Exhibit 10.1


 


EXECUTION VERSION


 


 



 





LOAN AGREEMENT


 


Dated as of October 6, 2015


 


between


 


The Borrowers listed on Schedule II
attached hereto

individually and collectively, as Borrower(s)


 


and


 


LADDER CAPITAL FINANCE LLC


 


and


 


GERMAN AMERICAN CAPITAL CORPORATION,


 


individually and collectively, as Lender


 


EQUITY INNS HOTEL PORTFOLIO


 


$232,000,000


 




     


     


    

 


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	1
	2.1.3	 	Use of Proceeds	2
	 	 	 	 
	Section 2.2	 	Interest Rate	2
	 	 	 	 
	2.2.1	 	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	3
	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	6
	 	 	 	 
	Section 2.5	 	Partial Releases	6
	 	 	 	 
	2.5.1	 	Partial Releases	6
	2.5.2	 	Release of Properties	8
	 	 	 	 
	Section 2.6	 	REMIC Test on Property Release	8
	 	 	 	 
	Article 3:	REPRESENTATIONS AND WARRANTIES	9
	 	 	 	 
	Section 3.1	 	Borrower Representations	9
	 	 	 	 
	3.1.1	 	Organization	9
	3.1.2	 	Proceedings	9
	3.1.3	 	No Conflicts	9
	3.1.4	 	Litigation	10
	3.1.5	 	Agreements	10
	3.1.6	 	Consents	10
	3.1.7	 	Title	10
	3.1.8	 	No Plan Assets	11
	3.1.9	 	Compliance	11
	3.1.10	 	Financial Information	12


 




    	 	 i	 



     


    

 


Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	3.1.11	 	Condemnation	12
	3.1.12	 	Easements; Utilities and Public Access	12
	3.1.13	 	Separate Lots	12
	3.1.14	 	Taxes and Assessments	12
	3.1.15	 	Enforceability	12
	3.1.16	 	Assignment of Leases	13
	3.1.17	 	Insurance	13
	3.1.18	 	Licenses	13
	3.1.19	 	Flood Zone	13
	3.1.20	 	Physical Condition	13
	3.1.21	 	Boundaries	13
	3.1.22	 	Leases	14
	3.1.23	 	Filing and Recording Taxes	14
	3.1.24	 	Single Purpose	14
	3.1.25	 	Tax Filings	14
	3.1.26	 	Solvency	14
	3.1.27	 	Federal Reserve Regulations	15
	3.1.28	 	Organizational Chart	15
	3.1.29	 	Organizational Status	15
	3.1.30	 	Bank Holding Company	15
	3.1.31	 	No Casualty	15
	3.1.32	 	Purchase Options	15
	3.1.33	 	FIRPTA	15
	3.1.34	 	Illegal Activity	15
	3.1.35	 	Investment Company Act	15
	3.1.36	 	Use of Property	16
	3.1.37	 	Fiscal Year	16
	3.1.38	 	No Other Financing	16
	3.1.39	 	Contracts	16
	3.1.40	 	Full and Accurate Disclosure; No Change in Facts	16
	3.1.41	 	Other Obligations and Liabilities	17
	3.1.42	 	Operating Lease	17
	3.1.43	 	Intentionally Omitted	17
	3.1.44	 	Bankruptcy Filings	17
	3.1.45	 	PIP Plans	18
	3.1.46	 	Intermediate Management Agreement	18
	3.1.47	 	Property Management Agreement	18
	3.1.48	 	Beverage Concession Agreement	18
	3.1.49	 	Beverage Management Agreement	18
	3.1.50	 	Franchise Agreement	18
	3.1.51	 	Personal Property	19
	3.1.52	 	Equipment Leases	19
	3.1.53	 	Collective Bargaining	19
	3.1.54	 	Apollo Transaction	19
	 	 	 	 
	Section 3.2	 	Survival of Representations; Reliance	19


 




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Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	Article 4:	BORROWER COVENANTS	19
	 	 	 	 
	Section 4.1	 	Borrower Affirmative Covenants	19
	 	 	 	 
	4.1.1	 	Payment and Performance of Obligations	19
	4.1.2	 	Existence; Compliance with Legal Requirements	20
	4.1.3	 	Taxes and Other Charges	20
	4.1.4	 	Litigation	21
	4.1.5	 	Access to Property	21
	4.1.6	 	Further Assurances; Supplemental Mortgage Affidavits	21
	4.1.7	 	Financial Reporting	21
	4.1.8	 	Title to the Property	25
	4.1.9	 	Estoppel Statement	25
	4.1.10	 	Leases	26
	4.1.11	 	Alterations	26
	4.1.12	 	Approval of Major Contracts	26
	4.1.13	 	After Acquired Property	27
	4.1.14	 	Patriot Act	27
	4.1.15	 	Special Purpose	27
	4.1.16	 	Operating Leases	27
	4.1.17	 	Major Contracts; REA	27
	4.1.18	 	O&M Program	28
	4.1.19	 	PIPs	28
	4.1.20	 	Required Repairs	29
	4.1.21	 	Cure of Violations	29
	 	 	 	 
	Section 4.2	 	Borrower Negative Covenants	29
	 	 	 	 
	4.2.1	 	Due on Sale and Encumbrance; Change of Control; Transfers of Interests	30
	4.2.2	 	Liens	30
	4.2.3	 	Dissolution	30
	4.2.4	 	Change in Use	31
	4.2.5	 	Debt Cancellation	31
	4.2.6	 	Intentionally Omitted	31
	4.2.7	 	Zoning	31
	4.2.8	 	Intentionally Omitted	31
	4.2.9	 	No Joint Assessment	31
	4.2.10	 	Principal Place of Business	31
	4.2.11	 	Change of Name, Identity or Structure	31
	4.2.12	 	Intentionally Omitted	32
	4.2.13	 	ERISA	32
	4.2.14	 	Compliance with Restrictive Covenants, Etc	32
	4.2.15	 	Intentionally Omitted	32
	4.2.16	 	Embargoed Person	33
	4.2.17	 	Matters Concerning Leases	34
	4.2.18	 	Apollo Transaction	34


 




    	 	 iii	 



     


    

 


Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	Article 5:	INSURANCE, CASUALTY AND CONDEMNATION	34
	 	 	 	 
	Section 5.1	 	Insurance	34
	 	 	 	 
	5.1.1	 	Insurance Policies	34
	5.1.2	 	Insurance Company	38
	 	 	 	 
	Section 5.2	 	Casualty and Condemnation	39
	 	 	 	 
	5.2.1	 	Casualty	39
	5.2.2	 	Condemnation	40
	5.2.3	 	Casualty Proceeds	40
	 	 	 	 
	Section 5.3	 	Delivery of Net Proceeds	41
	 	 	 	 
	5.3.1	 	Minor Casualty or Condemnation	41
	5.3.2	 	Major Casualty or Condemnation	41
	 	 	 	 
	Article 6:	CASH MANAGEMENT AND RESERVE FUNDS	45
	 	 	 	 
	Section 6.1	 	Cash Management Arrangements	45
	 	 	 	 
	Section 6.2	 	Required Repairs Funds	46
	 	 	 	 
	6.2.1	 	Deposit of Required Repairs Funds	46
	6.2.2	 	Release of Required Repairs Funds	46
	 	 	 	 
	Section 6.3	 	Tax Funds	47
	 	 	 	 
	6.3.1	 	Deposits of Tax Funds	47
	6.3.2	 	Release of Tax Funds	48
	 	 	 	 
	Section 6.4	 	Insurance Funds	48
	 	 	 	 
	6.4.1	 	Deposits of Insurance Funds	48
	6.4.2	 	Release of Insurance Funds	48
	6.4.3	 	Blanket Insurance	49
	 	 	 	 
	Section 6.5	 	FF&E Funds	49
	 	 	 	 
	6.5.1	 	Deposits of FF&E Funds	49
	6.5.2	 	Release of FF&E Funds	49
	 	 	 	 
	Section 6.6	 	PIP Reserve	50
	 	 	 	 
	6.6.1	 	Deposit of PIP Reserve Funds	50
	6.6.2	 	Release of PIP Reserve Funds	51
	 	 	 	 
	Section 6.7	 	Intentionally Omitted	52
	 	 	 	 
	Section 6.8	 	Operating Expenses	52
	 	 	 	 
	6.8.1	 	Hilton Brand Managed Properties	52
	6.8.2	 	Other Properties	52
	 	 	 	 
	Section 6.9	 	Excess Cash Flow Funds	53
	 	 	 	 
	Section 6.10	 	Security Interest in Reserve Funds; Reserve Funds Generally	53


 




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Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	6.10.1	 	Grant of Security Interest	53
	6.10.2	 	Interest on Certain Reserve Funds; Income Taxes	53
	6.10.3	 	Prohibition Against Further Encumbrance	54
	 	 	 	 
	Section 6.11	 	Property Cash Flow Allocation	54
	 	 	 	 
	6.11.1	 	Order of Priority of Funds in Cash Management Account	54
	6.11.2	 	Failure to Make Payments	56
	6.11.3	 	Application After Event of Default	56
	 	 	 	 
	Article 7:	PROPERTY MANAGEMENT	57
	 	 	 	 
	Section 7.1	 	The Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Beverage Concession Agreement	57
	 	 	 	 
	7.1.1	 	Franchise Agreement	57
	7.1.2	 	Property Management Agreement; Intermediate Management Agreement	57
	7.1.3	 	Beverage Concession Agreement	59
	7.1.4	 	Defaults	59
	 	 	 	 
	Section 7.2	 	Prohibition Against Termination or Modification of Franchise Agreement, Property Management Agreement, Intermediate Management Agreement and Concession Agreement	60
	 	 	 	 
	7.2.1	 	Franchise Agreement	60
	7.2.2	 	Intermediate Management Agreement; Property Management Agreement	60
	7.2.3	 	Beverage Agreements	61
	 	 	 	 
	Section 7.3	 	Expiration or Termination of Franchise Agreement, Intermediate Management Agreement and Property Management Agreement	61
	 	 	 	 
	7.3.1	 	Expiration or Franchisor Termination	61
	7.3.2	 	Expiration, or Property Manager or Intermediate Manager Termination	61
	7.3.3	 	Lender’s Right to Require Replacement of Franchise Agreement	62
	7.3.4	 	Lender’s Right to Require Replacement of Property Management Agreement	62
	7.3.5	 	Lender’s Right to Require Replacement of Beverage Concession Agreement	63
	7.3.6	 	Actions Following Event of Default	63
	7.3.7	 	Assignment of Franchise Agreement	63
	7.3.8	 	Assignment of Management Agreement	63
	7.3.9	 	Assignment of Beverage Concession Agreement	63
	 	 	 	 
	Article 8:	TRANSFERS	64
	 	 	 	 
	Section 8.1	 	Permitted Transfer of the Properties	64


 






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Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	Section 8.2	 	Permitted Transfers of Interest in Restricted Parties	65
	 	 	 	 
	Section 8.3	 	Costs and Expenses	73
	 	 	 	 
	Section 8.4	 	Compliance with other Covenants	73
	 	 	 	 
	Article 9:	SALE AND SECURITIZATION OF LOAN	73
	 	 	 	 
	Section 9.1	 	Sale of Loan and Securitization	73
	 	 	 	 
	Section 9.2	 	Securitization Indemnification	77
	 	 	 	 
	Section 9.3	 	Severance Documentation	81
	 	 	 	 
	Section 9.4	 	Cross Collateralization	82
	 	 	 	 
	Section 9.5	 	Secondary Market Transaction Costs	82
	 	 	 	 
	Article 10:	DEFAULTS	83
	 	 	 	 
	Section 10.1	 	Events of Default	83
	 	 	 	 
	Section 10.2	 	Remedies	88
	 	 	 	 
	Section 10.3	 	Lender’s Right to Perform	89
	 	 	 	 
	Section 10.4	 	Remedies Cumulative	89
	 	 	 	 
	Article 11:	MISCELLANEOUS	90
	 	 	 	 
	Section 11.1	 	Successors and Assigns; Assignments and Participations	90
	 	 	 	 
	Section 11.2	 	Lender’s Discretion	90
	 	 	 	 
	Section 11.3	 	Governing Law	91
	 	 	 	 
	Section 11.4	 	Modification, Waiver in Writing	92
	 	 	 	 
	Section 11.5	 	Delay Not a Waiver	92
	 	 	 	 
	Section 11.6	 	Notices	92
	 	 	 	 
	Section 11.7	 	Trial by Jury	93
	 	 	 	 
	Section 11.8	 	Headings	94
	 	 	 	 
	Section 11.9	 	Severability	94
	 	 	 	 
	Section 11.10	 	Preferences	94
	 	 	 	 
	Section 11.11	 	Waiver of Notice	94
	 	 	 	 
	Section 11.12	 	Remedies of Borrower	94
	 	 	 	 
	Section 11.13	 	Expenses; Indemnity	95
	 	 	 	 
	Section 11.14	 	Schedules Incorporated	96
	 	 	 	 
	Section 11.15	 	Offsets, Counterclaims and Defenses	96
	 	 	 	 
	Section 11.16	 	No Joint Venture or Partnership; No Third Party Beneficiaries	96
	 	 	 	 
	Section 11.17	 	Publicity and Confidentiality	97


 




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Table
of Contents


(continued)


 


	 	 	 	Page
	 	 	 	 
	Section 11.18	 	Waiver of Marshalling of Assets	98
	 	 	 	 
	Section 11.19	 	Waiver of Offsets/Defenses/Counterclaims	98
	 	 	 	 
	Section 11.20	 	Conflict; Construction of Documents; Reliance	98
	 	 	 	 
	Section 11.21	 	Brokers and Financial Advisors	99
	 	 	 	 
	Section 11.22	 	Exculpation	100
	 	 	 	 
	Section 11.23	 	Prior Agreements	104
	 	 	 	 
	Section 11.24	 	Co-Lenders	104
	 	 	 	 
	Section 11.25	 	Servicer	105
	 	 	 	 
	Section 11.26	 	Joint and Several Liability	105
	 	 	 	 
	Section 11.27	 	Creation of Security Interest	105
	 	 	 	 
	Section 11.28	 	Counterparts	106
	 	 	 	 
	Section 11.29	 	Set-Off	106
	 	 	 	 
	Section 11.30	 	Certain Additional Rights of Lender (VCOC)	106
	 	 	 	 
	Article 12:	MANDATORY DE-LEVERAGING OF PROPERTIES	107
	 	 	 	 
	Section 12.1	 	Application of QCR Redemption Amounts	107
	 	 	 	 
	Section 12.2	 	Pro-Rata De-Leveraging With Pool I	107
	 	 	 	 
	Section 12.3	 	Prohibition on Amendments Impacting Mandatory De-Leveraging	107
	 	 	 	 
	Section 12.4	 	Reporting	107
	 	 	 	 
	Section 12.5	 	Expiration	108


 




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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 	-	Approved Brands
	 	 	 
	Schedule VIII	 	Intentionally Omitted
	 	 	 
	Schedule IX	 	Allocated Loan Amounts
	 	 	 
	Schedule X	 	Franchisors and Franchise Agreements
	 	 	 
	Schedule XI	 	Property Managers 
	 	 	 
	Schedule XII	 	Intentionally Omitted
	 	 	 
	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 3.1.17	 	Insurance Claims


 


EXHIBITS


 


	Exhibit A	-	Form of Smith Travel Research Report
	 	 	 
	Exhibit B	-	Intentionally Omitted
	 	 	 
	Exhibit C	-	Form of Credit Card Bank Payment Direction Letter


 




    	 	 viii	 



     


    

 


TABLE OF CONTENTS (cont.)


