# EDGAR Filing Document

**Accession Number:** 0001356115
**File Stem:** 0001356115-23-000004
**Filing Date:** 2023-3
**Character Count:** 2201056
**Document Hash:** 2c9bfd197a04365f1f2fc54f74c71980
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001356115-23-000004.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001356115-23-000004

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 126

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NEXPOINT DIVERSIFIED REAL ESTATE TRUST
- **CENTRAL INDEX KEY:** 0001356115
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 800139099
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32921
- **FILM NUMBER:** 23783651

**BUSINESS ADDRESS:**
- **STREET 1:** 300 CRESCENT COURT
- **STREET 2:** SUITE 700
- **CITY:** DALLAS
- **STATE:** TX
- **ZIP:** 75201
- **BUSINESS PHONE:** 214-276-6300

**MAIL ADDRESS:**
- **STREET 1:** 300 CRESCENT COURT
- **STREET 2:** SUITE 700
- **CITY:** DALLAS
- **STATE:** TX
- **ZIP:** 75201

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NexPoint Strategic Opportunities Fund
- **DATE OF NAME CHANGE:** 20180319

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NexPoint Credit Strategies Fund
- **DATE OF NAME CHANGE:** 20120702

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Pyxis Credit Strategies Fund
- **DATE OF NAME CHANGE:** 20120109

?xml version="1.0" ? nxdt-20221231

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**_____________________________________________________________________________________**

**FORM 10-K**

**_____________________________________________________________________________________**

**(Mark One)**

⌧ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2022**

**OR**

□ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>**

**Commission File Number 001-32921**

**_____________________________________________________________________________________**

**NexPoint Diversified Real Estate Trust**

**(Exact Name of Registrant as Specified in Its Charter)**

**_____________________________________________________________________________________**

---

| | |
|:---|:---|
| **Delaware** | **80-0139099** |
| **(State or other Jurisdiction of<br>Incorporation or Organization)** | **(I.R.S. Employer<br>Identification No.)** |

---

---

| | |
|:---|:---|
| **300 Crescent Court, Suite 700, Dallas, Texas**<br>**(Address of Principal Executive Offices)** | **75201**<br>**(Zip Code)** |

---

 **(214) 276-6300**

**(Telephone Number, Including Area Code)**

**Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| **Common Shares, par value $0.001 per share** | **NXDT** | **New York Stock Exchange** |
| **5.50% Series A Cumulative Preferred Shares, par value<br>$0.001 per share ($25.00 liquidation preference per share)** | **NXDT-PA** | **New York Stock Exchange** |

---

**_____________________________________________________________________________________**

**Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934:**

**None**

**_____________________________________________________________________________________**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated Filer | □ | Accelerated Filer | □ |
| Non-Accelerated Filer | ⌧ | Smaller reporting company | ⌧ |
| Emerging growth company | □ | | |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No ⌧

The aggregate market value of the common equity of the registrant held by non-affiliates of the registrant, based upon the closing price of such shares on June 30, 2022, was approximately $534,005,152.

As of March 31, 2023, the registrant had 37,171,807 common shares, par value $0.001 per share, outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the proxy statement for the registrant's 2023 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.

Auditor Firm Id: 185 Auditor Name: KPMG, LLP Auditor Location: Dallas, Texas, United States

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<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**Form 10-K**

**Year Ended December 31, 2022**

**INDEX**

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| | | |
|:---|:---|:---|
| | | **Page** |
| | **<u>[PART I](#idb0f7d426d0d4b68ae9f07790ad4450e_10)</u>** | |
| [Item 1.](#idb0f7d426d0d4b68ae9f07790ad4450e_13) | <u>[Business](#idb0f7d426d0d4b68ae9f07790ad4450e_13)</u> | [2](#idb0f7d426d0d4b68ae9f07790ad4450e_13) |
| [Item 1A.](#idb0f7d426d0d4b68ae9f07790ad4450e_16) | <u>[Risk Factors](#idb0f7d426d0d4b68ae9f07790ad4450e_16)</u> | [16](#idb0f7d426d0d4b68ae9f07790ad4450e_16) |
| [Item 1B.](#idb0f7d426d0d4b68ae9f07790ad4450e_19) | <u>[Unresolved Staff Comments](#idb0f7d426d0d4b68ae9f07790ad4450e_19)</u> | [56](#idb0f7d426d0d4b68ae9f07790ad4450e_19) |
| [Item 2.](#idb0f7d426d0d4b68ae9f07790ad4450e_22) | <u>[Properties](#idb0f7d426d0d4b68ae9f07790ad4450e_22)</u> | [56](#idb0f7d426d0d4b68ae9f07790ad4450e_22) |
| [Item 3.](#idb0f7d426d0d4b68ae9f07790ad4450e_25) | <u>[Legal Proceedings](#idb0f7d426d0d4b68ae9f07790ad4450e_25)</u> | [56](#idb0f7d426d0d4b68ae9f07790ad4450e_25) |
| [Item 4.](#idb0f7d426d0d4b68ae9f07790ad4450e_28) | <u>[Mine Safety Disclosures](#idb0f7d426d0d4b68ae9f07790ad4450e_28)</u> | [57](#idb0f7d426d0d4b68ae9f07790ad4450e_28) |
|  | **<u>[PART II](#idb0f7d426d0d4b68ae9f07790ad4450e_31)</u>** |  |
| [Item 5.](#idb0f7d426d0d4b68ae9f07790ad4450e_34) | <u>[Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](#idb0f7d426d0d4b68ae9f07790ad4450e_34)</u> | [58](#idb0f7d426d0d4b68ae9f07790ad4450e_34) |
| [Item 6.](#idb0f7d426d0d4b68ae9f07790ad4450e_37) | [Reserved] | [58](#idb0f7d426d0d4b68ae9f07790ad4450e_37) |
| [Item 7.](#idb0f7d426d0d4b68ae9f07790ad4450e_40) | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#idb0f7d426d0d4b68ae9f07790ad4450e_40)</u> | [58](#idb0f7d426d0d4b68ae9f07790ad4450e_40) |
| [Item 7A.](#idb0f7d426d0d4b68ae9f07790ad4450e_79) | <u>[Quantitative and Qualitative Disclosures About Market Risk](#idb0f7d426d0d4b68ae9f07790ad4450e_79)</u> | [69](#idb0f7d426d0d4b68ae9f07790ad4450e_79) |
| [Item 8.](#idb0f7d426d0d4b68ae9f07790ad4450e_82) | <u>[Financial Statements and Supplementary Data](#idb0f7d426d0d4b68ae9f07790ad4450e_82)</u> | [70](#idb0f7d426d0d4b68ae9f07790ad4450e_82) |
| [Item 9.](#idb0f7d426d0d4b68ae9f07790ad4450e_172) | <u>[Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#idb0f7d426d0d4b68ae9f07790ad4450e_172)</u> | [122](#idb0f7d426d0d4b68ae9f07790ad4450e_172) |
| [Item 9A.](#idb0f7d426d0d4b68ae9f07790ad4450e_175) | <u>[Controls and Procedures](#idb0f7d426d0d4b68ae9f07790ad4450e_175)</u> | [123](#idb0f7d426d0d4b68ae9f07790ad4450e_175) |
| [Item 9B.](#idb0f7d426d0d4b68ae9f07790ad4450e_178) | <u>[Other Information](#idb0f7d426d0d4b68ae9f07790ad4450e_178)</u> | [123](#idb0f7d426d0d4b68ae9f07790ad4450e_178) |
| [Item 9C.](#idb0f7d426d0d4b68ae9f07790ad4450e_181) | <u>[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#idb0f7d426d0d4b68ae9f07790ad4450e_181)</u> | [123](#idb0f7d426d0d4b68ae9f07790ad4450e_181) |
|  | **<u>[PART III](#idb0f7d426d0d4b68ae9f07790ad4450e_184)</u>** |  |
| [Item 10.](#idb0f7d426d0d4b68ae9f07790ad4450e_187) | <u>[Directors, Executive Officers, and Corporate Governance](#idb0f7d426d0d4b68ae9f07790ad4450e_187)</u> | [124](#idb0f7d426d0d4b68ae9f07790ad4450e_187) |
| [Item 11.](#idb0f7d426d0d4b68ae9f07790ad4450e_190) | <u>[Executive Compensation](#idb0f7d426d0d4b68ae9f07790ad4450e_190)</u> | [124](#idb0f7d426d0d4b68ae9f07790ad4450e_190) |
| [Item 12.](#idb0f7d426d0d4b68ae9f07790ad4450e_193) | <u>[Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#idb0f7d426d0d4b68ae9f07790ad4450e_193)</u> | [124](#idb0f7d426d0d4b68ae9f07790ad4450e_193) |
| [Item 13.](#idb0f7d426d0d4b68ae9f07790ad4450e_196) | <u>[Certain Relationships and Related Transactions, and Director Independence](#idb0f7d426d0d4b68ae9f07790ad4450e_196)</u> | [124](#idb0f7d426d0d4b68ae9f07790ad4450e_196) |
| [Item 14.](#idb0f7d426d0d4b68ae9f07790ad4450e_199) | <u>[Principal Accounting Fees and Services](#idb0f7d426d0d4b68ae9f07790ad4450e_199)</u> | [124](#idb0f7d426d0d4b68ae9f07790ad4450e_199) |
|  | **<u>[PART IV](#idb0f7d426d0d4b68ae9f07790ad4450e_202)</u>** |  |
| [Item 15.](#idb0f7d426d0d4b68ae9f07790ad4450e_205) | <u>[Exhibit](#idb0f7d426d0d4b68ae9f07790ad4450e_205)[and](#idb0f7d426d0d4b68ae9f07790ad4450e_205)[Financial Statement Schedules](#idb0f7d426d0d4b68ae9f07790ad4450e_205)</u> | [125](#idb0f7d426d0d4b68ae9f07790ad4450e_205) |
| [Item 16.](#idb0f7d426d0d4b68ae9f07790ad4450e_208) | <u>[Form 10-K Summary](#idb0f7d426d0d4b68ae9f07790ad4450e_208)</u> | [127](#idb0f7d426d0d4b68ae9f07790ad4450e_208) |
| <u>[Signatures](#idb0f7d426d0d4b68ae9f07790ad4450e_211)</u> | <u>[Signatures](#idb0f7d426d0d4b68ae9f07790ad4450e_211)</u> |  |

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<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**PART I**

**Cautionary Statement Regarding Forward-Looking Statements**

This annual report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to our liquidity and capital resources, our performance and results of operations contain forward-looking statements. Furthermore, all of the statements regarding future financial performance (including market conditions and demographics) are forward-looking statements. We caution investors that any forward-looking statements presented in this annual report are based on management's current beliefs and assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "would," "result," the negative version of these words and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.

Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unfavorable changes in economic conditions and their effects on the real estate industry generally and our operations and financial condition, including inflation, rising interest rates, tightening monetary policy or recession, which may limit our ability to access funding and generate returns for shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our loans and investments expose us to risks similar to and associated with real estate investments generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial real estate-related investments that are secured, directly or indirectly, by real property are subject to delinquency, foreclosure and loss, which could result in losses to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with the ownership of real estate, including dependence on tenants and compliance with laws and regulations related to ownership of real property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our investment in diverse issuers, industries and investment forms and classes, both in real estate and in non-real estate sectors, including common equity, preferred equity securities, options or other derivatives, short sale contracts, secured loans of securities, reverse repurchase agreements, structured finance securities, below investment grade senior loans, bonds, convertible instruments, joint ventures, and emerging markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fluctuations in interest rate and credit spreads, could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The use of leverage to finance our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our loans and investments in debt instruments including, senior loans, mezzanine loans, collateralized loan obligations ("CLOs"), and structured finance securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our loans and investments are concentrated in terms of type of interest, geography, asset types, industry and sponsors and may continue to be so in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have a substantial amount of indebtedness which may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have limited operating history as a standalone company and may not be able to operate our business successfully, find suitable investments, or generate sufficient revenue to make or sustain distributions to our shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may not replicate the historical results achieved by other entities managed or sponsored by affiliates of NexPoint Advisors, L.P. ("NexPoint" or our "Sponsor"), members of the NexPoint Real Estate Advisors X, L.P. (our "Adviser") management team or their affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are dependent upon our Adviser and its affiliates to conduct our day-to-day operations; thus, adverse changes in their financial health or our relationship with them could cause our operations to suffer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We pay substantial fees and expenses to our Adviser and its affiliates, which payments increase the risk that you will not earn a profit on your investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to qualify as a real estate investment trust (a "REIT") for U.S. federal income tax purposes, cash available for distributions to be paid to our shareholders could decrease materially, which would limit our ability to make distributions to our shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any other risks included under the heading "Risk Factors" in this annual report.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this annual report. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.

**Item 1. Business**

**General**

NexPoint Diversified Real Estate Trust (the "Company", "we", "us" or "our") is an externally advised, publicly traded REIT focused on the acquisition, asset management, development, and disposition of opportunistic, value-add investments in real estate properties throughout the United States. The Company focuses primarily on investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity. The Company is advised by the Adviser. The Company was formed in Delaware and has elected to be taxed as a REIT. Substantially all of the Company's business is conducted through NexPoint Diversified Real Estate Trust Operating Partnership, L.P. (the "OP"), the Company's operating partnership and wholly owned subsidiary. The Company conducts its business (the "Portfolio") through the OP and its wholly owned taxable REIT subsidiaries ("TRSs"). The Company's wholly owned subsidiary, NexPoint Diversified Real Estate Trust OP GP, LLC (the "OP GP"), is the sole general partner of the OP.

**2022 Highlights**

Key highlights and transactions completed in 2022 include the following:

On July 1, 2022, the Securities and Exchange Commission (the "SEC") issued an order pursuant to Section 8(f) of the Investment Company Act of 1940 (the "Investment Company Act") declaring that the Company has ceased to be an investment company under the Investment Company Act (the "Deregistration Order"). The issuance of the Deregistration Order enables the Company to proceed with full implementation of its new business mandate to operate as a diversified REIT.

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*NexPoint Dominion Land, LLC*

On August 9, 2022, the Company purchased 21.5 acres of undeveloped land in Plano, Texas through a wholly owned special purpose entity ("SPE"), as detailed in the table below (dollars in thousands). The Company plans to develop this land into a life science property. No estimated completion date is available at this time. The details of the Company's acquisitions held by SPEs the Company consolidates for the year ended December 31, 2022 were as follows (dollars in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investment Vehicle** | **Location** | **Property Type** | **Date of <br>Acquisition** | **Purchase <br>Price** | **Debt** | **Effective <br>Ownership <br>(1)** |
| NexPoint Dominion Land, LLC | Plano, Texas | Land | August 9, 2022 | $26500 | $13250 | 100% |

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(1) Represents ownership of underlying property. The Company, through the OP, owns 100% of NexPoint Dominion Land, LLC as of December 31, 2022.

The Company borrowed approximately $13.3 million from the seller, Gabriel Legacy, LLC to finance its acquisition through NexPoint Dominion Land, LLC. The note bears interest at an annual rate equal to the WSJ Prime Rate and matures on August 8, 2025.

*Tivoli North Property*

On March 30, 2022, the Company invested in Las Vegas Land Owner, LLC ("Tivoli"), a joint venture that owns an 8.5 acre tract of land (the "Tivoli North Property") upon which site Tivoli plans to develop a 300-unit multifamily apartment community directly adjacent to Tivoli Village, a high-end mixed-use center in Las Vegas, Clark County, Nevada. On August 8, 2022, the joint venture was restructured to a tenants-in-common arrangement (the "TIC"). Post restructure, the Company owns 100% of Tivoli, and Tivoli owns 77% of the underlying land investment. Members of the TIC must unanimously agree on certain major decisions regarding the underlying investment giving the Company shared control.

On March 31, 2022, the Company, through a subsidiary, borrowed approximately $13.5 million from NREF to finance its acquisition of a 77% interest in Tivoli North Property. The bridge note bore interest at an annual rate equal to the WSJ Prime Rate plus 1.5% and had a maturity date of October 1, 2022. The Company refinanced this bridge note with PNC Bank, N.A. ("PNC Bank") on August 8, 2022. The new loan has a principal amount of $13.5 million, matures on August 7, 2023, and bears interest at an annual rate based on the daily simple secured overnight financing rate ("SOFR") plus 3.5%. Proceeds from the note with PNC Bank were used to repay in full the financing provided by NREF on August 9, 2022.

*NexPoint Real Estate Finance, Inc.*

On January 7, 2022, the Company received approximately 3,324,332 units of limited partnership of subsidiaries ("NREF SubOP Units") of NexPoint Real Estate Finance Operating Partnership, L.P. (the "NREF OP") in connection with pro rata liquidating distributions by certain entities through which the Company had invested in the NREF OP subsidiaries. Following the Company's receipt of the NREF SubOP Units, on January 7, 2022, the Company, through its wholly owned subsidiary NexPoint Real Estate Opportunities, LLC ("NREO"), redeemed a total of approximately 3,721,571 NREF SubOP Units, representing all of its NREF SubOP Units, for cash and purchased the same number of units of limited partnership of the NREF OP ("NREF OP Units") for the same cash. On December 23, 2022, the Company, through NREO, redeemed 2,100,000 NREF OP Units for 2,100,000 shares of common stock of NexPoint Real Estate Finance, Inc. ("NREF"). The NREF OP is the operating partnership of NREF, a publicly traded mortgage REIT managed by an affiliate of the Adviser. As of December 31, 2022, the Company held 2,100,000 shares, or approximately 12.3%, of NREF's common stock and approximately 4,869,082 NREF OP Units, or approximately 16.1% of the outstanding NREF OP Units.

*NexPoint SFR Operating Partnership, L.P.*

On June 8, 2022, the Company, directly or through one or more subsidiaries, contributed $25.0 million to the newly formed NexPoint SFR Operating Partnership, L.P. (the "SFR OP") in exchange for common units of the SFR OP ("SFR OP Units"). Additionally, on June 8, 2022, the Company, directly or through one or more subsidiaries, loaned $25.0 million to the SFR OP in exchange for $25.0 million of 7.50% convertible notes of the SFR OP ("SFR OP Convertible Notes") that are interest only during the term and mature on June 30, 2027. The SFR OP is a subsidiary of NexPoint Homes Trust, Inc., a private single-family rental ("SFR") REIT managed by an affiliate of the Adviser. Subsequent to June

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8, 2022 and through December 31, 2022, the Company, directly or through one or more subsidiaries, contributed approximately an additional $27.5 million to the SFR OP in exchange for SFR OP Units. Subsequent to June 8, 2022 and through December 31, 2022, the Company, directly or through one or more subsidiaries, contributed approximately an additional $1.0 million to the SFR OP in exchange for SFR OP Units through distribution reinvestments. Additionally, subsequent to June 8, 2022 and before December 31, 2022, the Company, directly or through one or more subsidiaries, loaned an additional $5.0 million to the SFR OP in exchange for $5.0 million of SFR OP Convertible Notes. As of December 31, 2022, the Company owns approximately 2,139,180, or 31.0%, of the outstanding SFR OP Units and $30 million in outstanding principal balance of SFR OP Convertible Notes.

*IQHQ Holdings, LP* 

On June 22, 2022, the Company subscribed for and purchased 142,857, or $4 million, of Class A-2 Units in IQHQ Holdings, LP ("IQHQ Holdings"), and subsequently subscribed for and purchased, on September 15, 2022, 107,143, or $3 million, of Class A-2 Units in IQHQ Holdings in connection with a restructuring of its investment in IQHQ, Inc. ("IQHQ"). In connection with the Company's subscription, the Company surrendered 1,938,671 shares of common stock in IQHQ in exchange for Class A-1 Units in IQHQ Holdings. IQHQ is a private life science REIT focused on acquiring, developing and redeveloping high-quality properties in core life science markets. As of December 31, 2022, the Company owns 1,938,671, or 1.4%, of the Class A-1 Units, and 250,000, or 0.7%, of the Class A-2 Units in IQHQ Holdings.

*NexPoint Storage Partners, L.P. and SAFStor Ventures*

On December 8, 2022, the Company, through NREO, entered into a Contribution Agreement pursuant to which NREO contributed all of its interests in joint ventures (the "SAFStor Ventures") with SAFStor NREA GP – I, LLC, SAFStor NREA GP – II, LLC and NREA GP – III, LLC to NexPoint Storage Partners Operating Company, LLC (the "NSP OC") in exchange for approximately 47,064 newly created Class B Units of the NSP OC, representing 14.8% of the combined classes of common units of the NSP OC ("NSP OC Common Units") immediately after NREO's acquisition of Class B Units. The NSP OC is the operating company of NexPoint Storage Partners, Inc. ("NSP"), a privately owned self-storage REIT indirectly managed by an affiliate of the Adviser, of which the Company owns approximately 86,369 shares, or 53.1%, of the outstanding common stock as of December 31, 2022. Concurrently with the foregoing, the NSP OC acquired all of the other interests in the SAFStor Ventures from affiliates of the Adviser. The SAFStor Ventures are invested, through subsidiaries, in various self-storage real estate development projects primarily located on the East Coast of the United States. As of December 31, 2022, the Company owns approximately 47,064 units, or 30.5%, of the outstanding NSP OC Common Units.

