law firms and other third-party advisory firms involved
with the Loan and the Loan Documents or the applicable Secondary Market Transaction, provided that such third parties are subject
to confidentiality agreements reasonably acceptable to Whitehall.


 




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(b)          Lender
agrees, for the sole benefit of Whitehall (and not any successor to or assign of Whitehall), that any reports, statements or other
information required to be delivered or provided under this Agreement, under the Loan Documents, or under a Replacement Guaranty
and furnished at any time and from time to time by Borrower, Preferred Equity Investor, or a guarantor under a Replacement Guaranty
and relating to Whitehall (“Furnished Information”) which is financial information with respect to Whitehall
which is provided to Lender by or on behalf of Borrower, Preferred Equity Investor or Whitehall and which when delivered to Lender
is specifically identified in writing as confidential (such information “Confidential Furnished Financial Information”)
shall be kept confidential; except that summary financial information regarding Whitehall, including statements as to net worth,
liquidity, total assets under management and similar statements of financial wherewithal with respect to Whitehall (“Summary
Financial Information”), may be included in any Disclosure Document and may be disclosed to investment banking firms,
lenders, investors, assignees of the Loan, Rating Agencies, accounting firms, law firms and other third-party advisory firms involved
with the Loan and the Loan Documents or the applicable Secondary Market Transaction, provided that such parties are subject to
confidentiality agreements reasonably acceptable to Whitehall. In addition, any other Confidential Furnished Financial Information
may also be disclosed to any Rating Agency, underwriter or NRSRO; provided (i) each Rating Agency or underwriter to which such
information is disclosed has executed its usual and customary confidentiality agreement and (ii) any NRSRO desiring access to any
secured website containing such information shall, as a condition to its access to, have either furnished to the Securities and
Exchange Commission the certification required under Rule 17g-5(e) of the Exchange Act or be required to agree to (or “click
through”) such website’s confidentiality provisions. Nothing herein shall preclude Lender from disclosing any Confidential
Furnished Financial Information (A) as required by any applicable Legal Requirement, (B) which is already publicly available as
a result of disclosure by any other party, (C) in response to any order of any court or other Governmental Authority, or (D) if
Lender is required to do so in connection with any litigation or similar proceeding; provided that in the case of clause (A), (C)
or (D), Lender shall exercise reasonable efforts to give prior written notice of such requirement to Whitehall (to the extent it
is lawful to do so) in order to permit Whitehall to, and shall reasonably cooperate, provided such cooperation shall be at no cost
or expense to Lender, with Whitehall in its efforts to, seek a protective order at Whitehall’s sole cost and expense). Confidential
Furnished Financial Information shall in no event be deemed to include Furnished Information pertaining to Whitehall’s investment
in the Properties, including without limitation, the ownership structure of Borrower.


 


Section 11.18       Waiver
of Marshalling of Assets. 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 Property, 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 the 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 the Property in preference to every other claimant whatsoever.


 




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Section 11.19      Waiver
of Offsets/Defenses/Counterclaims. Borrower 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.


 


Section 11.20      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 11.21       Brokers
and Financial Advisors.


 


(a)          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, costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in
any way relating to or arising from 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 11.21 shall survive the expiration and termination
of this Agreement and the payment of the Obligations. For the avoidance of doubt, the indemnity set forth in this Section 11.21
shall inure to the benefit of each Lender that has held an interest in the Loan at any time during the Term, including the initial
named Lender hereunder.


 


(b)          Lender
may pay additional compensation, fees, commissions or other payments to Broker relating to the origination, sale and/or securitization
of the Loan, in addition to any other compensation, fees, commissions or other payments which may be paid by Borrower or any other
party directly to Broker. Borrower hereby acknowledges and agrees that (i) the payment of any such compensation, fees, commissions
or other payments are in addition to any other compensation, fees, commissions or other payments which may be paid by Borrower
or any other party directly to Broker, (ii) the payment of any such compensation, fees, commissions or other payments may create
a potential conflict of interest for Broker in its


 




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relationship with Borrower,
and Lender is not responsible for any recommendation, services or advice given to Borrower by Broker, and (iii) no fiduciary or
other special relationship exists or will exist between Borrower and Lender other than as lender and borrower. Borrower (A) acknowledges
that (1) such compensation, fees, commissions or other payments may include a direct, one-time payment of an origination or
similar fee, certain payments based on volume and/or size of referrals, profit-sharing payments and/or an ongoing financial interest
in the Loan (including by acting as sub-servicer for the Loan) and (2) Borrower has had an opportunity to discuss the specifics
of any compensation, fees, commissions or other payments with Broker to the extent Borrower deemed necessary and Borrower has independently
determined to proceed with the Loan and (B) consents to any such arrangement and the payment by Lender to Broker of any such
compensation, fees, commissions or other payments.


 


Section 11.22      Exculpation.
Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the
Obligations contained in the Note, this Agreement, the Security Instruments or the other Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that 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 Security Instruments and the other Loan Documents, or in the Property, 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 only to the extent of Borrower’s interest
in the Property, in the Gross Revenue and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement,
the Security Instruments and the other Loan Documents, shall not sue for, seek or demand any deficiency judgment against Borrower
or Guarantor (whose liability shall be determined in accordance with the terms and conditions of the Guaranty) in any such action
or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Security Instruments or the other
Loan Documents. The provisions of this Section 11.22 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 as a party defendant in any action or suit for foreclosure and sale under the Security Instruments; (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) constitute a prohibition against Lender to seek a deficiency judgment against
Borrower in order to fully realize the security granted by the Security Instruments (in which event such deficiency judgment shall
be used solely to realize on such collateral) or to commence any other appropriate action or proceeding in order for Lender to
exercise its remedies against the Property; or (g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with
the following:


 


(i)          the
breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, the Security Instruments
or any other


 




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Loan Document concerning
environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any such document;


 


(ii)         intentional
physical waste unless such waste was due to the fact that (A) funds to pay related charges were, at the time in question, available
in the FF&E Reserve Account and Lender failed to pay (or make such funds available to pay) such charges unless Lender is restricted
in any manner from making such funds available as a result of a legal impediment caused by any Borrower or any Affiliate of Borrower
or (B) Gross Revenue received during the period in question is insufficient to pay all of Borrower’s Operating Expenses for
the time period in question (including such relevant costs relating to the applicable Property) with respect to the Property or,
after the occurrence and during the continuance of an Event of Default, the removal or disposal of any portion of the Property
in violation of the Loan Documents;


 


(iii)        the
misapplication, misappropriation or conversion by or on behalf of Borrowers of any of the following in violation of the terms of
this Agreement: (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, (B) any
Awards or other amounts received in connection with the Condemnation of all or a portion of the Property, or (C) any Gross
Revenue (including security deposits, advance deposits or any other deposits and Lease Termination Payments);


 


(iv)        any
security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender
upon a foreclosure of the Property or deed in lieu thereof, except to the extent any such deposits were applied in accordance with
the terms and provisions of the applicable Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure
or deed in lieu thereof;


 


(v)         the
failure to pay charges (including charges for labor or materials) that can create Liens on any portion of the Property (except
to the extent sufficient Reserve Funds allocable to such charges were on deposit and the same were not disbursed by Lender therefor
in violation of the terms and conditions of the Loan Documents) to the extent such Liens are not bonded over or discharged in accordance
with the Loan Documents;


 


(vi)        the
failure to (A) pay Taxes or (B) obtain and maintain the fully paid for Policies in accordance with Section 5.1
hereof, provided that Borrower shall not be liable to the extent (i) Gross Revenue from the Property is insufficient to pay the
same or (ii) funds to pay for Taxes or Insurance Premiums, as applicable, are available in the Tax Account or the Insurance Account,
as applicable, and Lender failed to pay the same;


 


(vii)       the
failure by Borrower or Guarantor to cooperate with Lender’s execution of a Secondary Market Transaction pursuant to the terms
and provisions of Section 9.1 hereof or to comply with the terms of Section 9.3 hereof;


 


(viii)      the
failure by Borrower to satisfy in full its indemnification obligations pursuant to and in accordance with the terms and provisions
of Section 9.2 hereof;


 


(ix)         the
commission of a criminal act by Borrower, Guarantor or any of their respective agents;


 




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(x)          Borrower
or any SPC Party fails to comply with any representation, warranty or covenant set forth in Sections 3.1.24 or 4.1.15
or Schedule III attached hereto beyond all applicable notice and cure periods;


 


(xi)         in
connection with the Loan or the Property (including, without limitation, any Lease), Borrower, Guarantor, any Affiliate of Borrower
or Guarantor or any of their respective agents or representatives, engages in any action constituting willful or intentional misrepresentation,
gross negligence or willful misconduct; or


 


(xii)        any
claim made by the applicable union for unfunded pension obligations or other liabilities of the employer under the Collective Bargaining
Agreement or any replacement thereof.


 


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 in the event that
any of the following occur:


 


(1)         in
connection with the Loan or the Property (including, without limitation, any Lease), Borrower, Guarantor, any Affiliate of Borrower
or Guarantor or any of their respective agents or representatives, engages in any action constituting fraud;


 


(2)         Borrower
or any SPC Party fails to comply with (A) any representation, warranty or covenant set forth in Sections 3.1.24 or 4.1.15
or Schedule III attached hereto and a court of competent jurisdiction orders a substantive consolidation of Borrower
based, in whole or in part, on such failure, and/or (B) any representation, warranty or covenant set forth in any of clauses
(a), (b), (d), (e), (k), (n) and/or (u) set forth in Schedule III attached
hereto and such failure is a substantial factor in Borrower being the debtor in, and/or the Property or any portion thereof or
interest therein becoming an asset in, an involuntary bankruptcy or insolvency proceeding brought by one or more Persons other
than Lender or any Affiliate of Lender and such proceeding is not discharged, stayed or dismissed within ninety (90) days;


 


(3)         Borrower
fails to obtain Lender’s prior written consent to any Indebtedness for borrowed money or any voluntary Lien (other than a
Lien resulting from the failure to pay charges for labor or materials) encumbering the Property or any portion thereof or interest
therein, except to the extent expressly permitted by the Loan Documents;


 


(4)         Borrower
fails to obtain Lender’s prior written consent to any Transfer (including, without limitation, any change in Control), except
to the extent expressly permitted by the Loan Documents;


 




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(5)         Borrower
or any SPC Party files a voluntary petition under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy
or insolvency law;


 


(6)         an
Affiliate, officer, director or representative which Controls, directly or indirectly, Borrower or any SPC Party files,
or joins in the filing of, an involuntary petition against Borrower or any SPC Party under the Bankruptcy Code or any other
federal, state, local or foreign bankruptcy or insolvency law, solicits or causes to be solicited petitioning creditors for any
involuntary petition against Borrower or any SPC Party from any Person or colludes with or otherwise assists such Person;


 


(7)         Borrower
or any SPC Party files an answer consenting to, or otherwise acquiescing in, or joining in, any involuntary petition filed
against it, by any other Person under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency
law, solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower or any SPC Party
from any Person or colludes with or otherwise assists such Person;


 


(8)         any
Affiliate, officer, director or representative which Controls Borrower or any SPC Party consents to, or acquiesces in, or
joins in, an application for the appointment of a custodian, receiver, trustee or examiner for Borrower or any SPC Party or
any portion of the Property;


 


(9)         Borrower
or any SPC Party makes an assignment for the benefit of creditors (other than to Lender at Lender’s request), or admits,
in writing or in any legal proceeding (other than to Lender at Lender’s request), its insolvency or inability to pay its
debts as they become due; or


 


(10)        Borrower,
or any SPC Party, Guarantor (or any Person comprising Borrower or any SPC Party or Guarantor), or any Affiliate of any of the foregoing,
in connection with any enforcement action or exercise or assertion of any right or remedy by or on behalf of Lender under or in
connection with the Note, the Security Instruments, the Guaranty or any other Loan Document, seeks a defense, judicial intervention
or injunctive or other equitable relief of any kind or asserts in a pleading filed in connection with a judicial proceeding any
defense against Lender or any right in connection with any security for the Loan, which a court of competent jurisdiction determines,
pursuant to a final, non-appealable judgment, to have been frivolous, brought in bad faith, without merit (in the case of a defense)
or unwarranted (in the case of a request for judicial intervention or injunctive or other equitable relief); or


 


(11)        if,
without Lender’s prior written consent (as provided in Section 7.2.1 of this Agreement), any Franchise Agreement
is surrendered, terminated, canceled, modified, renewed, extended or otherwise allowed to expire (other than, in the case of a
renewal or extension, a renewal or extension provided for in the Franchise Agreement); provided, however, in the
case of an expiration, the Obligations shall not be fully recourse to Borrower if, contemporaneously with such expiration, Borrower
enters into a Replacement Franchise Agreement with a Qualified Franchisor in accordance with the applicable


 




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terms and conditions
of this Agreement; provided, further, however, in the case of a termination or cancellation by Franchisor
(other than any such termination or cancellation by an Affiliate Franchisor or that Borrower, Guarantor, any Affiliate of Borrower
or Guarantor or any of their respective agents or representatives has consented to, solicited, requested or otherwise colluded
with Franchisor with respect to), the Obligations shall not be fully recourse to Borrower if Borrower enters into a Replacement
Franchise Agreement with a Qualified Franchisor in accordance with the applicable terms and conditions of this Agreement within
thirty (30) days after such termination or cancellation, provided that Borrower shall nonetheless be recourse to Lender in respect
of the Obligations to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by Lender (including
attorneys’ fees and costs reasonably incurred) arising out of or in connection with such termination or cancellation during
such thirty (30) day period. Borrower’s recourse liability under this clause (11) shall be limited to the Allocated
Loan Amount(s) for the applicable Property or Properties affected by the surrender, termination, cancellation, modification, renewal,
extension or expiration of the applicable Franchise Agreement.


 


Section 11.23      Prior
Agreements. The Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, including the
Term Sheet, are superseded by the terms of the Loan Documents.


 


Section 11.24       Administrative
Agent.


 


(a)          Ladder,
DBNY, and their respective successors and assigns with respect to the Loan, shall have the right, but not the obligation, by joint
written notice to Borrowers, to appoint any Person to serve as an administrative agent (such Person, in such capacity, the “Administrative
Agent”). An Administrative Agent shall be the contractual, non-fiduciary, agent of each Lender hereunder with authority
to administer all of the rights, powers, and prerogatives of “Lender” hereunder and under the other Loan Documents.
Ladder and DBNY hereby appoint Ladder as the initial Administrative Agent.


 


(b)          Ladder
and any subsequent Administrative Agent shall have the right, by written notice to Borrowers, to resign as Administrative Agent.
The holders of the Notes, by joint written notice to Borrowers, shall have the right to remove Ladder and any subsequently appointed
Administrative Agent. Commencing with the appointment of an Administrative Agent, and continuing until such Administrative Agent
resigns or is duly removed, Borrowers shall have the right to rely on such appointment of the Administrative Agent as the sole
representative of the Lenders.


 


(c)          A
duly appointed Administrative Agent shall have the sole right to exercise the rights, prerogatives, and powers given to “Lender”
under this Agreement and the other Loan Documents, including any consent, approval and waiver rights of “Lender. Borrower
acknowledges that notwithstanding any Lender’s role as Administrative Agent, certain actions by any Administrative Agent
may require such Administrative Agent to secure the consent of some or all Lenders pursuant to the applicable agreement among the
Lenders.


 




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(d)          An
Administrative Agent shall have the right, by written notice to Borrowers, to delegate any of its rights, prerogatives, and powers
to a Servicer.


 


(e)          As
between Lenders, nothing in this Section 11.24 shall be deemed to amend any so-called “Co-Lender Agreement”
between the Lenders. As between the Lenders, in the event of any conflict between this Section 11.24 and such a Co-Lender
Agreement, the Co-Lender Agreement shall control. However, Borrowers shall not be deemed to be on notice of any such Co-Lender
Agreement or the terms thereof, and the terms of any such Co-Lender Agreement shall not be construed to impair Borrower’s
right to rely on the authority of the Administrative Agent.


 


(f)          The
liabilities of Ladder and DBNY shall be several and not joint, (i) neither Ladder nor DBNY shall be responsible for the obligations
of DBNY or Ladder, respectively, and (ii) each of Ladder and DBNY shall be liable to Borrower only for that portion of the Loan
funded by such Lender. Notwithstanding anything to the contrary herein, all indemnities by Borrowers and obligations for costs,
expenses, damages or advances set forth herein shall run to and benefit each Lender based on the proportion of the Loan funded
by such Lender.


 


(g)          Each
of Ladder and DBNY agrees that it has, independently and without reliance on any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of Borrowers, Guarantor and their respective Affiliates
and decision to enter into this agreement and that it will, independently and without reliance upon any other 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.


 


Section 11.25       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, designees or nominees, collectively,
“Servicer”) selected by Lender and Lender may delegate all or any portion of its responsibilities under the
Loan Documents to the Servicer pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement
and/or other agreement providing for the servicing of one or more mortgage loans (collectively, the “Servicing Agreement”)
between Lender and Servicer. Borrower shall be responsible for any reasonable set-up fees and any other initial costs relating
to or arising under the Servicing Agreement as well as for payment of a scheduled monthly servicing fee not to exceed two (2) basis
points per annum. In addition, Borrower shall pay (i) any fees and expenses of Servicer (including, without limitation, out-of-pocket
attorneys’ fees and disbursements) in connection with any release of the Property or a portion thereof, any prepayment, defeasance,
transfer, assumption, amendment or modification of the Loan, any documents or other matters requested by Borrower or Guarantor,
any special servicing or workout of the Loan or enforcement of the Loan Documents, including, without limitation, any advances
made by Servicer and interest on such advances, any liquidation fees in connection with the exercise of any or all remedies permitted
under this Agreement and (ii) the costs of all property inspections and/or appraisals of the Property (or any updates to any
existing


 




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inspection or appraisal)
that a Servicer may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under
the Servicing Agreement); provided, however, that Borrower shall not be responsible for payment of any fees or expenses
required to be borne by, and not reimbursable to, Servicer. Without limiting the generality of the foregoing, Servicer shall be
entitled to reimbursement of costs and expenses as and to the same extent (but without duplication) as Lender is entitled thereto
pursuant to the terms of the Loan Documents. Borrower’s obligations under this Section 11.25 are secured by the
Security Instruments.


 


(b)          Upon
notice thereof from Lender, Servicer shall have the right to exercise all rights of Lender and enforce all obligations of Borrower
and Guarantor under the Loan Documents.


 


(c)          Provided
Borrower shall have received notice from Lender of Servicer’s address, Borrower shall deliver, and cause to be delivered,
to Servicer duplicate originals of all notices and other documents and instruments which Borrower and/or Guarantor deliver to Lender
pursuant to the Loan Documents. No delivery of any such notices or other documents shall be of any force or effect unless delivered
to Lender and Servicer as provided in this Section 11.24(c).


 


Section 11.26       Refinancing
Loan. Borrowers shall not obtain or enter into any binding agreement to obtain any financing to refinance, directly or
indirectly, all or any portion of the Loan (a “Refinancing Loan”), or any commitment for a Refinancing Loan
(a “Refinancing Loan Commitment”), unless and until Borrowers shall have complied with this Section 11.26.


 


11.26.1    Intentionally
Omitted.


 


11.26.2    Right
of First Refusal


 


(a)          Borrowers
shall, from time to time during the Term, give Ladder a written notice (a “Financing Notice”) setting forth
a description in reasonable detail of any proposal by another Person to provide a Refinancing Loan or Refinancing Commitment, whether
by way of a credit facility, mortgage repurchase facility or otherwise (each, a “Proposed Financing”), including
the Refinancing Material Terms of any such Proposed Financing. The Financing Notice shall be delivered within ten (10) Business
Days following Borrowers’ and such Person’s agreement with respect to the terms of the Proposed Financing.


 


(b)          During
the ten (10) Business Day period commencing on the date Ladder receives a Financing Notice, Ladder shall have the option (but not
the obligation) to provide financing for Borrowers on terms which shall match the Refinancing Material Terms of the Proposed Financing
(“Ladder’s Proposed Financing”) by giving Borrowers written notice (the “Exercise Notice”);
provided that the non-material terms of Ladder’s Proposed Financing may differ from the non-material terms of the Proposed
Financing. Upon Ladder giving an Exercise Notice, Borrowers and Ladder shall negotiate in good faith the non-material terms of
Ladder’s Proposed Financing, and diligently pursue the consummation of a financing with Ladder on the terms of Ladder’s
Proposed Financing or such other terms as Borrowers and Ladder may agree. Borrowers may at any time and from time to time elect
not to refinance.


 




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(c)          If
(i) Ladder fails to give an Exercise Notice during such ten (10) Business Day period or (ii) Ladder gives an Exercise Notice during
such ten (10) Business Day period but after diligent good faith efforts Ladder and Borrowers shall fail to enter into a nonbinding
term sheet (which shall not be deemed to be a lending commitment) with Ladder within twenty-one (21) days (or such longer period
as is agreed to by Ladder and Borrowers) after the giving of the Exercise Notice (other than by reason of Borrowers failing to
negotiate in good faith, diligently provide diligence materials, perform its obligations under the preceding paragraph or under
the terms and conditions of Ladder’s Proposed Financing), then Lender shall be deemed to have elected not to provide financing
on terms which match the Refinancing Material Terms of the Proposed Financing, and Borrowers may thereafter proceed with the Proposed
Financing with the Person referred to in the related Financing Notice upon the terms thereof; provided, however, if within ninety
(90) days after the deemed election by Lender to not provide financing as set forth above, Borrower does not consummate the Proposed
Financing or the Refinancing Material Terms of the Proposed Financing shall be materially less favorable to Borrowers than those
terms originally identified in the Financing Notice (provided that such ninety (90) day period shall be extended for up to an additional
thirty (30) days if Borrowers and the Person referred to in the related Financing Notice are diligently and in good faith pursuing
the consummation of such Proposed Financing), then Ladder’s rights hereunder will renew and Borrower shall again be obligated
to comply with the provisions set forth in this Section 11.26.


 


11.26.3         For
the purposes of this Section 11.26: (a) “Refinancing Material Terms” shall mean, collectively, the term
of the facility(ies), the principal amount of the facility(ies), the type(s) of facility(ies) (e.g., mortgage, mezzanine and/or
preferred equity; fixed rate or floating rate; interest only or amortization), collateral, interest rate, advance rate, points
and other fees, types of recourse, identity of guarantors, types of reserves, required equity and any material terms that are unique
to the Properties, Borrowers or sponsor; and (b) “Ladder” shall include Ladder and any Affiliate thereof.


 


11.26.4         Lender
Not Liable. No Lender shall be liable in any manner whatsoever for (i) failure to deliver any notice or documents specified
herein or (ii) its failure to continue to consider whether or not it will commit to extend any Refinancing Loan or issue any Refinancing
Loan Commitment.


 


11.26.5         Application
of this Section. This Section 11.26 shall apply each and every time that Borrower seeks a Refinancing Loan or Refinancing
Loan Commitment until one or more Refinancing Loans is/are consummated which, in the aggregate, refinance the entire Loan in accordance
with the terms of this Agreement, after which this Section 11.26 shall have no further effect.


 


11.26.6         Preferred
Equity. The terms and provisions of this Section 11.26 shall not apply from and after a Permitted Preferred Equity Changeover
Event until such time, if ever, as ARCHOP shall Control Borrowers pursuant to a Transfer contemplated pursuant to Section 8.2(e)
hereof.


 


Section 11.27       Joint
and Several Liability. If more than one Person has executed any of the Loan Documents as “Borrower,” the representations,
covenants, warranties and obligations of all such Persons under such Loan Documents shall be joint and several.


