Exhibit 10.9


  


LOAN AGREEMENT


 


Dated as of May 8, 2017


 


between


 


KAUAI COCONUT BEACH, LLC and KAUAI COCONUT BEACH
OPERATOR, LLC,

individually and collectively, and jointly and severally, as Borrower


 


and


 


TH COMMERCIAL MORTGAGE LLC,

as Lender


 




     


     


    

 


SCHEDULES


 


Table of Contents


 


	 	 	Page
	 	 	 
	ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION	1
	 	 	 
	Section 1.1	Definitions	1
	 	 	 
	Section 1.2	Principles of Construction	38
	 	 	 
	ARTICLE II GENERAL TERMS	38
	 	 	 
	Section 2.1	Loan Commitment; Disbursement to Borrower.	38
	 	 	 
	Section 2.2	Interest Rate.	39
	 	 	 
	Section 2.3	Debt Service Payments.	41
	 	 	 
	Section 2.4	Prepayments	42
	 	 	 
	Section 2.5	Future Advances	45
	 	 	 
	Section 2.6	Release of Property	49
	 	 	 
	Section 2.7	Cash Management	49
	 	 	 
	Section 2.8	Interest Rate Cap Agreement	53
	 	 	 
	Section 2.9	Extension Options	56
	 	 	 
	Section 2.10	Change in Law; Taxes	58
	 	 	 
	Section 2.11	Taxes	58
	 	 	 
	ARTICLE III EXCULPATION	60
	 	 	 
	Section 3.1	Exculpation	60
	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	64
	 	 	 
	Section 4.1	Borrower Representations	64
	 	 	 
	Section 4.2	Survival of Representations	76























 




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TABLE
OF CONTENTS

(Continued)





 










	 	Page
	 	 
	ARTICLE
V BORROWER COVENANTS	76
	 	 	 
	Section 5.1	Affirmative Covenants	76
	 	 	 
	Section 5.2	Negative Covenants	90
	 	 	 
	Section 5.3	Hotel Covenants	98
	 	 	 
	Section 5.4	Environmental Covenants	99
	 	 	 
	Section 5.5	Labor Matters	100
	 	 	 
	Section 5.6	CapEx	100
	 	 	 
	ARTICLE VI INSURANCE; CASUALTY; CONDEMNATION	102
	 	 	 
	Section 6.1	Insurance	102
	 	 	 
	Section 6.2	Casualty	106
	 	 	 
	Section 6.3	Condemnation	107
	 	 	 
	Section 6.4	Restoration	107
	 	 	 
	ARTICLE VII RESERVE FUNDS	112
	 	 	 
	Section 7.1	Tax and Insurance Escrow	112
	 	 	 
	Section 7.2	PIP Work Reserve Account	113
	 	 	 
	Section 7.3	Special Incentive Fee Reserve Funds	114
	 	 	 
	Section 7.4	Intentionally Omitted	114
	 	 	 
	Section 7.5	Intentionally Omitted	114
	 	 	 
	Section 7.6	FF&E Reserve Funds	114
	 	 	 
	Section 7.7	Excess Cash Reserve Funds	115
	 	 	 
	Section 7.8	Reserve Funds, Generally	116
	 	 	 
	ARTICLE VIII DEFAULTS	117
	 	 	 
	Section 8.1	Event of Default	117



 






    	 	ii	 



     


    

 


TABLE
OF CONTENTS

(Continued)


 


	 	Page
	 	 
	ARTICLE IX SPECIAL PROVISIONS	123
	 	 	 
	Section 9.1	Transfer of Loan	123
	 	 	 
	Section 9.2	Cooperation	124
	 	 	 
	Section 9.3	Servicer	125
	 	 	 
	Section 9.4	Restructuring of Loan	125
	 	 
	ARTICLE X MISCELLANEOUS	127
	 	 	 
	Section 10.1	Survival	127
	 	 	 
	Section 10.2	Lender’s Discretion	127
	 	 	 
	Section 10.3	Governing Law	127
	 	 	 
	Section 10.4	Modification, Waiver in Writing	129
	 	 	 
	Section 10.5	Delay Not a Waiver	129
	 	 	 
	Section 10.6	Notices	129
	 	 	 
	Section 10.7	Trial by Jury	131
	 	 	 
	Section 10.8	Headings	131
	 	 	 
	Section 10.9	Severability	131
	 	 	 
	Section 10.10	Preferences	131
	 	 	 
	Section 10.11	Waiver of Notice	131
	 	 	 
	Section 10.12	Remedies of Borrower	131
	 	 	 
	Section 10.13	Expenses; Indemnity	132
	 	 	 
	Section 10.14	Schedules Incorporated	133
	 	 	 
	Section 10.15	Offsets, Counterclaims and Defenses	133
	 	 	 
	Section 10.16	No Joint Venture or Partnership; No Third Party Beneficiaries	133
	 	 	 
	Section 10.17	Publicity	134
	 	 	 
	Section 10.18	Waiver of Marshalling of Assets	134










 




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TABLE
OF CONTENTS

(Continued)


 





	 	 	Page
	 	 	 
	Section 10.19	Waiver of Counterclaim	134
	 	 	 
	Section 10.20	Conflict; Construction of Documents; Reliance	135
	 	 	 
	Section 10.21	Brokers and Financial Advisors	135
	 	 	 
	Section 10.22	Prior Agreements	135
	 	 	 
	Section 10.23	Cumulative Rights	135
	 	 	 
	Section 10.24	Counterparts	135
	 	 	 
	Section 10.25	Time Is of the Essence	135
	 	 	 
	Section 10.26	Consent of Holder	136
	 	 	 
	Section 10.27	Successor Laws	136
	 	 	 
	Section 10.28	Performance by Borrower and Lender; Reliance on Third Parties	136
	 	 	 
	Section 10.29	Reserved	136
	 	 	 
	Section 10.30	Joint and Several Liability; Right of Contribution	136







 


	SCHEDULE I	Rent Roll
	SCHEDULE II	Required Repairs
	SCHEDULE III	Borrower Organizational Chart
	SCHEDULE IV	Deposit Amounts
	SCHEDULE V	Federal Tax ID Numbers
	SCHEDULE VI	REA
	SCHEDULE VII	Amortization Schedule
	SCHEDULE VIII	Litigation
	SCHEDULE IX	Form of U.S. Tax Compliance Certificate
	SCHEDULE X	PIP Work
	SCHEDULE XI	Prohibited Transferee


 




    	 	iv	 



     


    

 


LOAN AGREEMENT


 


This LOAN AGREEMENT, dated
as of May 8, 2017 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”),
between TH COMMERCIAL MORTGAGE LLC, a Delaware limited liability company, having an address at c/o Two Harbors Investment Corp.,
601 Carlson Parkway, Suite 1400, Minnetonka, Minnesota 55305 (together with its successors and assigns, “Lender”),
and KAUAI COCONUT BEACH, LLC (“Owner Borrower”) and KAUAI COCONUT BEACH OPERATOR, LLC (“Operator Borrower”
and together with Owner Borrower, individually and collectively, and jointly and severally, Borrower”), each a Delaware
limited liability company having its principal place of business at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001.


 


WITNESSETH:


 


WHEREAS, Borrower desires
to obtain a loan in the original principal amount of up to FORTY-FOUR MILLION and No/100 Dollars ($44,000,000.00) from Lender pursuant
to this Agreement (the “Loan”); and


 


WHEREAS, Lender is willing
to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter
defined).


 


NOW THEREFORE, in consideration
of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Agreement,
the parties hereto hereby covenant, agree, represent and warrant as follows:


 


ARTICLE
I



DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


Section
1.1     Definitions. For all purposes of this Agreement, except as otherwise expressly
required or unless the context clearly indicates a contrary intent:


 


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


 


“Additional Insolvency
Opinion” shall have the meaning set forth in Section 5.2.12(b) hereof.


 


“Affiliate”
shall mean, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common
Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.


 


“Affiliated Manager”
shall mean any Manager in which Borrower or Guarantor has, directly or indirectly, any legal, beneficial or economic interest.


 


“Agreement”
shall mean this Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to
time.


 




    	 	1	 



     


    

 


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


 


“Amortization
Commencement Date” shall mean June 9, 2020.


 


“Annual Budget”
shall mean the operating budget, including all planned Capital Expenditures, for the Property prepared by Borrower in accordance
with Section 5.1.11(d) hereof for the applicable Fiscal Year or other period.


 


“Appraisal”
shall mean an “as is” appraisal prepared in accordance with the requirements of FIRREA, prepared by an independent
third-party appraiser selected by Lender holding an MAI designation, who is state licensed or state certified if required under
the laws of the state where the Property is located, who meets the requirements of FIRREA and is otherwise in form and substance
reasonably acceptable to Lender.


 


“Approved Annual
Budget” shall have the meaning set forth in Section 5.1.11(e) hereof.


 


“Approved CapEx
Expenses” shall mean expenses for effecting and completing (x) the PIP Work as set forth in the PIP Work Budget and (y)
the Elective CapEx Work as set forth in the Elective CapEx Work Budget.


 


“Approved Counterparty”
shall mean a bank or other financial institution which has either (a) a long-term unsecured debt rating of “A-” or
higher by S&P or (b) a long-term unsecured debt rating of not less than “A3” by Moody’s (or, after a Securitization,
if applicable, the equivalent of the foregoing by the applicable Approved Rating Agencies). After a Securitization of the Loan,
only the ratings of those Rating Agencies designated by Lender in connection with such Securitization shall apply.


 


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


 


“Approved Rating
Agencies” shall mean each of S&P, Moody’s, Fitch, Kroll, DBRS, Morningstar and Realpoint or any other nationally
recognized statistical rating agency which has been approved by Lender and designated by Lender to assign a rating to the Securities.


 


“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, assigning to Lender all of Borrower’s interest in and to the Leases and Rents of the
Property as security for the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time
to time.


 


“Assignment of
Management Agreement” shall mean that certain Assignment of Management Agreement and Subordination of Management Fees,
dated as of the date hereof, among Lender, Borrower and Manager, or, if Manager is replaced with a Qualified Manager after the
date hereof, an Assignment of Management Agreement and Subordination of Management Fees among Lender, Borrower and Qualified Manager,
delivered to Lender pursuant to the terms and provisions of this Agreement, in each case, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.


 




    	 	2	 



     


    

 


“Assignment of
Rate Cap” shall mean that certain Assignment of Interest Rate Cap Agreement dated on or about the date hereof, between
Lender and Borrower, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Assumed Debt
Service” shall mean the Debt Service which would be due on the most recent Payment Date, annualized, assuming an interest
rate equal to the lesser of (i) LIBOR for the next twelve months after the date of measurement as then reported by Chatham Financial,
or if LIBOR is not available from Chatham Financial, then from Reuters and (ii) the Strike Price then in effect.


 


“Assumed Note
Rate” shall mean an interest rate equal to the sum of one percent (1%) plus the Interest Rate applicable to the preceding
Interest Period.


 


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


 


“Backward-Looking
Special Purpose Entity Representations and Warranties” shall have the meaning set forth in Section 4.1.30 hereof.


 


“Bankruptcy Action”
shall mean with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other federal
or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code
or any other federal or state bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for
any involuntary petition filed against such Person; (c) 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 or
state bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition
from any Person; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, assignee, sequestrator (or similar official), liquidator, or examiner for such Person or any portion of the
Property; (e) the filing of a petition against a Person seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the Bankruptcy Code or any other applicable law; (f) under the provisions of any other law
for the relief or aid of debtors, an action taken by any court of competent jurisdiction that allows such court to assume custody
or Control of a Person or of the whole or any substantial part of its property or assets or (g) 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, 11 U.S.C. § 101, et seq., as the same may be 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 or any other federal or state bankruptcy or insolvency law.


 




    	 	3	 



     


    

 


“Basic Carrying
Costs” shall mean, for any period, the sum of the following costs: (a) Taxes, (b) Other Charges and (c) Insurance Premiums.


 


“Behringer Guarantor”
shall mean Behringer Harvard Opportunity REIT II, Inc., a Maryland corporation.


 


“Behringer JV
Member” shall mean, collectively, Behringer Harvard Kauai Hotel, LLC, a Delaware limited liability company, and Harvard
Kauai Hotel TRS, Inc., a Delaware corporation. 


 


“Behringer Buyout
Event” shall mean Behringer JV Member ceases to be a member of the Joint Venture as a result of the exercise by either
JMI JV Member or Behringer JV Member of the provisions set forth in Article X of the JV Agreement in effect on the Closing Date.


 


“Behringer Buyout
Event Conditions” shall mean, (1) after giving effect to the Behringer Buyout Event, either (x) JMI Guarantor satisfies
all of the financial covenants applicable to both Behringer Guarantor and JMI Guarantor set forth in Section 5.2 and/or 13 of the
Guarantor Documents, as applicable (and all of the Guarantor Documents shall be deemed to be modified to state that JMI Guarantor
shall satisfy all such covenants), or (y) Borrower provides a replacement guarantor acceptable to Lender and such replacement guarantor
executes and delivers to Lender a new guaranty, completion guaranty and environmental indemnity agreement or joinders to the Guarantor
Documents pursuant to which such guarantor assumes, on a joint and several basis, all of Behringer Guarantor’s obligations
under the Guarantor Documents, in each case, in form and substance reasonably acceptable to Lender, (2) no Event of Default shall
have occurred and be continuing, (3) after giving effect to the Behringer Buyout Event, (x) JMI JV Member owns at least twenty
percent (20)% of the direct or indirect interests in each Borrower and the remaining interests in each Borrower are directly or
indirectly owned by JMI JV Member or another Person acceptable to Lender and (y) JMI Guarantor owns at least two and seventy-five
hundredths percent (2.75%) of the direct interests in JMI JV Member and continues to Control, directly or indirectly, JMI JV Member
and each Borrower, (4) all of the conditions set forth in clauses (II) – (VIII) of Section 5.2.10(d)
have been satisfied, and (5) Borrower pays all reasonable out-of-pocket costs and expenses incurred by Lender in connection with
the foregoing.


 


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


 


“Breakage Costs”
shall have the meaning set forth in Section 2.2.6 hereof.


 


“Broker”
shall have the meaning set forth in Section 10.21 hereof.


 


“Business Day”
shall mean any day other than a Saturday, Sunday or any other day on which any of the following institutions is not open for business:
(a) banks and savings and loan institutions in New York, New York, (b) the trustee under a Securitization (or, if no Securitization
has occurred, Lender), (c) any Servicer, (d) the financial institution that maintains any collection account for or on behalf of
any Servicer or any Reserve Funds, (e) the New York Stock Exchange or (f) the Federal Reserve Bank of New York.


 




    	 	4	 



     


    

 


“CapEx”
shall mean, individually and collectively, the PIP Work set forth on the PIP Work Budget and the Elective CapEx Work set forth
on the Elective CapEx Work Budget.


 


“Capital Expenditures”
shall mean, for any period, the amount expended for items capitalized under GAAP (including expenditures for building improvements
or major repairs, leasing commissions and tenant improvements).


 


“Cash Management
Account” shall have the meaning set forth in Section 2.7.2(a) hereof.


 


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


 


“Cash Trap Cure”
shall mean the occurrence of any of the following with respect to the applicable Cash Trap Event: (i) in the case of a Cash Trap
Event set forth in clause (i) of the definition of Cash Trap Event, a cure of the Event of Default giving rise to such Cash Trap
Event occurs and no other Event of Default has occurred which is continuing; (ii) in the case of a Cash Trap Event set forth in
clause (ii) of the definition of Cash Trap Event with respect to Manager only, if Borrower replaces Manager with a Qualified Manager
under a Replacement Management Agreement; and (iii) in the case of a Cash Trap Event set forth in clause (iii) of the definition
of Cash Trap Event, if for two consecutive calendar quarters since the calendar quarter in which the Cash Trap Event occurred (A) no
Event of Default has occurred and is continuing at the end of such period, (B) no event that would trigger another Cash Trap
Period has occurred and is continuing at the end of such period, and (C) the Debt Yield has been equal to or greater than
eight and fifty hundredths percent (8.50%); provided, however, Borrower may, at its sole election, elect to voluntarily prepay
such portion of the Loan pursuant to and in accordance with the terms and provisions of Section 2.4.1 hereof to the extent
necessary to satisfy the provisions of this clause (iii).


 


“Cash Trap Event”
shall mean the occurrence of any of the following: (i) an Event of Default; (ii) a Bankruptcy Action with respect to Borrower,
Principal, Guarantor or Manager; or (iii) at any time after the earlier of (x) twelve months after the PIP Work has
been Completed and (y) June 9, 2019 to maintain a Debt Yield equal to or greater than eight and fifty hundredths
percent (8.50%).


 


“Cash Trap Period”
shall be deemed to commence upon the occurrence of a Cash Trap Event and shall continue until all prior Cash Trap Events have been
the subject of a Cash Trap Cure.


 


“Casualty”
shall have the meaning set forth in Section 6.2 hereof.


 


“Casualty Consultant”
shall have the meaning set forth in Section 6.4(b)(iii) hereof.


 


“Casualty Threshold”
shall have the meaning set forth in Section 6.2 hereof.


 




    	 	5	 



     


    

 


“Certification
of Documents” shall mean that certain Certification of Financial Statements and Operating Statement, dated as of the
date hereof, made by Borrower for the benefit of Lender.


 


“Change in Law”
shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of
any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline
or directive by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities,
in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.


 


“Clearing Account”
shall have the meaning set forth in Section 2.7.1(a) hereof.


 


“Clearing Account
Agreement” shall mean that certain Deposit Account Control Agreement, dated the date hereof among Borrower, Manager,
Lender and the Clearing Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time,
relating to funds deposited in the Clearing Account.


 


“Clearing Bank”
shall mean First Hawaiian Bank, or any successor or permitted assigns thereof.


 


“Closing Date”
shall mean the date of this Agreement.


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


“Collateral”
shall have the meaning set forth in the Security Instrument.


 


“Comfort Letter”
shall mean the comfort letter, dated as of the date hereof, among Lender, Borrower and Franchisor, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.


 


“Commencement”
shall mean the commencement of any physical construction relating to the CapEx. The words “Commence” and “Commenced”
shall have correlative meanings.


 




    	 	6	 



     


    

 


“Complete”
shall mean, (1) with respect to the PIP Work, (x) that the same is completed substantially in accordance with the PIP Work Budget,
the PIP, all plans and specifications approved by Franchisor in connection therewith, all applicable Legal Requirements and, the
Franchise Agreement, and paid for in full, free of all mechanics’, labor, materialmen’s and other Lien claims, (y)
a certificate of completion for such PIP Work has been signed by Borrower and Borrower’s third party architect and delivered
to Lender (which such certificate shall include a statement that the PIP has been completed substantially in accordance with the
PIP Work Budget, all plans and specifications approved by Franchisor in connection therewith, and the Franchise Agreement), and
(z) at Lender’s option, a satisfactory inspection of the PIP Work made by Lender or its agent, representative, or independent
contractor, and (2) with respect to the Elective CapEx Work, (x) that the same is completed substantially in accordance with the
Elective CapEx Work Budget, all plans and specifications in connection therewith, all applicable Legal Requirements and, to the
extent applicable, the Franchise Agreement, and paid for in full, free of all mechanics’, labor, materialmen’s and
other Lien claims and (y) a certificate of completion for such Elective CapEx Work has been signed by Borrower and Borrower’s
third party architect (if any) and delivered to Lender (which such certificate shall include a statement that the Elective CapEx
Work has been completed substantially in accordance with the Elective CapEx Work Budget, all plans and specifications in connection
therewith, and, if applicable, the Franchise Agreement). The words “Completed” and “Complete” shall have
correlative meanings.


 


“Completion Date”
shall mean the earlier of (x) with respect to any item specified under the PIP, the date specified by Franchisor in any written
notice to Borrower and (y) the Stated Maturity Date.


 


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


 


“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.


 


“Condemnation
Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.


 


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


 


“Counterparty”
shall mean, with respect to the Interest Rate Cap Agreement, the party identified as the “Counterparty” in the Assignment
of Rate Cap and with respect to any Replacement Interest Rate Cap Agreement, any Approved Counterparty thereunder.


 


“Counterparty
Opinion” shall have the meaning set forth in Section 2.8.3(f) hereof.


 


“Covered Rating
Agency Information” shall have the meaning set forth in Section 10.13(d) hereof.


 


“DBRS”
shall mean Dominion Bond Rating Service.


 




    	 	7	 



     


    

 


“Debt”
shall mean the Outstanding Principal Balance together with all interest accrued and unpaid thereon and all other sums (including
any Yield Maintenance Premium, the Exit Fee and Breakage Costs) due to Lender in respect of the Loan under the Note, this Agreement,
the Security Instrument or any other Loan Document.


 


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


 


“Debt Service
Coverage Ratio” shall mean, as of any date, the ratio calculated by Lender of (a) the Net Operating Income to (b) the
Assumed Debt Service as of such date of determination.


 


“Debt Yield”
shall mean, as of any date, the percentage calculated by Lender equal to the quotient, stated as a percentage, obtained by dividing
(i) the Net Operating Income by (ii) the Outstanding Principal Balance as of such date.


 


“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 be an Event of Default.


 


“Default Rate”
shall mean a rate per annum equal to the lesser of (a) the Maximum Legal Rate and (b) four percent (4%) above the Interest Rate.


 


“Deficiency”
shall have the meaning set forth in Section 2.5.6(b) hereof.


 


“Deposit Bank”
shall mean Wells Fargo Bank, National Association, or any successor Eligible Institution acting as the “Deposit Bank”
under the Cash Management Agreement.


 


“Disclosure Document”
shall mean a prospectus, prospectus supplement, private placement memorandum, offering memorandum, offering circular, term sheet,
road show presentation materials or other offering documents or marketing materials, in each case in preliminary or final form,
used to offer Securities in connection with a Securitization.


 


“Disregarded Entity”
shall mean an entity disregarded from its owner for federal income tax purposes under United States Treasury regulations Section
301.7701-3.


 


“Dollars”
and the sign “$” shall mean lawful money of the United States of America.


 


“Elective CapEx
Work” shall mean all of the work and items including all hard and soft costs and capital improvements to the Property
contemplated by the Elective CapEx Work Budget that is not PIP Work.


 


“Elective CapEx
Work Budget” shall have the meaning set forth in Section 5.6.1(b) hereof.


 


“Elective
CapEx Work Conditions” shall have the meaning set forth in Section 5.6.1(b) hereof.


 


“Elective CapEx
Work Deficiency” shall have the meaning set forth in Section 2.5.6(b) hereof.


 




    	 	8	 



     


    

 


“Elective CapEx
Work Future Advance Amount” shall have the meaning set forth in Section 2.1.2 hereof.


 


“Eligible Account”
shall mean a separate and identifiable account from all other funds held by the holding institution that is either (a) an account
or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition
of “Eligible Institution” or (b) a segregated trust account or accounts maintained with a federal- or state-chartered
depository institution or trust company acting in its fiduciary capacity that has a Moody’s rating of at least “Baa3”
and which, in the case of a state-chartered depository institution or trust company, is subject to regulations substantially similar
to 12 C.F.R. § 9.10(b), having in either case a combined capital and surplus of at least Fifty Million and No/100 Dollars
($50,000,000.00) and subject to supervision or examination by federal and state authority, as applicable. An Eligible Account will
not be evidenced by a certificate of deposit, passbook or other instrument.


 


“Eligible Institution”
shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short-term unsecured
debt obligations or commercial paper of which are rated at least “A-1” by S&P and “P-2” by Moody’s,
in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held
for more than thirty (30) days, the long-term unsecured debt obligations of which are rated at least “A” by S&P
and “Aa2” by Moody’s.


 


“Embargoed Person”
shall mean any Person subject to trade restrictions under U.S. law, including, but not limited to, The USA Patriot Act (including
the anti-terrorism provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder including
those related to Specially Designated Nationals and Specially Designated Global Terrorists, with the result that the investment
in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan made by Lender
is in violation of law.


 


“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.


 




    	 	9	 



     


    

 


“Environmental
Statutes” shall mean any present and future federal, state and local laws, statutes, ordinances, rules, regulations and
the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances, and/or
relating to liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental
Statutes” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues:
the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act;
the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle
I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the
Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the
Rivers and Harbors Appropriation Act. The term “Environmental Statutes” also includes, but is not limited to, any present
and future federal, state and local laws, statutes, ordinances, rules, regulations, permits or authorizations and the like, as
well as common law, that (a) condition transfer of property upon a negative declaration or other approval of a Governmental Authority
of the environmental condition of the property or any portion thereof; (b) require notification or disclosure of releases of Hazardous
Substances or other environmental condition of a property to any Governmental Authority or other Person, whether or not in connection
with any transfer of title to or interest in such property; (c) impose conditions or requirements in connection with environmental
permits or other environmental authorization for lawful activity; (d) relate to environmental causes of action related to the Property
or any portion thereof; or (e) relate to wrongful death, personal injury, or property or other damage in connection with any environmental
condition of or at the Property or any portion thereof.


 


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


 


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


 


“Event of Default”
shall have the meaning set forth in Section 8.1(a) hereof.


 


“Excess Cash”
shall have the meaning set forth in Section 2.7.2(b)(viii) hereof.


 


“Excess Cash Reserve
Account” shall have the meaning set forth in Section 7.7 hereof.


 


“Excess Cash Reserve
Funds” shall have the meaning set forth in Section 7.7 hereof.


 


“Exchange Act”
shall mean the Securities Exchange Act of 1934, as the same may be amended, modified or replaced, from time to time.


 


“Exchange Act
Filing” shall have the meaning set forth in Section 5.1.11(g) hereof.


 


“Excluded Tax”
shall mean any of the following Taxes required to be withheld or deducted from a payment to Lender: (a) Taxes imposed on or measured
by net income (however denominated), franchise Taxes and branch profits Taxes, in each case, imposed as a result of Lender being
organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing
such Taxes (or any political subdivision thereof), and (b) in the case of a Foreign Lender, U.S. federal withholding Taxes imposed
on amounts payable to or for the account of such Foreign Lender with respect to an applicable interest in the Loan pursuant to
a law in effect on the date on which (i) such Foreign Lender acquires such interest in the Loan or (ii) such Foreign Lender changes
its lending office, except in each case to the extent that, pursuant to Section 2.11, amounts with respect to such Taxes
were payable either to such Foreign Lender’s assignor immediately before such Foreign Lender became a party hereto or to
such Foreign Lender immediately before it changed its lending office.


 




    	 	10	 



     


    

 


“Exit Fee”
shall mean an amount equal to fifty hundredths of one percent (.50%) of the principal balance of the Loan being repaid or prepaid,
plus, with respect to amounts due and owing on the Maturity Date (or earlier acceleration) or final repayment of the Loan, fifty
hundredths of one percent (.50%) of the maximum principal amount of the Loan less (x) the aggregate amount of Exit Fees already
paid and (y) any unadvanced Future Advance Amount that has been cancelled pursuant to Section 2.5.8. The Exit Fee payable
hereunder by the Borrower to the Lender is payment for the use or forbearance of money or consideration for entering into this
Agreement to make a loan, and are not payments for services, and shall be taken into account by the Borrower and Lender as required
by the original issue discount rules of the Code and the Treasury regulations thereunder.


 


“Extension Fee”
shall mean, (x) with respect to the First Extension Option, a non-refundable fee equal to twenty-five hundredths of one percent
(.25%) of the Outstanding Principal Balance as of the Stated Maturity Date, payable on the Stated Maturity Date and (y) with respect
to the Second Extension Option, a non-refundable fee equal to twenty-five hundredths of one percent (.25%) of the Outstanding Principal
Balance as of the First Extended Maturity Date, payable on the First Extended Maturity Date. The Extension Fee payable hereunder
by the Borrower to the Lender are payments for the use or forbearance of money or consideration for entering into this Agreement
to make a loan, and are not payments for services, and shall be taken into account by the Borrower and Lender as required by the
original issue discount rules of the Internal Revenue Code of 1986, as amended, and the Treasury regulations thereunder.


 


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


 


“Extraordinary
Expense” shall have the meaning set forth in Section 5.1.11(f) hereof.


 


“FF&E”
shall mean fixtures, furnishings, equipment, furniture, and other items of tangible personal property now or hereafter located
in or on the Property or the Improvements or used in connection with the use, occupancy, operation and maintenance of all or any
part of the hotel located on the Property, other than stocks of food and other supplies held for consumption in normal operation
but including, without limitation, appliances, machinery, equipment, signs, artwork, office furnishings and equipment, guest room
furnishings, and specialized equipment for kitchens, laundries, bars, restaurant, public rooms, health and recreational facilities,
linens, dishware, all partitions, screens, awnings, shades, blinds, floor coverings, hall and lobby equipment, heating, lighting,
plumbing, ventilating, refrigerating, incinerating, elevators, escalators, air conditioning and communication plants or systems
with appurtenant fixtures, vacuum cleaning systems, call or beeper systems, security systems, sprinkler systems and other fire
prevention and extinguishing apparatus and materials; reservation system computer and related equipment; all equipment, manual,
mechanical or motorized, for the construction, maintenance, repair and cleaning of, parking areas, walks, underground ways, truck
ways, driveways, common areas, roadways, highways and streets; and the Vehicles (as defined in the Uniform System of Accounts for
Hotels).


 




    	 	11	 



     


    

 


“FF&E Expenditures”
for any period shall mean the amount expended for FF&E Work in, at or to the Property.


 


“FF&E Reserve
Account” shall have the meaning set forth in Section 7.6.1 hereof.


 


“FF&E Reserve
Funds” shall have the meaning set forth in Section 7.6.1 hereof.


 


“FF&E Reserve
Monthly Deposit” shall have the meaning set forth in Section 7.6.1.


 


“FF&E Work”
shall have the meaning set forth in Section 7.6.1 hereof.


 


“First Extended
Maturity Date” shall have the meaning set forth in Section 2.9.1 hereof.


 


“First Extension
Notice” shall have the meaning set forth in Section 2.9.1 hereof.


 


“First Extension
Option” shall have the meaning set forth in Section 2.9.1 hereof.


 


“First Payment
Date” shall have the meaning set forth in Section 2.3.2(a) hereof.


 


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


 


“Fitch”
shall mean Fitch, Inc.


 


“Food and Beverage
Management Agreement” shall mean that certain Amended and Restated Food and Beverage Management Agreement, dated as of
October 20, 2010, between Operator Borrower and License Holder.


 


“Foreign Lender”
shall mean a Lender at any time that it is not a U.S. Person.


 


“Franchise Agreement”
shall mean, individually and collectively, as the context requires, (x) that certain Franchise Agreement, as amended by Amendment
to Franchise Agreement required by the State of Hawaii, dated as of October 21, 2010, between Operator Borrower and Franchisor,
pursuant to which Operator Borrower has the right to operate the hotel located on the Property under a name and/or hotel system
controlled by such Franchisor, and (y) that certain Owner Agreement, dated as of October 21, 2010, between Owner Borrower, Operator
Borrower and Franchisor, as each of the same may have been amended or modified by the Comfort Letter.


 


“Franchisor”
shall mean Marriott International, Inc., a Delaware corporation.


 


“Full Replacement
Cost” shall have the meaning set forth in Section 6.1(a)(i) hereof.


 


“Future Advance”
shall have the meaning set forth in Section 2.1.2 hereof.


 


“Future Advance
Amount” shall have the meaning set forth in Section 2.1.2 hereof.


 


“Future Advance
Force Funding Date” shall mean November 9, 2018.


 




    	 	12	 



     


    

 


“GAAP”
shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial
report.


 


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


 


“Gross Income
from Operations” shall mean, as of any date of determination, all income, computed in accordance with GAAP, and the Uniform
System of Accounts for Hotels, derived from the ownership and operation of the Property or any portion thereof from whatever source
during the twelve (12) month period ending with the most recent calendar month reporting, including, but not limited to, Rents,
utility charges, escalations, room revenues, credit card receipts, food and beverage revenues, forfeited security deposits, interest
(if any) on credit accounts and on Reserve Funds, concession fees and charges, business interruption or other loss of income or
rental insurance proceeds, service fees or charges, license fees, sums paid from users of parking spaces and other facilities or
amenities located on the Property, rent concessions or credits, and other pass-through or reimbursements paid by Tenants under
the Leases of any nature but excluding (a) other than with respect to Hotel Transactions, Rents from Tenants that
(i) are in monetary default under the applicable Lease for a period of sixty (60) days or more, (ii) are not in physical occupancy
of the applicable leased premises, (iii) intentionally omitted, (iv) are then in a free rent period (other than the non-abated
portion of rents under such Leases which are still payable during the applicable free rent period any and other rent payable following
such period), (v) are the subject of, or otherwise subject to, or whose lease guarantor(s) are subject to, a Bankruptcy Action,
(vi) are Affiliates of Borrower or Guarantor (except that proceeds from the Operating Lease shall be included, as set forth above),
or (vii) have notified Borrower or their intent to terminate the applicable lease or vacate the applicable leased premises, (b)
sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, (c)
refunds and uncollectible accounts, (d) proceeds from the sale of FF&E, (e) insurance proceeds and Condemnation Proceeds (other
than business interruption or other loss of income insurance) payable following a Casualty or Condemnation of all or any portion
of the Property, and (f) any disbursements to Borrower from any of the Reserve Funds. Notwithstanding anything to the contrary
contained in this definition, (i) Gross Income from Operations shall exclude any non-recurring Gross Income from Operations and
(ii) Rents from Tenants who have less than two (2) months remaining on the term of their applicable Lease(s) as of the date of
determination shall be capped at $250,000 per year.


 


“Guarantor”
shall mean, individually and collectively, and jointly and severally, Behringer Guarantor and JMI Guarantor.


 


“Guarantor Documents”
shall mean, individually and collectively, the Guaranty, the Completion Guaranty, and the Environmental Indemnity.


 


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


 




    	 	13	 



     


    

 


“Hotel Transactions”
shall mean, collectively, (i) occupancy arrangements for customary hotel transactions in the ordinary course of Borrower’s
business conducted at the hotel located at the Property, including nightly rentals (or licensing) of individual hotel rooms or
suites, banquet room use and food and beverage services and (ii) informational or guest services which are terminable on one month’s
notice or less without cause and without penalty or premium, including co-marketing, promotional services and outsourced services.


 


“Hazardous Substances”
shall include, but are not limited to, (a) any and all substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of
similar meaning or regulatory effect under any present or future Environmental Statutes or that may have a negative impact on human
health or the environment, including, but not limited to, petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives, but excluding substances of kinds and
in amounts ordinarily and customarily used or stored in such properties similar to the Property for the purposes of cleaning or
other maintenance or operations and otherwise in compliance with all Environmental Statutes, and (b) mold, mycotoxins, microbial
matter, and/or airborne pathogens (naturally occurring or otherwise) which pose a threat (imminent or otherwise) to human health
or the environment or adversely affect the Property or any portion thereof.


 


“Hawaiian Rainforest
Lease” shall mean that certain Lease, dated as of April 27, 2005, between Operator Borrower (successor-in-interest to
PK Holdings, LLC, a Hawaii limited liability company, as landlord, and Hawaiian Rainforest LLC, a Hawaii limited liability company,
as tenant, as the same may be amended, restated, supplemented or otherwise modified from time to time pursuant to the terms and
provisions of this Agreement.


 


“Highgate”
shall mean Highgate Hotels L.P., a Delaware limited partnership.


 


“Improvements”
shall have the meaning set forth in the granting clause(s) of the Security Instrument.


 


“Increased Costs”
shall have the meaning set forth in Section 2.10.1 hereof.


 


“Indebtedness”
shall mean for any Person, on a particular date, the sum (without duplication) at such date of (a) all indebtedness or liability
of such Person (including, without limitation, amounts for borrowed money and indebtedness in the form of mezzanine debt and preferred
equity); (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred
purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations
under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business)
and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person, or otherwise
to assure a creditor against loss; and (g) obligations secured by any Liens, whether or not the obligations have been assumed (other
than Permitted Encumbrances).


 


“Indemnified Liabilities”
shall have the meaning set forth in Section 10.13(b) hereof.


 




    	 	14	 



     


    

 


“Indemnified Parties”
shall mean Lender and any Affiliate or designee of Lender that has filed any registration statement relating to a Securitization
or has acted as the sponsor or depositor in connection with a 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 issued in a Securitization, and each of their respective officers, directors, partners, employees,
representatives, agents and Affiliates and each Person who Controls any such Person within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, any Person that is or will have been involved in the origination of the Loan, any Person
that is or will have been involved in the servicing of the Loan secured hereby, any Person in whose name the encumbrance created
by the Security Instrument is or will have been recorded, any Person that may hold or acquire or will have held a full or partial
interest in the Loan secured hereby (including, but not limited to, investors or prospective investors in the Securities, as well
as custodians, trustees and other fiduciaries that hold or have held a full or partial interest in the Loan secured hereby for
the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors, subcontractors, Affiliates, subsidiaries, participants, successors and assigns of any and all of
the foregoing (including, but not limited to, any other Person that holds or acquires or will have held a participation or other
full or partial interest in the Loan, whether during the term of the Loan or as a part of or following a foreclosure of the Loan
and including, but not limited to any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s
assets and business).


 


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


 


“Independent Director”
shall mean an individual who has prior experience as an independent director, independent manager or independent member with
at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National
Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or another nationally-recognized
company reasonably approved by 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 its business, and which individual is duly appointed as an Independent
Director and is not, and has never been, and will not while serving as Independent Director be, any of the following:


 


(a)     a
member, partner, equityholder, manager, director, officer or employee of Borrower or any of its equityholders or Affiliates (other
than as an Independent Director of Borrower or an Affiliate of Borrower that is not in the direct chain of ownership of Borrower
and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such Independent Director is
employed by a company that routinely provides professional Independent Directors or managers in the ordinary course of its business);


 




    	 	15	 



     


    

 


(b)     a
creditor, supplier or service provider (including provider of professional services) to Borrower or any of its equityholders or
Affiliates (other than a nationally recognized company that routinely provides professional Independent Directors and other corporate
services to Borrower or any of its Affiliates in the ordinary course of its business);


 


(c)     a
family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider;
or


 


(d)     a
Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above.


 


A natural person who otherwise
satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Director of a “special
purpose entity” affiliated with Borrower shall be qualified to serve as an Independent Director of the Borrower, provided
that the fees that such individual earns from serving as an Independent Director of affiliates of Borrower in any given year constitute
in the aggregate less than five percent (5%) of such individual’s annual income for that year. For purposes of this paragraph,
a “special purpose entity” is an entity whose organizational documents contain restrictions on its activities and impose
requirements intended to preserve such entity’s separateness that are substantially similar to those contained in the definition
of Special Purpose Entity of this Agreement.


 


“Initial Advance”
shall have the meaning set forth in Section 2.1,2 hereof.


 


“Initial Insurance
Premiums Deposit” shall mean the amount set forth on Schedule IV.


 


“Initial Interest
Rate Cap Agreement” shall have the meaning set forth in Section 2.8.1 hereof.


 


“Initial Tax Deposit”
shall mean the amount set forth on Schedule IV.


 


“Insolvency Opinion”
shall mean that certain substantive non-consolidation opinion letter, dated the date hereof, in connection with the Loan.


 


“Insurance Premiums”
shall have the meaning set forth in Section 6.1(b) hereof.


 


“Insurance Proceeds”
shall have the meaning set forth in Section 6.4(b) hereof.


 


“Interest Determination
Date” shall mean, (a) with respect to the initial Interest Period, the date that is two (2) Business Days before the
Closing Date and (b) with respect to any other Interest Period, the date that is two (2) Business Days prior to the ninth (9th)
day of the calendar month in which such Interest Period commences. When used with respect to an Interest Determination Date, “Business
Day” shall mean any day on which banks are open for dealing in foreign currency and exchange in London. The Interest Determination
Date shall be subject to adjustment as described in Section 2.3.2 below.


 


“Interest Period”
shall mean (a) initially, the period commencing on and including the Closing Date and ending on and including the eighth (8th)
day of the calendar month following the Closing Date, and (b) thereafter, for any specified Payment Date including the Maturity
Date, the period commencing on and including the ninth (9th) day of the calendar month prior to the calendar month in which such
Payment Date occurs and ending on and including the eighth (8th) day of the calendar month in which such Payment Date occurs. The
Interest Period shall be subject to adjustment as described in Section 2.3.2 below.


 




    	 	16	 



     


    

 


“Interest Rate”
shall mean, with respect to each Interest Period, an interest rate per annum at which the Outstanding Principal Balance bears interest
from time to time in accordance with the provisions of Section 2.2 hereof.


 


“Interest Rate
Cap Agreement” shall mean the Confirmation and Agreement (together with the confirmation and schedules relating thereto)
that complies with all of the requirements of Section 2.8 hereof between the Counterparty and Borrower, obtained by Borrower
and collaterally assigned to Lender pursuant to the Assignment of Rate Cap dated on or about the date hereof. After delivery of
a Replacement Interest Rate Cap Agreement to Lender, the term “Interest Rate Cap Agreement” shall be deemed to mean
such Replacement Interest Rate Cap Agreement.


 


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


 


“Investor”
shall have the meaning set forth in Section 9.1(a) hereof.


 


“IRS”
shall mean the United States Internal Revenue Service.


 


“JMI Guarantor”
shall mean JMI Realty, LLC, a Delaware limited liability company.


 


“JMI JV Member”
shall mean JMIR Investments III, LP, a Delaware series limited partnership.