In connection with the foregoing, the Company entered into a Sponsor Guaranty Agreement in favor of Extra Space Storage LP ("Extra Space") pursuant to which the Company and certain affiliates of the Adviser (the "Co-Guarantors") guaranteed obligations of NSP with respect to NSP's newly created Series D Preferred Stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space. The guaranties by the Company and the Co-Guarantors are capped at $97.6 million, which cap amount will be reduced as the guaranteed obligations of NSP are paid. Each of the Company and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP's common stock. The maximum liability of the Company under the guaranties is approximately $83.8 million.

In addition, on September 14, 2022, the Company entered into guaranties for the benefit of JPMorgan Chase Bank, National Association and any additional or subsequent lenders from time to time pursuant to which the Company guaranteed certain obligations of one or more borrowers in which the Company owns an indirect interest through its ownership in NSP. With respect to a loan agreement (the "BS Loan Agreement") providing for an initial advance of $221.8 million with the right to request additional advances, the Company guaranteed certain carrying obligations, including interest payments, of the borrowers and certain recourse obligations of the borrowers pertaining to exculpation or indemnification of the lender. Amounts outstanding under the BS Loan Agreement are due and payable on September 9, 2023 which date may be extended by the borrowers for two successive one-year terms on certain terms and conditions. Borrowings outstanding under the BS Loan Agreement bear interest at the one-month SOFR, subject to a floor of 0.50%, plus an applicable spread of approximately 4.0% with respect to approximately $184.9 million of initial principal thereunder and approximately 5.4% with respect to approximately $36.9 million of initial principal thereunder. With respect to a loan agreement (the "CMBS Loan Agreement") providing for a loan of $356.5 million, the Company guaranteed certain recourse obligations of the borrowers pertaining to exculpation or indemnification of the lender. Amounts outstanding under the CMBS Loan Agreement are due and payable on September 9, 2024 which date may be extended by the borrowers for three successive one-year terms on certain terms and conditions. Borrowings outstanding under the CMBS Loan Agreement bear interest at one-month SOFR plus a spread of approximately 3.6%, which will increase by 0.1% upon a second extension of the loan maturity and by an additional approximately 0.2% upon a third extension of the loan maturity. The Company also may be required to repay principal amounts under both loan agreements upon the occurrence of certain events, including certain action or inaction by the borrowers. Borrowings under the

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guaranties with respect to both loan agreements are secured by mortgages on real property owned by one or more of the borrowers. The maximum liability of the Company under the guaranties is approximately $578.3 million.

In addition, during 2022, the Company received $0.1 million in payments with respect to its holdings of NSP's convertible debt financing that mature on February 18, 2024 (the "NSP Convertible Note"). The NSP Convertible Note bears interest at a fixed rate of approximately 5.1% per year. During 2022, NSP paid down the full balance on the NSP Convertible Note.

*NexPoint Hospitality Trust*

During 2022, the Company accrued $0.9 million in interest with respect to its holdings of convertible notes in the operating partnership (the "NHT OP") of NexPoint Hospitality Trust ("NHT") that mature between 2039 and 2042 (the "NHT OP Notes"). NHT is a publicly traded hospitality REIT listed on the TSX Venture Exchange ("TSXV") managed by an affiliate of the Adviser. The NHT OP Notes bear interest at a fixed rate between 1.82% and 6.00%. As of December 31, 2022, the NHT OP Notes have an outstanding balance of $24.8 million and the Company owned 13,571,131 shares, or 45.4% of the outstanding common stock of NHT and 29.9% of the outstanding NHT OP Notes. The remaining NHT OP Notes are held by affiliates of the Adviser.

The Company is a limited guarantor and an indemnitor on one of NHT's loans with an aggregate principal amount of $77.4 million as of December 31, 2022. The obligations include a customary environmental indemnity and a so-called "bad boy" guarantee, which is generally only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper.

*Caddo Sustainable Timberlands*

On August 5, 2022, the Company's investment in Caddo Sustainable Timberlands was redeemed for approximately $10.9 million in cash.

*Metro-Goldwyn Mayer, Inc.*

On March 17, 2022, Amazon.com, Inc. announced it had closed its acquisition of Metro-Goldwyn Mayer, Inc.("MGM"). At the announcement date, the Company held 309,137 shares of MGM's Class A Common Stock directly and 557,618 shares of MGM's Class A Common Stock indirectly via the CLOs. As a result of the acquisition of MGM, the Company received $126.4 million in cash in exchange for its shares of Class A Common Stock.

*Specialty Financial Products, Ltd.*

During 2022, the Company, through Specialty Financial Products, Ltd. ("SFP"), a wholly owned Irish Designated Activity Company, purchased three U.S. life settlement contracts with a combined face value of $28.0 million for $8.7 million, had one life settlement contract mature with an aggregate net death benefit of $7.0 million, and paid $2.6 million in premiums to keep the life settlement contracts in force.

***Share Repurchase Program***

On October 24, 2022, our Board of Trustees (our "Board") authorized a share repurchase program (the "Share Repurchase Program") through which we may repurchase an indeterminate number of common shares and our 5.50% Series A Cumulative Preferred Shares, liquidation preference $25.00 per share (the "Series A Preferred Shares"), at an aggregate market value of up to $20.0 million during a two-year period that is set to expire on October 24, 2024. We may utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether our common shares or Series A Preferred Shares is trading at a significant discount to net asset value ("NAV") per share. Repurchases under this program may be discontinued at any time. As of December 31, 2022, we had not made any repurchases of our common shares or Series A Preferred Shares pursuant to the Share Repurchase Program.

**Our Portfolio**

As of December 31, 2022, the Company's Portfolio includes real estate investments comprised of four operating properties, three of which are rented from the Company for retail, hospitality or office use and one which is undeveloped, two convertible note investments in businesses focused on SFR and hospitality real estate, and 19 equity investments in businesses primarily focused on investing in SFR, self-storage, hospitality, life science or undeveloped real estate, as well as investing in commercial mortgage loans or other structured investments with underlying properties types including

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single-family, multifamily, life science and self-storage. As of December 31, 2022, the Company's Portfolio also includes other investments comprised of its ownership of common equity, loans, CLOs, rights and warrants, U.S. life settlement contracts, convertible notes and bonds from a number of diverse issuers and investment vehicles, including litigation claims and midband spectrum frequency licenses.

The Company's Portfolio, based on net equity, is comprised of 82.3% real estate investments and 17.7% other investments. See below for a table of our investments as of December 31, 2022 (dollars in thousands).

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Acquisition Date** | **Real Estate Value** | **Debt** | **Net Equity (1)** | **Location** | **Property Type** |
| **Operating Properties** | | | | | | |
| Cityplace Tower | 8/15/2018 | $218614 | $144668 | $100786 | Dallas, Texas | Office & Hospitality\* |
| White Rock Center | 6/13/2013 | 13454 |  | 13918 | Dallas, Texas | Retail |
| NexPoint Dominion Land, LLC | 8/9/2022 | 26500 | 13250 | 13000 | Plano, Texas | Land |
| 5916 W Loop 289 | 7/23/2013 | 4020 |  | 4157 | Lubbock, Texas | Retail |
| **Total** |  | **$262588** | **$157918** | **$131861** |  |  |

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\*&nbsp;&nbsp;&nbsp;&nbsp;Cityplace is currently under development, and the Company is converting part of the property into a hotel, which was still under construction as of December 31, 2022.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Real Estate Equity Method Investments** | **Ownership Percentage** | | **Investment Type** | **Net Equity (1)** | **Location** |
| &nbsp;&nbsp;VineBrook Homes Operating Partnership, L.P. | 11.1% |  | Single-Family Rental | $169661 | Various |
| &nbsp;&nbsp;NexPoint Storage Partners, Inc. | 53.1% |  | Self-Storage | 103695 | Various |
| &nbsp;&nbsp;NexPoint Real Estate Finance Operating Partnership, L.P. | 16.1% | (2) | Mortgage | 77370 | Various |
| &nbsp;&nbsp;NexPoint Storage Partners Operating Company, LLC | 30.5% |  | Self-Storage | 56505 | Various |
| &nbsp;&nbsp;NexPoint SFR Operating Partnership, L.P. | 31.0% |  | Single-Family Rental | 53480 | Various |
| &nbsp;&nbsp;NexPoint Real Estate Finance, Inc. | 12.3% | (2) | Mortgage | 33369 | Various |
| &nbsp;&nbsp;NexPoint Hospitality Trust | 45.4% |  | Hospitality | 27685 | Various |
| &nbsp;&nbsp;AM Uptown Hotel, LLC | 60.0% |  | Hospitality | 27136 | Dallas, Texas |
| &nbsp;&nbsp;Sandstone Pasadena Apartments, LLC | 50.0% |  | Multifamily | 13013 | Pasadena, Texas |
| &nbsp;&nbsp;Las Vegas Land Owner, LLC | 77.0% | (3) | Multifamily | 12312 | Las Vegas, Nevada |
| &nbsp;&nbsp;SFR WLIF III, LLC | 20.0% |  | Single-Family Rental | 7272 | Various |
| &nbsp;&nbsp;LLV Holdco, LLC | 26.8% |  | Land | 4331 | Henderson, Nevada |
| &nbsp;&nbsp;NexPoint Residential Trust, Inc. | 0.3% |  | Multifamily | 3825 | Various |
| **Total** |  |  |  | $**589654** |  |
| **Other Real Estate Common Equity** | **Shares/Units (in thousands)** |  | **Investment Type** | **Net Equity (1)** |  |
| &nbsp;&nbsp;IQHQ Holdings Class A-1 | 1939 |  | Life Science | $45733 |  |
| &nbsp;&nbsp;Other | 197 | (2) | Real Estate Other | 12103 |  |
| &nbsp;&nbsp;IQHQ Holdings Class A-2 | 250 |  | Life Science | 6308 |  |
| **Total** |  |  |  | $**64144** |  |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Real Estate Convertible Notes** | **Principal Amount** | | **Investment Type** | **Net Equity (1)** | | |
| &nbsp;&nbsp;SFR OP Convertible Note | $30000 |  | Single-Family Rental | $29350 |  |  |
| &nbsp;&nbsp;NHT OP Notes | $24802 |  | Hospitality | 21479 |  |  |
| **Total** |  |  |  | $**50829** |  |  |
| **Real Estate Senior Loans** | **Principal Amount** |  | **Investment Type** | **Net Equity (1)** |  |  |
| &nbsp;&nbsp;LLV Holdco, LLC Revolver | $12127 |  | Land | $10842 |  |  |
| **Other Equity Method Investments** | **Shares/Units (in thousands)** |  | **Investment Type** | **Net Equity (1)** |  | **Location** |
| &nbsp;&nbsp;Perilune Aero Equity Holdings One, LLC | 10310 |  | Aircraft | $10923 |  | Various |
| &nbsp;&nbsp;Claymore Holdings, LLC | 4465 |  | Litigation Claims |  | (4) | **N/A** |
| &nbsp;&nbsp;Allenby, LLC | 668 |  | Litigation Claims |  | (4) | **N/A** |
| **Total** |  |  |  | $**10923** |  |  |
| **Other Assets** | **Net Equity (1)** |  |  |  |  |  |
| &nbsp;&nbsp;Common Equity | $55821 | (2) |  |  |  |  |
| &nbsp;&nbsp;Senior Loans | 32565 |  |  |  |  |  |
| &nbsp;&nbsp;CLO | 6975 |  |  |  |  |  |
| &nbsp;&nbsp;Rights and Warrants | 3794 |  |  |  |  |  |
| &nbsp;&nbsp;Bonds | 20 |  |  |  |  |  |
| &nbsp;&nbsp;Life Settlement | 71957 |  |  |  |  |  |
| **Total** | $**171132** |  |  |  |  |  |