 




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Section 11.28      Creation
of Security Interest. Notwithstanding any other provision set forth in the Loan Documents, Lender may at any time create
a security interest in all or any portion of its rights under any of the Loan Documents (including, without limitation, payments
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 or to secure a borrowing by Lender or its Affiliates from any Person that purchases or funds financial assets.


 


Section 11.29       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.


 


Section 11.30       Set-Off.
In addition to any rights and remedies of Lender provided by this Agreement and by law, Lender shall have the right, without prior
notice to Borrower, any such notice being expressly waived by Borrower to the extent permitted by Legal Requirements, 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 accordance with Legal Requirements, 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. 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 11.31      Certain
Additional Rights of Lender (VCOC). Notwithstanding anything to the contrary contained in the Loan Documents, Lender shall
have:


 


(a)          the
right to routinely consult with and advise Borrower’s management regarding the significant business activities and business
and financial developments of Borrower, including, but not limited to, with respect to (i) annual operating and capital budgets,
(ii) insurance, (iii) material leases and lease forms, (iv) property management and leasing agents and amendments,
modifications or termination of any agreements with such agents, and (v) changes in business; provided, however, that
such consultations shall not include discussions of environmental compliance programs or disposal of hazardous substances. Consultation
meetings should occur on a regular basis (no less frequently than quarterly) with Lender having the right to call special meetings
at any reasonable times upon reasonable notice;


 


(b)          the
right, in accordance with the terms of this Agreement, to examine the books and records of Borrower at any reasonable times upon
reasonable notice;


 


(c)          the
right, in accordance with the terms of this Agreement, including, without limitation, Section 4.1.7 hereof, to receive
monthly, quarterly and year-end financial reports, including balance sheets, statements of income, shareholder’s equity and
cash flow, a management report and schedules of outstanding indebtedness; and


 


(d)          the
right, without restricting any other rights of Lender under this Agreement (including any similar right), to approve any acquisition
by Borrower of any other


 




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significant property
(other than personal property required for the day to day operation of the Property) and to restrict any financing and/or Indebtedness
with respect thereto.


 


Article
12:


 


MANDATORY
DE-LEVERAGING OF PROPERTIES


 


Section 12.1         Application
of QCR Redemption Amounts. In the event of the occurrence of any Qualified Capital Raise during any calendar month, the
Pool II Common Equity Investors shall cause an amount equal to the QCR Redemption Amount for such Qualified Capital Raise (together
with an accounting of all Qualified Capital Raises that occurred during such month) to be contributed by the Pool II Common Equity
Investors to Pool II Holdco by no later than the fifth (5th) day of the next calendar month (or the next Business Day if such 5th
day is not a Business Day). Immediately thereafter, provided that no Event of Default has occurred and is occurring, Pool II Holdco
shall distribute such amount as provided in Section 8.4 of the Pool II Holdco Operating Agreement.


 


Section 12.2         Pro-Rata
De-Leveraging With Pool I. Without limiting Section 12.1, concurrently with the occurrence of any Qualified Pool
I De-Leveraging, Pool II Holdco shall distribute to the Pool II Preferred Equity Investors an amount equal to twenty eight and
74/100 percent (28.74%) of the amount of the Qualified Pool I De-Leveraging, but only to the extent that the following conditions
are satisfied:


 


(a)          No
Event of Default has occurred and is continuing.


 


(b)          The
source of capital for the Qualified Pool I De-Leveraging was a contribution of capital to Pool I Holdco, and the direct or indirect
source of such capital contribution was a Qualified Capital Raise.


 


Section 12.3         Prohibition
on Amendments Impacting Mandatory De-Leveraging. Without Lender’s prior written consent:


 


(a)          Neither
the parties to the Pool I Holdco Operating Agreement nor their Affiliates shall amend, waive any rights relating to, or enter into
any new agreements pertaining to any of the following: (i) Article 8 of the Pool I Holdco Operating Agreement (or any definitions
relating thereto), or (ii) any other term or condition of the Pool I Holdco Operating Agreement to the extent that such amendment
could impact the distribution of proceeds of a Qualified Capital Raise to the Preferred Equity Investors or Pool I Preferred Equity
Investors.


 


(b)          Neither
the parties to the Pool II Holdco Operating Agreement nor their Affiliates shall amend, waive any rights relating to, or enter
into any new agreements pertaining to any of the following: (i) Article 8 of the Pool II Holdco Operating Agreement (or
any definitions relating thereto), or (ii) any other term or condition of the Pool II Holdco Operating Agreement to the extent
that such amendment could impact the distribution of proceeds of a Qualified Capital Raise to the Preferred Equity Investors or
Pool I Preferred Equity Investors.


 




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Section 12.4         Reporting.


 


(a)          Not
later than the fifth (5th) day of each calendar month (or the next Business Day if such 5th day is not a Business Day), Borrower
shall deliver to Lender:


 


(i)          An
accounting of all Qualified Capital Raises that occurred during the prior month and the QCR Redemption Amount for each such Qualified
Capital Raise.


 


(ii)         Evidence,
in reasonable detail, confirming that the contributions and distributions required by Section 12.1 hereof occurred.


 


(iii)        An
accounting of any Qualified Pool I De-Leveraging that occurred during the prior month.


 


(iv)        Evidence,
in reasonable detail, confirming that the distributions required by Section 12.2 hereof occurred.


 


(b)          Borrower
shall deliver to Lender written notice, accompanied by reasonable detail, of the occurrence of any of the following within three
(3) Business Days after such occurrence:


 


(i)          Any
amendment to the Pool I Holdco Operating Agreement or any waiver of any material right thereunder.


 


(ii)         Any
amendment to the Pool II Holdco Operating Agreement or any waiver of any material right thereunder.


 


(iii)        Any
new agreement or amendment to an existing agreement to which Borrower, any party to the Pool I Holdco Operating Agreement, or Pool
II Holdco Operating Agreement, or any of their Affiliates is a party, to the extent that such new agreement or amendment could
impact the distribution of proceeds of a Qualified Capital Raise to the Preferred Equity Investors or Pool I Preferred Equity Investors.


 


(iv)        An
accounting of any Qualified Pool I De-Leveraging.


 


Section 12.5         Expiration.
This Article 12 shall be of no further force or effect following a Permitted Common Equity Buyout Event.


 


[NO FURTHER
TEXT ON THIS PAGE]


 




    	111



    	 



    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Loan Agreement to be duly executed by their duly authorized representatives, all as of the
day and year first above written.


 


	 	LENDER:
	 	 
	 	LADDER CAPITAL FINANCE LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	DEUTSCHE BANK AG, NEW YORK

BRANCH,  a branch of Deutsche Bank AG,

a German Bank
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	BORROWERS:
	 	 
	 	[BORROWERS TO PROVIDE],
	 	a [_____________________________]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 




    	 



    	 



    

 


SCHEDULE
I


 


DEFINITIONS


 


“Acceptable
Tenant Estoppel Certificate” shall mean a fully-executed estoppel certificate from the applicable Tenant(s) in form and
substance satisfactory to Lender that, in each case, affirms the applicable Lease(s) as being in full force and effect and provides,
among other things (i) that such Tenant has accepted and is occupying all of the space demised under such Lease, is open for
business and is paying full, unabated rent in accordance with such Lease, (ii) that all of the obligations of Borrower, as
landlord under such Lease, have been duly performed, completed and paid for, including, without limitation, any obligations of
Borrower to make or to pay or reimburse such Tenant for any tenant improvements and leasing commissions, (iii) that any improvements
described in such Lease have been constructed in accordance therewith and have been accepted by such Tenant, (iv) that such
Tenant is not then entitled to any concession or rebate of Rent or other charges from time to time due and payable under such Lease,
and (iv) that there are no defaults by Borrower or such Tenant under such Lease.


 


“Account”
shall mean an Eligible Account at the Cash Management Bank controlled by Lender.


 


“Act”
shall have the meaning set forth in clause (cc)(viii) of Schedule III attached hereto.


 


“Additional
Interest” shall mean an amount equal to one and one-quarter percent (1.25%) of the original principal amount of the Loan.


 


“Adjusted
Operating Expenses” shall mean, as of any date of determination by Lender, the actual Operating Expenses incurred during
the preceding twelve (12) month period using the greater of (i) assumed management fees of four percent (4.0%) of Gross
Revenue and (ii) actual management fees incurred; provided, however, such Operating Expenses shall be adjusted
by Lender to reflect actual increases in Taxes, Other Charges, Insurance Premiums and utility charges, and all other expenses shall
be adjusted by the CPI; provided, further, however, in the event that Borrower has failed to timely deliver
the financial statements required pursuant to this Agreement, Lender shall determine the amount of Adjusted Operating Expenses
in its sole and absolute discretion.


 


“Affected
Properties” shall have the meaning set forth in Section 9.1(k).


 


“Affiliate”
shall mean, as to any Person, any other Person that (i) owns directly or indirectly twenty percent (20%) or more of all equity
interests in such Person, (ii) is in Control of, is Controlled by or is under common ownership or Control with such Person,
(iii) is a director or executive officer of such Person or of an Affiliate of such Person, and/or (iv) is the spouse,
issue or parent of such Person. For the avoidance of doubt, the Preferred Equity Investors shall not constitute Affiliates of the
Borrower until a change in Control of Pool II Holdco.


 


“Affiliated
Franchisor” shall mean any Franchisor that is an Affiliate of Borrower, any SPC Party or Guarantor.


 




    	S-I-1



    	 



    

 


“Affiliated
Manager” shall mean any Property Manager or Intermediate Manager that is an Affiliate of Borrower, any SPC Party or Guarantor.


 


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


 


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


 


“Allocated
Loan Amount” shall mean with respect to each of the Properties, the amount shown with respect to such Property on Schedule
IX attached hereto.


 


“Alteration
Threshold” shall mean (a) with respect to any individual Property an amount equal to three percent (3%) of its Allocated
Loan Amount and (b) with respect to all Properties, an aggregate amount of Five Million Dollars ($5,000,000).


 


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


 


“Applicable
Minimum Interest Amount” shall mean (i) in connection with any prepayment or repayment of the Loan in whole or in part
or the acceleration thereof in accordance with the terms of the Loan Documents prior to the commencement of the Extension Period,
an amount equal to the interest that would have accrued hereunder on the original principal amount of the Loan of $227,000,000,
or the portion being prepaid, as applicable, commencing on the Closing Date and through, but not including, the Monthly Payment
Date occurring in September 2015 based on the LIBOR Interest Rate or Base Rate, as the case may be, in effect on the date of determination,
and (ii) in connection with any prepayment or repayment of the Loan in whole or in part or the acceleration thereof in accordance
with the terms of the Loan Documents during the Extension Period, an amount equal to the interest that would have accrued hereunder
on the outstanding principal balance of the Loan as of the commencement of the Extension Period, or the portion thereof being prepaid,
as applicable, commencing on the Monthly Payment Date occurring in March 2017 and through, but not including, the Monthly Payment
Date occurring in September 2017 based on the LIBOR Interest Rate or Base Rate, as the case may be, in effect on the date of determination.


 


“Applicable
Spread” shall mean six percent (6.00%).


 


“Appraisal”
shall mean an appraisal of one or more Properties, as applicable, prepared not more than ninety (90) days prior to the relevant
date with respect to which an appraisal shall be required hereunder by a member of the American Institute of Real Estate Appraisers
selected by Lender, which appraisal shall (i) meet the minimum appraisal standards for national banks promulgated by the Comptroller
of the Currency pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (FIRREA),
(ii) be prepared on as “as is” basis, and (iii) otherwise be in form and substance satisfactory to Lender.
Lender shall endeavor to cause the appraiser to prepare the Appraisal using a Portfolio Valuation to the extent that the appraiser
(x) is permitted to prepare appraisals using such methodology, (y) prepares appraisals using such methodology for similar
portfolios of Properties, and (z) determines that such methodology is an appropriate valuation method for the Properties;
provided, however, that


 




    	S-I-2



    	 



    

 


Borrower hereby acknowledges
that the appraiser may determine that a different valuation method is appropriate and Lender shall not have any liability hereunder
as a result of any such determination.


 


“Approved
Annual Budget” shall have the meaning set forth in Section 4.1.7(e).


 


“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 or delayed.


 


“Approved
FF&E Expenses” shall mean amounts expended by Borrower for FF&E and either (i) included in the Approved
Annual Budget or (ii) approved by Lender, which approval shall not be unreasonably withheld or delayed.


 


“Approved
Leasing Expenses” shall mean actual out-of-pocket expenses incurred by Borrower in leasing space at the Property pursuant
to Leases entered into in accordance with the Loan Documents, including brokerage commissions and tenant improvements, which expenses
(i) are (a) specifically approved by Lender in connection with approving the applicable Lease, (b) incurred in the
ordinary course of business and on market terms and conditions in connection with Leases which do not require Lender’s approval
under the Loan Documents, and Lender shall have received and approved a budget for such tenant improvement costs and a schedule
of leasing commissions payments payable in connection therewith, or (c) otherwise approved by Lender, which approval shall
not be unreasonably withheld or delayed, and (ii) are substantiated by executed Lease documents and brokerage agreements.


 


“Approved
Operating Expenses” shall mean Operating Expenses incurred by Borrower 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 Property, (iii) are for property management fees exclusive of any fees that are in the nature
of incentive management fees or other premiums payable to any Property Manager and Intermediate Manager under the Property Management
Agreement and the Intermediate Management Agreement, as applicable, such amounts not to exceed, in the aggregate, four percent
(4.0%) of the monthly Gross Revenue, (iv) are for franchise fees payable to Franchisor under the Franchise Agreement, or
(v) have otherwise been approved by Lender; provided, however, such 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 Borrowers provide to Lender a reasonably detailed explanation of the reasons for and expenditures resulting in
Operating Expenses exceeding the Monthly Operating Expense Amount.


 


“ARCHOP”
shall mean American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership.


 


“Assignment
of Beverage Concession Agreement” shall mean that certain Liquor License Agreement, dated as of February 27, 2015, among
Secured Parties, ARC Hospitality Portfolio II NTC TRS, LP, ARC Hospitality Portfolio II TX Beverage Company, LLC and ARC


 




    	S-I-3



    	 



    

 


Hospitality Portfolio
II NTC Owner, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Assignment
of Beverage Management Agreement” shall mean that certain Assignment of Management Agreement and Subordination of Fees,
dated as of February 27, 2015, among Secured Parties, ARC Hospitality Portfolio II NTC TRS, LP, ARC Hospitality Portfolio II NTC
Owner, LP, Beverage Concessionaire, Crestline Hotels and Resorts LLC, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.


 


“Assignment
of Franchise Agreement” shall mean those certain agreements set forth on Schedule XVIII attached hereto, dated
as of the date hereof, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Assignment
of Interest Rate Protection Agreement” shall have the meaning set forth in Section 2.8.1(b).


 


“Assignment
of Intermediate Management Agreement” shall mean, collectively, that certain (i) Assignment of Management Agreement and
Subordination of Management Fees (Operating Agreement) (Crestline), dated as of February 27, 2015, among ARC Hospitality Portfolio
II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Secured Parties and consented and agreed to by American Realty Capital
Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II NTC Owner, LP, (ii)
Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Pillar), dated as of February 27,
2015, among ARC Hospitality Portfolio II MISC TRS, LP to Secured Parties and consented and agreed to by American Realty Capital
Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC and ARC Hospitality Portfolio II NTC Owner, LP, (iii)
Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (McKibbon), dated as of February
27, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II MISC TRS, LLC to Secured Parties and
consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC, ARC Hospitality Portfolio II Owner, LLC, and
ARC Hospitality Portfolio II NTC Owner, LP, (iv) Assignment of Management Agreement and Subordination of Management Fees (Operating
Agreement) (Hilton), dated as of February 27, 2015, among ARC Hospitality Portfolio II HIL TRS, LP to Secured Parties and consented
and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC, (v) Assignment
of Management Agreement and Subordination of Management Fees (Operating Agreement) (Courtyard Houston), dated as of February 27,
2015, among ARC Hospitality Portfolio II NTC HIL TRS, LP to Secured Parties and consented and agreed to by American Realty Capital
Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II NTC Owner, LP and (vi) Assignment of Management Agreement and
Subordination of Management Fees (Operating Agreement) (Stratford), dated as of February 27, 2015, among ARC Hospitality TRS Stratford,
LLC to Secured Parties and consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality
Stratford, LLC, as each of the foregoing may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 




    	S-I-4



    	 



    

 


“Assignment
of Leases” shall mean that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from Borrower,
as assignor, to Lender, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time
to time.


 


“Assignment
of Property Management Agreement” shall mean, collectively, that certain (i) Assignment of Management Agreement and Subordination
of Management Fees (Management Agreement) (Crestline), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC TRS,
LP and ARC Hospitality Portfolio II TRS, LLC to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner,
LLC, ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, and LLC Crestline Hotels &
Resorts, LLC, (ii) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Pillar) (Management
Agreement), dated as of February 27, 2015, among ARC Hospitality Portfolio II MISC TRS, LP to Secured Parties and consented and
agreed to by, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP American Realty Capital Hospitality
Properties and LLC Pillar Hotels and Resorts, L.P., (iii) Assignment of Management Agreement and Subordination of Management Fees
(Management Agreement) (McKibbon), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality
Portfolio II MISC TRS, LLC to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality
Portfolio II NTC Owner, LP, American Realty Capital Hospitality Properties, LLC and McKibbon Hotel Management, Inc., (iv) Assignment
of Management Agreement and Subordination of Management Fees (Management Agreement) (Hilton), dated as of February 27, 2015, among
ARC Hospitality Portfolio II HIL TRS, LP to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner,
LLC American Realty Capital Hospitality Properties, LLC and Hampton Inns Management LLC, (v) Assignment of Management Agreement
and Subordination of Management Fees (Management Agreement) (Hilton), dated as of February 27, 2015, among ARC Hospitality Portfolio
II HIL TRS, LP to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital
Hospitality Properties, LLC and Homewood Suites Management LLC, (vi) Assignment of Management Agreement and Subordination of Management
Fees (Management Agreement) (Courtyard Houston), dated as of February 27, 2015, among ARC Hospitality Portfolio II NTC HIL TRS,
LP to Secured Parties and consented and agreed to by ARC Hospitality Portfolio II NTC Owner, LP, American Realty Capital Hospitality
Properties, LLC and Crestline Hotels & Resorts, LLC, and (vii) Assignment of Management Agreement and Subordination
of Management Fees (Management Agreement) (Stratford), dated as of February 27, 2015, among ARC Hospitality TRS Stratford, LLC
to Secured Parties and consented and agreed to by ARC Hospitality Stratford, LLC, American Realty Capital Hospitality Properties,
LLC and Crestline Hotels & Resorts, LLC, as each of the foregoing may be amended, restated, replaced, supplemented or otherwise
modified from time to time.


 


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


 




    	S-I-5



    	 



    

 


“Bankruptcy
Action” shall mean with respect to any Person (i) such Person filing a voluntary petition under the Bankruptcy Code
or any other federal, state, local or foreign bankruptcy or insolvency law; (ii) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law, or soliciting
or causing to be solicited petitioning creditors for any involuntary petition against such Person; (iii) such Person filing
an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person
under the Bankruptcy Code or any other federal, state, local or foreign bankruptcy or insolvency law, or soliciting or causing
to be solicited petitioning creditors for any involuntary petition from any Person; (iv) such Person consenting to or acquiescing
in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion
of the Property; or (v) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any
legal proceeding, its insolvency or inability to pay its debts as they become due.


 


“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, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’ rights.


 


“Base Rate”
shall mean the rate per annum equal to the aggregate of the Applicable Spread plus the then applicable Treasury Rate which in no
event shall be less than six and one-quarter percent (6.25%) per annum.


 


“Beverage
Concession Agreement” shall mean that certain Courtyard Dallas Medical/Market Center Alcohol Concession Agreement dated
as of the date hereof by and between ARC Hospitality Portfolio II NTC TRS, LP, a Delaware limited partnership, and Beverage Concessionaire,
together with any replacement thereof in accordance with the terms of this Agreement.


 


“Beverage
Concessionaire” shall mean ARC Hospitality Portfolio II TX Beverage Company, LLC, a Delaware limited liability company,
together with any replacement thereof in accordance with the terms of this Agreement.


 


“Beverage
Management Agreement” shall mean that certain Courtyard Dallas Medical/Market Center Alcohol Management and Services
Agreement dated as of the date hereof by and between Beverage Concessionaire and Beverage Manager, together with any replacement
thereof in accordance with the terms of this Agreement.


 


“Beverage
Manager” shall mean Crestline Hotels and Resorts LLC, a Delaware limited liability company, together with any replacement
thereof in accordance with the terms of this Agreement.


 


“Borrower”
shall have the meaning set forth in the Recitals to this Agreement. Each reference herein to “Borrower” shall be deemed
to include all Borrowers, individually or collectively as the context may require.


 


“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


 




    	S-I-6



    	 



    

 


where the corporate trust
office of the Trustee is located, or (iii) the state where the servicing offices of Servicer are located.


 


“Capital Adequacy
Events” shall have the meaning set forth in Section 2.4.4(d).


 


“Capital Expenditure
Account” shall have the meaning set forth in Section 6.5.1.


 


“Capital Expenditure
Funds” shall have the meaning set forth in Section 6.5.1.


 


“Capital Expenditures”
shall mean, for any period, the amounts expended for items required to be capitalized under the Uniform System of Accounts and
reconciled in accordance with GAAP (including expenditures for replacements, building improvements, major repairs, alterations,
tenant improvements and leasing commissions).


 


“Cash Management
Account” shall have the meaning set forth in Section 6.1.


 


“Cash Management
Agreement” shall mean that certain Cash Management Agreement, dated as of the date hereof, among Borrower, Lender and
the Cash Management Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Cash Management
Bank” shall mean Wells Fargo Bank, N.A. and any successor Eligible Institution thereto under the Cash Management Agreement
in effect from time to time.


 


“Cash Sweep
DSCR Trigger Event” shall mean that, as of any date of determination by Lender, the Debt Service Coverage Ratio is less
than 1.225 to 1.00.


 


“Cash Sweep
Event” shall mean the occurrence of:


 


		(i)	an Event of Default;



 


		(ii)	any event of default under the Intermediate Management
Agreement or the Property Management Agreement;



 


		(iii)	a Cash Sweep DSCR Trigger Event;



 


		(iv)	the delivery of notice by Franchisor of any breach or default
by Borrower under any Franchise Agreement that, with the passage of time and/or delivery of notice, permits Franchisor to terminate
or cancel the Franchise Agreement (provided, however, this shall not include any notice by Franchisor solely by reason of the
existence of a required PIP then being performed by a Borrower at a Property so long as such PIP Work is being performed in accordance
with the terms of the applicable Franchise Agreement); or



 


		(v)	any failure on the part of Borrowers to deposit or cause
to be deposited the amounts required pursuant to Section 6.6.1(a) of this Agreement and otherwise in accordance with the
PIP Reserve Funding Schedule.



 




    	S-I-7



    	 



    

  


“Cash Sweep
Event Cure” shall mean:


 


		(i)	if the Cash Sweep Event is caused solely by the occurrence
of clause (i) in the definition of “Cash Sweep Event,” the date on which a cure of the Event of Default
which gave rise to such Cash Sweep Event is accepted by Lender in its sole and absolute discretion; provided that no such
cure shall be deemed to have been accepted by Lender unless and until such Event of Default is waived in writing by Lender in
its sole and absolute discretion in accordance with the terms and provisions of the Loan Documents;



 


		(ii)	if the Cash Sweep Event is caused solely by the occurrence
of clause (ii) in the definition of “Cash Sweep Event,” (a) the date on which the event of default
under the Intermediate Management Agreement or Property Management Agreement, as applicable, has been cured to Lender’s
satisfaction, or (b) the date on which Borrower has entered into a Replacement Management Agreement with a Qualified Manager
in accordance with the terms of this Agreement;



 


		(iii)	if the Cash Sweep Event is caused solely by the occurrence
of clause (iii) in the definition of “Cash Sweep Event,” the date on which the Debt Service Coverage Ratio
is at least 1.325:1.00 for two (2) consecutive calendar quarters;



 


		(iv)	if the Cash Sweep Event is caused solely by the occurrence
of clause (iv) in the definition of “Cash Sweep Event,” the date on which Borrower has delivered evidence
reasonably satisfactory to Lender, which may include a “good standing” or similar letter from Franchisor, indicating
that the Franchise Agreement is in full force and effect with no default thereunder; or



 


		(v)	if the Cash Sweep Event is caused solely by the occurrence
of clause (v) in the definition of “Cash Sweep Event,” the date on which the aggregate deposits actually made
to the PIP Reserve Account equal the amount required to have been deposited prior to such date as reflected on the PIP Reserve
Funding Schedule.