 


“Joint Venture”
shall mean, individually and collectively, BH-JMIR Kauai Hotel, LLC, a Delaware limited liability company, and BH-JMIR Kauai Hotel
Operator, LLC, a Delaware limited liability company.


 


“JV Agreement”
shall mean, individually and collectively, (x) that certain Limited Liability Company Agreement of BH-JMIR Kauai Hotel, LLC, dated
as of October 20, 2010, between JMI JV Member, Behringer JV Member and JMIR-Project Manager LLC, as amended by that certain First
Amendment to Limited Liability Company Agreement of BH-JMIR Kauai Hotel, LLC, dated as of May 8, 2017, and (y) that certain Limited
Liability Company Agreement of BH-JMIR Kauai Hotel Operator, LLC, dated as of October 20, 2010, between JMI JV Member, Behringer
Harvard Kauai Hotel TRS, Inc., and JMIR-Project Manager LLC, as amended by that certain First Amendment to Limited Liability Company
Agreement of BH-JMIR Kauai Hotel Operator, LLC, dated as of May 8, 2017.


 


“Kroll”
shall mean Kroll Bond Rating Agency, Inc.


 


“KSL Transferee”
shall have the meaning set forth in Section 5.2.10(e) hereof.


 




    	 	17	 



     


    

 


“Lease”
shall mean any lease, sublease or subsublease, 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 by or on behalf of Borrower, and (a) every modification, amendment or other agreement
relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease,
or other agreement, and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto. As used herein, the term “Leases” shall not include Hotel Transactions
or the Operating Lease.


 


“Legal Requirements”
shall mean all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions, permits or requirements of Governmental Authorities applicable to Borrower or the Property
(or any portion thereof or any part thereof), or the administration thereof, or the construction, use, alteration or operation
of the Property, or any part thereof, whether now or hereafter enacted and in force, any Environmental Statutes, the Americans
with Disabilities Act of 1990, as amended, and all permits, licenses and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any
time in force affecting Borrower, the Property or any part thereof, including, without limitation, any which may (a) require repairs,
modifications or alterations in or to the Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.


 


“Lender”
shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.


 


“Liabilities”
shall have the meaning set forth in Section 9.2 hereof.


 


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


 


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


 


(b)     If
such rate does not appear on Reuters Screen LIBOR01 Page (or its equivalent) as of 11:00 a.m., London time, on the applicable Interest
Determination Date, Lender shall request the principal London office of any four major reference banks in the London interbank
market selected by Lender to provide such reference bank’s offered quotation to prime banks in the London interbank market
for deposits in U.S. Dollars for a one-month period as of 11:00 a.m., London time, on such Interest Determination Date in a principal
amount of not less than One Million and No/100 Dollars ($1,000,000.00) that is representative for a single transaction in the relevant
market at the relevant time. If at least two such offered quotations are so provided, LIBOR shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, Lender shall request any three major banks in New York City selected
by Lender to provide such bank’s rates for loans in U.S. Dollars to leading European banks for a one-month period as of 11:00
a.m., New York City time, on such Interest Determination Date in a principal amount not less than One Million and No/100 Dollars
($1,000,000.00) that is representative for a single transaction in the relevant market at the relevant time. If at least two such
rates are so provided, LIBOR shall be the arithmetic mean of such rates. If fewer than two rates are so provided, then LIBOR shall
be the LIBOR rate used for the immediately preceding Interest Period and Interest Determination Date.


 




    	 	18	 



     


    

 


“LIBOR Floor”
shall mean fifty hundredths of one percent (0.50%).


 


“LIBOR Loan”
shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon LIBOR in accordance with the terms
of this Agreement.


 


“LIBOR Rate”
shall mean, with respect to each Interest Period for which interest is calculated using the LIBOR Rate pursuant to Section 2.2
hereof, an interest rate per annum equal to the sum of (a) the greater of (i) LIBOR, determined as of the Interest Determination
Date applicable to such Interest Period, and (ii) the LIBOR Floor, plus (b) the Spread.


 


“Licenses”
shall have the meaning set forth in Section 4.1.22 hereof.


 


“License Holder”
shall mean DHC Food & Beverage Corporation, an Affiliate of Manager, or such other holder of the Liquor License as permitted
pursuant to the terms and provisions of this Agreement.


 


“Lien”
shall mean any mortgage, deed of trust, deed to secure debt, indemnity 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 Borrower, the Property, or any portion thereof or any
interest therein, or any direct or indirect interest in Borrower, including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing
of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.


 


“Liquor Authority”
shall mean the Liquor Control Commission of the County of Kauai.


 


“Liquor License”
means the alcoholic beverage license(s) issued to License Holder by the Liquor Authority for the Property.


 


“Liquor License
Cooperation Agreement” shall mean that certain Agreement Regarding Liquor License, dated as of the date hereof, by and
among License Holder, Borrower and Lender or, if the context requires, the Replacement Liquor License Cooperation Agreement, in
each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Loan”
shall have the meaning set forth in the recitals hereof.


 




    	 	19	 



     


    

 


“Loan Documents”
shall mean, collectively, this Agreement, the Note, the Security Instrument, the Assignment of Leases, the Environmental Indemnity,
the Assignment of Management Agreement, the Guaranty, the Completion Guaranty, the Clearing Account Agreement, the Cash Management
Agreement, the Liquor License Cooperation Agreement, the Comfort Letter, the Subordination of Operating Lease, the Certification
of Documents, the Assignment of Rate Cap, and all other documents executed and/or delivered in connection with the Loan.


 


“Loan to Value
Ratio” shall mean, as of the date of its calculation, the ratio of (a) the Outstanding Principal Balance as of the date
of such calculation to (b) the “as-is” fair market value of the Property, as determined by an Appraisal (if a Securitization
has occurred, for purposes of any REMIC provision, counting only real property and excluding any personal property or going concern
value).


 


“Losses”
shall have the meaning set forth in Section 3.1(b) hereto.


 


“Major Lease”
shall mean any Lease of all or any part of the Property and Improvements which: (i) has a term of one (1) year or more, (ii) accounts
for $100,000 or more of income per fiscal year, or (iii) could reasonably be expected to have a material adverse effect on the
Property or the operation thereof.


 


“Management Agreement”
shall mean that certain Management Agreement entered into by and between Borrower (as assignee of JMI Realty, LLC) and Manager,
dated as of September 15, 2010, as amended by that certain First Amendment to Management Agreement, dated August 8, 2011, and that
certain Second Amendment to Management Agreement, dated as of April 19, 2017, pursuant to which Manager is to provide management
and other services with respect to the Property, or, if the context requires, the Replacement Management Agreement.


 


“Manager”
shall mean Davidson Hotel Company, LLC, or, if the context requires, a Qualified Manager that is managing the Property in accordance
with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.


 


“Material Action”
shall mean, with respect to Borrower, to consolidate or merge Borrower with or into any Person, or sell all or substantially all
of the assets of Borrower (unless such sale results in the repayment, in full, of the Loan), or to institute a Bankruptcy Action
or take action in furtherance of any such action, or, to the fullest extent permitted by law, to dissolve or liquidate Borrower.


 


“Material Adverse
Change” shall mean the business, operations, property, assets, liabilities or financial condition of any applicable Person
and each of their subsidiaries, taken as a whole, or in the ability of any such Person to perform its obligations under the Loan
Documents has changed in a manner which could impair the value of Lender’s security for the Loan or prevent timely repayment
of the Loan or otherwise prevent the applicable Person from timely performing any of its material obligations under the Loan Documents,
as the case may be, as determined by Lender in its reasonable discretion.


 




    	 	20	 



     


    

 


“Material Agreements”
shall mean (i) each contract and agreement relating to the ownership, management, development, use, operation, leasing, maintenance,
repair or improvement of the Property or any portion thereof, other than the Management Agreement, the Franchise Agreement,
the Operating Lease and the Leases, as to which either (x) there is an obligation of Borrower to pay more than Three
Hundred Thousand and No/100 Dollars ($300,000.00) in the aggregate or (y) the term thereof extends beyond one year,
in each case, unless cancelable on thirty (30) days or less notice without requiring the payment of termination fees or payments
of any kind and (ii) any agreement with (x) a general contractor or construction manager requiring payments over $150,000 or (y)
an engineer or architect, in each case, relating to the CapEx and requiring payments over $300,000. Material Agreements shall also
include any Hotel Transaction relating to any reservation covering more than 200 rooms for a period of more than thirty (30) days.


 


“Maturity Date”
shall mean the Stated Maturity Date, provided that (a) if Borrower timely and properly exercises the First Extension Option pursuant
to Section 2.9, the Maturity Date shall be the First Extended Maturity Date, and (b) if Borrower timely and properly exercises
the Second Extension Option pursuant to Section 2.9, the Maturity Date shall be the Second Extended Maturity Date, or such
earlier date on which the final payment of principal of the Note becomes due and payable as herein or therein provided, whether
at such 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 state or states whose laws are held by any court of competent jurisdiction to govern the interest
rate provisions of the Loan.


 


“Mold”
shall mean fungi that reproduces through the release of spores or the splitting of cells or other means, including, but not limited
to, mold, mildew, fungi, fungal spores, fragments and metabolites such as mycotoxins and microbial organic compounds.


 


“Monthly Debt
Service Payment Amount” shall have the meaning set forth in Section 2.3.2(a) hereof.


 


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


 


“Morningstar”
shall mean Morningstar Credit Ratings, LLC.


 


“Multiemployer
Plan” shall mean a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which Borrower, Guarantor or any
ERISA Affiliate of any of them is making or accruing an obligation to make contributions or has within any of the preceding five
plan years made or accrued an obligation to make contributions.


 


“Net Operating
Income” shall mean, as of any date of determination, the amount calculated by Lender by subtracting (a) the Operating
Expenses for the twelve (12) month period ending with the most recent calendar month reporting, from (b) the Gross Income from
Operations as of such date. If Borrower fails to provide the reporting as required pursuant to this Agreement and such failure
continues through the date on which Lender makes the applicable Debt Yield and/or Debt Service Coverage Ratio calculation, then
in such case, and without limiting any other rights that Lender has due to such failure, (x) Borrower shall not be entitled to
any benefits under this Agreement which is conditioned on a calculation that requires delivery of such monthly or quarterly reporting,
including, without limitation, granting any extension term and effecting the termination of a Cash Trap Period, and (y) in making
any calculation with respect to Debt Yield or Debt Service Coverage Ratio, Lender shall be entitled, in Lender’s sole discretion,
to calculate the Debt Yield and the Debt Service Coverage Ratio. Lender’s calculation of the Debt Yield and the Debt Service
Coverage Ratio shall be final absent manifest error.


 




    	 	21	 



     


    

 


“Net Proceeds”
shall have the meaning set forth in Section 6.4(b) hereof.


 


“Net Proceeds
Account” shall have the meaning set forth in Section 6.4(b)(ii) hereof.


 


“Net Proceeds
Deficiency” shall have the meaning set forth in Section 6.4(b)(vi) hereof.


 


“New Mezzanine
Loan” shall have the meaning set forth in Section 9.4(a) hereof.


 


“Note”
shall mean that certain Promissory Note of even date herewith in the principal amount of Forty-Four Million and No/100 Dollars
($44,000,000.00), made by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.


 


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


 


“OFAC”
shall mean the Office of Foreign Asset Control of the Department of the Treasury of the United States of America.


 


“Officer’s
Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by an authorized officer of (a) the
general partner, manager, or managing member of Borrower or (b) Manager, in each case, provided Borrower agrees that such
shall be deemed to be signed and bind Borrower.


 


“Operating Expenses”
shall mean, for any period, the total of all expenditures, computed in accordance with GAAP, and the Uniform System of Accounts
for Hotels, current edition, of whatever kind relating to the operation, maintenance and management of the Property, which expenditures
are incurred on a regular monthly or other periodic basis, including without limitation, utilities, ordinary repairs and maintenance,
insurance, license fees, Taxes, Other Charges, advertising expenses, management fees, payroll and related taxes, computer processing
charges, operational equipment or other lease payments, expenditures for operating inventory and consumables, sales and marketing
expenses, and other similar costs. Notwithstanding anything to the contrary in the foregoing, Operating Expenses shall (w) not
include depreciation, amortization and other non-cash items, debt service, Capital Expenditures, any contributions to any of the
Reserve Funds, income taxes or other taxes in the nature of income taxes on sales, or use taxes required to be paid to any Governmental
Authority, equity distributions, and other extraordinary and non-recurring items, and legal or other professional services fees
and expenses unrelated to the operation of the Property, (x) be increased to reflect known increases in Operating Expenses that
are anticipated, in Lender’s reasonable determination, to occur within the succeeding twelve (12) month period including
without limitation those related to Property Taxes and Insurance Premiums, (y) include a management fee equal to the lesser of
(i) actual management fees paid and (ii) three percent (3%) of Gross Income from Operations for such period, and (z) include an
amount equal to an imputed capital improvement/FF&E requirement amount equal to the greater of (i) four percent (4.0%) of Gross
Income from Operations for such period and (ii) the monthly FF&E reserve required under Section 11.2B of the Franchise Agreement
for such period (regardless of whether a reserve therefor is required hereunder or the amount of such reserve). Operating Expenses
shall also include all franchise fees and expenses incurred in connection with any Franchise Agreement.


 




    	 	22	 



     


    

 


“Operating Lease”
shall mean that certain Lease Agreement, dated as of the Closing Date, between Owner Borrower, as lessor, and Operator Borrower,
as lessee, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms
and provisions hereof.


 


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


 


“Other Charges”
shall mean all ground rents, maintenance charges, impositions other than Taxes, any “common expenses” or expenses allocated
to and required to be paid by Borrower under the REA and any other charges, including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Property or any portion thereof, now or hereafter levied or
assessed or imposed against the Property or any part thereof.


 


“Other Obligations”
shall mean (a) the performance of all obligations of Borrower contained herein; (b) the performance of each obligation of Borrower
contained in any other Loan Document; (c) the payment of all costs, expenses, legal fees and liabilities incurred by Lender in
connection with the enforcement of any of Lender’s rights or remedies under the Loan Documents, or any other instrument,
agreement or document which evidences or secures any other Obligations or collateral therefor, whether now in effect or hereafter
executed; and (d) the payment, performance, discharge and satisfaction of all other liabilities and obligations of Borrower to
Lender, whether now existing or hereafter arising, direct or indirect, absolute or contingent, and including, without limitation,
each liability and obligation of Borrower under any one or more of the Loan Documents and any amendment, extension, modification,
replacement or recasting of any one or more of the instruments, agreements and documents referred to herein or therein or executed
in connection with the transactions contemplated hereby or thereby.


 


“Other Taxes”
shall have the meaning set forth in Section 2.10.2 hereof.


 


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


 


“Participant Register”
shall have the meaning set forth in Section 9.1(c) hereof.


 


“Payment Date”
shall mean, commencing with the First Payment Date, the ninth (9th) day of each calendar month during the term of
the Loan until and including the Maturity Date or, for purposes of making payments hereunder, but not for purposes of calculating
Interest Periods, if such day is not a Business Day, the immediately preceding Business Day. The Payment Date shall be subject
to adjustment as described in Section 2.3.2 below.


 




    	 	23	 



     


    

 


“Pension Plan”
shall mean any “pension plan” (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, subject to Title
IV of ERISA and/or Section 412 of the Code to which Borrower, Guarantor or any ERISA Affiliate of any of them is making or accruing
an obligation to make contributions or has within any of the preceding five plan years made or accrued an obligation to make contributions
or otherwise has any liability with respect thereto.


 


“Permitted Encumbrances”
shall mean, collectively (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other
matters disclosed in “Schedule B-I” of the Title Insurance Policy, (c) the Liens, if any, for Taxes imposed by any
Governmental Authority which are not yet due or which are being contested in accordance with the terms and provisions of Section
5.1.2 hereof, (d) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s
sole discretion, (e) any workers’, mechanics’ or other similar Liens on the Property provided that any such Lien is
being contested in accordance with the terms of this Agreement and the other Loan Documents, and (f) trade and operational debt
and equipment leases to the extent the same are incurred in accordance with this Agreement, solely to the extent that the items
set forth in clauses (a)-(f) of this definition, do not, in the aggregate, materially adversely affect the value or use of the
Property or any portion thereof or Borrower’s ability to repay the Loan.


 


“Permitted Investments”
shall mean any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including
those issued by the Servicer or the trustee under any Securitization, if any has occurred, or any of their respective Affiliates,
payable on demand or having a maturity date not later than the Business Day immediately prior to the first Payment Date following
the date of acquiring such investment and meeting one of the appropriate standards set forth below:


 


(a)     obligations
of, or obligations directly and unconditionally guaranteed as to principal and interest by, the U.S. government or any agency or
instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America and have
maturities not in excess of one year;


 


(b)     federal
funds, unsecured certificates of deposit, time deposits, banker’s acceptances, and repurchase agreements having maturities
of not more than 90 days of any commercial bank organized under the laws of the United States of America or any state thereof or
the District of Columbia, the short-term debt obligations of which are rated (i) “A-1+” (or the equivalent) by S&P
and, if it has a term in excess of three months, the long-term debt obligations of which are rated “AAA” (or the equivalent)
by S&P, and that (1) is at least “adequately capitalized” (as defined in the regulations of its primary federal
banking regulator) and (2) has Tier 1 capital (as defined in such regulations) of not less than One Billion and No/100 Dollars
($1,000,000,000.00), and (ii) in one of the following Moody’s rating categories: (1) for maturities less than one month,
a long-term rating of “A2” or a short-term rating of “P-1”, (2) for maturities between one and three months,
a long-term rating of “A1” and a short-term rating of “P-1”, (3) for maturities between three months to
six months, a long-term rating of “Aa3” and a short-term rating of “P-1” and (4) for maturities over six
months, a long-term rating of “Aaa” and a short-term rating of “P-1”, or such other ratings as confirmed
by Lender in its sole discretion (and in a Rating Agency Confirmation if a Securitization has occurred);


 




    	 	24	 



     


    

 


(c)     deposits
that are fully insured by the Federal Deposit Insurance Corporation;


 


(d)     commercial
paper rated (i) “A–1+” (or the equivalent) by S&P and having a maturity of not more than 90 days and (ii)
in one of the following Moody’s rating categories: (1) for maturities less than one month, a long-term rating of “A2”
or a short-term rating of “P-1”, (2) for maturities between one and three months, a long-term rating of “A1”
and a short-term rating of “P-1”, (3) for maturities between three months to six months, a long-term rating of “Aa3”
and a short-term rating of “P-1” and (4) for maturities over six months, a long-term rating of “Aaa” and
a short-term rating of “P-1”;


 


(e)     any
money market funds that (i) has substantially all of its assets invested continuously in the types of investments referred to in
subparagraph (a) above, (ii) has net assets of not less than Five Billion and No/100 Dollars ($5,000,000,000.00), and (iii) has
the highest rating obtainable from S&P and Moody’s; and


 


(f)     such
other investments as to which each Approved Rating Agency shall have delivered a Rating Agency Confirmation (if a Securitization
has occurred) and to which Lender shall have approved in its sole discretion.


 


Notwithstanding the foregoing,
“Permitted Investments” (i) shall exclude any security with the S&P’s “r” symbol (or any other
Approved Rating Agency’s corresponding symbol) attached to the rating (indicating high volatility or dramatic fluctuations
in their expected returns because of market risk), as well as any mortgage-backed securities and any security of the type commonly
known as “strips”; (ii) shall be limited to those instruments that have a predetermined fixed dollar of principal due
at maturity that cannot vary or change; (iii) shall only include instruments that qualify as “cash flow investments”
(within the meaning of Section 860G(a)(6) of the Code); and (iv) shall exclude any investment where the right to receive principal
and interest derived from the underlying investment provides a yield to maturity in excess of one hundred and twenty percent (120%)
of the yield to maturity at par of such underlying investment. Interest may either be fixed or variable, and any variable interest
must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index. No
investment shall be made which requires a payment above par for an obligation if the obligation may be prepaid at the option of
the issuer thereof prior to its maturity. All investments shall mature or be redeemable upon the option of the holder thereof on
or prior to the earlier of (x) three months from the date of their purchase and (y) the Business Day preceding the day before the
date such amounts are required to be applied hereunder.


 


“Permitted Transfer”
shall mean any transfer expressly permitted pursuant to Section 5.2.10(d).


 


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


 




    	 	25	 



     


    

 


“Personal Property”
shall have the meaning set forth in the granting clause(s) of the Security Instrument.


 


“PIP”
shall mean the Property Improvement Plan attached to the Franchise Agreement, as amended or modified pursuant to the terms and
provisions of this Agreement.


 


“PIP Work”
shall mean all of the work and items required, but not Completed as of the Closing Date, under and otherwise contemplated by the
PIP, including all hard and soft costs and required capital improvements to the Property included in the PIP, as set forth on Schedule
X attached hereto.


 


“PIP Work
Budget” shall have the meaning set forth in Section 5.6.1(a) hereof.


 


“PIP Work Conditions”
shall have the meaning set forth in Section 5.6.1(a) hereof.


 


“PIP Work Deficiency”
shall have the meaning set forth in Section 2.5.6(a) hereof.


 


“PIP Work Future
Advance Amount” shall have the meaning set forth in Section 2.1.2 hereof.


 


“PIP Work Reserve
Account” shall have the meaning set forth in Section 7.2 hereof.


 


“PIP Work Reserve
Funds” shall have the meaning set forth in Section 7.2 hereof.


 


“Policies”
shall have the meaning set forth in Section 6.1(b) hereof.


 


“Preferred Equity
Investment” shall have the meaning set forth in Section 9.4(a) hereof.


 


“Prime Rate”
shall mean the annual rate of interest publicly announced by Wells Fargo Bank, N.A. in San Francisco, California, as its prime
rate, as such rate shall change from time to time. If Wells Fargo Bank, N.A. ceases to announce a prime rate, Prime Rate shall
mean the rate of interest published in The Wall Street Journal from time to time as the “Prime Rate.” If more than
one “Prime Rate” is published in The Wall Street Journal for a day, the average of such “Prime Rates” shall
be used, and such average shall be rounded up to the nearest one hundredth of one percent (0.01%). If The Wall Street Journal ceases
to publish the “Prime Rate,” Lender shall select an equivalent publication that publishes such “Prime Rate,”
and if such “Prime Rates” are no longer generally published or are limited, regulated or administered by a governmental
or quasi-governmental body, then Lender shall select a comparable interest rate index.


 


“Prime Rate Loan”
shall mean the Loan at such time as interest thereon accrues at a rate of interest based upon the Prime Rate in accordance
with the terms of this Agreement.


 


“Prime Rate Spread”
shall mean the difference (expressed as the number of basis points) between (a) the Interest Rate on the date LIBOR was
last applicable to the Loan and (b) the Prime Rate on the date that LIBOR was last applicable to the Loan; provided, however,
in no event shall such difference be a negative number.


 




    	 	26	 



     


    

 


“Principal”
shall mean the Special Purpose Entity that is the general partner of Borrower if Borrower is a limited partnership, or member of
Borrower, if Borrower is a limited liability company other than a Delaware single-member limited liability company that satisfies
the requirements of a Special Purpose Entity.


 


“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 ERISA or Section 4975 of the Code.


 


“Prohibited Transferee”
shall mean the Persons set forth on Schedule XI attached hereto.


 


“Property”
shall mean each parcel of real property, the Improvements thereon and all personal property owned by Borrower and encumbered by
the Security Instrument, together with all rights pertaining to such property and Improvements, as more particularly described
in the granting clause(s) of the Security Instrument and referred to therein as the “Property”.


 


“Property Condition
Report” shall mean that certain Property Condition Assessment, dated April 27, 2017, prepared by EMG, as project number
125799.17R000-001.042 and delivered to Lender in connection with the closing of the Loan.


 


“Property Taxes”
shall mean all taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property
or any part thereof, together with all interest and penalties thereon, whether any or all of said taxes, assessments or charges
be levied directly or indirectly or as excise taxes or ad valorem real estate or personal property taxes or as income taxes.


 


“Provided Information”
shall mean any and all financial and other information provided at any time by, or on behalf of, Borrower, Manager or Guarantor
with respect to the Property, Borrower, Guarantor and/or Manager.


 


“Qualified Manager”
shall mean either (a) Manager, (b) Highgate, or (c) in the reasonable judgment of Lender, a Person that is a reputable and experienced
management organization (which may be an Affiliate of Borrower) possessing experience in managing properties similar in size, scope,
use and value as the Property, provided, that (i) if the Loan has been Securitized, Borrower shall have obtained a Rating Agency
Confirmation from each Approved Rating Agency with respect to the change of management of the Property, (ii) if such Person is
an Affiliate of Borrower, Borrower shall have obtained an Additional Insolvency Opinion in form reasonably acceptable to Lender
and each Approved Rating Agency (if a Securitization has occurred), and (iii) such Person shall have entered into a Replacement
Management Agreement and an assignment of management agreement in the same form and substance as the Assignment of Management Agreement.


 




    	 	27	 



     


    

 


“Rating Agencies”
shall mean each of S&P, Moody’s, Fitch, Kroll, DBRS, Morningstar and Realpoint or any other nationally recognized statistical
rating agency which has assigned a rating to the Securities, if any.


 


“Rating Agency
Confirmation” shall mean a written affirmation from a Rating Agency that the credit rating of the Securities issued 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.


 


“REA”
shall mean, individually and collectively, that certain Amendment and Restatement of Declaration of Easements and Covenants and
that certain Declaration of Covenants and Restrictions, as more specifically described on Schedule VI.


 


“Realpoint”
shall mean Realpoint, LLC, a Pennsylvania limited liability company.


 


“Register”
shall have the meaning set forth in Section 9.1(b) hereof.


 


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


 


“Release”
shall mean, with respect to any Hazardous Substance, any release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing (including the abandonment or discharging of barrels,
containers or other closed receptacles containing Hazardous Substances) into the environment or other movement of Hazardous Substances.


 


“Remediation”
shall mean any response, remedial, removal, or corrective action; any activity to clean up, detoxify, decontaminate, contain or
otherwise remediate any Hazardous Substance; any actions to prevent, cure or mitigate any Release of any Hazardous Substance; any
action to comply with any Environmental Statutes or with any permits issued pursuant thereto; any inspection, investigation, study,
monitoring, assessment, audit, sampling and testing, or laboratory or other analysis, or evaluation relating to any Hazardous Substances
or to anything referred to herein.


 


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


 




    	 	28	 



     


    

 


“Rents”
shall mean all rents (including additional rents of any kind and percentage 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, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and
other payments and consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower
or any of its agents or employees from any and all sources arising from or attributable to the Property or any portion thereof,
and the Improvements, including charges for oil, gas, water, steam, heat, ventilation, air-conditioning, electricity, license fees,
maintenance fees, charges for Property Taxes, operating expenses or other amounts payable to Borrower (or for the account of Borrower),
revenues from telephone services, vending, and all receivables, customer 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 the Property (or
any portion thereof) or rendering of services by Borrower, Manager, or any of their respective agents or employees and proceeds,
if any, from business interruption or other loss of income insurance. Rents shall include revenues from the rental of rooms, guest
suites, conference and banquet rooms, food and beverage facilities, health clubs, spas or other amenities, telephone services,
laundry, vending, television and parking, Operating Rent (without duplication), and all other items of revenue, receipts
or other income as identified in the Uniform System of Accounts for Hotels.


 


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


 


“Replacement Assignment
of Rate Cap” shall have the meaning set forth in Section 2.8.3(b) hereof.


 


“Replacement Interest
Rate Cap Agreement” shall mean an interest rate cap agreement from an Approved Counterparty with terms that are the same
in all material respects as the terms of the Interest Rate Cap Agreement except that the same shall be effective as of (a) in connection
with a replacement pursuant to Section 2.8.1, the date of the expiration of the Initial Interest Rate Cap Agreement, (b)
in connection with a replacement pursuant to Section 2.8.3(c) following a downgrade, withdrawal or qualification of the
long-term unsecured debt rating of the Counterparty, the date required in Section 2.8 or (c) in connection with a replacement
(or extension of the then-existing Interest Rate Cap Agreement) in connection to an extension of the Maturity Date pursuant to
Section 2.9, the date required in Section 2.9; provided that to the extent any such interest rate cap agreement does
not meet the foregoing requirements, a “Replacement Interest Rate Cap Agreement” shall be such interest rate cap agreement
approved in writing by Lender, and if the Loan or any portion thereof is included in a Securitization, each of the Rating Agencies
with respect thereto.


 


“Replacement Liquor
License Cooperation Agreement” shall mean an Agreement Regarding Liquor License, by and among License Holder, Borrower
and Lender, entered into after the date hereof in accordance with the terms and provision of Section 5.1.28 hereof, as the
same may be amended, restated, supplemented or otherwise modified from time to time.


 


“Replacement Management
Agreement” shall mean, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in
the same form and substance as the Management Agreement, or (ii) a management agreement with a Qualified Manager which is reasonably
acceptable to Lender in form and substance (it being agreed that the form of that certain Management Agreement between Operator
Borrower and Highgate approved by Lender (dated April 6, 2017, version 7) (or an agreement substantially similar thereto; provided,
however, any changes with respect to the payment of any fees or the amounts thereof and other material changes shall be subject
to Lender’s reasonable consent) is acceptable to Lender), provided that, with respect to this clause (ii), if a Securitization
has occurred, Lender, at its option, may require that Borrower obtain a Rating Agency Confirmation from each Approved Rating Agency
with respect to each such management agreement; and (b) an assignment of management agreement and subordination of management fees
substantially in the form then used by Lender (or such other form and substance reasonably acceptable to Lender), executed and
delivered to Lender by Borrower and such Qualified Manager at Borrower’s expense.


 




    	 	29	 



     


    

 


“Required Records”
shall have the meaning set forth in Section 5.1.11(o) hereof.


 


“Required Repairs”
shall have the meaning set forth in Section 5.1.31 hereof.


 


“Reserve Accounts”
shall mean, collectively, the Tax and Insurance Escrow Account, the FF&E Reserve Account, the Excess Cash Reserve Account,
the Net Proceeds Account, the PIP Work Reserve Account, the Special Incentive Fee Reserve Account, and any other escrow or reserve
account established pursuant to the Loan Documents.


 


“Reserve Funds”
shall mean, collectively, the Tax and Insurance Escrow Funds, the FF&E Reserve Funds, the Excess Cash Reserve Funds, the PIP
Work Reserve Funds, the Special Incentive Fee Reserve Funds, and any other escrow or reserve fund established pursuant to the Loan
Documents.


 


“Restoration”
shall mean the repair and restoration of the Property or any portion thereof after a Casualty or Condemnation as nearly as possible
to the condition the Property (or such portion thereof) was in immediately prior to such Casualty or Condemnation, with such alterations
as may be approved by Lender in accordance with the standards set forth in Section 5.1.22 hereof.


 


“Restricted Party”
shall mean, collectively, (a) Borrower, Principal, Guarantor and any Affiliated Manager, and (b) any shareholder, partner, member,
non-member manager, direct or indirect legal or beneficial owner, agent or employee of Borrower, Guarantor, any Affiliated Manager
or any non-member manager.


 


“Retention Amount”
shall have the meaning set forth in Section 6.4(b)(iv) hereof.


 


“RICO”
shall mean the Racketeer Influenced and Corrupt Organizations Act.


 


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


 


“Sale or Pledge”
shall mean a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance, pledge, grant of an option or other
transfer or disposal of a legal or beneficial interest, whether direct or indirect.


 


“Second Extended
Maturity Date” shall have the meaning set forth in Section 2.9.1 hereof.


 


“Second Extension
Notice” shall have the meaning set forth in Section 2.9.1 hereof.


 


“Second Extension
Option” shall have the meaning set forth in Section 2.9.1 hereof.


 




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“Securities”
shall have the meaning set forth in Section 9.1(a) hereof.


 


“Securities Act”
shall mean the Securities Act of 1933, as the same shall be amended from time to time.


 


“Securitization”
shall have the meaning set forth in Section 9.1(a) hereof.


 


“Security Instrument”
shall mean that certain Fee and Leasehold Mortgage, Security Agreement, Assignment of Leases and Fixture Filing, dated the date
hereof, executed and delivered by Borrower for the benefit of Lender as security for the Obligations which encumbers the Property
or any portion thereof, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Servicer”
shall have the meaning set forth in Section 9.3 hereof.


 


“Servicing Agreement”
shall have the meaning set forth in Section 9.3 hereof.


 


“Severed Loan
Documents” shall have the meaning set forth in Section 8.1.2(c) hereof.


 


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


 


“Sole Operator
Borrower Member” shall mean BH-JMIR Kauai Operator Member, LLC, a Delaware limited liability company.


 


“Sole Owner Borrower
Member” shall mean BH-JMIR Kauai Fee Member, LLC, a Delaware limited liability company.


 


“Special Incentive
Fee Reserve Account” shall have the meaning set forth in Section 7.3 hereof.


 


“Special Incentive
Fee Reserve Funds” shall have the meaning set forth in Section 7.3 hereof.


 


“Special Purpose
Entity” shall mean a corporation, limited partnership or limited liability company which at all times prior to, on and
after the date hereof:


 


(a)     was,
is and will be organized solely for the purpose of (i) in the case of Owner Borrower, acquiring, developing, owning, holding, selling,
leasing, transferring, exchanging, managing and operating the Property (and no other property), entering into this Agreement with
Lender and performing its obligations under the Loan Documents, refinancing the Property in connection with a permitted repayment
of the Loan, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing, (ii) in the
case of Operator Borrower, leasing, managing and operating the Property (and no other Property), entering into this Agreement with
Lender and performing its obligations under the Loan Documents, and transacting lawful business that is incident, necessary and
appropriate to accomplish the foregoing, or (iii) in the case of Principal, acting as a member of Borrower;


 




    	 	31	 



     


    

 


(b)     has
not been, is not, and will not be engaged, in any business unrelated to (i) in the case of Borrower, the acquisition, development,
ownership (or, with respect to Operator Borrower, leasing), management or operation of the Property, and (ii) in the case of Principal,
acting as a member of the Borrower, as applicable;


 


(c)     has
not had, does not have, and will not have, any assets other than (i) in the case of Borrower, those related to the Property or
(ii) in the case of Principal, the membership interest in the Borrower;


 


(d)     has
not engaged in, sought or consented to, and will not engage in, seek or consent to, any dissolution, winding up, liquidation, consolidation,
merger, sale of all or substantially all of its assets (unless such sale will result in the repayment in full of the Loan), transfer
of partnership or membership interests (if such entity is a general partner in a limited partnership or a member in a limited liability
company) or amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate of
formation or operating agreement (as applicable) with respect to the matters set forth in this definition;


 


(e)     if
such entity is a limited partnership, has had, now has, and will have as its only general partners, Special Purpose Entities each
of which (i) is a corporation or single-member Delaware limited liability company or multimember Delaware limited liability
company treated as a single member limited liability company that complies with the requirements set forth in subparagraph (h)
hereof, (ii) has two (2) Independent Directors, and (iii) holds a direct interest as general partner in the limited partnership
of not less than one-half-of-one percent (0.5%) (or one-tenth-of-one percent (0.1%) if the limited partnership is a Delaware entity);


 


(f)     if
such entity is a corporation, has had, now has and will have at least two (2) Independent Directors, and has not caused or allowed,
and will not cause or allow, the board of directors of such entity to take any Bankruptcy Action or any other Material Action either
with respect to itself or, if the corporation is a Principal, with respect to the Borrower, or any action requiring the unanimous
affirmative vote of one hundred percent (100%) of the members of its board of directors unless the two (2) Independent Directors
shall have participated in such vote and shall have voted in favor of such action;


 


(g)     if
such entity is a limited liability company with more than one member, has had, now has and will have at least one member that is
a Special Purpose Entity (i) that is a corporation (ii) that has at least two (2) Independent Directors, and (iii) that directly
owns at least one-half-of-one percent (0.5%) of the equity of the limited liability company (or one-tenth-of-one percent (0.1%)
if the limited liability company is a Delaware entity);


 


(h)     if
such entity is a limited liability company with only one member, has been, now is, and will be a limited liability company organized
in the State of Delaware that (i) has at least two (2) Independent Directors, (ii) has not caused or allowed, and will not cause
or allow the members or managers of such entity to take any Bankruptcy Action or any other Material Action, either with respect
to itself or, if the company is a Principal with respect to the Borrower, in each case unless the two (2) Independent Directors
then serving as managers of the company shall have consented in writing to such action, and (iii) has and shall have either (x)
a member which owns no economic interest in the company, has signed the company’s limited liability company agreement and
has no obligation to make capital contributions to the company, or (y) two (2) natural persons or one entity that is not a member
of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company
agreement becomes a member of the company immediately prior to the withdrawal or dissolution of the last remaining member of the
company;


 




    	 	32	 



     


    

 


(i)     has
been, is and intends to remain solvent and has paid and shall pay its debts and liabilities from its then available assets (including
a fairly allocated portion of any personnel and overhead expenses that it shares with any Affiliate) from its assets as the same
shall become due, and has maintained and shall 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, the forgoing shall
not require any shareholder, partner, or member of such entity, as applicable, to make additional capital contributions to such
entity);


 


(j)     has
not failed, and will not fail, to correct any known misunderstanding regarding the separate identity of such entity and has not
and shall not identify itself as a division of any other Person;


 


(k)     has
maintained and will maintain its accounts, books and records separate from any other Person and has filed and will file its own
Tax returns, except to the extent that it has been or is required to file consolidated Tax returns by law or is treated as a Disregarded
Entity and is not required to file a particular Tax return;


 


(l)     has
maintained and will maintain its own records, books, resolutions and agreements;


 


(m)     other
than as provided in the Cash Management Agreement, (i) has not commingled, and will not commingle, its funds or assets with those
of any other Person and (ii) has not participated and will not participate in any cash management system with any other Person;


 


(n)     has
held and will hold its assets in its own name;


 


(o)     has
conducted and shall conduct its business in its name or in a name franchised or licensed to it by an entity other than an Affiliate
of itself or of Borrower, except for business conducted on behalf of itself by another Person under a business management services
agreement that is on commercially reasonable terms, so long as the manager, or equivalent thereof, under such business management
services agreement holds itself out as an agent of Borrower;


 


(p)     has
maintained and will maintain its books, bank accounts, balance sheets, financial statements, accounting records and other entity
documents separate from any other Person and has not permitted, and will not permit, its assets to be listed as assets on the financial
statement of any other entity except as required by GAAP; provided, however, that appropriate notation shall be made on any such
consolidated statements to indicate its separateness from such Affiliate and to indicate that its assets and credit are not available
to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall be listed on its own separate
balance sheet;


 




    	 	33	 



     


    

 


(q)     has
paid and will pay its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets,
and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations (provided,
however, the foregoing shall not require any shareholder, partner or member of such entity, as applicable, to make additional capital
contributions to such entity);


 


(r)     has
observed and will observe all partnership, corporate or limited liability company formalities, as applicable;


 


(s)     has
had no and will have no Indebtedness (including loans, whether or not such loans are evidenced by a written agreement) other than
(I) with respect to Borrower, (i) the Loan, (ii) unsecured trade and operational debt incurred, or equipment leases entered into,
in the ordinary course of business relating to the ownership and operation of the Property and the routine administration of Borrower
(excluding payments made to Owner Borrower under the Operating Lease), in amounts not to exceed $1,000,000, in the aggregate, which
liabilities are not more than sixty (60) days past the date incurred, are not evidenced by a note and are paid when due, and which
amounts are normal and reasonable under the circumstances, and (iii) such other liabilities that are expressly permitted pursuant
to this Agreement and (II) with respect to Principal, unsecured operational debt incurred in the ordinary course of business relating
to the ownership and operation of the Borrower, and the routine administration of Principal, in amounts not to exceed $25,000,
in the aggregate, which liabilities are not more than sixty (60) days past the date incurred, are not evidenced by a note and are
paid when due, and which amounts are normal and reasonable under the circumstances;


 


(t)     has
not assumed or guaranteed or become obligated for, and will not assume or guarantee or become obligated for, the debts of any other
Person and has not held out and will not hold out its credit as being available to satisfy the obligations of any other Person
except as permitted or required pursuant to this Agreement;


 


(u)     has
not acquired and will not acquire obligations or securities of its partners, members or shareholders or any other Affiliate;


 


(v)     has
allocated and will allocate, fairly and reasonably, any overhead expenses that are shared with any Affiliate, including, but not
limited to, paying for shared office space and services performed by any employee of an Affiliate;


 


(w)     has
maintained and used, now maintains and uses, and will maintain and use, separate stationery, invoices and checks bearing its name,
which stationery, invoices and checks utilized by the Special Purpose Entity or utilized to collect its funds or pay its expenses
have borne, and shall bear its own name and have not borne and shall not bear the name of any other entity unless such entity is
clearly designated as being the Special Purpose Entity’s agent;


 




    	 	34	 



     


    

 


(x)     except
pursuant to the Loan Documents (and any prior loans secured by the Property each of which has been repaid in full), has not pledged
and will not pledge its assets for the benefit of any other Person;


 


(y)     has
held itself out and identified itself, and will hold itself out and identify itself, as a separate and distinct entity under its
own name or in a name franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part
of any other Person, except for services rendered under a business management services agreement with an Affiliate that complies
with the terms contained in subparagraph (cc) of this definition, so long as the manager, or equivalent thereof, under such business
management services agreement holds itself out as an agent of Borrower;


 


(z)     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 other Person;


 


(aa)     has
not made and will not make loans to any Person or hold evidence of indebtedness issued by any other Person (other than cash and
investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity);


 


(bb)     has
not identified and will not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part
of it, and has not identified itself, and shall not identify itself, as a division of any other Person;


 


(cc)     has
not entered into or been a party to, and will not enter into or be a party to, any transaction with its partners, members, shareholders
or Affiliates except (i) in the ordinary course of its business and on terms which are intrinsically fair, commercially reasonable
and are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party,
and (ii) in connection with this Agreement;


 


(dd)     other
than capital contributions and distributions permitted under the terms of its organizational documents, has not entered into or
been a party to, and shall not enter into or be a party to, any transaction with any of its partners, members, shareholders or
Affiliates except in the ordinary course of its business and on terms which are commercially reasonable terms comparable to those
of an arm’s-length transaction with an unrelated third party;


 


(ee)     has
not had and shall not have any obligation to, and has not indemnified and shall not indemnify its partners, officers, directors
or members, as the case may be, in each case unless such an obligation or indemnification is fully subordinated to the Debt and
shall not constitute a claim against it in the event that its cash flow is insufficient to pay the Debt;


 


(ff)     if
such entity is a corporation, shall consider the interests of its creditors in connection with all corporate actions;


 




    	 	35	 



     


    

 


(gg)     does
not and will not have any of its obligations guaranteed by any Affiliate except for the Franchise Agreement and as provided in
the Loan Documents (or documents evidencing prior loans secured by the Property, each of which has been repaid in full) including
without limitation the Guarantor Documents;


 


(hh)     has
conducted and shall conduct its business so that each of the assumptions made about it and each of the facts stated about it in
the Insolvency Opinion are true;


 


(ii)     has
complied and will comply with all of the terms and provisions contained in its organizational documents and cause statements of
facts contained in its organizational documents to be and to remain true and correct; and


 


(jj)     has
not permitted and shall not permit any Affiliate or constituent party independent access to its bank accounts except as permitted
under the Loan Documents.