 


	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


 




    	 	 ix	 



     


    

 


LOAN AGREEMENT


 


THIS LOAN AGREEMENT,
dated as of October 6, 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 GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation,
having an address at 60 Wall Street, New York, New York 10005 (“GACC”; 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 Sixty Million and 00/100 Dollars ($60,000,000.00), executed by Borrowers and payable to the order of Ladder (“Note
A-1”) (b) that certain Promissory Note A-2 of even date herewith in the stated principal amount of Thirty Nine Million
Six Hundred Thousand and 00/100 Dollars ($39,600,000.00), executed by Borrowers and payable to the order of Ladder (“Note
A-2”), (c) that certain Promissory Note A-3 of even date herewith in the stated principal amount of Thirty Nine Million
Six Hundred Thousand and 00/100 Dollars ($39,600,000.00), executed by Borrowers and payable to the order of Ladder (“Note
A-3”), (d) that certain Promissory Note A-4 of even date herewith in the stated principal amount of Forty Million and
00/100 Dollars ($40,000,000.00), executed by Borrowers and payable to the order of GACC (“Note A-4”), (e) that
certain Promissory Note A-5 of even date herewith in the stated principal amount of Twenty Six Million Four Hundred Thousand and
00/100 Dollars ($26,400,000.00), executed by Borrowers and payable to the order of GACC (“Note A-5”), and (f)
that certain Promissory Note A-6 of even date herewith in the stated principal amount of Twenty Six Million Four Hundred Thousand
and 00/100 Dollars ($26,400,000.00), made by Borrower to GACC (“Note A-6”; together with Note A-1, Note A-2,
Note A-3, Note A-4 and Note A-5, as the same may hereafter be amended, supplemented, restated increased, extended or consolidated
from time to time, collectively, 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) pay and discharge any existing loans, if any, relating
to the Properties, (b) pay all past-due Taxes, Insurance Premiums and Other Charges, if any, in respect of the Properties,
(c) make initial deposits of the Reserve Funds, (d) pay costs and expenses incurred in connection with the closing of
the Loan, as approved by Lender, and (e) fund any working capital requirements of the Properties, as approved by Lender. Any
excess proceeds may be used for any lawful purpose.


 


Section 2.2           Interest
Rate.


 


2.2.1           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 the 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 Interest Rate or the Default Rate, as then applicable, expressed as an annual rate divided by 360) by (c) the
Outstanding Principal Balance. The accrual period for calculating interest due on each Monthly Payment Date shall be the Interest
Period immediately prior to such Monthly Payment Date.


 




    2


     


    

 


2.2.4           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 Interest 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)          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 prior to a Securitization of the entire Loan, 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.


 


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 Yield Maintenance Premium, if any, and all other amounts due under the
Loan Documents.


 




    3


     


    

 


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 or counterclaim and shall be made irrespective of any defense thereto.


 


Section 2.4           Prepayments.


 


2.4.1           Voluntary
Prepayments.


 


(a)          Except
as otherwise provided herein, Borrowers shall not have the right to prepay the Loan in whole or in part prior to the Stated Maturity
Date. Subject to Sections 2.4.1(b), 2.4.2 and 2.4.3 hereof, on the Prepayment Lockout Expiration Date, and
on any Business Day thereafter, Borrowers may, at Borrowers’ option and upon not less than twenty (20) days prior notice
to Lender, prepay the Outstanding Principal Balance in whole only with payment of the Yield Maintenance Premium; provided,
however, that, subject to Section 2.4.3 hereof, payment of the Yield Maintenance Premium shall not be required
if the prepayment occurs on or after the Open Prepayment Date. Any prepayment received by Lender under this Section 2.4.1
shall be accompanied by (a) 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), (b) all other sums due and payable under the Loan Documents, and (c) all reasonable out-of-pocket
costs and expenses incurred by Lender in connection with such prepayment.


 




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(b)          On
the Prepayment Lockout Expiration Date and on any Business Day thereafter, Borrowers may, at Borrowers’ option and upon not
less than twenty (20) days prior notice to Lender, prepay the Outstanding Principal Balance in part (x) to effect a Property Release
in accordance with Section 2.5 hereof, which amount shall be applied by Lender in accordance with the terms of Section
2.5.1(c) of this Agreement, or (y) in connection with payment of a DSCR/LTV Remedial Payment Amount to effect a Cash Sweep
Event Cure under clause (iii) of the definition of “Cash Sweep Event Cure” which amount, Lender shall apply
to the Outstanding Principal Balance, Yield Maintenance Premium, and any other interest and fees due Lender.


 


(c)          A
notice of prepayment made under Section 2.4.1(a) or Section 2.4.1(b) may be revoked by Borrowers if written notice
of such revocation is delivered by Borrowers to Lender on or before the date that is five (5) Business Days prior to the prepayment
date set forth in the notice of prepayment. If Borrowers deliver to Lender notice of prepayment and subsequently revoke such notice
prior to prepayment, Borrowers shall promptly reimburse Lender for all reasonable out-of-pocket costs and expenses incurred by
Lender (including any reasonable 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, Lender shall, at its option,
apply such Net Proceeds to the prepayment of the Outstanding Principal Balance; 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, 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 Yield Maintenance Premium or
other prepayment premium or penalty shall be due in connection with any prepayment made pursuant to this Section 2.4.2.
In the event that the application of Net Proceeds in respect of any particular Property pursuant to this Section 2.4.2 shall
result in a reduction of the Outstanding Principal Balance in an amount greater than sixty percent (60%) of the Allocated Loan
Amount of such affected Property, then, subject to Section 2.6 hereof and provided each of the conditions set forth in Section
2.5.1 shall have been satisfied, Borrower shall be entitled to effect a Property Release for such affected Property provided
that in lieu of the payments due under Section 2.5.1(c), Borrower shall pay to Lender, and Lender shall have received by
wire transfer of immediately available federal funds, an amount equal to the sum of (i) the difference, if any, between one hundred
fifteen percent (115%) of the Allocated Loan Amount in respect of such affected Property and the Net Proceeds previously applied
pursuant to the first part of this Section 2.4.2, plus (ii) 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), plus (iii) all other sums then due and payable under the Loan Documents,
plus (iv) all reasonable out-of-pocket costs and expenses incurred by Lender in connection with such prepayment.


 




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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 hereof, and Borrower shall pay, in addition to the Debt, or portion thereof then
being prepaid or satisfied, (i) the Yield Maintenance Premium on the Outstanding Principal Balance, or portion thereof then
being prepaid or satisfied, 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, and (v) all reasonable out-of-pocket costs and expenses incurred by Lender in connection with such
prepayment.


 


Section 2.5           Partial
Releases


 


2.5.1           Partial
Releases. Notwithstanding anything to the contrary set forth in this Agreement and the other Loan Documents, in connection
with the sale of one or more of the Properties (each such sale, a “Property Sale”) to a bona fide
third party purchaser who is not a Restricted Party or an Affiliate of a Restricted Party (other than a Property Release undertaken
to cure an Event of Default identified in Section 10.1(a)(xix), as permitted therein), Borrower shall have the right, subject
to Section 2.6 hereof, pursuant to the provisions of this Section 2.5, at any time on or after the Prepayment
Lockout Expiration Date, to sell a Property or Properties and obtain a release of such Property or Properties from the Lien of
the applicable Security Instrument and the other Loan Documents (each such release, a “Property Release”) upon
satisfaction of the following conditions precedent:


 


(a)          No
Event of Default shall have occurred and then be continuing or shall occur solely as a result of such Property Release;


 


(b)          Borrowers
shall have submitted to Lender a written request for such Property Release at least thirty (30) days prior to the proposed Property
Release, which request (i) shall specify the Property or Properties that such Borrowers intend to release and state the anticipated
closing date of such Property Sale (the “Property Release Date”) and (ii) shall include an Officer’s Certificate
certifying that (A) as of the date of such request, no Event of Default shall have occurred and be continuing or shall occur solely
as a result of such Property Release and (B) all of the requirements set forth in this Section 2.5 have been satisfied;


 


(c)          Borrowers
shall have paid, or shall have arranged to be paid contemporaneously with the Property Release, to Lender, and Lender shall have
received by wire transfer of immediately available federal funds, an amount equal to the sum of (i) the Property Release Price
for the Property or Properties to be released, which shall be applied by Lender as a prepayment of the Outstanding Principal Balance,
plus (ii) the DSCR/LTV Remedial Payment Amount, if any, plus, without duplication, (iii) the Yield Maintenance Premium on the portion
of the Outstanding Principal Balance being prepaid, plus, without duplication, (iv) all interest which would have accrued on the
portion of the Outstanding Principal Balance being prepaid through, but not including, the next occurring Monthly Payment Date
(or, if such prepayment occurs on a Monthly Payment Date, through, but not including, such Monthly Payment Date), plus, without
duplication, (v) all other sums then due and payable under the Loan Documents;


 




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(d)          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 Property or Properties 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 applicable Property is located;


 


(e)          If
any portion of the Loan shall then be held by a REMIC Trust fund pursuant to a Securitization, and requested by Lender, Borrowers
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;


 


(f)          Borrowers
and each SPC Party shall continue 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;


 


(g)          after
giving effect to the Property Release and the receipt and application of any DSCR/LTV Remedial Payment Amount, the Debt Service
Coverage Ratio for the remaining Properties shall not be less than the applicable DSCR Threshold;


 


(h)          after
giving effect to the Property Release and the receipt and application of any DSCR/LTV Remedial Payment Amount, the Loan to Value
Ratio for the remaining Properties shall not be greater than the lesser of (i) sixty-four and four tenths percent 64.4 % and
(ii) the Loan to Value Ratio in effect immediately prior to the Property Release;


 


(i)          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 Property or Properties that are the subject
of such Property Release 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 Property or Properties that are the subject of such
Property Release with respect to any period of time from and after the date of such Property Release;


 


(j)          Borrowers
shall have executed and delivered to Lender such other certificates, documents or instruments as Lender may reasonably require
in connection with the Property Release;


 




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(k)          Borrowers
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, Borrowers shall have paid reasonable out-of-pocket costs and expenses of
third parties relating to the release (including, without limitation, the cost of title and recording costs and the out-of-pocket
costs and expenses incurred by, and all fees and charges of, the Rating Agencies) incurred in connection with the release of the
Property or Properties; and


 


(l)          in
connection with any Property Release undertaken to cure an Event of Default identified in Section 10.1(a)(xix), as permitted
therein, Borrowers shall have delivered an Officer’s Certificate to Lender providing a certification that as of the date
of such request, 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 commercially viable.


 


2.5.2           Release
of Properties. With respect to any Property Release, simultaneously with the closing of such Property Release if all of the
conditions set forth in Section 2.5.1 with respect to such Property Release have been satisfied, Lender, at the sole
cost and expense of Borrowers, shall execute and deliver to Borrowers the releases, satisfactions, discharges and/or assignments,
as applicable and as reasonably requested by Borrowers, of the Security Instruments, the Assignments of Leases and the other Loan
Documents which solely relate to the Property or Properties (and if applicable, the applicable Borrower and/or Guarantor) 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 Property or Properties released.


 


Section 2.6           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 Section 2.5, 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 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 2.6 shall be accompanied by payment of
the Yield Maintenance Premium, except that (i) subject to Section 2.4.3, no Yield Maintenance Premium or other prepayment
fee or penalty shall be due in connection with any prepayment made on or after the Open Prepayment Date and (ii) so long as no
Event of Default shall have occurred and be continuing, no Yield Maintenance Premium or other prepayment fee or penalty 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 2.6.


 




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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).


 


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).


 




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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 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 which would reasonably be expected to have a Material Adverse Effect.


 


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) materially 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 prior to 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 in the Zoning Reports delivered to Lender on or prior to the date hereof, 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. All covenants, restrictions or agreements of record relating to the construction, operation or
use of the Property and 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, to Borrower’s knowledge, are in full force
and effect without default by any party thereunder. To Borrower’s knowledge, there are no covenants, restrictions or agreements
of record relating to the construction, operation or use of the Property not described in the Title Insurance Policy. 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, 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.