 


provided, that each Cash
Sweep Event Cure set forth above shall be subject to the following conditions: (1) after giving effect to such Cash Sweep
Event Cure, no Cash Sweep Event shall have occurred and remain outstanding, (2) Borrower shall have notified Lender in writing
of its election to cure the applicable Cash Sweep Event, (3) a Cash Sweep Event Cure may occur no more than three (3) times
during the Term, and (4) Borrower shall have paid all of Lender’s reasonable out-of-pocket costs and expenses incurred
in connection with such Cash Sweep Event Cure (including reasonable attorneys’ fees and expenses).


 


“Cash Sweep
Event Period” shall mean any period commencing on the occurrence of a Cash Sweep Event and continuing until the earlier
of (i) the Monthly Payment Date following


 




    	S-I-8



    	 



    

 


the occurrence of the
applicable Cash Sweep Event Cure or (ii) the payment in full of all principal and interest on the Loan and all other amounts
payable under the Loan Documents, including the Additional Interest and the Minimum Interest Required Payment, as applicable, in
accordance with the terms and provisions of the Loan Documents.


 


“Casualty”
shall mean the occurrence of any casualty, damage or injury, by fire or otherwise, to the Property or any part thereof.


 


“Casualty
and Condemnation Account” shall have the meaning set forth in the Cash Management Agreement.


 


“Casualty
Consultant” shall have the meaning set forth in Section 5.3.2(c).


 


“Casualty
Retainage” shall have the meaning set forth in Section 5.3.2(d).


 


“Cause”
shall mean, with respect to an Independent Manager, (i) acts or omissions by such Independent Manager that constitute willful disregard
of, or gross negligence with respect to, such Independent Manager’s duties, (ii) such Independent Manager has engaged in
or has been charged with or has been indicted or convicted for any crime or crimes of fraud or other acts constituting a crime
under any law applicable to such Independent Manager, (iii) such Independent Manager has breached its fiduciary duties of loyalty
and care as and to the extent of such duties in accordance with the terms of the related limited liability company’s organizational
documents, (iv) there is a material increase in the fees charged by such Independent Manager or a material change to such Independent
Manager’s terms of service, (v) such Independent Manager is unable to perform his or her duties as Independent Manager
due to death, disability or incapacity, or (vi) such Independent Manager no longer meets the definition of Independent Manager.


 


“Clearing
Account Agreement” shall mean, collectively, that certain (i) Deposit Account Control Agreement (Crestline), dated as
of February 27, 2015, between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality
Portfolio Owner II NTC Owner, LP, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio II NTC TRS, LP, Secured Parties
and Wells Fargo Bank, N.A., (ii) Deposit Account Control Agreement (Pillar), dated as of February 27, 2015, between ARC Hospitality
Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio
II MISC TRS, LLC, Secured Parties and Wells Fargo Bank, N.A., (iii) Deposit Account Control Agreement (McKibbon) between ARC Hospitality
Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality
Portfolio II MISC TRS, LLC, ARC Hospitality Portfolio NTC TRS, LP, Secured Parties and Wells Fargo Bank, N.A., (iv) Deposit Account
Control Agreement (Hilton) between ARC Hospitality Portfolio II TRS Holdco, LLC, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality
Portfolio II NTC Owner, LP, ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Portfolio II NTC HIL TRS, LP, Borrowers,
Secured Parties and Wells Fargo Bank, N.A.; and (v) Deposit Account Control Agreement (Stratford) between ARC Hospitality TRS Holding
Stratford, LLC, ARC Hospitality Stratford, LLC, ARC Hospitality TRS Stratford, LLC, Secured Parties and Wells Fargo Bank, N.A.,
as each of the same may be amended, restated, replaced, supplemented or otherwise


 




    	S-I-9



    	 



    

 


modified from time to
time or, if the context requires, a replacement clearing account agreement executed in accordance with the terms and provisions
of the Loan Agreement.


 


“Clearing
Account” shall mean, individually or collectively, as the context requires,
each DACA Account and Sub-DACA account as set forth in the Clearing Account Agreement.


 


“Clearing
Bank” shall have the meaning set forth in Section 6.1.


 


“Closed Property
Release Conditions” shall have the meaning set forth on Schedule VIII, attached hereto and made a part hereof.


 


“Closing Date”
shall mean the date of the funding of the Loan.


 


“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, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.


 


“Collective
Bargaining Agreement” shall mean that certain Agreement, effective on September 11, 2011, by and between Hampton Inns
Management Company d/b/a Hampton Inn  – Milford and Local 371, United Food and Commercial Workers International Union,
AFL-CIO, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with
the terms and provisions of this Agreement.


 


“Common Equity
Change in Control Notice” shall have the meaning provided in Section 8.2(e).


 


“Common Equity
Member” shall mean American Realty Capital Hospitality Portfolio Member, L.P., a Delaware limited partnership.


 


“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 the Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting the Property or any part thereof.


 


“Control”
as to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management,
policies or activities of such Person, whether through ownership of voting securities or other beneficial interests, by contract
or otherwise, and the terms “controlled” or “controlling” shall have a correlative meaning; provided,
however, for purposes of the definition of “Institutional Lender” below, “Control” as to any Person,
shall mean (i) the ownership, directly or indirectly, in the aggregate of more than fifty percent (50%) of the beneficial
ownership interests of such Person and (ii) the possession, directly or indirectly, of the power to direct or cause the direction
of the management, policies or activities of such Person, whether through ownership of voting securities or other beneficial interests,
by contract or otherwise, and the terms “controlled” or “controlling” shall have a correlative meaning.


 




    	S-I-10



    	 



    

 


“Controlling
Person” as to any Person, shall mean any other Person that Controls such Person.


 


“Courtyard
Houston Property” shall mean the Property located at 12401 Katy Freeway, Houston, Texas.


 


“CPI”
shall mean the Consumer Price Index, as published by the United States Department of Labor, Bureau of Labor Statistics for the
region in which the Property is located or any substitute index hereafter adopted by the United States Department of Labor.


 


“Credit Card
Banks” shall have the meaning set forth in Section 6.1.


 


“Credit Card
Bank Payment Direction Letter” shall have the meaning set forth in Section 6.1.


 


“Credit Card
Companies” shall have the meaning set forth in Section 6.1.


 


“Credit Card
Company Payment Direction Letter” shall have the meaning set forth in Section 6.1.


 


“Debt”
shall mean the Outstanding Principal Balance together with all interest accrued and unpaid thereon and all other sums (including
the Additional Interest and the Minimum Interest Required Payment, if applicable) due to Lender in respect of the Loan under the
Loan Documents.


 


“Debt Service”
shall mean, with respect to any particular period of time, the aggregate amount of scheduled interest payments due and payable
under the Note and this Agreement.


 


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


 


		(i)	the numerator is the Underwritten Net Cash Flow, and



 


		(ii)	the denominator is the Debt Service due and payable during
the succeeding twelve (12) month period (for purposes of this calculation, “Debt Service” shall mean a monthly
constant payment of principal and interest computed by Lender using the LIBOR Interest Rate or Base Rate, as applicable, in effect
on the date of determination, and sufficient to fully amortize the Outstanding Principal Balance over a thirty (30) year period
from the date of determination).



 


“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, with respect to the Loan, a rate per annum equal to the lesser of (i) the Maximum Legal Rate, or (ii) five
percent (5%) above the LIBOR Interest Rate, or (iii)


 




    	S-I-11



    	 



    

 


at any time when the
Loan shall bear interest at the Base Rate in accordance with Section 2.4.4(b), five percent (5%) in excess of the Base Rate.


 


“Disclosure
Document” shall mean, collectively, any written materials used or provided to any prospective investors and/or NRSROs
in connection with any public offering or private placement in connection with a Securitization, including, but not limited to,
any preliminary or final offering circular, prospectus, prospectus supplement, free writing prospectus, private placement memorandum
or other offering documents, marketing materials or information.


 


“Easements”
shall have the meaning set forth in Section 3.1.12.


 


“Eligible
Account” shall have the meaning set forth in the Cash Management Agreement.


 


“Eligible
Institution” shall have the meaning set forth in the Cash Management Agreement.


 


“Embargoed
Person” shall have the meaning set forth in Section 4.2.15.


 


“Environmental
Indemnity” shall mean that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower
and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.


 


“Equipment”
shall, with respect to each Property, have the meaning set forth in the Security Instrument executed by the Borrowers owning an
interest in such Property.


 


“Equipment
Leases” shall mean equipment leases or financing or other similar instruments entered into with respect to the Equipment
and/or the Personal Property with respect to each Property provided.


 


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


 


“ERISA Affiliate”
shall mean each person (as defined in Section 3(9) of ERISA) that together with Borrower would be deemed to be a “single
employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.


 


“Eurodollar
Business Day” shall mean any Business Day on which commercial banks are open for international business (including dealings
in dollar deposits (in London, England).


 


“Event of
Default” shall have the meaning set forth in Section 10.1.


 


“Excess Cash
Flow” shall have the meaning set forth in Section 6.11.1.


 


“Excess Cash
Flow Account” shall have the meaning set forth in Section 6.9.


 


“Excess Cash
Flow Funds” shall have the meaning set forth in Section 6.9.


 




    	S-I-12



    	 



    

 


“Exchange
Act” shall have the meaning set forth in Section 9.2(a).


 


“Exchange
Act Filing” shall mean a filing pursuant to the Exchange Act in connection with or relating to a Securitization.


 


“Exercise
Notice” shall have the meaning provided in Section 11.26.3.


 


“Extended
Maturity Date” shall have the meaning set forth in Section 2.7.1.


 


“Extension
Option” shall have the meaning set forth in Section 2.7.1.


 


“Extension
Period” shall have the meaning set forth in Section 2.7.1.


 


“Extraordinary
Expense” shall have the meaning set forth in Section 4.1.7(e).


 


“FF&E”
shall mean furniture, fixtures and equipment at or in or used in connection with the use, occupancy, operation and maintenance
of all or any part of the hotel located on the Property and of the type customarily utilized in hotel properties such as the Property.


 


“FF&E
Account” shall have the meaning set forth in Section 6.5.1.


 


“FF&E
Funds” shall have the meaning set forth in Section 6.5.1.


 


“FF&E
Work” shall mean the replacement of FF&E.


 


“Final Member”
shall have the meaning set forth in clauses (cc)(ix) or (ee)(ix) of Schedule III attached
hereto, as the context requires.


 


“Financial
Covenants” shall mean the covenants contained in Section 5.2 of the Guaranty.


 


“Financing
Notice” shall have the meaning provided in Section 11.26.2.


 


“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 IBCA, Inc.


 


“Franchise
Agreement” shall mean individually or collectively, as the context requires, the franchise agreements listed on Schedule
X attached hereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in
accordance with the terms and provisions of this Agreement, or, if the context requires, the Replacement Franchise Agreement executed
in accordance with the terms and provisions of this Agreement.


 


“Franchise
Agreement Cash Sweep Event” shall have the meaning provided in Section 6.9.


 




    	S-I-13



    	 



    

 


“Franchise
Cash Sweep Event Cap” shall mean, with respect to a Franchise Agreement Cash Sweep Event pertaining to a particular Property,
the Allocated Loan Amount with respect to such Property.


 


“Franchisor”
shall mean individually or collectively, as the context requires, (a) any entity that is a hotel franchisor or licensor pursuant
to any Franchise Agreement as of the date hereof, or (b) any other franchisor approved by Lender and the Rating Agencies in accordance
with the terms and conditions of the Loan Documents, including, without limitation, Article 7 of this Agreement.


 


“Funding Losses”
shall have the meaning set forth in Section 2.4.4(a).


 


“Funding Party”
means any bank or other entity, if any, which is indirectly or directly funding any Lender with respect to the Loan, in whole or
in part, including, without limitation, any direct or indirect assignee of, or participant in, the Loan.


 


“GAAP”
shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other
statements by such entity as may be in general use by significant segments of the U.S. accounting profession.


 


“Government
Lists” shall have the meaning set forth in Section 4.2.16(b).


 


“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, foreign or otherwise) whether now or hereafter in existence.


 


“Governmental
Matter” shall mean (i) any governmental or regulatory investigation actually known to Lender to be active, ongoing and
pending (other than ordinary course examinations conducted by any governmental or regulatory authority) with respect to Borrower,
Guarantor, Affiliated Manager, any of their respective external corporate advisors (including AR Capital, LLC) or any of their
respective Affiliates that Lender determines in its reasonable business judgment exercised in good faith could reasonably be likely
to result in material liability, material sanctions, or criminal charges the conviction of which would be a felony, or (ii) any
material liability, material sanctions, criminal charges the conviction of which would be a felony, or felony convictions resulting
from any governmental or regulatory investigation.


 


“Grace Acquisition
I” shall have the meaning set forth in Section 8.2(i).


 


“Gross Revenue”
shall mean all revenue, including, without limitation, Rents, derived from the ownership and operation of the Property from whatever
source.


 


“Guarantor”
shall mean American Realty Capital Hospitality Trust, Inc. or any replacement guarantor pursuant to Section 8.2 hereof.


 




    	S-I-14



    	 



    

 


“Guaranty”
shall mean that certain Guaranty of Recourse Obligations, dated as of the date hereof, from Guarantor for the benefit of Lender,
as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Hedge Losses”
shall mean all actual losses incurred by Lender or its affiliates in connection with the hedge positions taken by Lender or its
affiliates with respect to the LIBOR Interest Rate. Borrower acknowledges that such hedging transactions may include the sale of
U.S. Obligations or other securities and/or the execution of certain derivative transactions, which hedging transactions would
have to be “unwound” if all or any portion of the Loan is paid down.


 


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


 


“Hilton Brand
Operating Expense Account” shall have the meaning set forth in Section 6.8.1.


 


“Hilton Brand
Operating Expense Funds” shall have the meaning set forth in Section 6.8.1.


 


“Improvements”
shall have the meaning set forth in the granting clause of the Security Instruments.


 


“Indebtedness”
shall mean, for any Person, without duplication: (i) all indebtedness of such Person for borrowed money, for amounts drawn
under a letter of credit, or for the deferred purchase price of property for which such Person or its assets is liable (including,
without limitation, so-called property-assessed clean energy or similar loans), (ii) all unfunded amounts under a loan agreement,
letter of credit, or other credit facility for which such Person would be liable if such amounts were advanced thereunder, (iii) 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, (iv) all indebtedness guaranteed by such Person, directly or indirectly, (v) all
obligations under leases that constitute capital leases for which such Person is liable, and (vi) all obligations of such
Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is
liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise
assures a creditor against loss.


 


“Indemnified
Liabilities” shall have the meaning set forth in Section 11.13(b).


 


“Indemnified
Persons” shall have the meaning set forth in Section 9.2(b).


 


“Indemnity
Agreement” means an Indemnity Agreement dated as of the date hereof by a Borrower which is the owner of a Property, American
Realty Capital Hospitality Operating Partnership, L.P., American Realty Capital Hospitality Trust, Inc., American Realty Capital
Hospitality Portfolio Member GP, LLC, American Realty Capital Hospitality Portfolio Member, L.P., ARC Hospitality Portfolio II
Holdco, LLC, ARC Hospitality Portfolio II Mezz GP, LLC, and ARC Hospitality Portfolio II Mezz, LP, for the benefit of the Borrower
which is the lessee of


 




    	S-I-15



    	 



    

 


such Property under an
Operating Agreement and ARC Hospitality Portfolio II TRS Holdco, LLC, and American Realty Capital Hospitality Grace Portfolio,
LLC.


 


“Independent
Director” shall have the meaning set forth in clause (bb) of Schedule III attached hereto.


 


“Insolvency
Opinion” shall mean, as the context may require, (i) that certain bankruptcy non-consolidation opinion letter dated
the date hereof delivered by Duane Morris in connection with the Loan or (ii) any other bankruptcy non-consolidation opinion
letter delivered to Lender in connection with the Loan, including any bankruptcy non-consolidation opinion letter delivered to
Lender after the closing of the Loan pursuant to the terms and conditions of the Loan Documents, which post-closing opinion shall
be from counsel, and in form and substance, in each case reasonably acceptable to Lender and acceptable to the Rating Agencies
in their sole discretion.


 


“Insurance
Account” shall have the meaning set forth in Section 6.4.1.


 


“Insurance
Funds” shall have the meaning set forth in Section 6.4.1.


 


“Insurance
Premiums” shall have the meaning set forth in Section 5.1.1(b).


 


“Insurance
Proceeds” shall mean all payments from any insurance company payable as a result of the Policies required by Article 5
or any other insurance policy covering the Property and/or Borrower.


 


“Intercreditor
Agreement” shall have the meaning set forth in Section 12.3.


 


“Interim Disbursement
Date” shall have the meaning set forth in Section 6.11.1(b).


 


“Interest
Period” shall have the meaning set forth in Section 2.3.1.


 


“Interest
Rate Protection Agreement” shall have the meaning provided in Section 2.8.1(a).


 


“Interest
Rate Protection Trigger Date” shall mean the date, if any, that LIBOR first equals or exceeds two percent (2.00%).


 


“Intermediate
Manager” shall mean, if any, individually or collectively, as the context may require, American Realty Capital Hospitality
Properties, LLC, American Realty Capital Hospitality Grace Portfolio, LLC or such other Person retained by one or more Borrowers
to contract for property management services with a Property Manager, approved by Lender and the Rating Agencies in accordance
with the terms and conditions of the Loan Documents, including, without limitation, Article 7 of this Agreement.


 


“Intermediate
Management Agreement” shall mean, if any, individually or collectively, as the context may require, certain property
management agreements entered into by one or more Borrowers with an Intermediate Manager to provide management and other services
with respect to one or more Properties, as the same may be amended, restated, replaced,


 




    	S-I-16



    	 



    

 


supplemented or otherwise
modified from time to time in accordance with the terms and provisions of this Agreement.


 


“Ladder’s
Proposed Financing” shall have the meaning provided in Section 11.26.3.


 


“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 the 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. The term “Lease” excludes Operating Leases, but includes all subleases under an Operating Lease (whether
or not identified as a sublease on the face thereof).


 


“Lease Termination
Payments” shall have the meaning set forth in Section 6.6.1(b)(i).


 


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


 


“Lender”
shall have the meaning set forth in the Recitals to this Agreement.


 


“Lender Indemnified
Parties” “ shall mean Lender and any designee of Lender, any Affiliate of Lender that has filed any registration
statement relating to a Securitization or has acted as the issuer, sponsor, depositor or seller in connection with such Securitization,
any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in a Securitization,
any other co-underwriters, co-placement agents or co-initial purchasers of Securities issues in a Securitization, each Person who
controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any such Person,
any Person who is, was or will have been involved in the origination of the Loan, any Person who is, was or will have been involved
in the servicing of the Loan, any Person in whose name the Lien created by the Loan Documents are, were or will be recorded or
filed, any Person who may hold or acquire, held or will have held a full or partial interest in the Loan (including, but not limited
to, investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have
held a full or partial interest in the Loan for the benefit of third


 




    	S-I-17



    	 



    

 


parties), any Person
who holds or acquires, held or will have held a participation or other full or partial interest in the Loan, whether during the
Term or as a part of or following a foreclosure thereof, any successors by merger, consolidation or acquisition of all or a substantial
portion of Lender’s assets and business, as well as the respective directors, officers, shareholders, partners, members,
employees, agents, servants, representatives, contractors, subcontractors, Affiliates, participants, successors and assigns of
any and all of the foregoing. For the avoidance of doubt, and without limiting the generality of the foregoing, “Lender Indemnified
Parties” shall include the initial named Lender hereunder and each Lender that has held an interest in the Loan at any time
during the Term, including prior to the occurrence of the act or omission giving rise to the applicable Indemnified Liabilities.


 


“Lender Refinancing
Term Sheet” shall have the meaning provided in Section  11.26.1(b).


 


“Lender Transfer
Requirements” shall mean, with respect to a proposed transferee of a direct or indirect interest, or Person acquiring
Control, in a Restricted Party, a requirement that Borrower deliver, or cause to be delivered, at Borrower’s sole cost and
expense, such customary searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) as
Lender may reasonably require with respect to such transferee or Person, its owners and/or Controlling Persons, as applicable,
the results of which must be reasonably acceptable to Lender (unless such transferee or Person, its owners and/or Controlling Persons,
as applicable, were previously the subject of searches by Lender which were reasonably acceptable to Lender, in which case Borrower’s
obligation to deliver or cause the delivery of such searches with respect to such Person(s) shall be satisfied to the extent reasonably
acceptable updates to such searches are delivered to Lender), and such transferee or Person, its owners and Controlling Persons
shall otherwise satisfy Lender’s then current applicable underwriting criteria and requirements.


 


“Letter of
Credit” shall mean an irrevocable, unconditional, transferable (without the payment of a transfer fee), clean, evergreen
(or not expiring until at least thirty (30) Business Days after the Stated Maturity Date) sight draft letter of credit acceptable
to Lender and the Rating Agencies in favor of Lender and entitling Lender to draw thereon in New York, New York based solely on
a statement purportedly executed by an officer of Lender stating that it has the right to draw thereon issued by a domestic Eligible
Institution or the U.S. agency or branch of a foreign Eligible Institution and with respect to which Borrower has no reimbursement
obligation. The evergreen clause of each Letter of Credit shall provide that the expiration date of such Letter of Credit
shall automatically extend (i.e., without requiring a consent, approval, amendment or other modification) for additional periods
from the current or each future expiration date unless the issuing bank provides Lender and Servicer with written notice that such
Letter of Credit will not be renewed at least sixty (60) days, and not more than ninety (90) days, prior to the date on which the
outstanding Letter of Credit is scheduled to expire. Lender shall have the right immediately to draw down any Letter of Credit
in full and hold the proceeds of such draw in the same manner as funds deposited in the Reserve Funds (i) if at any time the
bank issuing any such Letter of Credit shall cease to be an Eligible Institution, (ii) with respect to an evergreen Letter
of Credit, if Lender has received a notice from the issuing bank that the 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,


 




    	S-I-18



    	 



    

 


(iii) 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 thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled
to expire, (iv) 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 prior to such termination), or (v) during the continuance of an Event of Default. Notwithstanding anything to the
contrary contained in the above, Lender is not obligated to draw any Letter of Credit upon the happening of any of the foregoing
events and shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit
if Lender has not drawn the Letter of Credit.


 


“Liabilities”
shall have the meaning set forth in Section 9.2(b).