 


“Spread”
shall mean four and seventy hundredths percent (4.70%) per annum.


 


“State”
shall mean the State or Commonwealth in which the Property or any part thereof is located.


 


“Stated Maturity
Date” shall mean May 9, 2020.


 


“Stored Materials”
shall have the meaning set forth in Section 2.5.1 hereof.


 


“Strike Price”
shall mean (x) with respect to the Initial Interest Rate Cap Agreement, three percent (3.00%) per annum and (y) with respect
to any Interest Rate Cap other than the Initial Interest Rate Cap Agreement, a rate such that the Debt Service Coverage Ratio on
the Outstanding Principal Balance at the new LIBOR cap rate results in a Debt Service Coverage Ratio not less than 1.20x.


 


“Subaccounts”
shall have the meaning set forth in Section 2.7.2(a) hereof.


 


“Subordination
of Operating Lease” shall mean that certain Assignment and Subordination of Operating Lease, dated as of the date hereof,
made by Operator Borrower for the benefit of Lender, as the same may be amended, restated, supplemented or otherwise modified from
time to time.


 


“Survey”
shall mean one or more survey(s) of the Property prepared by a surveyor licensed in the State and reasonably satisfactory to Lender
and the Title Company, and containing a certification of such surveyor reasonably satisfactory to Lender.


 


“Tax and Insurance
Escrow Account” shall have the meaning set forth in Section 7.1.1 hereof.


 


“Tax and Insurance
Escrow Funds” shall have the meaning set forth in Section 7.1.1 hereof.


 




    	 	36	 



     


    

 


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


 


“Tenant”
shall mean the lessee of all or any portion of the Property under a Lease.


 


“Threshold Amount”
shall have the meaning set forth in Section 5.1.22 hereof.


 


“Title Company”
shall mean the title insurance company which issued the Title Insurance Policy.


 


“Title Insurance
Policy” shall mean an ALTA mortgagee title insurance policy in a form reasonably acceptable to Lender (or, if the Property
is in a State which does not permit the issuance of such ALTA policy, such form as shall be permitted in such State and reasonably
acceptable to Lender) with respect to the Property and insuring the lien of the Security Instrument encumbering the Property.


 


“Transfer”
shall have the meaning set forth in Section 5.2.10(b) hereof.


 


“UCC”
shall mean the Uniform Commercial Code as in effect on the date hereof in the State in which the Property or any portion thereof
is located; provided, however, that if by reason of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection or priority of the security interest in any item or portion of the collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State in which the Property is located (“Other UCC State”),
“UCC” means the Uniform Commercial Code as in effect in such Other UCC State for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or priority.


 


“Uniform System
of Accounts for Hotels” shall mean the accounting standards printed in the then most recently revised edition of A Uniform
System of Accounts for Hotels, as adopted by the Hotel Association of New York City, Inc. and the American Hotel and Motel Association,
as amended or changed from time to time by the Hotel Association of New York City, Inc. and the American Hotel and Motel Association
(or other appropriate board or committee of both Associations); except that any accounting principle or practice required or permitted
to be changed by the Hotel Association of New York City, Inc. and the American Hotel and Motel Association (or other appropriate
board or committee of both Associations) in order to continue as an accounting standard or practice may be so changed only so long
as such required or permitted change shall not have the effect of permitting Borrower’s and Guarantor’s compliance
with any financial covenants or performance tests contained in this Agreement when without such change, such parties would not
so comply.


 


“Updated Zoning
Report” shall have the meaning set forth in Section 5.1.32(a) hereof.


 


“U.S. Obligations”
shall mean non-redeemable securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner
that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged,
or (b) to the extent acceptable to the Approved Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended.


 




    	 	37	 



     


    

 


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


 


“Yield Maintenance
Date” shall mean November 9, 2018.


 


“Yield Maintenance
Premium” shall mean, with respect to any payment or prepayment of principal (or acceleration of the Loan) on or prior
to the Yield Maintenance Date, an amount equal to the product of the following: (a) the amount of such prepayment (or the amount
of principal so accelerated), multiplied by (b) the quotient obtained by dividing the Assumed Interest Rate by 360, multiplied
by (c) the number of calendar days that occur in the period commencing on the date such prepayment (or acceleration) occurs and
ending on and including the Yield Maintenance Date.  As used in this definition, “Assumed Interest Rate”
shall mean an annual interest rate equal to the Interest Rate in effect at the time of such prepayment, but the LIBOR portion of
such Interest Rate being calculated using the forward LIBOR curve then in effect as promulgated by Chatham Financial or, if such
forward LIBOR curve is not available from Chatham Financial, then the forward LIBOR curve then in effect as promulgated by Reuters.


 


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. All uses of the word
“including” shall mean “including, without limitation” unless the context shall indicate otherwise. Unless
otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless
otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural
forms of the terms so defined.


 


ARTICLE
II



GENERAL TERMS


 


Section
2.1           Loan Commitment; Disbursement to Borrower.


 


2.1.1     Agreement
to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make, and Borrower
hereby agrees to borrow, the Loan on the Closing Date.


 




    	 	38	 



     


    

 


2.1.2     Initial
and Future Disbursements to Borrower. On the date hereof, Lender is making an initial advance of the Loan to Borrower in the
amount of $36,000,000.00 (the “Initial Advance”). Lender agrees to make one or more future advances of the Loan
to Borrower from time to time in accordance with the express terms and conditions set forth in this Agreement (each a “Future
Advance”) up to an aggregate amount of $8,000,000.00 (the “Future Advance Amount”) to pay for Approved
CapEx Expenses, of which (x) $5,500,000.00 shall be available for Approved CapEx Expenses related to the PIP Work (as the same
may be adjusted pursuant to the terms and provisions of Section 2.5.9 hereof, the “PIP Work Future Advance Amount”)
and (y) $2,500,000.00 shall be available for Approved CapEx Expenses related to the Elective CapEx Work (as the same may be adjusted
pursuant to the terms and provisions of Section 2.5.9 hereof, the “Elective CapEx Work Future Advance Amount”).
Any amount borrowed and repaid hereunder in respect of the Loan may not be re-borrowed.


 


2.1.3     The
Note, Security Instrument and Loan Documents. The Loan shall be evidenced by the Note and secured by the Security Instrument,
the Assignment of Leases and the other Loan Documents.


 


2.1.4     Use
of Proceeds. Borrower shall use the proceeds of the Loan to (a) refinance the Property and/or repay and discharge any existing
loans relating to the Property, (b) pay all past-due Basic Carrying Costs, if any, with respect to the Property, (c) make deposits
into the Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses incurred in connection with
the closing of the Loan, as approved by Lender, (e) fund any working capital requirements of the Property, (f) pay for the Approved
CapEx Expenses, and (g) use the balance of the Initial Advance, if any, for business purposes.


 


Section
2.2           Interest Rate.


 


2.2.1     Interest
Rate. Subject to Section 2.2.5 hereof, interest on the Outstanding Principal Balance shall accrue from the Closing Date
to but excluding the Maturity Date at the Interest Rate.


 


2.2.2     Interest
Calculation. With respect to any applicable period, 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 the Interest Rate and a three hundred sixty (360) day year by (c) the Outstanding Principal Balance in effect for the applicable
period as calculated by Lender.


 


2.2.3     Determination
of Interest Rate.


 


(a)        The
Interest Rate with respect to the Loan shall be: (i) the LIBOR Rate with respect to the applicable Interest Period for a LIBOR
Loan, (ii) the Prime Rate plus the Prime Rate Spread for a Prime Rate Loan if the Loan is converted to a Prime Rate Loan pursuant
to the provisions hereof or (iii) when applicable pursuant to this Agreement, the Default Rate. Notwithstanding any provision of
this Agreement to the contrary, in no event shall Borrower have the right to convert a LIBOR Loan to a Prime Rate Loan.


 


(b)       Subject
to the terms and conditions hereof, the Loan shall be a LIBOR Loan and Borrower shall pay interest on the Outstanding Principal
Balance at the LIBOR Rate for the applicable Interest Period. Any change in the rate of interest hereunder due to a change in the
Interest Rate shall become effective as of the opening of business on the first day on which such change in the Interest Rate shall
become effective. Each determination by Lender of the Interest Rate shall be conclusive and binding for all purposes, absent manifest
error.


 




    	 	39	 



     


    

 


(c)        In
the event that Lender shall have determined (which determination shall be conclusive and binding upon Borrower absent manifest
error) that by reason of circumstances affecting the interbank Eurodollar market, adequate and reasonable means do not exist for
ascertaining LIBOR, then Lender shall forthwith give notice by telephone of such determination, confirmed in writing, to Borrower
at least one (1) day prior to the last day of the related Interest Period. If such notice is given, the related outstanding LIBOR
Loan shall be converted, on the last day of the then current Interest Period, to a Prime Rate Loan.


 


(d)       If,
pursuant to the terms hereof, any portion of the Loan has been converted to a Prime Rate Loan and Lender shall determine
(which determination shall be conclusive and binding upon Borrower absent manifest error) that the event(s) or
circumstance(s) which resulted in such conversion shall no longer be applicable, Lender shall give notice by telephone of
such determination, confirmed in writing, to Borrower at least one (1) day prior to the last day of the related Interest
Period. If such notice is given, the related outstanding Prime Rate Loan shall be converted to a LIBOR Loan on the last day
of the then current Interest Period.


 


(e)       If
any requirement of law, or any change therein or in the interpretation or application thereof, shall hereafter make it unlawful
for Lender to make or maintain a LIBOR Loan as contemplated hereunder (i) the obligation of Lender hereunder to make a LIBOR
Loan or to convert a Prime Rate Loan to a LIBOR Loan shall be canceled forthwith and (ii) any outstanding LIBOR Loan shall
be converted automatically to a Prime Rate Loan on the last day of the then current Interest Period or within such earlier period
as required by law. Borrower hereby agrees to promptly pay to Lender, upon demand, any additional amounts necessary to compensate
Lender for any costs incurred by Lender in making any conversion in accordance with this Agreement, including, without limitation,
any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain the LIBOR Loan hereunder.
Lender’s notice of such costs, as certified to Borrower, shall be conclusive absent manifest error.


 


(f)        Borrower
agrees to pay any Breakage Costs in connection with the conversion (for any reason whatsoever, whether voluntary or involuntary)
of the Interest Rate from the LIBOR Rate to the Prime Rate with respect to any portion of the Outstanding Principal Balance then
bearing interest at the LIBOR Rate on a date other than the last day of an Interest Period.


 


2.2.4     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, all accrued and unpaid interest in respect thereof and any other amounts due pursuant
to the Loan Documents, shall accrue interest at the Default Rate, calculated from the date such payment was due without regard
to any grace or cure periods contained herein.


 




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2.2.5     Usury
Savings. This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time shall Borrower
be obligated or 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 this Agreement, the Note or
the other Loan Documents, Borrower is 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 applicable law,
be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate
or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.


 


2.2.6     Breakage
Indemnity. Borrower shall indemnify Lender against any loss or expense which Lender may actually sustain or incur in liquidating
or redeploying deposits from third parties acquired to effect or maintain the Loan or any part thereof as a consequence of (a)
any payment or prepayment of the Loan or any portion thereof made on a date other than a Payment Date and (b) any default in payment
or prepayment of the Outstanding Principal Balance or any part thereof or interest accrued thereon, as and when due and payable
(at the date thereof or otherwise, and whether by acceleration or otherwise) (collectively, “Breakage Costs”).
Lender shall deliver to Borrower a statement for any such sums which it is entitled to receive pursuant to this Section 2.2.6,
which statement shall be binding and conclusive absent manifest error. Borrower’s obligations under this Section 2.2.6
are in addition to Borrower’s obligations to pay any Yield Maintenance Premium applicable to a payment or prepayment of the
Loan and the Exit Fee.


 


Section
2.3           Debt Service Payments.


 


2.3.1     Payments
Generally. For purposes of making payments hereunder, but not for purposes of calculating Interest Periods, if the date on which
any such payment is due is not a Business Day, then amounts due on such date shall be due on the immediately succeeding Business
Day. All amounts due pursuant to this Agreement and the other Loan Documents shall be payable without setoff, counterclaim, defense
or any other deduction whatsoever.


 


2.3.2     Monthly
Debt Service Payment.


 


(a)       On
the Closing Date, Borrower shall make a payment of interest only for the period commencing on and including the Closing Date. On
June 9, 2017 (the “First Payment Date”) and each subsequent Payment Date up to and including the Maturity Date,
Borrower shall make a payment to Lender of interest on the Outstanding Principal Balance for the Interest Period that immediately
precedes such Payment Date (the “Monthly Debt Service Payment Amount”). Lender shall have the right from time
to time, in its sole discretion, upon not less than thirty (30) days prior written notice to Borrower, to change (a) the Payment
Date to a different calendar day and/or (b) the calendar days upon which the Interest Period shall commence (in a particular calendar
month) and end (in the immediately succeeding calendar month), with a corresponding change in the Interest Determination Date and,
if requested by Lender, Borrower shall promptly execute an amendment to this Agreement to evidence all such changes, but the failure
of Borrower to exercise such amendment shall not affect the effectiveness of any change for which Lender has so notified Borrower.


 




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(b)       Notwithstanding
anything to the contrary contained herein, on the Amortization Commencement Date and each Payment Date thereafter through and including
the Maturity Date, in addition to the required interest payments set forth in Section 2.3.2(a) above, Borrower shall make
monthly principal amortization payments (which amounts shall be applied to the outstanding principal balance of the Loan) pursuant
to the payment schedule set forth on Schedule VII attached hereto; provided, however, such Schedule shall be modified
on the Amortization Commencement Date by Lender as may be necessary to reflect any prepayments of principal or cancellation of
Future Advances pursuant to the terms and provisions hereof. Notwithstanding anything to the contrary contained herein, no Exit
Fee shall be payable in connection with the payments required under this Section 2.3.2(b).


 


2.3.3     Payment
on Maturity Date. Borrower shall pay to Lender not later than 1:00 p.m., New York City time, on the Maturity Date the Outstanding
Principal Balance, all accrued and unpaid interest, the Exit Fee and all other amounts due hereunder and under the Note, the Security
Instrument and the other Loan Documents.


 


2.3.4     Late
Payment Charge. If any principal, interest or any other sums due under the Loan Documents (other than the payment of principal
due on the Maturity Date) is not paid by Borrower on or prior to the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of (a) four percent (4%) of such unpaid sum, and (b) the Maximum Legal Rate, 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 Instrument and the other Loan Documents to the
extent permitted by applicable law.


 


2.3.5     Method
and Place of Payment. 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 Dollars
in immediately available funds at Lender’s office or as otherwise directed by Lender, 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. Any prepayments required
to be made hereunder or under the Cash Management Agreement by Lender or Servicer out of the Cash Management Account shall be deemed
to have been timely made for purposes of this Section 2.3.5.


 


Section
2.4           Prepayments.


 


2.4.1     Voluntary
Prepayments.


 


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


 




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(b)       Permitted
Prepayment. On any Payment Date, so long as no Event of Default has occurred and is continuing, Borrower may, at its option
and upon not more than ninety (90) and not less than thirty (30) days prior written notice to Lender, and subject to compliance
with the provisions of this Section 2.4.1, prepay the Loan in whole or in part, provided that such prepayment is accompanied
by (i) all accrued and unpaid interest on the Outstanding Principal Balance prepaid and (ii) all other amounts then due under the
Note, this Agreement, or any of the other Loan Documents (including, without limitation, any Breakage Costs, the Exit Fee, and,
if such prepayment is made on or prior to the Yield Maintenance Date, the Yield Maintenance Premium). A prepayment notice may be
revoked by written notice of revocation to Lender on or prior to the date of prepayment specified in any such prepayment notice;
provided that Borrower shall pay Lender upon demand for all of Lender’s out-of-pocket costs and expenses (including reasonable
fees and disbursements of Lender’s counsel) incurred in connection with such anticipated prepayment and Breakage Costs actually
incurred by Lender.


 


(c)       Prepayment/Repayment
Conditions.


 


(i)           On
the date on which a prepayment is made, Borrower shall pay to Lender:


 


(A)     all
accrued and unpaid interest calculated at the Interest Rate on the amount of principal being prepaid through and including the
Repayment Date together with an amount equal to the interest that would have accrued at the Interest Rate on the amount of principal
being prepaid through the end of the Interest Period in which such prepayment occurs, notwithstanding that such Interest Period
extends beyond the date of prepayment;


 


(B)     intentionally
omitted;


 


(C)     if
such prepayment is made on any date other than a Payment Date, Breakage Costs, if any, without duplication of any sums paid pursuant
to the preceding subparagraph (A);


 


(D)     the
Yield Maintenance Premium applicable thereto (if such prepayment occurs on or prior to the Yield Maintenance Date);


 


(E)     the
Exit Fee; and


 


(F)     all
other sums then due under the Note, this Agreement, the Security Instrument, and the other Loan Documents.


 


(ii)     Intentionally
Omitted.


 




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2.4.2     Mandatory
Prepayments. Following any Casualty or Condemnation, on the next occurring Payment Date following the date on which Lender actually
receives any Net Proceeds, if Lender is not obligated to make such Net Proceeds available to Borrower for Restoration, Borrower
shall prepay, or authorize Lender to apply such Net Proceeds as a prepayment of, the Outstanding Principal Balance of the Note
in an amount equal to one hundred percent (100%) of such Net Proceeds; provided, however, that if an Event of Default has occurred
and is continuing, Lender may apply such Net Proceeds to the Debt (until paid in full) in any order or priority in its sole discretion.
Additionally, so long as no Event of Default has occurred and is continuing, no Yield Maintenance Premium shall be due in connection
with any prepayment made pursuant to this Section 2.4.2, but Borrower shall pay the Exit Fee. Any partial prepayment under
this Section 2.4.2 shall be applied to the last payments of principal due under the Loan.


 


2.4.3     Prepayments
Made While an Event of Default Exists. If, following the occurrence and during the continuance of an Event of Default, payment
of all or any part of the Debt is tendered by Borrower for any reason or otherwise recovered by Lender (including, without limitation,
through acceleration or the application of any Reserve Funds or Net Proceeds) Borrower shall pay, as part of the Debt, all of (a)
all accrued interest calculated at the Interest Rate on the amount of principal being prepaid through and including the date of
such prepayment together with an amount equal to the interest that would have accrued at the Interest Rate on the amount of principal
being prepaid through the end of the Interest Period in which such prepayment occurs, notwithstanding that such Interest Period
extends beyond the date of prepayment, (b) intentionally omitted, (c) the Breakage Costs, if any, without duplication of any sums
paid pursuant to the preceding clause (a), (d) an amount equal to the Yield Maintenance Premium (if made before the Yield Maintenance
Date) and (e) the Exit Fee.


 




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Section
2.5           Future Advances.


 


2.5.1     Future
Advances. Lender shall make Future Advances to Borrower from time to time, but not more frequently than once in any calendar
month, to pay or reimburse Borrower for Approved CapEx Expenses upon satisfaction by Borrower of each of the following conditions
with respect to each Future Advance: (i) Borrower shall submit a written request to Lender at least ten (10) Business Days prior
to the date on which Borrower requests such payment be made, which request shall specify the Approved CapEx Expenses to be paid
or reimbursed from such Future Advance and whether such Approved CapEx Expenses are for the PIP Work or the Elective CapEx Work,
and be accompanied by copies of invoices for the amounts requested; (ii) Borrower shall deliver Lien waivers (or partial Lien waivers,
as applicable) or other evidence of payment, in each case, reasonably satisfactory to Lender and releases (with respect to amounts
then due and owing) from all parties furnishing materials and/or services in connection with the requested payment; (iii) on the
date such request is received by Lender and on the date such payment is to be made, no Event of Default or monetary or material
non-monetary Default shall exist and remain uncured; (iv) Lender shall have received an Officer’s Certificate from Borrower
(A) stating that the items to be funded by the requested disbursements hereunder are Approved CapEx Expenses, and a description
thereof, (B) stating that, to the best of Borrower’s knowledge, all CapEx related to the Approved CapEx Expenses to be funded
by the requested Future Advance has been performed in a good and workmanlike manner and in accordance with all Legal Requirements
and, with respect to the PIP Work, the Franchise Agreement, such Officer’s Certificate to be accompanied by a copy of all
licenses, permits and other approvals by any Governmental Authority and Franchisor required to commence and/or complete the portion
of the CapEx to be paid for by the applicable Approved CapEx Expenses, if applicable, each of which shall be in full force and
effect, (C) identifying each Person that supplied materials or labor in connection with the Approved CapEx Expenses to be funded
by the requested Future Advance, (D) stating that each such Person has been paid in full or will be paid in full upon such Future
Advance for work completed and/or materials furnished to date, (E) stating that all previous disbursements of Future Advances have
been used to pay or reimburse Borrower for the previously identified Approved CapEx Expenses, together with reasonable evidence
that such payments have been made and (F) stating that all outstanding trade payables relating to the Approved CapEx Expenses (other
than those to be paid from the requested disbursements) have been paid in full; (v) if the amount of Future Advances requested
is $500,000 or more or, if the aggregate amount of the Future Advance requested, together with all Future Advances made since the
date of the last ALTA 33-06 Disbursement Endorsement received by Lender is $500,000 or more, Lender shall have received, at Borrower’s
cost, an ALTA 33-06 Disbursement Endorsement, in form and substance reasonably acceptable to Lender, to, and mechanic’s lien
coverage on, the Title Insurance Policy insuring the Lien of the Security Instrument to the date of such Future Advance setting
forth no additional exceptions (including survey exceptions), together with a title search indicating that the Property is free
from all Liens, claims and other encumbrances not previously approved by Lender other than Permitted Encumbrances; provided, however,
in connection with the final Future Advance made hereunder (regardless of the amount of such Future Advance), Lender shall have
received an ALTA 33-06 Disbursement Endorsement, in form and substance reasonably acceptable to Lender, to, and mechanic’s
lien coverage on, the Title Insurance Policy insuring the Lien of the Security Instrument to the date of such Future Advance setting
forth no additional exceptions (including survey exceptions), together with a title search indicating that the Property is free
from all Liens, claims and other encumbrances not previously approved by Lender other than Permitted Encumbrances; (vi) Borrower
shall have paid all actual and out of pocket costs incurred by Lender in connection with such requested Future Advance; (vii) no
Deficiency shall exist; (viii) Lender shall have received (1) such other evidence as Lender shall reasonably request that the Approved
CapEx Expenses to be funded by the requested Future Advance have been completed and are paid for or will be paid upon receipt by
Borrower, and (2) if Lender so requires, advice from Lender’s construction consultant that the work that is the subject of
the applicable Future Advance is proceeding satisfactorily, on schedule, and in a good and workmanlike manner to the satisfaction
of such construction consultant; and (ix) (1) with respect to Future Advances for Approved CapEx Expenses relating to the PIP Work,
all of the PIP Work Conditions shall have been satisfied and (2) with respect to Future Advances for Approved CapEx Expenses relating
to the Elective CapEx Work, all of the Elective CapEx Work Conditions shall have been satisfied. Lender shall not be required to
make any Future Advances more than one (1) time per calendar month and unless the aggregate amount requested hereunder is in an
amount greater than Fifty Thousand and No/100 Dollars ($50,000.00) (or a lesser amount if the total unfunded amount of Loan proceeds
available for Future Advances is less than Fifty Thousand and No/100 Dollars ($50,000.00), in which case only one advance of the
unfunded amount remaining shall be made) and such advance shall be made only upon satisfaction of each condition contained in this
Section 2.5.1. In no event shall Lender have any obligation to make Future Advances (w) that are not for Approved CapEx
Expenses, (x) in the aggregate in excess of the Future Advance Amount, (y) for the PIP Work in the aggregate in excess of the PIP
Work Future Advance Amount and (z) for the Elective CapEx Work in the aggregate in excess of the Elective CapEx Work Future Advance
Amount. For the avoidance of doubt, and notwithstanding anything to the contrary contained herein, Lender shall have no obligation
to make any Future Advances (1) for Approved CapEx Expenses related to the PIP Work unless all of the PIP Work Conditions have
been satisfied and (2) for Approved CapEx Expenses related to the Elective CapEx Work unless all of the Elective CapEx Work Conditions
have been satisfied. Lender shall not be required to disburse any funds for any materials, machinery or other Personal Property
not yet incorporated into the Improvements (the “Stored Materials”), unless the following conditions are satisfied:
(i) Borrower shall deliver to Lender bills of sale or other evidence reasonably satisfactory to Lender of the cost of, and, subject
to the payment therefor, Borrower’s title in and to such Stored Materials; (ii) the Stored Materials are identified to the
Property and Borrower, are segregated so as to adequately give notice to all third parties of Borrower’s title in and to
such materials, and are components in substantially final form ready for incorporation into the Improvements; (iii) the Stored
Materials are stored at the Property or at such other third-party owned and operated site as Lender shall reasonably approve, and
are protected against theft and damage in a manner reasonably satisfactory to Lender, including, if requested by Lender, storage
in a bonded warehouse in the greater metropolitan area in which the Property is located; (iv) the Stored Materials will be paid
for in full with the funds to be disbursed, and all lien rights or claims of the supplier will be released upon full payment; (v)
Lender has or will have upon payment with disbursed funds a perfected, first priority security interest in the Stored Materials;
and (vi) the Stored Materials are insured for an amount equal to their replacement costs in accordance with Section 6.1(a)
of this Agreement.


 




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2.5.2     No
Obligation to do Work. Nothing in this Section 2.5 shall (i) make Lender responsible for performing or completing all
or any portion of the CapEx; (ii) require Lender to expend funds in addition to the allocated Future Advances to complete any portion
of the CapEx; (iii) obligate Lender to proceed with or personally perform any portion of the CapEx; or (iv) require Borrower to
perform any Elective CapEx Work, except to the extent such Elective CapEx Work has been Commenced (and then only to the extent
of that specific Elective CapEx Work).


 


2.5.3     Inspections.
Borrower shall permit Lender and Lender’s agents and representatives or independent contractors hired by Lender (including
Lender’s construction consultant, engineer, architect or other inspector) to enter onto the Property, subject to the rights
of Tenants under applicable Leases, during normal business hours following reasonable advance notice to inspect the progress of
the CapEx and all materials being used in connection therewith and to examine all plans and shop drawings relating to such CapEx.
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 2.5.3.


 


2.5.4     Additional
Inspection Provisions. Lender may require an inspection of the Property at Borrower’s expense prior to making a Future
Advance in order to verify completion of the portion of the CapEx for which payment is sought. Lender may require, to the extent
it deems it to be reasonably necessary, that such inspection be conducted by its construction consultant or another appropriate
independent qualified professional selected by Lender and may require a certificate of completion by an independent qualified professional
architect acceptable to Lender prior to making a Future Advance. Borrower shall pay the reasonable expense of the inspection as
required hereunder, whether such inspection is conducted by Lender, its construction consultant or an independent qualified professional
architect.


 


2.5.5     No
Waiver. Any Future Advance by Lender of Loan proceeds made prior to or without the fulfillment by Borrower of all of the conditions
precedent thereto described in this Section 2.5, whether or not known to Lender, shall not constitute a waiver by Lender
of the requirement that all conditions, including the non-performed conditions, shall be required with respect to all additional
Future Advances.


 




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2.5.6     Additional
Condition to Future Advances.


 


(a)       If
at any time Lender reasonably determines that the then cost to Complete the PIP Work is in excess of the amount set forth on the
PIP Work Budget for such PIP Work (a “PIP Work Deficiency”), then Lender shall have no obligation to make any
Future Advances for Approved CapEx Expenses unless Borrower pays out-of-pocket from Borrower equity (provided, however, so long
as no Event of Default has occurred and is continuing, Borrower may use amounts in the FF&E Reserve Account, if any, that are
in excess of amounts needed to complete the FF&E Work set forth in the Approved Annual Budget to fund any such PIP Work Deficiency)
all Approved CapEx Expenses for PIP Work until the cost to complete the PIP Work is equal to the remaining unfunded portion of
the Future Advance Amount for the PIP Work (as based on evidence reasonably acceptable to Lender) (and thereafter Future Advances
for Approved CapEx Expenses shall again be made pursuant to this Agreement).


 


(b)       If
at any time Lender reasonably determines that the then cost to Complete the Elective CapEx Work actually Commenced is in excess
of the amount set forth on the Elective CapEx Work Budget for such Elective CapEx Work (an “Elective CapEx Work Deficiency”;
and together with a PIP Work Deficiency, individually and collectively, a “Deficiency”), then Lender shall have
no obligation to make any Future Advances relating to the Elective CapEx Work unless Borrower pays out-of-pocket from Borrower
equity (provided, however, so long as no Event of Default has occurred and is continuing, Borrower may use amounts in the FF&E
Reserve Account, if any, that are in excess of amounts needed to complete the FF&E Work set forth in the Approved Annual Budget
to fund any such Elective CapEx Work Deficiency) all Approved CapEx Expenses for Elective CapEx Work until the cost to complete
the Elective CapEx Work is equal to the remaining unfunded portion of the Future Advance Amount for the Elective CapEx Work (as
based on evidence reasonably acceptable to Lender) (and thereafter Future Advances for Approved CapEx Expenses shall again be made
pursuant to this Agreement).


 


2.5.7     Force
Funding. (PIP Work). Notwithstanding anything to the contrary contained herein, from and after the applicable Future Advance
Force Funding Date, Lender shall have the right (and Borrower hereby authorizes Lender) at any time to advance the Future Advances
remaining undisbursed in an amount necessary to Complete the PIP Work (as reasonably determined by Lender) into the PIP Work Reserve
Account and all of the monies therein shall automatically be deemed to be “Reserve Funds” hereunder), at which point
the outstanding balance of the Loan shall be increased by the amount so deposited (and, as such, Debt Service payments due and
owing hereunder shall be paid based on such increased outstanding balance), and the terms and conditions for the disbursement of
such monies from the PIP Work Reserve Account shall be the same terms and conditions for the making of Future Advances for PIP
Work set forth in this Section 2.5, as if incorporated herein, mutatis mutandis (although Borrower shall not be required
to obtain the applicable ALTA 33-06 Disbursement Endorsement with respect to each draw). Borrower hereby acknowledges that Lender’s
advance of Future Advances into the PIP Work Reserve Account described in the immediately preceding sentence shall not in any way
diminish or otherwise modify the conditions precedent to Future Advances for PIP Work described in this Section 2.5 or any
of Borrower’s obligations under the Loan Documents. In connection with any force funding pursuant to this Section 2.5.7,
Borrower shall, at Borrower’s cost and at Lender’s request, deliver to Lender an ALTA 33-06 Disbursement Endorsement,
in form and substance reasonably acceptable to Lender, to, and mechanic’s lien coverage on, the Title Insurance Policy insuring
the Lien of the Security Instrument to the date of such advance setting forth no additional exceptions (including survey exceptions),
together with a title search indicating that the Property is free from all liens, claims and other encumbrances not previously
approved by Lender other than Permitted Encumbrances.


 




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2.5.8     Cancellation
of Future Advances (Elective CapEx Work). Borrower shall have the right to notify Lender in writing at least thirty (30) but
no more than sixty (60) days prior to the Future Advance Force Funding Date that Borrower desires to cancel its ability to receive
all or a portion of the Future Advances related to the Elective CapEx Work so long as (x) no Elective CapEx Work has Commenced
or will Commence or (y) all Elective CapEx Work actually Commenced has been Completed. If Borrower so notifies Lender prior to
the Future Advance Force Funding Date that it so desires to cancel its ability to receive all or a portion of the Future Advances
for Approved CapEx related to the Elective CapEx Work, as set forth herein, Borrower’s right to receive, and Lender’s
obligation to make, any further Future Advance for Approved CapEx Expenses related to the Elective CapEx Work pursuant to this
Agreement equal to the amount so cancelled shall be terminated and of no further force and effect. For the avoidance of doubt,
and notwithstanding anything to the contrary contained herein, the amount of the Future Advances up to the Elective CapEx Work
Future Advance Amount that Borrower does not (or is deemed to not) request that Lender force fund pursuant to this Section 2.5.8
shall be terminated and of no further force and effect. If Borrower does not so elect to cancel its ability to receive Future Advances
for Approved CapEx relating to the Elective CapEx Work in accordance with the terms and provisions of this Section 2.5.8, Lender
shall have the right (and Borrower hereby authorizes Lender to) to deposit all Future Advances remaining undisbursed in an amount
up to the Elective CapEx Work Future Advance Amount into a Reserve Account to be established hereunder (and all of the monies therein
shall automatically be deemed to be “Reserve Funds” hereunder), at which point the outstanding balance of the Loan
shall be increased by the amount so deposited (and, as such, Debt Service payments due and owing hereunder shall be paid based
on such increased outstanding balance), and the terms and conditions for the disbursement of such monies from such Reserve Account
shall be the same terms and conditions for the making of Future Advances set forth in this Section 2.5, as if incorporated herein,
mutatis mutandis (although Borrower shall not be required to obtain the applicable ALTA 33-06 Disbursement Endorsement with respect
to each draw). Borrower hereby acknowledges that Lender’s advance of Future Advances for Elective CapEx Work into a Reserve
Account described in the immediately preceding sentence shall not in any way diminish or otherwise modify the conditions precedent
to Future Advances for Elective CapEx Work described in this Section 2.5 or any of Borrower’s obligations under the Loan
Documents. In connection with any force funding pursuant to this Section 2.5.8, Borrower shall, at Borrower’s cost and at
Lender’s request, deliver to Lender an ALTA 33-06 Disbursement Endorsement, in form and substance reasonably acceptable to
Lender, to, and mechanic’s lien coverage on, the Title Insurance Policy insuring the Lien of the Security Instrument to the
date of such advance setting forth no additional exceptions (including survey exceptions), together with a title search indicating
that the Property is free from all liens, claims and other encumbrances not previously approved by Lender other than Permitted
Encumbrances.


 




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2.5.9     Reallocation
of Future Advance Amounts. Borrower shall have the one-time right to request that a portion of the PIP Work Future Advance Amount
be reallocated to the Elective CapEx Work Future Advance Amount or a portion of the Elective CapEx Work Future Advance Amount be
reallocated to the PIP Work Future Advance Amount so long as (x) no Event of Default shall have occurred and be continuing, and
(y) Borrower has not yet submitted the PIP Work Budget or the Elective CapEx Work Budget to Lender for its review and approval
pursuant to the terms of Sections 5.6.1(a) and (b), which request shall be subject to Lender’s approval, not to be unreasonably
withheld, conditioned or delayed.


 


Section
2.6     Release of Property. Except as set forth in this Section 2.6, no repayment
or prepayment of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release
of the Lien of the Security Instrument.


 


2.6.1     Release
on Payment in Full. Lender shall, upon the written request and at the expense of Borrower, upon payment in full of the Debt
in accordance with the terms of this Agreement and the other Loan Documents, release the Lien of the Security Instrument.


 


Section
2.7           Cash Management.


 


2.7.1     Clearing
Account.


 


(a)       Borrower
shall establish and maintain a segregated Eligible Account (the “Clearing Account”) with the Clearing Bank in
trust for the benefit of Lender, which Clearing Account shall be under the sole dominion and control of Lender. The Clearing Account
shall be entitled “kAUai coconut beach, llc and kauai coconut beach operator, llc,
as pledgor, for the benefit of TH COMMERCIAL MORTGAGE LLC, as Secured Party – Clearing Account,” or such other name
as required by Lender from time to time. Borrower (i) hereby grants to Lender a first priority security interest in the Clearing
Account and all deposits at any time contained therein and the proceeds thereof, and (ii) will take all actions necessary to maintain
in favor of Lender a perfected first priority security interest in the Clearing Account, including, without limitation, the execution
of any account control agreement required by Lender. Borrower will not in any way alter, modify or close the Clearing Account and
will notify Lender of the account number thereof. Except as may be expressly permitted in the Clearing Account Agreement, Lender
and Servicer shall have the sole right to make withdrawals from the Clearing Account and all costs and expenses for establishing
and maintaining the Clearing Account shall be paid by Borrower. All monies now or hereafter deposited into the Clearing Account
shall be deemed additional security for the Obligations.


 


(b)       Borrower
shall, or shall cause Manager to, deliver written instructions to (i) all Tenants under Leases, to deliver all Rents payable thereunder
and (ii) all issuers of credit cards accepted at the Property, to cause all sums payable by such issuers to be transmitted directly
to the Clearing Account. Borrower shall, and shall cause Manager to, deposit into the Clearing Account within one (1) Business
Day after receipt all amounts received by Borrower or Manager constituting Rents (including, for the avoidance of doubt, any Operating
Rent). The Clearing Account Agreement and Clearing Account shall remain in effect until the Loan has been repaid in full.


 




    	 	49	 



     


    

 


(c)       During
any Cash Trap Period, Borrower shall cause the Clearing Bank to transfer to the Cash Management Account in immediately available
funds by federal wire transfer all amounts on deposit in the Clearing Account once every Business Day (less any required
minimum balance pursuant to the terms of the Clearing Account Agreement). If no Cash Trap Period is then continuing, funds in the
Clearing Account shall be available to Borrower daily.


 


(d)       Upon
the occurrence of an Event of Default, Lender may, in addition to any and all other rights and remedies available to Lender, direct
the Clearing Bank to immediately pay over all funds on deposit in the Clearing Account to Lender and to apply any such funds to
the payment of the Debt in any order in its sole discretion.


 


(e)       Funds
deposited into the Clearing Account shall not be commingled with other monies held by Borrower, Manager or the Clearing Bank.


 


(f)       Borrower
shall not further pledge, assign or grant any security interest in the Clearing Account or the monies deposited therein 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.


 


(g)       Borrower
shall indemnify Lender and the Clearing Bank and hold Lender and the Clearing Bank harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable
attorneys’ fees and expenses) arising from or in any way connected with the Clearing Account, the Clearing Account Agreement
or the performance of the obligations for which the Clearing Account was established (unless arising from the gross negligence
or willful misconduct of Lender or the Clearing Bank, as applicable).


 


2.7.2     Cash
Management Account.


 


(a)       Lender
shall establish and maintain a segregated Eligible Account (the “Cash Management Account”) to be held by the
Deposit Bank in trust for the benefit of Lender, which Cash Management Account shall be under the sole dominion and control of
Lender. The Cash Management Account shall be entitled “kAUai coconut beach, llc and
kauai coconut beach operator, llc, as pledgor, for the benefit of TH COMMERCIAL MORTGAGE LLC, as Secured Party – Cash
Management Account,” or such other name as required by Lender from time to time. Lender will also establish subaccounts of
the Cash Management Account which shall at all times be Eligible Accounts (and may be ledger or book entry accounts and not actual
accounts) (such subaccounts are referred to herein as “Subaccounts”). Borrower (i) hereby grants to Lender
a first priority security interest in the Cash Management Account and the Subaccounts and all deposits at any time contained therein
and the proceeds thereof, and (ii) will take all actions necessary to maintain in favor of Lender a perfected first priority
security interest in the Cash Management Account and the Subaccounts, including, without limitation, filing or authorizing Lender
to file UCC-1 financing statements and continuations thereof. Borrower will not in any way alter, modify or close the Cash Management
Account and will notify Lender of the account number thereof. Lender and Servicer shall have the sole right to make withdrawals
from the Cash Management Account and the Subaccounts and all costs and expenses for establishing and maintaining the Cash Management
Account and the Subaccounts shall be paid by Borrower. All monies now or hereafter deposited into the Cash Management Account and
the Subaccounts shall be deemed additional security for the Obligations.