 




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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 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, to Borrower’s knowledge, 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, except as set forth in a physical condition report for such Property prepared by
Nova Consulting Group, Inc. dated on or about August 25, 2015, a copy of which has been delivered to Lender prior to 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;
to Borrower’s knowledge, there exists no structural or other material defects or damages in such Property, whether latent
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 prior to 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 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.


 




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3.1.22         Leases.
No Property is subject to any Leases other than that certain antenna license agreement with Sprintcom, Inc., with respect to the
Hampton Inn Knoxville Airport, dated as of September 1998. No Person has any possessory interest in any Property or right to occupy
the same other than as transient, overnight guests.


 


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. 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.


 


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, 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).


 




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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. No single Person, individually
or together with Affiliates, owns an amount equal to or greater than twenty percent (20%) of all legal and beneficial interests
in 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. 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)          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 reasonably be expected to 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 reasonably be expected to 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.  The Operating Leases provide that they shall
have a term expiring no earlier than March 1, 2020 and thereafter shall automatically renew for at least one additional term of
no less than five (5) years at a rent determined by the parties in accordance with the Operating Leases.


 


3.1.43         Intentionally
Omitted.


 


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 copies 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 expected timeline and deadline
for completing the applicable PIP Plan as currently required by the applicable Franchisor. The copy of each PIP Plan attached on
Exhibit P-1 has been approved by the applicable Borrower and the applicable Franchisor and is hereby approved by Lender.
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. Lender hereby approves the PIP Budgets related to the PIP Plans for following Properties,
which form a part of Schedule P-2 attached hereto and are expected to commence within sixty (60) days of the date hereof:
(i) Courtyard Dalton, Georgia, (ii) Courtyard Houston, Texas, (iii) Homewood Suites Augusta, Georgia, (iv) Homewood Suites Orlando,
Florida, and (v) Residence Inn Jacksonville, Florida (collectively, the “Closing-Approved PIP Budgets”).


 


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 are being performed by 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
customer satisfaction ratings, surveys or reports (except as disclosed in the Closing Quality Assurance Reports), provided that
the mere existence of the Closing Quality Assurance Reports shall not, in and of themselves, trigger a Cash Sweep Event under clause
(iv) of the definition thereof, a Default or Event of Default; provided, however, subsequent quality assurance
reports citing the same circumstances identified in the Closing Quality Assurance Reports may serve as a basis for triggering a
Cash Sweep Event, Default or Event of Default, (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.


 




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3.1.51         Personal
Property. Borrower owns all material personal property necessary to operate the Property in the manner it is currently operated.


 


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 which has expired by its terms but
the parties thereto continue to operate under its terms while a new agreement (which shall not constitute a Major Contract requiring
Lender’s approval pursuant to Section 4.1.12) is being negotiated, there are no collective bargaining agreements affecting
any Property.  No Borrower has violated in any material respects any applicable laws, rules and regulations relating to the
employment of labor, including those relating to wages, hours, collective bargaining and the payment and withholding of taxes and
other sums as required by appropriate Governmental Authorities. To Borrower’s knowledge, there are no outstanding obligations
with respect to pending pension obligations.


 


3.1.54         Apollo
Transaction. The Apollo Transaction Agreement and the closing of the transactions contemplated thereunder will not result in
a “Changeover Event” (as defined in the organizational documents of Pool II Holdco).


 


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.


 




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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 and permits 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 each Borrower shall use commercially reasonable efforts to prevent any other Person in occupancy of or involved with the operation
or use of any Property from committing 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 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 material 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 Borrowers shall promptly discharge, any Lien or charge against the Property other
than Permitted Encumbrances, 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 the applicable Taxes or Other Charges being contested
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.


 




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4.1.4           Litigation.
Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or to its knowledge 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). In connection with any inspection
undertaken in accordance with the foregoing sentence, Lender or its agents, representatives, consultants and employees, as part
of such inspection, may take soil, air, water, building material and other samples from any Property, subject to the rights of
Tenants under Leases, if any.


 


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.


 




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(b)          Borrower
shall furnish Lender annually, within one hundred twenty (120) days following the end of each Fiscal Year, a complete copy of audited
consolidated financial statements for an entity required to report 100% of the consolidated financial results of Borrowers and
the Properties in accordance with GAAP (excluding, for the avoidance of doubt, any entity that is required to include within its
consolidated financial results in accordance with GAAP any assets that are not collateral for the Loan) (“Holdco”)
(which, to the extent required by GAAP, shall separately denote any “non-controlling” or “minority” interest
in the earnings of any subsidiary of Holdco), certified by an Independent Accountant in accordance with GAAP and prepared in accordance
with the requirements of Regulation AB, covering the Properties on a combined basis for such Fiscal Year, including a consolidated
balance sheet as of the end of such Fiscal Year and a consolidated statement of operations. Such 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. Borrower’s annual financial statements shall be accompanied by (i) a current rent roll for the Property
(if applicable), (ii) a summary of any and all FF&E Work, PIP Work and Capital Expenditures made at the Properties on a combined
basis, as well as for each Property where the cost of FF&E Work, PIP Work and Capital Expenditures at such Property exceeds
$500,000, during the prior twelve (12) month period, (iii) an occupancy report for each Property for such Fiscal Year, including
an average daily rate and (iv) an Officer’s Certificate of the Chief Financial Officer of Borrower certifying (A) that
such statements are true, correct, accurate and complete and fairly represent the results of operations of Holdco (taking into
account any “non-controlling” or “minority” interests in the earnings of any subsidiary of Holdco) and
the Properties, 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.


 


(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, accompanied by an Officer’s Certificate of the Chief Financial Officer of Borrower certifying (i) that such statements
are true, correct, accurate and complete and fairly represent the results of operations of Holdco (taking into account any “non-controlling”
or “minority” interests in the earnings of any subsidiary of Holdco) and the Properties, 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)          unaudited
consolidated financial statements of Holdco, internally prepared on an accrual basis including a consolidated balance sheet as
of the end of such quarter and profit and loss statements for the quarter and year then ended compared to the corresponding period
for the previous Fiscal Year (which, to the extent required by GAAP, shall separately denote any “non-controlling”
or “minority” interest in the net assets of any subsidiary of Holdco), and Property-level profit and loss statement
for the previous twelve months;


 


(ii)         a
comparison of the budgeted income and expenses as set forth in the Annual Budget or Approved Annual Budget, as applicable, 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 Annual
Budget or Approved Annual Budget, as applicable, 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 Annual Budget or Approved Annual Budget, as applicable, in
each case, for such quarter and year to date;


 




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(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 each calendar month, the following items, accompanied by an Officer’s Certificate of the Chief Financial Officer
of Borrower certifying (i) that such statements are true, correct, accurate and complete and fairly represent the results
of operations of Holdco (taking into account any “non-controlling” or “minority” interests in the earnings
of any subsidiary of Holdco) and the Properties, 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)          until
the occurrence of a Securitization of the entire Loan, a consolidated profit and loss statement for Holdco (which, to the extent
required by GAAP, shall separately denote any “non-controlling” or “minority” interest in the earnings
of any subsidiary of Holdco) for the month and year then ended compared to the corresponding period of the previous Fiscal Year
and for each Property, a profit and loss statement for the twelve (12) months then ended;


 


(ii)         until
the occurrence of a Securitization of the entire Loan, a comparison of the budgeted income and expenses as set forth in the Annual
Budget or Approved Annual Budget, as applicable, and the actual income and 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 Annual Budget or Approved Annual Budget, as applicable, and (y) more than five percent
(5%) between budgeted and actual amounts in respect of the Annual Budget or Approved Annual Budget, as applicable, taken as a whole,
in each case, for such month and year to date;


 


(iii)        until
the occurrence of a Securitization of the entire Loan, a current rent roll for the Property (if applicable);


 


(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) until the occurrence of a Securitization of the entire
Loan, an occupancy report for the Property for the subject month, including an average daily rate; and


 




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(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. During the continuance
of a Cash Sweep Event Period, Lender shall have the right, subject to Section 4.1.7(g) below, to approve each Annual Budget
(which approval shall not be unreasonably withheld or delayed so long as no Event of Default is continuing), and Annual Budgets
approved by or deemed approved by Lender shall hereinafter be referred to as an “Approved Annual Budget”; provided,
however, that if Borrower shall have not delivered to Lender within five (5) Business Days of the occurrence of a Cash Sweep
Event, an updated Annual Budget for Lender’s review and approval, Lender shall review the last Annual Budget delivered pursuant
to the first sentence of this Section 4.1.7(e). 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 Annual Budget or Approved Annual Budget, as applicable, 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, which approval shall not be unreasonably withheld, conditioned or delayed. Until such time
that any Annual Budget has been approved by Lender, the previous 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 prior to 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 information with respect to the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Lender.


 




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(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 GERMAN AMERICAN
CAPITAL CORPORATION, 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 GERMAN AMERICAN CAPITAL CORPORATION, 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 Interest Rate, (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.


 


(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.


 




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(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 except
for up to two (2) Leases at each Property demising premises exclusive of any guest rooms, provided that (a) no Event of Default
shall have occurred and is then continuing, and (b) such Leases shall, together with any other Lease affecting such Property, (i)
constitute less than five percent (5%) in the aggregate of the Gross Revenue of such Property, (ii) provide for economic terms,
including rental rates, comparable to existing local market rates for similar properties, (iii) be on commercially reasonable terms,
(iv) have a term of not more than ten (10) years, including extensions and renewals, and (v) not be to an Affiliate of Borrower,
Guarantor, or an Affiliated Manager.


 


4.1.11         Alterations.
Except with respect to the alterations identified in the PIP Plans which are governed by Section 4.1.19, Lender’s
prior written approval shall be required in connection with (a) any alterations to any Improvements (i) that could reasonably
be expected to 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.


 


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.


 




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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 replace, 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; provided,
however, from and after December 1, 2019, any replacement, modification or amendment to any Operating Lease shall be deemed
approved by Lender so long as (i) no Event of Default shall have occurred and be continuing, (ii) such replacement, modification
or amendment shall, except with respect to the rent due under such Operating Lease, be on substantially the same terms as the Operating
Lease existing on the Closing Date, (iii) Borrower shall have delivered the letter of a “Big Four” accounting firm
or Independent Accountant stating that the total rent (base rent and additional rent) is equal to an amount adequately and reasonably
supported by a fair market rent pricing model, (iv) Borrower shall provide prior written notice of all such modifications or amendments
and required supporting documentation, and (v) Borrower shall execute and deliver to Lender all additional documents and other
evidence reasonably requested by Lender to confirm the foregoing matters and the continuing priority and perfection Lien held by
Lender in respect of such Operating Lease.


 


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 commercially reasonable and 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 in all material respects
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.


 




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(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 commercially reasonable and necessary to
preserve and keep unimpaired its material 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 in all material respects
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.


 


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 (A)
increase any PIP Budget by more than five percent (5%) of the total amount of such PIP Budget (provided Borrower shall have made
a deposit into the PIP Reserve in the amount of any such increase prior to effecting such modification or amendment), (B) accelerate
any time limits prescribed therein by more than thirty (30) days provided that Borrower shall have given Lender sixty (60) days
written notice prior to such acceleration and such acceleration shall not change the calendar quarter in which Borrower’s
obligations to perform all or any portion of the PIP Work thereunder shall become due or (C) otherwise increase the obligations
of any Borrower in any material respect, in each case, 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 as promptly as practicable, but in no event more
than one hundred eighty (180) 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.


 




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(b)          Subject
to Lender’s required approval of any modification to the PIP Budget attached to this Agreement in accordance with clause
(a), above, sixty (60) days prior to Borrower’s commencement of any work related to a PIP Plan at any Property, but in
no event later than sixty (60) 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.
The Closing-Approved PIP Budgets, in the form attached to and made part of Schedule P-2, are hereby approved by Lender.


 


(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 (subject to any
force majeure event and/or cure period expressly provided for under the applicable PIP Plan or Franchise Agreement), 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 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 and
permit violations affecting the Property.


 


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


 




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4.2.1           Due
on Sale and Encumbrance; Change of Control; Transfers of Interests. Except for Permitted Encumbrances, a Property Release effected
in compliance with Section 2.5 hereof, 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”). Borrowers hereby represent and warrant
that, as of the Closing Date, American Realty Capital Hospitality Trust, Inc. Controls the Borrowers and the SPC Parties, and the
parties to this Agreement stipulate that prior to any time American Realty Capital Hospitality Trust, Inc. relinquishes Control
of the Borrowers or the SPC Parties, as applicable, to a Permitted Transferee or otherwise as permitted in accordance with this
Agreement, references to “change in Control” or “change of Control” of Borrowers or the SPC Parties, shall
mean, as of the date of such determination, if American Realty Capital Hospitality Trust, Inc. no longer Controls Borrowers or
the SPC Parties, as applicable. For purposes of this Agreement, no “change in Control” or “change of Control”
of Guarantor shall be deemed to exist as a result of any properly authorized corporate action taken to (a) replace members of the
corporate board governing Guarantor or otherwise change the composition of such governing body, or (b) the substitution or other
change to the identity of the advisor engaged to manage Guarantor. 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) other than the Operating Leases, 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, 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;
and (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.


 


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.


 




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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 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 limited liability 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.


 




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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:


 


(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, amend, supplement, waive or release in any material respect any
(i) easements, (ii) covenants, restrictions or agreements of record relating to the construction, operation or use of the Property,
(iii) 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         Intentionally
Omitted.


 




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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.


 


(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”.


 




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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.