 


“LIBOR”
shall mean, with respect to any Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest one-eighth (1/8th)
of one percent (1%)) reported, with respect to the initial Interest Period, at 11:00 a.m. London time on the date of this Agreement
(or if such date is not a Eurodollar Business Day, the immediately preceding Eurodollar Business Day), and thereafter, at 11:00
a.m. London time on the date two (2) Eurodollar Business Days prior to the last day of the Interest Period preceding the applicable
Interest Period (such date, the “LIBOR Determination Date”), on Reuters Page LIBOR01 as the non-reserve adjusted
London Interbank Offered Rate for U.S. dollar deposits having a thirty (30) day term and in an amount of $1,000,000.00 or more
(or on such other page as may replace said Page LIBOR01 on that service or such other service or services as may be nominated by
the British Bankers Association for the purpose of displaying such rate, all as determined by Lender in its sole but good faith
discretion). In the event that (i) more than one such LIBOR is provided, the average of such rates shall apply, or (ii) no such
LIBOR is published, then LIBOR shall be determined from such comparable financial reporting company as Lender in its sole but good
faith discretion shall determine. LIBOR for any Interest Period shall be adjusted from time to time by increasing the rate thereof
to compensate Lender, to the extent rate increases shall be imposed on similarly situated loans held by Lender, for any aggregate
reserve requirements (including, without limitation, all basic, supplemental, marginal and other reserve requirements and taking
into account any transitional adjustments or other scheduled changes in reserve requirements during any Interest Period) which
are required to be maintained by Lender with respect to “Eurocurrency Liabilities” (as presently defined in Regulation
D of the Board of Governors of the Federal Reserve System) of the same term under Regulation D, or any other regulations of a Governmental
Authority having jurisdiction over Lender or such Funding Party of similar effect.


 


“LIBOR Determination
Date” shall have the meaning set forth in the definition of “LIBOR” above.


 


“LIBOR Interest
Rate” shall have the meaning set forth in Section 2.2.1.


 


“Lien”
shall mean any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, easement, restrictive covenant, preference,
assignment, security interest, or any other encumbrance, charge or transfer of, or any agreement to enter into or create any of
the


 




    	S-I-19



    	 



    

 


foregoing, on or affecting
all or any portion of the Property or any interest therein, or any direct or indirect interest in Borrower or any SPC 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, any lien associated with a so-called property-assessed clean energy or
similar loan and mechanic’s, materialmen’s and other similar liens and encumbrances.


 


“Liquor Entity
Pledge Agreement” shall mean that certain Pledge and Security Agreement made by ARC Hospitality Portfolio TX Holdings,
LLC to Lender, acknowledged and agreed to by ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II NTC Owner,
LP.


 


“Liquor License
Subsidiary” shall mean ARC Hospitality Portfolio II Concessions, LLC, ARC Hospitality Portfolio II TX Management, LLC,
ARC Hospitality Portfolio II TX Holdings, LLC and ARC Hospitality Portfolio II TX Beverage Company, LLC.


 


“LLC Borrower”
shall mean, individually and collectively as the context requires, ARC Hospitality Portfolio II Owner, LLC, ARC Hospitality Portfolio
II TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC and ARC Hospitality Portfolio II HIL TRS, LLC, ARC Hospitality Stratford,
LLC and ARC Hospitality TRS Stratford, LLC.


 


“Loan”
shall mean the loan in the original principal amount of Two Hundred Twenty Seven Million and 00/100 Dollars ($227,000,000.00) made
by Lender to Borrower pursuant to this Agreement.


 


“Loan Documents”
shall mean, collectively, the Loan Agreement, the Note, the Security Instruments, the Assignment of Leases, the Cash Management
Agreement, the Clearing Account Agreement, the Environmental Indemnity, the Assignment of Intermediate Management Agreement, the
Assignment of Franchise Agreement, the Assignment of Property Management Agreement, the Assignment of Beverage Concession Agreement,
the Assignment of Beverage Management Agreement, the Assignment of Interest Rate Protection Agreement, if any, the Guaranty and
any other documents, agreements, certificates, affidavits and instruments now or hereafter evidencing, securing or delivered to
Secured Parties in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.


 


“Loan Taxes”
shall have the meaning provided in Section 2.6(a).


 


“Loan to Value
Ratio” shall mean a ratio, as determined by Lender, in which, as of any date of determination by Lender: (i) the
numerator is equal to the Outstanding Principal Balance and (ii) the denominator is equal to the appraised value of the Property
based on an Appraisal.


 


“LP Borrower”
shall mean individually and collectively as the context requires, ARC Hospitality Portfolio II NTC Owner, LP, ARC Hospitality Portfolio
II TRS, LP and ARC Hospitality Portfolio II NTC HIL TRS, LP.


 


“Major Contract”
shall mean (i) any management or franchise (other than the Intermediate Management Agreement, the Property Management Agreement
and the Franchise


 




    	S-I-20



    	 



    

 


Agreement), interim beverage,
brokerage or leasing agreement, (ii) any cleaning, maintenance, service or other contract or agreement of any kind (other
than Leases) of a material nature (materiality for these purposes to include contracts in excess of $50,000.00 or which extend
beyond one year (unless cancelable on thirty (30) days or less notice)), or (iii) the Collective Bargaining Agreement, in either
case relating to the ownership, leasing, management, use, operation, maintenance, repair or restoration of the Property, whether
written or oral.


 


“Material
Action” shall mean, with respect to any Person, to institute proceedings to have such Person be adjudicated bankrupt
or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against such Person or file a petition seeking,
or consent to, reorganization or relief with respect to such Person under any applicable federal, state, local or foreign law relating
to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official)
of such Person or a substantial part of its property, or make any assignment for the benefit of creditors of such Person, or admit
in writing such Person’s inability to pay its debts generally as they become due, or declare or effectuate a moratorium on
the payment of any obligation, or take action in furtherance of any such action.


 


“Material
Adverse Effect” shall mean any material adverse effect upon (i) the business operations, economic performance, assets,
condition (financial or otherwise), equity, contingent liabilities, prospects, material agreements or results of operations of
Borrower, any SPC Party, Guarantor or the Property, (ii) the ability of Borrower or Guarantor to perform their respective
obligations under any of the Loan Documents, (iii) the enforceability or validity of any of the Loan Documents, the perfection
or priority of any Lien created under any of the Loan Documents or the rights, interests or remedies of Lender under any of the
Loan Documents, or (iv) the value, use operation of, or cash flows from, the Property.


 


“Material
Alteration” shall have the meaning set forth in Section 4.1.11.


 


“Material
Equipment Leases” shall mean, collectively, Equipment Leases of a material nature (materiality for these purposes to
include contracts in excess of $50,000.00 or which extend beyond one year (unless cancelable on thirty (30) days or less notice)),
whether written or oral.


 


“Maturity
Date” shall mean the date on which the final payment of principal of the Note becomes due and payable as herein and therein
provided, whether at the Stated Maturity Date or the Extended Maturity Date, by declaration of acceleration, or otherwise.


 


“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.


 


“Minimum Disbursement
Amount” shall mean Twenty-Five Thousand and No/100 Dollars ($25,000.00).


 


“Minimum Interest
Required Payment” shall mean, as of the date of any prepayment or repayment of the Loan in whole or in part or the acceleration
thereof in accordance with the


 




    	S-I-21



    	 



    

 


terms of the Loan Documents,
an amount equal to the positive difference between (i) the Applicable Minimum Interest Amount and (ii)(a) in connection with any
prepayment or repayment of the Loan in whole or in part or acceleration thereof prior to the Extension Period, the aggregate amount
of all accrued interest on the Loan, or the portion thereof being prepaid, as applicable, that has been paid by Borrower during
the Term of the Loan (but excluding any interest paid at the Default Rate), inclusive of any Minimum Interest Required Payments
previously made by Borrower during the Term of the Loan, and (b) in connection with any prepayment or repayment of the Loan in
whole or in part or acceleration thereof during the Extension Period, the aggregate amount of all accrued interest on the Loan,
or the portion thereof being prepaid, as applicable, that has been paid by Borrower during the Extension Period (but excluding
any interest paid at the Default Rate), inclusive of any Minimum Interest Required Payments previously made by Borrower during
the Extension Period; provided, however, that in no event shall the Minimum Interest Required Payment be less than zero (0). The
calculation of the Minimum Interest Required Payment shall be made by Lender and shall be final and binding absent manifest error.


 


“Monthly Debt
Service Payment” shall have the meaning set forth in Section 2.3.1.


 


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


 


“Monthly Payment
Date” shall mean the sixth (6th) day of every calendar month occurring during the Term commencing with April 6, 2015.


 


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


 


“Net Cash
Flow” shall mean, for the period in question, the amount obtained by subtracting Operating Expenses and Capital Expenditures
for such period from Gross Revenue for such corresponding period.


 


“Net Operating
Income” shall mean, for the period in question, the amount obtained by subtracting Operating Expenses for such period
from Gross Revenue for such corresponding period.


 


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


 


“Net Proceeds
Deficiency” shall have the meaning set forth in Section 5.3.2(f).


 


“New Mezzanine
Loan” shall have the meaning set forth in Section 9.3.


 


“New Note”
shall have the meaning set forth in Section 9.1(k).


 




    	S-I-22



    	 



    

 


“Non Hilton
Brand Operating Expense Account” shall have the meaning set forth in Section 6.8.2.


 


“Non Hilton
Brand Operating Expense Funds” shall have the meaning set forth in Section 6.8.2.


 


“Note”
shall have the meaning set forth in Section 2.1.2.


 


“Notice”
shall have the meaning set forth in Section 11.6.


 


“NRSRO”
shall mean any credit rating agency that has elected to be treated as a nationally-recognized statistical rating agency for purposes
of the Exchange Act irrespective of whether or not such credit rating agency has been engaged by Lender or another Indemnified
Person to rate any of the Securities issued in connection with a Securitization of the Loan or any portion thereof.


 


“O&M Program”
shall have the meaning set forth in Section 4.1.18.


 


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


 


“OFAC”
shall have the meaning set forth in Section 4.2.15(b).


 


“Officer’s
Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by an authorized senior officer
of an SPC Party.


 


“Operating
Expense Account” shall have the meaning set forth in Section 6.8.2.


 


“Operating
Expense Funds” shall have the meaning set forth in Section 6.8.2.


 


“Operating
Expenses” shall mean all costs and expenses of operating, maintaining, directing, managing and supervising the Property
(excluding (i) depreciation and amortization, (ii) any Debt Service, (iii) any Capital Expenditures, (iv) deposits
required to be made to the Reserve Funds, or (v) the costs of any other things specified to be done or provided at Property
Manager’s or Intermediate Manager’s sole cost and expense), incurred by Borrower, Property Manager or Intermediate
Manager pursuant to any Property Management Agreement or any Intermediate Property Management Agreement, or as otherwise specifically
provided therein, which are properly attributable to such period under Borrower’s system of accounting, including, without
limitation: (a) the cost of all food and beverages sold or consumed and of all necessary chinaware, glassware, linens, flatware,
uniforms, utensils and other items of a similar nature, including such items bearing the name or identifying characteristics of
the hotel as Borrower, Property Manager and/or Intermediate Manager shall reasonably consider appropriate (collectively, the “Operating
Equipment”) and paper supplies, cleaning materials and similar consumable items (collectively, the “Operating
Supplies”) placed in use (other than reserve stocks thereof in storerooms), provided Operating Equipment and Operating
Supplies shall be considered to have been placed in use when they are transferred from the storerooms of the Property to the appropriate
operating departments; (b) salaries and wages of personnel of the Property, including costs of payroll taxes and employee
benefits (which benefits may include,


 




    	S-I-23



    	 



    

 


without limitation, a
pension plan, medical insurance, life insurance, travel accident insurance and an executive bonus program) and the costs of moving
employees of the Property and their families and their belongings to the area in which the Property is located at the commencement
of their employment at the Property and all other expenses not otherwise specifically referred to in this definition which are
referred to as “Administrative and General Expenses” in the Uniform System of Accounts; (c) the cost of all other
goods and services obtained by Borrower, Property Manager or Intermediate Manager in connection with its operation of the Property,
including, without limitation, heat and utilities, office supplies and all services performed by third parties, including leasing
expenses in connection with telephone and data processing equipment, and all existing and any future installations necessary for
the operation of the Improvements for hotel purposes (including, without limitation, heating, lighting, sanitary equipment, air
conditioning, laundry, refrigerating, built-in kitchen equipment, telephone equipment, communications systems, computer equipment
and elevators), Operating Equipment and existing and any future furniture, furnishings, wall coverings, fixtures and hotel equipment
necessary for the operation of the Property for hotel purposes which shall include all equipment required for the operation of
kitchens, bars, laundries (if any), and dry cleaning facilities (if any), office equipment, cleaning and engineering equipment
and vehicles; (d) the cost of repairs to and maintenance of the Property other than of a capital nature; (e) Insurance
Premiums and losses incurred on any self-insured risks of the foregoing types, provided that (1) Lender has specifically
approved in advance such self-insurance or (2) insurance is unavailable to cover such risks. Insurance Premiums will be prorated
over the period of insurance and Insurance Premiums under blanket Policies will be allocated among properties covered; (f) all
Taxes and Other Charges (other than federal, state or local income taxes and franchise taxes or the equivalent) payable by or assessed
against Borrower, Property Manager or Intermediate Manager with respect to the operation of the Property; (g) legal fees and
fees of any firm of independent certified public accounts designated from time to time by Borrower (the “Independent CPA”)
for services directly related to the operation of the Property; (h) the costs and expenses of technical consultants and specialized
operational experts for specialized services in connection with non-recurring work on operational, legal, functional, decorating,
design or construction problems and activities, including the reasonable fees of Guarantor, any Affiliate of Guarantor or any subsidiary
or division of Guarantor or any Affiliate of Guarantor in connection therewith, provided that such employment of Guarantor, any
Affiliate of Guarantor or of any such subsidiary or division of Guarantor or any Affiliate of Guarantor is approved in advance
by Lender; provided, however, that if such costs and expenses have not been included in an Approved Annual Budget, then,
if such costs exceed $5,000 in any one instance, the same shall be subject to approval by Lender; (i) all expenses for advertising
the Property and all expenses of sales promotion and public relations activities; (j) all out-of-pocket expenses and disbursements
determined by the Independent CPA to have been reasonably, properly and specifically incurred by Borrower, Property Manager, Intermediate
Manager, Guarantor or any of their respective Affiliates pursuant to, in the course of and directly related to, the management
and operation of the Property under any Property Management Agreement and/or any Intermediate Management Agreement. Without limiting
the generality of the foregoing, such charges may include all reasonable travel, telephone, telegram, radiogram, cablegram, air
express and other incidental expenses, but excluding costs relating to the offices maintained by Borrower, Property Manager, Intermediate
Manager, Guarantor, or any of their respective Affiliates other than the offices maintained at the Property for the management
of the Property and excluding transportation


 




    	S-I-24



    	 



    

 


costs of Borrower, Property
Manager or Intermediate Manager related to meetings between Borrower, Property Manager and/or Intermediate Manager with respect
to administration of the Property Management Agreement and/or Intermediate Management Agreement, as applicable, or of the Property
involving travel away from such party’s principal offices; (k) the cost of any reservations system, any accounting services
or other group benefits, programs or services from time to time made available to the Property; (l) the cost associated with
any Leases; (m) any management fees, basic and incentive fees or other fees and reimbursables paid or payable to Property
Manager and/or Intermediate Manager under the Property Management Agreement and/or Intermediate Management Agreement; and (n) any
franchise fees or other fees and reimbursables paid or payable to Franchisor under the Franchise Agreement.


 


“Operating
Lease” shall mean those operating leases identified on Schedule XIII, attached hereto and made a part hereof.


 


“Origination
Fees” shall have the meaning set forth in Section 2.1.4.


 


“Other Charges”
shall mean all ground rents, 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 the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.


 


“Other Obligations”
shall mean (i) the performance of all obligations of Borrower contained herein; (ii) the performance of each obligation
of Borrower contained in the Note or any other Loan Document; and (iii) the performance of each obligation of Borrower 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.


 


“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.


 


“Patriot Act
Offense” shall have the meaning set forth in Section 4.2.15(b).


 


“Permitted
Common Equity Buyout Event” shall mean, following or concurrently with a Permitted Preferred Equity Changeover Event,
a purchase by Preferred Equity Investors (or Affiliates of Preferred Equity Investors), in a single consensual transaction, of
one hundred percent (100%) of the interest in Pool II Holdco held by the Common Equity Member, including a purchase effected pursuant
to the buy/sell terms in Section 3.4 of the Pool II Holdco Operating Agreement, provided that such transaction includes a full
and final termination of all right, title, and interest of ARCHOP and its Affiliates in any direct or indirect interest in Borrower
(other than any direct or indirect interest held by any such Person in Whitehall).


 




    	S-I-25



    	 



    

 


“Permitted
Preferred Equity Changeover Event” shall mean a change in Control of Pool II Holdco pursuant to a “Changeover Event”,
as described in Section 3.3 of the Pool II Holdco Operating Agreement, that satisfies all of the conditions of Section 8.2(c) hereof.


 


“Permitted
Encumbrances” shall mean, collectively, (i) the Liens and security interests created by the Loan Documents, (ii) all
encumbrances and other matters disclosed in the Title Insurance Policy and otherwise acceptable to Lender in its sole discretion,
(iii) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent (other than Liens associated
with any so-called property-assessed clean energy or similar loans), (iv) any workers’, mechanics’ or similar
Liens on the Property provided any such Lien is discharged or bonded in accordance with Section 3.6 of each Security Instrument,
and (v) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion.



 


“Permitted
Indebtedness” shall have the meaning set forth in clause (d) of Schedule III attached hereto


 


“Permitted
Investments” shall have the meaning set forth in the Cash Management Agreement.


 


“Permitted
Transferee” shall mean a corporation, partnership (including a limited or limited liability limited partnership), limited
liability company or other type of entity acceptable to Lender that satisfies the following conditions: (i) such transferee
and Transferee’s Principals shall be acceptable to Lender, which determination shall be based upon, inter alia, (a) such
transferee and Transferee’s Principals having an aggregate net worth and liquidity reasonably satisfactory to Lender, (b) Lender’s
receipt of searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) reasonably required
by Lender on such transferee and Transferee’s Principals, the results of which must be reasonably acceptable to Lender, and
(c) such transferee and Transferee’s Principals otherwise satisfying Lender’s then current applicable underwriting
criteria and requirements, (ii) such transferee shall qualify as a single purpose, bankruptcy remote entity under criteria
established by the Rating Agencies, and (iii) if an Insolvency Opinion has previously been delivered in connection with the
Loan, such transferee shall have delivered to Lender a new Insolvency Opinion, and (iv) such transferee, together with
Transferee’s Principals, shall be an experienced operator and/or owner of properties similar in location, size, class, use,
operation and value as the Property, as evidenced by financial statements and other information reasonably requested by Lender
or requested by the Rating Agencies.


 


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


 


“Personal
Property” shall, with respect to each Property, have the meaning set forth in the Security Instrument executed by the
Borrowers owning an interest in such Property.


 


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


 




    	S-I-26



    	 



    

 


“PIP Alterations”
shall mean, with respect to each Property, any repair, maintenance, alterations or improvements at such Property required to be
made in accordance with the respective PIP Plan or any new PIP plan imposed by a Franchisor.


 


“PIP Budget”
shall mean, with respect to each Property, the projected budget associated with the PIP Alterations for such Property, each of
which is set forth and attached hereto as Exhibit P-2, as approved by Lender in its reasonable discretion, together with
such modifications or amendments to such budgets approved by Lender in accordance with Section 4.1.19 hereof and/or any
additional detail provided pursuant to Section 4.1.19(b) hereof.


 


“PIP Completion
Date” shall mean the date for completion of PIP Alterations as required under any PIP Plan.


 


“PIP Plan”
shall mean, with respect to each Property, the applicable PIP attached hereto as Exhibit P-1.


 


“PIP Reserve
Account” shall have the meaning set forth in Section 6.6.1.


 


“PIP Reserve
Funds” shall have the meaning set forth in Section 6.6.1.


 


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


 


“Policies”
shall have the meaning set forth in Section 5.1.1(b).


 


“Pool I Common
Equity Investors” shall mean the holders, from time to time, of any membership interest in Pool I Holdco other than a
Class A membership interest.


 


“Pool I Holdco”
shall mean ARC Hospitality Portfolio I Holdco, a Delaware limited liability company.


 


“Pool I Holdco
Operating Agreement” shall mean the Amended and Restated Limited Liability Agreement of Pool I Holdco (as it exists on
the date hereof and without giving effect to any amendments to the terms thereof made after the date hereof).


 


“Pool I Preferred
Equity Investors” shall mean the holders, from time to time, of any Class A membership interest in Pool I Holdco.


 


“Pool I Redemption
Price” shall have the meaning ascribed to the term “Redemption Price” in the Pool I Holdco Operating Agreement.


 


“Pool II Common
Equity Investors” shall mean the holders, from time to time, of any membership interest in Pool II Holdco other than
a Class A membership interest.


 


“Pool II Holdco”
shall mean ARC Hospitality Portfolio II Holdco, LLC, a Delaware limited liability company.


 




    	S-I-27



    	 



    

 


“Pool II Holdco
Operating Agreement” shall mean the Amended and Restated Limited Liability Agreement of Pool II Holdco (as it exists
on the date hereof and without giving effect to any amendments to the terms thereof made after the date hereof).


 


“Portfolio
Valuation” shall mean a valuation method based on the assumption that each of the Properties which are the subject of
such Appraisal is marketed and sold in a single multi-parcel transaction rather than in separate transactions for separate parcels.
Borrowers acknowledge that there is no assurance that such methodology will have any impact on the appraiser’s opinion of
value.


 


“Preferred
Equity Change in Control Notice” shall have the meaning provided in Section 8.2(c).


 


“Preferred
Equity Investor” shall mean W2007 Equity Inns Trust, a Maryland Trust, and W2007 Equity Inns Partnership, L.P., a Tennessee
limited partnership, individually and collectively as the context may require, together with their respective permitted successors
and assigns.


 


“Preferred
Equity Interest” shall mean any issued and outstanding equity interest in Pool II Holdco if the holder thereof has a
right, exercisable individually or in conjunction with the holders of any other Preferred Equity Interests, to acquire Control
of Pool II Holdco as a result of the occurrence of a “Changeover Event” (as defined in the organizational documents
of Pool II Holdco).


 


“Prohibited
Transaction” shall mean any action or transaction which would cause any obligation, or action taken or to be taken, hereunder
(or the exercise by Lender 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 ERISA or Section 4975 of the Code.


 


“Property”
or “Properties” shall mean the parcels of real property, the Improvements thereon and all personal property
owned by Borrower and encumbered by the Security Instruments, together with all rights pertaining to such property and Improvements,
all as more particularly described in the granting clause of the Security Instruments.


 


“Property
Management Agreement” shall mean, individually or collectively, as the context may require, (i) to the extent any Borrower
shall have entered into an Intermediate Management Agreement in respect of any Property, one or more property management agreements
entered into by and between the applicable Intermediate Manager and a Property Manager pursuant to which such Property Manager
agrees to undertake all of the obligations of such Intermediate Manager under the applicable Intermediate Management Agreement
or to perform property management services for the applicable Property, or (ii) one or more property management agreements entered
into by and between certain Borrowers and a Property Manager pursuant to which such Property Manager agrees to perform property
management services for those Properties owned or leased by such Borrowers, in each case, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time in accordance with the


 




    	S-I-28



    	 



    

 


terms and provisions
of this Agreement, or, if the context requires the Replacement Management Agreement executed in accordance with the terms and provisions
of this Agreement.


 


“Property
Manager” shall mean, individually or collectively, as the context may require, (a) each property manager listed on Schedule
XI attached hereto, (b) any other property manager engaged in accordance with the terms hereof, or (c) any other property manager
approved by Lender and the Rating Agencies in accordance with the terms and conditions of the Loan Documents, including, without
limitation, Article 7 of this Agreement.


 


“Proposed
Financing” shall have the meaning provided in Section 11.26.2.


 


“QCR Redemption
Amount” shall have the meaning ascribed to that term in the Pool II Holdco Operating Agreement.