 




    	 	50	 



     


    

 


(b)        Provided
no Event of Default shall have occurred and be continuing, on each Payment Date during a Cash Trap Period (or, if such Payment
Date is not a Business Day, on the immediately succeeding Business Day) all funds on deposit in the Cash Management Account shall
be applied by Lender (or by the Deposit Bank at Lender’s direction) to the payment of the following items in the order indicated:


 


(i)           First,
payment to Lender (for deposit in the Tax and Insurance Escrow Account) in respect of the Tax and Insurance Escrow Funds in accordance
with the terms and conditions of Section 7.1 hereof, to be disbursed as set forth in this Agreement;


 


(ii)          Second,
payment to the Deposit Bank of the fees and expenses of the Deposit Bank then due and payable pursuant to the Cash Management Agreement;


 


(iii)         Third,
payment to Borrower in an amount equal to the aggregate of (A) operating expenses due and payable by Borrower during the succeeding
month as set forth in the Approved Annual Budget (which, for the avoidance of doubt, shall not include amounts for the asset management
fee payable to Kauai Hotel Series of JMIR Investments III, LP and/or Behringer Harvard Kauai Hotel, LLC pursuant to the terms of
the JV Agreement), (B) Extraordinary Expenses, if any, approved by Lender; less (C) any amounts which were previously disbursed
to Borrower pursuant to this Section 2.7.2(b)(iii) and which are not being used by Borrower to pay operating expenses or
Extraordinary Expenses; provided, however, that Lender shall have no obligation to disburse any funds to Borrower under this Section
2.7.2(b)(iii) unless Borrower has delivered to Lender not less than five (5) Business Days prior to the disbursement date an
Officer’s Certificate in form and substance reasonably acceptable to Lender certifying to Lender: (x) a list in reasonable
detail of the operating expenses which are due and payable by Borrower during the succeeding month as set forth in the Annual Budget,
and (y) a reconciliation showing all operating expenses and Extraordinary Expenses actually paid by Borrower for the prior quarter
and all amounts distributed to Borrower under this Section 2.7.2(b)(iii);


 


(iv)         Fourth,
payment to Lender of the Monthly Debt Service Payment Amount;


 




    	 	51	 



     


    

 


(v)          Fifth,
payment to Lender (for deposit in the FF&E Reserve Account) in respect of the FF&E Reserve Monthly Deposit in accordance
with the terms and conditions of Section 7.6.1 hereof;


 


(vi)         Sixth,
payment to Lender of any other amounts then due and payable under the Loan Documents;


 


(vii)        Seventh,
payment to Borrower for distribution to the Joint Venture for payment to Kauai Hotel Series of JMIR Investments III, LP and/or
Behringer Harvard Kauai Hotel, LLC of an amount equal to fifty percent (50%) of the asset management fees then due and payable
pursuant to the terms of the JV Agreement;


 


(viii)       Eighth,
payment of all amounts then remaining after payment of items (i) through (vii) (all amounts then remaining after payment of items
(i) through (vii) being hereinafter referred to as “Excess Cash”) to the Excess Cash Reserve Fund in accordance
with the terms and conditions of Section 7.7 hereof; and


 


(ix)          Lastly,
if no Cash Trap Period is then continuing, payment of all available Excess Cash to Borrower.


 


(c)       The
insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower of the obligation to make any payments,
as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent,
and not conditioned on any event or circumstance whatsoever.


 


(d)       Notwithstanding
Section 2.7.2(b) above, following the occurrence of an Event of Default and during the continuance thereof, all funds on
deposit in the Cash Management Account may be applied by Lender in such order and priority as Lender shall determine in its sole
discretion until the Debt has been indefeasibly paid in full.


 


(e)       Borrower
hereby agrees to reasonably cooperate with Lender with respect to any requested modifications to the Cash Management Agreement
for the purpose of establishing additional sub-accounts in connection with any payments otherwise required under this Agreement
and the other Loan Documents.


 


(f)       Borrower
shall indemnify Lender and the Deposit Bank and hold Lender and the Deposit Bank harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable
attorneys’ fees and expenses) arising from or in any way connected with the Cash Management Account, the Cash Management
Agreement or the performance of the obligations for which the Cash Management Account was established (unless arising from the
gross negligence or willful misconduct of Lender or the Deposit Bank, as applicable).


 




    	 	52	 



     


    

 


2.7.3     Intentionally
Omitted.


 


2.7.4     Cash
Management Account.


 


(a)       Pursuant
and subject to the terms hereof and of the other Loan Documents, Borrower agrees that the Clearing Bank shall at all times be entitled
to comply with all instructions originated by Lender, without further consent by Borrower, directing disposition of the Clearing
Account and all sums at any time held, deposited or invested therein, together with any interest or other earnings thereon, and
all proceeds thereof (including proceeds of sales and other dispositions), whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities.


 


(b)       The
Clearing Account and Cash Management Account shall not, at any time, be held in the name of any Person other than Borrower, as
pledgor, for the benefit of Lender, as secured party.


 


Section
2.8           Interest Rate Cap Agreement.


 


2.8.1     Interest
Rate Cap Agreement. Prior to or contemporaneously with the Closing Date, Borrower shall have obtained, and thereafter maintain
in effect, the Interest Rate Cap Agreement (the “Initial Interest Rate Cap Agreement”), which:


 


(a)       has
a term expiring no earlier than the last day of the Interest Period in May 2019;


 


(b)       has
a notional amount equal to the maximum principal amount of the Loan;


 


(c)       has
a strike rate equal to the Strike Price;


 


(d)       is
governed by the laws of the State of New York;


 


(e)       is
issued by the Counterparty to Borrower and pledged to Lender by Borrower in accordance with the Assignment of Rate Cap;


 


(f)       has
a Counterparty that is obligated to make a stream of payments, directly to the Clearing Account (whether or not an Event of Default
has occurred) from time to time equal to the product of (i) the notional amount of such Interest Rate Cap Agreement multiplied
by (ii) the excess, if any, of LIBOR (including any upward rounding under the definition of LIBOR) over the Strike Price and shall
provide that such payment shall be made on a monthly basis in each case not later than (after giving effect to and assuming the
passage of any cure period afforded to the Counterparty under the Interest Rate Cap Agreement, which cure period shall not in any
event be more than three (3) Business Days) each Payment Date; and


 


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


 




    	 	53	 



     


    

 


In addition, Borrower shall
cause the Counterparty under the Interest Rate Cap Agreement to execute and deliver the Acknowledgment.


 


No later than five (5)
days prior to the expiration of the Initial Interest Rate Cap Agreement, Borrower shall deliver an extension of the Initial Interest
Rate Cap Agreement or a replacement of the same meeting the requirements of this Section 2.8.1 except that the term shall
expire no earlier than the last day of the Interest Period in the calendar month on which the Stated Maturity Date occurs. Failure
to deliver such Replacement Interest Rate Cap Agreement(s) shall constitute an automatic Event of Default.


 


2.8.2     Pledge
and Collateral Assignment. As security for the full and punctual payment and performance of the Obligations when due (whether
upon stated maturity, by acceleration, early termination or otherwise), Borrower shall execute and deliver the Assignment of Rate
Cap and cause the Counterparty to execute and deliver same to Lender.


 


2.8.3     Covenants.


 


(a)       Borrower
shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by
the Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately into the Clearing Account
pursuant to Section 2.7. Subject to the terms hereof, provided no Event of Default has occurred and is continuing, Borrower
shall be entitled to exercise all rights, powers and privileges of Borrower under, and to control the prosecution of all claims
with respect to, the Interest Rate Cap Agreement. Borrower shall take all actions reasonably requested by Lender to enforce Borrower’s
rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty thereunder and shall not waive, amend
or otherwise modify any of its rights thereunder.


 


(b)       In
the event of any downgrade, withdrawal or qualification of the rating of the Counterparty such that it ceases to qualify as an
“Approved Counterparty”,  Borrower shall replace the Interest Rate Cap Agreement with a Replacement Interest
Rate Cap Agreement (and deliver a fully executed assignment of interest rate cap agreement in substantially the form of the Assignment
of Rate Cap with respect thereto (a “Replacement Assignment of Rate Cap”)) not later than ten (10) Business
Days following receipt of notice from Lender, Servicer or any other Person of such downgrade, withdrawal or qualification; provided
that, notwithstanding the downgrade, until a Replacement Assignment of Rate Cap is in place, the Counterparty must continue to
perform its obligations under the Interest Rate Cap Agreement.


 


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


 




    	 	54	 



     


    

 


(d)       Borrower
shall not sell, assign, or otherwise dispose of, or mortgage, pledge or grant a security interest in, the Interest Rate Cap Agreement
(other than to Lender pursuant to the Assignment of Rate Cap), and any sale, assignment, mortgage, pledge or security interest
whatsoever made in violation of this covenant shall be a nullity and of no force and effect, and upon demand of Lender, shall forthwith
be cancelled or satisfied by an appropriate instrument in writing.


 


(e)       Borrower
shall not (i) without the prior written consent of Lender, modify, amend or supplement the terms of the Interest Rate Cap Agreement,
(ii) without the prior written consent of Lender, terminate the Interest Rate Cap Agreement, (iii) without the prior written consent
of Lender, waive or release any obligation of the Counterparty (or any successor or substitute party to the Interest Rate Cap Agreement)
under the Interest Rate Cap Agreement, (iv) without the prior written consent of Lender, consent or agree to any act or omission
to act on the part of the Counterparty (or any successor or substitute party to the Interest Rate Cap Agreement) which, without
such consent or agreement, would constitute a default under the Interest Rate Cap Agreement, (v) fail to exercise promptly and
diligently each and every right which it may have under the Interest Rate Cap Agreement, (vi) take or omit to take any action or
suffer or permit any action to be omitted or taken, the taking or omission of which would result in any right of offset against
sums payable under the Interest Rate Cap Agreement or any defense by the Counterparty (or any successor or substitute party to
the Interest Rate Cap Agreement) to payment or (vii) fail to give prompt notice to Lender of any notice of default given by or
to Borrower under or with respect to the Interest Rate Cap Agreement, together with a complete copy of such notice.


 


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


 




    	 	55	 



     


    

 


2.8.4     Replacement
Interest Rate Cap Agreement. In connection with any Replacement Interest Rate Cap Agreement, including, without limitation,
in connection with Borrower’s exercise of any Extension Option pursuant to Section 2.9 hereof, all the provisions
of this Section 2.8 applicable to the Interest Rate Cap Agreement delivered on the Closing Date shall be applicable to the
Replacement Interest Rate Cap Agreement.


 


Section
2.9           Extension Options.


 


2.9.1     Extension
Options. Subject to the provisions of this Section 2.9, Borrower shall have the option (the “First Extension
Option”), by irrevocable written notice (the “First Extension Notice”) delivered to Lender no earlier
than one hundred twenty (120) days prior to, nor later than thirty (30) days prior to, the Stated Maturity Date, to extend the
Maturity Date to May 9, 2021 (the “First Extended Maturity Date”). If the Maturity Date shall have been timely
and properly extended to the First Extended Maturity Date, then Borrower shall have the option (the “Second Extension
Option”), by irrevocable written notice (the “Second Extension Notice”) delivered to Lender no earlier
than one hundred twenty (120) days prior to, nor later than thirty (30) days prior to, the First Extended Maturity Date, to extend
the Maturity Date to May 9, 2022 (the “Second Extended Maturity Date”). Borrower’s right to so extend
the Maturity Date to the First Extended Maturity Date and the Second Extended Maturity Date shall be subject to the satisfaction
of the following conditions precedent prior to each extension hereunder:


 


(a)       no
Event of Default or monetary or material non-monetary Default shall have occurred and be continuing on the date Borrower delivers
the First Extension Notice or the Second Extension Notice, as applicable, and no Event of Default or monetary or material non-monetary
Default shall have occurred and be continuing on the Stated Maturity Date and the First Extended Maturity Date, as applicable;


 


(b)       Borrower
shall (i) obtain and deliver to Lender not later than one (1) Business Day prior to the first day of the term of the Loan as extended,
one or more Replacement Interest Rate Cap Agreements from an Approved Counterparty in a notional amount equal to the maximum principal
amount of the Loan, which Replacement Interest Rate Cap Agreement(s) shall be (A) effective for the period commencing on the day
immediately following the then-applicable Maturity Date (prior to giving effect to the applicable Extension Option) and ending
on the last day of the Interest Period in which the applicable extended Maturity Date occurs and (B) otherwise on same terms set
forth in Section 2.8, and (ii) (x) execute and deliver a Replacement Assignment of Rate Cap and (y) deliver an executed
Acknowledgment with respect to each such Replacement Interest Rate Cap Agreement;


 




    	 	56	 



     


    

 


(c)       Borrower
shall deliver a Counterparty Opinion with respect to the Replacement Interest Rate Cap Agreement and the related Acknowledgment
and a Replacement Assignment of Rate Cap with respect thereto;


 


(d)       all
amounts due and payable to Lender pursuant to this Agreement or the other Loan Documents as of the Stated Maturity Date or the
First Extended Maturity Date, as applicable (other than the Outstanding Principal Balance), and all costs and expenses of Lender,
including fees and expenses of Lender’s counsel, in connection with the Loan and/or the applicable extension of the Term
shall have been paid in full;


 


(e)       on
the Stated Maturity Date or the First Extended Maturity Date, as applicable, Borrower shall pay to Lender the applicable Extension
Fee;


 


(f)       Borrower
shall have achieved Completion of the PIP Work;


 


(g)       the
Debt Yield shall be equal to or greater than (i) with respect to the First Extension Option, nine percent (9.00%), and (ii) with
respect to the Second Extension Option, nine and seventy-five hundredths percent (9.75%); provided, however, that, subject to Borrower’s
satisfaction of all other conditions to extension set forth in this Section 2.9, Borrower may, at its sole election, prepay
such portion of the Loan to the extent necessary to satisfy this condition (g) without the payment of any Yield Maintenance Premium
or other penalty or fee; provided, however, Borrower shall pay the applicable Exit Fee; and


 


(h)       with
respect to the Second Extension Option, Borrower shall have delivered to Lender either (1) evidence that the term of the Operating
Lease has been extended to May 31, 2023 or (2) subject to Franchisor’s consent, if required, a new operating lease, in form
and substance reasonably acceptable to Lender, with a term expiring no earlier than May 31, 2023 and, to the extent necessary,
Borrower shall have recorded a memorandum of operating lease to evidence such extension or new operating lease.


 


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


 




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2.9.2     Intentionally
Omitted.


 


Section
2.10         Change in Law; Taxes.


 


2.10.1   Increased
Costs. If as a result of any Change in Law or compliance of Lender therewith, the basis
of taxation of payments to Lender or any Person Controlling Lender of the principal of or interest on the Loan is changed or Lender
or the Person Controlling Lender shall be subject to (i) any tax, duty, charge or withholding of any kind with respect to this
Agreement (excluding federal taxation of the overall net income of Lender or the Person Controlling Lender); or (ii) any reserve,
special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other
liabilities, of Lender or any Person Controlling Lender is imposed, modified or deemed applicable; or (iii) any other condition
affecting loans to borrowers subject to LIBOR-based interest rates is imposed on Lender or any Person Controlling Lender and Lender
reasonably determines that, by reason thereof, the cost to Lender or any Person Controlling Lender of making, maintaining or extending
the Loan to Borrower is increased, or any amount receivable by Lender or any Person Controlling Lender hereunder in respect of
any portion of the Loan to Borrower is reduced (such increases in cost and reductions in amounts receivable being herein called
“Increased Costs”), then Lender shall provide notice thereof to Borrower and Borrower agrees that it will pay
to Lender upon Lender’s written request such additional amount or amounts as will compensate Lender or any Person Controlling
Lender for such Increased Costs to the extent Lender reasonably determines that such Increased Costs are allocable to the Loan.
If Lender requests compensation under this Section 2.10.1, Lender shall, if requested by notice by Borrower to Lender, furnish
to Borrower a statement setting forth the basis for requesting such compensation and the method for determining the amount thereof.
If Lender is advised by counsel chosen by it that the payment by Borrower of any amounts described in this Section 2.10.1
would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense of usury, then in any such event, Lender
may, by written notice to Borrower of not less than one hundred twenty (120) days, declare the Obligations immediately due and
payable.


 


2.10.2   Other
Taxes. Borrower agrees to pay any and all present or future stamp, court or documentary,
intangible, recording, filing or similar taxes or other excise or property taxes, charges, or similar levies which arise from any
payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of
a security interest under, or otherwise with respect to, this Agreement, the other Loan Documents, or the Loan (hereinafter referred
to as “Other Taxes”).


 


Section
2.11         Taxes.


 


(a)       Payments
Free of Taxes. Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good
faith discretion of both Borrower and Lender after consultation with each other) requires the deduction or withholding of any Tax
from any such payment by Borrower, then Borrower shall be entitled to make such deduction or withholding and shall timely pay the
full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an
Indemnified Tax, then the sum payable by Borrower shall be increased as necessary so that after all deductions or withholdings
have been made (including all deductions and withholdings applicable to additional sums payable under this Section), the applicable
Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.


 


(b)       Payment
of Other Taxes by Borrower. Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable
law, or at the option of Lender timely reimburse it for the payment of, any Other Taxes.


 


(c)       Indemnification
by Borrower. Borrower shall indemnify Lender, within ten (10) days after demand therefor, for the full amount of any Taxes
indemnified under this Section 2.11 (including Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable or paid by Lender or required to be withheld or deducted from a payment to Lender and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive
absent manifest error.


 




    	 	58	 



     


    

 


(d)         Evidence
of Payments. As soon as practicable after any payment of Taxes by or on account of Borrower to a Governmental Authority pursuant
to this Section, Borrower shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory
to Lender.


 


(e)         Status
of Lenders. If Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under
any Loan Document, Lender shall deliver to Borrower, promptly following the time or times reasonably requested by Borrower, such
properly completed and executed documentation reasonably requested by Borrower as will permit such payments to be made without
withholding or at a reduced rate of withholding, including:


 


(i)            if
Lender is a U.S. Person, executed originals of IRS Form W-9 certifying that Lender is exempt from U.S. federal backup withholding
tax;


 


(ii)           If
Lender is a Foreign Lender, executed originals of IRS Form W-8BEN or W-8BEN-E, W-8ECI or W-8IMY, as applicable, together with all
supporting documentation required under applicable law, including in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, a certificate substantially in the form of Schedule IX
to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code; and


 


(iii)          any
documentation required to be provided by a Lender as prescribed under Sections 1471 through 1474 of the Code and the applicable
Treasury regulations thereunder and official interpretations thereof.


 


(f)         Changes
in Tax, Debt, Credit and Documentary Stamp Laws.


 


(i)            If
any law is enacted or adopted or amended after the date of this Agreement which deducts the Loan from the value of the Property
for the purpose of taxation and which imposes a tax, either directly or indirectly, on Lender’s interest in the Loan or Lender’s
interest in the Property, Borrower will pay the tax, with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for
a defense of usury then Lender shall have the option by written notice of not less than one hundred twenty (120) days to declare
the Obligations immediately due and payable.


 




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(ii)           Borrower
will not claim or demand or be entitled to any credit or credits on account of the Loan for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall otherwise be made or claimed from the assessed value
of the Property, or any part thereof, for real estate tax purposes by reason of the Security Instrument or the Loan. If such claim,
credit or deduction shall be required by applicable law and such claim, credit or deduction results in a tax, either directly or
indirectly on Lender’s interest in the Loan or Lender’s interest in the Property, Lender shall have the option, by
written notice of not less than one hundred twenty (120) days, to declare the Obligations immediately due and payable.


 


(iii)          If
at any time the United States of America, any State thereof or any subdivision of any such State shall require revenue or other
stamps to be affixed to the Note, the Security Instrument, or any of the other Loan Documents or impose any other similar tax or
charge on the same, Borrower will pay for the same, with interest and penalties thereon, if any.


 


ARTICLE
III



EXCULPATION


 


Section
3.1           Exculpation.


 


(a)        Subject
to the qualifications below, Lender shall not enforce the liabilities and obligations of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Security Instrument 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 Instrument and the other Loan Documents, or in the Property, the Rents, or any other collateral given to Lender pursuant
to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any
other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Security Instrument and the other Loan
Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding
under, or by reason of, or in connection with, the Note, this Agreement, the Security Instrument or the other Loan Documents. The
provisions of this Section 3.1 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced
or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or
suit for foreclosure and sale under the Security Instrument; (c) affect the validity or enforceability of the Environmental Indemnity
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; or (f) constitute a prohibition
against Lender seeking a deficiency judgment against Borrower in order to fully realize the security granted by the Security Instrument
or commencing any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property.


 




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(b)         Nothing
contained herein shall in any manner or way release, affect or impair the right of Lender to recover, and Borrower shall be fully
and personally liable and subject to legal action, for any losses, damages (including, without limitation, punitive or exemplary
damages), costs, expenses, liabilities (including, without limitation, strict liability), claims, obligations, settlement payments,
penalties, fines, assessments, citations, litigation, demands, defenses, judgments, suits, proceedings or other expenses of any
kind whatsoever incurred or suffered by Lender (including reasonable attorneys’ fees and expenses and court costs) arising
out of or in connection with the following (“Losses”):


 


(i)            fraud
or intentional misrepresentation by or on behalf of Borrower, Guarantor or any Affiliate of any of them in connection with the
Loan or the Property;


 


(ii)            willful
misconduct of Borrower, Guarantor, or any Affiliate of any of them in connection with the Loan or the Property;


 


(iii)          breach
of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity, the Loan Agreement or the
Security Instrument concerning Environmental Statutes or Hazardous Substances;


 


(iv)          active,
intentional material physical waste of the Property or any portion thereof by Borrower, Guarantor, or any Affiliate of any of them;


 


(v)          intentional
removal or disposal of any portion of the Property during the continuance of an Event of Default which is not promptly replaced
with property of comparable utility and value;


 


(vi)          breach
of any Legal Requirement (including RICO) mandating the forfeiture by Borrower of the Property, or any portion thereof, because
of the conduct or purported conduct of criminal activity by Borrower, Guarantor or any Restricted Party or any Affiliate of any
of them in connection therewith;


 


(vii)        intentionally
omitted;


 


(viii)        misapplication,
misappropriation or conversion by or on behalf of Borrower, Guarantor, or any Affiliate of any of them of (A) any insurance proceeds,
(B) any Awards, (C) any Rents, (D) any Rents paid more than one (1) month in advance, or (E) any other monetary collateral for
the Loan;


 




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(ix)          failure
to pay charges for Taxes, Other Charges, labor or materials or judgments that can create Liens on any portion of the Property,
unless (1) such charges are the subject of a bona fide dispute in which Borrower is contesting the amount or validity thereof in
accordance with Section 5.1.2, in a manner which prevents any interest or penalties from accruing, or any Lien from attaching,
(2) with respect to Taxes, sufficient funds to pay such charges are available in the Tax and Insurance Escrow Account and Lender
fails to pay same or (3) there is insufficient Rents to pay same;


 


(x)          failure
to deliver to Lender any security deposits, advance deposits or any other deposits collected with respect to the Property upon
a foreclosure of the Property or action in lieu thereof, except to the extent any such security deposits were applied in accordance
with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure
or action in lieu thereof;


 


(xi)          failure
by Borrower to obtain and maintain, from time to time, the fully paid for insurance policies in accordance with the terms hereof
unless (1) sufficient funds to pay such amounts are available in the Tax and Insurance Escrow Account and Lender fails to pay same
or (2) there is insufficient Rents to pay same;


 


(xii)          an
act or omission of any of Borrower, Principal or Guarantor, or any Affiliate of any of them which hinders, delays or interferes
with Lender’s enforcement of its rights under any Loan Document or the realization of the collateral, including the assertion
by Borrower, Principal or Guarantor, or any Affiliate of any of them of defenses or counterclaims, in each case, other than good
faith defenses and compulsory counterclaims;


 


(xiii)         Borrower’s
indemnifications of Lender set forth in Section 9.2 of this Agreement;


 


(xiv)        intentionally
omitted;


 


(xv)         failure
by Borrower or License Holder to (A) comply with its obligations in all material respects pursuant to the Liquor License
Cooperation Agreement or a loss of the Liquor License as a result of (x) any act or omission (to the extent such omission is in
the reasonable control of License Holder, Borrower or their respective Affiliates) of License Holder, Borrower or any Affiliate
thereof, or (y) the conduct of criminal activity by License Holder, Borrower, or Guarantor or any Affiliate of any of the them,
or (B) cooperate with Lender or Lender’s designee during the continuance of an Event of Default after notice from Lender,
in making application to the License Authority to transfer the Liquor License and inventory of beer, wine, and distilled spirits
that is subject to the Liquor License or take such action as may be necessary to transfer the Liquor License to Lender or its
designee upon Lender’s written request therefor, to the extent permitted by applicable law, or continue to hold the Liquor
License for the benefit of Lender (for a reasonable period of time pursuant to a customary interim beverage agreement reasonably
acceptable to Lender) until such time as Lender can obtain a liquor license for the Property in the name of its nominee; or


 




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(xvi)        except
as set forth in clause (c)(x) below, Borrower or Principal failing to comply with any representation, warranty or covenant set
forth in Section 4.1.30 hereof or failing to maintain its status as a Special Purpose Entity, as required by, and in accordance
with, the terms and provisions of this Agreement or the Security Instrument, including, without limitation, the breach of the covenant
in Section 5.2.12 to provide thirty (30) days’ prior written notice prior to the removal of an Independent Director,
or the breach of any Backward-Looking Special Purpose Entity Representations and Warranties set forth in Section 4.1.30.


 


(c)          Notwithstanding
anything to the contrary in this Agreement, the Note or any of the 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 U.S. Bankruptcy Code to file
a claim for the full amount of the Debt secured by the Security Instrument or to require that all collateral shall continue to
secure all of the Obligations in accordance with the Loan Documents, and (B) Borrower shall be personally liable for the payment
of the entire amount of the Debt in the event of:


 


(i)            Borrower,
Principal or Guarantor filing a voluntary petition under the Bankruptcy Code or any other federal or state bankruptcy or insolvency
law;


 


(ii)           the
filing of an involuntary petition against Borrower, Principal or Guarantor under the Bankruptcy Code or any other federal or state
bankruptcy or insolvency law, by any Person that is an Affiliate of Borrower, Principal or Guarantor;


 


(iii)          Borrower,
Principal or Guarantor consenting to or otherwise or joining in an any involuntary petition filed against it, by any other Person
under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law;


 


(iv)         Borrower,
Principal or Guarantor consenting to or otherwise or joining in an application for the appointment of a custodian, receiver, trustee
or examiner for Borrower or any portion of the Property (other than an application by Lender in connection with the enforcement
of Lender’s remedies under the Loan Documents);


 


(v)           Borrower,
Principal or Guarantor or any Affiliate of any of them soliciting or causing to be solicited petitioning creditors or any other
Person for any involuntary petition against Borrower, Principal or Guarantor by any Person (other than by Lender in connection
with the exercise of Lender’s remedies under the Loan Documents);


 


(vi)          Borrower,
Principal or Guarantor 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 (other than merely Borrower’s inability to repay or as a
result of Borrower’s mere failure to repay, in either case, the Debt on the Maturity Date);


 




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(vii)        Borrower
or Principal failing to obtain Lender’s prior written consent to any subordinate financing (to the extent such consent is
required hereunder);


 


(viii)       Borrower
encumbers the Property, the Collateral or any portion thereof with a voluntary Lien, in each instance, other than in accordance
with the terms of the Loan Documents;


 


(ix)          Borrower
or Principal failing to obtain Lender’s prior written consent to any Transfer, as required by this Agreement or the other
Loan Documents; or


 


(x)           Borrower
or Principal failing to comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof or failing
to maintain its status as a Special Purpose Entity, as required by, and in accordance with, the terms and provisions of this Agreement
or the Security Instrument, including, without limitation, the breach of the covenant in Section 5.2.12 to provide thirty
(30) days’ prior written notice prior to the removal of an Independent Director, or the breach of any Backward-Looking
Special Purpose Entity Representations and Warranties set forth in Section 4.1.30; provided that such failure to comply
or breach results in a substantive consolidation of either Borrower or either Principal with any other Person in any federal or
state bankruptcy proceeding.


 


ARTICLE
IV



REPRESENTATIONS AND WARRANTIES


 


Section
4.1            Borrower Representations.
Borrower represents and warrants as of the date hereof that:


 




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4.1.1     Organization.
Borrower has been duly organized and is validly existing and in good standing with requisite power and authority to own its properties
and to transact the business in which it is now engaged. Borrower is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its properties, businesses and operations. Borrower possesses
all material rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own, or lease,
as applicable, its properties and to transact the businesses in which it is now engaged, and the sole business of (x) Owner Borrower
is the ownership, management and operation of the Property and (y) Operator Borrower is the leasing, management and operation of
the Property. The ownership interests of Borrower are as set forth on the organizational chart attached hereto as Schedule
III. Borrower (a) has complied in all respects with its certificate of incorporation, bylaws, limited partnership agreement,
articles of organization and limited liability company operating agreement, as applicable; (b) has maintained complete books and
records and bank accounts separate from those of its Affiliates; (c) has obeyed all formalities required to maintain its status
as, and at all times has held itself out to the public as, a legal entity separate and distinct from any other entity (including,
but not limited to, any Affiliate thereof); and (d) has all requisite power and authority to conduct its business and to own its
property, as now conducted or owned, and as contemplated by this Agreement, including, without limitation, the power and authority
to do business in the state in which the Property is located. The signatory hereto has all requisite power, authority and legal
right to execute this Agreement, the Note and the other Loan Documents on Borrower’s behalf to which Borrower is a party.
Guarantor has the necessary power, authority and legal right to execute, deliver and perform its obligations under the Guarantor
Documents.


 


4.1.2     Proceedings.
Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan
Documents. This Agreement and the other Loan Documents have been duly executed and delivered by or on behalf of Borrower and constitute
the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, subject
only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).


 


4.1.3     No
Conflicts. The execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower and/or Guarantor, as applicable, will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition of any Lien, charge or encumbrance (other than pursuant
to the Loan Documents) upon any of the property or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, management agreement or other agreement or instrument to which Borrower is a party
or by which any of Borrower’s property or assets is subject, nor will such action result in any violation of the provisions
of any Legal Requirements of any Governmental Authority having jurisdiction over Borrower or any of Borrower’s property or
assets, and any consent, approval, authorization, order, registration or qualification of or with any court or any such Governmental
Authority required for the execution, delivery and performance by Borrower and/or Guarantor, as applicable, of this Agreement or
any other Loan Documents has been obtained and is in full force and effect.


 


4.1.4     Litigation.
There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority or other agency now pending
or threatened against or affecting Borrower, Guarantor, Principal or the Property or any portion thereof, which actions, suits
or proceedings, if determined against Borrower, Guarantor, Principal or the Property or such portion thereof, might materially
adversely affect the condition (financial or otherwise) or business of Borrower, Guarantor, Principal or the condition or ownership
of the Property or any portion thereof.


 




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4.1.5     Agreements.
To Borrower’s knowledge, Borrower is not a party to any agreement or instrument or subject to any restriction that would
reasonably be expected to materially and adversely affect Borrower or the Property or any portion thereof, or Borrower’s
business, property or assets, operations or condition, financial or otherwise. Borrower is not in default in any material respect
in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which Borrower or the Property are bound. Borrower has no material financial obligation
under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Borrower is a party or by
which Borrower or the Property is otherwise bound, other than (a) any obligations incurred in the ordinary course of the operation
of the Property as permitted pursuant to clause (s) of the definition of “Special Purpose Entity” set forth in Section
1.1 hereof, (b) the obligations under the Loan Documents, (c) the Operator Borrower’s obligations under the Franchise
Agreement, (d) the obligations under the Operating Lease, and (e) Operator Borrower’s obligations under the Management Agreement.


 


4.1.6     Title.
(a) Owner Borrower has good, marketable and insurable fee simple title to the real property comprising part of the Property and
good title to the balance of the Property, free and clear of all Liens whatsoever, except the Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents and (b) Operator Borrower has
a good, marketable and insurable leasehold interest in the real property comprising part of the Property, free and clear of all
Liens whatsoever, except the Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens
created by the Loan Documents. The Permitted Encumbrances, in the aggregate, do not materially and adversely affect the value,
operation or use of the Property or any portion thereof (as currently used) or Borrower’s ability to repay the Loan. The
Security Instrument and the Assignment of Leases, when properly recorded in the appropriate records, together with any UCC-1 financing
statements required to be filed in connection therewith, will create (a) a valid, perfected first priority lien on the Property,
subject only to Permitted Encumbrances and the Liens created by the Loan Documents, and (b) perfected security interests in and
to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in
each case subject only to any applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents
and the Liens created by the Loan Documents. There are no claims for payment for work, labor or materials affecting the Property
or any portion thereof that are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.


 




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4.1.7     Solvency.
Borrower has (a) not entered into the transactions contemplated by this Agreement or executed the Note, this Agreement or any other
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 such Loan Documents. After giving effect to the Loan, the fair saleable value of Borrower’s assets
exceeds and will, immediately following the making of the Loan, exceed Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrower’s assets is and will,
immediately following the making of the Loan, be greater than Borrower’s probable liabilities, including the maximum amount
of its contingent liabilities on its debts as such debts become absolute and matured. Borrower’s 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. Borrower does not intend to, and does not believe that it will, incur debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debts and liabilities as they mature (taking into account the
timing and amount of cash to be received by Borrower and the amount to be payable on or in respect of the obligations of Borrower).
No Bankruptcy Action exists against Borrower or any Principal, and neither Borrower nor Principal has ever been a party to a Bankruptcy
Action. Neither Borrower nor Principal is contemplating either a Bankruptcy Action or the liquidation of all or a major portion
of Borrower’s assets or property, and Borrower has no knowledge of any Person contemplating the filing of any petition against
it or Principal.


 


4.1.8     Full
and Accurate Disclosure. No statement of fact made by or on behalf of Borrower in this
Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading. There is no material fact presently known to Borrower
that has not been disclosed to Lender that adversely affects, nor as far as Borrower can foresee, might adversely affect, the Property
(or any portion thereof) or the business, operations or condition (financial or otherwise) of Borrower or Guarantor.


 


4.1.9     No
Plan Assets. Borrower is not an “employee benefit plan” as defined in Section
3(3) of ERISA which is subject to Title I of ERISA or a “plan” as defined in and subject to the provisions of Section
4975 of the Code, and none of the assets of Borrower constitutes or will constitute “plan assets” of one or more such
plans for purposes of ERISA or the Code. In addition, (a) Borrower is not a “governmental plan” within the meaning
of Section 3(32) of ERISA or an entity whose assets constitute “plan assets” of a governmental plan or plans, (b) transactions
by or with 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 3(32) of ERISA), in any case, which is similar to the provisions
of Section 406 of ERISA or Section 4975 of the Code currently in effect, which would prohibit or otherwise restrict the transactions
contemplated by this Agreement, and (c) none of Borrower, Guarantor or their ERISA Affiliates is at the date hereof, or has been
at any time within the five (5) years preceding the date hereof, required to contribute to any Multiemployer Plan or any Pension
Plan, or a “contributing sponsor” (as such term is defined in Section 4001 of ERISA) in any Multiemployer Plan or Pension
Plan; and none of Borrower, Guarantor or any ERISA Affiliate has any contingent liability with respect to any post-retirement “employee
welfare benefit plan” (as such term is defined in Section 3(1) of ERISA), except as disclosed to Lender in writing.


 




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4.1.10     Compliance.
Borrower and the Property (including the use thereof) comply in all material respects with all applicable Legal Requirements, including,
without limitation, building and zoning ordinances and codes. Borrower is not in default or violation of any order, writ, injunction,
decree or demand of any Governmental Authority applicable to Borrower or the Property. There has not been committed by Borrower,
or any other Person in occupancy of or involved with the operation or use of the Property or any portion thereof, any act or omission
affording any Governmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in
performance of Borrower’s Obligations under any of the Loan Documents. Neither the Improvements as constructed, nor the use
of the Property by Tenants under the Leases and the contemplated accessory uses, violate, in any material respect, (a) any Legal
Requirements (including subdivision, zoning, building, environmental protection and wetland protection Legal Requirements), or
(b) any building permits, restrictions or records, or agreements affecting the Property or any part thereof. Neither the zoning
authorizations, approvals or variances nor any other right to construct or to use the Property is to any extent dependent upon
or related to any real estate other than the Property.


 


4.1.11     Financial
Information. All financial data with respect to the Property, Borrower and Guarantor,
including, without limitation, the statements of cash flow and income and operating expenses that have been delivered to Lender
in connection with the Loan, (a) are true, complete and correct in all material respects, (b) accurately represent the financial
condition of the Property, Borrower and Guarantor as of the date of such reports, and (c) to the extent prepared or audited by
an independent certified public accounting firm, have been prepared in accordance with GAAP, and the Uniform System of Accounts
for Hotels (or such other accounting basis, consistently applied, and acceptable to Lender) throughout the periods covered, except
as disclosed therein. Except for Permitted Encumbrances, Borrower does not have 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
Borrower and reasonably likely to have a material adverse effect on the Property or any portion thereof or the operation thereof
as a select service hotel and its other intended uses, except as referred to or reflected in said financial statements.
Since the date of such financial statements, there has been no Material Adverse Change in the financial condition, operation or
business of Borrower or Guarantor from that set forth in said financial statements.


 


4.1.12     Condemnation.
No Condemnation or other similar proceeding has been commenced or, to Borrower’s knowledge, is threatened or contemplated
with respect to all or any portion of the Property or for the relocation of any roadway providing access to the Property.


 


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


 


4.1.14     Utilities
and Public Access. The 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 the Property are located either in the public right-of-way abutting the Property
(which are connected so as to serve the Property without passing over other property) or in recorded easements serving the Property
and such easements are set forth in and insured by the Title Insurance Policy. All roads necessary for the use of the Property
for its current purpose have been completed and dedicated to public use and accepted by all applicable Governmental Authorities.
There is no on-site sewage disposal system and the Property is served by a sewer system maintained by a Governmental Authority
or property owners association.


 




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4.1.15     Not
a Foreign Person. Borrower and, if Borrower is a disregarded entity for federal income
tax purposes, the Person treated as owning the assets owned by Borrower for federal income tax purposes, is not a “foreign
person” within the meaning of §1445(f)(3) or of §7701 of the Code.


 


4.1.16     Separate
Lots. The Property is comprised of one (1) or more parcels, which constitute a separate
tax lot or lots and does not constitute a portion of any other tax lot not a part of the Property.


 


4.1.17     Assessments.
There are no pending or, to Borrower’s knowledge, proposed special or other assessments for public improvements or otherwise
affecting the Property, nor are there any contemplated improvements to the Property that might result in such special or other
assessments.


 


4.1.18     Enforceability.
The Loan Documents are enforceable by Lender (or any subsequent holder thereof) in accordance with their respective terms, subject
to principles of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights and the enforcement
of debtors’ obligations. The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense
by Borrower or Guarantor, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy,
insolvency and other laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and neither
Borrower nor Guarantor has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.


 


4.1.19     No
Prior Assignment. There are no prior assignments of the Leases or any portion of the Rents
due and payable or to become due and payable that are presently outstanding.


 


4.1.20     Insurance.
Borrower has obtained and has delivered to Lender certificates of insurance, together with applicable endorsements and upon request
will provide complete copies of all Policies, with all premiums paid thereunder, reflecting the insurance coverages, amounts and
other requirements set forth in Section 6.1 of this Agreement. As of the date of this Agreement, no litigated claims are
currently pending, outstanding or otherwise remain unsatisfied under any such Policies limited to the Property, and, to Borrower’s
knowledge, no Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any such Policies
limited the Property.


 


4.1.21     Use
of Property. The Property (and each portion thereof) is used exclusively as a select
service hotel and other appurtenant and related uses.


 


4.1.22     Certificate
of Occupancy; Licenses. All material certifications, permits, licenses and approvals,
including, without limitation, certificates of completion and occupancy permits required for the legal use, occupancy and operation
of the Property and each portion thereof for its intended uses and otherwise as a select service hotel (collectively, the
“Licenses”), have been obtained and are in full force and effect. The use being made of the Property and each
portion thereof is in conformity with the certificate of occupancy issued for the Property and any portion thereof.


 




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4.1.23     Flood
Zone. None of the Improvements on the Property are located in an area as identified by
the Federal Emergency Management Agency as an area having special flood hazards or, if so located, the flood insurance required
pursuant to Section 6.1(a)(i) hereof is in full force and effect with respect to the Property.


 


4.1.24     Physical
Condition. Except for the PIP Work and the Required Repairs and except as otherwise described
in the Property Condition Report, and to Borrower’s knowledge, (a) the Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems,
electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components
are in good condition, order and repair in all material respects and (b) there exists no structural or other material defects or
damages in or on the Property, whether latent or otherwise, and Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in the 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.


 


4.1.25     Boundaries.
To Borrower’s knowledge, (a) all of the Improvements which were included in determining the appraised value of any portion
of the Property lie wholly within the boundaries and building restriction lines of such portion of the Property, (b) no improvements
on adjoining properties encroach upon any portion of the Property, and (c) no easements or other encumbrances upon the Property
or any portion thereof encroach upon any of the Improvements, so as to adversely affect the value or marketability of the Property,
except those easements or other encumbrances with respect to which the Title Insurance Policy insures against any losses resulting
therefrom.