 


4.2.18         Apollo
Transaction. Borrower shall obtain any necessary consents required pursuant to the organizational documents of Pool II Holdco
to enter into the Apollo Transaction Agreement prior to effecting the transaction contemplated therein.


 


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 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 “special
flood hazard area” coverage, which may be no greater than $500,000, and 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);


 




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(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 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;


 




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(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


 


(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.


 




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(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 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 continuation of such Policy upon notice of cancellation due to non-payment
of Insurance Premiums pursuant to the mortgagee clause required herein.


 




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(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.


 


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, complete 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 complete 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 complete 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.


 




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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 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.


 




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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 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.


 




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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 2.6 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 any 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 to Borrower 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 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;


 




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(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 in its reasonable discretion;


 


(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 2.6 hereof shall have been satisfied.


 




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(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 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.


 




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(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.


 


(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; provided,
however, that if an Event of Default is not continuing, then no Yield Maintenance Premium or other prepayment premium or penalty
shall be payable with respect to the application of Net Proceeds in accordance with this Section 5.3.2(h).


 




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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 not withdraw or change any such instruction during the Term unless requested
to do so by Lender, which request must be consistent with the terms of this Agreement) 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 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 any amounts on deposit in each such account in excess of $1,000.00 are transferred by wire
transfer to the Clearing Account no less frequently than once each calendar week.


 




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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, if any, 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”). Lender’s decision of whether or not to collect Required Repairs Funds in connection with any
particular Required Repairs shall not reduce Borrowers’ obligation to complete such Required Repair.


 


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 the 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. Any Required Repairs Funds remaining in
the Required Repairs Account after the Obligations have been paid in full shall be returned to Borrower.


 




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(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 actual and reasonable out-of-pocket expenses 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.


 


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 Eight Hundred Ninety Thousand Two Hundred Fifteen and 26/100 Dollars ($890,215.26) 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.


 




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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, 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.


 




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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 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 (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”.


 


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. Any FF&E Funds remaining after the Obligations have been paid in full shall be returned to
Borrower.


 




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(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) to
enter onto the Property during normal business hours (subject to the rights of transient hotel guests and their invitees and 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 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. Borrowers shall deposit or cause to be deposited with or on behalf of Lender (a) on the Closing
Date, the amount of Ten Million and No/100 Dollars ($10,000,000.00), (b) funds at the times and in the amounts specified in the
PIP Reserve Funding Schedule attached hereto as Schedule XIV; (c) any additional amounts required to be deposited by any
Borrower in compliance with Section 4.1.19(a)(ii) hereof; and (d)  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,
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.


 




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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 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)). After all of the PIP Alterations have been completed in accordance with the PIP
Plans and Borrowers shall have provided evidence reasonably satisfactory to Lender that the applicable Franchisors have accepted
the PIP Alterations as complete, any PIP Reserve Funds remaining on deposit in the PIP Reserve Account shall be deposited into
the FF&E Account for application in accordance the terms of Section 6.5 hereof.


 


(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.


 






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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 Annual Budget or Approved Annual Budget, as applicable, 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”) to the extent there are amounts in the Cash Management 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 Annual Budget or Approved Annual Budget, as applicable, 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
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.


 




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Section 6.9           Excess
Cash Flow Funds. During the continuance of a Cash Sweep Event Period, all Excess Cash Flow
together with any DSCR/LTV Remedial Payments made to Lender for deposit to the Excess Cash Flow Account in lieu of being paid to
the Lender for application to the Outstanding Principal Balance, Yield Maintenance Premium, and other interest and fees due Lender
under the Loan and as reasonably determined by Lender 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 (ii) or 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/Management 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/Management 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,
unless payment of such funds to Borrower would cause the occurrence of a Cash Sweep DSCR Trigger Event that had been cured by Borrowers’
deposit of a DSCR/LTV Remedial Payment Amount to the Excess Cash Flow Account. 


 


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 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).


 






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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);





 


(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);


 






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(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, all amounts remaining in the Cash Management Account after deposits for items
(a)(i) through (a)(vii) 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/Management
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


 


(ix)         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 Cash Sweep Event Period), on October 21, 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 Event Period
is then continuing, all funds deposited into the Cash Management Account since the last Monthly Payment Date shall be applied on
such Interim Disbursement Date in the following order of priority:


 


(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;


 


(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;


 






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(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 Cash Management 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 or to make the required payments from such 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.


 





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.


 






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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 (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, use best efforts to 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.


 






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(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 Agreement with Property Manager, Borrower shall use best efforts to 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.


 




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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 and such default shall not be cured after expiration of all applicable notice and cure periods, 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 and such default shall not be cured after
expiration of all applicable notice and cure periods, 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 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.


 




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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 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) 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 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.


 






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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.


 


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.


 






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(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 and during the continuation 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.


 





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 and during the continuation 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.


 






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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 and during the continuation 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, 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).


 






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Article
8: TRANSFERS


 





Section 8.1           Permitted
Transfer of the Properties. Borrowers shall have the right to unlimited Transfers of all
of the Properties to one or more Permitted Transferees as part of a single transaction and have such Permitted Transferees assume
the Loan provided that the following conditions precedent are satisfied: (a) Lender shall have received a notice from Borrowers
requesting Lender’s consent to such Transfer not less than thirty (30) days prior to the proposed date of Transfer; (b) no
Default or Event of Default shall have occurred and be continuing or shall occur solely as a result of such Transfer; (c) Lender
shall have received a Rating Agency Confirmation as to the conveyance of all of the Properties to, and the assumption of the Loan
by, such Permitted Transferees and the replacement and release of Guarantor as contemplated in clause (h) below; (d) Lender
shall have received an agreement, in form and substance reasonably acceptable to Lender, pursuant to which Permitted Transferees
have assumed all of Borrowers’ obligations under the Loan Documents; (e) Borrowers shall have paid to Lender an assumption
fee equal to one-half of one percent (0.5%) of the Outstanding Principal Balance for the first Transfer and assumption and one
percent (1.0%) of the Outstanding Principal Balance for each subsequent Transfer and assumption; (f) Lender shall have received
such agreements, certificates, legal opinions and other documentation as may be reasonably requested by Lender, including, without
limitation, a title insurance endorsement confirming the Liens of the Security Instruments as valid first liens on each of the
Properties, as applicable, subject to Permitted Encumbrances; (g) the Permitted Transferee and its property manager shall have
sufficient experience in the ownership and management of properties similar in location, size, class, use, operation and value
as the Properties, and Lender shall be provided with reasonable evidence thereof (and Lender reserves the right to approve the
Permitted Transferee without approving the substitution of the property manager); provided, however, each of the
Scheduled Managers shall be deemed acceptable by Lender as a Property Manager so long as such Person shall not have suffered any
material adverse change to the reputation and/or financial condition of such Person since the Closing Date; (h)(i) one or more
Satisfactory Replacement Guarantors shall (A) have assumed all obligations of Guarantor under the Guaranty and Environmental Indemnity
for events or conditions occurring subsequent to the Transfer or (B) have executed and delivered 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, (ii) if required by Lender or the Rating Agencies,
Borrowers shall have delivered 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, (A) that the Guaranty and
the Environmental Indemnity (or the replacement guaranty and environmental indemnity, as the case may be) are enforceable against
such substitute guarantor(s) in accordance with their terms and (B) 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 replacement and release, (iii) if required by Lender or the Rating Agencies,
Borrowers shall have delivered to Lender a new Insolvency Opinion, and (iv) Lender and the Rating Agencies shall have received
such other documentation and information as may be reasonably requested by Lender or requested by the Rating Agencies in connection
with such replacement and release, including, without limitation, a spousal consent in form and substance acceptable to Lender,
as and to the extent applicable; (i) such Transfer, assumption and replacement and release 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, assumption and replacement and release and deliver the same to Lender; (j) Borrowers
shall have obtained the consent of the Preferred Equity Investor to such Transfer if required pursuant to the Pool II Holdco Operating
Agreement; and (k) Lender may, as a condition to evaluating any requested consent to such Transfer, require that Borrowers post
a cash deposit with Lender in an amount equal to Lender’s anticipated reasonable out-of-pocket costs and expenses in evaluating
any such request for consent. Upon the closing of a Transfer and assumption and the satisfaction of all of the above requirements,
the named Guarantor herein shall be released from any further liability under the Guaranty and the Environmental Indemnity for
acts that arise from and after the date of such Transfer and assumption and the approved substitute guarantor(s) shall be the “Guarantor”
for all purposes of this Agreement.


 






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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 in Restricted Parties 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 beneficial and economic interests in all Borrowers and any SPC Parties, and shall
continue to Control Borrowers and any SPC Parties and (B) Guarantor shall continue to own, directly or indirectly, at least
fifty-one percent (51%) of all 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 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.


 






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(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 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 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; provided, however, in connection with any single Transfer of less than twenty percent (20%)
of direct or indirect interests in ARCHOP permitted under this Section 8.2(b), such notice and accompanying documentation
may be delivered not more than ten (10) days after 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;


 


(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));


 






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(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 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;


 






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(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 (i) any obligations thereunder arising from any action or event occurring prior to the effective date of such replacement
and (ii) all matters concerning the Property located in Stratford, Connecticut and any Borrowers owning any interest in such Property
whether such liability arises before or following 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 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 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 Pool II 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)         Pool
II 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)      Intentionally
Omitted;


 





(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 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;


 






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(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 Property Manager
or will be managed by a Scheduled Manager after the Transfer;


 


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


 


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


 






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(n)          For
the avoidance of doubt, provided that the Apollo Transaction Agreement and the closing of the transactions contemplated thereunder
do not result in a “Changeover Event” (as defined in the organizational documents of Pool II Holdco), such transactions
shall not be deemed to be a prohibited Transfer hereunder. No later than ten (10) days following completion of the transfers contemplated
by the Apollo Transaction Agreement, Borrowers shall give Lender notice of such Transfer.


 


Section 8.3           Costs
and Expenses. Borrower shall pay all reasonable out-of-pocket 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, those Rating Agencies engaged to rate any Securitization involving all
or any portion of the Loan, the respective successors and assigns of Lender, and their respective counsel, agents and representatives,
as to bankruptcy non-consolidation 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,
with applicable exceptions related to changes in facts since the date of Closing;


 


(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 reasonably determines 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:


 






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(i)          if
Lender reasonably determines that the principal amount of the Loan together with any Related Loans, as of the cut-off date for
such Securitization, may equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal amount
of all mortgage loans included or expected to be included in the Securitization, net operating income for the 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 reasonably determines 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.


 






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(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 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 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.


 






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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, as it relates to Borrower, Borrower Affiliates, the Properties (or any portion thereof), any Affiliated Manager, or Guarantor,
contained in the information provided to Lender by Borrower, any Affiliate of Borrower or any of their respective agents, counsel
or representatives (collectively, the “Covered Disclosure Information”), (B) the omission or alleged omission
to state therein a material fact required to be stated in such Covered Disclosure Information or necessary in order to make the
statements in such Covered Disclosure 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 to Lender (1) in connection with the preparation of the Covered
Disclosure Information 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 to Lender 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 to Lender (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 to Lender 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 reasonable legal or other related 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.


 




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(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 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 Rating Agencies
engaged to rate any Securitization holding all or a portion of the Loan 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, and/or (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 to Lender (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 to Lender 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.


 







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(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.




 






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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 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 2.6 hereof or following a
Casualty, Condemnation or Event of Default, but in no other circumstances), 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 and (5) Borrower’s rights and Lender’s obligations under
the Loan Documents shall not decrease (other than to a de minimis extent) and the Lender’s rights and Borrower’s
obligations under the Loan Documents shall not increase (other than to a de minimis extent). 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 four (4) days after notice has been given to Borrower
by Lender of Lender’s intent to exercise its rights under such power and Borrower has failed to execute such documents.


 




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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, 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, or decrease any rights of Borrowers or obligations of Lender under the Loan Documents (other than to a de
minimis extent) or increase any rights of Lender under the Loan Documents (other than to a de minimis extent). 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 in the aggregate for all Securitizations
(and Lender shall reimburse Borrower for all such costs and expenses, including reasonable out-of-pocket legal fees 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).


 




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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
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
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 in connection with the Loan 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;


 




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(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 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 factual assumptions contained in any Insolvency Opinion is or shall become untrue in any material respect; provided,
however, such breach shall not constitute an Event of Default in the event that (A) such breach is not intentional, (B)
such breach is immaterial, (C) such 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 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 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;


 




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(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 or prosecute the discharge 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) and such mechanic’s
lien or other Lien is not bonded or removed within ten (10) days after attaching to the Property;


 


(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 material right
or remedies under any Franchise Agreement, unless in the case of a termination or cancellation by the applicable Franchisor (other
than any Voluntary Franchise Termination), the applicable Borrower, within sixty (60) days after such termination or cancellation,
enters into a Replacement Franchise Agreement for such affected Property, in accordance with the applicable terms and conditions
of this Agreement, with (i) a Qualified Franchisor or, (ii) an Approved Brand, provided Borrower’s selection of an Approved
Brand under this clause (ii) shall be permitted without satisfying the requirements of a Qualified Franchisor up to a maximum
of four (4) times without Lender consent (inclusive of any instances in which an Approved Brand is engaged by Borrower to limit
Borrower’s recourse liability under Section 11.22(11)(D));


 




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(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
in any material respect 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 material rights or remedies under any Intermediate Management Agreement,
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 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 Property Management Agreement), (B) any Borrower or any Intermediate Manager,
as the case may be, defaults in any material respect under any Property Management Agreement beyond the expiration of any applicable
notice and/or cure 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 material right or remedies
under any Property Management Agreement, 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 in any material respect
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 material rights or remedies under the Beverage Concession Agreement;


 




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(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, with respect to no more than two (2) Properties during the Term, effect a Property
Release in respect of such Property 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 any covenant set forth in Sections 12.1, 12.2, or 12.3 of this Agreement;


 


(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 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, an Affiliated Manager, Intermediate Manager, the Property or any Affiliate of
any of them, 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 (other than any payment due under Section 2.4.2, hereof) or to permit Lender
to accelerate the maturity of all or any portion of the Obligations.