 


“Qualified
Affiliated Manager Equity Holder” shall mean (i) AR Capital, LLC or any of its Affiliates, (ii) Barceló Crestline
Corporation or any of its Affiliates, (iii) any Qualified Manager or any of their respective Affiliates, or (iv) a bank, savings
and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund
or pension advisory firm, mutual fund, government entity or plan, real estate company, investment fund or an institution substantially
similar to any of the foregoing, provided, in each case under this clause (iv) that such Person (x) has total assets (in
its name or under its management) in excess of $50,000,000.00 and (except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder’s equity in excess of $10,000,000.00, (y) is regularly engaged in the business of
directly or indirectly owning or operating hotel properties similar to, or better than, the Properties, and (z) at the time of
the applicable Transfer, directly or indirectly owns or operates no less than twenty (20) hotel properties similar to, or better
than, the Properties containing an aggregate of no less than three thousand (3000) keys (in each case of clauses (x) through
(z) above, exclusive of the Properties), or (iv) any other Person reasonably approved by Lender.  In no event, however,
shall a Person be deemed a Qualified Equity Holder for purposes of this Agreement if (i) such Person shall be American Realty Capital
Properties, Inc. or any of its Affiliates or (ii) such Person or its Affiliates (1) is or has during the previous ten (10) years
been the subject of a Bankruptcy Action, (2) has been convicted in a criminal proceeding for a felony or any crime involving moral
turpitude or is an organized crime figure or is reputed to have substantial business or other affiliations with any organized crime
figure, or (3) is listed on any Government Lists.


 


“Qualified
Capital Raise” shall mean the issuance of debt or equity interests in the REIT or in any subsidiary of the REIT (excluding
any such issuance completed on or before the date hereof).


 


“Qualified
Equity Holder” shall mean (i) Guarantor or (ii) a bank, savings and loan association, investment bank, insurance company,
trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity
or plan, real estate company, investment fund or an institution substantially similar to any of the foregoing, provided, in each
case under this clause (ii) that such Person (x) has total assets (in its name or under its management) in excess of $1,000,000,000.00
and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity
in


 




    	S-I-29



    	 



    

 


 


excess of $400,000,000.00
(in both cases, exclusive of the Property), (y) is regularly engaged in the business of directly or indirectly owning or operating
hotel properties similar to, or better than, the Properties, and (z) at the time of the applicable Transfer, directly or indirectly
owns or operates no less than fifty (50) hotel properties similar to, or better than, the Properties, containing an aggregate of
no less than seven thousand (7,000) keys (in each case of clause (x) through clause (z) above, exclusive of the Properties),
or (iii) any other Person reasonably approved by Lender. In no event, however, shall a Person be deemed a Qualified Equity Holder
for purposes of this Agreement if (i) such Person shall be American Realty Capital Properties, Inc. or any of its Affiliates or
(ii) (x) such Person or its Affiliates (1) is or has during the previous ten (10) years been the subject of a Bankruptcy Action,
(2) has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude or is an organized crime figure
or is reputed to have substantial business or other affiliations with any organized crime figure, or (3) is listed on any Government
Lists.


 


“Qualified
Franchisor” shall mean (i) Franchisor or (ii) a reputable and experienced franchisor which, in the judgment
of Lender, possesses experience in flagging hotel properties similar in location, size, class, use, operation and value as the
Property; provided, that Lender, at its option, may require that Borrower shall have obtained (a) a Rating Agency Confirmation
from the Rating Agencies and (b) if such Person is an Affiliate of Borrower and an Insolvency Option has previously been delivered
in connection with the Loan, a new Insolvency Opinion.


 


“Qualified
IPO” shall mean the closing of a public offering of the equity of the Affiliated Manager pursuant to a registration statement
under the Securities Act of 1933, as amended, which results in aggregate cash proceeds to the Affiliated Manager of $100,000,000
(net of underwriting discounts and commissions). 


 


“Qualified
Manager” shall mean (i) Property Manager or (ii) a reputable and experienced manager (which may not be an Affiliate
of Borrower unless such Affiliated is approved by Lender in Lender’s sole discretion) which, in the judgment of Lender, possesses
experience in managing properties similar in location, size, class, use, operation and value as the Property; provided,
that Lender, at its option, may require that Borrower shall have obtained (a) a Rating Agency Confirmation from the Rating
Agencies and (b) if such Person is an Affiliate of Borrower and an Insolvency Option has previously been delivered in connection
with the Loan, a new Insolvency Opinion.


 


“Qualified
Pool I De-Leveraging” shall mean any distribution by Pool I Holdco to the Pool I Preferred Equity Investors that is applied
to reduction of the Pool I Redemption Price.


 


“Qualifying
Third Party Lender Term Sheet” shall have the meaning provided in Section 11.26.1(e).


 


“Rating Agencies”
shall mean, prior to the final Securitization of the Loan, each of S&P, Moody’s, Fitch, DBRS, Inc. and Morningstar Credit
Ratings, LLC or any other nationally-recognized statistical rating agency which has been designated by Lender and, after the final
Securitization of the Loan, shall mean any of the foregoing that have rated any of the Securities.


 




    	S-I-30



    	 



    

 


“Rating Agency
Confirmation” shall mean a written affirmation from each of the Rating Agencies that the credit rating of the Securities
given 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; provided, however, (i) if a
Securitization has occurred and either (a) any Rating Agency fails to respond to any request for a Rating Agency Confirmation
with respect to such event or otherwise elects (orally or in writing) not to consider such event or (b) Lender (or Servicer)
is not required to and has elected not to obtain (or cause to be obtained) a Rating Agency Confirmation with respect to such event,
in each case, pursuant to and in compliance with the Securitization’s pooling and servicing agreement (or similar agreement),
then, notwithstanding anything contained in this Agreement to the contrary, Lender’s written approval of such event shall
be required in lieu of a Rating Agency Confirmation, in the case of clause (i)(a) above, from such Rating Agency or
Rating Agencies (only) or, in the case of clause (i)(b) above, from each of the Rating Agencies or (ii) if a Securitization
has not occurred, then, notwithstanding anything contained in this Agreement to the contrary, the term “Rating Agency Confirmation”
shall be deemed instead to require Lender’s written approval of such event. In the event that either of clause (i) or
(ii) of the foregoing proviso applies, Lender’s approval shall be based on Lender’s good faith determination
of applicable Rating Agency standards and criteria, unless Lender has an independent approval right in respect of such event pursuant
to the other terms of this Agreement or the other Loan Documents, in which case the discretion afforded to Lender in connection
with such independent approval right shall apply.


 


“Recognition
Agreement” means the Recognition Agreement, dated as of the date hereof, made by and among Lender, W2007 Equity Inns
Partnership, L.P., a Tennessee limited partnership, and W2007 Equity Inns Trust, a Maryland trust.


 


“REA”
shall mean, collectively, as any of the same may be amended, restated, replaced, supplemented or otherwise modified from time to
time, those certain agreements more specifically described on Schedule XII attached hereto and made a part hereof and
including any other covenants, restrictions or agreements of record relating to the construction, operation or use of the Property.


 


“Refinancing
Material Terms” shall have the meaning provided in Section 11.26.3.


 


“Refinancing
Loan” shall have the meaning provided in Section 11.26.


 


“Refinancing
Loan Commitment” shall have the meaning provided in Section 11.26.


 


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


 


“Regulation
S-K” shall mean Regulation S-K of the Securities Act, as such regulation may be amended from time to time.


 


“Regulation
S-X” shall mean Regulation S-X of the Securities Act, as such regulation may be amended from time to time.


 




    	S-I-31



    	 



    

 


“REIT”
shall mean American Realty Capital Hospitality Trust, Inc., a Maryland corporation.


 


“Related Loan”
shall mean (i) a loan made to an Affiliate of Borrower or Guarantor or secured by a Related Property that is included in a
Securitization with the Loan or any portion thereof or interest therein or (ii) any loan that is cross-collateralized or cross-defaulted
with the Loan.


 


“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 the Property.


 


“Release Date”
shall have the meaning set forth in Section 2.6.1(a).


 


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


 


“Rents”
shall mean all rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in
a Bankruptcy Action) or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and
bonuses), income, fees, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits
(including, without limitation, cash, letters of credit or securities deposited under Leases to secure the performance by the lessees
of their obligations thereunder)), accounts, cash, issues, profits, charges for services rendered, and other payment and consideration
of whatever form or nature received by or paid to or for the account of or benefit of Borrower, Property Manager, Intermediate
Manager or any of their respective agents or employees from any and all sources arising from or attributable to the Property and
the Improvements, including, without limitation, all hotel receipts, revenues and credit card receipts collected from guest rooms,
restaurants, bars, meeting rooms, banquet rooms 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 any 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), license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage
wholesale and retail sales, service charges, vending machine sales and the Insurance Proceeds, if any, from business interruption
or other loss of income insurance, including Insurance Proceeds that Lender elects to treat as business or rental interruption
Insurance Proceeds pursuant to Section 5.2.3 of this Agreement.


 


“Replacement
Franchise Agreement” shall mean, collectively, (i)(a) a franchise, trademark and license agreement with a Qualified
Franchisor substantially in the same form and substance as the Franchise Agreement, or (b) a franchise, trademark and license
agreement with a Qualified Franchisor, which franchise, trademark and license agreement shall be in form and substance reasonably
acceptable to Lender; provided, that , with respect to this clause (b), Lender, at its option, may require that
Borrower shall have obtained a Rating Agency


 




    	S-I-32



    	 



    

 


Confirmation, and (ii) a
comfort letter/tri-party agreement/non-disturbance agreement/assignment of franchise agreement and subordination of franchise
fees or similar agreement in form and substance reasonably satisfactory to Lender, executed and delivered to Lender by such Qualified
Franchisor and, if necessary, Borrower.


 


“Replacement
Environmental Indemnity” shall mean an Environmental Indemnity substantially in the form attached as Exhibit D to the
Recognition Agreement.


 


“Replacement
Guaranty” shall mean a Guaranty of Recourse Obligations substantially in the form attached as Exhibit C to the
Recognition Agreement.


 


“Replacement
Guaranty Financial Covenants” shall mean the financial covenants contained in Section 5.2 of the Replacement Guaranty.


 


“Replacement
Management Agreement” shall mean, collectively, (i)(a) a management agreement with a Qualified Manager substantially
in the same form and substance as the Property Management Agreement that the Replacement Management Agreement would be replacing,
or (b) a management agreement with a Qualified Manager, which management agreement shall be in form and substance reasonably
acceptable to Lender (it being acknowledged that an agreement in the same form and substance of any of the Property Management
Agreements in place at the time of the closing of the Loan shall be deemed to be reasonably acceptable to Lender); provided,
that , with respect to this clause (b), Lender, at its option, may require that Borrower shall have obtained a Rating
Agency Confirmation, and (ii) an assignment of management agreement and subordination of management fees substantially in
the form of the Assignment of Property Management Agreement (or in such other form and substance reasonably satisfactory to Lender),
executed and delivered to Lender by Borrower and such Qualified Manager.


 


“Required
Repairs Account” shall have the meaning set forth in Section 6.2.1.


 


“Required
Repairs Funds” shall have the meaning set forth in Section 6.2.1.


 


“Required
Repairs” shall have the meaning set forth in Section 6.2.1.


 


“Reserve Accounts”
shall mean each of the Accounts established pursuant to the terms and conditions of this Agreement to hold Reserve Funds.


 


“Reserve Disbursement
Conditions” shall mean (i) Borrower shall have submitted a request for payment to Lender at least ten (10) days
prior to the date on which Borrower has requested such payment be made, which request specifies the Required Repairs, Approved
FF&E Expenses, or PIP Alterations, as applicable, to be paid, (ii) on the date such request is received by Lender and
on the date such payment is to be made, no Event of Default shall have occurred and be continuing, and (iii) Lender shall
have received (a) an Officer’s Certificate from Borrower (1) in the case of a requested disbursement of FF&E
Funds, stating that the items to be funded by the requested disbursement are Approved FF&E Expenses, and a description thereof,
(2) stating that all PIP Alterations, Required Repairs or Approved FF&E Expenses, as applicable, to be funded by the requested
disbursement have been completed in a good and workmanlike manner and in accordance with all applicable Legal Requirements, (3)
in the case of a requested


 




    	S-I-33



    	 



    

 


distribution of PIP Reserve
Funds or FF&E Funds for PIP Alterations, stating that such disbursement is for PIP Alterations contemplated by the applicable
PIP Plan and have been completed in accordance therewith, (4) identifying each Person that supplied materials or labor in
connection with the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, to be funded by the requested
disbursement, (4) stating that each such Person has been paid in full or will be paid in full upon such disbursement, (5) stating
that the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, to be funded have not been the subject
of a previous disbursement of Required Repair Funds, FF&E Funds, or PIP Reserve Funds, as applicable, (6) stating that
all previous disbursements of Required Repair Funds, FF&E Funds, or PIP Reserve Funds, as applicable, have been used to pay
the previously identified Required Repairs Approved FF&E Expenses, or PIP Alterations as applicable, and (7) stating that
all outstanding trade payables (other than those to be paid from the requested disbursement or those constituting Permitted Indebtedness)
have been paid in full, (b) a copy of any license, permit or other approval by any Governmental Authority required in connection
with the Required Repairs, FF&E Work, or PIP Alterations, as applicable, and not previously delivered to Lender, (c) lien
waivers or other evidence of payment satisfactory to Lender, (d) at Lender’s option, a title search for the Property
indicating that the Property is free from all Liens, claims and other encumbrances not previously approved by Lender, (e) at
Lender’s option, if the cost of the Required Repairs, Approved FF&E Expenses, or PIP Alterations, as applicable, exceeds
$25,000.00, a report satisfactory to Lender in its reasonable discretion from an architect or engineer approved by Lender in respect
of such architect or engineer’s inspection of the Required Repairs, FF&E Work, or PIP Work, as applicable, and (f) such
other evidence as Lender shall reasonably request to demonstrate that the Required Repairs, Approved FF&E Expenses, or PIP
Alterations, as applicable, to be funded by the requested disbursement have been completed and are paid for or will be paid upon
such disbursement to Borrower.


 


“Reserve Funds”
shall mean, collectively, all funds deposited by Borrower with Lender or the Cash Management Bank pursuant to Article 6
of this Agreement, including, but not limited to, FF&E Funds, the Insurance Funds, the Tax Funds, the Required Repair Funds,
the Operating Expense Funds, the Excess Cash Flow Funds, the PIP Reserve Funds, any other escrow or reserve fund established by
the Loan Documents and such other amounts deposited by or on behalf of Borrower with Lender as security for the Loan pursuant to
the Loan Documents.


 


“Restoration”
shall have the meaning set forth in Section 5.2.1.


 


“Restoration
Threshold” shall mean (a) with respect to any individual Property an amount equal to four percent (4%) of its Allocated
Loan Amount and (b) with respect to all Properties, an aggregate amount of Ten Million Dollars ($10,000,000).


 


“Restricted
Party” shall mean, collectively, (i) Borrower, any SPC Party, Guarantor, any Affiliated Franchisor and any Affiliated
Manager, (ii) any shareholder, partner, member, non-member manager or any other direct or indirect legal or beneficial owner
of Borrower, any SPC Party, Guarantor, any Affiliated Manager any Affiliated Franchisor, or any non-member manager, and
(iii) Preferred Equity Investor. For avoidance of doubt: (a) a Class A Member of Pool II Holdco, and the shareholders, partners,
members, managers, and other direct or indirect legal or beneficial owners of such Class A Member, shall no longer be Restricted
Parties from and after the consummation of a transaction by which the entire interest of such Class A Member


 




    	S-I-34



    	 



    

 


is acquired by a Class
B Member of Pool II Holdco in compliance with the terms and conditions hereof; and (b) a Class B Member of Pool II Holdco, and
the shareholders, partners, members, managers, and other direct or indirect legal or beneficial owners of such Class B Member,
shall no longer be Restricted Parties from and after the consummation of a transaction by which the entire interest of such Class
B Member is acquired by a Class A Member of Pool II Holdco in compliance with the terms and conditions hereof.


 


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


 


“Satisfactory
Guarantor Substitution Conditions” shall mean all of the following conditions: (a) a Satisfactory Replacement Guarantor
(i) assumes the obligations of Guarantor under the Guaranty and the Environmental Indemnity or (ii) executes and delivers
to Lender a replacement guaranty and a replacement environmental indemnity, in each case in form and substance substantially the
same as the Guaranty and the Environmental Indemnity, respectively, and otherwise reasonably acceptable to Lender, for liabilities
arising from any circumstance, condition, action or event first occurring after the effective date of such substitution; (b) concurrently
with such assumption or execution and delivery (i) such Satisfactory Replacement Guarantor (if a natural married person) delivers
to Lender a spousal consent in form and substance acceptable to Lender, as and to the extent applicable, and (ii) each of
Borrower, the remaining Guarantor and/or such Satisfactory Replacement Guarantor, as applicable, affirms each of their respective
obligations under the Loan Documents; (c) if required by Lender or the Rating Agencies, Borrower delivers to Lender an opinion
from counsel, and in form and substance, in each case reasonably acceptable to Lender and acceptable to the Rating Agencies in
their sole discretion stating, among other things, (i) that the Guaranty and the Environmental Indemnity (or the replacement
guaranty and environmental indemnity, as the case may be) are enforceable against such Satisfactory Replacement Guarantor in accordance
with their terms and (ii) that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as
a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be subject to tax
as a result of such Substitution; and (d) if required by Lender or the Rating Agencies and an Insolvency Opinion has previously
been delivered in connection with the Loan, Borrower delivers to Lender a new Insolvency Opinion.


 


“Satisfactory
Replacement Guarantor” shall mean a replacement guarantor that is acceptable to Lender, which determination shall be
based upon, inter alia, (A) such replacement guarantor having (1) a direct or indirect ownership interest in Borrower,
which is reasonably satisfactory to Lender, and (2) the ability to Control Borrower, (B) such replacement guarantor having
a net worth and liquidity reasonably satisfactory to Lender, (C) Lender’s receipt of searches (including credit, negative
news, OFAC, litigation, judgment, lien and bankruptcy searches) reasonably required by Lender on such replacement guarantor, the
results of which must be reasonably acceptable to Lender, (D) such replacement guarantor otherwise satisfying Lender’s
then current applicable underwriting criteria and requirements, and (E) such replacement guarantor being an experienced operator
and/or owner of properties similar in location, size, class, use, operation and value as the Property, as evidenced by financial
statements and other information reasonably requested by Lender or requested by the Rating Agencies; provided that the parties
hereto hereby acknowledge that any Qualified Equity Holder shall be deemed to satisfy clause (B) of this definition for
purposes of qualifying as a


 




    	S-I-35



    	 



    

 


Satisfactory Replacement
Guarantor so long as such Qualified Equity Holder covenants to satisfy the ongoing financial covenants contained in the Guaranty
and the Environmental Indemnity.


 


“Scheduled
Managers” shall refer to each of the Persons identified on Schedule XVII attached hereto.


 


“Secondary
Market Transaction” shall have the meaning set forth in Section 9.1(a).


 


“Securities”
shall have the meaning set forth in Section 9.1(a).


 


“Securities
Act” shall have the meaning set forth in Section 9.2(a).


 


“Securitization”
shall have the meaning set forth in Section 9.1(a).


 


“Security
Instruments” shall mean those certain first priority fee Mortgages, Assignments of Leases and Rents and Security Agreements
and Deeds of Trust, Assignments of Leases and Rents and Security Agreements, each dated as of the date hereof, executed and delivered
by Borrower as security for the Loan and encumbering the Properties, as the same may be amended, restated, replaced, supplemented
or otherwise modified form time to time.


 


“Servicer”
shall have the meaning set forth in Section 11.24.


 


“Servicing
Agreement” shall have the meaning set forth in Section 11.24.


 


“Severed Loan
Documents” shall have the meaning set forth in Section 10.2(c).


 


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


 


“SPC Party”
shall have the meaning set forth in clause (y) of Schedule III attached hereto.


 


“State”
shall mean the State or Commonwealth in which the applicable Property or any part thereof is located.


 


“Stated Maturity
Date” shall mean March 6, 2017; provided, however, if the Extension Option is duly exercised, the Stated Maturity
Date shall mean March 6, 2018.


 


“Survey”
shall mean a survey of the Property prepared by a surveyor licensed in the State and satisfactory to Lender and the company or
companies issuing the Title Insurance Policy, and containing a certification of such surveyor satisfactory to Lender.


 


“Tax Account”
shall have the meaning set forth in Section 6.3.1.


 


“Tax Funds”
shall have the meaning set forth in Section 6.3.1.


 


“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 Property or part thereof, together with all interest and penalties thereon.


 




    	S-I-36



    	 



    

  


“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 the Property.


 


“Tenant Direction
Letter” shall have the meaning set forth in Section 6.1.


 


“Tender Date”
shall mean the date of any prepayment of the Loan contemplated under Sections 2.4.1, 2.4.2 or 2.4.3.


 


“Term”
shall mean the entire term of this Agreement, which shall expire upon repayment in full of the Debt and full performance of each
and every obligation to be performed by Borrower pursuant to the Loan Documents.


 


“Term Sheet”
shall mean that certain term sheet dated January 23, 2015 (as amended) executed on behalf of Borrower, together with all exhibits
and documentation attached thereto and/or submitted by Borrower, Guarantor or their respective Affiliates in connection therewith.


 


“Third Party
Lender” shall have the meaning provided in Section 11.26.1(d).


 


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


 


“Transfer”
shall have the meaning set forth in Section 4.2.1.


 


“Transferee’s
Principals” shall mean, with respect to any proposed transferee, such transferee’s shareholders, partners, members
or non-member managers that, directly or indirectly, (i) own twenty percent (20%) or more of the legal, beneficial or economic
interests in such Transferee or (ii) are in Control of such Transferee.


 


“Treasury
Rate” shall mean, with respect to any Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest
one-eighth (1/8th) of one percent (1%)) reported, with respect to the initial Interest Period, at 11:00 a.m. New York time on the
date of this Agreement (or if such date is not a Business Day, the immediately preceding Business Day), and during any Interest
Period thereafter, at 11:00 a.m. New York time on the date two (2) Business Days prior to prior to the last day of the Interest
Period preceding the applicable Interest Period, equal to the then current yield to maturity, on an annual equivalent bond basis
(recalculated to a three hundred sixty (360) day year basis), of a U.S. Treasury bill, note or bond selected by Lender (a “Treasury
Note”) that is then actively trading in the secondary market and maturing one year following the date of such determination;
provided, however, that if such a Treasury Note is not then outstanding, the Treasury Rate shall be the per annum rate as of each
applicable determination date, equal to the current yield to maturity, on an annual equivalent bond basis (recalculated to a three
hundred sixty (360) day year basis), of a Treasury Note that Lender shall, in each case in its sole and absolute discretion, determine
as being appropriate to determine the Treasury Rate. If two or more issues of such Treasury Notes mature on the same day, then
Lender shall in its sole discretion select one such issue for purposes of determining the Treasury Rate.


 




    	S-I-37



    	 



    

  


“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.