 




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4.1.26     Leases.
No portion of the Property is subject to any Leases other than the Leases described on the rent roll attached as Schedule
I. Borrower is the owner and lessor of landlord’s interest in the Leases. No Person has any possessory interest in
the Property or any portion thereof, except under and pursuant to the provisions of the Leases. The current Leases are in full
force and effect and there are no known defaults thereunder by either party and there are no conditions that, with the passage
of time or the giving of notice, or both, would constitute defaults thereunder. The copies of the Leases and any related guaranty
(including all amendments thereto) delivered to Lender are accurate, true and complete, and there are no oral agreements with respect
thereto. No Rents (other than security deposits, if any, listed on Schedule I) have been paid more than one (1) month
in advance of its due date. All work to be performed by the landlord under each Lease has been performed as required in such Lease
and has been accepted by the applicable Tenant, and any payments, free rent, partial rent, rebate of rent or other payments, credits,
allowances or abatements required to be given by the landlord under such Lease to any Tenant has already been received by such
Tenant. There has been no prior sale, transfer or assignment, hypothecation or pledge of any Lease or of the Rents received therein
which is still in effect. Except as listed on Schedule I, no Tenant has assigned its Lease or sublet all or any portion
of the premises demised thereby, no such Tenant holds its leased premises under assignment or sublease, nor does anyone, except
such Tenant and its employees occupy such leased premises. No Tenant under any Lease has a right or option pursuant to such Lease
or otherwise to purchase all or any part of the Property. No Tenant under any Lease has any right or option for additional space
in the Improvements.


 


4.1.27     Survey.
To Borrower’s knowledge, the Survey for the Property (and each portion thereof) delivered to Lender in connection with this
Agreement has been prepared by a professional and properly licensed land surveyor in accordance with the Accuracy Standards for
ALTA/ACSM Land Title Surveys as adopted by ALTA, American Congress on Surveying & Mapping and National Society of Professional
Surveyors in 2016. The Survey reflects the same legal description contained in the Title Insurance Policy.


 


4.1.28     Principal
Place of Business; State of Organization. Each Borrower’s principal place of business
as of the date hereof is the address set forth in the introductory paragraph of this Agreement. Each Borrower is organized under
the laws of the State of Delaware and the organizational identification number of Owner Borrower is 4877919 and the organizational
identification number of Operator Borrower is 4878085.


 


4.1.29     Filing
and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts
in the nature of transfer taxes (including all Other Taxes) required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the transfer of the Property to Borrower have been paid. All mortgage, mortgage recording,
stamp, intangible or other similar tax (including all Other Taxes) required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of
any of the Loan Documents, including, without limitation, the Security Instrument, have been paid or are being paid simultaneously
herewith.


 


4.1.30     Special
Purpose Entity/Separateness.


 


(a)        Until
the Debt has been paid in full, Borrower hereby represents, warrants and covenants that (i) Borrower is, shall be and shall
continue to be a Special Purpose Entity, and (ii) Principal is, shall be and shall continue to be a Special Purpose Entity.


 


(b)        The
representations, warranties and covenants set forth in Section 4.1.30(a) shall survive for so long as any amount remains
payable to Lender under this Agreement or any other Loan Document.


 


(c)        Any
and all of the stated facts and assumptions made in any Insolvency Opinion, including, but not limited to, any exhibits attached
thereto, will have been and shall be true and correct in all respects, and Borrower and Principal will have complied and will comply
with all of the stated facts and assumptions made with respect to it in any Insolvency Opinion. Each entity other than Borrower
and Principal with respect to which an assumption is made or a fact stated in any Insolvency Opinion will have complied and will
comply with all of the assumptions made and facts stated with respect to it in any such Insolvency Opinion.


 


In addition to the foregoing,
Borrower hereby represents, warrants and agrees that (being hereinafter referred to as the “Backward-Looking Special Purpose
Entity Representations and Warranties”) prior to the Closing Date:


 




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(i)           Each
Borrower and Principal has always been (A) since the date of its formation in Delaware, duly formed, validly existing and in good
standing under the laws of the state of Delaware, and (B) duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with the Property and its business and operations, with requisite power and
authority, and all material rights, licenses, permits and authorizations, governmental or otherwise, necessary to own the Property
and to transact the business in which it has been engaged.


 


(ii)           Neither
Borrower nor Principal has ever had any judgments or liens of any nature against it except for tax liens not yet delinquent, Permitted
Encumbrances, and liens which have been released on or prior to the Closing Date.


 


(iii)         Each
of Borrower and Principal has always been in material compliance with all laws, regulations, and orders applicable to it and has
always had, all material permits necessary for it to operate.


 


(iv)         Except
as set forth on Schedule VIII attached hereto, neither Borrower nor Principal is aware of any pending or threatened litigation,
nor has ever been a party to any material lawsuit, arbitration, summons, or other material legal proceeding except as disclosed
in writing to Lender.


 


(v)          Neither
Borrower nor Principal has been, except as disclosed in writing to Lender, nor is involved in, any dispute with any taxing authority
(other than any Property Tax appeals), and Borrower has paid all taxes due to any taxing authority before the delinquency thereof.


 


(vi)         To
the extent financial statements of Borrower have been provided to Lender by or on behalf of Borrower in connection with the Loan,
to Borrower’s knowledge, the latest set of each such financial statements fairly and accurately reflects the current financial
condition of the subject of such statement, as of the date of such statement, in all material respects.


 


(vii)         Borrower
has never owned any real property other than the Property and has never engaged in any business except the ownership and operation
of such Property; Principal has never owned any property or assets other than the interests in Borrower and the proceeds thereof.


 


(viii)       Borrower
has no material contingent or actual obligations unrelated to the Property and Principal has no material contingent or actual obligations.


 




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4.1.31     Management
Agreement. The Management Agreement is in full force and effect and, to Borrower’s
knowledge, there is no default thereunder by any party thereto and no event has occurred that, with the passage of time and/or
the giving of notice would constitute a default thereunder. Neither the execution and delivery of the Loan Documents or Borrower’s
performance thereunder will adversely affect Borrower’s rights under the Management Agreement.


 


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


 


4.1.33     No
Change in Facts or Circumstances; Disclosure. All information submitted by Borrower to
Lender including, but not limited to, all financial statements, rent rolls, reports, certificates and other documents submitted
in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower in this Agreement
or in any other Loan Document, are accurate, complete and correct in all material respects. There has been no material adverse
change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading
in any material respect or that otherwise materially and adversely affects or might materially and adversely affect the use, operation
or value of the Property or any portion thereof or the business operations and/or the financial condition of Borrower or Guarantor.
Borrower and Guarantor have disclosed to Lender all material facts and have not failed to disclose any material fact that could
cause any Provided Information or representation or warranty made herein to be materially misleading.


 


4.1.34     Investment
Company Act. Borrower is not (a) an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding
company” or a “subsidiary company” of a “holding company” or an “affiliate” of either
a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company
Act of 2005, as amended; or (c) subject to any other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.


 


4.1.35     Embargoed
Person. As of the date hereof and at all times throughout the term of the Loan, including
after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower,
Principal or Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person; (b)
no Embargoed Person has any interest of any nature whatsoever in Borrower, Principal or Guarantor, as applicable, with the
result that the investment in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited
by law or the Loan is in violation of law; and (c) none of the funds of Borrower, Principal or Guarantor, as applicable, has been
derived from any unlawful activity with the result that the investment in Borrower, Principal or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in violation of law.


 


4.1.36     Cash
Management Account.


 


(a)          This
Agreement, together with the other Loan Documents, creates a valid and continuing security interest (as defined in the UCC) in
the Clearing Account and Cash Management Account in favor of Lender, as and when each such account may be established, which security
interest is prior to all other Liens, other than Permitted Encumbrances, and is enforceable as such against creditors of and purchasers
from Borrower. Other than in connection with the Loan Documents and except for Permitted Encumbrances, Borrower has not sold, pledged,
transferred or otherwise conveyed its interest in the Clearing Account and Cash Management Account.


 




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(b)          Each
of the Clearing Account and Cash Management Account shall constitute a “deposit account” within the meaning of the
UCC.


 


(c)          Pursuant
and subject to the terms hereof and of the other Loan Documents, Borrower agrees that it shall instruct the Clearing Bank and Deposit
Bank to comply with all instructions originated by Lender, without further consent by Borrower, directing disposition of the Clearing
Account and Cash Management Account and all sums at any time held, deposited or invested therein, together with any interest or
other earnings thereon, and all proceeds thereof (including proceeds of sales and other dispositions), whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or securities.


 


(d)          The
Clearing Account and Cash Management Account shall not be held in the name of any Person other than Borrower, as pledgor, for the
benefit of Lender, as secured party.


 


(e)          The
Property is not subject to any cash management system (other than pursuant to the Loan Documents), and any and all existing tenant
instruction letters and credit card company instruction letters issued in connection with any previous financing have been duly
terminated on or prior to the date hereof.


 


4.1.37     Filing
of Returns; Payment of Taxes. Each of Borrower’s and Guarantor’s federal tax
identification number is set forth on Schedule V. Each of Borrower and Guarantor has at all times been
properly treated for federal income tax purposes either as a Disregarded Entity or as a partnership. All Taxes relating to the
Property are current and are not delinquent. Each of Borrower and Guarantor has filed, or caused to be filed, all federal, state,
local and foreign Tax returns, reports and other Tax-related documents required to be filed by it and has paid all Taxes payable
by it that have become due, other than those not yet delinquent and except for those being contested in accordance with Section
5.1.2. Each of Borrower and Guarantor has established on its books such charges, accruals and reserves in respect of Taxes
for all fiscal periods as are required by sound accounting principles consistently applied. Neither Borrower nor Guarantor knows
of any proposed assessment for additional Taxes for any period, or of any basis therefor, that, individually or in the aggregate,
taking into account such charges, accruals and reserves in respect thereof as such Person has made, could reasonably be expected
to cause a Material Adverse Change with respect to Borrower, Guarantor or the Property.


 


4.1.38     REA.
The REA is in full force and effect and neither Borrower nor, to Borrower’s knowledge, any other party to the REA, is in
material default thereunder, and to Borrower’s knowledge, there are no conditions which, with the passage of time or the
giving of notice, or both, would constitute a material default thereunder. Except as set forth on Schedule VI,
the REA has not been modified, amended or supplemented.


 




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4.1.39     Food
and Beverage Agreement. On or prior to the date hereof, Borrower has delivered to Lender
a true, correct and complete copy of the Food and Beverage Management Agreement. The Food and Beverage Management Agreement is
in full force and effect and there is no material default, breach or violation existing thereunder by Operator Borrower or, to
Borrower’s knowledge, License Holder and no event has occurred that, with the passage of time or the giving of notice, or
both, would constitute a material default, breach or violation thereunder.


 


4.1.40     Environmental
Representations. Except as otherwise disclosed by that certain Phase I environmental report
(or Phase II environmental report, if required by Lender) with respect to the Property delivered to Lender by Borrower on or prior
to the date hereof (hereinafter referred to as the “Environmental Reports”) and based upon Borrower’s
actual knowledge, (A) there are no Hazardous Substances or underground storage tanks in, on, or under the Property, except those
that are both (i) in compliance with all Environmental Statutes and with permits issued pursuant thereto and (ii) fully disclosed
to Lender in writing pursuant to the Environmental Report(s); (B) there are no past, present or threatened Releases of Hazardous
Substances in, on, under or from the Property which have not been fully remediated in accordance with Environmental Statute; (C)
there is no past or present non-compliance with Environmental Statutes, or with permits issued pursuant thereto, in connection
with the Property which has not been fully remediated in accordance with Environmental Statutes; (D) Borrower does not know of,
and has not received, any written or oral notice or other communication from any Person (including, but not limited to, a Governmental
Authority) relating to the threat of any Release of Hazardous Substances migrating to the Property; (E) Borrower does not know
of, nor has it received, any written or oral notice or other communication from any Person (including, but not limited to, a Governmental
Authority) relating to Hazardous Substances or Remediation thereof, of possible liability of any Person pursuant to any Environmental
Statute, any other environmental conditions in connection with the Property, or any actual or potential administrative or judicial
proceedings in connection with any of the foregoing; (F) Borrower has truthfully and fully delivered to Lender, in writing, any
and all information relating to environmental conditions in, on, under or from the Property that is known to Borrower and all information
that is contained in the files and records of Borrower, including, but not limited to, any reports relating to Hazardous Substances
in, on, under or from the Property and/or to the environmental condition of the Property; and (G) no Mold is present in the indoor
air of the Property at concentrations exceeding ambient air levels and no visible Mold is present on any building materials or
surfaces at the Property for which any Governmental Authority recommends or requires removal thereof by remediation professionals,
and Borrower is not aware of any conditions at the Property that are likely to result in the presence of Mold in the indoor air
at concentrations that exceed ambient air levels or on building materials or surfaces that would require such removal.


 


4.1.41     Franchise
Agreement. The Franchise Agreement is in full force and effect and, to Borrower’s
knowledge, there is no default, breach or violation existing thereunder by any party thereto and no event has occurred (other than
payments due but not yet delinquent) that, with the passage of time or the giving of notice, or both, would constitute a default,
breach or violation by any party thereunder. Neither the execution and delivery of the Loan Documents nor Borrower’s performance
thereunder will adversely affect Borrower’s rights under the Franchise Agreement.


 


4.1.42     PIP.
There are no property improvement plans outstanding with respect to the Property other than the PIP.


 




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4.1.43     Labor
Matters. There are no collective bargaining agreements or similar agreements
in effect with respect to Borrower or the Property. Borrower does not have any employees.


 


4.1.44     Operating
Lease. Owner Borrower is the owner and lessor of landlord’s interest in the Operating
Lease. The Operating Lease is in full force and effect and there are no material defaults thereunder by either party and there
are no conditions that, with the passage of time or the giving of notice, or both, would constitute defaults thereunder. No Operating
Rent has been paid more than one (1) month in advance of its due date. All security deposits (if any) under the Operating Lease
are held by the Owner Borrower in accordance with applicable Legal Requirements. There has been no prior sale, transfer or assignment,
hypothecation or pledge of the Operating Lease or of the Operating Rents received thereunder which is still in effect. Except pursuant
to the Loan Documents, Operator Borrower has not assigned the Operating Lease or sublet all or any portion of the premises demised
thereby other than pursuant to a Lease. Operator Borrower has no right or option pursuant to the Operating Lease or otherwise to
purchase all or any part of the leased premises or the building of which the leased premises are a part.


 


Section
4.2     Survival of Representations. Borrower agrees
that all of the representations and warranties of Borrower set forth in Section 4.1 and elsewhere in this Agreement and
in the other Loan Documents shall survive for so long as any amount remains owing to Lender under this Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and agreements made in this Agreement or in the other
Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter
made by Lender or on its behalf.


 


ARTICLE
V



BORROWER COVENANTS


 


Section
5.1          Affirmative Covenants. From the date hereof
and until payment and performance in full of all Obligations, Borrower hereby covenants and agrees with Lender that:


 




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5.1.1     Existence;
Compliance with Legal Requirements. Borrower shall do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises necessary for the
conduct of its business and comply with all Legal Requirements applicable to Borrower and the Property (or any portion thereof).
There shall never be committed by Borrower, and Borrower shall not permit any other Person in occupancy of or involved with the
operation or use of the Property or any portion thereof to commit, any act or omission affording any Governmental Authority the
right of forfeiture against the Property or any part thereof or any monies paid in performance of Borrower’s Obligations
under any of the Loan Documents. Borrower shall not commit, permit or suffer to exist any act or omission affording such right
of forfeiture. Borrower shall at all times maintain, preserve and protect all franchises and trade names, preserve all the remainder
of its property used or useful in the conduct of its business, and shall keep the Property in good working order and repair (normal
wear and tear excepted and subject to repairs and work expressly contemplated by this Agreement), 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 Security Instrument. Borrower shall keep the Property insured at all times by financially sound and reputable insurers,
to such extent and against such risks, and maintain liability and such other insurance, as is more fully provided in this Agreement.
After prior notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding promptly initiated and
conducted in good faith and with due diligence, the validity of any Legal Requirement, the applicability of any Legal Requirement
to Borrower or the Property (or portion thereof) or any alleged violation of any Legal Requirement; provided, that: (a) no Default
or Event of Default has occurred and remains uncured; (b) such proceeding shall be permitted under, and be conducted in accordance
with, the provisions of any instrument to which Borrower is subject and shall not constitute a default thereunder and such proceeding
shall be conducted in accordance with all applicable statutes, laws and ordinances; (c) neither the Property nor any part thereof
or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (d) Borrower shall, upon final determination
thereof, promptly comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal
Requirement; (e) such proceeding shall suspend the enforcement of the contested Legal Requirement against Borrower and the Property;
and (f) Borrower shall furnish such security as may be required in the proceeding, or as may be reasonably requested by Lender,
to insure compliance with such Legal Requirement, together with all interest and penalties payable in connection therewith. Lender
may apply any such security, as necessary to cause compliance with such Legal Requirement at any time when, in the reasonable judgment
of Lender, the validity, applicability or violation of such Legal Requirement is finally established or the Property (or any part
thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost.


 




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5.1.2     Taxes
and Other Charges. Borrower shall pay, or shall cause its Tenant(s) to pay (to the extent
any Tenant is obligated to make such payments under its Lease), all Property Taxes and Other Charges now or hereafter levied or
assessed or imposed against the Property, or any part thereof, as the same become due and payable (and with respect to Property
Taxes, prior to the date the same become delinquent); provided, however, Borrower’s obligation to directly pay Property Taxes
shall be suspended for so long as Borrower complies with the terms and provisions of Section 7.1 hereof. Borrower will deliver
to Lender receipts for payment or other evidence satisfactory to Lender that the Property Taxes and Other Charges have been so
paid or are not then delinquent no later than ten (10) days prior to the date on which the Property Taxes and/or Other Charges
would otherwise be delinquent if not paid; provided, however, Borrower is not required to furnish such receipts for payment of
Property Taxes in the event that such Property Taxes have been paid by Lender pursuant to Section 7.1 hereof. Subject to
the terms of this Section 5.1.2 and Section 5.2.2, Borrower shall not suffer and shall promptly cause to be paid
and discharged any Lien or charge whatsoever, which may be or become a Lien or charge against the Property or any portion thereof
(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, promptly initiated and conducted in good
faith and with due diligence, the amount or validity or application in whole or in part of any Property Taxes or Other Charges;
provided that (a) no Default or Event of Default has occurred and remains uncured; (b) such proceeding shall be permitted
under, and be conducted in accordance with, the provisions of any other instrument to which Borrower is subject and shall not constitute
a default thereunder and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (c) neither
the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost;
(d) Borrower shall promptly upon final determination thereof pay the amount of any such Property 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 such contested Property Taxes or Other Charges from the Property (except that if such Property Taxes or Other Charges
must be paid sooner in order to avoid being delinquent, then Borrower shall cause the same to be paid prior to delinquency, and
upon making such payment prior to delinquency Borrower may continue such contest); and (f) Borrower shall furnish such security
as may be required in the proceeding, or as may be reasonably requested by Lender, to insure the payment of any such Property Taxes
or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash deposit or part thereof held
by Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender, the entitlement of such claimant
is established or the Property (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled
or lost or there shall be any danger of the Lien of the Security Instrument being primed by any related Lien.


 


5.1.3     Litigation.
Borrower shall give prompt notice to Lender of any proceedings by any Governmental Authority and any litigation, in each case,
pending or threatened against Borrower, Principal and/or Guarantor which might materially adversely affect Borrower’s, Principal’s
or Guarantor’s condition (financial or otherwise) or business or the Property or any portion thereof.


 


5.1.4     Access
to Property. Borrower shall permit agents, representatives and employees of Lender to
inspect the Property or any part thereof at reasonable hours upon reasonable advance notice (which may be given verbally).


 


5.1.5     Notice
of Default. Borrower shall promptly advise Lender of (i) any Material Adverse Change in
Borrower’s, Principal’s or Guarantor’s condition, financial or otherwise, of which Borrower has knowledge or
(ii) receipt of any written notice of default under the Management Agreement.


 


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


 


5.1.7     Perform
Loan Documents. Borrower shall observe, perform and satisfy all the terms, provisions,
covenants and conditions of, and shall pay when due all costs, fees and expenses to the extent required under the Loan Documents
executed and delivered by, or applicable to, Borrower. Payment of the costs and expenses associated with any of the foregoing shall
be in accordance with the terms and provisions of this Agreement, including, without limitation, the provisions of Section 10.13
hereof.


 




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5.1.8     Award
and Insurance Benefits. Borrower shall cooperate with Lender in obtaining for Lender the
benefits of any Awards or insurance proceeds lawfully or equitably payable in connection with the Property or any portion thereof
in accordance with the terms of Article VI below, and Lender shall be reimbursed for any expenses incurred in connection
therewith (including attorneys’ fees and disbursements, and the payment by Borrower of the expenses of an appraisal on behalf
of Lender in the case of Casualty or Condemnation affecting the Property or any part thereof) out of such insurance proceeds.


 


5.1.9     Further
Assurances. Borrower shall, at Borrower’s sole cost and expense:


 


(a)         furnish
to Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every other document, certificate, agreement and instrument
required to be furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested by Lender in
connection therewith;


 


(b)        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 under
the Loan Documents, as Lender may reasonably require; and


 


(c)        do
and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying
out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to
time. In furtherance hereof, Borrower grants to Lender, effective only upon the occurrence of an Event of Default, an irrevocable
power of attorney coupled with an interest for the purpose of protecting, perfecting, preserving and realizing upon the interests
granted pursuant to this Agreement and to effect the intent hereof, all as fully and effectually as Borrower might or could do;
and Borrower hereby ratifies all that Lender shall lawfully do or cause to be done by virtue hereof. Upon receipt of an affidavit
of an officer of Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document which is not of
public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or other applicable Loan Document,
Borrower will issue, in lieu thereof, a replacement Note or other applicable Loan Document, dated the date of such lost, stolen,
destroyed or mutilated Note or other Loan Document in the same principal amount thereof and otherwise of like tenor.


 


5.1.10   Mortgage
Taxes. Borrower shall simultaneously herewith pay all state, county and municipal mortgage,
recording, stamp, intangible and all Other Taxes imposed upon the execution and recordation of the Security Instrument.


 




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5.1.11   Financial
Reporting.


 


(a)        Borrower
will keep and maintain or will cause to be kept and maintained on a Fiscal Year basis in accordance with GAAP, and the Uniform
System of Accounts for Hotels (or such other accounting basis selected by Borrower, consistently applied, and reasonably acceptable
to Lender), and the requirements of Regulation AB, proper and accurate books, records and accounts reflecting, in all material
respects, all of the financial affairs of Borrower and all items of income and expense in connection with the operation of the
Property. Lender shall have the right from time to time, at all times during normal business hours upon reasonable notice (which
may be verbal), to examine such books, records and accounts at the office of Borrower or any other Person maintaining such books,
records and accounts and to make such copies or extracts thereof as Lender shall desire. After the occurrence of an Event of Default,
Borrower shall pay any reasonable costs and expenses incurred by Lender to examine Borrower’s accounting records with respect
to the Property, as Lender shall reasonably determine to be necessary or appropriate in the protection of Lender’s interest.
Upon Lender’s reasonable request, Borrower shall furnish to Lender such other information reasonably necessary and sufficient
to fairly represent the financial condition of Borrower and the Property.


 


(b)        Borrower
will furnish to Lender annually, within one hundred twenty (120) days following the end of each Fiscal Year of Borrower, a complete
copy of Borrower’s and Guarantor’s annual financial statements certified as true and correct by the party providing
such statements, in accordance with GAAP, and the Uniform System of Accounts for Hotels (or such other accounting basis consistently
applied and acceptable to Lender) and the requirements of Regulation AB covering the Property for such Fiscal Year, and containing
statements of profit and loss for Borrower, Guarantor and the Property and a balance sheet for Borrower and Guarantor. Such statements
of Borrower shall set forth the financial condition and the results of operations for the Property for such Fiscal Year, and shall
include, but not be limited to, Net Operating Income, Gross Income from Operations and Operating Expenses. Borrower’s annual
financial statements shall be accompanied by (i) a comparison of the budgeted income and expenses and the actual income and
expenses for the prior Fiscal Year, (ii) intentionally omitted, (iii) intentionally omitted, (iv) intentionally omitted, (v)
intentionally omitted, and (vi) an Officer’s Certificate certifying that each annual financial statement fairly presents,
in all material respects, the financial condition and the results of operations of Borrower and the Property subject to such reporting,
and that such financial statements have been prepared in accordance with GAAP, and the Uniform System of Accounts for Hotels and
as of the date thereof whether there exists an event or circumstance which constitutes a Default or Event of Default under the
Loan Documents executed and delivered by, or applicable to, Borrower, 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. Guarantor’s annual financial
statements shall be accompanied by (i) intentionally omitted, (ii) a statement of its Net Worth and Liquidity (as such terms are
defined in the Guaranty) within such one hundred twenty (120) day period described above and (iii) an Officer’s Certificate
certifying that each annual financial statement fairly presents, in all material respects, the financial condition and the results
of operations of Guarantor being reported upon and that such financial statements have been prepared in accordance with GAAP (or
such other accounting basis consistently applied and acceptable to Lender) and as of the date thereof whether there exists an event
or circumstance which constitutes a Default or Event of Default under the Loan Documents executed and delivered by, or applicable
to, Guarantor, and if such Default or an Event of Default exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy the same.


 




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(c)         Borrower
will furnish, or cause to be furnished, to Lender on or before forty-five (45) days after the end of each calendar quarter the
following items, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete
and fairly present, in all material respects, the financial condition and results of the operations of Borrower and the Property
(subject to normal year-end adjustments) as applicable: (i) intentionally omitted; (ii) intentionally omitted; (iii) 
quarterly and year-to-date operating statements (including Capital Expenditures) prepared for each calendar quarter, noting Net
Operating Income, Gross Income from Operations, and Operating Expenses (not including any contributions to the FF&E Reserve
Account), and, upon Lender’s reasonable request, other information necessary and sufficient to fairly represent the
financial position and results of operation of the Property during such calendar quarter and containing a comparison of budgeted
income and expenses and the actual income and expenses, and, upon Lender’s written request, a detailed explanation of any
variances of ten percent (10%) or more between budgeted and actual amounts for such periods, all in form reasonably satisfactory
to Lender; (iv) a calculation reflecting the annual Debt Service Coverage Ratio and Debt Yield as of the last day of such
quarter; (v) intentionally omitted; (vi) intentionally omitted; and (vii) a trailing-twelve month operating statement in the Uniform
System of Accounts for Hotels format, presented on a month-by-month basis and in the aggregate for operations reported through
the last month of the given calendar quarter. In addition, such Officer’s Certificate shall also state that the representations
and warranties of Borrower set forth in Section 4.1.30 are true and correct as of the date of such certificate.


 


(d)        In
addition, Borrower shall provide to Lender within thirty (30) days of the end of each calendar month the financial reports that
Borrower receives from the Manager pursuant to the terms and provisions of the Management Agreement, together with (i) a rent roll
for the subject month or quarter containing the names of all tenants at the Property, the terms and expiration date of their respective
leases, the space occupied, the rents payable and the securities deposited thereunder, annualized expense reimbursement income
detail paid by each tenant, together with the name of any lease guarantor thereof and (ii) STR Reports and PACE Reports for the
most recently completed calendar month, including a summary report detailing monthly occupancy, including average daily rate.


 




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(e)        For
the partial year period commencing on the date hereof, and for each Fiscal Year thereafter, Borrower shall submit to Lender an
Annual Budget not later than thirty (30) days prior to the commencement of such period or Fiscal Year in form reasonably satisfactory
to Lender. The Annual Budget shall be subject to Lender’s approval, which shall not be unreasonably withheld, conditioned
or delayed (each such Annual Budget, an “Approved Annual Budget”). In the event that Lender objects to a proposed
Annual Budget submitted by Borrower which requires the approval of Lender hereunder, Lender shall advise Borrower of such objections
within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and
Borrower shall promptly revise such Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections
to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description
of such objections) and Borrower shall promptly revise the same in accordance with the process described in this subsection until
Lender approves the Annual Budget. Until such time that Lender approves a proposed Annual Budget that requires the approval of
Lender hereunder, the most recently Approved Annual Budget shall apply; provided that, such Approved Annual Budget shall be adjusted
to reflect actual increases in Taxes, Insurance Premiums and Other Charges, and such other adjustments to operating expenses required
based on fluctuations in revenue as are reasonably approved by Lender. Notwithstanding anything to the contrary contained herein,
in no event shall Borrower pay, or the Annual Budget include, any asset management fee payable to Kauai Hotel Series of JMIR Investments
III, LP and/or Behringer Harvard Kauai Hotel, LLC or any construction management fee payable to JMIR-Project Manager LLC (unless
expressly set forth in the PIP Work Budget and/or the Elective CapEx Work Budget approved by Lender), in each case, pursuant to
the terms of the JV Agreement or otherwise; it being understood and agreed that any such fees shall be subordinate in all respects
to the Obligations. Upon request of Lender, Borrower shall obtain and deliver to Lender subordination agreements in form and substance
reasonably satisfactory to Lender executed by JMIR Investments III, LP, Behringer Harvard Kauai Hotel, LLC and JMIR-Project Manager
LLC, as applicable.


 


(f)         In
the event that Borrower must incur an extraordinary Operating Expense or Capital Expenditure not set forth in the Approved Annual
Budget (each an “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such proposed Extraordinary Expense for Lender’s approval; provided, however, Lender’s approval shall
not be required for Extraordinary Expenses incurred in connection with circumstances posing imminent danger to the life and safety
of any Person at or on the Property so long as Borrower promptly notifies the Lender of the same.


 




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(g)        If,
at the time a Disclosure Document is being prepared for a Securitization, Lender expects that Borrower alone or Borrower and one
or more Affiliates of Borrower collectively, or the Property alone, will be a Significant Obligor, Borrower shall furnish to Lender
upon request (i) the selected financial data or, if applicable, Net Operating Income for Borrower and the Property for the most
recent Fiscal Year and interim period (or such longer period as may be required by Regulation S-K if the Loan is not treated as
a non-recourse loan under Instruction 3 for Item 1101(k) of Regulation AB) meeting the requirements and covering the time periods
specified in Section 301 of Regulation S-K and Item 1112 of Regulation AB, if Lender expects that the principal amount of the Loan
together with any related Loans as of the cut-off date for such Securitization may, or if the principal amount of the Loan together
with any related Loans as of the cut-off date for such Securitization and at any time during which the Loan and any related Loans
are included in a Securitization does, 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, as applicable, in the Securitization, or (ii) the financial
statements required under Item 1112(b)(2) of Regulation AB, if Lender expects that the principal amount of the Loan together with
any related Loans as of the cut-off date for such Securitization may, or if the principal amount of the Loan together with any
related Loans as of the cut-off date for such Securitization and at any time during which the Loan and any related Loans are included
in a Securitization does, equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included
or expected to be included, as applicable, in the Securitization. Such financial data or financial statements shall be furnished
to Lender (A) within ten (10) Business Days after notice from Lender in connection with the preparation of Disclosure Documents
for the Securitization, (B) not later than thirty (30) days after the end of each fiscal quarter of Borrower and (C) not later
than seventy-five (75) days after the end of each Fiscal Year of Borrower; provided, however, that Borrower shall not be obligated
to furnish financial data or financial statements pursuant to clauses (B) or (C) of this sentence with respect to any period for
which a filing pursuant to the Exchange Act in connection with or relating to the Securitization (an “Exchange Act Filing”)
is not required. If requested by Lender, Borrower shall use commercially reasonable efforts to furnish to Lender financial data
and/or financial statements for any Tenant of the Property if, in connection with a Securitization, Lender expects there to be,
with respect to such Tenant or group of Affiliated Tenants, a concentration within all of the mortgage loans included or expected
to be included, as applicable, in the Securitization such that such Tenant or group of affiliated Tenants would constitute a Significant
Obligor. All financial data and financial statements provided by Borrower hereunder pursuant to this Section 5.1.11(g) shall
be prepared in accordance with GAAP, and the Uniform System of Accounts for Hotels, 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 referred
to in this Section 5.1.11(g) hereof shall be audited by independent accountants of Borrower reasonably acceptable to Lender
in accordance with Regulation AB, Regulation S-K or Regulation S-X, as applicable, 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, all of which shall be provided at the same time as the related financial statements are required to be
provided. All financial data and financial statements (audited or unaudited) provided by Borrower under this Section 5.1.11(g)
shall be accompanied by an Officer’s Certificate, which certification shall state that such financial statements meet the
requirements set forth in this Section 5.1.11(g). If requested by Lender, each Borrower shall provide Lender, promptly upon
request, 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 in connection with any Disclosure Document or any Exchange Act
filing in connection with or relating to a Securitization or as shall otherwise be reasonably requested by the Lender. In the event
Lender reasonably determines, in connection with a Securitization, that the financial data and financial statements required in
order to comply with Regulation S-K or Regulation S-X, as applicable, Regulation AB or any amendment, modification or replacement
thereto or other legal requirements are other than as provided herein, then notwithstanding the provisions of this Section 5.1.11(g),
Lender may request, and Borrower shall promptly provide, such other financial data and financial statements as Lender reasonably
determines to be necessary or appropriate for such compliance.


 


(h)        Intentionally
Omitted.


 




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(i)         Borrower
shall furnish to Lender, within ten (10) 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.


 


(j)         Borrower
shall furnish to Lender, within ten (10) Business Days after Lender’s request (or as soon thereafter as may be reasonably
possible), financial and sales information from the Tenant under the Hawaiian Rainforest Lease (to the extent such financial and
sales information is required to be provided under the Hawaiian Rainforest Lease and the same is received by Borrower after request
therefor).


 


(k)        Borrower
agrees that Lender may disclose information regarding the Property and Borrower that is provided to Lender pursuant to this Section
5.1.11 in connection with any Securitization to such parties requesting such information in connection with such Securitization.


 


(l)         Borrower
shall furnish to Lender, promptly upon receipt, all franchise inspection reports received by Borrower.


 


(m)       Borrower
shall furnish or cause to be furnished to Lender, within thirty (30) days after the end of each calendar month, the most current
Smith Travel Research Reports then available to Borrower reflecting market penetration and relevant hotel properties competing
with the Property.


 


(n)       All
monthly and other operating statements to be delivered by or on behalf of Borrower hereunder shall be (and all accompanying Officer’s
Certificates shall state that they have been) prepared based upon the Uniform System of Accounts for Hotels.


 


(o)        Breach.
If Borrower fails to provide to Lender or its designee any of the financial statements, certificates, reports or information (the
“Required Records”) required by this Section 5.1.11 within the applicable time periods set forth
in this Section 5.1.11, Lender shall have the option, upon fifteen (15) days’ notice to Borrower, to gain access to
Borrower’s books and records and prepare or have prepared at Borrower’s expense, any Required Records not delivered
by Borrower. In addition, it shall be an Event of Default if any of the following shall occur: (i) any failure of Borrower to provide
to Lender any of the Required Records within the applicable time periods set forth in this Section 5.1.11, if such failure
continues for fifteen (15) days after written notice thereof, or (ii) in the event any Required Records shall be materially inaccurate
or false, or (iii) in the event of the failure of Borrower to permit Lender or its representatives to inspect said books, records
and accounts upon request of Lender as required by this Section 5.1.11.


 


5.1.12    Business
and Operations. Borrower will continue to engage in the businesses presently conducted
by it as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Property. Borrower
will qualify to do business and will remain in good standing under the laws of each jurisdiction as and to the extent the same
are required for the ownership, maintenance, management and operation of the Property. Borrower shall keep and maintain all Licenses
necessary for the operation of the Property and each portion thereof for its intended uses and otherwise as a select service
hotel.


 




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5.1.13     Title
to the Property. Borrower will warrant and defend (a) the title to the Property and every
part thereof, subject only to Permitted Encumbrances, and (b) the validity and priority of the Lien of the Security Instrument
and the Assignment of Leases, subject only to Permitted Encumbrances, in each case against the claims of all Persons whomsoever.
Borrower shall reimburse Lender for any Losses incurred by Lender if an interest in the Property, other than as permitted hereunder,
is claimed by another Person.


 


5.1.14     Costs
of Enforcement. In the event (a) that the Security Instrument is foreclosed in whole
or in part or that the Security Instrument is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of
the foreclosure of any mortgage prior to or subsequent to the Security Instrument in which proceeding Lender is made a party, or
(c) of a Bankruptcy Action related to Borrower or any Principal or an assignment by Borrower or any Principal for the benefit
of its creditors, Borrower, on behalf of itself and its successors and assigns, agrees that it/they shall be chargeable with and
shall pay all costs of collection and defense, including attorneys’ fees and expenses, and court costs, incurred by Lender
or Borrower in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, together
with all required service or use Taxes.


 


5.1.15     Estoppel
Statement.


 


(a)          After
request by Lender, Borrower shall within ten (10) days furnish Lender with a statement, duly acknowledged and certified, setting
forth (i) the original principal amount of the Loan, (ii) the Outstanding Principal Balance, (iii) the Interest
Rate of the Loan, (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses
to the performance of the Obligations, if any, and (vi) that the Note, this Agreement, the Security Instrument and the other
Loan Documents are valid, legal and binding obligations of Borrower and have not been modified or if modified, giving particulars
of such modification.


 


(b)          Borrower
shall use commercially reasonable efforts to deliver to Lender upon request, tenant estoppel certificates from each commercial
Tenant leasing space at the Property in form and substance reasonably satisfactory to Lender; provided that Borrower shall not
be required to deliver such certificates more frequently than two (2) times in any calendar year.


 


5.1.16     Estoppel
Certificates. Borrower shall use commercially reasonable efforts to deliver to Lender,
upon request, estoppel certificates from each party under the REA; provided that such certificates may be in the form required
under the REA and, so long as no Event of Default has occurred and is continuing, Borrower’s obligations under this Section
5.1.16 shall be limited to no more than one (1) time per year.


 


5.1.17     Loan
Proceeds. Borrower shall use the proceeds of the Loan received by it on the Closing Date
only for the purposes set forth in Section 2.1.4.


 


5.1.18     Performance
by Borrower. Borrower shall in a timely manner observe, perform and fulfill each and every
covenant, term and provision of each Loan


 




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 Document executed and delivered by, or applicable to, Borrower and shall not enter into
or otherwise suffer or permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed
and delivered by, or applicable to, Borrower without the prior written consent of Lender.


 


5.1.19     Confirmation
of Representations. Borrower shall deliver, in connection with any Securitization, (a)
one or more Officer’s Certificates certifying as to the accuracy of all representations made by Borrower in the Loan Documents
as of the date of the closing of such Securitization in all relevant jurisdictions, and (b) certificates of the relevant Governmental
Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower as of the date of the Securitization.


 


5.1.20     No
Joint Assessment. Borrower shall not suffer, permit or initiate the joint assessment of
the Property or any portion thereof (a) with any other real property constituting a tax lot separate from the Property, and (b)
which constitutes real property with any portion of the 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 real property portion of the Property.


 


5.1.21     Leasing
Matters.


 


(a)          Other
than Hotel Transactions, Borrower shall not enter into any Major Lease (or any renewals, amendments or modifications (other than
immaterial changes) of a Major Lease) without Lender’s prior consent in its reasonable discretion.


 


(b)          Each
Major Lease shall be subject to Lender’s written approval, in its reasonable discretion, prior to Borrower’s execution
of any such Major Lease (or any expansion, renewal or modification of such Major Lease (other than immaterial changes), or any
cancellation or termination of any such Major Lease). All non-Major Leases (or any expansion, renewal or modification of such non-Major
Leases) shall not require Lender’s prior approval. Borrower shall deliver to Lender true, complete and correct copies of
any proposed Major Lease (or proposed expansion, renewal or modification of a Major Lease) requiring Lender’s approval.


 


(c)          Borrower
shall not permit or consent to any assignment or sublease of any Major Lease without Lender’s prior written approval (other
than assignments or subleases expressly permitted under any Major Lease pursuant to a unilateral right of the Tenant thereunder
not requiring the consent of Borrower).


 


(d)          Borrower
(i) shall observe and timely perform all obligations imposed upon the lessor under the Leases in a commercially reasonable manner;
(ii) shall enforce the terms, covenants and conditions contained in the Leases upon the part of the Tenant thereunder to be observed
or performed in a commercially reasonable manner and in a manner not to impair the value of the Property involved, except that
Borrower shall not terminate, or accept the surrender by a Tenant of, any Lease unless by reason of a Tenant default and then only
in a commercially reasonable manner to preserve and protect the Property; (iii) shall not collect any of the Rents more than one
(1) month in advance (other than security deposits required pursuant to such Lease); (iv) shall not execute any other assignment
of lessor’s interest in the Leases or the Rents (except as contemplated by the Loan Documents); (v) shall not alter, modify
or change the terms of the Leases in a manner inconsistent with the provisions of the Loan Documents; and (vi) shall execute and
deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Leases as Lender
shall from time to time reasonably require. Lender shall have the right to require each new Tenant to execute and deliver to Lender
a subordination, non-disturbance of possession and attornment agreement in form, content and manner of execution reasonably acceptable
to Lender.


 




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(e)          Borrower
shall furnish Lender with true, correct and complete copies of all Leases, amendments thereof and any related agreements promptly
following execution thereof.


 


(f)          Borrower
shall promptly notify Lender, in writing, of any material defaults by any tenant or lease guarantor after Borrower becomes aware
of the same.