 




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(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 Yield Maintenance Premium,
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 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.


 




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(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 Yield Maintenance Premium, if applicable, in such order, priority and proportions as Lender in its sole discretion
shall determine.


 


Section 10.3         Lender’s
Right to Perform. During the continuation of any Event of Default, 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.


 




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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 with respect to matters first arising 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 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 absent manifest error. 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 reasonable
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).


 




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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:


 


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.


 




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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 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	
        German American Capital Corporation

        60 Wall Street

        New York, New York 10005

        Attention: Robert Pettinato

         



 




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	with a copy to	
        DLA Piper LLP (US)

        1251 Avenue of the Americas

        New York, New York 10020

        Attention: Jeffrey B. Steiner, Esq.

         

	and with a copy to:	
        Wells Fargo Bank National Association

        Commercial Mortgage Servicing

        MAC D1086-120

        550 South Tryon Street, 14th Floor

        Charlotte, North Carolina 28202

        Attention: Asset Management

         

	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 



 


(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.


 




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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.
Following the occurrence and during the continuation of an Event of Default or in connection with any bankruptcy proceedings, 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, 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.


 




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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 upon
prior notice to Borrower unless an Event of Default has occurred and is continuing, in which case such prior notice shall not be
required, from any amounts in the Cash Management Account.


 


(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 or any portion of the
Properties securing the Loan (as to the Properties so foreclosed), 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.


 




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(c)          Subject
to Section 9.5 hereof, 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.


 


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.


 



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(b)          The
Loan Documents are solely for the benefit of Lender and Borrower 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.


 


(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, Servicers, 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.


 




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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.


 


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.


 




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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 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.


 




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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 below, 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 and any indemnification
of Lender contained therein;


 


(ii)         intentional
physical waste unless such waste was due to the fact that (A) funds specifically identified to pay charges which would have prevented
such waste were, at the time in question, available in the FF&E Reserve Account, PIP Reserve Account and/or Required Repairs
Account, as applicable, 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 intentional removal or disposal of any portion of the
Property in violation of the Loan Documents;


 




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(iii)        the
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);


 


(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 (i) 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, (ii) such charges are the subject of a bona fide dispute
in which Borrower is contesting the amount or the validity thereof in accordance with the terms of this Agreement), or (iii) in
respect of any Liens or charges other than those incurred with respect to PIP Work, Gross Revenue is insufficient to pay the same;
provided, however, that the foregoing exceptions shall not apply if (A) the labor, materials or other charges
were contracted for in violation of this Agreement (including not obtaining any required Lender consent) or (B) the labor, materials
or other charges were for matters unrelated to so-called “life/safety” issues and contracted for when Borrower knew
there would not be sufficient remaining cash flow or applicable Reserve Funds to pay for such charges;


 


(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)       [intentionally
omitted];


 


(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)         [intentionally
omitted];


 


(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 fraud, willful or intentional
misrepresentation, gross negligence or willful misconduct;


 




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(xii)        [intentionally
omitted];


 


(xiii)       the
modification or amendment of the Franchise Agreement for any particular Property without Lender’s prior written consent as
provided in Section 7.2.1 of this Agreement;


 


(xiv)      the
termination or cancellation of the Franchise Agreement for any particular Property without Lender’s prior written consent
as provided in Section 7.2.1 of this Agreement (other than a Voluntary Franchise Termination) on or after any date that
(A) all of the amounts set forth on the PIP Reserve Funding Schedule shall have been funded by Borrower in accordance with the
terms hereof, or (B) the applicable PIP Plan for such Property has been completed in accordance with the applicable PIP Budget
and Franchise Agreement; or


 


(xv)       Borrower
grants a voluntary Lien related to an easement or restrictive covenant that benefits a Property, or the operation of the hospitality
business contemplated thereon, without Lender’s consent in accordance with the terms and conditions of this Agreement.


 


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)         [intentionally
omitted];


 


(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
grants a voluntary Lien (other than a Lien resulting from the failure to pay charges for labor or materials or a Lien related to
an easement or restrictive covenant that benefits a Property or the operation of the hospitality business contemplated thereon)
encumbering the Property or any portion thereof or interest therein in violation of 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 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 or wholly without basis in fact or law, other than for mandatory or affirmative defenses;
or


 




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(11)        if,
without Lender’s prior written consent as provided in Section 7.2.1 of this Agreement), the Franchise Agreement for
any particular Property is (A) modified or amended in any material respect, (B) surrendered, renewed or extended (other than, in
the case of a renewal or extension, a renewal or extension provided for in such Franchise Agreement), (C) the subject of a Voluntary
Franchise Termination, or (D) terminated or canceled by Franchisor under circumstances other than a Voluntary Franchise Termination,
in the case of this clause (D) only, prior to the date (1) all of the amounts set forth on the PIP Reserve Funding Schedule
shall have been funded by Borrower in accordance with the terms hereof, or (2) the PIP Plan for such Property shall have been completed
in accordance with the applicable PIP Budget and Franchise Agreement; provided, however, in the case of a termination
or cancellation contemplated in clause 11(D) above, the Obligations shall not be fully recourse to Borrower if within sixty
(60) days after such termination or cancellation, Borrower enters into a Replacement Franchise Agreement for such affected Property,
in accordance with the applicable terms and conditions of this Agreement, with (x) a Qualified Franchisor or (y) an Approved Brand,
provided Borrower’s selection of an Approved Brand under this clause (y) shall be permitted without satisfying the
requirements of a Qualified Franchisor up to a maximum of four (4) times without Lender consent (inclusive of any instances in
which an Approved Brand is engaged by Borrower to cure an Event of Default under Section 10.1(a)(xv)), 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 sixty (60) 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 material modification or amendment or surrender, termination, cancellation, renewal or extension 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         Co-Lenders.


 


(a)          Borrower
hereby acknowledges and agrees that, prior to a Securitization of the entire Loan, all copies of documents, reports, requests and
other delivery obligations of Borrower required hereunder shall be delivered by Borrower to Servicer.


 


(b)          Notwithstanding
anything to the contrary herein, all indemnities by Borrower and obligations of Borrower for costs, expenses, damages or advances
set forth herein shall run to and benefit each Lender based on the proportion of the Loan held by such Lender.


 


(c)          Each
Lender agrees that it has, independently and without reliance on the other Lender, and based on such documents and information
as it has deemed appropriate, made its own credit analysis of Borrower and its Affiliates and decision to enter into this Agreement
and that it will, independently and without reliance upon the other 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.


 




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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; provided, however, that Borrower shall not be responsible for payment
of scheduled monthly servicing fees due to Servicer under the Servicing Agreement. 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 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 11.25(c).


 


Section 11.26         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.


 


Section 11.27         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.


 




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Section 11.28         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 11.29         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 11.30         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 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.


 




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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 then continuing, 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.


 


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.


 




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(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]


 




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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:	/s/ Mark Ableman
	 	 	Name: Mark Ableman
	 	 	Title: Managing Director


 


	 	GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation
	 	 
	 	By:	/s/ David Goodman
	 	 	Name: David Goodman
	 	 	Title: Director
	 	 	 
	 	By:	/s/ Lisa Paterson
	 	 	Name: Lisa Paterson
	 	 	Title: Director


 


	 	BORROWERS:
	 	 
	 	ARC HOSPITALITY PORTFOLIO II OWNER, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Paul C. Hughes
	 	 	Name: Paul C. Hughes
	 	 	Title: Authorized Signatory


 


	 	ARC HOSPITALITY PORTFOLIO II TRS, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Paul C. Hughes
	 	 	Name: Paul C. Hughes
	 	 	Title: Authorized Signatory


 




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	 	ARC HOSPITALITY PORTFOLIO II MISC TRS, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Paul C. Hughes
	 	 	Name: Paul C. Hughes
	 	 	Title: Authorized Signatory


 


	 	ARC HOSPITALITY PORTFOLIO II HIL TRS, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Paul C. Hughes
	 	 	Name: Paul C. Hughes
	 	 	Title: Authorized Signatory


 


	 	ARC HOSPITALITY STRATFORD, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Paul C. Hughes
	 	 	Name: Paul C. Hughes
	 	 	Title: Authorized Signatory


 


	 	ARC HOSPITALITY TRS STRATFORD, LLC, a Delaware limited liability company
	 	 
	 	By:	/s/ Paul C. Hughes
	 	 	Name: Paul C. Hughes
	 	 	Title: Authorized Signatory


 


	 	ARC HOSPITALITY PORTFOLIO II NTC OWNER, LP, a Delaware limited partnership
	 	 
	 	By: ARC Hospitality Portfolio II NTC Owner GP, LLC, its general partner
	 	 
	 	 	By:	/s/ Paul C. Hughes
	 	 	 	 Name: Paul C. Hughes
	 	 	 	Title: Authorized Signatory


 




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	 	ARC HOSPITALITY PORTFOLIO II NTC HIL TRS, LP, a Delaware limited partnership
	 	 
	 	By: ARC Hospitality Portfolio II NTC TRS GP, LLC, its general partner
	 	 
	 	 	By:	/s/ Paul C. Hughes
	 	 	 	Name: Paul C. Hughes
	 	 	 	Title: Authorized Signatory


 


	 	ARC HOSPITALITY PORTFOLIO II NTC TRS, LP, a Delaware limited partnership
	 	 
	 	By: ARC Hospitality Portfolio II NTC TRS GP, LLC, its general partner
	 	 
	 	 	By:	/s/ Paul C. Hughes
	 	 	 	Name: Paul C. Hughes
	 	 	 	Title: Authorized Signatory


 




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SCHEDULE
I


 


DEFINITIONS


 


“Acceptable
Tenant Estoppel Certificate” shall mean a fully-executed estoppel certificate from the applicable Tenant(s) in form and
substance reasonably satisfactory to Lender that, in each case, affirms the applicable Lease(s) as being in full force and effect
and provides, among other things (with such exceptions as may be required consistent with the facts at such time) (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.


 


“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 assumed management fees of three percent (3.0%) of Gross Revenue; 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 any relevant 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.


 


“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.


 




    	 	S-I-1	 



     

    

 


“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.


 


“Apollo Transaction
Agreement” shall mean that certain Transaction Agreement, dated August 6, 2015, as amended from time to time, by and
among AR Capital, LLC AMH Holdings (Cayman), L.P. and AR Global, LLC.


 


“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 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
Brand” or “Approved Brands” shall mean, individually or collectively as the context may require, each
of the Persons identified on Schedule VII attached hereto.


 


“Approved
Capital Expenditures” shall mean Capital Expenditures incurred by Borrower and either (i) included in the current
Annual Budget or Approved Annual Budget, as applicable, 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 current Annual
Budget or Approved Annual Budget, as applicable, or (ii) approved by Lender, which approval shall not be unreasonably withheld
or delayed.


 




    	 	S-I-2	 



     

    

 


“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 its reasonable discretion 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 Annual Budget
or Approved Annual Budget, as applicable, 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, three percent (3.0%) of the monthly Gross Revenue, (iv) are for franchise fees payable to Franchisor under
the Franchise Agreement, or (v) have otherwise been reasonably 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. For the avoidance
of doubt, any additional property management fees payable pursuant to the Intermediate Management Agreements or Property Management
Agreements which are not Approved Operating Expenses may be paid by Borrower out of Excess Cash Flow received by Borrower.


 


“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 October 6, 2015, among
Lender, ARC Hospitality Portfolio II NTC TRS, LP, ARC Hospitality Portfolio II TX Beverage Company, LLC and ARC 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 October 6, 2015, among Lender, 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.


 




    	 	S-I-3	 



     

    

 


“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 Intermediate Management Agreement” shall mean, collectively, that certain (i) Assignment of Management Agreement and
Subordination of Management Fees (Operating Agreement) (Crestline), dated as of October 6, 2015, among ARC Hospitality Portfolio
II MISC TRS, LP, ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Lender 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)
(McKibbon), dated as of October 6, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II MISC TRS,
LLC to Lender 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, (iii) Assignment of Management Agreement and Subordination of Management
Fees (Operating Agreement) (Hilton), dated as of October 6, 2015, among ARC Hospitality Portfolio II HIL TRS, LP to Lender and
consented and agreed to by American Realty Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II Owner, LLC,
(iv) Assignment of Management Agreement and Subordination of Management Fees (Operating Agreement) (Courtyard Houston), dated as
of October 6, 2015, among ARC Hospitality Portfolio II NTC HIL TRS, LP to Lender and consented and agreed to by American Realty
Capital Hospitality Grace Portfolio, LLC and ARC Hospitality Portfolio II NTC Owner, LP and (v) Assignment of Management Agreement
and Subordination of Management Fees (Operating Agreement) (Stratford), dated as of October 6, 2015, among ARC Hospitality TRS
Stratford, LLC to Lender 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.


 


“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.


 




    	 	S-I-4	 



     

    

 


“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 October 6, 2015, among ARC Hospitality Portfolio II MISC TRS,
LP, ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio II TRS, LLC to Lender 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) (McKibbon), dated as of October 6, 2015, among ARC Hospitality Portfolio II NTC TRS, LP and ARC Hospitality Portfolio
II MISC TRS, LLC to Lender 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., (iii) Assignment of Management
Agreement and Subordination of Management Fees (Management Agreement) (Hilton), dated as of October 6, 2015, among ARC Hospitality
Portfolio II HIL TRS, LP to Lender and consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital
Hospitality Properties, LLC and Hampton Inns Management LLC, (iv) Assignment of Management Agreement and Subordination of Management
Fees (Management Agreement) (Hilton), dated as of October 6, 2015, among ARC Hospitality Portfolio II HIL TRS, LP to Lender and
consented and agreed to by ARC Hospitality Portfolio II Owner, LLC American Realty Capital Hospitality Properties, LLC and Homewood
Suites Management LLC, (v) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Courtyard
Houston), dated as of October 6, 2015, among ARC Hospitality Portfolio II NTC HIL TRS, LP to Lender 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 (vi) Assignment of Management Agreement and Subordination of Management Fees (Management Agreement) (Stratford),
dated as of October 6, 2015, among ARC Hospitality TRS Stratford, LLC to Lender 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.