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(1) Net equity represents the carrying value of the investment. For investments in operating properties, any debt secured by the underlying real property is subtracted from the carrying value of the investment.

(2) All or part of this security is pledged as collateral for short sales, margin borrowing or credit facilities.

(3) The Company owns 100% of Tivoli which owns 77% of the Tivoli North Property as described above. Through the TIC, the Company shares control and as such accounts for this investment using the equity method.

(4) The Company owns noncontrolling interests in two LLCs, Claymore Holdings, LLC and Allenby, LLC, created to hold litigation claims. The probability, timing, and potential amount of recovery, if any, are unknown as of December 31, 2022.

***Primary Investment Objective***

As a diversified REIT, the Company's primary investment objective is to provide both current income and capital appreciation. The Company seeks to achieve this objective through its focus on investing across the capital structure in various commercial real estate property types. Target underlying property types primarily include, but are not limited to, SFR, multifamily, self-storage, life science, office, industrial, hospitality, net lease and retail. The Company may, to a limited extent, hold, acquire or transact in certain non-real estate securities.

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The Company focuses on opportunistic investments in real estate properties with a value-add component and real estate credit with the objective to increase the cash flow and value of our properties, acquire properties with cash flow growth potential and achieve capital appreciation for shareholders through a value-add program. The Company pursues real estate credit investments based on where the Adviser believes the various real estate subsectors are performing within the broader real estate cycle and tactically allocates its investments among these opportunities.

The Company believes that a diversified investment approach is appropriate for the current market environment. However, to capitalize on investment opportunities at different times in the economic and real estate investment cycle, the Company may change its investment strategy from time to time. The Company believes that the flexibility of the Company's investment strategy and the experience and resources of the Adviser and its affiliates will allow the Company to take advantage of changing market conditions to provide both current income and generate capital appreciation. The Board is able to modify the Company's strategies to the extent it determines it is in Company's best interest.

***Target Investments***

We invest primarily in commercial real estate, including operating properties and common equity but also including, but not limited to, mortgage debt, mezzanine debt and preferred equity:

• ***Operating Properties:*** We make investments in operating properties with a value-add component, including but not limited to retail, hospitality, and office space rented from the Company and land for development.

• ***Common Equity:*** We make investments in common equity in publicly traded companies and privately held entities focused on investment in real estate across a range of underlying property types.

• ***Mortgage Debt:*** We expect that we may make investments in mortgage debt on real estate properties. The loans may vary in duration, bear interest at a fixed or floating rate and amortize, typically with a balloon payment of principal at maturity. These investments may include whole loans or pari passu participations within such mortgage debt.

• ***Mezzanine Loans:*** We expect that we may originate or acquire mezzanine loans. These loans are generally subordinate to the other mortgage debt on a property, but senior to the equity of the borrower. These loans are not secured by the underlying real estate, but generally can be converted into preferred equity of the mortgage borrower or owner of a mortgage borrower, as applicable.

• ***Preferred Equity:*** We expect that we may make investments that are subordinate to any mortgage or mezzanine loan, but senior to the common equity of the borrower. Preferred equity investments typically receive a preferred return from the issuer's cash flow rather than interest payments and often have the right for such preferred return to accrue if there is insufficient cash flow for current payment. These investments are not secured by the underlying real estate, but upon the occurrence of a default, the preferred equity provider typically has the right to effect a change of control with respect to the ownership of the property.

In addition to investments in real estate, the Company may, to a limited extent, hold, acquire or transact in certain non-real estate securities. The Company's non-real estate investments include its ownership of common equity, preferred equity, loans, CLOs, rights and warrants, U.S. life settlement contracts, convertible notes and bonds from a number of diverse issuers and investment vehicles, including litigation claims and midband spectrum frequency licenses.

**Our Financing Strategy**

While we do not have any formal restrictions or policy with respect to our debt-to-equity leverage ratio, we currently expect that our leverage will not exceed a ratio of 3-to-l. We believe this leverage ratio is prudent given that leverage typically exists at the asset level. The amount of leverage we may employ for particular assets depends upon the availability of particular types of financing and our Adviser's assessment of the credit, liquidity, price volatility and other risks of those assets and financing counterparties. Our decision to use leverage to finance our assets is at the discretion of our Adviser, subject to review by our Board, and is not subject to the approval of our shareholders. We generally intend to match leverage term and structure to that of the underlying investment financed. For additional information on sources of and trends regarding our liquidity, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

**Our Structure**

The following chart shows our ownership structure as of the date hereof:

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![nxdt-20221231_g1.gif](nxdt-20221231_g1.gif)

(1) The Portfolio may be held directly or through one or more intermediate entities.

**Our Adviser**

The Company is externally managed by the Adviser, through an agreement dated July 1, 2022, amended on October 25, 2022 (the "Advisory Agreement"), by and among the Company and the Adviser for an initial three-year term that will expire on July 1, 2025 and successive one-year terms thereafter unless earlier terminated. The Adviser manages the day-to-day operations of the Company and provides investment management services. All of the Company's investment decisions are made by the Adviser, subject to general oversight by the Adviser's investment committee and the Company's Board. The Adviser is wholly owned by our Sponsor. The members of our Adviser's investment committee are James Dondero, Matt McGraner, Matthew Goetz, and Brian Mitts.

**Our Advisory Agreement**

We pay our Adviser annual fees. We do not pay any incentive fees to our Adviser. We also generally reimburse our Adviser for operating or offering expenses it incurs on our behalf or in connection with the services it performs for us.

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Direct payment of operating expenses by us together with reimbursement of operating expenses to the Adviser, plus compensation expenses relating to equity awards granted under a long-term incentive plan and all other corporate general and administrative expenses of the Company, including the Fees (defined below) payable under the Advisory Agreement, may not exceed 1.5% (the "Expense Cap") of Managed Assets (defined below), calculated as of the end of each quarter, for the twelve-month period following the Company's receipt of the Deregistration Order; provided, however, that this limitation will not apply to Offering Expenses (defined below), legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions or other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate-related investments; provided, further, in the event the Company consolidates another entity that it does not wholly own as a result of owning a controlling interest in such entity or otherwise, expenses will be calculated without giving effect to such consolidation and instead such entity's expenses will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of expenses. The Adviser may, at its discretion and at any time, waive its right to reimbursement for eligible out-of-pocket expenses paid on the Company's behalf. Once waived, these expenses are considered permanently waived and become non-recoupable in the future.

Under the terms of the Advisory Agreement, our Adviser will, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify, evaluate and negotiate the structure of our investments (including performing due diligence);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• find, present and recommend investment opportunities consistent with our investment policies and objectives;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• structure the terms and conditions of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• review and analyze financial information for each investment in our overall Portfolio;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• close, monitor and administer our investments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify debt and equity capital needs and procure the necessary capital.

As consideration for the Adviser's services under the Advisory Agreement, we pay our Adviser an annual fee (the "Advisory Fee") of 1.00% of Managed Assets and an annual fee (the "Administrative Fee" and, together with the Advisory Fee, the "Fees") of 0.20% of the Company's Managed Assets. The Advisory Agreement provides that the first portion of the monthly installment of the Advisory Fee shall be paid in cash up to $1.0 million and the remainder of the monthly installment of the Advisory Fee, if any, shall be paid in common shares of the Company, subject to certain restrictions related to maintaining the Company's status as a REIT and compliance with federal securities laws and rules promulgated by the New York Stock Exchange (the "NYSE"). In addition, in no event will the common shares issued to the Adviser under the Advisory Agreement exceed five percent of the number of common shares or five percent of the voting power of the Company outstanding prior to the first such issuance. The number of common shares payable to the Adviser under the Advisory Agreement as a portion of the Advisory Fee shall equal (i) the total dollar amount of the monthly installment of the Advisory Fee payable minus the $1.0 million cash portion of the monthly installment of the Advisory Fee divided by (ii) the volume-weighted average price per share for the 10 trading days prior to the end of the month for which the Fees will be paid. The Fees shall be payable independent of the performance of the Company or its investments. The Advisory Agreement also provides that the Administrative Fee shall be paid in cash.

Under the Advisory Agreement, "Managed Assets" means an amount equal to the total assets of the Company, including any form of leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing to purchase or develop real estate or other investments, borrowing through a credit facility, or the issuance of debt securities), (ii) the issuance of preferred shares or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Company's investment objectives and policies, and/or (iv) any other means. In the event the Company holds collateralized mortgage-backed securities ("CMBS") where the Company holds the controlling tranche of the securitization and is required to consolidate under generally accepted accounting principles all assets and liabilities of a specific CMBS trust, the consolidated assets and liabilities of the consolidated trust will be netted to calculate the allowable amount to be included as Managed Assets. In addition, in the event the Company consolidates another person it does not wholly own as a result of owning a controlling interest in such person or otherwise, Managed Assets will be calculated without giving effect to such consolidation and instead such person's assets, leverage, expenses, liabilities and obligations will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of Managed Assets. The Adviser computes Managed Assets as of the end of each fiscal quarter and then computes each installment of the Fees as promptly as possible after the end of the month with respect to which such installment is payable.