 


5.1.22     Alterations.
Borrower shall obtain Lender’s prior written consent to any alterations to any Improvements, which consent shall not be unreasonably
withheld, except with respect to any alterations to any Improvements which may have a material adverse effect on Borrower’s
financial condition, the value of the Property or any portion thereof or the Net Operating Income. Notwithstanding the foregoing,
Lender’s consent shall not be required in connection with any alterations that will not have a material adverse effect
on Borrower’s financial condition, the value of the Property or any portion thereof or the Net Operating Income; provided
that such alterations (a)(i) are either work performed pursuant to the terms of any Lease approved or deemed approved in accordance
with the terms hereof, or the costs for such alterations are adequately covered in the current Approved Annual Budget, (ii) do
not adversely affect any structural component of any Improvements, any utility or HVAC system contained in any Improvements or
the exterior of any building constituting a part of any Improvements and (iii) the aggregate cost thereof does not exceed
Four Hundred Thousand and No/100 Dollars ($400,000.00) (the “Threshold Amount”), (b) are performed in connection
with Restoration after the occurrence of a Casualty in accordance with the terms and provisions of this Agreement or (c) are on
account of Approved CapEx Expenses performed in accordance with the terms and provisions of this Agreement.


 


5.1.23     Operation
of Property.


 


(a)          Borrower
shall cause the Property to be operated, in all material respects, in accordance with the Management Agreement or Replacement Management
Agreement, as applicable. In the event that the Management Agreement expires or is terminated (without limiting any obligation
of Borrower to obtain Lender’s consent to any termination or modification of the Management Agreement in accordance with
the terms and provisions of this Agreement), Borrower shall promptly enter into a Replacement Management Agreement with Manager
or another Qualified Manager, as applicable.


 


(b)          Borrower
shall: (i) promptly perform and/or observe in all material respects all of the covenants and agreements required to be performed
and observed by it under the Management Agreement (including, without limitation, paying the Special Incentive Fee (as such term
is defined in the Management Agreement) as and when the same is due and payable) and do all things necessary to preserve and to
keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any material default under the Management Agreement
of which it is aware; (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures
plan, material notice and material report received by it under the Management Agreement; and (iv) enforce the performance and observance
of all of the covenants and agreements required to be performed and/or observed by Manager under the Management Agreement, in a
commercially reasonable manner.


 




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(c)          If
(i)  an Event of Default occurs and is continuing, (ii) the Manager shall be the subject of a Bankruptcy Action or become
insolvent, (iii) a material default occurs under the Management Agreement beyond any applicable grace and cure periods, or
(iv) fifty percent (50%) or more of the direct or indirect ownership interest in Manager has changed and Control of Manager has
changed, in each event from what it was on the Closing Date, Borrower shall, at the request of Lender, terminate the Management
Agreement and replace the Manager with a manager approved by Lender on terms and conditions satisfactory to Lender, it being understood
and agreed that (x) the management fee for such replacement manager shall not exceed the then prevailing market rates (and in any
event shall not exceed three percent (3%) of Gross Income from Operations per annum, from time to time), and (y) Lender shall not
be liable for or obligated to pay any termination fee or other penalty in connection with such termination.


 


(d)         All
Material Agreements shall be subject to the prior review and approval, not to be unreasonably withheld, of Lender.


 


5.1.24     No
Credits on Account of the Obligations. Borrower will not claim or demand or be entitled
to any credit or credits on account of the Obligations for any payment of Property Taxes assessed against the Property and no deduction
shall otherwise be made or claimed from the assessed value of the Property for real estate Tax purposes because of the Loan Documents
or the Obligations. If Legal Requirements or other laws, orders, requirements or regulations require such claim, credit or deduction,
Lender may, by written notice to Borrower of not less than ninety (90) days, declare the Obligations immediately due and payable.


 


5.1.25     Personal
Property. Borrower shall cause all of its personal property, fixtures, attachments and
equipment delivered upon, attached to or used in connection with the operation of the Property to always be located at the Property
and shall be kept free and clear of all Liens, encumbrances and security interests, except Permitted Encumbrances.


 


5.1.26     Appraisals.
Lender shall have the right to obtain a new or updated appraisal of the Property (and/or any portions thereof) from time to time;
provided, however, that so long as no Event of Default has occurred Lender shall do so with respect to the same portion of the
Property not more often than once in every twelve (12) month period. Borrower shall cooperate with Lender in this regard. If the
appraisal is obtained to comply with this Agreement or any applicable law or regulatory requirement, or bank or lender policy promulgated
to comply therewith, or if an Event of Default exists, Borrower shall pay for any such appraisal upon Lender’s request.


 




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5.1.27     Financing
Statements. Borrower, at its sole cost and expense, shall at all times cause the Security
Instrument and the Assignment of Leases, together with any UCC-1 financing statements required to be filed in connection therewith,
to be recorded, registered or filed in the appropriate public records, and any amendments or supplements hereto and thereto, and,
if requested by Lender, any instruments of assignment hereof or thereof, to be recorded, registered and filed, as applicable, and
to be kept recorded, registered and filed, in such manner and in such places, shall pay all recording, registration and filing
fees and taxes and other charges, including any recording, transfer or intangible personal property tax or similar imposition,
with respect thereto, and shall comply with all applicable Legal Requirements in order fully and effectively to establish, preserve,
perfect and protect Lender’s first priority security interest in the Property and the Collateral, subject only to Permitted
Encumbrances and the Liens created by the Loan Documents. Borrower hereby authorizes Lender to file UCC-1 financing and continuation
statements with respect to the Property and the Collateral.


 


5.1.28     Liquor
License. Borrower shall maintain, or cause the Manager to maintain, all hospitality licenses
required to operate the Property as operating on the Closing Date; and shall cause License Holder to maintain the Liquor License
pursuant to the Food and Beverage Management Agreement and renew or obtain a new Liquor License prior to the expiration of the
Liquor License. Borrower shall not permit the Manager or License Holder to transfer the Liquor License or other hospitality licenses,
except to Lender pursuant to the terms of the Loan Documents and, if applicable, to Highgate or an Affiliate of Highgate in connection
with the replacement of Manager with Highgate. Borrower shall promptly deliver to Lender, at Borrower’s sole cost and expense,
a Replacement Liquor License Cooperation Agreement fully executed by Borrower and License Holder.


 


5.1.29     ERISA.
Borrower further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the
term of the Loan, as may be requested by Lender in its reasonable discretion that (i) Borrower is not an “employee benefit
plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” as defined in and subject
to the provisions of Section 4975 of the Code an entity whose assets are treated as “plan assets” for purposes of ERISA
or the Code or a “governmental plan” within the meaning of Section 3(32) of ERISA or any entity whose assets are treated
as “plan assets” of a governmental plan or plans; (ii) Borrower is not subject to any state statute regulating investments
of, or fiduciary obligations with respect to, governmental plans, in either case, subjecting Lender to liability for a violation
of ERISA, the Code, a state statute or regulation or a similar law; and (iii) one or more of the following circumstances is true:


 


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


 


(b)         less
than twenty-five percent (25%) of each outstanding class of equity interests in Borrower is held by “benefit plan investors”
within the meaning of Section 3(42) of ERISA;


 


(c)         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); or


 


(d)         the
Loan meets the requirements of PTE 95-60, 91-38, 90-1, 84-14 or similar exemption.


 




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5.1.30     Operating
Lease. Each of Owner Borrower and Operator Borrower shall (a) cause the Property be operated
in accordance with the terms of the Operating Lease; (b) promptly perform and/or observe all of the material covenants, agreements
and obligations required to be performed and observed by it under the Operating Lease, and do all things necessary to preserve
and to keep unimpaired its material rights thereunder; and (c) promptly notify Lender of any default by either Borrower under the
Operating Lease beyond any applicable notice and cure period.


 


5.1.31     Required
Repairs. Borrower shall complete the repairs and improvements to the Property identified
on Schedule II attached hereto (such repairs hereinafter referred to as “Required Repairs”) in
a good and workmanlike manner on or before the date that is forty-five (45) days after the Closing Date. It shall be an Event of
Default if Borrower does not complete the Required Repairs within the aforementioned timeframe.


 


5.1.32     Post-Closing
Obligations.


 


(a)          No
later than thirty (30) days after the Closing Date, Borrower shall deliver to Lender, at Borrower’s sole cost and expense,
an update (dated no earlier than the date hereof) to that certain PZR Report with respect to the Property dated May 4, 2017, prepared
by the Planning and Zoning Commission (which shall include the violation searches and verifications) (the “Updated Zoning
Report”). In the event that the Updated Zoning Report reflects any violations of Legal Requirements or violation cited
from any Governmental Authority with respect to all or any portion of the Property (including any zoning, local code, or ordinance
violations), Borrower shall, or shall cause a third party to, cure such violation with diligence within an amount of time as shall
be reasonably necessary to so effect such cure, at Borrower’s sole cost and expense.


 


(b)         Borrower
shall use commercially reasonable efforts to deliver to Lender within ten (10) days after the Closing Date, at Borrower’s
sole cost and expense, an estoppel certificate executed by the tenant under the Rainforest Lease, in form and substance reasonably
satisfactory to Lender.


 


(c)         Borrower
shall deliver to Lender within five (5) Business Days of the Closing Date (x) copies of the ACH agreements with issuers of credit
cards accepted at the Property, and (y) evidence that Borrower or Manager has delivered instruction letters to each of the issuers
of credit cards accepted at the Property to transmit all sums directly to the Clearing Account; provided, however, in each case,
so long as Borrower is diligently pursuing the foregoing, Borrower shall have an additional five (5) Business Days to deliver the
same to Lender.


 


Section
5.2            Negative Covenants. From the date hereof until
payment and performance in full of the Obligations, Borrower covenants and agrees with Lender that it will not do, directly or
indirectly, any of the following:


 





 




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5.2.1     Operation
of Property.


 


(a)         Borrower
shall not, without Lender’s prior written consent (which consent shall not be unreasonably withheld): (i) surrender, terminate
or cancel the Management Agreement; provided, that Borrower may, without Lender’s consent, replace the Manager so long as
the replacement manager is a Qualified Manager pursuant to a Replacement Management Agreement; (ii) reduce or consent to the
reduction of the term of the Management Agreement; (iii) increase or consent to the increase of the amount of any charges
or fees under the Management Agreement; or (iv) otherwise modify, change, supplement, alter or amend, or waive or release
any of its rights and remedies under, the Management Agreement in any material respect.


 


(b)         Following
the occurrence and during the continuance of an Event of Default, Borrower shall not exercise any rights, make any decisions, grant
any approvals or otherwise take any action under the Management Agreement without the prior written consent of Lender, which consent
may be granted, conditioned or withheld in Lender’s sole discretion.


 


5.2.2     Liens.
Borrower shall not create, incur, assume or suffer to exist any Lien on any portion of the Property or permit any such action to
be taken, except for Permitted Encumbrances; provided, however, after prior notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity
or application in whole or in part of any mechanic’s or materialmen’s liens; provided that (a) no Default or Event
of Default has occurred and remains uncured; (b) such proceeding shall be permitted under, and be conducted in accordance with,
the provisions of any other instrument to which Borrower is subject and shall not constitute a default thereunder and such proceeding
shall be conducted in accordance with all applicable statutes, laws and ordinances; (c) neither the Property nor any part thereof
or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (d) Borrower shall promptly upon
final determination thereof pay the amount of any claim resulting in such Lien, together with all costs, interest and penalties
which may be payable in connection therewith; (e) such proceeding shall suspend the collection of any claims resulting in such
contested Lien; and (f) Borrower shall furnish such security as may be required in the proceeding, or as may be reasonably requested
by Lender, to insure the payment of any claim resulting in such contested Lien, together with all interest and penalties thereon.


 


5.2.3     Dissolution.
Borrower shall not (a) engage in any dissolution, liquidation, 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 Property, (c) transfer, lease or sell,
in one transaction or any combination of transactions, the assets or all or substantially all of the property or assets of Borrower
except to the extent permitted by the Loan Documents (unless such transfer or sale will result in the indefeasible repayment in
full of the Loan), (d) modify, amend, waive or terminate its organizational documents or its qualification and good standing
in any jurisdiction, or (e) cause or allow Principal to (i) dissolve, wind up or liquidate or take any action, or omit to take
any action, as a result of which Principal, as applicable 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 Principal, in each case, without obtaining the
prior consent of Lender.


 




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5.2.4     Change
in Business. Borrower shall not enter into any line of business other than the ownership
and operation of the Property, or make any material change in the scope or nature of its business objectives, purposes or operations,
or undertake or participate in activities other than the continuance of its present business.


 


5.2.5     Debt
Cancellation. Borrower shall not cancel or otherwise forgive or release any material claim
or debt (other than termination of Leases in accordance herewith) owed to Borrower by any Person, except for adequate consideration
and in the ordinary course of Borrower’s business.


 


5.2.6     Zoning.
Borrower shall not 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, in each
case, without the prior written consent of Lender.


 


5.2.7     No
Joint Assessment. Borrower shall not suffer, permit or initiate the joint assessment of
all or any portion of the Property with (a) any other real property constituting a tax lot separate from the Property, or (b) any
portion of the Property which may be deemed to constitute personal property, or any other procedure whereby the Lien of any Taxes
that may be levied against such personal property shall be assessed or levied or charged to the Property.


 


5.2.8     Principal
Place of Business and Organization. Borrower shall not change its principal place of business
set forth in the introductory paragraph of this Agreement without first giving Lender at least thirty (30) days’ prior notice.
Borrower shall not change the place of its organization as set forth in Section 4.1.28 without the consent of Lender, which
consent shall not be unreasonably withheld. Upon Lender’s request, Borrower shall execute and deliver additional financing
statements, security agreements and other instruments which may be necessary to effectively evidence or perfect Lender’s
security interest in the Property as a result of such change of principal place of business or place of organization.


 


5.2.9     ERISA.
Borrower shall not 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 Note, this Agreement or the other Loan Documents) to be a Prohibited Transaction.


 


5.2.10   Transfers.


 


(a)         Borrower
acknowledges that Lender has examined and relied on the experience of Borrower and its general partners, members, principals and
(if Borrower is a trust) beneficial owners, as applicable, in owning and operating properties such as the Property in agreeing
to make the Loan, and will continue to rely on Borrower’s ownership of the Property as a means of maintaining the value of
the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender
has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of
the Debt or the performance of the Other Obligations contained in the Loan Documents, Lender can recover the Debt by a sale of
the Property.


 




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(b)        Without
the prior written consent of Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall
not, and shall not permit any Restricted Party to, (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant
options with respect to, or otherwise transfer or dispose of (in each case, directly or indirectly, voluntarily or involuntarily,
by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal
or beneficial interest therein, directly or indirectly, at any tier of ownership, except with respect to (x) the transient occupancy
of guest rooms at the Property by hotel guests in the ordinary course of Borrower’s business and (y) any Leases otherwise
expressly permitted under this Agreement, (ii) permit a Sale or Pledge of any interest in any Restricted Party, directly or indirectly,
at any tier of ownership (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), or (iii) suffer
or permit any such Transfer described in this Section 5.2.10 to occur by or in a Restricted Party, directly or indirectly,
at any tier of ownership, in each case, other than (A) the leasing of space in the Improvements to Tenants pursuant to Leases entered
into in accordance with the provisions of Section 5.1.21 hereof and any Hotel Transactions, (B) Permitted Transfers, (C)
Permitted Encumbrances, and (D) any Transfer by Borrower to Lender or its designee or other Transfer resulting from the exercise
by Lender of its rights and remedies under the Loan Documents.


 


(c)        A
Transfer shall include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property,
or any part thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or substantially all of
the Property or all or substantially all of a building located on the Property, 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 a Restricted
Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance
of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the
change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general
partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests
or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership
interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation
or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership
interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest,
or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non-managing membership interests;
(vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial
interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation
of the Manager (including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.23 hereof.


 




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(d)        Notwithstanding
the provisions of Sections 5.2.10(a)-(c), Lender’s consent shall not be required under this Section 5.2.10
in connection with one or a series of Transfers (but not encumbrances of) as follows: (i) the indirect interests in each of
Owner Borrower, Operator Borrower, Owner Sole Member and Operator Sole Member; (ii) the sale, transfer or issuance of stock in
any Restricted Party so long as such stock is listed on the New York Stock Exchange or another nationally recognized stock exchange;
(iii) a Transfer by devise or descent or by operation of law upon the death of an individual having a direct or indirect legal
or beneficial ownership interest in Borrower; (iv) a Transfer made pursuant to Section 5.2.10(e) hereof (so long as all
of the conditions set forth therein have been satisfied); or (v) a Behringer Buyout Event (so long as all of the Behringer Buyout
Event Conditions have been satisfied); provided, however, that with respect to each Transfer described in clauses (i) – (iii)
hereof, such Transfer will only be permitted without Lender consent if, (I) following such Transfer, (A) JMI JV Member directly
or indirectly owns at least twenty percent (20%) of each Borrower, (B) JMI Guarantor owns at least two and seventy-five hundredths
percent (2.75%) of the direct interests in JMI JV Member and continues to Control, directly or indirectly, JMI JV Member and each
Borrower (unless Behringer JV Member exercises its rights pursuant to Section 7.2(d) of the JV Agreement in effect on the Closing
Date, in which case Behringer JV Member may appoint a replacement manager of the Joint Venture acceptable to Lender provided such
replacement manager or an Affiliate thereof assumes all of the JMI Guarantor’s obligations, on a joint and several basis,
under the Guarantor Documents), and (C) Behringer Guarantor (1) directly or indirectly owns at least fifty-one percent (51%) of
each Borrower and (2) continues to Control, directly or indirectly, each Behringer JV Member (unless a Behringer Buyout Event has
occurred and all of the Behringer Buyout Event Conditions have been satisfied), (II) as a condition precedent to each such Transfer
(other than a Transfer pursuant to (ii) above), Lender shall receive not less than fifteen (15) days’ prior notice of such
proposed Transfer (or, in the case of a Transfer pursuant to (iii) above, Borrower shall deliver to Lender notice of such Transfer
promptly following such death), (III) if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate
of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than forty-nine percent
(49%) direct or indirect interest in Borrower as of the Closing Date, Borrower shall, no less than thirty (30) days prior to the
effective date of any such Transfer (other than a Transfer pursuant to (iii) above), deliver to Lender an Additional Insolvency
Opinion acceptable to Lender (and the Rating Agencies if a Securitization has occurred), (IV) with respect to Transfers
in (i) above, no transferee shall have been convicted of any crime (other than a misdemeanor not involving moral turpitude), or
be the subject of any ongoing criminal proceeding, (V) neither such transferee nor any of such transferee’s direct and indirect
beneficial owners are an Embargoed Person, (VI) such transferees shall not have filed for bankruptcy (or other similar insolvency
proceedings) within the seven (7) year period prior to such Transfer (in the case of this clause (VI), if such transferee will,
by virtue of any such transfer, have or obtain direct or indirect Control of Borrower or Guarantor), (VII) such Transfer shall
not cause any violation of Section 4.1.30 or Section 5.2.12 of this Agreement, and (VIII) to the extent a
transferee shall own ten percent (10%) or more of the direct or indirect ownership interests in either Borrower immediately following
such Transfer (provided such transferee owned less than ten percent (10%) of the direct or indirect ownership interests in Borrower
as of the Closing Date) or shall Control Borrower, Borrower shall deliver (and Borrower shall be responsible for any reasonable
out-of-pocket costs and expenses in connection therewith), customary searches reasonably requested by Lender in writing (including
credit, judgment, lien, litigation, bankruptcy, criminal and OFAC) reasonably acceptable to Lender with respect to such transferee.
Borrower shall pay any and all reasonable costs and expenses of Lender incurred in connection with a Transfer permitted under this
Section 5.2.10(d) (including, without limitation, reasonable attorneys’ fees and expenses). Upon request from Lender,
Borrower shall promptly provide Lender a revised version of the organizational chart delivered to Lender in connection with the
Loan reflecting any equity transfer consummated in accordance with this Section 5.2.10(d). Notwithstanding anything to the
contrary contained in this Agreement, (x) no Transfer of any direct ownership interests in any Borrower, Sole Owner Member or Sole
Operator Member shall be permitted without Lender’s prior written consent, in its sole discretion and (y) no Transfer shall
be a Permitted Transfer unless such Transfer is made in compliance with the Franchise Agreement.


 




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(e)        In
connection with a Transfer of either the Property or one hundred percent (100%) of the direct or indirect interests in Borrower,
Borrower shall have the right to request Lender’s consent to the assumption of the Loan by the purchaser of the Property
or one hundred percent (100%) of the direct or indirect interests in Borrower, which consent Lender may grant or deny in its sole
and absolute discretion. Any such assumption of the Loan shall be conditioned upon, among other things, (i) (A) the financial condition
and creditworthiness of such purchaser and its direct and indirect owners and sponsors must be acceptable to Lender in all respects
and (B) the delivery of financial information, including, without limitation, audited financial statements and other documents
reasonably requested by Lender, for such purchaser and the direct and indirect owners and sponsors of such purchaser in order for
Lender to make a determination with respect to the terms of the preceding clause (A), (ii) the delivery of evidence that the purchaser
is a Special Purpose Entity, (iii) the execution and delivery of all documentation reasonably requested by Lender including, without
limitation, replacement guaranties (with the same net worth and liquidity covenants as set forth in the Guarantor Documents) and
an environmental indemnity agreement, from an entity or entities satisfactory to Lender and the applicable Rating Agencies, the
form and substance of each shall be the same in all material respects as the Guarantor Documents delivered by Guarantor, (iv) the
delivery of opinions of Borrower’s counsel requested by, and in form and substance satisfactory to, Lender, including, without
limitation, an Additional Insolvency Opinion, with respect to the purchaser and other entities identified by Lender or requested
by the applicable Rating Agencies and opinions with respect to the valid formation, due authority and good standing of the purchaser
and any additional pledgors and the continued enforceability of the Loan Documents and any other matters requested by Lender, (v)
the delivery of an endorsement to the title insurance policy insuring the Lien of the Security Instrument in form and substance
acceptable to Lender, as assumed, subject only to the Permitted Encumbrances, (vi) the payment of all of Lender’s fees, costs
and expenses, including, without limitation, attorneys’ fees and costs, actually incurred by Lender in connection with such
assumption, (vii) evidence that the new borrower is of good repute and qualified to own properties of this type, (viii) payment
to Lender of an assumption fee equal to .50% of the then Outstanding Principal Balance, (ix) (A) prior to a Securitization, Lender
determines in its sole discretion that a Rating Agency Confirmation would be obtainable had a Securitization occurred, or (B) after
a Securitization, delivery to Lender of a Rating Agency Confirmation, (x) confirmation that such Transfer will not cause a default
under the Franchise Agreement, (xi) confirmation that the Property will continue to be managed by Manager or a Qualified Manager,
and (xii) confirmation that the transferee or its Affiliate (a) has not (within the past ten (10) years) defaulted, or is not now
in default, beyond any applicable cure period, of its material obligations, under any material written agreement with Lender, any
Affiliate of Lender, or any other financial institution or other Person providing or arranging financing; (b) has not been convicted
in a criminal proceeding for a felony or a crime involving moral turpitude or that is not an organized crime figure or is not reputed
(as determined in good faith by Lender in its sole discretion) to have substantial business or other affiliations with an organized
crime figure; (c) has not at any time filed a voluntary petition under the Bankruptcy Code or any other federal or state bankruptcy
or insolvency law; (d) as to which an involuntary petition (which was not subsequently dismissed within sixty (60) days), has not
at any time been filed under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (e) has not at any
time filed an answer consenting to or acquiescing in any involuntary petition filed against it by any other Person under the Bankruptcy
Code or any other federal or state bankruptcy or insolvency law; (f) has not at any time consented to or acquiesced in or joined
in an application for the appointment of a custodian, receiver, trustee or examiner for itself or any of its property; (g) has
not at any time made an assignment for the benefit of creditors, or has at any time admitted its insolvency or inability to pay
its debts as they become due; and (h) has not been found by a court of competent jurisdiction or other Governmental Authority in
a comparable proceeding to have violated any federal or state securities laws or regulations promulgated thereunder. Notwithstanding
anything to the contrary contained herein, an assumption of the Loan by KSL Capital Partners Management IV, LLC or its Affiliate
(a “KSL Transferee”) shall be permitted, subject to (1) no Event of Default having occurred, (2) the satisfaction
all of the conditions set forth in clauses (ii)-(vii) and (ix)-(xii) hereof (it being agreed that no assumption fee shall be due
and payable in connection with a Transfer to a KSL Transferee) and (3) receipt by Lender of (a) customary searches reasonably requested
by Lender (including credit, judgment, lien, litigation, bankruptcy, criminal and OFAC) reasonably acceptable to Lender with respect
to such KSL Transferee and its Affiliates and (b) financial statements of such KSL Transferee and its direct and indirect owners
and sponsors reasonably requested by, and acceptable to, Lender.


 




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(f)           Lender
shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon a Transfer prohibited hereunder without Lender’s consent. This provision
shall apply to every Transfer prohibited hereunder regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer.


 


5.2.11     REA.
Neither Borrower nor its Affiliates shall, without the prior written consent of Lender, modify the REA in any material respect.


 


5.2.12     Special
Purpose Entity/Separateness.


 


(a)          Each
of Borrower and Principal is and shall continue to be a Special Purpose Entity.


 




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(b)         Any
assumptions made in any non-consolidation opinion required to be delivered in connection with the Loan Documents subsequent to
the Insolvency Opinion (an “Additional Insolvency Opinion”), including, but not limited to, any exhibits attached
thereto, shall be true and correct in all respects. Borrower has complied with and will comply with (and Principal has complied
with and Borrower will cause Principal to comply with) all of the assumptions made with respect to Borrower (or Principal) in the
Insolvency Opinion. Borrower will comply with all of the assumptions made with respect to Borrower, and Principal in any Additional
Insolvency Opinion. Each entity other than Borrower and Principal with respect to which an assumption shall be made in any Additional
Insolvency Opinion will comply with all of the assumptions made with respect to it in any Additional Insolvency Opinion. Borrower
covenants that in connection with any Additional Insolvency Opinion delivered in connection with this Agreement it shall provide
an updated certification regarding compliance with the facts and assumptions made therein. Borrower shall provide Lender with thirty
(30) days’ prior written notice prior to the removal of an Independent Director of any of Borrower and/or Principal and Borrower
shall not permit or suffer to exist the removal of any Independent Director (nor the appointment of any Independent Director) without
Lender’s consent, and shall replace an Independent Director who resigns with another Independent Director within ten (10)
days of such resignation.


 


5.2.13     Embargoed
Person; OFAC. As of the date hereof and at all times throughout the term of the Loan,
including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets
of Borrower, Principal and Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed
Person; (b) no Embargoed Person has any interest of any nature whatsoever in Borrower, Principal or Guarantor, as applicable,
with the result that the investment in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited
by law or the Loan is in violation of law; and (c) none of the funds of Borrower, Principal or Guarantor, as applicable, have been
derived from any unlawful activity with the result that the investment in Borrower, Principal or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of law. Neither Borrower, Principal nor Guarantor is
(or will be) a Person with whom Lender is restricted from doing business under OFAC regulations (including those persons named
on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including the September 24,
2001 #13224 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated
with such Persons. In addition, to help the U.S. Government fight the funding of terrorism and money laundering activities, the
U.S.A. Patriot Act (and the regulations thereunder) requires the Lender to obtain, verify and record information that identifies
its customers. Borrower shall provide the Lender with any additional information that the Lender reasonably deems necessary from
time to time in order to ensure compliance with the U.S.A. Patriot Act and any other applicable Legal Requirements concerning money
laundering and similar activities.


 


5.2.14   Operating
Lease. Without Lender’s prior written consent, neither Borrower shall (i) surrender,
terminate or cancel the Operating Lease; (ii) reduce or consent to the reduction or termination of the term of the Operating Lease;
(iii) increase or consent to the increase of the amount of any charges under the Operating Lease; (iv) modify, change, supplement,
alter or amend the Operating Lease in any material respect or waive or release any of Owner Borrower’s rights and remedies
under the Operating Lease; or (v) waive, excuse, permit or in any way release or discharge Operator Borrower from any of its material
obligations, covenants and/or conditions under the Operating Lease.


 




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Section
5.3            Hotel Covenants.


 


(a)         Borrower
shall cause the hotel located on the Property to be operated pursuant to the Franchise Agreement.


 


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


 


(c)         If
Borrower shall enter into any new or amended Franchise Agreement with Lender’s consent (other than any amendments in connection
with the replacement of Manager with Highgate pursuant to the terms and provisions of this Agreement), Lender shall receive within
thirty (30) days following the execution of such Franchise Agreement a comfort letter from the Franchisor which is in form and
substance reasonably acceptable to Lender (it being agreed that the form and substance of the Comfort Letter is reasonably acceptable
to Lender); provided, however, so long as Borrower is diligently pursuing the delivery of a comfort letter from the Franchisor,
Borrower shall have an additional period of time not to exceed ten (10) days to deliver the same. If a Securitization has occurred,
notwithstanding the foregoing, Borrower shall not be permitted to enter into any new Franchise Agreement or any material amendment
to the existing Franchise Agreement unless it has received a Rating Agency Confirmation from each Approved Rating Agency with respect
thereto.


 


(d)         Operator
Borrower shall not, without Lender’s prior written consent (and, if a Securitization has occurred, without obtaining a Rating
Agency Confirmation from each Approved Rating Agency with respect thereto), (i) surrender, terminate or cancel the Franchise Agreement;
(ii) reduce or consent to the reduction of the term of the Franchise Agreement; (iii) increase or consent to the increase of the
amount of any charges under the Franchise Agreement; or (iv) otherwise modify, change, supplement, alter or amend, or waive or
release any of its material rights and remedies under, the Franchise Agreement.


 


(e)         Without
in any way limiting the covenants set forth in the Loan Documents, Borrower shall: (i) cause the hotel located on the Property
to be operated, repaired and maintained as a well-maintained “select-service hotel” which shall mean a hotel providing
amenities, services and facilities substantially equivalent or superior to hotels of similar average room rate and targeted market
segment from time to time operating in the same or comparable geographic area of the Property, taking into consideration the age
and location of the hotel located on the Property and (ii) maintain Inventory in amounts sufficient to meet the hotel industry
standard for hotels comparable to the hotel located on the Property and at levels sufficient for the operation of the hotel located
on the Property at full occupancy levels.


 




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Section
5.4     Environmental Covenants. Borrower covenants
and agrees that: (A) all uses and operations on or of the Property, whether by Borrower or any other Person, shall be in compliance
in all material respects with all Environmental Statutes and permits issued pursuant thereto; (B) there shall be no Releases of
Hazardous Substances in, on, under or from the Property, except those that are both (i) in compliance in all material respects
with all Environmental Statutes and with permits issued pursuant thereto and (ii) fully disclosed to Lender in writing; (C) there
shall be no Hazardous Substances in, on, or under the Property, except those that are both (i) in compliance in all material respects
with all Environmental Statutes and with permits issued pursuant thereto and (ii) fully disclosed to Lender in writing; (D) Borrower
shall keep the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Statute, whether
due to any act or omission of Borrower or any other Person; (E) Borrower shall, at its sole cost and expense, perform any environmental
site assessment or other investigation of environmental conditions in connection with the Property, by an environmental consultant
approved by Lender pursuant to any reasonable written request of Lender (including, but not limited to, sampling, testing and analysis
of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), and share with Lender
the reports and other results thereof, and Lender shall be entitled to rely on such reports and other results thereof; (F) Borrower
shall, at its sole cost and expense, comply with all reasonable written requests of Lender to (i) effectuate Remediation or obtain
a no further action letter for any condition (including, but not limited to, a Release of any Hazardous Substances) in, on, under
or from the Property, in full compliance of Environmental Statutes or reasonably required by Lender based upon recommendations
and observations of an independent environmental consultant approved by Lender, (ii) comply with any Environmental Statute, (iii)
comply with any directive from any Governmental Authority, and (iv) take any other reasonable action necessary or appropriate for
protection of human health or the environment; (G) Borrower shall not do, or allow any Tenant or other user of the Property to
do, any act that materially increases the dangers to human health or the environment, poses an unreasonable risk of harm to any
Person (whether on or off the Property), impairs or may impair the value of the Property, is contrary to any requirement of any
insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; (H) Borrower shall use commercially reasonable efforts to enforce the applicable provisions of the
Leases in order to prevent Tenants or other users of the Property from taking any action that violates any applicable Environmental
Statute, impairs or may impair the value of the Property, constitutes a public or private nuisance, constitutes waste or violates
any covenant, condition, agreement or easement applicable to the Property; and (I) promptly after becoming aware thereof, Borrower
shall notify Lender in writing of (i) any presence or Release or threatened Release of Hazardous Substances in, on, under, from
or migrating towards the Property, (ii) any non-compliance with any Environmental Statutes related in any way to the Property,
(iii) any actual or potential imposition of a lien or other encumbrances against the Property imposed pursuant to any Environmental
Statute (iv) any required or proposed Remediation of environmental conditions relating to the Property, and/or (v) any written
or oral notice or other communication of which any Borrower becomes aware from any source whatsoever (including, but not limited
to, a Governmental Authority) relating in any way to Hazardous Substances or Remediation thereof, possible liability of any Person
pursuant to any Environmental Statute, other environmental conditions in connection with the Property, the discovery of any occurrence
or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any actual or potential
administrative or judicial proceedings in connection with anything referred to in this Section 5.4.


 




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Section
5.5           Labor Matters. Borrower shall (i) not enter
into or otherwise permit the Property to be affected by any collective bargaining agreements without the prior written consent
of Lender, not to be unreasonably withheld, and (ii) not consent to enter into any collective bargaining agreements unless required
by applicable law. Neither Borrower nor Manager shall take any action that would trigger a withdrawal liability to any Multiemployer
Plan or any Pension Plan.


 


Section
5.6           CapEx.


 


5.6.1     CapEx
Budget and Scope.


 


(a)         Borrower
shall deliver to Lender for its review and approval as soon as possible following the date hereof but no later than ten (10) Business
Days prior to the earlier of (x) six (6) months after the date hereof and (y) the date Franchisor requires any item of the PIP
Work to be Commenced (as may be set forth in any written notice delivered by Franchisor), (1) a capital expense budget for the
construction and completion of the PIP Work and (2) any plans and specifications relating to the PIP Work, in each case, to be
approved by Lender in its reasonable discretion (such capital expense budget for the construction and completion of the PIP Work,
once approved, and as the same may be modified pursuant to the terms and provisions of this Agreement, the “PIP Work Budget”).
In the event that Lender objects to the proposed capital expense budget or any plans and specifications submitted by Borrower for
the construction and completion of the PIP Work, Lender shall advise Borrower of such objections within fifteen (15) days after
receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise
such capital expense budget and plans and specifications, as applicable, and resubmit the same to Lender within ten (10) days after
receipt of Lender’s objection. Lender shall advise Borrower of any objections to such revised capital expense budget and
plans and specifications within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description
of such objections) and Borrower shall promptly revise and resubmit the same within ten (10) days and otherwise in accordance with
the process described in this subsection until Lender approves the capital expense budget and any plans and specifications relating
to the PIP Work. Borrower’s delivery, and Lender’s approval, of the capital expense budget and any plans and specifications
relating to the PIP Work together with the delivery of any modifications or reaffirmations of the Completion Guaranty by Guarantor,
at Guarantor’s sole cost and expense, as Lender may reasonably require, are referred to herein, collectively, as the “PIP
Work Conditions”).


 




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(b)        If
Borrower elects to perform any of the Elective CapEx Work, Borrower shall deliver to Lender for its review and approval no later
than ten (10) Business Days prior to November 9, 2018, (1) a capital expense budget for the construction and completion of the
Elective CapEx Work, and (2) a general scope of the Elective CapEx Work and any plans and specifications relating to the Elective
CapEx Work, in each case, to be approved by Lender in its reasonable discretion (such capital expense budget for the construction
and completion of the Elective CapEx Work, once approved, and as the same may be modified pursuant to the terms and provisions
of this Agreement, the “Elective CapEx Work Budget”). In the event that Lender objects to the proposed capital
expense budget or any plans and specifications submitted by Borrower for the construction and completion of the Elective CapEx
Work, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall promptly revise such capital expense budget and plans and
specifications, as applicable, and resubmit the same to Lender within ten (10) days after receipt of Lender’s objection.
Lender shall advise Borrower of any objections to such revised capital expense budget and plans and specifications within ten (10)
days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly
revise and resubmit the same within ten (10) days and otherwise in accordance with the process described in this subsection until
Lender approves the capital expense budget and any plans and specifications relating to the Elective CapEx Work. Borrower’s
delivery, and Lender’s approval, of the capital expense budget and any plans and specifications relating to the Elective
CapEx Work together with the delivery of any modifications or reaffirmations of the Completion Guaranty by Guarantor, at Guarantor’s
sole cost and expense, as Lender may reasonably require, are referred to herein, collectively, as the “Elective CapEx
Work Conditions”).


 


(c)        Once
Lender approves the PIP Work Budget and/or the Elective CapEx Work Budget, as applicable, Borrower shall not modify the PIP Work
Budget or the Elective CapEx Work Budget, as applicable, or the scope of the PIP Work or the Elective CapEx Work, as applicable,
without the prior written consent of Lender, not to be unreasonably withheld, conditioned or delayed; provided, however, that so
long as no Event of Default has occurred and is continuing and so long as the same does not cause a default under the Franchise
Agreement or the PIP, Borrower may from time to time (x) with respect to the PIP Work Budget, reallocate cost savings actually
realized from one line item to other line item(s) in the PIP Work Budget or reallocate from the contingency line item in the PIP
Work Budget to any other line item in such PIP Work Budget (up to a pro rata amount based on the then estimated cost to achieve
Completion of the PIP Work) and (y) with respect to the Elective CapEx Work Budget, reallocate cost savings actually realized from
one line item to other line item(s) in the Elective CapEx Work Budget or reallocate from the contingency line item in the Elective
CapEx Work to any other line item in such Elective CapEx Work (up to a pro rata amount based on the then estimated cost to achieve
Completion of the Elective CapEx Work), in each case, upon written notice to, but without the approval of, Lender.


 


5.6.2     Completion.


 


(a)        Borrower
has received extensions from Franchisor for the Commencement and Completion of the PIP Work and, as of the date hereof, Borrower
has not received any notice from Franchisor which would require Borrower to Commence or Complete any items of the PIP Work by any
specific dates. Borrower shall cause the PIP Work to be Commenced no later than the date Franchisor requires any item of the PIP
Work to be Commenced as set forth in any written notice from Franchisor, if any (and prior to Commencement of the PIP Work, all
of the PIP Work Conditions shall have been satisfied). Once the PIP Work has been Commenced, Borrower shall cause the PIP Work
to be prosecuted and Completed in a good and workmanlike manner in accordance with the PIP Work Budget, applicable plans and specifications
and in compliance with all Legal Requirements (including landmarks and zoning laws and all applicable administrative ordinance
and code requirements) and in accordance with the terms and provisions of the Franchise Agreement and the PIP, by the Completion
Date.


 




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(b)        Borrower
shall cause any Elective CapEx Work actually Commenced to be prosecuted and Completed in a good and workmanlike manner in accordance
with the Elective CapEx Work Budget, applicable plans and specifications and in compliance with all Legal Requirements (including
landmarks and zoning laws and all applicable administrative ordinance and code requirements) and in accordance with the terms and
provisions of the Franchise Agreement, if applicable. Notwithstanding anything to the contrary contained herein, Borrower shall
not Commence any Elective CapEx Work unless and until all of the Elective CapEx Work Conditions have been satisfied.


 


5.6.3     Will
Serve Letters. Borrower shall, at Lender’s request, (x) obtain and deliver to Lender,
in a form reasonably satisfactory to Lender, “will-serve” letters from each general contractor and (y) use commercially
reasonable efforts to obtain and deliver to Lender, in a form reasonably satisfactory to Lender, “will-serve” letters
for all contracts related to the CapEx, including contracts with each architect, engineer and construction manager performing work
at the Property, in each case, to the extent such contract is an amount in excess of $200,000.


 


5.6.4     Plans.
Once Lender has approved any plans and specifications for the CapEx Work, Borrower shall not modify the same in any material respect
without Lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed.


 


ARTICLE
VI



INSURANCE; CASUALTY; CONDEMNATION


 


Section
6.1            Insurance.