 


“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.


 


“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.


 




    	 	S-I-5	 



     

    

 


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


 


“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 1.75 to 1.00.


 


“Cash Sweep
Event” shall mean the occurrence of:


 


		(i)	an Event of Default;



 


		(ii)	any event of default (i.e., beyond all applicable notice and cure periods) by any Borrower, Intermediate
Manager, or Affiliated Manager under one or more Property Management Agreements, which affects five (5) or more Properties in the
aggregate;



 




    	 	S-I-6	 



     

    

 


		(iii)	a Cash Sweep DSCR Trigger Event; or



 


		(iv)	the delivery of one or more notices by any Franchisor of any breach or default by Borrower under
any Franchise Agreement that (a) affect five (5) or more Properties in the aggregate, and (b) 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).



 


“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 reasonable 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 shall equal or exceed the applicable DSCR
Threshold for two (2) consecutive calendar quarters, which may be achieved (x) at any time Underwritten Net Cash Flow shall have
increased to achieve such DSCR Threshold, (y) prior to the Prepayment Lockout Expiration Date, the date on which Borrower shall
have delivered a Letter of Credit in the notional amount of the applicable DSCR/LTV Remedial Payment Amount or a cash deposit of
such amount to the Excess Cash Flow Account, and (z) at any time on or after the Prepayment Lockout Expiration Date, after payment
of immediately available federal funds in the amount of such DSCR/LTV Remedial Payment Amount to Lender for application in accordance
with the terms of Section 2.4.1(b) of this Agreement; or



 




    	 	S-I-7	 



     

    

 


		(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.



 


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 under clauses (i), (ii),
and (iv) above 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); provided, further, subject to satisfaction of the immediately foregoing conditions, in the case
of any cash deposit to the Excess Cash Flow Account or Letter of Credit delivered to Lender pursuant to clause (iii) above,
upon Borrower’s written request, so long as no Event of Default has occurred and is continuing and the Debt Service Coverage
Ratio as of such date of determination, calculated without giving effect to any DSCR/LTV Remedial Payment evidenced by such cash
deposit or Letter of Credit, is at least 1.80:1.00 for two (2) consecutive calendar quarters, such cash deposit shall be returned
to Borrower in accordance with Section 6.9 hereof and such Letter of Credit shall be returned to Borrower.


 


“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 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 Yield Maintenance
Premium, if 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.


 




    	 	S-I-8	 



     

    

 


“Clearing
Account Agreement” shall mean, collectively, that certain (i) Deposit Account Control Agreement (Crestline), dated as
of October 6, 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, ARC Hospitality
Portfolio II MISC TRS, LLC, Lender and Wells Fargo Bank, N.A., (ii) Deposit Account Control Agreement (McKibbon) , dated as of
October 6, 2015, 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, Lender and Wells
Fargo Bank, N.A., (iii) Deposit Account Control Agreement (Hilton) , dated as of October 6, 2015, 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, Lender and Wells Fargo Bank, N.A.; and (iv) Deposit Account
Control Agreement (Stratford) , dated as of October 6, 2015, between ARC Hospitality TRS Holding Stratford, LLC, ARC Hospitality
Stratford, LLC, ARC Hospitality TRS Stratford, LLC, Lender and Wells Fargo Bank, N.A., as each of the same may be amended, restated,
replaced, supplemented or otherwise 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.


 


“Closing-Approved
PIP Budgets” shall have the meaning set forth in Section 3.1.45.


 


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


 


“Closing Quality
Assurance Reports” shall mean the quality assurance evaluations delivered to Borrower by Hilton Worldwide, Inc. and relating
to the following Properties: (i) Hampton Inn Austin-North @IH-35 Hwy 183, TX (Facility ID 2840), dated March 24, 2015, (ii) Hampton
Inn Knoxville-AirportTN (Facility ID 3337), dated February 13, 2015, (iii) Hampton Inn Orlando-Int’l Drive Area/Convention
Ctr., FL (Facility ID 16015), dated June 5, 2015, (iv) Homewood Suites by Hilton Augusta, GA (Facility ID 12407), dated May 19,
2015, and (v) Homewood Suites by Hilton Orlando/Int’l Drive-Conv. Center, FL (Facility ID 16106), dated June 4, 2015.


 


“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.


 




    	 	S-I-9	 



     

    

 


“Collective
Bargaining Agreement” shall mean that certain Agreement, effective on September 11, 2010, 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.


 


“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 Yield Maintenance Premium, if applicable) due to Lender in respect of the Loan under the Loan Documents.


 




    	 	S-I-10	 



     

    

 


“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.



 


“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 Interest 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 or marketing materials.


 


“DSCR Threshold”
shall mean, (i) with respect to a calculation of the Debt Service Coverage Ratio pursuant to Section 2.5.1(g) of this Agreement,
the greater of (x) 2.35 to 1.00 and (y) the Debt Service Coverage Ratio calculated as of the date immediately prior to the Property
Release, and (ii) with respect to a calculation of the Debt Service Coverage Ratio in clause (iii) of the definition of
“Cash Sweep Event Cure”, 1.80 to 1.00.


 


“DSCR/LTV
Remedial Payment Amount” shall mean an amount reasonably calculated by Lender and equal to the aggregate of the following:
(i) an amount which, when applied by Lender as a prepayment of the Outstanding Principal Balance (after giving effect to any other
prepayments being made simultaneously therewith), shall reduce Debt Service due and payable during the succeeding twelve (12) month
period such that Borrower shall satisfy the applicable DSCR Threshold as of such date of determination and, in connection with
a Property Release, the requirements of Section 2.5.1(g) and Section 2.5.1(h), plus (ii) the Yield Maintenance Premium
due in connection with the portion of the Outstanding Principal Balance being prepaid, plus (iii) 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), provided, in the case of a Letter of
Credit or cash collateral to the Excess Cash Flow Account posted with Lender in lieu of payment of such DSCR/LTV Remedial Payment
Amount, the calculation in this clause (iii) shall assume thirty (30) days of accrued interest, plus (iv) all other sums
then due and payable under the Loan Documents.


 


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


 




    	 	S-I-11	 



     

    

 


“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.


 


“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.


 


“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.


 


“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.


 




    	 	S-I-12	 



     

    

 


“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.


 


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


 


“Franchise/Management
Cash Sweep Event Cap” shall mean, with respect to a Franchise/Management 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.


 


“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.


 


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


 




    	 	S-I-13	 



     

    

 


“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.


 


“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 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.


 


“Holdco”
shall have the meaning set forth in Section 4.1.7.


 


“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).


 




    	 	S-I-14	 



     

    

 


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


 


“Independent
Accountant” shall mean a “Big Four” accounting firm or another independent certified public accountant acceptable
to Lender.


 


“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” shall mean a rate of Four and Ninety-Six One Hundredths percent (4.96%) per annum.


 


“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, reasonably 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.


 




    	 	S-I-15	 



     

    

 


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


 


“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).


 


“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.


 




    	 	S-I-16	 



     

    

 


“Lender Indemnified
Parties” shall mean 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 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 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 or, in the case of a Letter
of Credit delivered to effect a Cash Sweep Event Cure, pay the proceeds of such Letter of Credit to Lender for application to the
Outstanding Principal Balance, Yield Maintenance Premium, and outstanding interest and fees as reasonably determined by Lender
based on the original calculation of such DSCR/LTV Remedial Payment Amount, (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, (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) upon the occurrence and 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.


 




    	 	S-I-17	 



     

    

 


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


 


“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 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 Thirty Two Million and 00/100 Dollars ($232,000,000.00) made
by Lender to Borrower pursuant to this Agreement.


 




    	 	S-I-18	 



     

    

 


“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 Guaranty and any other documents, agreements, certificates, affidavits and
instruments now or hereafter evidencing, securing or delivered to Lender 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 Agreement), interim beverage, brokerage or leasing agreement, or (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 $250,000.00 per annum or which extend beyond one year (unless cancelable on thirty (30) days or less notice)),
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, 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.


 




    	 	S-I-19	 



     

    

 


“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 $150,000.00 per annum 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, 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).


 


“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 Annual Budget or Approved
Annual Budget, as applicable, 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 November 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).


 




    	 	S-I-20	 



     

    

 


“Net Sale
Proceeds” shall mean, in connection with any Property Sale, the value of all consideration received by Borrowers in connection
with such Property Sale, including cash, notes, assumed indebtedness, deferred payments (contingent or otherwise), prepaid expenses
and non-customary prorations in favor of Borrowers (collectively “Sales Proceeds”), less the reasonable and
actual costs and expenses of such Property Sale reasonably approved by Lender, including broker’s commissions, regardless
of whether the broker is a Restricted Party or an Affiliate of Borrower, market rate sales and marketing expenses, legal fees and
transfer and recording taxes (but excluding income taxes attributable to such Property Sale), all of which costs and expenses shall
not exceed six percent (6%) of the Sales Proceeds.


 


“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).


 


“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 Borrower or an SPC Party, as applicable.


 


“Open Prepayment
Date” shall mean the date which is the Monthly Payment Date occurring three (3) months prior to the Stated Maturity Date.


 


“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.


 




    	 	S-I-21	 



     

    

 


“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, 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 the current Annual Budget or Approved
Annual Budget, as applicable, 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 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.


 




    	 	S-I-22	 



     

    

 


“Operating
Lease” shall mean those operating leases identified on Schedule XIII, attached hereto and made a part hereof,
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.


 


“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.


 




    	 	S-I-23	 



     

    

 


“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).


 


“Payment Differential”
shall mean, as of any Tender Date, an amount equal to (i) the Interest Rate minus the Reinvestment Yield as of such
Tender Date, divided by (ii) 12, and multiplied by (iii) the Outstanding Principal Balance (or the portion thereof then
being prepaid or satisfied) on such Tender Date, provided that the Payment Differential shall in no event be less than zero.


 


“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).


 


“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
or which is being contested in good faith in accordance with the requirements of Section 4.1.3 hereof, 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.


 




    	 	S-I-24	 



     

    

 


“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, and
(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, (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. Clause (i)(a) and clause (iv) of this definition shall be deemed satisfied if such transferee or
Transferee’s Principal is a Qualified Equity Holder.


 


“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.


 


“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.


 




    	 	S-I-25	 



     

    

 


“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.


 


“Pool II Holdco
Operating Agreement” shall mean the Amended and Restated Limited Liability Agreement of Pool II Holdco, as amended by
that certain First Amendment to Amended and Restated Limited Liability Company Agreement of Pool II Holdco (as it exists on the
date hereof and without giving effect to any further amendments to the terms thereof made after the date hereof), together with
that certain letter agreement, dated October 6, 2015, from Pool II Holdco and delivered to and consented to by Preferred Equity
Investor, regarding consent to enter into the Loan Documents and the First Amendment to Amended and Restated Limited Liability
Company Agreement of Pool II Holdco.


 


“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.


 




    	 	S-I-26	 



     

    

 


“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).


 


“Prepayment
Lockout Expiration Date” shall mean the earlier of (i) two (2) years after the “startup day,” within the
meaning of Section 860G(a)(9) of the Code, for the REMIC Trust established in connection with the final Securitization involving
any portion of the Loan and (ii) December 31, 2017.


 


“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 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
reasonably approved by Lender and approved by the Rating Agencies in accordance with the terms and conditions of the Loan Documents,
including, without limitation, Article 7 of this Agreement.


 


“Property
Release” shall have the meaning set forth in Section 2.5.1.


 


“Property
Release Date” shall have the meaning set forth in Section 2.5.1(b).


 




    	 	S-I-27	 



     

    

 


“Property
Release Price” shall mean, on any date of determination and with respect to any Property in respect of which a Property
Release is requested under Section 2.5, the greater of (i) the Net Sale Proceeds in respect of such Property and
(ii) one hundred fifteen percent (115%) of the Allocated Loan Amount in respect of such Property or Properties.


 


“Property
Sale” shall have the meaning set forth in Section 2.5.1.


 


“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 commencing upon the closing of the transactions
contemplated by the Apollo Transaction Agreement, AR Global Investments, LLC or Apollo Global Management, 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 Affiliated Manager 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).


 




    	 	S-I-28	 



     

    

 


“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 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 VEREIT 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 reasonable
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 reasonable 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.


 


“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-29	 



     

    



 





“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 reasonable 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.


 


“REA”
shall mean, collectively, any covenants, restrictions or agreements of record relating to the construction, operation or use of
the Property.


 


“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.


 


“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.


 


“REIT”
shall mean American Realty Capital Hospitality Trust, Inc., a Maryland corporation.


 




    	 	S-I-30	 



     

    

 


“Reinvestment
Yield” shall mean, as of any Tender Date, an amount equal to the lesser of (i) the yield on the U.S. Obligations
with the same maturity date as the Open Prepayment Date, or if no such U.S. Obligations issue is available, then the interpolated
yield on the two (2) U.S. Obligations issues (primary issues) with maturity dates (one prior to and one following) that are
closest to the Open Prepayment Date or (ii) the yield on the U.S. Obligations with a term equal to the remaining average life
of the Debt, or if no such U.S. Obligations are available, then the interpolated yield on the two (2) U.S. Obligations issues
(primary issues) with terms (one prior to and one following) that are closest to the remaining average life of the Debt, with each
such yield being based on the bid price for such issue as published in The Wall Street Journal on the date that is fourteen
(14) days prior to the Tender Date (or, if such bid price is not published on that date, the next preceding date on which
such bid price is so published) and converted to a monthly compounded nominal yield.