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Incentive compensation may be payable to our executive officers and certain other employees of our Adviser or its affiliates pursuant to a long-term incentive plan adopted by us and approved by our shareholders. Compensation expense is generally not considered when calculating Managed Assets.

We are required to pay directly or reimburse the Adviser for all of the documented "operating expenses" (all out-of-pocket expenses of the Adviser in performing services for us, including but not limited to the expenses incurred by the Adviser in connection with any provision by the Adviser of legal, accounting, financial, due diligence, investor relations or other services performed by the Adviser that outside professionals or outside consultants would otherwise perform and our pro rata share of rent, telephone, utilities, office furniture, equipment, machinery or other office, internal and overhead expenses of the Adviser required for our operations) and any and all expenses (other than underwriters' discounts) paid or to be paid by us in connection with an offering of our securities, including, without limitation, our legal, accounting, printing, mailing and filing fees and other documented offering expenses (collectively, "Offering Expenses"), paid or incurred by the Adviser or its affiliates in connection with the services it provides to us pursuant to the Advisory Agreement. Direct payment of operating expenses by us together with reimbursement of operating expenses to the Adviser, plus compensation expenses relating to equity awards granted under a long-term incentive plan and all other corporate general and administrative expenses of the Company, including the Fees payable under the Advisory Agreement, may not exceed the Expense Cap of 1.5% of Managed Assets, calculated as of the end of each quarter, for the twelve-month period following the Company's receipt of the Deregistration Order; provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions or other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate-related investments; provided, further, in the event the Company consolidates another entity that it does not wholly own as a result of owning a controlling interest in such entity or otherwise, expenses will be calculated without giving effect to such consolidation and instead such entity's expenses will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of expenses. The Adviser may, at its discretion and at any time, waive its right to reimbursement for eligible out-of-pocket expenses paid on the Company's behalf. Once waived, these expenses are considered permanently waived and become non-recoupable in the future.

The Advisory Agreement has an initial term of three years that will expire on July 1, 2025 and successive additional one-year terms thereafter unless earlier terminated. We have the right to terminate the Advisory Agreement on 30 days' written notice upon the occurrence of a cause event (as defined in the Advisory Agreement). The Advisory Agreement can be terminated by us or the Adviser without cause upon the expiration of the then-current term with at least 180 days' written notice to the other party prior to the expiration of such term. The Adviser may also terminate the agreement with 30 days' written notice if we have materially breached the agreement and such breach has continued for 30 days before we are given such notice. In addition, the Advisory Agreement will automatically terminate in the event of Advisers Act Assignment (as defined in the Advisory Agreement) unless we provide written consent. A termination fee will be payable to the Adviser by us upon termination of the Advisory Agreement for any reason, including non-renewal, other than a termination by us upon the occurrence of a cause event or due to an Advisers Act Assignment. The termination fee will be equal to three times the Fees earned by the Adviser during the twelve-month period immediately preceding the most recently completed calendar quarter prior to the effective termination date; provided, however, if the Advisory Agreement is terminated prior to the one year anniversary of the date of the Advisory Agreement, the Fees earned during such period will be annualized for purposes of calculating the Fees.

Under the terms of the Advisory Agreement, the Adviser will indemnify and hold harmless the Company and its subsidiaries, including the OP, from all claims, liabilities, damages, losses, costs and expenses, including amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and expenses of investigating or defending against any claim or alleged claim, of any nature whatsoever, known or unknown, liquidated or unliquidated, that are incurred by reason of the Adviser's bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of its duties; provided, however, that the Adviser will not be held responsible for any action of our Board in following or declining to follow any written advice or written recommendation given by the Adviser. However, the aggregate maximum amount that the Adviser may be liable to us pursuant to the Advisory Agreement will, to the extent not prohibited by law, never exceed the amount of the Advisory Fees received by the Adviser under the Advisory Agreement prior to the date that the acts or omissions giving rise to a claim for indemnification or liability have occurred. In addition, the Adviser will not be liable for special, exemplary, punitive, indirect, or consequential loss, or damage of any kind whatsoever, including without limitation lost profits. The limitations described in the preceding two sentences will not apply, however, to the extent such damages are determined in a final binding non-appealable court or arbitration proceeding to result from the bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of the Adviser's duties.

The Adviser and its affiliates expect to engage in other business ventures, and as a result, their resources will not be dedicated exclusively to our business. However, pursuant to the Advisory Agreement, the Adviser is required to devote sufficient resources to our administration to discharge its obligations under the Advisory Agreement.

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**Management of Operating Properties**

The Company's operating properties, other than undeveloped land, are managed by NexVest Realty Advisors, LLC ("NexVest"), an affiliate of the Adviser. The property management agreement with NexVest for the retail property in Lubbock, Texas is dated January 1, 2014 and has a fixed fee of $750 per month. The property management agreement with NexVest for Cityplace Tower is dated August 15, 2018, and the management fee is calculated on 3% of gross revenues, with a minimum fee of $20,000 per month. The property management agreement with NexVest for the White Rock Center is dated June 1, 2013, and the management fee is calculated on 4% of gross receipts, payable monthly.

**Management of Life Settlement Contracts**

The Company's investments in U.S. life settlement contracts through SFP, a wholly owned Irish Designated Activity Company, are managed by NexAnnuity Asset Management, L.P. ("NexAnnuity"), an affiliate of the Adviser. SFP acquires life settlement contracts funded by the issuance of debt securities (the "Structured Note") purchased by the Company and utilizes proceeds from maturing life settlement contracts to repay the Structured Note and to further invest in life settlement contracts. The management agreement (the "SFP IMA") with NexAnnuity provides that NexAnnuity will receive a management fee (the "SFP Management Fee") paid monthly in an amount equal to 1.0% of the average weekly value of an amount equal to the total assets of SFP, including any form of leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to investment leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities), (ii) the issuance of preferred stock or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the investment objective, investment guidelines and policies under the SFP IMA, and/or (iv) any other means, plus any value added tax or any other applicable tax, if any, thereon. NexAnnuity may waive all or a portion of the SFP Management Fee. For the year ended December 31, 2022, NexAnnuity did not waive any portion of the SFP Management Fee.

**Competition**

Our profitability depends, in large part, on our ability to acquire investments in commercial real estate at attractive prices. We are subject to significant competition in acquiring these investments. In particular, we will compete with a variety of institutional investors, including other REITs, specialty finance companies, public and private funds, commercial and investment banks, hedge funds, mortgage bankers, commercial finance and insurance companies, governmental bodies and other financial institutions, as well as developers, owners, and operators of real estate. We may also compete with our Sponsor and its affiliates for investment opportunities. There are significant potential conflicts of interest that could affect our investment returns. In addition, there are several REITs with similar investment objectives and others may be organized in the future. These other REITs will increase competition for the available supply of commercial real estate investments, including operating properties, common equity mortgage debt, mezzanine debt, preferred equity and other real estate related assets suitable for investment. Some of our anticipated competitors have greater financial resources, different cost structures, access to lower costs of capital and access to funding sources that may not be available to us, such as funding from the U.S. government, if we are not eligible to participate in programs established by the U.S. government. In addition, some of our competitors are not subject to the operating constraints associated with REIT tax compliance or maintenance of an exclusion or exemption from the Investment Company Act. Furthermore, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments, or pay higher prices, than we can. Current market conditions may attract more competitors, which may increase the competition for our investments. An increase in the competition for such assets may decrease the availability or increase the price of such assets, which may limit our ability to generate attractive risk-adjusted current income and capital appreciation for our shareholders, thereby adversely affecting the market price of our common shares.

In addition, with respect to our operating properties, we compete for tenants based on a number of factors, including location, rental rates, security, flexibility, and expertise to design space to meet prospective tenants' needs and the manner in which the property is operated, maintained, and marketed. As leases at our properties expire, we may encounter significant competition to renew or re-lease space in light of the large number of competing properties within the markets in which we operate. As a result, we may be required to provide rent concessions or abatements, incur charges for tenant improvements and other inducements, including early termination rights or below-market renewal options, or we may not be able to timely lease vacant space.

In the face of this competition, we expect to have access to our Sponsor's professionals and their industry experience, which we believe will provide us with a competitive advantage and help us assess investment risks and determine appropriate pricing for potential investments. We expect that these relationships will enable us to compete more efficiently and effectively for attractive investment opportunities. Although we believe we are well positioned to compete effectively, there can be no assurance that we will be able to achieve our business goals or expectations due to the extensive

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competition in our market sector. We operate in a competitive market for investment opportunities and future competition may limit our ability to acquire desirable investments in commercial real estate and could also affect the pricing of our securities.

**Operating and Regulatory Structure**

***General***

Our operating properties are subject to various laws, ordinances and regulations, including those relating to fire and safety requirements, and affirmative and negative covenants and, in some instances, common area obligations. We believe that each of the operating properties in our Portfolio has the necessary permits and approvals.

***Americans with Disabilities Act***

Our operating properties must comply with Title III of the Americans with Disabilities Act of 1990 (the "ADA"), to the extent that such properties are "public accommodations" as defined by the ADA. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our operating properties where such removal is readily achievable. In addition, under the ADA, alterations to a place of public accommodation or a commercial facility are to be made so that, to the maximum extent feasible, such altered portions are readily accessible to and usable by disabled individuals. The readily achievable standard considers, among other factors, the financial resources of the affected site and the owner, lessor or other applicable person.

Compliance with the ADA, as well as other federal, state and local laws, may require modifications to operating properties we currently own or may purchase or may restrict renovations of those properties. Failure to comply with these laws or regulations could result in the imposition of fines or an award of damages to private litigants, as well as the incurrence of the costs of making modifications to attain compliance, and future legislation could impose additional obligations or restrictions on our operating properties. We could be held liable as the owner of the property for a failure of one of our tenants to comply with these laws or regulations.

We believe that our operating properties are in substantial compliance with the ADA and that substantial capital expenditures to address the requirements of the ADA will not be required. However, noncompliance with the ADA could result in imposition of fines or an award of damages to private litigants. The obligation to make readily accessible accommodations is an ongoing one, and we will continue to assess our operating properties and make alterations as appropriate in this respect.

***Environmental Matters***

Under various federal, state and local laws and regulations relating to the environment, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from the presence or discharge of hazardous or toxic substances, waste or petroleum products at, on, in, under, or migrating from such property, including costs to investigate and clean up such contamination and liability for harm to natural resources. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such contamination, and the liability may be joint and several. These liabilities could be substantial and the cost of any required remediation, removal, fines, or other costs could exceed the value of the property and/or our aggregate assets. In addition, the presence of contamination or the failure to remediate contamination at our operating properties may expose us to third-party liability for costs of remediation and/or personal or property damage or materially adversely affect our ability to sell, lease or develop our operating properties or to borrow using the properties as collateral. In addition, environmental laws may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our operating properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures.