 


“Underwritten
Gross Revenue” shall mean, as of any date of determination by Lender, all sustainable Gross Revenue for the preceding
twelve (12) month period as determined by Lender received by Borrower, Property Manager or Intermediate Manager for the use,
occupancy or enjoyment of the Property, or any part thereof, or received by Borrower, Property Manager or Intermediate Manager
for the sale of any goods, services or other items sold on or provided from the Property in the ordinary course of operating the
Property, including, but not limited to (i) all income and proceeds received from Leases and rental of rooms, commercial space
and meeting, conference and/or banquet space within the Property (including net parking revenue) and (ii) all income and proceeds
received from food and beverage operations and from catering services conducted from the Property even though rendered outside
of the Property, but excluding (a) gross receipts received by lessees, licensees or concessionaires of the Property, (b) consideration
received at the Property for hotel accommodations, goods and services to be provided at other hotels, although arranged by, for
or on behalf of Borrower, Property Manager or Intermediate Manager, (c) income and proceeds from the sale or other disposition
of goods, capital assets (including furniture, fixtures and equipment) and other items not in the ordinary course of operating
the Property, (d) federal, state and municipal excise, sales, use, occupancy or other taxes collected directly from patrons
or guests of the Property as a part of or based on the sales price of any goods, services or other items, such as gross receipts,
room, admission, cabaret or other taxes on receipts required to be accounted for by or on behalf of Borrower to any Governmental
Authority, (e) gratuities collected by the Property employees, (f) any credits or refunds made to customers, guests or
patrons in the form of allowances or adjustments to previously recorded revenues, (h) other refunds and uncollectible accounts,
(i) Insurance Proceeds (other than business or rental interruption or other loss of income insurance applicable to the period
under consideration (but only to the extent that the same is treated as business or rental interruption Insurance Proceeds pursuant
to Section 5.2.3)), (j) Awards, (k) security deposits, utility and other similar deposits, (l) any disbursements
to Borrower from the Reserve Funds, (m) interest on credit accounts, and (n) items of a non-recurring nature or other
income or proceeds resulting other than from the use or occupancy of the Property, or any part thereof, or other than from the
sale of goods, services or other items sold on or provided from the Property in the ordinary course of business. Lender’s
calculation of Underwritten Gross Revenue shall be subject to such other adjustments deemed necessary by Lender based on Lender’s
current applicable underwriting criteria and requirements and Lender’s good faith determination of applicable Rating Agency
criteria.


 


“Underwritten
Net Cash Flow” shall mean, as of any date of determination by Lender, (i) Underwritten Gross Revenue, less (ii)(a)
Adjusted Operating Expenses, and (b) FF&E Fund contributions equal to the greater of (1) assumed FF&E Fund contributions
in an amount equal to four percent (4%) of the Gross Revenue generated during the preceding twelve (12) month period and (2) deposits
required to be made to the FF&E Funds during the succeeding twelve (12) month period.


 




    	S-I-38



    	 



    

  


“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.


 


“Updated Information”
shall have the meaning set forth in Section 9.1(b)(i).


 


“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, not subject to prepayment,
call or early redemption or (ii) other non-callable “government securities” within the meaning of Treasury Regulations
Section 1.860G-2(a)(8)(ii), as amended, which (a) will not result in a reduction, downgrade or withdrawal of the ratings
for the Securities or any class thereof issued in connection with a Securitization, (b) are then outstanding, and (c) are
then being generally accepted by the Rating Agencies without any reduction, downgrade or withdrawal of the ratings for the Securities
or any class thereof issued in connection with a Securitization.


 


“Whitehall” shall mean,
collectively, Whitehall Global Real Estate Fund and Whitehall Parallel Global Real Estate Fund.


 


“Whitehall Global Real Estate Fund”
shall mean Whitehall Street Global Real Estate Limited Partnership 2007, a Delaware limited partnership.


 


“Whitehall
Parallel Global Real Estate Fund” shall mean Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware
limited partnership.


 


“Zoning Reports” shall have the
meaning set forth in Section 3.1.9.


 




    	S-I-39



    	 



    

 


SCHEDULE
II


 


BORROWERS


 


	Borrower Name	 	Organization

type	 	State of

Formation	 	Organizational

ID
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II Owner, LLC	 	Limited liability company	 	Delaware	 	5573787
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II TRS, LLC	 	Limited liability company	 	Delaware	 	5573795
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II MISC TRS, LLC	 	Limited liability company	 	Delaware	 	5602002
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II HIL TRS, LLC	 	Limited liability company	 	Delaware	 	5601971
	 	 	 	 	 	 	 
	ARC Hospitality Stratford, LLC	 	Limited liability company	 	Delaware	 	5461941
	 	 	 	 	 	 	 
	ARC Hospitality TRS Stratford, LLC	 	Limited liability company	 	Delaware	 	5461963
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II NTC Owner, LP	 	Limited partnership	 	Delaware	 	5573903
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II NTC HIL TRS, LP	 	Limited partnership	 	Delaware	 	5601952
	 	 	 	 	 	 	 
	ARC Hospitality Portfolio II NTC TRS, LP	 	Limited partnership	 	Delaware	 	5573911


 




    	S-II-1



    	 



    

 


SCHEDULE
III


 


SINGLE PURPOSE PROVISIONS


 


(a)          Each
Borrower has not owned, does not own and will not own any asset or property other than (i) the applicable Property, (ii) incidental
personal property necessary for the ownership, management or operation of such Property, (iii) any other assets permitted to be
owned pursuant to the terms and provisions of the Loan Agreement and (iv) in the case of ARC Hospitality Portfolio II NTC TRS,
LP, the limited liability company interests in ARC Hospitality Portfolio II Concessions,
LLC.


 


(b)          No
Borrower has engaged, does engage, or will engage in any business other than (i) the ownership, management and operation of the
applicable Property and (ii) in the case of ARC Hospitality Portfolio II NTC TRS, LP, acting as the member and manager of ARC Hospitality
Portfolio II Concessions, LLC, and each Borrower will conduct and operate its business
as presently conducted and operated.


 


(c)          No
Borrower has entered and is a party to or will enter into or be a party to any contract or agreement with any Affiliate of any
Borrower, any constituent party of any Borrower or any Affiliate of any constituent party, except (i) in the ordinary course of
business and on terms and conditions that are disclosed to each Lender in advance and that are intrinsically fair, commercially
reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than any
such party, (ii) the Operating Leases, the Loan Documents, and the Contribution Agreement, and (iii) the Beverage Concession Agreement
and the Property Management Agreements, which agreements are intrinsically fair, commercially reasonable and substantially similar
to those that would be available on an arms-length basis with third parties.


 


(d)          No
Borrower has incurred or will incur any Indebtedness other than (i) the Debt and (ii) Equipment Leases, unsecured trade
payables and operational debt (excluding so-called property-assessed clean energy or similar loans) not evidenced by a note and
in an aggregate amount not exceeding in the aggregate with the other Borrowers two percent (2%) of the original principal amount
of the Loan at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall (A) be
not more than sixty (60) days past due, (B) be incurred in the ordinary course of business, and (C) not, for any Borrower,
exceed two percent (2%) of the Allocated Loan Amount in respect of the Properties owned or leased by such Borrower (the Indebtedness
described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as “Permitted
Indebtedness”). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property.


 


(e)          No
Borrower has made or will make any loans or advances to any Person (including any Affiliate or constituent party). No Borrower
has acquired nor shall acquire obligations or securities of its Affiliates; provided however that ARC Hospitality Portfolio II
NTC TRS, LP may acquire the limited liability company interests in ARC Hospitality Portfolio II Concessions,
LLC.


 




    	S-III-1



    	 



    

  


(f)          Each
Borrower is and intends to remain solvent and each Borrower has paid and will pay its debts and liabilities (including, as applicable,
shared personnel and overhead expenses) from its assets (including Net Operating Income and available Reserve Funds), as the same
shall become due; provided, however, that the foregoing shall not require any direct or indirect member, partner
or shareholder of any Borrower to make any additional capital contributions to Borrower.


 


(g)          Each
Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its
existence, and such Borrower will not, nor will Borrower permit any SPC Party to, (i) terminate or fail to comply with the
provisions of its organizational documents, or (ii) unless (A) each Lender has consented and (B) following a Securitization
of the Loan, the 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.


 


(h)          Except
with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, each Borrower has maintained and
will maintain all of its accounts, books, records, financial statements and bank accounts separate from those of its Affiliates
and any other Person. Each Borrower’s assets have not been and will not be listed as assets on the financial statement of
any other Person; provided, however, that each Borrower’s assets may be included in a consolidated financial
statement of its Affiliates if (i) appropriate notation shall be made on such consolidated financial statements to indicate
the separateness of each Borrower and such Affiliates and to indicate that each Borrower’s assets and credit are not available
to satisfy the debts and other obligations of such Affiliates (other than the other Borrowers with respect to this Loan) or any
other Person, and (ii) such assets shall be listed on each Borrower’s own separate balance sheet. Each Borrower has
and will file its own tax returns (to the extent such Borrower is required to file any such tax returns) and will not file a consolidated
federal income tax return with any other Person, except to the extent that such Borrower is (i) required to file consolidated tax
returns by law or (ii) treated as a “disregarded entity” for tax purposes and are not required to file tax returns
under applicable law. Each Borrower has maintained and shall maintain its books, records, resolutions and agreements as official
records.


 


(i)          Except
with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, each Borrower has been and will
be, and has held and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower or any constituent party of Borrower) (recognizing that any 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), has corrected and
shall correct any known misunderstanding regarding its status as a separate entity, has conducted and shall conduct business in
its own name, has not identified and shall not identify itself or any of its Affiliates as a division or part of the other, and
has maintained and shall, to the extent reasonably necessary for the operation of its business, maintain and utilize separate stationery,
invoices and checks bearing its own name.


 


(j)          Each
Borrower has maintained and intends to maintain adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of


 




    	S-III-2



    	 



    

  


its contemplated business
operations; provided, however, that the foregoing shall not require any direct or indirect member, partner or shareholder
of Borrower to make any additional capital contributions to Borrower.


 


(k)          No
Borrower and no constituent party has sought or will seek or effect the liquidation, dissolution, winding up, consolidation or
merger, in whole or in part, of any Borrower; provided, however, that any Borrower may merge with or into any other Borrower, provided
that, in each case no Default (as defined in the Loan Agreement) shall have occurred and be continuing at the time of such proposed
transaction or would result therefrom. .


 


(l)          Except
with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, no Borrower has commingled and
will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person,
and has held and will hold all of its assets in its own name; provided, provided however that the revenue from a Property may be
deposited by the related Manager in a Clearing Account maintained in the name of ARC Hospitality Portfolio II TRS Holdco, LLC (the
“Account Representative”) wherein the funds attributable to such Property can be comingled with other funds
belonging to one or more other Borrowers, so long as such funds attributable to such Property can be identified through a book
entry subaccount and applied in accordance with the terms of the Loan Agreement.


 


(m)          Except
with respect to other Borrowers, as required pursuant to this Agreement or other Loan Documents, each Borrower has maintained and
will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or constituent party or any other Person.


 


(n)          Except
in connection with the Loan or pursuant to an Indemnity Agreement, no Borrower has assumed or guaranteed or become obligated for
the debts of any other Person and has not held itself out to be responsible for or have its credit available to satisfy the debts
or obligations of any other Person (except in each case for the other Borrowers with respect to the Loan and the Obligations),
and Borrower will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold
itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Persons; provided
however that the obligations of a Borrower under a Franchise Agreement may be guaranteed by the Borrower which is the fee owner
of the Property to which such Franchise Agreement relates.


 


(o)          Each
Borrower, each SPC Party and each Liquor License Subsidiary shall conduct their respective business so that the assumptions made
with respect to each Borrower, each SPC Party and each Liquor License Subsidiary in any Insolvency Opinion delivered in connection
with the Loan shall be true and correct in all material respects and, to the extent that an Insolvency Opinion has previously been
delivered in connection with the Loan, each Borrower, each SPC Party and each Liquor License Subsidiary have at all times conducted
their respective business so that the assumptions made with respect to each Borrower, each SPC Party and each Liquor License Subsidiary
in such Insolvency Opinion shall be true and correct in all material respects. In connection with the foregoing, each Borrower
hereby covenants and agrees that it, each SPC Party and each Liquor License Subsidiary will comply with or cause the compliance
with, (i) in all material respects, all of the facts and assumptions (whether regarding any


 




    	S-III-3



    	 



    

  


Borrower, any SPC Party
or any Liquor License Subsidiary) set forth in any Insolvency Opinion delivered in connection with the Loan, (ii) all the
representations, warranties and covenants in Sections 3.1.24 and 4.1.15 and this Schedule III, and
(iii) all the organizational documents of each Borrower, each SPC Party and each Liquor License Subsidiary.


 


(p)          No
Borrower has permitted nor will permit any Affiliate or constituent party independent access to its bank accounts other than (i)
Intermediate Manager, as Borrower’s agent, in connection with Intermediate Manager’s role as a hotel manager of the
Property pursuant to the Intermediate Management Agreement and subject to subsection (l) and Crestline Hotels & Resorts, LLC,
as Borrower’s agent, in connection with Crestline Hotels & Resorts, LLC’s role as a hotel manager of the Property
pursuant to a Property Management Agreement and subject to subsection.


 


(q)          Each
Borrower has paid and shall pay the salaries of its own employees (if any) from its own funds and has and shall maintain a sufficient
number of employees (if any) in light of its contemplated business operations; provided, however, that the foregoing
shall not require any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions
to such Borrower.


 


(r)          Each
Borrower has compensated and shall compensate each of its consultants and agents from its funds for services provided to it and
pay from its own assets all obligations of any kind incurred; provided, however, that the foregoing shall not require
any direct or indirect member, partner or shareholder of any Borrower to make any additional capital contributions to such Borrower.


 


(s)          No
Borrower has, nor without the unanimous consent of all of its members, partners, directors or managers (including each Independent
Director) will, take any action that might reasonably be expected to cause any Borrower or any Liquor License Subsidiary to become
insolvent.


 


(t)          Each
Borrower has allocated and will allocate fairly and reasonably any shared expenses, including shared office space.


 


(u)          Except
in connection with the Loan, no Borrower has pledged nor will pledge its assets for the benefit of any other Person.


 


(v)         Each
Borrower either (i) has no, and will have no, obligation to indemnify its officers, directors, managers, members, shareholders
or partners, as the case may be, or (ii) if it has any such obligation, such obligation is fully subordinated to the Debt
and will not constitute a claim against any Borrower if cash flow in excess of the amount required to pay the Debt is insufficient
to pay such obligation.


 


(w)          Each
Borrower will consider the interests of Borrowers’ creditors in connection with all limited liability company or limited
partnership actions.


 


(x)          Except
(i) as provided in the Loan Documents or an Indemnity Agreement and (ii) in the case of ARC Hospitality Stratford, LLC and ARC
Hospitality TRS Stratford, LLC, any prior mortgage financing that has been fully paid and discharged in full prior to the date
hereof,


 




    	S-III-4



    	 



    

  


no Borrower has, or will
have, any of its obligations guaranteed by any Affiliate; provided however that a Borrower which is the lessee of a Property may
have its obligations under the Franchise Agreement related to such Property, may be guaranteed by American Realty
Capital Hospitality Trust, Inc. or the Borrower which is the fee owner of such Property.


 


(y)          Each
LP Borrower’s organizational documents shall provide that such LP Borrower shall have (and such LP Borrower shall at all
times cause there to be) at least one general partner of such LP Borrower (each, an “SPC Party”) which shall
be a Delaware limited liability company whose sole asset is its interest in such LP Borrower, and each such SPC Party:


 


(i)          will
cause the related LP Borrowers to comply with each of the representations, warranties and covenants contained in Sections 3.1.24
and 4.1.15 and this Schedule III;


 


(ii)         will
at all times comply with each of the representations, warranties and covenants contained in Sections 3.1.24 and 4.1.15
and this Schedule III (other than subsections (a), (b), (d), (cc), (dd), (ee), (ff) and
(gg) of this Schedule III) as if such representation, warranty or covenant was made directly by such SPC Party;


 


(iii)        has
not owned, does not own and will not own any asset or property other than (A) its interest in the related LP Borrowers and
(B) incidental personal property necessary for the ownership of such interest or acting as the general partner of such LP
Borrower;


 


(iv)        has
not and will not engage in any business or activity other than owning an interest in the related LP Borrower and acting as the
general partner of the such LP Borrower; and


 


(v)         has
not 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 the related LP
Borrower that (A) do not exceed at any one time $10,000.00, and (B) are paid within thirty (30) days after the date incurred.


 


Each LP Borrower’s organizational
documents shall provide that upon the withdrawal or the disassociation of the related SPC Party from such LP Borrower, such LP
Borrower shall immediately appoint a new SPC Party whose certificate of formation and limited liability company agreement are substantially
similar to those of such SPC Party and, if an Insolvency Opinion has previously been delivered in connection with the Loan, shall
deliver a new Insolvency Opinion.


 


(z)          The
organizational documents of each Borrower shall provide that as long as any portion of the Obligations remain outstanding, such
Borrower will not:


 


(i)          dissolve,
merge, liquidate or consolidate, except as provided in clause (k) above or clause (aa)(i) below;


 




    	S-III-5



    	 



    

  


(ii)         except
in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;


 


(iii)        amend
its organizational documents with respect to the matters set forth in this Schedule III, without (A) the prior written
consent of each Lender, (B) in the case of a LLC Borrower, the affirmative vote of each Independent Director of such
LLC Borrower, and (C) in the case of a LP Borrower (i) the affirmative vote of the related SPC Party and (ii) the affirmative
vote of each Independent Director of such SPC Party; or


 


(iv)        (A)
without the affirmative vote of each of its members or partners, (B) in the case of a LLC Borrower, the affirmative vote of
each Independent Director of such LLC Borrower, (C) in the case of a LP Borrower, without the affirmative vote of each Independent
Director of the related SPC Party, take any Material Action with respect to itself or to any other entity in which it has a direct
or indirect legal or beneficial ownership interest.


 


(aa)         The
organizational documents of each LP Borrower shall provide that as long as any portion of the Obligations remain outstanding,


 


(i)          such
LP Borrower will dissolve only upon the bankruptcy of the related SPC Party;


 


(ii)         the
vote of a majority-in-interest of the remaining partners of such LP Borrower is sufficient to continue the life of the limited
partnership in the event of such bankruptcy of the related SPC Party; and


 


(iii)        if
the vote of a majority-in-interest of the remaining members or partners of such LP Borrower to continue the life of the limited
liability partnership following the bankruptcy of the related SPC Party is not obtained, such LP Borrower may not liquidate the
related Property without the prior written consent of each Lender and the Rating Agencies for as long as the Loan is outstanding.


 


(bb)         The
organizational documents of each SPC Party shall provide that there shall at all times be (and each SPC Party shall at all times
cause there to be) at least two (2) duly appointed managers (each, an “Independent Director”) of such SPC
Party:


 


(i)          who
shall be a natural person who is provided by a nationally recognized professional service company;


 


(ii)         who
shall have at least three (3) years prior employment experience as an independent director; and


 


(iii)        who
shall not have been at the time of such individual’s appointment or at any time while serving as an Independent Director,
and shall not have ever been (A) a stockholder, member, director or manager (other than as an Independent Director), officer,
employee, partner, attorney or counsel of any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower,
any Liquor License Subsidiary, any SPC Party or any direct or indirect equity holder of any of them, (B) a


 




    	S-III-6



    	 



    

  


creditor, customer,
supplier, service provider or other Person who derives any of its revenues or purchases from its activities with any Borrower,
any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary or any SPC Party,
(C) a member of the immediate family of any such stockholder, member, director, manager, officer, employee, partner, attorney,
counsel, creditor, customer, supplier, service provider or other Person, (D) a Person who is otherwise affiliated with any
Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary, any SPC
Party or any direct or indirect equity holder of any of them or any such stockholder, member, director, manager, officer, employee,
partner, attorney, counsel, creditor, customer, supplier, service provider or other Person, or (E) a Person Controlling, Controlled
by or under common Control with any of (A), (B), (C) or (D) above.


 


As used in this subsection (bb),
“nationally recognized professional service company” includes Corporation Services Company, CT Corporation, National
Registered Agents, Inc., Stewart Management Company, Wilmington Trust Company and Lord Securities Corporation or, if none of those
companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by each
Lender, in each case that is not an Affiliate of Borrower and that provides professional Independent Directors and other corporate
services in the ordinary course of business.


 


(cc)         The
organizational documents of each SPC Party shall provide that as long as any portion of the Obligations remain outstanding:


 


(i)          the
managers of such SPC Party shall not take any action which, under the terms of such SPC Party’s certificate of formation
and limited liability company agreement, requires a unanimous vote of the managers of such SPC Party unless, at the time of such
action, there shall be at least two Independent Directors of such SPC Party then serving in such capacity and each Independent
Director has participated in such vote;


 


(ii)         no
resignation or removal of an Independent Director, and no appointment of a successor Independent Director, shall be effective until
such successor shall have executed a counterpart to such SPC Party’s limited liability company agreement; provided,
however, that (A) no Independent Director may be removed or replaced without Cause, and (B) no Independent Director
shall resign or be removed, and no successor Independent Director shall be appointed unless Borrower provides each Lender with
at least five (5) days prior written notice of any such proposed resignation or removal and the identity of any such successor
Independent Director together with a certification that such successor satisfies the requirements for an Independent Director
set forth in this Schedule III;


 


(iii)        in
the event of a vacancy in the position of Independent Director, the members of such SPC Party shall, subject to the preceding clause (ii),
appoint a successor Independent Director as soon as practicable;


 




    	S-III-7



    	 



    

  


(iv)        to
the fullest extent permitted by law and notwithstanding any duty existing at law or equity, the Independent Directors shall consider
only the interests of the applicable LP Borrower, including each Lender and its other creditors, in acting or otherwise voting
on the matters referred to in clauses (cc)(vii)(C) or (cc)(vii)(D) below of this Schedule III;


 


(v)         except
for duties to the applicable LP Borrower as set forth in the immediately preceding clause (iv) (including duties
to the SPC Party and such LP Borrower’s creditors solely to the extent of their respective economic interests in Borrower
but excluding (A) all other interests of the SPC Party, (B) the interests of other Affiliates of such LP Borrower, and
(C) the interests of any group of Affiliates of which such LP Borrower is a part), the Independent Directors shall not have
any fiduciary duties to such SPC Party or any other Person bound by such SPC Party’s operating agreement; provided,
however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing;


 


(vi)        [Intentionally
deleted];


 


(vii)       such
SPC Party will not:


 


(A)         dissolve,
merge, liquidate or consolidate, except as provided in clause (cc)(viii) below;


 


(B)         except
in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;


 


(C)         amend
its organizational documents or the applicable LP Borrower’s organizational documents with respect to the matters set forth
in this Schedule III, without the prior written consent of each Lender and without the affirmative vote of each Independent
Director of such SPC Party; or


 


(D)         without
the affirmative vote of its each Independent Director of such SPC Party and of all other directors or managers of such SPC Party,
take any Material Action with respect to itself, the applicable LP Borrower or any other entity in which the applicable LP Borrower
has a direct or indirect legal or beneficial ownership interest;


 


(viii)      such
SPC Party 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 SPC Party or the occurrence of any other event which terminates the
continued membership of the last remaining member of such SPC Party in such SPC Party unless the business of such SPC Party 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;


 


(ix)         upon
the occurrence of any event that causes the last remaining member of such SPC Party or the sole member of such SPC Party (in each
case, the “Final Member”) to cease to be a member of such SPC Party (other than (A) upon an


 




    	S-III-8



    	 



    

  


assignment
by Final Member of all of its limited liability company interest in such SPC Party and the admission of the transferee, if permitted
pursuant to the organizational documents of such SPC Party and the Loan Documents, or (B) the resignation of Final Member
and the admission of an additional member of such SPC Party, if permitted pursuant to the organizational documents of such SPC
Party 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 SPC Party, agree in writing (1) to continue the existence of such SPC Party and (2) to the admission
of the personal representative or its nominee or designee, as the case may be, as a substitute member of such SPC Party, effective
as of the occurrence of the event that terminated the continued membership of such member in such SPC Party;


 


(x)          the
bankruptcy of Final Member or a special member of such SPC Party shall not cause Final Member or special member, respectively,
to cease to be a member of such SPC Party and upon the occurrence of such an event, the business of such SPC Party shall continue
without dissolution;


 


(xi)         in
the event of the dissolution of such SPC Party, such SPC Party shall conduct only such activities as are necessary to wind up its
affairs (including the sale of the assets of such SPC Party in an orderly manner), and the assets of such SPC Party shall be applied
in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and


 


(xii)        to
the fullest extent permitted by law, each of Final Member and the special members of such SPC Party shall irrevocably waive any
right or power that they might have to cause such SPC Party 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 SPC Party, to compel any sale of all or any portion of the assets of such
SPC Party 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 SPC Party.