 


“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
Environmental Indemnity” shall mean an Environmental Indemnity substantially in the form attached as Exhibit D to the
Recognition Agreement.


 




    	 	S-I-31	 



     

    

 


“Replacement
Franchise Agreement” shall mean, collectively, (i)(a) a franchise, trademark and license agreement with a Qualified
Franchisor or Approved Brand, as applicable, substantially in the same form and substance as the Franchise Agreement, or (b) a
franchise, trademark and license agreement with a Qualified Franchisor or Approved Brand, 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 Confirmation with respect to the substance
of such franchise, trademark and license agreement, 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 or Approved Brand, as applicable, and, if necessary, Borrower.


 


“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.


 




    	 	S-I-32	 



     

    

 


“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) in the case of any disbursement of Required Repair Funds,
the amount of such disbursement does not exceed the amount identified for such Required Repair set forth in Schedule V attached
hereto, (iii) 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 (iv) 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 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 the
portion of such PIP Alterations to be funded by the requested disbursement 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 with respect to the applicable Required Repairs,
Approved FF&E Expenses or PIP Alterations (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) conditional lien waivers or other evidence of payment reasonably 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).


 




    	 	S-I-33	 



     

    

 


“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 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 reasonably 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, provided that a replacement guarantor with a Net Worth (as
defined in the Guaranty) of $250,000,000 and Liquidity (as defined in the Guaranty) of $15,000,000 shall be deemed to have satisfied
the requirements of this clause (B), and (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, as evidenced by financial statements and other information reasonably requested
by Lender or requested by the Rating Agencies.


 




    	 	S-I-34	 



     

    

 


“Scheduled
Manager” or “Scheduled Managers” shall mean, individually or collectively as the context may require,
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 11.25.


 


“Servicing
Agreement” shall have the meaning set forth in Section 11.25.


 


“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 October 6, 2020.


 


“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.


 




    	 	S-I-35	 



     

    

 


“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.


 


“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 August 3, 2015 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 beneficial or economic interests
in such Transferee or (ii) are in Control of such Transferee.


 


“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.


 




    	 	S-I-36	 



     

    

 


“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) 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, during the succeeding twelve
(12) month period.


 


“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.


 




    	 	S-I-37	 



     

    

 


“Voluntary
Franchise Termination” shall mean, a termination or cancellation of a Franchise Agreement for any particular Property
in which 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 such termination or cancellation (or termination
or cancellation by an Affiliate Franchisor).


 


“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.


 


“Yield Maintenance
Premium” shall mean, as of any Tender Date, an amount equal to the greater of (i) one percent (1%) of the Outstanding
Principal Balance, or portion thereof, being prepaid or satisfied unless as of such Tender Date an Event of Default shall have
occurred and then be continuing, in which event, three percent (3%) of the Outstanding Principal Balance, or portion thereof, being
prepaid or satisfied, and (ii) an amount equal to the present value of a series of payments, in each case, each equal to the
Payment Differential as of such Tender Date and payable on each Monthly Payment Date over the remaining original term of the Note
until the Open Prepayment Date and on the Open Prepayment Date, discounted at the Reinvestment Yield as of such Tender Date for
the number of months remaining from such Tender Date to each Monthly Payment Date until the Open Prepayment Date; provided,
however, if on any Tender Date, an Event of Default shall have occurred and be continuing, the calculation under clause
(ii) shall be calculated as if each reference to the Open Prepayment Date in the definition of Reinvestment Yield and this
definition of Yield Maintenance Premium shall instead be to the Stated Maturity Date.


 


“Zoning Reports” shall have the
meaning set forth in Section 3.1.9.


 




    	 	38	 



     


    

 


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.


 




    	 	S-III-2	 



     

    

 


(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 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 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.


 




    	 	S-III-3	 



     

    

 


(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.


 




    	 	S-III-4	 



     

    

 


(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, 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


 




    	 	S-III-6	 



     

    

 


(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 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;


 




    	 	S-III-8	 



     

    

 


(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 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


 




    	 	S-III-9	 



     

    

 


(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 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 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;


 




    	 	S-III-10	 



     

    

 


(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;


 




    	 	S-III-11	 



     

    

 


(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 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 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;


 




    	 	S-III-12	 



     

    

  


(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 eighty (180) days after the Closing Date.


 


	 
Property
	 	Immediate
 Repair Cost	 	 	Deferred
 Maintenance
 Reserve at
 Closing	 	 	Full Repair Description	 	Reserved Items	 	Post-Closing Items
	CY Dalton	 	$	1,000	 	 	$	1,250	 	 	Repair damaged metal fence located along northern parking lot.	 	125% Reserved.	 	None
	CY Houston	 	$	27,770	 	 	$	34,713	 	 	Add 11 portable hearing impaired device kits at front desk.  Sealcoat and restripe parking area with alligator cracking and potholes.  Replace pool heater.  Repair damaged balcony for unit 277 and unit 283.  Replace condensing unit serving guestroom #183.  Replace exhaust fan on Building B.	 	125% Reserved.	 	None
	CY Carlsbad	 	$	19,402	 	 	$	24,253	 	 	Replace rust damaged and deteriorated bollard lighting at landscaped areas.	 	125% Reserved.	 	None
	HI Austin	 	$	78,400	 	 	$	76,063	 	 	Replace concrete stormwater troughs at 3 locations along east paved parking area perimeter.  Replace precast concrete curbing alongside concrete sidewalks around building.  Repair precast concrete curbing along west and east perimeter (re-level, re-grout joints, replace damaged units).  Replace ADA curb cuts at handicap parking areas.  Replace all cast in-place concrete walkways.  Replace steel guardrails/handrails at east side of property and at rail end at north retaining wall.  Rebuild section of brick/concrete vehicle dropoff area on the south section of front entrance dropoff area.  Repair EPDM roofing membrane and replace wet insulation.  Replace inoperable water boiler in the boiler room.  Repair miscellaneous ADA deficiencies in section 5.0 and 5.1 of engineering report.	 	125% of concrete curbing, cast in-place concrete walkways, water boiler, and misc. ADA deficiencies.  Everything else will be a post closing item.	 	Replace concrete stormwater troughs at 3 locations along east paved parking area perimeter, Repair precast concrete curbing along west and east perimeter (re-level, re-grout joints, replace damaged units),  Replace ADA curb cuts at handicap parking areas, Replace steel guardrails/handrails at site east end and at rail end at site north retaining wall, rebuild section of brick/concrete vehicle dropoff area at south area, and repair EPDM roof membrane.




 




    	 	S-V-1	 



     

    

 


	 
Property
	 	Immediate
 Repair Cost	 	 	Deferred
 Maintenance
 Reserve at
 Closing	 	 	Full Repair Description	 	Reserved Items	 	Post-Closing Items
	HI Chicago/Naperville	 	$	4,000	 	 	$	0	 	 	Refinish outdoor pool due to peeling and chipped paint on the walls and floor of the outdoor swimming pool.	 	No Reserve Taken.  Post Closing item.	 	 
	HI College Station	 	$	5,250	 	 	$	0	 	 	Add additional handicapped-designated parking space.  Replace misaligned panels and NW corner of building and repair chips at curb ramp near southeast corner of building.  Repair damaged EIFS to the right of the door on the storage shed building.  Repair window frame finish on exterior windows below PTAC units.  Scrape and paint rooftop gas lines.	 	No Reserve Taken.  Post Closing item.	 	Add additional handicapped-designated parking space.  Replace misaligned panels and NW corner of building and repair chips at curb ramp near southeast corner of building.  Repair damaged EIFS to the right of the door on the storage shed building.  Repair window frame finish on exterior windows below PTAC units.  Scrape and paint rooftop gas lines.
	HI E. Lansing	 	$	0	 	 	$	0	 	 	None	 	No Reserve Taken.	 	None
	HI Indianapolis	 	$	1,200	 	 	$	0	 	 	Repair water damage in manager's office	 	No Reserve Taken.  Post Closing item.	 	Repair water damage in manager's office
	HI Alcoa	 	$	5,800	 	 	$	0	 	 	Repair areas of cracking within EIFS façade along southeast and west elevations of building.	 	No Reserve Taken.  Post Closing item.	 	Repair areas of cracking within EIFS façade along southeast and west elevations of building.
	HI Milford	 	$	10,860	 	 	$	0	 	 	Relocate roof access to a safer location.  Reseal all joints at the standing seam metal roofs.	 	No Reserve Taken.  Post Closing item.	 	Relocate roof access to a safer location.  Reseal all joints at the standing seam metal roofs.
	HI Orlando	 	$	22,750	 	 	$	15,000	 	 	Add one ADA compliant parking space.  Repair roofing membrane leaks.  Replace the 3 inoperable rooftop HVAC units.  Repair pool vessel liner.	 	125% of rooftop HVAC units replacement.  Everything else will be a post closing item.	 	Add one ADA compliant parking space.  Repair roofing membrane leaks.  Repair pool vessel liner.



 




    	 	S-V-2	 



     

    

 


	 
Property
	 	Immediate
 Repair Cost	 	 	Deferred
 Maintenance
 Reserve at
 Closing	 	 	Full Repair Description	 	Reserved Items	 	Post-Closing Items
	HI Urbana	 	$	3,850	 	 	$	0	 	 	Add one van-accessible ADA parking space.  Install poll-mounted ADA accessible parking sign on spot.  Repair deteriorated asphalt at the south most parking area.	 	No Reserve Taken.  Post Closing item.	 	Add one van-accessible ADA parking space.  Install poll-mounted ADA accessible parking sign on spot.  Repair deteriorated asphalt at the south most parking area.
	HGI Rio Rancho	 	$	0	 	 	$	0	 	 	None	 	No Reserve Taken.	 	None
	HGI Louisville	 	$	0	 	 	$	0	 	 	None	 	No Reserve Taken.	 	None
	HWS Augusta	 	$	250	 	 	$	0	 	 	Install 1 ADA handicap parking space	 	No Reserve Taken.  Post Closing item.	 	Install 1 ADA handicap parking space
	HWS Orlando	 	$	7,720	 	 	$	9,650	 	 	Roofing membrane repair as there are active roof leaks.	 	125% Reserved.	 	None
	HWS Seattle	 	$	0	 	 	$	0	 	 	None	 	No Reserve Taken.	 	None
	HWS Stratford	 	$	6,310	 	 	$	0	 	 	Repair damaged pavement in the main drive and parking aisles.  Repair vinyl siding and trim to cure staining and isolated areas of missing and displaced materials.	 	No Reserve Taken.  Post Closing item.	 	Repair damaged pavement in the main drive and parking aisles.  Repair vinyl siding and trim to cure staining and isolated areas of missing and displaced materials.
	RI Jax	 	$	0	 	 	$	0	 	 	None	 	No Reserve Taken.  Post Closing item.	 	None
	SHS Asheville	 	$	0	 	 	$	0	 	 	None	 	No Reserve Taken.	 	None



 




    	 	S-V-3	 



     

    

 


	 
Property
	 	Immediate
 Repair Cost	 	 	Deferred
 Maintenance
 Reserve at
 Closing	 	 	Full Repair Description	 	Reserved Items	 	Post-Closing Items
	TPS Savannah	 	$	1,850	 	 	$	0	 	 	Add 1 ADA van-accessible parking space.  Lavatory serving public restroom needs piping insulation.  Repair tripping hazards on southeast corner of Building A leading to electrical room.  Replace retaining wall and wood has rotted and failed.	 	No Reserve Taken.  Post Closing item.	 	Add 1 ADA van-accessible parking space.  Lavatory serving public restroom needs piping insulation.  Repair tripping hazards on southeast corner of Building A leading to electrical room.  Replace retaining wall and wood has rotted and failed.
	TOTAL	 	$	196,412	 	 	$	160,928	 	 	 	 	 	 	 



 




    	 	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
VII


 


Approved
Brands


 


		1.	Hilton



 


		2.	Marriott



 


		3.	Starwood



 


		4.	IHG



 


		5.	Hyatt



 


		6.	Choice



 


		7.	Carlson



 


		8.	Wyndham



 


		9.	AmericInn



 


		10.	La Quinta



 




    	 	S-VII-1	 



     

    

 


SCHEDULE
3.1.17



 


insurance
claims


 




    	 	S-3.1.17-1	 



     

    

 


Schedule
VIII


 


Intentionally
Omitted


 




    	 	S-VIII-1	 



     

    

 


Schedule
IX



 


Allocated
Loan Amounts


 


	Property	 	Allocated Loan Amount	 
	Courtyard Dalton	 	$	5,900,000	 
	Courtyard Houston	 	$	13,500,000	 
	Courtyard Carlsbad	 	$	14,600,000	 
	Hampton Inn Austin	 	$	11,000,000	 
	Hampton Inn Naperville	 	$	7,300,000	 
	Hampton Inn College Station	 	$	10,500,000	 
	Hampton Inn East Lansing	 	$	8,000,000	 
	Hampton Inn Indianapolis	 	$	9,050,000	 
	Hampton Inn Alcoa	 	$	4,950,000	 
	Hampton Inn Milford	 	$	2,700,000	 
	Hampton Inn Orlando	 	$	11,150,000	 
	Hampton Inn Urbana	 	$	12,400,000	 
	Hilton Garden Inn Rio Rancho	 	$	7,200,000	 
	Hilton Garden Inn Louisville	 	$	11,450,000	 
	Homewood Suites Augusta	 	$	4,850,000	 
	Homewood Suites Orlando	 	$	18,350,000	 
	Homewood Suites Seattle	 	$	42,100,000	 
	Homewood Suites Stratford	 	$	12,500,000	 
	Residence Inn Jacksonville	 	$	4,500,000	 
	Springhill Suites Asheville	 	$	11,500,000	 
	TownePlace Suites Savannah	 	$	8,500,000	 
	TOTAL	 	$	232,000,000	 