 


(a)         Borrower
shall obtain and maintain, or cause to be maintained, at all times insurance for Borrower and the Property providing at least the
following coverages:


 


(i)     comprehensive
“All Risk” or “Special Form” insurance, including the peril of wind (named storms) on the Improvements
and the Personal Property, in each case (A) in an amount equal to or greater than one hundred percent (100%) of the “Full
Replacement Cost”, which for purposes of this Agreement shall mean actual replacement value with no waiver of depreciation,;
(B) containing an agreed amount endorsement with respect to the Improvements and Personal Property waiving all co-insurance provisions,
or confirmation that co-insurance does not apply; and (C) providing for no deductible in excess of Twenty-Five Thousand and No/100
Dollars ($25,000.00) per occurrence for all such insurance coverage, except for windstorm and earthquake, which shall provide for
no deductible in excess of 5% of the total insurable value of the Property. In addition, Borrower shall obtain: (x) if any portion
of the Improvements is currently, or at any time in the future, located in a federally designated “special flood hazard area”
designated by the Federal Emergency Management Agency, flood hazard insurance covering building and contents 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, together with such “excess flood”
insurance naming Lender as mortgagee/loss payee in such amount and with such deductible as Lender may reasonably require; and (y)
if the Property is located in an area with a high degree of seismic risk as reasonably determined by Lender, and the PML/SEL of
the Property exceeds twenty percent (20%), earthquake insurance in amounts and in form and substance satisfactory to Lender);


 




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(ii)           commercial
general liability insurance, including coverage provided by a broad form comprehensive general liability endorsement and coverage
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 with a combined limit of not less than Two Million and No/100 Dollars
($2,000,000.00) in the aggregate and One Million and No/100 Dollars ($1,000,000.00) per occurrence (and, if on a blanket policy,
containing an “Aggregate Per Location” endorsement); (B) to continue at not less than the aforesaid limit until required
to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate; (C) add Lender as
an additional insured; and (D) to cover at least the following hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent contractors; and (4) contractual liability for all insured contracts;


 


(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 subsections 6.1(a)(i), (iv) and (vi); (C) which provides that after the physical
loss to the Improvements and Personal Property occurs, the loss of rents or income, as applicable, will be insured until completion
of Restoration or the expiration of eighteen (18) months, whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period; (D) which contains an extended period of indemnity endorsement which provides that after the physical
loss to the Improvements and Personal Property has been repaired, the continued loss of income will be insured until such income
either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date that the 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 (E) for loss of Rents in an amount equal to one hundred percent (100%) of the projected Gross Income
from Operations for a period of eighteen (18) months from the date of such Casualty (assuming such Casualty had not occurred)
and notwithstanding that the policy may expire at the end of such period. Business income coverage is required to reimburse for
loss net profit, continuing expenses and necessary payroll, while the Property is under restoration. The amount of such loss of
Rents or business income insurance shall be determined prior to the date hereof and at least once each year thereafter based on
Borrower’s reasonable estimate from the Property for the succeeding eighteen (18) month period. Notwithstanding anything
to the contrary in Section 2.7 hereof, all proceeds payable to Lender pursuant to this subsection shall be held by Lender
and shall be applied at Lender’s sole discretion to (I) the Debt, or (II) Operating Expenses approved by Lender in its sole
discretion; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the
Debt, except to the extent such amounts are actually paid out of the proceeds of such business income insurance;


 




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(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 coverage forms do not otherwise apply, (A) commercial general liability umbrella liability insurance
covering claims not covered by or under the terms or provisions of the commercial general liability and umbrella liability insurance
policies required herein this Section 6.1(a); and (B) the insurance provided for in subsection (i) above written in a so-called
builder’s risk completed value form (1) on a non-reporting basis, (2) against all risks insured against pursuant to subsection
(i) above, (3) including permission to occupy the Property, and (4) with an agreed amount endorsement waiving co-insurance provision,
or confirmation that co-insurance does not apply;


 


(v)           worker’s
compensation insurance with respect to any employees of Borrower, as required by any Governmental Authority or Legal Requirement
(if applicable);


 


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


 


(vii)           motor
vehicle liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits
per occurrence of not less than One Million and No/100 Dollars ($1,000,000.00) (if applicable);


 


(viii)        umbrella
insurance in an amount not less than Twenty Million and No/100 Dollars ($20,000,000.00) per occurrence on terms consistent with
the commercial general liability insurance policy required under subsection (ii) above;


 


(ix)           intentionally
omitted;


 


(x)            if
the Improvements or the use of the Property shall at any time constitute legal non-conforming structures or use, ‘Ordinance
or Law” coverage to the undamaged portion of the Improvements, demolition and debris removal, and increased cost of construction
in amounts acceptable to Lender;


 




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(xi)          the
commercial property policy (including business income), general liability and umbrella or excess liability insurance required under
Sections 6.1(a)(i), (ii), (iii) and (viii) above shall cover perils of terrorism and acts of terrorism
and Borrower shall maintain commercial property and business income insurance for loss resulting from perils and acts of terrorism
on terms (including amounts) consistent with those required under Section 6.1(a)(i), (ii), (iii) and (viii)
above at all times during the term of the Loan; and


 


(xii)         upon
sixty (60) days’ notice, such other reasonable insurance and in such reasonable amounts as Lender from time to time may reasonably
request against such other insurable hazards, which at the time are commonly insured against for properties similar to the Property
located in or around the region in which the Property is located.


 


(b)        All
insurance provided for in Section 6.1(a) shall be obtained under valid and enforceable policies (collectively, the “Policies”
or in the singular, the “Policy”), and shall be subject to the approval of Lender as to insurance companies,
amounts, deductibles, loss payees and insureds. The Policies shall be issued by financially sound and responsible insurance companies
authorized to do business in the state and having a claims paying ability rating of “A-” or better by S&P and a
financial strength rating of at least “A” and a financial size category of at least “X” from A.M. Best
Company. Notwithstanding the foregoing, Lender shall accept Starr Surplus Lines Insurance Company, rated “A XV” with
AM Best, as an insurer for the property Policy, for so long as the rating of such insurer is not withdrawn or downgraded below
the date hereof. In the event such insurer's rating is withdrawn or downgraded below an A: X rating from AM Best, Borrower shall
promptly notify Lender and replace such insurer with an insurer meeting the rating requirements set forth herein. Not less than
ten (10) days prior to the expiration of the Policies theretofore furnished to Lender, Borrower shall deliver certificates of insurance
evidencing the renewal or successor Policies accompanied by evidence satisfactory to Lender of payment of the premiums due thereunder
(the “Insurance Premiums”), and, upon receipt of written request from Lender, copies of all renewal Policies
shall be delivered by Borrower to Lender.


 


(c)        Any
blanket insurance Policy shall specifically allocate to the Property the amount of coverage from time to time required hereunder
and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions
of Section 6.1(a) hereof; provided, however, any blanket insurance policy that does not specifically allocate
to the Property the amount of coverage from time to time required hereunder shall be subject to Lender’s reasonable approval
after taking into account, among other things, the amount, location, number, type and size of properties covered by such blanket
insurance policy.


 


(d)        All
Policies provided for or contemplated by Section 6.1(a), shall name Borrower as a named insured and, in the case of liability
Policies, except for the for the Policies referenced in Section 6.1(a)(v) and (vii), shall name Lender (and its successors
and assigns) as an additional insured, and in the case of property Policies, including but not limited to boiler and machinery,
loss of rents/business interruption, terrorism, earthquake and flood insurance shall contain a standard non-contributing mortgagee
clause in favor of Lender providing that the loss thereunder shall be payable to Lender.


 




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(e)        With
respect to the Policies of property insurance, they shall contain clauses or endorsements to the effect that, or otherwise provide
that: (i) no act or negligence of Borrower, or anyone acting for Borrower, or failure to comply with the provisions of any Policy,
which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the validity or enforceability
of the insurance insofar as Lender is concerned; (ii) the Policies shall not be canceled without at least thirty (30) days’
notice to Lender, except for non-payment of premium which shall be ten (10) days; and (iii) Lender shall not be liable for any
Insurance Premiums thereon or subject to any assessments thereunder.


 


(f)        With
respect to the Policies of liability insurance, they shall provide that the Policy shall not be cancelled without at least thirty
(30) days’ written notice to Lender, except for ten (10) days’ written notice for cancellation due to non-payment of
premium. If the issuers cannot or will not provide notice, the Borrower shall be obligated to provide such notice.


 


(g)        Policies
shall be required to be provided to Lender upon written request. If at any time Lender is not in receipt of written evidence that
all Policies are in full force and effect, Lender shall have the right, with three (3) days’ notice to Borrower, to take
such action as Lender deems necessary to protect its interest in the Property, including, without limitation, the obtaining of
such insurance coverage as Lender in its sole discretion deems appropriate. All premiums incurred by Lender in connection with
such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and, until
paid, shall be secured by the Security Instrument and shall bear interest at the Default Rate.


 


Section
6.2           Casualty. If the Property shall be damaged
or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall (a) give prompt
notice of such damage to Lender, and (b) unless Lender fails to make Net Proceeds available for Restoration in violation of this
Agreement, promptly commence and diligently prosecute the completion of Restoration so that the Property resembles, as nearly as
possible, the condition the Property was in immediately prior to such Casualty, with such alterations as may be reasonably approved
by Lender and otherwise in accordance with Section 6.4. Unless Lender fails to make Net Proceeds available for Restoration
in violation of this Agreement, 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 make proof of loss if not made promptly by Borrower. In addition, Lender may participate
in (and have approval rights over) any settlement discussions with any insurance companies with respect to any Casualty in which
the Net Proceeds or the costs of completing Restoration are equal to or greater than One Million and No/100 Dollars ($1,000,000.00)
(the “Casualty Threshold”) and Borrower shall deliver to Lender all instruments required by Lender to permit
such participation.


 




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Section
6.3            Condemnation.


 


(a)        Borrower
shall promptly give Lender notice of the actual or threatened commencement of any proceeding in respect of Condemnation, and shall
deliver to Lender copies of any and all papers served in connection with such proceedings. Lender may participate in any such proceedings,
and Borrower shall from time to time deliver to Lender all instruments reasonably 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 taking by any public or quasi-public
authority through Condemnation or otherwise (including, but not limited to, any transfer made in lieu of or in anticipation of
the exercise of such taking), Borrower shall continue to perform the Obligations at the time and in the manner provided in this
Agreement and the other Loan Documents and the Outstanding Principal Balance shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of collection, to the reduction or discharge of the Obligations.
Lender shall not be limited to the interest paid on the Award by the applicable 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 a Governmental Authority, Borrower shall promptly commence and diligently prosecute Restoration and otherwise comply with
the provisions of Section 6.4. If the Property or any portion thereof 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.


 


(b)        Notwithstanding
the foregoing provisions of Section 6.2, Section 6.3(a), and Section 6.4 hereof, if the Loan or any portion
thereof is included in a REMIC Trust and, immediately following a release of any portion of the Lien of the Security Instrument
in connection with a Casualty or Condemnation (but taking into account any proposed Restoration on the remaining portion of the
Property), the Loan to Value Ratio is greater than one hundred twenty-five percent (125%) (such value to be determined, in Lender’s
reasonable discretion, by any commercially reasonable method permitted to a REMIC Trust), the principal balance of the Loan must
be paid down by a “qualified amount” as that term is defined in the IRS Revenue Procedure 2010-30, as the same may
be amended, replaced, supplemented or modified from time to time, unless the Lender receives an opinion of counsel that if such
amount is not paid, the Securitization will not fail to maintain its status as a REMIC Trust and will not be subject to a prohibited
transactions tax as a result of the related release of such portion of the Lien of the Security Instrument.


 


Section
6.4            Restoration. The following provisions shall
apply in connection with any Restoration:


 


(a)        If
the Net Proceeds shall be less than the Casualty Threshold and the costs of completing Restoration shall be less than the Casualty
Threshold, the Net Proceeds will be disbursed by Lender to Borrower upon receipt; provided that all of the conditions set forth
in Section 6.4(b)(i) are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to satisfactorily
complete with due diligence Restoration in accordance with the terms of this Agreement.


 




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(b)          If
the Net Proceeds are equal to or greater than the Casualty Threshold, but less than twenty percent (20%) of the original principal
balance of the Loan or the costs of completing Restoration is equal to or greater than the Casualty Threshold, but less than twenty
percent (20%) of the original principal balance of the Loan, the Net Proceeds will be held by Lender and Lender shall make the
Net Proceeds available for Restoration in accordance with the provisions of this Section 6.4. The term “Net Proceeds”
for purposes of this Section 6.4 shall mean: (i) the net amount of all insurance proceeds received by Lender pursuant to
Section 6.1(a)(i), (iv), (vi), (ix) and (x) as a result of such damage or destruction, after
deduction of Lender’s reasonable costs and expenses (including, but not limited to, reasonable counsel costs and fees), if
any, in collecting same (“Insurance Proceeds”), or (ii) the net amount of the Award, after deduction of Lender’s
reasonable costs and expenses (including, but not limited to, reasonable counsel costs and fees), if any, in collecting same (“Condemnation
Proceeds”), whichever the case may be.


 


(i)            The
Net Proceeds shall be made available to Borrower for Restoration upon the approval of Lender in its reasonable discretion that
the following conditions are met:


 


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


 


(B)     (1)
in the event the Net Proceeds are Insurance Proceeds, less than twenty-five percent (25%) of the total floor area of the affected
building has been damaged, destroyed or rendered unusable as a result of such Casualty, or (2) in the event the Net Proceeds are
Condemnation Proceeds, less than ten percent (10%) of the land constituting the parcel has been taken, and such land is located
along the perimeter or periphery of such parcel, and no portion of the Improvements is located on such land;


 


(C)     intentionally
omitted;


 


(D)     Borrower
shall commence 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); provided that so long as Borrower is diligently pursuing commencement of the
Restoration within ninety (90) days after such Casualty or Condemnation, such ninety (90) day period shall be extended for such
time as is reasonably necessary for Borrower in the exercise of due diligence to so commence Restoration, such additional period
not to exceed thirty (30) days, and Borrower shall diligently pursue the Restoration satisfactory completion. For the avoidance
of doubt, the aforementioned periods of time may be extended at Lender’s reasonable discretion.


 


(E)     Lender
shall be satisfied that any operating deficits, including all scheduled payments of principal and interest under the Note, which
will be incurred with respect to the Property as a result of the occurrence of any such Casualty or Condemnation, whichever the
case may be, will be covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(iii),
if applicable, or (3) by other funds of Borrower;


 




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(F)     Lender
shall be satisfied that Restoration will be completed on or before the earliest to occur of (1) six (6) months prior to the then
applicable Maturity Date, (2) the earliest date required for such completion under the terms of any Leases, if any, (3) such time
as may be required under all applicable Legal Requirements in order to repair and restore the Property to the condition it was
in immediately prior to such Casualty or to as nearly as possible the condition it was in immediately prior to such Condemnation,
as applicable, or (4) the expiration of the insurance coverage referred to in Section 6.1(a)(iii);


 


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


 


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


 


(I)     such
Casualty or Condemnation, as applicable, does not result in the loss of access to any portion of the Property or the related Improvements
that cannot be restored as part of the Restoration;


 


(J)     intentionally
omitted;


 


(K)     the
Loan to Value Ratio after giving effect to Restoration, shall be equal to or less than the lesser of (x) the Loan to Value Ratio
on the Closing Date and (y) the Loan to Value Ratio on the date immediately preceding such Casualty or Condemnation;


 


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


 


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


 


(N)     Lender
shall be satisfied that the Restoration will be completed in accordance with any requirements under the Franchise Agreement.


 




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(ii)           The
Net Proceeds shall be paid directly to Lender for deposit in an interest-bearing account (the “Net Proceeds Account”)
and, until disbursed in accordance with the provisions of this Section 6.4(b), shall constitute additional security for
the Debt and the Other Obligations. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to
time during the course of Restoration, upon receipt of evidence satisfactory to Lender that (A) all materials installed and work
and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with Restoration
have been paid for in full, and (B) there exist no notices of pendency, stop orders, mechanic’s or materialmen’s liens
or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on the Property or any portion
thereof which (1) have not either been fully bonded to the reasonable satisfaction of Lender and discharged of record or in the
alternative fully insured to the satisfaction of Lender by the Title Company, or (2) are not being contested in accordance with
the terms of Section 5.2.2 hereof.


 


(iii)          All
plans and specifications required in connection with Restoration shall be subject to prior review and acceptance in all respects
by Lender and by an independent consulting engineer selected by Lender (the “Casualty Consultant”). Lender shall
have the use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with Restoration.
The identity of the contractors, subcontractors and materialmen engaged in Restoration, as well as the contracts under which they
have been engaged, shall be subject to prior review and acceptance by Lender and the Casualty Consultant. All costs and expenses
incurred by Lender in connection with making the Net Proceeds available for Restoration including, without limitation, reasonable
counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by Borrower.


 


(iv)          In
no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of Restoration, as certified by the Casualty Consultant, minus the Retention
Amount. The term “Retention Amount” shall mean, as to each contractor, subcontractor or materialman engaged
in Restoration, an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of Restoration, as
certified by the Casualty Consultant, until Restoration has been completed. The Retention Amount shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 6.4(b), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in Restoration. The Retention Amount shall not be released until the Casualty
Consultant certifies to Lender that Restoration has been completed in accordance with the provisions of this Section 6.4(b)
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 Restoration have been paid in full or will be
paid in full out of the Retention Amount; provided, however, that Lender will release the portion of the Retention Amount being
held with respect to any contractor, subcontractor or materialman engaged in Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialmen’s
contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due
to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the Title Company issuing the Title
Insurance Policy, and Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the lien
of the related Security Instrument and evidence of payment of any premium payable for such endorsement. If required by Lender,
the release of any such portion of the Retention Amount shall be approved by the surety company, if any, which has issued a payment
or performance bond with respect to the applicable contractor, subcontractor or materialman.


 




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


 


(vi)          If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in the 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 Restoration, Borrower shall deposit the deficiency (the “Net Proceeds
Deficiency”) with Lender before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency
deposited with Lender shall be held by Lender and shall be disbursed for costs actually incurred in connection with Restoration
on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 6.4(b)
shall constitute additional security for the Debt and the Other Obligations.


 


(vii)        The
excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency deposited with Lender after
the Casualty Consultant certifies to Lender that Restoration has been completed in accordance with the provisions of this Section 6.4(b),
and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in connection with Restoration have been paid
in full, shall be remitted by Lender to Borrower; provided no Event of Default shall have occurred and shall be continuing.


 


(c)        If
Net Proceeds are (i) equal to or greater than twenty percent (20%) of the original principal amount of the Loan, or (ii) not required
to be made available for Restoration (due to Borrower’s inability to satisfy the conditions set forth in Section 6.4(b)(i)
or otherwise), then in any such event all Net Proceeds may be retained and applied by Lender in accordance with Section 2.4.2
hereof toward reduction of the Outstanding Principal Balance whether or not then due and payable in such order, priority and proportions
as Lender in its sole discretion shall deem proper, or, in the sole discretion of Lender, the same may be paid, either in whole
or in part, to Borrower for such purposes as Lender shall approve, in its sole discretion.


 




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(d)        In
the event of foreclosure of the Security Instrument, or other transfer of title to the Property in extinguishment in whole or in
part of the Debt 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.


 


ARTICLE
VII



RESERVE FUNDS


 


Section
7.1            Tax and Insurance Escrow.


 


7.1.1     Tax
and Insurance Escrow Funds. On the date hereof, Borrower shall deposit with Lender
the Initial Tax Deposit on account of the Property Taxes next coming due and the Initial Insurance Premiums Deposit on
account of the Insurance Premiums next coming due. Additionally, Borrower shall pay to Lender on each Payment Date (a)
one-twelfth (1/12) of the Property Taxes that Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Property Taxes at least thirty (30) days prior to their
respective due dates, and (b) one-twelfth (1/12) 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 with Lender sufficient
funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies (the foregoing
amounts so deposited with Lender are hereinafter called the “Tax and Insurance Escrow Funds” and the
account in which such amounts are held shall hereinafter be referred to as the “Tax and Insurance Escrow
Account”). At Lender’s option, the Tax and Insurance Escrow Account shall be maintained as a Subaccount of
the Cash Management Account or be an account maintained by Servicer either at Servicer or at an Eligible Institution.
Notwithstanding the previous requirements of this Section 7.1.1, Lender shall waive Borrower’s obligations to
(I) deposit the Initial Insurance Premiums Deposit, and (II) pay to Lender on each Payment Date the payment described in
clause (b) of this Section 7.1.1, each for so long as the following conditions are met (any of which may be waived, in
Lender’s sole and absolute discretion): (i) no Event of Default has occurred and is continuing hereunder, (ii) the
insurance coverage for the Property is included in a blanket policy insuring multiple properties and held by Borrower or an
entity that Controls Borrower, which blanket policy is acceptable to Lender in its sole discretion, (iii) Borrower binds all
applicable insurance prior to the then current expiration date of the blanket policy described in clause (ii) hereof, (iv)
Guarantor shall satisfy all net worth and liquidity covenants set forth in the Guaranty and the Completion Guaranty (if
any), and (v) Borrower provides Lender evidence of renewal policies prior to the then current expiration date of the
applicable policy (the conditions contained in the foregoing clauses (i) through (v), collectively, the “Insurance
Escrow Funds Waiver Conditions”). If, at any time, Borrower fails to meet any of the Insurance Escrow Funds Waiver
Conditions (and Lender has not opted to waive such condition in its sole and absolute discretion), commencing with the next
applicable Payment Date and continuing on each Payment Date until such time as all Insurance Escrow Funds Waiver Conditions
have again been met, Borrower shall deposit an amount equal to the product of (x) the resulting fraction where (A) the
numerator is one (1), and (B) the denominator is the number of Payment Dates then remaining in the then current calendar
year, and (y) the amount of Insurance Premiums that Lender reasonably estimates will be payable to obtain and subsequently
retain policies of insurance which meet the requirements of Section 6.1 hereof. In addition to the foregoing, if
Borrower fails to renew the policy or policies described in clause (ii) hereof by the date which is seven (7) days prior to
the expiration thereof, Borrower agrees to notify Lender of such failure, and to keep Lender reasonably apprised of all
developments in connection therewith, and if, following such notice, Lender reasonably believes that Borrower will be unable
to bind the policy or policies described in clause (ii) prior to the expiration thereof, then 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,
without limitation, the obtaining of insurance coverage as provided in or required pursuant to Section 6.1 hereof. All
premiums incurred by Lender in connection with such action or in obtaining such insurance and keeping it in effect shall be
paid by Borrower to Lender upon demand and, until paid, shall be secured by the Security Instrument and shall bear interest
at the Default Rate.


 



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7.1.2     Disbursements
from Tax and Insurance Escrow Funds. Provided no Default or Event of Default has occurred
and is continuing, Lender will apply the Tax and Insurance Escrow Funds to payments of Property Taxes and Insurance Premiums required
to be made by Borrower pursuant to Section 5.1.2 hereof and under the Security Instrument. In making any payment relating
to the Tax and Insurance Escrow Funds, Lender may do so according to any bill, statement or estimate procured from the appropriate
public office (with respect to Property Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any Tax, assessment, sale, forfeiture, Tax lien or title or
claim thereof. If the amount of the Tax and Insurance Escrow Funds shall exceed the amounts due for Property Taxes and Insurance
Premiums pursuant to Section 5.1.2 hereof, Lender shall, in its sole discretion, return any excess to Borrower or credit
such excess against future payments to be made to the Tax and Insurance Escrow Account. Any amount remaining in the Tax and Insurance
Escrow Account after the Debt has been paid in full shall be returned to Borrower. In allocating such excess, Lender may deal with
the Person shown on the records of Lender to be the owner of the Property. If at any time Lender reasonably determines that the
Tax and Insurance Escrow Funds are not or will not be sufficient to pay Property Taxes and Insurance Premiums by the due dates
thereof, Lender shall notify Borrower of such determination and Borrower shall increase its monthly payments to Lender by the amount
that Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to the due date of the Property Taxes
and/or thirty (30) days prior to the expiration of the Policies, as the case may be.


 


Section
7.2            PIP Work Reserve Account. Borrower has established
on the date hereof an account into which amounts may be deposited pursuant to the terms and provisions of Section 2.5.7
hereof (the “PIP Work Reserve Account”; amounts so deposited being hereinafter referred to as the “PIP
Work Reserve Funds”). At Lender’s option, the PIP Work Reserve Account shall be maintained as a Subaccount of the
Cash Management Account or be an account maintained by Servicer either at Servicer or at an Eligible Institution. Amounts on deposit
in the PIP Work Reserve Account shall be disbursed to Borrower for Approved CapEx Expenses related to the PIP Work in accordance
with the same terms and conditions for the disbursement of Future Advances set forth in Section 2.5.1, as if incorporated
herein, mutatis mutandis (although Borrower shall not be required to obtain the applicable ALTA 33-06 Disbursement Endorsement
with respect to each draw). Borrower (i) hereby grants to Lender a first priority security interest in the PIP Work Reserve Account
and all deposits at any time contained therein and the proceeds thereof, and (ii) will take all actions necessary to maintain in
favor of Lender a perfected first priority security interest in the PIP Work Reserve Account, including, without limitation, the
execution of any account control agreement required by Lender. Borrower will not in any way alter, modify or close the PIP Work
Reserve Account and will notify Lender of the account number thereof. All monies now or hereafter deposited into the PIP Work Reserve
Account shall be deemed additional security for the Obligations. All sums on deposit in the PIP Work Reserve Account shall be disbursed
to Borrower upon the earliest to occur of (i) payment in full of the Debt, (ii) the release of the Lien of the Security Instrument
(and all related obligations) in accordance with the terms of this Agreement or (iii) Completion of the PIP Work.

 




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Section
7.3            Special Incentive Fee Reserve Funds. Borrower
has established on the date hereof an account into which $125,000 has been deposited (the “Special Incentive Fee Reserve
Account”; amounts so deposited being hereinafter referred to as the “Special Incentive Fee Reserve Funds”).
At Lender’s option, the Special Incentive Fee Reserve Account shall be maintained as a Subaccount of the Cash Management
Account or be an account maintained by Servicer either at Servicer or at an Eligible Institution. Upon Lender’s receipt of
a certification from Borrower and satisfactory evidence that the “Special Incentive Fee” (as such term is defined in
the Management Agreement in effect on the Closing Date) is due and payable to Manager, and so long as no Event of Default shall
have occurred and be continuing, Lender shall disburse the Special Incentive Fee Reserve Funds to Borrower to pay such Special
Incentive Fee. Notwithstanding anything to the contrary contained herein, in the event Borrower does not Transfer the Property
to a KSL Transferee and Borrower provides Lender with satisfactory evidence that the term of the Management Agreement has been
extended for at least one (1) year or Borrower has entered into a Replacement Management Agreement with a term of at least one
(1) year, then so long as no Event of Default has occurred and is continuing, Lender shall disburse the Special Incentive Fee Reserve
Funds to Borrower.


 


Section
7.4            Intentionally Omitted.


 


Section
7.5            Intentionally Omitted.


 


Section
7.6            FF&E Reserve Funds.


 


7.6.1     Deposits
of FF&E Reserve Funds. Borrower shall deposit with or on behalf of Lender on each
Payment Date an amount equal to the greater of (x) four percent (4.0%) of the Rents for the Property for the prior month and (y)
the monthly FF&E reserve required under Section 11.2B of the Franchise Agreement (the “FF&E Reserve Monthly Deposit”)
for the repair and replacement of the FF&E (such FF&E, collectively, the “FF&E Work”) that may be
incurred following the date hereof, which amounts shall be transferred into an Account established for such purpose (the “FF&E
Reserve Account”). Amounts deposited from time to time into the FF&E Reserve Account pursuant to this Section
7.6.1 shall hereinafter be referred to as the “FF&E Reserve Funds”. At Lender’s option, the FF&E
Reserve Account shall be maintained as a Subaccount of the Cash Management Account or be an account maintained by Servicer either
at Servicer or at an Eligible Institution.


 




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7.6.2     Release
of FF&E Reserve Funds. Lender shall make disbursements from the FF&E Reserve Funds
for the cost of Approved FF&E Expenditures incurred by Borrower upon satisfaction by Borrower of each of the following conditions
with respect to each such disbursement: (a) Borrower shall submit Lender’s standard form of draw request for payment to Lender
at least ten (10) Business Days prior to the date on which Borrower requests such payment be made, which request shall specify
the Approved FF&E Expenditures to be paid and shall be accompanied by copies of paid invoices for the amounts requested; (b)
on the date such request is received by Lender and on the date such payment is to be made, no Default or Event of Default shall
exist and remain uncured; and (c) Lender shall have received (i) an Officer’s Certificate from Borrower (A) stating that
the items to be funded by the requested disbursement for Approved FF&E Expenditures, and a description thereof, (B) stating
that all Approved FF&E Expenditures to be funded by the requested disbursement have been completed in a good and workmanlike
manner and in accordance with all applicable Legal Requirements and, to the extent applicable, the Franchise Agreement, (C) identifying
each Person that supplied materials or labor in connection with the Approved FF&E Expenditures to be funded by the requested
disbursement, (D) stating that each such Person has been paid in full or will be paid in full upon such disbursement, (E) stating
that the Approved FF&E Expenditures to be funded have not been the subject of a previous disbursement, (F) stating that all
previous disbursements of FF&E Reserve Funds have been used to pay the previously identified Approved FF&E Expenditures,
and (G) stating that all outstanding trade payables relating to the Approved FF&E Expenditures (other than those to be paid
from the requested disbursement) have been paid in full; (ii) a copy of any license, permit or other approval by any Governmental
Authority required in connection with the Approved FF&E Expenditures and not previously delivered to Lender; (iii) if required
by Lender for requests in excess of Fifty Thousand and No/100 Dollars ($50,000.00) in the aggregate, lien waivers or other evidence
of payment satisfactory to Lender and releases from all parties furnishing materials and/or services in connection with the requested
payment; (iv) at Lender’s option, a title search for the Property indicating that the Property is free from all Liens other
than Permitted Encumbrances; and (v) such other evidence as Lender shall reasonably request to demonstrate that the Approved FF&E
Expenditures to be funded by the requested disbursement has been completed and paid for or will be paid upon such disbursement
to Borrower. Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than Twenty Five
Thousand and No/100 Dollars ($25,000.00) per disbursement. Lender may require an inspection of the Property or any portion thereof
at Borrower’s expense prior to making a monthly disbursement in order to verify completion of improvements in excess of Twenty-Five
Thousand and No/100 Dollars ($25,000.00) for which reimbursement is sought.


 


7.6.3     Balance
in the FF&E Reserve Account. The insufficiency of any balance in the FF&E Reserve
Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents.


 


Section
7.7            Excess Cash Reserve Funds. Upon
the occurrence and during the continuance of a Cash Trap Period, all Excess Cash shall be collected by Lender and all such
amounts shall be held by Lender as additional security for the Obligations (amounts so held shall be hereinafter referred to
as the “Excess Cash Reserve Funds” and the account in which such amounts are held shall hereinafter be
referred to as the “Excess Cash Reserve Account”). At Lender’s option, the Excess Cash Reserve
Account shall be maintained as a Subaccount of the Cash Management Account or be an account maintained by Servicer either at
Servicer or at an Eligible Institution. At such time as any Cash Trap Period shall end, any funds held in the Excess Cash
Reserve Account shall be returned to Borrower.


 




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Section
7.8            Reserve Funds, Generally.


 


(a)     Borrower
(i) hereby grants to Lender a first priority security interest in all of the Reserve Funds and any and all monies now or hereafter
deposited in each Reserve Account as additional security for payment and performance of the Obligations and (ii) will take all
actions necessary to maintain in favor of Lender a perfected first priority security interest in the Reserve Funds, including,
without limitation, filing or authorizing Lender to file UCC-1 financing statements and continuations thereof. Until expended or
applied in accordance herewith, the Reserve Funds shall constitute additional security for the Obligations.


 


(b)     Upon
the occurrence and during the continuance of an Event of Default, Lender may, in addition to any and all other rights and remedies
available to Lender, apply any sums then present in any or all of the Reserve Funds to the reduction of the Outstanding Principal
Balance in any order in its sole discretion.


 


(c)     Borrower
shall not further pledge, assign or grant any security interest in any Reserve Fund or the monies deposited therein 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.


 


(d)     The
Reserve Funds shall not constitute trust funds and may be commingled with other monies held by Lender. No earnings or interest
on the Reserve Funds shall be payable to Borrower. Neither Lender nor any Servicer that at any time holds or maintains the Reserve
Funds shall have any obligation to keep or maintain such Reserve Funds or any funds deposited therein in interest bearing accounts.
If Lender or any Servicer elects in its sole and absolute discretion to keep or maintain any Reserve Funds or any funds deposited
therein in an interest bearing account, (i) such funds shall not be invested except in Permitted Investments, and (ii) all interest
earned or accrued thereon shall be for the benefit of Borrower and credited to the Cash Management Account. Lender shall not be
responsible and shall have no liability whatsoever for the rate of return earned or losses incurred on the investment of any Reserve
Funds in Permitted Investments.


 


(e)     Borrower
shall indemnify Lender and hold Lender harmless from and against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and reasonable attorneys’ fees and expenses) arising
from or in any way connected with the Reserve Funds or the performance of the obligations for which the Reserve Funds were established,
other than any actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses arising from the
gross negligence or willful misconduct of Lender. Borrower shall assign to Lender all rights and claims Borrower may have against
all Persons supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided, however,
that Lender may not pursue any such right or claim, unless an Event of Default has occurred and remains uncured.


 




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(f)     Upon
indefeasible payment in full of the Obligations, all Reserve Funds then being held shall be returned to Borrower.


 


ARTICLE
VIII



DEFAULTS


 


Section
8.1            Event of Default.


 


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


 


(i)        if
any portion of the Debt is not paid when due (including, without limitation, the failure of Borrower to repay the entire outstanding
principal balance of the Note in full on the Maturity Date) or any other amount under Section 2.7.2(b)(i) through
(vi) is not paid in full on each Payment Date (unless during any Cash Trap Period sufficient funds are available in the
relevant subaccount on the applicable date); provided, however, that Borrower shall have a five (5) day grace period following
the date when due for all payments that are not due on a Payment Date;


 


(ii)        if
any of the Property Taxes or Other Charges are not paid when the same are due and payable (unless Lender is paying such Property
Taxes pursuant to Section 7.1), subject to the provisions of Section 5.1.2 hereof;


 


(iii)        if
the Policies are not kept in full force and effect, or if copies of the certificates evidencing the Policies (or certified copies
of the Policies if requested by Lender) are not delivered to Lender within thirty (30) days after written request therefor; provided,
however, there shall be no Event of Default under this Section 8.1(a)(iii) if: (x) sufficient funds exist in the Tax and
Insurance Escrow Account to pay all premiums and any other amounts owing with respect to such Policies, and (y) in violation of
this Agreement, Lender fails to release such funds in order to pay same;


 


(iv)        if
Borrower Transfers or otherwise encumbers any portion of the Property or the Collateral in violation of the provisions of this
Agreement, or Article 6 (Due on Sale/Encumbrance) of the Security Instrument or any Transfer is made in violation of the provisions
of Section 5.2.10 hereof;


 


(v)        if
any representation or warranty made by Borrower herein or in any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender shall have been false or misleading in any material respect
as of the date the representation or warranty was made or deemed remade;


 




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(vi)        if
the representation and warranty contained in Section 4.1.37 regarding the tax classification of each of Borrower and Guarantor
as either a Disregarded Entity or a partnership is false or misleading at any time;


 


(vii)        if
Borrower, Principal or Guarantor shall (i) make an assignment for the benefit of creditors or (ii) generally not be paying its
debts as they become due;


 


(viii)        if
a receiver, liquidator or trustee shall be appointed for Borrower or Principal or if Borrower or Principal, as applicable, shall
be adjudicated bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, Borrower or Principal,
as applicable, or if any proceeding for the dissolution or liquidation of Borrower or Principal, as applicable, shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower or
Principal, as applicable, upon the same not being discharged, stayed or dismissed within sixty (60) days;


 


(ix)        if
Guarantor or any guarantor or indemnitor under any guaranty or indemnity issued in connection with the Loan shall make an assignment
for the benefit of creditors or if a receiver, liquidator or trustee shall be appointed for Guarantor or any guarantor or indemnitor
under any guarantee or indemnity issued in connection with the Loan or if Guarantor or such other guarantor or indemnitor shall
be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, Guarantor or such other
guarantor or indemnitor, or if any proceeding for the dissolution or liquidation of Guarantor or such other guarantor or indemnitor
shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented
to by Guarantor or such other guarantor or indemnitor, upon the same not being discharged, stayed or dismissed within ninety  (90)
days; provided, further, however, it shall be at Lender’s option to determine whether any of the foregoing shall be an Event
of Default;


 


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


 


(xi)        if
Borrower breaches any representation, warranty or covenant contained in Sections 4.1.30, 5.3, or 5.6, or any
of its negative covenants contained in Section 5.2 or any covenant contained in Section 5.1.11 hereof unless, (1)
with respect to a breach of Sections 4.1.30, 5.2.2, 5.2.5, or 5.2.12, such breach was not intentional,
is susceptible of being cured, and is so cured within ten (10) days of notice of such breach from Lender or (2) with respect to
a breach of Section 5.1.11, such breach was not intentional, is susceptible of being cured, and is so cured within (5) days
of notice (which may be via email) of such breach from Lender or Servicer;


 




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(xii)        with
respect to any term, covenant or provision set forth herein which specifically contains a notice requirement or grace period, if
Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such grace
period;


 


(xiii)        if
any of the assumptions contained in the Insolvency Opinion delivered to Lender in connection with the Loan, or in any Additional
Insolvency Opinion delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect, unless such
matter is cured in a timely manner;


 


(xiv)        if
a material default has occurred and continues beyond any applicable cure period under the Management Agreement (or any Replacement
Management Agreement) and if such default permits the Borrower thereunder to terminate or cancel the Management Agreement (or any
Replacement Management Agreement) and Borrower fails to comply with Section 5.1.23 hereof;


 


(xv)        if
Borrower shall continue to be in Default under any of the terms, covenants or conditions of Section 9.1 hereof, or fails
to cooperate with Lender in connection with a Securitization pursuant to the provisions of Section 9.1 hereof, for five
(5) days after written notice to Borrower from Lender;


 


(xvi)        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) through (xv) above or (xvii) through (xix) below, 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 for thirty (30) days after notice 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 thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within
such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period
shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default,
such additional period not to exceed ninety (90) days;


 


(xvii)        if
Borrower fails to obtain or maintain an Interest Rate Cap Agreement or Replacement thereof in accordance with Section 2.8
and/or Section 2.9 hereof;


 




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(xviii)    if
a default has occurred and continues beyond any applicable cure period under the Franchise Agreement (or any successor franchise
agreement) which permits the Franchisor to terminate or cancel the Franchise Agreement (or any successor franchise agreement)
and the Franchisor has taken any action (including sending a notice) to so terminate or cancel the Franchisor Agreement (or any
successor franchise agreement);


 


(xix)       if
a material default has occurred and continues beyond any applicable cure period under the Operating Lease; or


 


(xx)        if
there shall be default under any of the other Loan Documents not specified in clauses (i) through (xix) above, beyond any
applicable cure periods contained in such documents, if any, whether as to Borrower, Guarantor, any Restricted Party, the Property
or any other Person, or if any other such event shall occur or condition shall exist, if the effect of such default, event or condition
is to accelerate the maturity of any portion of the Debt or to permit Lender to accelerate the maturity of all or any portion of
the Debt in accordance with the Loan Documents.


 


(b)     Upon
the occurrence of an Event of Default (other than an Event of Default described in clauses (a)(vii), (a)(viii) or (a)(ix) above)
and at any time thereafter, in addition to any other rights or remedies available to it pursuant to this Agreement and the other
Loan Documents or at law or in equity, Lender may 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, without limitation, 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, without limitation, all rights or remedies available at law or in equity; and upon
any Event of Default described in clauses (a)(vii), (a)(viii) or (a)(ix) above, the Debt and all Other Obligations of Borrower
hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand,
and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding.


 


8.1.2     Remedies.


 


(a)        Upon
the occurrence 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 this Agreement or any of the other 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 Debt 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. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singularly, 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 herein or in the other Loan Documents.
Without limiting the generality of the foregoing, Borrower agrees that 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 has been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Obligations have been paid in full.


 




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(b)       With
respect to Borrower and the Property, nothing contained herein or in any other Loan Document shall be construed as requiring Lender
to resort to the Property for the satisfaction of any of the Debt in any preference or priority, and Lender may seek satisfaction
out of the Property, or any part thereof, in its absolute discretion in respect of the Debt. In addition, Lender shall have the
right from time to time to partially foreclose the Security Instrument in any manner and for any amounts secured by the Security
Instrument 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/or
interest, Lender may foreclose the Security Instrument 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 to recover so much
of the Debt as Lender may accelerate and such other sums secured by the Security Instrument as Lender may elect. Notwithstanding
one or more partial foreclosures, the Property shall remain subject to the Security Instrument to secure payment of sums secured
by the Security Instrument and not previously recovered.


 


(c)        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. 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, Lender shall not make or execute any
such documents under such power until three (3) days after notice has been given to Borrower by Lender of Lender’s intent
to exercise its rights under such power. Except as may be required in connection with a Securitization pursuant to Section 9.1
hereof, 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. Borrower shall not be obligated to pay any costs or expenses incurred in connection with the preparation, execution, recording
or filing of the Severed Loan Documents.


 


(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 in such order, priority
and proportions as Lender in its sole discretion shall determine.


 




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(e)        If
an Event of Default exists, Lender may (directly or by its agents, employees, contractors, engineers, architects, nominees, attorneys
or other representatives), but without any obligation to do so and without notice to Borrower and without releasing Borrower from
any obligation hereunder, cure the Event of Default in such manner and to such extent as Lender may deem necessary to protect the
security hereof. Subject to Tenant’ rights under the Leases, Lender (and its agents, employees, contractors, engineers, architects,
nominees, attorneys or other representatives) are authorized to enter upon the Property to cure such Event of Default, and Lender
is authorized to appear in, defend, or bring any action or proceeding reasonably necessary to maintain, secure or otherwise protect
the Property or any portion thereof or the priority of the Lien granted by the Security Instrument.


 


(f)         Lender
may appear in and defend any action or proceeding brought with respect to the Property or any portion thereof and may bring any
action or proceeding, in the name and on behalf of Borrower, which Lender, in its sole discretion, decides should be brought to
protect its interest in the Property. Lender shall, at its option, be subrogated to the Lien of any mortgage or other security
instrument discharged in whole or in part by the Obligations, and any such subrogation rights shall constitute additional security
for the payment of the Obligations.


 


(g)        As
used in this Section 8.1.1, a “foreclosure” shall include, without limitation, a power of sale.