 


(dd)         Each
LLC Borrower’s organizational documents shall provide that there shall at all times be (and such LLC Borrower shall at all
times cause there to be) at least two (2) duly appointed Independent Directors of such LLC Borrower:


 


(i)          who
shall be a natural person who is provided by a nationally recognized professional service company;


 


(ii)         who
shall have at least three (3) years prior employment experience as an independent director; and


 


(iii)        who
shall not have been at the time of such individual’s appointment or at any time while serving as an Independent Director,
and shall not have ever been (A) a stockholder, member, director or manager (other than as an Independent Director), officer,
employee, partner, attorney or counsel of any Borrower, any Liquor License Subsidiary, any SPC Party or any Affiliate of any Borrower,
any Liquor License


 




    	S-III-9



    	 



    

  


Subsidiary,
any SPC Party or any direct or indirect equity holder of any of them, (B) a creditor, customer, supplier, service provider
or other Person who derives any of its revenues or purchases from its activities with any Borrower, any Liquor License Subsidiary,
any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary or any SPC Party, (C) a member of the immediate
family of any such stockholder, member, director, manager, officer, employee, partner, attorney, counsel, creditor, customer, supplier,
service provider or other Person, (D) a Person who is otherwise affiliated with any Borrower, any Liquor License Subsidiary,
any SPC Party or any Affiliate of any Borrower, any Liquor License Subsidiary, any SPC Party or any direct or indirect equity holder
of any of them or any such stockholder, member, director, manager, officer, employee, partner, attorney, counsel, creditor, customer,
supplier, service provider or other Person, or (E) a Person Controlling, Controlled by or under common Control with any of
(A), (B), (C) or (D) above


 


As used in this subsection (dd),
“nationally recognized professional service company” includes Corporation Services Company, CT Corporation, National
Registered Agents, Inc., Stewart Management Company, Wilmington Trust Company and Lord Securities Corporation or, if none of those
companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by each
Lender, in each case that is not an Affiliate of Borrower and that provides professional Independent Directors and other corporate
services in the ordinary course of business.


 


(ee)         Each
LLC Borrower’s organizational documents shall provide that as long as any portion of the Obligations remains outstanding:


 


(i)          the
directors or managers of such LLC Borrower shall not take any action which, under such LLC Borrower’s certificate of formation
or operating agreement, requires the unanimous affirmative vote of such LLC Borrower’s directors or managers unless at the
time of such action there are at least two (2) Independent Directors then serving in such capacity and each Independent Director
has participated in such vote;


 


(ii)         no
resignation or removal of an Independent Director, and no appointment of a successor Independent Director, shall be effective until
such successor shall have executed a counterpart to such LLC Borrower’s operating agreement; provided, however,
that no Independent Director shall resign or be removed, and no successor Independent Director shall be appointed unless such LLC
Borrower provides each Lender with at least five (5) days prior written notice of any such proposed resignation or removal
and the identity of any such successor Independent Director, together with a certification that such successor satisfies the requirements
for an Independent Director set forth in this Schedule III;


 


(iii)        in
the event of a vacancy in the position of Independent Director, the member of such LLC Borrower shall, subject to the preceding
clause (ii), appoint a successor Independent Director as soon as practicable;


 


(iv)        to
the fullest extent permitted by law and notwithstanding any duty existing at law or equity, the Independent Directors shall consider
only the interests of


 




    	S-III-10



    	 



    

  


such LLC Borrower, including
each Lender and its other creditors, in acting or otherwise voting on the matters referred to in clauses (ee)(vii)(C)
or (ee)(vii)(D) below of this Schedule III;


 


(v)         except
for duties to such LLC Borrower as set forth in the immediately preceding clause (iv) (including duties to the
member(s) of such LLC Borrower and such LLC Borrower’s creditors solely to the extent of their respective economic interests
in such LLC Borrower but excluding (A) all other interests of the member(s) of such LLC Borrower, (B) the interests of
other Affiliates of such LLC Borrower, and (C) the interests of any group of Affiliates of which such LLC Borrower is a part),
the Independent Directors shall not have any fiduciary duties to the member(s) of such LLC Borrower or any other Person bound by
such LLC Borrower’s operating agreement; provided, however, the foregoing shall not eliminate the implied contractual
covenant of good faith and fair dealing;


 


(vi)        [intentionally
deleted]; and


 


(vii)       such
LLC Borrower will not:


 


(A)         dissolve,
merge, liquidate or consolidate, except as provided in clause (k) above or clause (ee)(viii) below;


 


(B)         except
in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;


 


(C)         amend
its organizational documents with respect to the matters set forth in this Schedule III, without the prior written
consent of each Lender and without the affirmative vote of its two (2) Independent Directors; or


 


(D)         without
the affirmative vote of its two (2) Independent Directors and of all other directors or managers of such LLC Borrower, take
any Material Action with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership
interest.


 


(viii)      such
LLC Borrower 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 Borrower or the occurrence of any other event which
terminates the continued membership of the last remaining member of such LLC Borrower in such LLC Borrower unless the business
of such LLC Borrower is continued in a manner permitted by its operating agreement or the Act, or (B) the entry of a decree
of judicial dissolution under Section 18-802 of the Act;


 


(ix)         upon
the occurrence of any event that causes the last remaining member of such LLC Borrower or the sole member of such LLC Borrower
(in each case, the “Final Member”) to cease to be a member of such LLC Borrower (other than (A) upon an
assignment by Final Member of all of its limited liability company interest in such LLC Borrower and the admission of the transferee,
if permitted pursuant to the organizational documents of such LLC Borrower and the Loan Documents, or (B) the resignation
of


 




    	S-III-11



    	 



    

  


Final Member and the admission
of an additional member of such LLC Borrower, if permitted pursuant to the organizational documents of LLC Borrower 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 Borrower, agree in writing (1) to continue the existence of such LLC Borrower and (2) to the admission of
the personal representative or its nominee or designee, as the case may be, as a substitute member of such LLC Borrower, effective
as of the occurrence of the event that terminated the continued membership of such member in such LLC Borrower;


 


(x)          the
bankruptcy of Final Member or a special member of such LLC Borrower shall not cause Final Member or such special member, respectively,
to cease to be a member of such LLC Borrower and upon the occurrence of such an event, the business of such LLC Borrower shall
continue without dissolution;


 


(xi)         in
the event of the dissolution of such LLC Borrower, such LLC Borrower shall conduct only such activities as are necessary to wind
up its affairs (including the sale of the assets of such LLC Borrower in an orderly manner), and the assets of such LLC Borrower
shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and


 


(xii)        to
the fullest extent permitted by law, each of Final Member and the special members of such LLC Borrower shall irrevocably waive
any right or power that they might have to cause such LLC Borrower 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 Borrower, to compel any sale of all or any portion of the assets
of such LLC Borrower 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 Borrower.


 


(ff)         Each
Liquor License Subsidiary shall be a Delaware limited liability company with one member and:


 


(i)          will
at all times comply with each of the representations, warranties and covenants contained in Sections 3.1.24 and 4.1.15
and this Schedule III (other than subsections (a), (b), (d), (e), (s), (y),
(z), (aa), (bb), (cc), (dd) and (ee) of this Schedule III) as if such representation,
warranty or covenant was made directly by such Liquor License Subsidiary;


 


(ii)         has
not owned, does not own and will not own any asset or property other than (A) in the case of ARC
Hospitality Portfolio II Concessions, LLC, its interest in ARC Hospitality Portfolio
II TX MANAGEMENT, LLC and incidental personal property necessary for the ownership of such interest, (B) in the case
of ARC Hospitality Portfolio II TX MANAGEMENT, LLC, its interest in ARC
Hospitality Portfolio II TX HOLDINGS, LLC and incidental personal property necessary for the ownership of such interest,
(C) in the case of ARC


 




    	S-III-12



    	 



    

  


Hospitality
Portfolio II TX HOLDINGS, LLC, its interest in ARC Hospitality Portfolio II TX BEVERAGE
COMPANY and incidental personal property necessary for the ownership of such interest, and (D) in the case of ARC
Hospitality Portfolio II TX BEVERAGE COMPANY, its interest in the liquor licenses, its interest in the alcohol bought and
sold, and incidental personal property necessary for the ownership of such interest;


 


(iii)        has
not and will not engage in any business or activity other than A) in the case of ARC
Hospitality Portfolio II Concessions, LLC, owning an interest in, and acting as the member and manager of, ARC
Hospitality Portfolio II TX MANAGEMENT, (B) in the case of ARC Hospitality Portfolio
II TX MANAGEMENT, LLC, owning an interest in, and acting as the member and manager of, ARC
Hospitality Portfolio II TX HOLDINGS, LLC, (C) in the case of ARC Hospitality Portfolio
II TX HOLDINGS, LLC, owning an interest in, and acting as the member and manager of, ARC
Hospitality Portfolio II TX BEVERAGE COMPANY, and (D) in the case of ARC Hospitality
Portfolio II TX BEVERAGE COMPANY, owning the liquor licenses, owning the alcohol related products, and acting holder of
a liquor license;


 


(iv)        has
not 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 applicable business set forth in clause
(iv) above that (A) do not exceed at any one time $10,000.00, and (B) are paid within thirty (30) days after the
date incurred;


 


(v)         (A)
has not made and will not make any loans or advances to any Person (including any Affiliate or constituent party); and (B) has
not acquired and shall not acquire obligations or securities of its Affiliates; provided however that (1)
ARC Hospitality Portfolio II Concessions, LLC may acquire the limited liability company interests in ARC
Hospitality Portfolio II TX MANAGEMENT, (2) ARC Hospitality Portfolio II TX MANAGEMENT
may acquire the limited liability company interests in ARC Hospitality Portfolio II TX
HOLDINGS, LLC and (3) ) ARC Hospitality Portfolio II TX HOLDINGS, LLC may
acquire the limited liability company interests in ARC Hospitality Portfolio II TX BEVERAGE
COMPANY; and


 


(vi)        has
not, and without the unanimous consent of (A) all of its members, partners, directors or managers and (B) each Independent Director
of ARC Hospitality Portfolio II NTC TRS, LP, will not, take any action that might reasonably be expected to cause such Liquor License
Subsidiary to become insolvent;


 


(gg)         The
organizational documents of each Liquor License Subsidiary shall provide that as long as any portion of the Obligations remain
outstanding, such Liquor License Subsidiary will not:


 


(i)          dissolve,
merge, liquidate or consolidate, except as provided in clause (k) above or clause (aa)(i) above;


 




    	S-III-13



    	 



    

  


(ii)         except
in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;


 


(iii)        amend
its organizational documents with respect to the matters set forth in this Schedule III without (A) the prior written
consent of each Lender, (B) the affirmative vote of each of its members and ARC
Hospitality Portfolio II NTC TRS, LP, and (C) the affirmative vote of each Independent Director of ARC
Hospitality Portfolio II NTC TRS, LP; or


 


(iv)        (A)
without the affirmative vote of each of its members and ARC
Hospitality Portfolio II NTC TRS, LP, and (B) the affirmative vote of each Independent Director of ARC
Hospitality Portfolio II NTC TRS, LP, take any Material Action with respect to itself or to any other entity in which
it has a direct or indirect legal or beneficial ownership interest.


 


(hh)         The
organizational documents of each Borrower and each SPC Party shall provide an express acknowledgment that each Lender is an intended
third-party beneficiary of the “special purpose” provisions of such organizational documents.


 




    	S-III-14



    	 



    

 


SCHEDULE
IV


 


ORGANIZATIONAL CHART


 




    	S-IV-1



    	 



    

 


SCHEDULE
V


 


REQUIRED REPAIRS


 


Each
of the items listed on this Schedule V shall be completed no later than the earlier of (i) the requirements of any PIP,
and (ii) one hundred twenty (120) days after the Closing Date.


 


	Property	 	Required Repair	 	Reserve

Amount
	Courtyard Dalton	 	
        ·   Replace
        standard response sprinkler heads in the pool, pool restrooms & fitness center replace with quick response, corrosive resistant
        type sprinkler heads.

        ·   A
        2nd sprinkler head may need to be added for proper coverage in the pool equipment room. Have sprinkler company confirm coverage
        and add a head if necessary.

        ·   Add
        a sprinkler head in the linen chute discharge closet.

        ·   Replace
        the painted sidewall sprinkler above the bathroom door in guestroom 101. As well as the complete list from the sprinkler contractor.

        ·   Add
        a strobe in the kitchen, maintenance shop, guest laundry, employee break room, employee restroom and in the public space corridor
        on the 1st floor.

        ·   Provide
        stairwell identification signage on all levels including name of stair, floor level, terminus of stair enclosure (top and bottom)
        and direction to exit discharge.

        ·   Install
        emergency lighting with battery back-up in the kitchen, maintenance shop and guest laundry.

        ·   Relocate
        exit signs in the 2nd & 3rd floor corridors that are being blocked by lights.
	 	$14,375.00
	 	 	 	 	 
	Courtyard Houston	 	
        ·   All
        sprinkler valves must have signage attached that indicates the valve type, function, and area served.

        ·   Install
        emergency lighting in the following areas:

        ·   1st
        floor linen chute room

        ·   Employee
        break room

        ·   Main
        Laundry

        ·   Fitness
        room

        ·   Admin
        back office

        ·   Back
        office by the time clock

        ·   Kitchen,
        one on each side of the cook line

        ·   Install
        emergency lighting in the following areas:

        ·   In
        the corridor by the meeting room main doors so that when exiting the space, an exit sign will be seen in 2 directions.

        ·   In
        front of the corridor fire doors by the Engineers office
	 	$6,650.00


 




    	S-V-1



    	 



    

  


	Property	 	Required Repair	 	Reserve

Amount
	 	 	
        ·   In
        the corridor by room 150

        ·   Install
        a strobe light warning device in the guest laundry, and in the employee break room.

        ·   Install
        110 candela strobe light warning devices in the hearing impaired guest room sleeping areas. Currently the strobe devices are 75
        cd.

        ·   Install
        a fire alarm system remote annunciator in the area of the front desk or in an area constantly attended 24/7.

        ·   Install
        sprinkler protection in the closets of the meeting rooms.
	 	 
	 	 	 	 	 
	Courtyard Carlsbad	 	
        ·   Label
        all sprinkler control valves to include the valve type, function, and area served. The description should correspond with the fire
        alarm control panel.

        ·   Install
        emergency exit lights with battery back up in the following locations:

        ·   a)
        Outside the hotel above the front door

        ·   b)
        Outside the hotel above the exit door near room 101

        ·   c)
        Outside the hotel above the exit door by the fitness room

        ·   d)
        Outside the hotel above the side exit door of the breakfast room

        ·   e)
        Employee restrooms

        ·   f)
        Guest laundry room

        ·   Modify
        the existing fire alarm system throughout the hotel to include the following:

        ·   Install
        a horn/strobe in the kitchen area.

        ·   Install
        new hard-wired single station photoelectric smoke alarms with a battery backup in all guest rooms.

        ·   Install
        new hard-wired single station photoelectric smoke alarms equipped with an integrated strobe with battery backup in the sleeping
        areas (including living rooms) of all hearing-impaired guestrooms.

        ·   Interconnect
        smoke alarms within multiple-room suites so that when one smoke alarm is in alarm it activates the other smoke alarms within the
        same guest room suite.

        ·   If
        the existing fire alarm panel is replaced, ensure that it meets the current editions of Marriott International Design Standard
        Module 14 and NFPA 72, to include Module 14 submittal requirements.
	 	$17,875.00
	 	 	 	 	 
	Residence Inn	 	·   Replace the painted and rusted sprinkler head in stair “B”, 1st floor.	 	$30,938.00


 




    	S-V-2



    	 



    

  


	Property	 	Required Repair	 	Reserve

Amount
	Jacksonville	 	
        ·   Replace
        the damaged sprinkler head in the soda/liquor storeroom.

        ·   Provide
        stairwell identification signage on all levels including name of stair, floor level, terminus of stair enclosure (top and bottom)
        and direction to exit discharge.
	 	 
	 	 	 	 	 
	SpringHill Suites Asheville	 	
        ·   Install
        stairwell identification signage on all levels including name of stair, floor level, terminus of stair enclosure (top and bottom)
        and direction to exit discharge.

        ·   Replace
        the sprinkler heads above the pool with new quick response corrosive resistant sprinkler heads.

        ·   Install
        emergency exit lights with battery back up in the following locations:

        ·   All
        public restrooms

        ·   Employee
        break room

        ·   Employee
        restrooms

        ·   Fitness
        room

        ·   Guest
        laundry room

        ·   Mechanical/electrical
        rooms

        ·   Kitchen

        ·   Board
        room
	 	$4,225.00
	 	 	 	 	 
	TownePlace Suites Savannah	 	
        ·   Install
        “F.D.C.” (Fire Department Connection) signage on or above the sprinkler system Siamese fire hose connection on both
        building A & B. The permanent sign to feature 4” white letters on a red background.

        ·   Label
        all sprinkler control valves to include the area served, i.e. 4th floor, attic etc. The description should correspond with the
        fire alarm control panel.

        ·   Replace
        the painted sprinkler heads in the new breakfast area.
	 	$5,313.00
	 	 	 	 	 
	Hampton Inn Milford	 	
        ·   Carbon
        monoxide detectors must be provided in the room or area of origin for all areas utilizing fuel-fired equipment, including fireplaces.
        Combination smoke/carbon monoxide detectors are permissible. Refer to local codes and ordinances for additional requirements. Install
        in the boiler room and behind the dryers.

        ·   NFPA
        70 compliant wiring is required for the refrigeration equipment in the 3rd Floor Storage Room.

        ·   The
        fire door to the Laundry Room (1st floor) shall not be wedged open. A magnetic hold-open device tied in to the building's fire
        alarm is recommended and is the only compliant method of holding this door open

        ·   The
        smoke alarm in Room #117 needs repair.
	 	$3,750.00


 




    	S-V-3



    	 



    

 


	Property	 	Required Repair	 	Reserve

Amount
	Homewood Suites by Hilton Augusta	 	·   Install CO Detector in lobby / fireplace	 	$1,250.00


 




    	S-V-4



    	 



    

 


SCHEDULE
VI


 


SECONDARY MARKET TRANSACTION INFORMATION


 


		(A)	Any proposed program for the renovation, improvement or development of the Property, or any part
thereof, including the estimated cost thereof and the method of financing to be used.



 


		(B)	The general competitive conditions to which the Property is or may be subject.



 


		(C)	Management of the Property.



 


		(D)	Occupancy rate expressed as a percentage for each of the last five (5) years.



 


		(E)	Principal business, occupations and professions carried on in, or from the Property.



 


		(F)	Number of Tenants occupying 10% or more of the total rentable square footage of the Property and
principal nature of business of such Tenant, and the principal provisions of the Leases with those Tenants including, but not limited
to: rental per annum, expiration date and renewal options.



 


		(G)	The average effective annual rental per square foot or unit for each of the last three (3) years
prior to the date of filing.



 


		(H)	Schedule of the Lease expirations for each of the ten (10) years starting with the year
in which the registration statement is filed (or the year in which the prospectus supplement is dated, as applicable), 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.



 




    	S-VI-1



    	 



    

 


SCHEDULE
3.1.11


 


Condemnation matters


 


	PROPERTY

NAME	 	ADDRESS	 	CITY	 	ST	 	Condemnation Proceedings
	 	 	 	 	 	 	 	 	 
	Hampton Inn Austin	 	7619 IH-35 North	 	Austin	 	TX	 	According to Christopher Bishop, Public Information Office with the Texas Department Transportation, “There are no immediate projects planned that would impact the hotel property. However, we are in the middle of long term planning for the future of Interstate 35. The process, called Mobility 35, could involve adding a travel lane in each direction, with some modifications to ramps all along the interstate in Williamson, Travis and Hays Counties.”  
	 	 	 	 	 	 	 	 	 
	Hampton Inn Knoxville	 	148 International Dr	 	Alcoa	 	TN	 	According to Andrew Sonner, “We did receive the grant. We are currently surveying and will start the environmental clearances for this project in the near future. We plan to start construction summer of 2015. Please see the revised exhibit.”  Attached is the Revised Greenway Trails/ Sidewalk Conceptual Plan. The subject property is highlighted in yellow. Proposed sidewalks are shown with a thick black line.  Sidewalks are proposed along Airport Plaza Blvd and International Drive. 
	 	 	 	 	 	 	 	 	 
	Homewood Suites Orlando	 	8745 International Dr	 	Orlando	 	FL	 	According to Brian Sanders, Chief Transportation Planner, “Orange County is in the process of developing


 




    	S-VII-1



    	 



    

 


	 	 	 	 	 	 	 	 	transit lanes on International Drive.  Currently, our Real Estate Management Division is assembling the necessary right-of-way needed to construct the improvement.  Based on discussions with our Right-of-way Acquisition Section it appears that our Real Estate Management Division has already made contact with the owner’s representative for a “right-of-entry” to reconstruct driveway connections during construction. Construction is scheduled to begin December 2014 and the anticipated completion date is December of 2016.”  