Independent environmental consultants have conducted Phase I environmental site assessments at all of our operating properties, including undeveloped land, in our Portfolio. A Phase I environmental site assessment is a report that identifies potential or existing environmental contamination liabilities. Site assessments are intended to discover and evaluate information regarding the environmental condition of the assessed property and surrounding properties. These assessments do not generally include soil samplings, subsurface investigations or an asbestos survey. None of the site assessments identified any known past or present contamination that we believe would have a material adverse effect on our business, assets or operations. However, the assessments are limited in scope and may have failed to identify all environmental conditions or concerns. A prior owner or operator of a property or historic operations at our operating properties, or operations and conditions at nearby properties, may have created a material environmental condition that is not known to us or the independent consultants preparing the site assessments. Material environmental conditions may have arisen after

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the review was completed or may arise in the future, and future laws, ordinances or regulations may impose material additional environmental liability. Moreover, conditions identified in environmental assessments that did not appear material at that time, may in the future result in material liability.

Environmental laws also govern the presence, maintenance and removal of hazardous materials in building materials (e.g., asbestos and lead), and may impose fines and penalties for failure to comply with these requirements or expose us to third-party liability (e.g., liability for personal injury associated with exposure to asbestos). Such laws require that owners or operators of buildings containing hazardous materials properly manage and maintain certain hazardous materials, adequately notify or train those who may come into contact with certain hazardous materials, and undertake special precautions, including removal or other abatement, if certain hazardous materials would be disturbed during renovation or demolition of a building. In addition, the operating properties in our Portfolio are subject to various federal, state, and local environmental and health and safety requirements, such as state and local fire requirements.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our operating properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs. We are not presently aware of any material adverse indoor air quality issues at our operating properties.

Generally, the leases with respect to our office and retail operating properties require the lessee to comply with environmental law and provide that the lessee will indemnify us for any loss or expense we incur as a result of the lessee's violation of environmental law or the presence, use or release of hazardous materials on our operating property attributable to the lessee. If our lessees do not comply with environmental law, or we are unable to enforce the indemnification obligations of our lessees, our results of operations would be adversely affected.

We believe that there are no compliance issues with laws and regulations that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have adversely affected, or are reasonably expected to adversely affect, our business, financial condition and results of operations, and we do not currently anticipate material capital expenditures arising from environmental regulation. We believe that climate change could present risks to our business. Some of the potential impacts of climate change to our business include increased operating costs due to additional regulatory requirements and the risk of disruptions to our business. We do not believe these risks are material to our business at this time. Our currently anticipated capital expenditures for environmental control facility matters are not material.

The cost of future environmental compliance may materially and adversely affect us. We cannot predict what other environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist on our properties in the future. Compliance with existing and new laws and regulations may require us or our tenants to spend funds to remedy environmental problems. If we or our tenants were to become subject to significant environmental liabilities, we could be materially and adversely affected. See "Item 1A. Risk Factors— We are subject to certain risks associated with investing in real estate, including potential liabilities under environmental laws and risks of loss from weather conditions, man-made or natural disasters, climate change and terrorism."

***Insurance***

We carry comprehensive general liability coverage on the operating properties in our Portfolio, with limits of liability customary within the industry to insure against liability claims and related defense costs. Similarly, we are insured against the risk of direct physical damage in amounts necessary to reimburse us on a replacement-cost basis for costs incurred to repair or rebuild each property, including loss of rental income during the reconstruction period. Our property policies include coverage for the perils of flood, tornado and earthquake shock with limits and deductibles customary in the industry and specific to the project. We will also obtain title insurance policies when acquiring new properties, which insure fee title to the properties in our Portfolio. We have obtained coverage for losses incurred in connection with both domestic and foreign terrorist-related activities. These policies include limits and terms we consider commercially reasonable. There are certain losses (including, but not limited to, losses arising from environmental conditions, acts of war or certain kinds of terrorist attacks) that are not insured, in full or in part, because they are either uninsurable or the cost of insurance makes it, in our belief, economically impractical to maintain such coverage. Should an uninsured loss arise

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against us, we would be required to use our own funds to resolve the issue, including litigation costs. In addition, for the operating properties in our Portfolio, we could self-insure certain portions of our insurance program and therefore, use our own funds to satisfy those limits. We believe the policy specifications and insured limits are adequate given the relative risk of loss, the cost of the coverage and industry practice. In the opinion of our management team, the operating properties in our Portfolio are adequately insured.

***REIT Qualification***

We have to be treated as a REIT for U.S. federal income tax purposes, beginning with our taxable year ended December 31, 2021. We believe that we have been organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), and that our intended manner of operation will enable us to meet the requirements for qualification and taxation as a REIT. However, we cannot assure you that we will qualify and remain qualified as a REIT. To qualify as a REIT, we must meet on a continuing basis, through our organization and actual investment and operating results, various requirements under the Code relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of our shares. If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax at corporate rates and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which we failed to qualify as a REIT. Even if we qualify for taxation as a REIT, we may be subject to some U.S. federal, state and local taxes on our income or property or REIT "prohibited transactions" taxes with respect to certain of our activities. Any distributions paid by us generally will not be eligible for taxation at the preferred U.S. federal income tax rates that apply to certain distributions received by individuals from taxable corporations.

***Investment Company Act Exclusion***

We, as well as our subsidiaries, intend to conduct our operations so that we are not required to register as an investment company under the Investment Company Act. Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer's total assets (exclusive of U.S. Government securities and cash items) on an unconsolidated basis, which we refer to as the 40% test. Excluded from the term "investment securities," among other things, are U.S. Government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exclusion from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

We are organized as a holding company and conduct our business primarily through our OP and through subsidiaries of our OP. We anticipate that our OP will always be at least a majority-owned subsidiary. We intend to conduct our operations so that neither we nor our OP will hold investment securities in excess of the limit imposed by the 40% test. The securities issued by any wholly owned or majority-owned subsidiaries that we may form in the future that are excluded from the definition of "investment company" based on Section 3(c)(1) or 3(c)(7) of the Investment Company Act, together with any other investment securities we may own, may not have a value in excess of 40% of the value of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We will monitor our holdings to ensure continuing and ongoing compliance with this test. In addition, we believe that neither we nor our OP are considered an investment company under Section 3(a)(1)(A) of the Investment Company Act because neither of us engage primarily, propose to engage primarily, or hold ourselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we and our OP are primarily engaged in the non-investment company businesses of our subsidiaries.

We anticipate that certain of our subsidiaries will meet the requirements of the exclusion set forth in Section 3(c)(5)(C) of the Investment Company Act, which excludes entities primarily engaged in the business of "purchasing or otherwise acquiring mortgages and other liens on and interests in real estate." To meet this exclusion, the SEC staff has taken the position that at least 55% of a subsidiary's assets must constitute qualifying assets (as interpreted by the SEC staff under the Investment Company Act) and at least another 25% of assets (subject to reduction to the extent the subsidiary invested more than 55% of its total assets in qualifying assets) must constitute real estate-related assets under the Investment Company Act (and no more than 20% comprised of miscellaneous assets). In general, we also expect, with regard to our subsidiaries relying on Section 3(c)(5)(C), to rely on other guidance published by the SEC staff and on our analyses of guidance published with respect to other types of assets to determine which assets are qualifying assets and real estate-related assets. Maintaining the Section 3(c)(5)(C) exclusion, however, will limit our ability to make certain investments.

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**Smaller Reporting Company Status**

We are a "smaller reporting company" as defined in Regulation S-K under the Securities Act of 1933, as amended (the "Securities Act"), and may elect to take advantage of certain of the scaled disclosures available to smaller reporting companies.

**Human Capital Disclosure**

We are externally managed by our Adviser pursuant to the Advisory Agreement between us and our Adviser. All of our executive officers are employees of our Adviser or its affiliates. As of December 31, 2022, we had no employees.

**COVID-19 Pandemic Updates**

For information on the effects that the COVID-19 pandemic has had on our business, see "Item 1A. Risk Factors— The current COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance."

**Corporate Information**

Our and our Adviser's offices are located at 300 Crescent Court, Suite 700, Dallas, Texas 75201. Our and our Adviser's telephone number is (214) 276-6300. Our website is located at nxdt.nexpoint.com. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this annual report or any other report or documents we file with or furnish to the SEC.

**Item 1A. Risk Factors**

*You should carefully consider the following risks and other information in this annual report in evaluating us and our common shares. Any of the following risks, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our business, financial condition or results of operations, and could, in turn, impact the trading price of our common shares.*