 


8.1.3     Remedies
Cumulative; Waivers. 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 this Agreement
or the other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued
singularly, 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.


 




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ARTICLE
IX



SPECIAL PROVISIONS


 


Section
9.1            Transfer of Loan.


 


(a)        Lender
may, at any time, sell, transfer or assign the Loan or any portion thereof (including, without limitation, this Agreement, the
Note, the Security Instrument and the other Loan Documents, and any or all servicing rights with respect thereto), or grant participations
therein or issue mortgage pass-through certificates or other securities (the “Securities”) evidencing a beneficial
interest in a rated or unrated public offering or private placement (such sales, transfers, assignments, participations, offerings
and/or placements, collectively, a “Securitization”) (provided, however, that so long as no Event of Default
has occurred and is continuing, no such Securitization shall be to a Prohibited Transferee). At Lender’s election, each note
and/or component comprising the Loan may be subject to one or more securitizations. Lender may forward to each purchaser, transferee,
assignee, servicer, participant or investor in such participations or Securities (collectively, the “Investor”)
or any Rating Agency rating such Securities, each prospective Investor, and any organization maintaining databases on the underwriting
and performance of commercial mortgage loans, all documents and information which Lender now has or may hereafter acquire relating
to the Loan or to Borrower, any Guarantor or the Property, whether furnished by Borrower, any Guarantor or otherwise, as Lender
determines necessary or desirable, including, without limitation, financial statements relating to Borrower, Guarantor, the Property
and any Tenant at the Property. Borrower irrevocably waives any and all rights it may have under law or in equity to prohibit such
disclosure, including but not limited to any right of privacy. Any assignee shall be treated as a Lender for all purposes hereunder.
Any purchaser of a participation interest shall be entitled to the benefits of Section 2.10.1 and Section 2.11 as
if it were a Lender hereunder (subject to the requirements and limitations therein, including the requirements under Section
2.11(e) (it being understood that the documentation required under Section 2.11(e) shall be delivered to the participating
Lender).


 


(b)        Register.
Lender, acting solely for this purpose as an agent of Borrower, shall maintain at its office a register for the recordation of
the names and addresses of any party to whom it assigns a portion of the Loan (for purposes of this Section 9.1(b) and Section
9.1(c), each a “Lender” and collectively, the “Lenders”), and principal amounts (and
stated interest) of the portion of the Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).
Notwithstanding anything in the Loan Documents to the contrary, the entries in the Register shall be conclusive absent manifest
error, and Borrower and Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as
a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrower and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.


 


(c)        Participant
Register. Each Lender that sells a participation shall, acting solely for this purpose as an agent of Borrower, maintain a
register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s
interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided
that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of
any participant or any information relating to a participant’s interest in any commitments, loans, or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment,
loan, or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury regulations. Notwithstanding
anything in the Loan Documents to the contrary, the entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for
all purposes of this Agreement notwithstanding any notice to the contrary.


 




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Section
9.2           Cooperation. Borrower, agrees (and agrees to
cause Guarantor) to cooperate with Lender (and agrees to cause their respective officers and representatives to cooperate) in connection
with any transfer made or any Securities created pursuant to this Article IX, including, without limitation, the taking,
or refraining from taking, of such action as may be necessary to satisfy all of the conditions of any Investor, the delivery of
an estoppel certificate required in accordance with Section 5.1.15 hereof and such other documents as may be reasonably
requested by Lender, and the execution of amendments to this Agreement, the Note, the Security Instrument and other Loan Documents
and Borrower’s organizational documents as reasonably requested by Lender; provided that (i) Lender shall pay all of Borrower’s
actual out-of-pocket costs and reasonable expenses in connection with Borrower’s obligations under this Section 9.2
and (ii) no changes to the Loan Documents shall be required which will result in an increase in the aggregate debt or monthly debt
service payments (or otherwise increase Borrower’s or Guarantor’s obligations or liabilities under the Loan Documents
(other than, in each case, administratively or in a de minimis respect)). Borrower shall also furnish and Borrower and Guarantor
consent to Lender furnishing to such Investors or prospective Investors or any Rating Agency any and all information concerning
the Property, the Leases, the financial condition of Borrower and Guarantor as may be requested by Lender, any Investor, any prospective
Investor or any Rating Agency in connection with any sale, transfer or participations or Securities and shall indemnify the Indemnified
Parties against, and hold the Indemnified Parties harmless from, any losses, claims, damages or liabilities (collectively, the
“Liabilities”) to which any such Indemnified Parties may become subject insofar as the Liabilities arise out
of or are based upon any untrue statement of any material fact contained in a Disclosure Document or arise out of or are based
upon the omission to state therein a material fact required to be stated in the Disclosure Document or necessary in order to make
the statements in the Disclosure Document, in light of the circumstances under which they were made, not misleading and agreeing
to reimburse the Indemnified Parties for any legal or other expenses reasonably incurred by each of them in connection with investigating
or defending the Liabilities; provided, however, that Borrower will be liable in any such case under this Section 9.2 only
to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or omission
made therein in reliance upon and in conformity with information furnished to Lender by or on behalf of Borrower in connection
with the preparation of the Disclosure Document or in connection with the underwriting or closing of the Loan, including, without
limitation, financial statements of Borrower, operating statements and rent rolls with respect to the Property. This indemnity
agreement will be in addition to any liability which Borrower may otherwise have and shall survive the termination of the Security
Instrument and the satisfaction and discharge of the Debt.


 




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Section
9.3           Servicer. 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/or trustee, together with its agents, nominees or designees, are collectively referred to as “Servicer”)
selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents
to Servicer pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement or other agreement
providing for the servicing of one or more mortgage loans (collectively, the “Servicing Agreement”) between
Lender and Servicer. Borrower shall not be responsible for any set up fees or any other initial costs relating to or arising under
the Servicing Agreement, nor shall Borrower be responsible for payment of the regular monthly master servicing fee or trustee fee
due to Servicer under the Servicing Agreement or any fees or expenses required to be borne by, and not reimbursable to, Servicer.
Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on demand for (a) interest payable on advances made by
Servicer with respect to delinquent debt service payments (to the extent interest at the Default Rate actually paid by Borrower
in respect of such payments are insufficient to pay the same) or expenses paid by Servicer or trustee in respect of the protection
and preservation of the Property or any portion thereof (including, without limitation, on account of Basic Carrying Costs), (b)
all costs and expenses, liquidation fees, workout fees, special servicing fees, operating advisor fees or any other similar fees
payable by Lender to Servicer which may be due and payable under the Servicing Agreement (whether on a periodic or a continuing
basis) as a result of an Event of Default under the Loan, the Loan becoming specially serviced, the commencement or continuance
of any enforcement action of any kind with respect to the Loan or any of the Loan Documents, a refinancing or a restructuring of
the credit arrangements provided under this Agreement in the nature of a “work-out” of the Loan Documents, or any Bankruptcy
Action involving Borrower, Principal, Guarantor or any of their respective principals or Affiliates, (c) all costs and expenses
of any Property inspections and/or appraisals (or any updates to any existing inspection or appraisal) that Servicer or the trustee
may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under the Servicing
Agreement), and (d) all costs and expenses relating to or arising from any special requests made by Borrower or Guarantor during
the term of the Loan including, without limitation, in connection with a prepayment, defeasance, assumption or modification of
the Loan.


 


Section
9.4            Restructuring of Loan.


 


(a)        Lender,
without in any way limiting Lender’s other rights hereunder, in its sole and absolute discretion, shall have the right at
any time to require Borrower to restructure the Loan into additional multiple notes (which may include component notes and/or senior
and junior notes), to re-allocate principal among component notes and/or senior and junior notes and/or to create participation
interests in the Loan, which restructuring may include the restructuring of a portion of the Loan to one or more of the foregoing
or to one or more mezzanine loans (the “New Mezzanine Loan”) to the direct or indirect owners of the equity
interests in Borrower, secured by a pledge of such interests, the establishment of different interest rates and debt service payments
for the Loan, and the New Mezzanine Loan and the payment of the Loan, and the New Mezzanine Loan in such order of priority as may
be designated by Lender; provided that (i) the total principal amounts of the Loan (including any component notes),
and the New Mezzanine Loan shall equal the total principal amount of the Loan immediately prior to the restructuring, (ii) except
in the case of the occurrence of an Event of Default or a default beyond all notice and cure periods under the New Mezzanine Loan,
or of a Casualty or Condemnation that results in the payment of principal under the Loan and/or the New Mezzanine Loan, the weighted
average interest rate and all other fees and economic terms of the Loan and the New Mezzanine Loan, if any, shall, in the aggregate,
equal the Interest Rate and other fees and economic terms as in effect on the Closing Date, and (iii) except in the case of
the occurrence of an Event of Default and/or a default beyond all notice and cure periods under the New Mezzanine Loan, or of a
Casualty or Condemnation that results in the payment of principal under the Loan and/or the New Mezzanine Loan, the aggregate debt
service payments on the Loan and the New Mezzanine Loan and all other fees and economic terms shall equal the aggregate debt service
payments and other fees and economic terms which would have been payable under the Loan had the restructuring not occurred. Without
in any way limiting Lender’s other rights hereunder, Lender shall have the right, in its sole and absolute discretion, at
any time, to convert a portion of the Loan into a preferred equity investment (the “Preferred Equity Investment”).
The Preferred Equity Investment shall be structured so that an Affiliate of Lender and Affiliate of Borrower are the preferred
equity member and common member, respectively, of an entity that is sole member of Borrower, but otherwise will be structured on
the same terms and conditions as though it were a New Mezzanine Loan (but without an equity pledge). The Preferred Equity Investment
shall be treated as debt for federal income tax purposes.


 




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(b)        Borrower
shall cooperate with all reasonable requests of Lender in order to restructure the Note, the Loan and/or to create a New Mezzanine
Loan, if applicable, and shall, upon thirty (30) Business Days’ written notice from Lender, which notice shall include the
forms of documents for which Lender is requesting execution and delivery, (i) execute and deliver such documents, including,
without limitation, in the case of any New Mezzanine Loan, a mezzanine note, a mezzanine loan agreement, a pledge and security
agreement and a mezzanine deposit account agreement, (ii) cause Borrower’s counsel to deliver such legal opinions, and
(iii) create such a bankruptcy remote borrower under the New Mezzanine Loan as, in each of the cases of clauses (i),
(ii) and (iii) above, shall be reasonably required by Lender and required by any Rating Agency in connection therewith, all in
form and substance reasonably satisfactory to Lender, including, without limitation, the severance of this Agreement, the Security
Instrument and the other Loan Documents if requested; provided, however, that following any such amendments required by Lender
(A) the total principal amounts of the Loan (including any component notes), and the New Mezzanine Loan shall equal the total
principal amount of the Loan immediately prior to the restructuring, (B) except in the case of the occurrence of an Event
of Default or a default beyond all notice and cure periods under the New Mezzanine Loan, or of a Casualty or Condemnation that
results in the payment of principal under the Loan and/or the New Mezzanine Loan, the weighted average interest rate and all other
fees and economic terms of the Loan and the New Mezzanine Loan, if any, shall, in the aggregate, equal the Interest Rate and other
fees and economic terms as in effect on the Closing Date, and (C) except in the case of the occurrence of an Event of Default
and/or a default beyond all notice and cure periods under the New Mezzanine Loan, or of a Casualty or Condemnation that results
in the payment of principal under the Loan and/or the New Mezzanine Loan, the aggregate debt service payments on the Loan and the
New Mezzanine Loan and all other fees and economic terms shall equal the aggregate debt service payments and other fees and economic
terms which would have been payable under the Loan had the restructuring not occurred.


 


(c)        Lender
shall pay all of its and Borrower’s actual out-of-pocket costs and reasonable expenses incurred in connection with the transactions
contemplated by this Section 9.4.


 


(d)        In
the event Borrower fails to execute and deliver such documents described in this Section 9.4 to Lender within thirty (30)
days following such written notice by Lender, and Lender sends a second notice to Borrower with respect to the delivery of such
documents containing a legend clearly marked in not less than fourteen (14) point bold face type, underlined, in all capital letters
“POWER OF ATTORNEY IN FAVOR OF LENDER DEEMED EFFECTIVE FOR EXECUTION AND DELIVERY OF DOCUMENTS IF NO RESPONSE WITHIN 30 DAYS”,
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 such transactions, Borrower ratifying all that such
attorney shall do by virtue thereof, if Borrower fails to execute and deliver such documents within ten (10) Business Days of delivery
of such second notice. It shall be an Event of Default if Borrower fails to comply with any of the terms, covenants or conditions
of this Section 9.4 after the expiration of ten (10) Business Days after delivery of the second notice thereof.


 




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ARTICLE
X



MISCELLANEOUS


 


Section
10.1         Survival. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making
by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long
as all or any of the Obligations are outstanding and unpaid, unless a longer period is expressly set forth herein or in the other
Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower,
shall inure to the benefit of the successors and assigns of Lender.


 


Section
10.2           Lender’s Discretion. Whenever pursuant
to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory
to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory
shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive.


 


Section
10.3           Governing Law.


 


(a)        THIS
AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES IRREVOCABLY
AND UNCONDITIONALLY 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,
EACH AND ALL OF THIS AGREEMENT, THE NOTE, THE OTHER LOAN DOCUMENTS, AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE ATTACHMENT, CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED UNDER THE SECURITY
INSTRUMENT AND THE ASSIGNMENT OF LEASES IN FAVOR OF LENDER IN RESPECT OF RENTS, REAL PROPERTY AND/OR PERSONAL PROPERTY SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH SUCH REAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO
THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY
AND ENFORCEABILITY OF THIS AGREEMENT, THE NOTE AND THE LOAN AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. 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, THE NOTE AND/OR THE LOAN, AND THIS AGREEMENT, THE NOTE AND THE LOAN SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.


 




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(b)        ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE, ANY OTHER LOAN DOCUMENT
OR THE ATTACHMENT, CREATION, PERFECTION, OR ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED UNDER THE SECURITY INSTRUMENT
AND THE ASSIGNMENT OF LEASES MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT LOCATED IN NEW YORK OR HAWAII,
INCLUDING WITHOUT LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE COUNTY OF NEW YORK AND/OR IN THE COUNTY IN WHICH THE REAL
PROPERTY ENCUMBERED BY THE SECURITY INSTRUMENT IS LOCATED 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
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:


 


THE LIGHTSTONE GROUP LLC

460 PARK AVENUE, 13TH FLOOR

NEW YORK, NEW YORK 10022

ATTN: JOSEPH E. TEICHMAN


 


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, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND 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 INCLUDING WITHOUT LIMITATION THOSE 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. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY JURISDICTION.


 




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Section
10.4           Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other 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 against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower,
shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.


 


Section
10.5           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 hereunder, or under the Note or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude
any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation,
by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender
shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement,
the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount.


 


Section
10.6           Notices. All notices, consents, approvals and requests required or permitted hereunder
or under any other Loan Document shall be given in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt requested or (b) expedited prepaid delivery service,
either commercial or United States Postal Service, with proof of attempted delivery, and by telecopier (with answer back acknowledged),
addressed as follows (or at such other address and Person as shall be designated from time to time by any party hereto, as the
case may be, in a notice to the other parties hereto in the manner provided for in this Section 10.6):


 


	If to Lender:	TH Commercial Mortgage LLC
	 	c/o Two Harbors Investment Corp.
	 	601 Carlson Parkway, Suite 1400
	 	Minnetonka, Minnesota 55305
	 	Attention:  General Counsel
	 	Facsimile No.: (612) 629-2501


 


	With a copy to:	Haynes and Boone, LLP
	 	30 Rockefeller Plaza, 26th Floor
	 	New York, New York, 10112
	 	Attention: Carolyn Sullivan, Esq.
	 	Email: Carolyn.Sullivan@haynesboone.com


 




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	If to Borrower:	c/o Behringer Harvard
	 	The Lightstone Group
	 	460 Park Avenue
	 	New York, NY 10022
	 	Attention: Alan Liu and Tom Kennedy
	 	Facsimile No.: 212-751-2494


 


	With a copy to:	JMI Realty LLC
	 	111 Congress Avenue, Suite 2600
	 	Austin, Texas 78701
	 	Attention: Gregory W. Clay and Bryant Burke, Esq.
	 	Facsimile No.:  (858) 350-1874


 


	And a copy to:	The Lightstone Group
	 	1985 Cedar Bridge Ave., Suite 1
	 	Lakewood, New Jersey 08701
	 	Attention:  Joseph E. Teichman, Esq.
	 	Facsimile No.: (732) 612-1444


 


	And a copy to:	Eckert Seamans Cherin & Mellott, LLC
	 	600 Grant Street, 44th Floor
	 	Pittsburgh, Pennsylvania 15219
	 	Attention:  Timothy Q. Hudak, Esq.
	 	Facsimile No.:  (412) 566-6099


 


A notice shall be deemed to have been given:
in the case of hand delivery, at the time of delivery; in the case of registered or certified mail, when delivered or the first
attempted delivery on a Business Day; or in the case of expedited prepaid delivery, upon the first attempted delivery on a Business
Day; or in the case of telecopy, upon sender’s receipt of a machine-generated confirmation of successful transmission after
advice by telephone to recipient that a telecopy notice is forthcoming; provided, however, if such telecopy is sent at any time
other than normal business hours on a Business Day at the location of receipt, same shall be deemed delivered on the next Business
Day. Any failure to deliver a notice by reason of a change of address not given in accordance with this Section 10.6, or
any refusal to accept a notice, shall be deemed to have been given when delivery was attempted. Any notice required or permitted
to be given by any party hereunder or under any other Loan Document may be given by its respective counsel. Additionally, any notice
required or permitted to be given by Lender hereunder or under any other Loan Document may also be given by the Servicer.


 





 




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Section
10.7          Trial by Jury. BORROWER 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 IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN
ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.


 


Section
10.8         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
10.9        Severability.
Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions
of this Agreement.


 


Section
10.10        Preferences.
Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion
of the Debt. 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, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds
received, the Obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect,
as if such payment or proceeds had not been received by Lender.


 


Section
10.11       Waiver of Notice. Borrower hereby expressly
waives, and shall not be entitled to, any notices of any nature whatsoever from Lender except with respect to matters for which
this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and
except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving
of notice.


 


Section
10.12       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 this Agreement or the other Loan Documents Lender or such agent, as the case may be, has an obligation to act reasonably
or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s
sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree
that any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory
judgment. Further, it is agreed Lender shall not be in default under this Agreement, or under any other Loan Document, unless a
written notice specifically setting forth the claim of Borrower shall have been given to Lender within thirty (30) days after Borrower
first had knowledge of the occurrence of the event which Borrower alleges gave rise to such claim and Lender does not remedy or
cure the default, if any there be, promptly thereafter. Failure to give such notice shall constitute a waiver of such claim.


  




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Section
10.13        Expenses; Indemnity


 


(a)        Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of notice from Lender for all costs
and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including without limitation any opinions
requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with respect to the Property
or any portion thereof); (ii) Borrower’s ongoing performance of and compliance with Borrower’s respective agreements
and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing
Date, including, without limitation, confirming compliance with environmental and insurance requirements; (iii) Lender’s
ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other Loan Documents
on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any
other documents or matters requested by Lender; (v) securing Borrower’s compliance with any requests made pursuant to the
provisions of this Agreement; (vi) 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 this Agreement and the other Loan Documents; (vii) enforcing or preserving any rights,
either in response to third-party claims or in prosecuting or defending any action or proceeding or other litigation, in each case
against, under or affecting Borrower, this Agreement, the other Loan Documents, the Property or any portion thereof, or any other
security given for the Loan; and (viii) enforcing any obligations of or collecting any payments due from Borrower under this Agreement,
the other Loan Documents or with respect to the Property or any portion thereof (including any fees and expenses reasonably incurred
by or payable to Servicer or a trustee in connection with the transfer of the Loan to a special servicer upon Servicer’s
anticipation of a Default or Event of Default, liquidation fees, workout fees, special servicing fees, operating advisor fees or
any other similar fees and interest payable on advances made by the Servicer with respect to delinquent debt service payments or
expenses of curing Borrower’s defaults under the Loan Documents), or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a “work-out” or of any insolvency or bankruptcy
proceedings or any other amounts required under Section 9.3; 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 or as otherwise expressly provided in Section 9.4 hereof. Any cost and expenses due and payable to
Lender may be paid from any amounts in the Clearing Account or the Cash Management Account, as applicable.


 




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(b)        Borrower
shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all Losses that may be imposed on, incurred
by, or asserted against any Indemnified Party in any manner relating to or arising out of (i) any breach by Borrower of its Obligations
under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, or (ii) the use
or intended use of the proceeds of the Loan (the liabilities, losses, costs, expenses and other matters described in this subparagraph
(b), collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation
to an Indemnified Party hereunder to the extent that such Indemnified Liabilities arise from the gross negligence, illegal acts,
fraud or willful misconduct of such Indemnified Party. 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 Indemnified Parties.


 


(c)        Borrower
covenants and agrees to pay or, if Borrower fails to pay, to reimburse Lender for, any fees and expenses incurred by any Rating
Agency in connection with any Rating Agency review of the Loan, the Loan Documents or any transaction contemplated thereby or any
consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of this Agreement
or any other Loan Document and Lender shall be entitled to require payment of such fees and expenses as a condition precedent to
the obtaining of any such consent, approval, waiver or confirmation.


 


(d)        Borrower
shall indemnify, defend and hold harmless each Indemnified Party against any Losses to which each such Indemnified Party may become
subject (i) in connection with any indemnification to the Rating Agencies in connection with issuing, monitoring or maintaining
the Securities and (ii) insofar as such Losses so incurred arise out of or are based upon any untrue statement of any material
fact in any information provided by or on behalf of the Borrower or Guarantor to the Rating Agencies, if any (the “Covered
Rating Agency Information”) or arise out of or are based upon the omission to state a material fact in the Covered Rating
Agency Information required to be stated therein or necessary in order to make the statements in the Covered Rating Agency Information,
in light of the circumstances under which they were made, not misleading, except to the extent such Losses arise from the gross
negligence or willful misconduct of such Indemnified Party.


 


Section
10.14       Schedules Incorporated. The Schedules annexed
hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.


 


Section
10.15       Offsets, Counterclaims and Defenses. Any
assignee of Lender’s interest in and to this Agreement, the Note and the other Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses, which are unrelated to such documents that 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
10.16        No Joint Venture or Partnership; No Third Party Beneficiaries.


 


(a)     Borrower
and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.


 




    	 	133	 



     


    

 


(b)     This
Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement
or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower 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 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 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
10.17        Publicity. All news releases, publicity or
advertising by Borrower or its Affiliates through any media intended to reach the general public that refers to the Loan Documents
or the financing evidenced by the Loan Documents, to Lender or any of its Affiliates, shall be subject to the prior approval of
Lender.


 


Section
10.18       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 partners and others with interests in Borrower, and of the Property, or to a sale in inverse order
of alienation in the event of foreclosure of the Security Instrument, and agrees not to 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 Debt without any prior or different resort for collection or of the right of Lender to the payment of
the Debt out of the net proceeds of the Property in preference to every other claimant whatsoever.


 


Section
10.19       Waiver of Counterclaim. 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.


 





 




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Section
10.20        Conflict; Construction of Documents; Reliance.
In the event of any conflict between the provisions of this Agreement
and those of 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 that 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 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 that 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 that may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.


 


Section
10.21       Brokers and Financial Advisors. Other than
the payment of any and all commissions or similar fees owed to Jones Lang LaSalle Americas, Inc. (the “Broker”)
in connection with the transactions contemplated by this Agreement, 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 hereby agrees to 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 Broker or any other Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated
herein. The provisions of this Section 10.21 shall survive the expiration and termination of this Agreement and the payment
of the Debt.


 


Section
10.22       Prior Agreements. This Agreement and the
other 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, understandings and negotiations among or between (or on behalf of) such parties,
whether oral or written, including, without limitation, the non-binding term sheet dated April 7, 2017 between Pine River Capital
Management L.P. (an Affiliate of Lender) and Borrower are superseded by the terms of this Agreement and the other Loan Documents.


 


Section
10.23       Cumulative Rights. All of the rights of Lender
under this Agreement and under each of the other Loan Documents, and any other agreement now or hereafter executed in connection
herewith or therewith, shall be cumulative and may be exercised singly, together, or in such combination as Lender may determine
in its sole judgment.


 


Section
10.24       Counterparts. This Agreement may be executed
in several counterparts, each of which when executed and delivered is an original, but all of which together shall constitute one
instrument. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart
that is executed by the party against whom enforcement of this Agreement is sought.


 


Section
10.25       Time Is of the Essence. Time is of the essence
of each provision of this Agreement and the other Loan Documents.


 





 




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Section
10.26       Consent of Holder. Wherever this
Agreement refers to Lender’s consent or discretion or other rights, such references to Lender shall be deemed to refer
to any holder of the Loan. The holder of the Loan may from time to time appoint a trustee or Servicer, and Borrower shall be
entitled to rely upon written instructions executed by a purported officer of the holder of the Loan as to the extent of
authority delegated to any such trustee or Servicer from time to time and determinations made by such trustee or Servicer to
the extent identified as within the delegated authority of such trustee or Servicer, unless and until such instructions are
superseded by further written instructions from the holder of the Loan.


 


Section
10.27       Successor Laws. Any reference in this Agreement
to any statute or regulation shall be deemed to include any successor statute or regulation.


 


Section
10.28       Performance by Borrower and Lender; Reliance on Third Parties.
Lender may perform any of its responsibilities hereunder through one or more agents, attorneys or independent contractors. In addition,
Lender may conclusively rely upon the advice or determinations of any such agents, attorneys or independent contractors in performing
any discretionary function under the terms of this Agreement. Wherever this Agreement refers to Borrower’s obligation to
cause action by the Guarantor or the Manager regarding the observance, performance or satisfaction of any term, provision, covenant
or condition contained herein, such obligation with respect to Borrower shall be interpreted to mean that Borrower shall not suffer
or permit such party to fail to observe, perform or satisfy any such term, provision or covenant contained herein.


 


Section
10.29        Reserved.


 


Section
10.30       Joint
and Several Liability; Right of Contribution. If more than one Person has executed this
Agreement as “Borrower,” the representations, covenants, warranties and obligations of all such Persons hereunder shall
be joint and several. Each entity that constitutes Borrower (for purposes of this Section 10.30 only, each a “Borrower”
and collectively, “Borrowers”) acknowledges and agrees that it shall be jointly and severally liable for the
Loan and all other Obligations arising under this Agreement and/or any of the other Loan Documents. In furtherance thereof, each
Borrower acknowledges and agrees as follows:


 


(a)       For
the purpose of implementing the joint borrower provisions of the Loan Documents, each Borrower hereby irrevocably appoints each
other Borrower as its agent and attorney-in-fact for all purposes of the Loan Documents, including the giving and receiving of
notices and other communications.


 


(b)       To
induce Lender to make the Loan, and in consideration thereof, each Borrower hereby agrees to indemnify Lender against, and hold
Lender harmless from, any and all liabilities, expenses, losses, damages and/or claims of damage or injury asserted against Lender
by any Borrower or by any other Person arising from or incurred by reason of reliance by Lender on any requests or instructions
from any Borrower.


 


(c)        Each
Borrower acknowledges that the liens and security interests created or granted herein and by the other Loan Documents will secure
the Obligations of all Borrowers under the Loan Documents and, in full recognition of that fact, each Borrower consents and agrees
that Lender may, at any time and from time to time, without notice or demand, and without affecting the enforceability or security
hereof or of any other Loan Document:


 




    	 	136	 



     


    

 


(i)            agree
with any Borrower to supplement, modify, amend, extend, renew, accelerate, or otherwise change the time for payment or the terms
of the Obligations or any part thereof, including any increase or decrease of the rate(s) of interest thereon;


 


(ii)           agree
with any Borrower to supplement, modify, amend or waive, or enter into or give any agreement, approval or consent with respect
to, the Obligations or any part thereof or any of the Loan Documents or any additional security or guaranties, or any condition,
covenant, default, remedy, right, representation or term thereof or thereunder;


 


(iii)          accept
new or additional instruments, documents or agreements in exchange for or relative to any of the Loan Documents or the Obligations
or any part thereof;


 


(iv)          accept
partial payments on the Obligations;


 


(v)            receive
and hold additional security or guaranties for the Obligations or any part thereof;


 


(vi)          release,
reconvey, terminate, waive, abandon, subordinate, exchange, substitute, transfer and enforce any security for or guaranties of
the Obligations, and apply any security and direct the order or manner of sale thereof as Lender, in its sole and absolute discretion,
may determine;


 


(vii)         release
any Person or any guarantor from any personal liability with respect to the Obligations or any part thereof; or


 


(viii)        settle,
release on terms satisfactory to Lender or by operation of applicable laws or otherwise liquidate or enforce any Obligations and
any security therefor or guaranty thereof in any manner, consent to the transfer of any such security and bid and purchase at any
sale; and consent to the merger, change or any other restructuring or termination of the corporate existence of any Borrower or
any other Person, and correspondingly restructure the obligations of such Borrower or other Person, and any such merger, change,
restructuring or termination shall not affect the liability of any Borrower or the continuing existence of any lien or security
interest hereunder, or under any other Loan Document to which any Borrower is a party, or the enforceability hereof or thereof
with respect to all or any part of the Obligations.


 




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(d)        Upon
the occurrence of and during the continuance of any Event of Default, Lender may enforce this Agreement and the other Loan Documents
independently as to each Borrower and independently of any other remedy or security Lender at any time may have or hold in connection
with the Obligations, and in collecting on the Loan it shall not be necessary for Lender to marshal assets in favor of any Borrower
or any other Person or to proceed upon or against and/or exhaust any other security or remedy before proceeding to enforce this
Agreement and the other Loan Documents. Each Borrower expressly waives any right to require Lender, in connection with Lender’s
efforts to obtain repayment of the Loan and Other Obligations, to marshal assets in favor of any Borrower or any other Person or
to proceed against any other Person or any collateral provided by any other Person, and agrees that Lender may proceed against
any Persons and/or collateral in such order as it shall determine in its sole and absolute discretion in connection with Lender’s
efforts to obtain repayment of the Loan and other Obligations. Lender may file a separate action or actions against each Borrower
to enforce the Obligations, whether action is brought or prosecuted with respect to any other security or against any other Person,
or whether any other Person is joined in any such action or actions. Each Borrower agrees that Lender, each Borrower and/or any
other Person may deal with each other in connection with the Obligations or otherwise, or alter any contracts or agreements now
or hereafter existing among any of them, in any manner whatsoever, all without in any way altering or affecting the security of
this Agreement or the other Loan Documents. The rights of Lender hereunder and under the other Loan Documents shall be reinstated
and revived, and the enforceability of this Agreement and the other Loan Documents shall continue, with respect to any amount at
any time paid on account of the Obligations, which thereafter shall be required to be restored or returned by Lender as a result
of the bankruptcy, insolvency or reorganization of any Borrower or any other Person, or otherwise, all as though such amount had
not been paid. The enforceability of this Agreement and the other Loan Documents at all times shall remain effective even though
any or all Obligations, or any other security or guaranty therefor, may be or hereafter may become invalid or otherwise unenforceable
as against any Borrower or any other Person and whether or not any Borrower or any other Person shall have any personal liability
with respect thereto. Each Borrower expressly waives any and all defenses to the enforcement of its Obligations under the Loan
Documents now or hereafter arising or asserted by reason of (i) any disability or other defense of any Borrower or any other Person
with respect to the Obligations, (ii) the unenforceability or invalidity of any security or guaranty for the Obligations or the
lack of perfection or continuing perfection or failure of priority of any security for the Obligations, (iii) the cessation for
any cause whatsoever of the liability of any Borrower or any other Person (other than by reason of the full and final payment and
performance of all Obligations), (iv) any failure of Lender to marshal assets in favor of any of the Borrowers or any other Person,
(v) any failure of Lender to give notice of sale or other disposition of any Collateral for the Obligations to Borrower or to any
other Person or any defect in any notice that may be given in connection with any such sale or disposition, (vi) any failure of
Lender to comply in any non-material respect with applicable laws in connection with the sale or other disposition of any collateral
or other security for any Obligation, (vii) any act or omission of Lender or others that directly or indirectly results in or aids
the discharge or release of any Borrower or of any other Person or of any of the Obligations or any other security or guaranty
therefor by operation of law or otherwise, (viii) any law that provides that the obligation of a surety or guarantor must neither
be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or guarantor’s
obligation in proportion to the principal obligation, (ix) any failure of Lender to file or enforce a claim in any bankruptcy or
similar proceeding with respect to any Person, (x) the election by Lender, in any bankruptcy or similar proceeding of any Person,
of the application or non-application of Section 1111(b)(2) of the Bankruptcy Code, (xi) any extension of credit or the grant of
any lien under Section 364 of the Bankruptcy Code except to the extent otherwise provided in this Agreement, (xii) any use of cash
collateral under Section 363 of the Bankruptcy Code, (xiii) any agreement or stipulation with respect to the provision of adequate
protection in any bankruptcy or similar proceeding of any Person, (xiv) the avoidance of any lien or security interest in favor
of Lender securing the Obligations for any reason, or (xv) any bankruptcy or similar proceeding commenced by or against any Person,
including any discharge of, or bar or stay against collecting, all or any of the Obligations (or any interest thereon) in or as
a result of any such proceeding.


 




    	 	138	 



     


    

 


(e)        Borrowers
represent and warrant to Lender that they have established adequate means of obtaining from each other, on a continuing basis,
financial and other information pertaining to their respective businesses, operations and condition (financial and otherwise) and
their respective properties, and each now is and hereafter will be completely familiar with the businesses, operations and condition
(financial and otherwise) of the other and their respective properties. Each Borrower hereby expressly waives and relinquishes
any duty on the part of Lender to disclose to such Borrower any matter, fact or thing related to the businesses, operations or
condition (financial or otherwise) of the other Borrowers or the other Borrowers’ properties, whether now known or hereafter
known by Lender during the life of this Agreement. With respect to any of the Obligations, Lender need not inquire into the powers
of any Borrower or the officers, employees or other Persons acting or purporting to act on such Borrower’s behalf.


 


(f)        EACH
BORROWER WARRANTS AND AGREES THAT EACH OF THE WAIVERS AND CONSENTS SET FORTH HEREIN IS MADE WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE
AND CONSEQUENCES, WITH THE UNDERSTANDING THAT EVENTS GIVING RISE TO ANY DEFENSE WAIVED MAY DIMINISH, DESTROY OR OTHERWISE ADVERSELY
AFFECT RIGHTS THAT EACH OTHERWISE MAY HAVE AGAINST THE OTHER, AGAINST LENDER OR OTHERS, OR AGAINST ANY COLLATERAL. IF ANY OF THE
WAIVERS OR CONSENTS HEREIN IS DETERMINED TO BE CONTRARY TO ANY APPLICABLE LAW OR PUBLIC POLICY, SUCH WAIVERS AND CONSENTS SHALL
BE EFFECTIVE TO THE MAXIMUM EXTENT PERMITTED BY LAW.


 


[The
Remainder of the Page is Intentionally Blank]


 




    	 	139	 



     


    

 


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


 


	 	OWNER BORROWER:
	 	 
	 	KAUAI COCONUT BEACH, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	Gregory W. Clay
	 	Title:	Senior Vice President
	 	 	 
	 	OPERATOR BORROWER:
	 	 
	 	KAUAI COCONUT BEACH OPERATOR, LLC, a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 Gregory W. Clay
	 	Title:	 Senior Vice President
	 	 	 
	 	LENDER:
	 	 
	 	TH COMMERCIAL MORTGAGE LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 




    	 	140	 



     


    

 


SCHEDULE I


 


[List
of Leases]


 


		1.	Lease dated as of April 27, 2005 between Kauai Coconut
Beach Operator, LLC (successor-in-interest to PK Holdings, LLC) and Hawaiian Rainforest LLC.



 


		2.	License Agreement dated November 30, 2012 between Kauai
Coconut Beach Operator, LLC and Activity Information Center, Inc.



 




     


     


    

 


SCHEDULE II


 


[required
repairs]






Inspect fire extinguishers, as more particularly described under
“Fire and Life Safety” in the Property Condition Report.


 




     


     


    

 


SCHEDULE III


 


[Borrower
Organizational Chart]


 


[Attached]


 




     


     


    

 


SCHEDULE IV


 


[Deposit
Amounts]


 


	Initial Tax Deposit:	 	$	144,569.08	 
	 	 	 	 	 
	Initial Insurance Premiums Deposit:	 	$	0	 



 




     


     


    

 


SCHEDULE V


 


[federal
tax identification numbers]


 


1.     Borrower:


 


(a)     Kauai Coconut Beach, LLC:
27-3565726


 


(b)     Kauai
Coconut Beach Operator, LLC: 27-3565837


 


2.     Guarantor:


 


(a)     JMI Realty LLC: 33-0983524


 


(b)     Behringer Harvard Opportunity
REIT II, Inc.: 20-8198863


 




     


     


    

 


SCHEDULE VI


 


[REA]


 


		1.	Amendment and Restatement of Declaration of Easements
and Covenants, dated February 25, 1993, and recorded March 19, 1993 in the Office of the Assistant Registrar of the Land Court
of the State of Hawaii, as Document No. 2007394, as amended by that certain First Amendment to the Amended and Restated Declaration
of Easements and Covenants and Consent, dated December 9, 2003, and recorded June 21, 2004 in the Office of the Assistant Registrar
of the Land Court of the State of Hawaii, as Document No. 3124940.



 


		2.	Declaration of Covenants and Restrictions, dated December
14, 2004, and recorded December 14, 2004 in the Office of the Assistant Registrar of the Land Court of the State of Hawaii, as
Document No. 3206663.



 




     


     


    

 


SCHEDULE VII


 


[amortization
schedule]


 


	Amortization
 Month	 	Payment
 Date	 	Principal
 Due	 	 	Loan
 Balance	 
	1	 	6/9/2020	 	$	(36,066	)	 	$	43,963,934	 
	2	 	7/9/2020	 	$	(36,277	)	 	$	43,927,657	 
	3	 	8/9/2020	 	$	(36,488	)	 	$	43,891,168	 
	4	 	9/9/2020	 	$	(36,701	)	 	$	43,854,467	 
	5	 	10/9/2020	 	$	(36,915	)	 	$	43,817,552	 
	6	 	11/9/2020	 	$	(37,131	)	 	$	43,780,421	 
	7	 	12/9/2020	 	$	(37,347	)	 	$	43,743,074	 
	8	 	1/9/2021	 	$	(37,565	)	 	$	43,705,508	 
	9	 	2/9/2021	 	$	(37,784	)	 	$	43,667,724	 
	10	 	3/9/2021	 	$	(38,005	)	 	$	43,629,719	 
	11	 	4/9/2021	 	$	(38,226	)	 	$	43,591,493	 
	12	 	5/9/2021	 	$	(38,449	)	 	$	43,553,044	 
	13	 	6/9/2021	 	$	(38,674	)	 	$	43,514,370	 
	14	 	7/9/2021	 	$	(38,899	)	 	$	43,475,471	 
	15	 	8/9/2021	 	$	(39,126	)	 	$	43,436,345	 
	16	 	9/9/2021	 	$	(39,354	)	 	$	43,396,990	 
	17	 	10/9/2021	 	$	(39,584	)	 	$	43,357,406	 
	18	 	11/9/2021	 	$	(39,815	)	 	$	43,317,591	 
	19	 	12/9/2021	 	$	(40,047	)	 	$	43,277,544	 
	20	 	1/9/2022	 	$	(40,281	)	 	$	43,237,263	 
	21	 	2/9/2022	 	$	(40,516	)	 	$	43,196,748	 
	22	 	3/9/2022	 	$	(40,752	)	 	$	43,155,996	 
	23	 	4/9/2022	 	$	(40,990	)	 	$	43,115,006	 
	24	 	5/9/2022	 	$	(41,229	)	 	$	43,073,777	 



 


 




     


     


    

 


SCHEDULE VIII


 


[Litigation]


 


Eugene D. Martin, et al., v. Marriott International, Inc., et
al., Case No. 5CC161000135, filed September 12, 2016


 




     


     


    

 


SCHEDULE IX


 


FORM OF U.S. TAX COMPLIANCE CERTIFICATE


 


Reference is hereby made
to the Loan Agreement dated as of May 8, 2017 (as amended, supplemented or otherwise modified from time to time, the “Agreement”),
among KAUAI COCONUT BEACH, LLC and KAUAI COCONUT BEACH OPERATOR, LLC, and TH COMMERCIAL MORTGAGE LLC (or its successors and assigns).


 


Pursuant to the provisions
of Section 2.11(e) of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a
bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the
meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described
in Section 881(c)(3)(C) of the Code.


 


The undersigned has provided
Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate,
the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform
Borrower, and (2) upon Borrower’s request the undersigned shall furnish Borrower with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be made to the undersigned or in either of the two
calendar years preceding such payments.


 


Unless otherwise defined
herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.


 


	[LENDER SIGNATURE BLOCK]	 
	 	 
	By:	 	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 


 


Date: _____________ _____, 20[  ]


 




     


     


    

 


SCHEDULE X


 


[PIP WORK]


 


[Attached]


 




     


     


    

 


SCHEDULE XI


 


[PROHIBITED TRANSFEREE]


 


		1.	Cerberus Capital Management and its Affiliates



 


		2.	Five Mile Capital Partners LLC and its Affiliates