 




    	S-VII-2



    	 



    

 


SCHEDULE
3.1.17


 


insurance claims


 




    	S-VII-1



    	 



    

 


Schedule
VIII


 


Closed Property Release Conditions


 


Notwithstanding anything
to the contrary set forth in this Agreement and the other Loan Documents, if Borrowers shall cease continuous operations of any
Property as a hotel for any reason whatsoever (other than temporary cessation in connection with any alteration, repair, renovation
or restoration thereof undertaken with the prior written consent of Lender) (each such Property that is subject to such cessation
of hotel operations, a “Closed Property”), an Event of Default shall be deemed to have occurred unless, no later
than twenty (20) days after hotel operations are suspended at such Closed Property, Borrowers shall satisfy all of the following
conditions (collectively, the “Closed Property Release Conditions”):


 


(a)          After
giving effect to the release of a Closed Property (each such release, a “Property Release”), no more than two
(2) Properties shall have been released from the Lien of the Security Instruments and the other Loan Documents in accordance with
these Closed Property Release Conditions;


 


(b)          Borrowers
shall have delivered an Officer’s Certificate to Lender providing a certification that as of the date of such request, (i)
no Default or Event of Default shall have occurred and be continuing or shall occur solely as a result of such Property Release,
and (ii) Borrowers shall have made a good faith determination that continued operation of a hotel at the Property which is the
subject of such proposed Property Release was no longer commercial;


 


(c)          Borrowers
shall have submitted to Lender a written request for such Property Release at least ten (10) days prior to the proposed Property
Release, which request shall specify the Closed Property (the “Property Release Date”);


 


(d)          no
other Default or Event of Default shall have occurred and be continuing on the Property Release Date or shall occur solely as a
result of such Property Release;


 


(e)          Borrowers
shall have paid, or shall have arranged to be paid contemporaneously with the Property Release, to Lender, and Lender shall have
received by wire transfer of immediately available federal funds, an amount equal to the sum of (i) one hundred fifteen percent
(115%) of the Allocated Loan Amount in respect of such Closed Property (the “Release Price”), which shall be
applied by Lender as a prepayment of the Outstanding Principal Balance in accordance with Section 2.4.1 of the Loan Agreement,
plus (ii) all amounts required to be paid in accordance with Section 2.4.1 of the Loan Agreement;


 


(f)          Borrowers
shall have submitted to Lender, not less than five (5) Business Days prior to the date of such release such releases, satisfactions,
discharges and/or assignments for the Closed Property to be released for execution by Lender, which shall be in form and substance
reasonably satisfactory to Lender and appropriate in the jurisdiction in which the Closed Property is located;


 




    	S-VIII-1



    	 



    

  


(g)          If
the Loan shall then be held by a REMIC Trust formed pursuant to a Securitization, Borrower shall have delivered an opinion from
counsel, and in form and substance, in each case reasonably acceptable to Lender and acceptable to the Rating Agencies in their
sole discretion stating, among other things, that any REMIC Trust formed pursuant to a Securitization will not fail to maintain
its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code or be
subject to tax as a result of such Property Release;


 


(h)          If
the Loan shall then be held by a REMIC Trust formed pursuant to a Securitization, Borrower shall have delivered to Lender evidence
reasonably satisfactory to Lender that Borrower and each SPC Party continues to be in compliance with each representation, warranty
and covenant set forth in Sections 3.1.24 or 4.1.15 and Schedule III following such Property Release
and if Borrower is transferring the Closed Property to a Restricted Party or an Affiliate of a Restricted Party and an Insolvency
Opinion has been previously delivered in connection with the Loan, Borrower shall be required to deliver a new Insolvency Opinion;


 


(i)          after
giving effect to the Property Release, the Debt Service Coverage Ratio for the remaining Properties shall not be less than the
greater of (i) 1.54 to 1.00 and (ii) the Debt Service Coverage Ratio in effect immediately prior to the Property Release;


 


(j)          after
giving effect to the Property Release, the Loan to Value Ratio for the remaining Property shall not be greater than the lesser
of (i) sixty three percent (63)% and (ii) the Loan to Value Ratio in effect immediately prior to the Property Release;


 


(k)          Intermediate
Manager and/or Property Manager and other parties to the applicable Intermediate Management Agreement and/or Property Management
Agreement shall provide Lender with evidence reasonably satisfactory to Lender that the Closed Property will no longer be subject
to any Intermediate Management Agreement or Property Management Agreement once such Property Release has been completed and that
no Intermediate Manager or Property Manager will earn fees under any Intermediate Management Agreement or Property Management Agreement
with respect to such Closed Property;


 


(l)          Borrower
shall have delivered an Officer’s Certificate certifying that all of the requirements set forth in this Section 2.5
have been satisfied;


 


(m)          Borrower
shall have executed and delivered to Lender such other certificates, documents or instruments as Lender may reasonably require
in connection with the Property Release; and


 


(n)          Borrower
shall have paid all of Lender’s reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and
disbursements) incurred in connection with the Property Release and the review and approval of the documents and information required
to be delivered in connection therewith. In addition, Borrower shall have paid reasonable out-of-pocket costs and expenses of third
parties relating to the release (including, without limitation, recording costs and the out-of-pocket costs and expenses incurred


 




    	S-VIII-2



    	 



    

  


by, and all fees and
charges of, the Rating Agencies) incurred in connection with the release of the Closed Property.


 


Upon the closing of such
Property Release if all of the foregoing conditions set forth on this Schedule VIII with respect to such Property Release
have been satisfied, Lender, at the sole cost and expense of Borrower, shall execute and deliver to Borrower the releases, satisfactions,
discharges and/or assignments, as applicable and as reasonably requested by Borrower, of the Security Instruments , the Assignment
of Leases and the other Loan Documents which solely relate to the Closed Property to be released. Upon the closing of any Property
Release, all references herein or in any of the other Loan Documents to the term “Property” shall be deemed to exclude
the Closed Property released.


 




    	S-VIII-3



    	 



    

 


Schedule
IX


 


Allocated Loan Amounts


 




    	S-IX-1



    	 



    

 


Schedule
X


 


FRANCHISOR AND FRANCHISE AGREEMENTS


 


[See attached]


 




    	S-X-1



    	 



    

 


Schedule
XI


 


Property ManagerS


 


Crestline Hotels & Resorts, LLC, a Delaware limited liability
company


 


Pillar Hotels and Resorts, L.P., a Delaware limited partnership


 


McKibbon Hotel Management, Inc., a Florida corporation


 


Hampton Inns Management LLC, a Delaware limited liability company


 


Homewood Suites Management LLC, a Delaware limited liability
company


 




    	S-XI-1



    	 



    

 


SCHEDULE
XII


 


REAs


 


Courtyard San Diego – Carlsbad, CA


Declaration of Covenants, Conditions, and Restrictions Carlsbad
Airport Centre San Diego, California dated September 4, 1986, recorded September 12, 1986, as File No. 86-401456 in the Official
Records of San Diego County, California; as amended by First Amendment to Declaration of Covenants, Conditions, and Restrictions
Carlsbad Airport Centre San Diego, California dated November 1986, recorded January 28, 1987, as File No. 87-048040 in said Official
Records; as further amended by Declaration of Annexation of Phase II of Carlsbad Airport Centre Pursuant to Declaration of Covenants,
Conditions, and Restrictions Carlsbad Airport Centre San Diego, California dated October 25, 1990, recorded October 30, 1990, as
File No. 90-589282 in said Official Records.


 


Hilton Garden Inn Rio Rancho – Rio Rancho, NM


Declaration of Protective Covenants and Restrictions for Gateway
North dated June 21, 1994, filed for record June 21, 1994, in Miscellaneous Book 313, page 795, as Document No. 43919, records
of Sandoval County, New Mexico.


 


TownePlace Suites Savannah Midtown – Savannah, GA


Declaration of Easements, Covenants, and Restrictions for Abercorn
Village (“ECR”) dated August 1, 1998, filed for record August 6, 1998, in Deed Book 195N, page 592, in the Office of
the Clerk of Superior Court in Chatham County, Georgia.


 


Hampton Inn Austin North – Austin, TX


Declaration of Covenants, Conditions and Restrictions dated
June 9, 1986, and recorded July 24, 1986, in Volume 9798, Page 962, of the Real Property Records of Travis County, Texas.


 


Hampton Inn Indianapolis Castleton – Indianapolis,
IN


Declaration of Easements, Covenants and Restrictions dated December
10, 1986 and recorded December 12, 1986 as Instrument No. 86-128685 of the Marion County Records; as amended by that First Amendment
to Declaration of Easements, Covenants and Restrictions dated February 20, 1990 and recorded March 9, 1990 as Instrument No. 90-25410
of the Marion County Records.


 


Hilton Garden Inn Louisville – Louisville, KY


Declaration of Covenants, Conditions and Restrictions, Blankenbaker
Crossings, dated January 1, 1990, and recorded in Book 5997, Page 664; as amended by Amended Declaration of Covenants, Conditions
and Restrictions recorded in Book 6057, Page 350; as amended by a Supplemental Declaration and Declaration of Annexation recorded
in Book 6057, Page 355; as amended by Amended Declaration of Covenants, Conditions and Restrictions recorded in Book 6325, Page
277; as amended by Amendment to Declaration of Covenants, Conditions and Restrictions recorded in Book 6654, Page 227; as further
amended by Declarations of Annexation and Amendment to Declaration of Covenants, Conditions and Restrictions recorded in Book 6735,
Page 259 and Book 6742, Page 519; as further amended by the following Declarations of Annexation to Declaration of Covenants, Conditions
and Restrictions recorded in


 




    	S-XII-1



    	 



    

  


Book 6017, Page 109; Book 6043, Page 653; Book 6049, Page 20;
Book 6052, Page 426; Book 6057, Page 366; Book 6083, Page 51; Book 6174, Page 285; Book 6294, Page 926; Book 6325, Page 272; Book
6333, Page 6; Book 6349, Page 549; Book 6350, Page 259; Book 6358, Page 974; Book 6433, Page 979; Book 6443, Page 482; Book 6446,
Page 495; Book 6468, Page 537; Book 6483, Page 155; Book 6490, Page 19; Book 6500, Page 499; Book 6524, Page 751; Book 6577, Page
385; Book 6579, Page 358; Book 6618, Page 543; Book 6641, Page 535; Book 6645, Page 633; Book 6660, Page 600; Book 6677, Page 288;
Book 6677, Page 869; Book 6678, Page 140; Book 6683, Page 496; Book 6697, Page 871l Book 6705, Page 68; Book 6729, Page 104; Book
6746, Page 508; Book 6775, Page 359; Book 6775, Page 954; Book 6893, Page 704, all in the Office of the Clerk of Court of Jefferson
County, Kentucky.


 


Homewood Suites Stratford – Stratford, CT


Agreement by and between Stratford Restorations, Inc., a Connecticut
corporation, and Stratford Development, LLC, a Connecticut limited liability company dated September 25, 1997, recorded in Book
1315, Page 342 of the Town of Stratford Land Records.


 


Hampton Inn Milford – Milford, CT


Revised Easement Agreement and Release dated June 29, 1987,
recorded as Volume 1589, Page 20 of the Milford Land Records.


 


Hampton Inn Urbana (Champaign) – Urbana, IL


Declaration of Reciprocal Easement and Maintenance Agreement
dated October 9, 1995, recorded October 11, 195 in the Champaign County Recorder.


 


Hampton Inn, 8900 Universal Blvd, Orlando, FL:


 


DECLARATION OF COVENANTS AND RESTRICTIONS FOR PLAZA INTERNATIONAL
UNIT ELEVEN BY ORLANDO PLAZA PARTNERS, A FLORIDA GENERAL PARTNERSHIP, RECORDED IN OFFICIAL RECORDS BOOK 4271, PAGE 2285, OF THE
PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.


 


DECLARATION OF EASEMENT FOR ACCESS BY ORLANDO PLAZA PARTNERS,
A FLORIDA GENERAL PARTNERSHIP, TO ORLANDO CONVENTION PARTNERS, L.P., A TENNESSEE LIMITED PARTNERSHIP, RECORDED IN OFFICIAL RECORDS
BOOK 5317, PAGE 2147, AND FIRST AMENDMENT TO DECLARATION OF EASEMENT FOR ACCESS RECORDED IN OFFICIAL RECORDS BOOK 5436, PAGE 782,
OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.


 


Homewood Suites, 8745 International Drive, Orlando, FL


CROSS EASEMENT AGREEMENT EXECUTED BY AND BETWEEN ORLANDO PLAZA
PARTNERS, A FLORIDA GENERAL PARTNERSHIP, AND E.I.P. ORLANDO, L.P., A TENNESSEE LIMITED PARTNERSHIP, RECORDED AUGUST 28, 1997, IN
OFFICIAL RECORDS BOOK 5317, PAGE 2590, PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.


 




    	S-XII-2



    	 



    

  


DECLARATION OF EASEMENT FOR ACCESS EXECUTED BY ORLANDO PLAZA
PARTNERS, A FLORIDA GENERAL PARTNERSHIP, TO E.I.P. ORLANDO, L.P., A TENNESSEE LIMITED PARTNERSHIP, RECORDED AUGUST 28, 1997, IN
OFFICIAL RECORDS BOOK 5317, PAGE 2580, PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.


 


Residence Inn, 1310 Airport Road, Jacksonville, FL:


 


DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS
EXECUTED BY WILMA/SKYLAND JOINT VENTURE, LTD., A GA LIMITED PARTNERSHIP, FILED AUGUST 2, 1990, IN OFFICIAL RECORDS BOOK 6941, PAGE
0427, AS AMENDED BY FIRST SUPPLEMENT RECORDED IN BOOK 6999, PAGE 2023; SECOND SUPPLEMENT RECORDED IN BOOK 7385, PAGE 1290; THIRD
SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 7631, PAGE 1706; FOURTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 7975, PAGE 558; FIFTH
SUPPLEMENT RECORDED IN BOOK 8123, PAGE 2296; SIXTH SUPPLEMENT RECORDED IN BOOK 8467, PAGE 147; AMENDED SIXTH SUPPLEMENT RECORDED
IN BOOK 8530, PAGE 1595; SEVENTH SUPPLEMENT RECORDED IN BOOK 8536, PAGE 162; EIGHTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8712,
PAGE 1305; NINTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8821, PAGE 2108; TENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8832,
PAGE 1630; ELEVENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8861, PAGE 2108; TWELFTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK
8861, PAGE 2470; THIRTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 8873, PAGE 213; FOURTEENTH SUPPLEMENT AND AMENDMENT RECORDED
IN BOOK 9120, PAGE 1311; FIFTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 9573, PAGE 138; SIXTEENTH SUPPLEMENT AND AMENDMENT
RECORDED IN BOOK 9848, PAGE 1282; SEVENTEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 9909, PAGE 1715; EIGHTEENTH SUPPLEMENT
AND AMENDMENT RECORDED IN BOOK 10083, PAGE 1413; AND NINETEENTH SUPPLEMENT AND AMENDMENT RECORDED IN BOOK 10984, PAGE 815, PUBLIC
RECORDS OF DUVAL COUNTY, FLORIDA.


 




    	S-XII-3



    	 



    

 


SCHEDULE
XIII


 


OPERATING LEASES


 


	LEASE	 	LESSOR 

    (FEE OWNER)	 	LESSEE

    (OPERATING

    LESSEE)	 	PROPERTY	 	ADDRESS	 	CITY /

    STATE / ZIP
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II TRS, LLC	 	Hampton Inn Orlando International Drive/Convention Center	 	8900 Universal Boulevard	 	Orlando, FL  32819
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II TRS, LLC	 	Homewood Suites by Hilton Orlando – International Drive/Convention	 	8745 International Drive	 	Orlando, FL  32819
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II TRS, LLC	 	Courtyard Dalton	 	411 Holiday Drive	 	Dalton, GA  30720
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II TRS, LLC	 	Hilton Garden Inn Albuquerque – North/Rio Rancho	 	1711 Rio Rancho Boulevard	 	Albuquerque, NM  87124
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Hampton Inn Milford	 	129 Plains Road	 	Milford, CT  06460
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Homewood Suites by Hilton Augusta	 	1049 Stevens Creek Road	 	Augusta, GA  30907
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Hampton Inn Chicago/Naperville	 	1087 East Diehl Road	 	Naperville, IL  60563
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Hampton Inn Indianapolis – NE/Castleton	 	6817 East 82nd Street	 	Indianapolis, IN  46250
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Hampton Inn Knoxville – Airport	 	148 International Avenue	 	Alcoa, TN  37701
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Homewood Suites by Hilton Seattle Downtown	 	206 Western Avenue West	 	Seattle, WA  98119
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II MISC TRS, LLC	 	TownePlace Suites Savannah Midtown	 	11309 Abercorn Street	 	Savannah, GA  31419
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II TRS, LLC	 	Hilton Garden Inn Louisville East	 	1530 Alliant Avenue	 	Louisville, KY  40299
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II MISC TRS, LLC	 	Residence Inn Jacksonville Airport	 	1310 Airport Road	 	Jacksonville, FL  32218


 




    	S-XIII-1



    	 



    

  


	LEASE	 	LESSOR 

    (FEE OWNER)	 	LESSEE

    (OPERATING

    LESSEE)	 	PROPERTY	 	ADDRESS	 	CITY /

    STATE / ZIP
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II MISC TRS, LLC	 	Hampton Inn Champaign/Urbana	 	1200 West University Avenue	 	Urbana, IL  61801
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II MISC TRS, LLC	 	Hampton Inn East Lansing	 	2500 Coolidge Road	 	East Lansing, MI  48823
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II NTC Owner, LP	 	ARC Hospitality Portfolio II NTC TRS, LP	 	SpringHill Suites Asheville	 	Two Buckstone Place	 	Asheville, NC  28805
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II NTC Owner, LP	 	ARC Hospitality Portfolio II NTC TRS, LP	 	Courtyard San Diego Carlsbad/McClellan-Palomar Airport	 	5835 Owens Avenue	 	Carlsbad, CA  92008
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II NTC Owner, LP	 	ARC Hospitality Portfolio II NTC TRS, LP	 	Courtyard Houston I-10 West/Energy Corridor	 	12401 Katy Freeway	 	Houston, TX  77079
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II NTC Owner, LP	 	ARC Hospitality Portfolio II NTC TRS, LP	 	Hampton Inn Austin – North @ I-35 & Hwy 183	 	7619 I-35 North	 	Austin, TX  78752
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Portfolio II NTC Owner, LP	 	ARC Hospitality Portfolio II NTC HIL, TRS, LP	 	Hampton Inn College Station	 	320 Texas Avenue South	 	College Station, TX 77840
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015	 	ARC Hospitality Stratford, LLC	 	ARC Hospitality TRS Stratford, LLC	 	Stratford Homewood	 	6905 Main Street	 	Stratford, CT 06614


 




    	S-XIII-2



    	 



    

 


SCHEDULE
XIV


 


PIP RESERVE FUNDING SCHEDULE


 


	DATE	 	AMOUNT OF REQUIRED DEPOSIT	 
	March 31, 2015	 	$	5,000,000	 
	June 30, 2015	 	$	2,500,000	 
	September 30, 2015	 	$	2,500,000	 
	December 31, 2015	 	$	5,000,000	 
	March 31, 2016	 	$	2,500,000	 
	June 30, 2016	 	$	2,500,000	 



 


Total Deposits: $20,000,000


 




    	S-XIV-1



    	 



    

 


SCHEDULE
XV


 


Reserved


 




    	S-XV-1



    	 



    

 


SCHEDULE
XVI


 


O&M Plan


 


(Courtyard
Houston (I-10) 12401 Katy Freeway, Houston, Texas 77079)


 




    	S-XVI-1



    	 



    

 


SCHEDULE
XVIi


 


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.	Huntington



 


		19.	Lingate



 


		20.	Musselman



 


		21.	Marriott



 


		22.	Hyatt



 


		23.	HEI



 




    	S-XVII-1



    	 



    

 


SCHEDULE
XVIiI


 


Assignment of Franchise Agreements


 


		1.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II MISC TRS, LLC, as franchisee, ARC Hospitality
Portfolio II Owner, LLC, as fee owner, and Marriott International, Inc., as franchisor, relating to TownePlace Suites by Marriott,
11309 Abercorn Street, Savannah, GA 31419



 


		2.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II MISC TRS, LLC, as franchisee, ARC Hospitality
Portfolio II Owner, LLC, as fee owner, and Marriott International, Inc., as franchisor, relating to Residence Inn by Marriott,
1310 Airport Road, Jacksonville, FL 32218



 


		3.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II NTC TRS, LP, as franchisee, ARC Hospitality
Portfolio II NTC Owner, LP, as fee owner, and Marriott International, Inc., as franchisor, relating to Courtyard by Marriott, 12401
Katy Freeway, Houston, TX 77079



 


		4.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II NTC TRS, LP, as franchisee, ARC Hospitality
Portfolio II NTC Owner, LP, as owner, and MIF, L.L.C., as franchisor, relating to Courtyard by Marriott, 5835 Owens Avenue, Carlsbad,
CA 92008



 


		5.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II TRS, LLC, as franchisee, ARC Hospitality
Portfolio II Owner, LLC, as fee owner, and Marriott International, Inc., as franchisor, relating to Courtyard by Marriott, 785
College Drive, Dalton, GA 30720



 


		6.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II NTC TRS, LP, as franchisee, ARC Hospitality
Portfolio II NTC Owner, LP, as fee owner, and Marriott International, Inc., as franchisor, relating to SpringHill Suites by Marriott,
Two Buckstone Place, Asheville, NC 28805



 


		7.	Comfort Letter, dated as of the date hereof, among Lender, ARC Hospitality Portfolio II TRS, LLC, ARC Hospitality Portfolio
II HIL TRS, LLC, ARC Hospitality Portfolio II MISC TRS, LLC; ARC Hospitality Portfolio II NTC TRS, LP, as franchisees, and Hilton
Garden Inns Franchise LLC; Hampton Inns Franchise LLC, Homewood Suites Franchise LLC, as franchisors, relating to the Hilton Brand
Managed Properties



 




    	S-XVIII-1



    	 



    

 


EXHIBIT
A


 


FORM OF SMITH TRAVEL RESEARCH REPORT


 




    	A-1



    	 



    

 


EXHIBIT
B


 


INTENTIONALLY OMITTED


 




    	B-1



    	 



    

 


EXHIBIT
C


 


FORM OF CREDIT CARD BANK PAYMENT DIRECTION LETTER


 


[BORROWER LETTERHEAD]


 


[_____________]. 201[_]


 


[Addressee]

[_______________]

[_______________]

[_______________]


 


		Re:	Payment Direction Letter for [BORROWER]

[PROPERTY NAME]



Dear [______]:


 


[BORROWER] (“Owner”),
the owner of the above captioned property (the “Property”), has mortgaged the Property to [LENDER] (together
with its successors and assigns, “Lender”) and has agreed that all receipts received for the Property will be
paid directly to a bank selected by Lender. Therefore, from and after the date hereof (until you are otherwise notified as provided
below), please remit all credit card receipts cleared by you and due to the Owner [under that certain [REFERENCE AGREEMENT], dated
[___], [____] (the “Agreement”) between the Owner and you,] by the ACH system or wire transfer to the following
account:


 


Bank Name

ABA# [_______________]

Attn:   [_______________]

Fax:    [_______________]

Account   [_______________]


 


These payment instructions
cannot be withdrawn or modified without the prior written consent of Lender or its agent (“Servicer”), or pursuant
to a joint written instruction from Owner and Lender or its Servicer. Until you receive written instructions from Lender or Servicer,
continue to send all payments due under the Agreement as directed above. All such payments due under the Agreement must be remitted
no later than the day on which such amounts are due under the Agreement.


 




    	C-1



    	 



    

  


If you have any questions
concerning this letter, please contact the persons identified for notice purposes in the Agreement. We appreciate your cooperation
in this matter.


 


	 	OWNER:
	 	 
	 	[______________________________]
	 	 	 
	 	By:	 
	 	Name:	 	 
	 	Title:	 	 


 




    	C-2



    	 



    

 


EXHIBIT
D


 


FORM OF CREDIT CARD COMPANY PAYMENT DIRECTION LETTER


 


[BORROWER LETTERHEAD]


 


[_____________]. 201[_]


 


[Addressee]

[_______________]

[_______________]

[_______________]


 


		Re:	Payment Direction Letter for [BORROWER]

[PROPERTY NAME]



Dear [______]:


 


[BORROWER] (“Owner”),
the owner of the above captioned property (the “Property”), has mortgaged the Property to [LENDER] (together
with its successors and assigns, “Lender”) and has agreed that all receipts received for the Property will be
paid directly to a bank selected by Lender. Therefore, from and after the date hereof (until you are otherwise notified as provided
below), please remit all payments due to the [Owner] [Lessee] [Manager] under that certain [REFERENCE AGREEMENT], dated [___],
[____] (the “Agreement”) between the [Owner] [Lessee] [Manager] and you, as follows:


 


Bank Name

ABA# [_______________]

Attn:  [_______________]

Fax:   [_______________]

Account   [_______________]


 


These payment instructions
cannot be withdrawn or modified without the prior written consent of Lender or its agent (“Servicer”), or pursuant
to a joint written instruction from Owner and Lender or its Servicer. Until you receive written instructions from Lender or Servicer,
continue to send all payments due under the Agreement as directed above. All such payments due under the Agreement must be remitted
no later than the day on which such amounts are due under the Agreement.


 




    	D-1



    	 



    

  


If you have any questions
concerning this letter, please contact the persons identified for notice purposes in the Agreement. We appreciate your cooperation
in this matter.


 


	 	OWNER:
	 	 
	 	[______________________________]
	 	 	 
	 	By:	 
	 	Name:	 	 
	 	Title:	 	 


 




    	D-2



    	 



    

 


EXHIBIT P-1


 


PIP Plans


 




    	Sch. 3.1.31-1



    	 



    

 


EXHIBIT P-2


 


PIP Budgets


 




    	Sch. 3.1.31-2



    	 



    

 


EXHIBIT P-3


 


PIP Timeline


 








    	Sch. 3.1.31-3