**Summary Risk Factors**

The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor contained below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unfavorable changes in economic conditions and their effects on the real estate industry generally and our &nbsp;&nbsp;&nbsp;&nbsp;operations and financial condition, including inflation, rising interest rates, tightening monetary policy or recession, which may limit our ability to access funding and generate returns for shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk we make significant changes to our strategies in a market downturn, or fail to do so;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with ownership of real estate, including properties in transition, subjectivity of valuation, environmental matters and lack of liquidity in certain asset classes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our investment in diverse issuers, industries and investment forms and classes, both in real estate and in non-real estate sectors, including common equity, preferred equity securities, options or other derivatives, short sale contracts, secured loans of securities, reverse repurchase agreements, structured finance securities, below investment grade senior loans, bonds, convertible instruments, joint ventures, and emerging markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our loans and investments in debt instruments including senior loans, CLOs, and structured finance securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the exposure of our loans and investments to risks similar to real estate investments generally, including the risk of delinquency, dependence on tenants, compliance with laws and regulations related to ownership of real property, and foreclosure and loss in any of our commercial real estate-related investments that are secured, directly or indirectly, by real property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in interest rate and credit spreads that could reduce our ability to generate income on our loans and investments;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the use of leverage to finance our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition for desirable loans and investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the concentration of loans and investments in terms of type of interest, geography, asset types, industry and sponsors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk of downgrade of any credit ratings assigned to our loans and investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk that any distressed loans or investments we may make may subject us to bankruptcy risks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our dependence on information systems and risks associated with breaches of our data security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• costs associated with being a public company, including compliance with securities laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk of adverse impact to our business if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our substantial current indebtedness and indebtedness we may incur in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with insurance, derivatives or hedging activity, including counterparty risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our limited operating history as a REIT and the possibility that we may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Sponsor, members of our Adviser's management team or their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our dependence on our Adviser, its affiliates and personnel to conduct our day-to-day operations and identify and realize returns on our investments within very broad investment guidelines and without fiduciary duties to us or a requirement to seek Board approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with the Adviser's ability to terminate the Advisory Agreement and risks associated with any potential internalization of our management functions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• conflicts of interest and competing demands for time faced by our Adviser, our Sponsor and their respective affiliates, officers and employees, and other significant potential conflicts of interest including in connection with (i) substantial fees and expenses we pay to our Adviser and its affiliates which may increase the risk that you will not earn a profit on your investment and (ii) competition with entities affiliated with our Adviser and our Sponsor for investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk of failure to maintain our status as a REIT and make required distributions to maintain such status, failure of which may materially limit our cash available for distribution to our shareholders and the risk of failure to maintain our status if values of our real estate investments rapidly change;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk of failure of our OP to be taxable as a partnership for U.S. federal income tax purposes, possibly causing us to fail to qualify for or to maintain REIT status;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with REIT requirements, which may limit our ability to hedge our liabilities effectively and cause us to forgo otherwise attractive opportunities, liquidate certain of our investments or incur tax liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk associated with investments in synthetic form;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk that certain of our business activities are potentially subject to the prohibited transaction tax and that even if we qualify as a REIT we may be subject to other tax liabilities that may reduce our cash flows and distributions on our shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ineligibility of dividends payable by REITs for the reduced tax rates available for some dividends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our Board to revoke our REIT qualification without shareholder approval;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to change our major policies, operations and targeted investments without shareholder consent and our Board's issuance of and ability to further issue debt securities or equity securities that may adversely impact the value or priority of or have dilutive effect on our shares or discourage a third-party acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with (i) provisions in our governing documents that may limit stockholders' choice of forum for disputes with us or discourage an acquisition of our securities or a change in control, including stock ownership restrictions and limits and (ii) provisions of our governing documents that may limit the ability for a third-party acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recent and potential legislative or regulatory changes or other actions with respect to tax, securitization, financial or other matters affecting REITs, the mortgage industry or debt-oriented real estate investments generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the general volatility of the capital and credit markets and the impact on the market for our shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the risk that we may not realize gains or income from our investments, that the repayments of our loans and investments may cause our financial performance and returns to investors to suffer or that we may experience a decline in the fair value of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with the Highland Bankruptcy (as defined below), including possible materially adverse consequences on our business, financial condition and results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with holding shares of the Series A Preferred Shares, including volatility in price and trading volume, subordination to our debt, dilution upon future issuances and lack of, or a low, rating on the Series A Preferred Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risk of failure to generate sufficient cash flows to service outstanding indebtedness or pay distributions on our shares at expected levels, and the risk that we may borrow funds or use funds from other sources to pay distributions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with the concentration of our share ownership.

**Risks Related to Our Business**

***Our real estate investments are subject to risks particular to real property. These risks may result in a reduction or elimination of or return from an investment secured by a particular property.***

Real estate investments are subject to various risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acts of nature, including extreme weather, earthquakes, floods and other natural disasters, as result of climate change or otherwise, which may result in uninsured losses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acts of war, terrorism, social unrest or civil disturbances, including the consequences of such acts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse changes in national and local economic and market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations and ordinances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• costs of remediation and liabilities associated with environmental conditions including, but not limited to, indoor mold; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the potential for uninsured or under-insured property losses.

If any of these or similar events occurs, it may reduce our return from an affected property or investment and reduce or eliminate our ability to pay dividends to shareholders.

***Because we primarily invest in the real estate industry, our investments expose us to risks similar to and associated with real estate investments generally.***

Our investments are primarily in or relating to real estate-related businesses, assets or interests, including but not limited to real property, common equity, debt and preferred equity. Any deterioration of real estate fundamentals generally,

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and in the United States in particular, could negatively impact our performance by making it more difficult for entities in which we have an investment requiring periodic payments or a return of capital, or "borrower entities," to satisfy their payment obligations, increasing the default risk applicable to these entities, and/or making it relatively more difficult for us to generate attractive risk-adjusted returns. Any such deterioration may also make it more difficult for entities in which we have an investment without a specific payment obligation to make distributions or returns of capital to us. Changes in general economic conditions will affect the creditworthiness of borrower entities or other investees and may include economic and/or market fluctuations, changes in environmental, zoning and other laws, casualty or condemnation losses, regulatory limitations on rents, variations in rental income, decreases in property values, changes in the appeal of properties to tenants, changes in supply and demand, fluctuations in real estate fundamentals, energy supply shortages, various uninsured or uninsurable risks, natural disasters, pandemics, changes in government regulations (such as rent control), changes in real property tax rates and operating expenses, changes in interest rates, changes in the availability of debt financing and/or mortgage funds which may render the sale or refinancing of properties difficult or impracticable, increased mortgage defaults, increases in borrowing rates, negative developments in the economy that depress travel activity, demand and/or real estate values generally and other factors that are beyond our control. The value of securities of companies that service the real estate business sector may also be affected by such risks.

We cannot predict the degree to which economic conditions generally, and the conditions for loans and investments in real estate, will improve or deteriorate. Declines in the performance of the U.S. and global economies or in the real estate debt markets could have a material adverse effect on our business, financial condition and results from operations. In addition, market conditions relating to real estate debt and preferred equity investments have evolved since the global financial crisis, which has resulted in a modification to certain structures and/or market terms. Any such changes in structures and/or market terms may make it relatively more difficult for us to monitor and evaluate our loans and investments.

***Commercial real estate-related investments that are secured, directly or indirectly, by real property are subject to delinquency, foreclosure and loss, which could result in losses to us.***

Commercial real estate investments, including investments in debt secured by commercial property, are subject to risks of delinquency and foreclosure and risks of loss that are greater than similar risks associated with investments in or loans made on the security of single-family residential property. Our ability to realize a return on our investments in commercial real estate typically is dependent primarily upon the successful operation of the property or properties. If the net operating income of the property is reduced, our ability to realize a return on our investment may be impaired. Net operating income of an income-producing property can be affected by, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tenant mix and tenant bankruptcies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• success of tenant businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• property management decisions, including with respect to capital improvements, particularly in older building structures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• property location and condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition from other properties offering the same or similar services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in laws that increase operating expenses or limit rents that may be charged;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any need to address environmental contamination at the property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in national, regional or local economic conditions and/or specific industry segments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• declines in regional or local real estate values;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• declines in regional or local rental or occupancy rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in interest rates and in the state of the debt and equity capital markets, including diminished availability or lack of debt financing for commercial real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in real estate tax rates and other operating expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in governmental rules, regulations and fiscal policies, including environmental legislation;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• natural disasters, acts of war, terrorism, social unrest and civil disturbances, which may decrease the availability of or increase the cost of insurance or result in uninsured losses; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse changes in zoning laws.

In addition, we are exposed to the risk of judicial proceedings with our borrowers and entities we invest in, including bankruptcy or other litigation, as a strategy to avoid foreclosure or enforcement of other rights by us as a lender or investor. In the event that any of the properties or entities underlying or collateralizing our loans or investments experiences any of the foregoing events or occurrences, the value of, and return on, such investments, could adversely affect our results of operations and financial condition.

***Most of real estate investments are dependent upon our tenants successfully operating their businesses, and their failure to do so could adversely affect us.*** 

Most of our properties are occupied by tenants. Therefore, the success of our investments in these properties is materially dependent upon the performance of our tenants. The financial performance of any one of our tenants is dependent on the tenant's individual business, its industry and, in some instances, may also be dependent on the performance of a larger business network that the tenant may be affiliated with or operate under. The financial performance of any one of our tenants could be adversely affected by poor management, unfavorable economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant's products or services or other factors, including the impact of a global pandemic which affects the United States, over which neither they nor we have control. Our Portfolio may include properties leased to tenants that operate in multiple locations, and in the future we may own multiple properties operated by the same tenant.

At any given time, any tenant may experience a decline in its business that may weaken its operating results or the overall financial condition of individual properties or its business as a whole. Any such decline may result in our tenant failing to make rental payments when due, declining to extend a lease upon its expiration, delaying occupancy of our property or the commencement of the lease or becoming insolvent or declaring bankruptcy. We depend on our tenants to operate their businesses at the properties we own or in which we own interests in a manner which generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent and, if agreed by the tenant, their obligations to maintain certain insurance coverage, pay real estate taxes, make repairs and otherwise maintain our properties. The ability of tenants to fulfill their obligations under leases may depend, in part, upon the overall profitability of their operations. Cash flow generated by certain tenant businesses may not be sufficient for a tenant to meet its obligations pursuant to the applicable lease.

***Many of our operating costs and expenses associated with our investments are or may be fixed and will not decline if revenues decline.***

Our results of operations or the results of operations of underlying property owners for our investments depend, in large part, on the level of revenues, operating costs, and expenses. The operating costs or expenses associated with ownership of a property by us or underlying property owners for our investments is not necessarily reduced when circumstances such as market factors and competition cause a reduction in revenue from the property. As a result, if revenues decline, we or the underlying property owners for our investments may not be able to reduce operating costs or expenses to keep pace with the corresponding reductions in revenues. Many of the costs and expenses associated with our investments, such as taxes, insurance, loan payments, and maintenance generally will or may not be reduced if a property is not fully occupied or other circumstances cause revenues to decrease, which could have a material adverse effect on our financial condition, results of operations, cash flow, cash available for distribution, and ability to service our debt obligations.

***We are subject to certain risks associated with investing in real estate, including potential liabilities under environmental laws and risks of loss from weather conditions, man-made or natural disasters, climate change and terrorism.***

Under various U.S. federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, under or in its property. Those laws typically impose cleanup responsibility and liability without regard to whether the owner or control party knew of or was responsible for the release or presence of such hazardous or toxic substances. The costs of investigation, remediation or removal of those substances may be substantial. The owner or control party of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. Certain environmental laws also impose liability in connection with the handling of or exposure to

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asbestos-containing materials, pursuant to which third parties may seek recovery from owners of real properties for personal injuries associated with asbestos-containing materials.

Weather conditions and man-made or natural disasters such as hurricanes, tornadoes, earthquakes, floods, droughts, fires and other environmental conditions can damage properties we own. Future weather conditions, man-made or natural disasters, effects of climate change or acts of terrorism could adversely impact the demand for, and value of, our assets and could also directly impact the value of our assets through damage, destruction or loss, and could thereafter materially impact the availability or cost of insurance to protect against these events. Although we believe our owned real estate and real estate we have investments in are adequately covered by insurance, we cannot predict at this time if we will be able to obtain appropriate coverage at a reasonable cost in the future, or if we will be able to continue to pass along all of the costs of insurance to our tenants. Any weather conditions, man-made or natural disasters, terrorist attack or effect of climate change, whether or not insured, could have a material adverse effect on our financial performance, liquidity and the market price of our shares. In addition, there is a risk that one or more of our property insurers may not be able to fulfill their obligations with respect to claims payments due to a deterioration in its financial condition.