 




    	 	S-IX-1	 



     

    




 


SCHEDULE X






FRANCHISOR AND FRANCHISE AGREEMENTS


 


	Property	 	Franchisor	 	Description of Franchise

 Agreement
	 	 	 	 	 
	
        Hampton Inn Orlando International Drive Area/Convention Center

        8900 Universal Blvd.

        Orlando, FL 32819
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Homewood Suites by Hilton Orlando/Int’l Driv.-Conv. Center

        8745 International Drive

        Orlando, FL 32819
	 	Homewood Suites Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Homewood Suites Franchise LLC and Franchisee, ARC Hospitality Portfolio II TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Courtyard Dalton

        411 Holiday Drive

        Dalton, GA 30720
	 	Marriott International, Inc., a Delaware corporation 	 	Relicensing Franchise Agreement by Marriott International, Inc., a Delaware corporation, and ARC Hospitality Portfolio II TRS, LLC, a Delaware limited liability company, Franchisee, dated as of the Effective Date
	 	 	 	 	 
	
        Hilton Garden Inn Albuquerque-North/Rio Rancho

        1711 Rio Rancho Blvd.

        Rio Rancho, NM 87124
	 	Hilton Garden Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hilton Garden Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Hampton Inn Milford

        129 Plains Road

        Milford, CT 06460
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Homewood Suites by Hilton Augusta

        1049 Stevens Creek Road

        Augusta, GA 30907
	 	Homewood Suites Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Homewood Suites Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Hampton Inn Chicago/Naperville

        1087 East Diehl Road

        Naperville, IL 60563
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Hampton Inn Indianapolis-NE/Castleton

        6817 East 82nd Street

        Indianapolis, IN 46250
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date


 




    	 	S-X-1	 



     

    

 


	
        Hampton Inn Knoxville-Airport

        148 International Avenue

        Alcoa, TN 37701
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Homewood Suites by Hilton Seattle-Downtown

        206 Western Avenue West

        Seattle, WA 98119
	 	Homewood Suites Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Homewood Suites Franchise LLC and Franchisee, ARC Hospitality Portfolio II HIL TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        TownePlace Suites Savannah

        11309 Abercorn Street

        Savannah, GA 31419
	 	Marriott International, Inc., a Delaware corporation	 	Relicensing Franchise Agreement by Marriot International Inc., a Delaware corporation, and ARC Hospitality Portfolio II MISC TRS, LLC, a Delaware limited liability company, Franchisee, dated as of the Effective Date
	 	 	 	 	 
	
        Hilton Garden Inn Louisville-East

        1530 Alliant Ave.

        Louisville, KY 40299
	 	Hilton Garden Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hilton Garden Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        Residence Inn Jacksonville

        1310 Airport Road

        Jacksonville, FL 32218
	 	Marriott International, Inc., a Delaware corporation	 	Relicensing Franchise Agreement by Marriott International, Inc., a Delaware corporation, and ARC Hospitality Portfolio II MISC TRS, LLC, a Delaware limited liability company, Franchisee, dated as of the Effective Date, and amended by Amendment to Residence Inn by Marriott Relicensing Franchise Agreement by Marriott International, Inc., a Delaware corporation, and ARC Hospitality Portfolio II MISC TRS, LLC, a Delaware limited liability company, Franchisee, dated August 31, 2015
	 	 	 	 	 
	
        Hampton Inn Champaign/Urbana

        1200 West University Ave.

        Urbana, IL 61801
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II MISC TRS, LLC, dated as of the Effective Date


 




    	 	S-X-2	 



     

    

 


	
        Hampton Inn East Lansing

        2500 Coolidge Road

        East Lansing, MI 48823
	 	Hampton Inns Franchise, LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II MISC TRS, LLC, dated as of the Effective Date
	 	 	 	 	 
	
        SpringHill Suites Asheville

        Two Buckstone Place

        Asheville, NC 28805
	 	Marriott International, Inc., a Delaware corporation	 	Relicensing Franchise Agreement by Marriott International, Inc., a Delaware corporation, and ARC Hospitality Portfolio II NTC TRS, LP, a Delaware limited partnership, Franchisee, dated as of the Effective Date
	 	 	 	 	 
	
        Courtyard San Diego

        5835 Owens Avenue

        Carlsbad, CA 92008
	 	MIF, L.L.C., a Delaware limited liability company	 	Relicensing Franchise Agreement by MIF, L.L.C., a Delaware limited liability company, and ARC Hospitality Portfolio II NTC TRS, LP, a Delaware limited partnership, Franchisee, dated as of the Effective Date
	 	 	 	 	 
	
        Courtyard Houston

        12401 Katy Freeway

        Houston, TX 77079
	 	Marriott International, Inc., a Delaware corporation 	 	Relicensing Franchise Agreement by Marriott International, Inc., a Delaware corporation, and ARC Hospitality Portfolio II NTC TRS, LP, a Delaware limited partnership, Franchisee, dated as of the Effective Date
	 	 	 	 	 
	
        Hampton Inn Austin-North@IH-35 Hwy 183

        7619 I-35 North

        Austin, TX 78752
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II NTC TRS, LP, dated as of the Effective Date
	 	 	 	 	 
	
        Hampton Inn College Station

        320 Texas Avenue South

        College Station, TX 77840
	 	Hampton Inns Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Hampton Inns Franchise LLC and Franchisee, ARC Hospitality Portfolio II NTC HIL TRS, LP, dated as of the Effective Date
	 	 	 	 	 
	
        Homewood Suites by Hilton Stratford

        6905 Main Street

        Stratford, CT 06614
	 	Homewood Suites Franchise LLC, a Delaware limited liability company	 	Franchise Agreement between Homewood Suites Franchise LLC and Franchisee, ARC Hospitality TRS Stratford, LLC, dated as of March 21, 2014


 









    	 	S-X-3	 



     

    

 


Schedule
XI



Property ManagerS


 


Crestline Hotels & Resorts, LLC, a Delaware limited liability
company


 


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



Intentionally Omitted


 




    	 	S-XII-1	 



     

    




 


SCHEDULE
XIII






OPERATING
LEASES


 


	LEASE	 	LESSOR

(FEE OWNER)	 	LESSEE

(OPERATING LESSEE)	 	PROPERTY	 	ADDRESS	 	CITY / 

STATE / ZIP
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II HIL TRS, LLC	 	Hampton Inn Milford	 	129 Plains Road	 	Milford, CT  06460


 




    	 	S-XIII-1	 



     

    

 


	LEASE	 	LESSOR

(FEE OWNER)	 	LESSEE

(OPERATING LESSEE)	 	PROPERTY	 	ADDRESS	 	CITY / 

STATE / ZIP
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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


 




    	 	S-XIII-2	 



     

    

 


	LEASE	 	LESSOR

(FEE OWNER)	 	LESSEE

(OPERATING LESSEE)	 	PROPERTY	 	ADDRESS	 	CITY / 

STATE / ZIP
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 2015	 	ARC Hospitality Portfolio II Owner, LLC	 	ARC Hospitality Portfolio II MISC TRS, LLC	 	Residence Inn Jacksonville Airport	 	1310 Airport Road	 	Jacksonville, FL  32218
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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


 




    	 	S-XIII-3	 



     

    

 


	LEASE	 	LESSOR

(FEE OWNER)	 	LESSEE

(OPERATING LESSEE)	 	PROPERTY	 	ADDRESS	 	CITY / 

STATE / ZIP
	 	 	 	 	 	 	 	 	 	 	 
	Lease Agreement, dated as of February 27, 2015, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 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, as amended by that certain First Amendment to Lease Agreement, dated October 6, 2015	 	ARC Hospitality Stratford, LLC	 	ARC Hospitality TRS Stratford, LLC	 	Stratford Homewood	 	6905 Main Street	 	Stratford, CT 06614


 









    	 	S-XIII-4	 



     

    

 


SCHEDULE
XIV






PIP RESERVE
FUNDING SCHEDULE


 


	DATE	 	AMOUNT OF REQUIRED DEPOSIT	 
	December 31, 2015	 	$	2,000,000	 
	March 31, 2016	 	$	3,750,000	 
	June 30, 2016	 	$	3,750,000	 
	September 30, 2016	 	$	3,000,000	 
	December 31, 2016	 	$	2,500,000	 
	March 31, 2017	 	$	2,500,000	 
	June 30, 2017	 	$	2,500,000	 
	September 30, 2017	 	$	2,500,000	 
	December 31, 2017	 	$	2,500,000	 
	March 31, 2018	 	$	1,250,000	 
	June 30, 2018	 	$	1,250,000	 



 


Total Deposits: $27,500,000


 




    	 	S-XIV-1	 



     

    






 


SCHEDULE
XV


 


Reserved


 




    	 	S-XV-1	 



     

    

 


SCHEDULE
XVI



 


O&M PlanS


 


		1.	Courtyard
Houston (I-10) 12401 Katy Freeway, Houston, Texas 77079 (see attached)



 


		2.	Hampton
Inn, 1087 East Diehl Road, Naperville, Illinois 60563 (see attached)



 


		3.	Hampton
Inn, 320 Texas Avenue South, College Station, Texas 77840 (see attached)



 


		4.	Hampton
Inn, 129 Plains Road, Milford, Connecticut 06460 (see attached)



 


		5.	Hampton
Inn, 7619 I-35 North, Austin, Texas 78752 (see attached)



 


		6.	Hampton
Inn, 6817 East 82nd Street, Indianapolis, Indiana 46250 (see attached)



 




    	 	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, 411 Holiday 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, ARC Hospitality Portfolio II NTC HIL TRS, LP, and ARC Hospitality TRS Stratford,
LLC as franchisees, and Hilton Franchise Holding LLC, as franchisor, relating to the Hilton Brand 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


 




    	 	P-1	 



     

    

 


EXHIBIT P-2


 


PIP Budgets




    	 	P-2	 



     

    

 


EXHIBIT P-3


 


PIP Timeline


 





	 	 	Actual PIP	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property	 	Estimates	 	 	Q3 2015	 	 	Q4 2015	 	 	Q1 2016	 	 	Q2 2016	 	 	Q3 2016	 	 	Q4 2016	 	 	Q1 2017	 	 	Q2 2017	 	 	Q3 2017	 	 	Q4 2017	 	 	Q1 2018	 	 	Q2 2018	 	 	Q3 2018	 	 	Q4 2018	 	 	Q1 2019	 	 	Q2 2019	 	 	Q3 2019	 	 	Q4 2019	 	 	Deadline
	CY Carlsbad	 	$	599	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	$	209	 	 	$	389	 	 	12/1/2019
	CY Dalton	 	$	2,134	 	 	 	427	 	 	 	854	 	 	 	854	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	3/31/2016
	CY Houston	 	$	3,916	 	 	 	783	 	 	 	1,566	 	 	 	1,566	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	3/31/2016
	HGI Louisville	 	$	2,199	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	770	 	 	 	1,429	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2017
	HGI Rio Rancho	 	$	3,094	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,083	 	 	 	2,011	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2017
	HI Alcoa	 	$	1,410	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	494	 	 	 	917	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2018
	HI Austin	 	$	1,822	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	638	 	 	 	1,184	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2018
	HI College Station	 	$	1,969	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	689	 	 	 	1,280	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2017
	HI East Lansing	 	$	1,932	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	676	 	 	 	1,256	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2016
	HI Indianapolis	 	$	2,016	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	706	 	 	 	1,310	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2018
	HI Milford	 	$	4,502	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,576	 	 	 	2,926	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2016
	HI Naperville	 	$	1,860	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	651	 	 	 	1,209	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2017
	HI Orlando	 	$	2,975	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,041	 	 	 	1,933	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2016
	HI Urbana	 	$	1,829	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	640	 	 	 	1,189	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2018
	HWS Augusta	 	$	2,649	 	 	 	265	 	 	 	1,324	 	 	 	1,059	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2016
	HWS Orlando	 	$	1,041	 	 	 	105	 	 	 	624	 	 	 	312	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2016
	HWS Seattle	 	$	5,821	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	2,037	 	 	 	3,784	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	8/31/2017
	HWS Stratford	 	$	0	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	N/A
	RI Jacksonville	 	$	2,321	 	 	 	232	 	 	 	1,161	 	 	 	928	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	3/31/2016
	SHS Asheville	 	$	1,189	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,189	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	12/1/2016
	TPS Savannah	 	$	296	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	104	 	 	 	193	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	3/31/2018
	Total	 	$	45,571	 	 	$	1,812	 	 	$	5,529	 	 	$	4,720	 	 	$	3,293	 	 	$	6,115	 	 	$	1,189	 	 	$	0	 	 	$	5,230	 	 	$	9,713	 	 	$	104	 	 	$	193	 	 	$	2,477	 	 	$	4,600	 	 	$	0	 	 	$	0	 	 	$	0	 	 	$	209	 	 	$	389	 	 	 
	x1000	 	$	45,571,108	 	 	$	1,811,700	 	 	$	5,528,600	 	 	$	4,720,100	 	 	$	3,292,813	 	 	$	6,115,225	 	 	$	1,188,810	 	 	$	0	 	 	$	5,229,841	 	 	$	9,712,562	 	 	$	103,718	 	 	$	192,619	 	 	$	2,476,817	 	 	$	4,599,803	 	 	$	0	 	 	$	0	 	 	$	0	 	 	$	209,475	 	 	$	389,025	 	 	 





  





Note: Stratford PIP 


completed in 03/2015.







 




    	 	P-3