***Investments in securities of other companies or issuers, including debt and equity instruments such as bonds, preferred or common stock, or convertible instruments, could cause us to incur losses or other expenses which could adversely affect our financial position, results of operations, and cash flows.*** 

We currently own and may own in the future, investments in securities of companies or issuers including debt and equity instruments, which may include bonds, preferred or common stock, or convertible instruments. Certain of these investments may be traded on an exchange or other active market while other investments may not be actively traded and without a readily observable market price. With respect to investments traded on an exchange or other active market, the price of the underlying instrument may be quoted such that the market value of the instrument varies during a given trading day, or the price may be quoted less frequently. Adverse fluctuations in the value of these investments, whether market-generated or not, may be reflected as unrealized losses on our balance sheet depending on the type of investment and our accounting methodologies. We may choose to or be required to liquidate these investments in whole or in part and at prices that result in realized losses on our investment. Should we incur realized losses on liquidating these investments, our financial position, results of operations and cash flows would be adversely impacted. Our investments in the securities of companies or issuers which are engaged in the real estate industry are also subject to risks associated with the investment in real estate generally.

***Our investments in non-real estate businesses, though expected to be limited, may expose us to risks from a number of diverse issuers, industries and investment forms.***

Though our investments are primarily in or relating to real estate-related businesses, assets or interests, we may, to a limited extent, hold, acquire or transact in certain non-real estate securities, including securities or investments held by us prior to our receipt of the Deregistration Order under the Investment Company Act on July 1, 2022. As a result, to the extent we hold, acquire or transact in non-real estate securities or investments, we may be exposed to risks from a number of diverse industries, issuers and investment forms, which may cause an investment in us to increase or decrease in value differently than may otherwise be expected if we solely invested in real estate businesses.

***Fluctuations in interest rates and credit spreads could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments.***

Our primary interest rate exposures relate to the yield on our loans and other investments and the financing cost of our debt, as well as interest rate swaps that we may utilize for hedging purposes. Changes in interest rates and credit spreads may affect our net income from loans and other investments, which is the difference between the interest and related income we earn on our interest-earning investments and the interest and related expense we incur in financing these investments. Interest rate and credit spread fluctuations resulting in our interest and related expense exceeding interest and related income would result in operating losses for us. Changes in the level of interest rates and credit spreads also may affect our ability to make loans or investments, the value of our loans and investments and our ability to realize gains from the disposition of assets. Increases in interest rates and credit spreads may also negatively affect demand for loans and could result in higher borrower default rates.

Our operating results depend, in part, on differences between the income earned on our investments, net of credit losses, and our financing costs. The yields we earn on our floating-rate assets and our borrowing costs tend to move in the same direction in response to changes in interest rates. However, one can rise or fall faster than the other, causing our net interest margin to expand or contract. In addition, we could experience reductions in the yield on our investments and an increase in the cost of our financing. Although we seek to match the terms of our liabilities to the expected lives of loans that we acquire or originate, circumstances may arise in which our liabilities are shorter in duration than our assets,

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resulting in their adjusting faster in response to changes in interest rates. For any period during which our investments are not match-funded, the income earned on such investments may respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may immediately and significantly decrease our results of operations and cash flows and the market value of our investments. In addition, unless we enter into hedging or similar transactions with respect to the portion of our assets that we fund using our balance sheet, returns we achieve on such assets will generally increase as interest rates for those assets rise and decrease as interest rates for those assets decline.

For information about our risks related to recent increases in prevailing interest rates, see "—Macroeconomic trends including inflation, rising interest rates or recession may adversely affect our financial condition and results of operations" below.

***Macroeconomic trends including inflation, rising interest rates or recession may adversely affect our financial condition and results of operations.***

Macroeconomic trends, including increases in inflation and rising interest rates, may adversely impact our business, financial condition and results of operations. Inflation in the United States has recently accelerated to historically high levels and may continue at an elevated level in the near-term. Rising inflation could have an adverse impact on general and administrative expenses, as these costs could increase at a rate higher than our rental revenue, interest income or other revenue. Inflationary pressures have increased our direct and indirect operating and investment costs. With regard to our investments in the SFR and multifamily housing market, inflationary pressures have increased or may have the effect of increasing costs related to property management, third-party contractors and vendors, insurance, transportation and taxes, and residents may also be adversely impacted by higher cost of living expenses, including food, energy and transportation, which may increase the rate of tenant defaults and harm our operating results. With regard to our commercial properties, inflationary pressures have increased or may have the effect of increasing our costs related to property management, third-party contractors and vendors, insurance, transportation and taxes, and our commercial tenants may be adversely impacted by higher operating expenses, which may increase the rate of tenant defaults and harm our operating results.

The U.S. Federal Reserve began rapidly raising the federal funds rate to decade-high levels in 2022 to combat inflation and restore price stability, and has signaled that the federal funds rate may continue to rise in 2023. In addition, the Federal Reserve began a quantitative tightening program in June of 2022. The combination of these actions have resulted in an increase in prevailing interest rates and a flattening of the yield curve. Certain of our investments pay interest at a fixed rate, and the relative value of the fixed cash flows from these investments will decrease as prevailing interest rates rise or increase as prevailing interest rates fall, causing potentially significant changes in value. In addition, to the extent our exposure to increases in interest rates on any of our debt is not eliminated through interest rate swaps and interest rate protection agreements that we may utilize for hedging purposes, such increases will result in higher debt service costs which will adversely affect our cash flows. We cannot assure you that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. Such future constraints could increase our borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments, which could slow or deter future growth.

In addition, these actions by the Federal Reserve, as well as efforts by other central banks globally to combat inflation and restore price stability and other global events, may raise the prospect or severity of a recession. The war in Ukraine adds, and other international tensions or escalations of conflict may add, instability to the uncertainty driving socioeconomic forces, which may continue to have an impact on global trade and result in inflation or economic instability. The COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases may also generally impair the performance of investments, increase funding costs, limit access to the capital markets or result in decisions by lenders not to extend credit. Present conditions and the state of the U.S and global economies make it difficult to predict whether and/or when and to what extent a recession will occur in the near future. Should a recession occur, or if one already exists and worsens in the future, it could negatively impact the value of commercial and residential real estate and the value of our investments, potentially materially. While the Company has taken steps to prepare for a potential downturn in the economy, should a recession occur, or if one already exists and worsens in the future, there can be no guaranty that the Company's efforts will prevent any negative impacts to the value of the Company's investments.

***Our loans and investments may be subject to fluctuations in interest rates that may not be adequately protected, or protected at all, by our hedging strategies.***

Our investments may include loans with either floating interest rates or fixed interest rates. Floating rate loans earn interest at rates that adjust from time to time (typically monthly) based upon an index (typically the one-month London Inter-Bank Offered Rate ("LIBOR") or SOFR). These floating rate loans are insulated from changes in value specifically

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due to changes in interest rates; however, the coupons they earn fluctuate based upon interest rates (again, typically one-month LIBOR or SOFR) and, in a declining and/or low interest rate environment, these loans would earn lower rates of interest and this would impact our operating performance. Conversely, in an increasing and/or high interest rate environment, these loans would earn higher rates of interest, which would also impact our operating performance. Fixed interest rate loans, however, do not have adjusting interest rates and the relative value of the fixed cash flows from these loans will decrease as prevailing interest rates rise or increase as prevailing interest rates fall, causing potentially significant changes in value. We may employ various hedging strategies to limit the effects of changes in interest rates (and in some cases credit spreads), including engaging in interest rate swaps, caps, floors and other interest rate derivative products. We believe that no strategy can completely insulate us from the risks associated with interest rate changes and there is a risk that such strategies may provide no protection at all and potentially compound the impact of changes in interest rates. Hedging transactions involve certain additional risks such as counterparty risk, leverage risk, the legal enforceability of hedging contracts, the early repayment of hedged transactions and the risk that unanticipated and significant changes in interest rates may cause a significant loss of basis in the contract and a change in current period expense. We cannot make assurances that we will be able to enter into hedging transactions or that such hedging transactions will adequately protect us against the foregoing risks.

Accounting for derivatives under generally accepted accounting principles in the United States ("GAAP") may be complicated. Any failure by us to meet the requirements for applying hedge accounting in accordance with GAAP could adversely affect our earnings. In particular, derivatives are required to be highly effective in offsetting changes in the value or cash flows of the hedged items (and appropriately designated and/or documented as such). If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued and the changes in fair value of the instrument are included in our reported net income.

***Investments in equity securities are subject to variation in their prices.***

The prices of equity securities which we have invested in may fall over short or long periods of time. In addition, common equity represents a share of ownership in a company, and rank junior to debt and preferred equity in their claim on the company's assets in the event of bankruptcy.

***We may use leverage in our investment program, resulting in a greater risk of loss.***

We may use leverage in our investment program, including the use of borrowed funds and investments in certain types of options, such as puts, calls and warrants, which may be purchased for a fraction of the price of the underlying securities. While such strategies and techniques increase the opportunity to achieve higher returns on the amounts invested, they also increase the risk of loss. To the extent we purchase securities with borrowed funds, our net assets will tend to increase or decrease at a greater rate than if borrowed funds are not used. If the interest expense on borrowings were to exceed the net return on the portfolio securities purchased with borrowed funds, our use of leverage would result in a lower rate of return than if we were not leveraged.

***We may invest in preferred equity securities which contain provisions that may result in a decline in the value of such preferred security in certain situations.***

We may invest in preferred equity securities which contain provisions that may result in a decline in the value of such preferred security in certain situations. Preferred stock, which may include preferred stock in real estate transactions, represents an equity or ownership interest in an issuer that pays dividends at a specified rate and that has precedence over common stock in the payment of dividends. In the event an issuer of preferred stock is liquidated or declares bankruptcy, the claims of creditors and owners of debt take precedence over the claims of those who own preferred and common stock. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking company provisions, as well as provisions allowing the stock to be called or redeemed prior to its maturity, which can have a negative impact on the stock's price when interest rates decline. Unlike interest on debt securities, preferred stock dividends may only be payable if declared by the issuer's board of directors or other governing body. The value of convertible preferred stock can depend heavily upon the value of the security into which such convertible preferred stock is converted, depending on whether the market price of the underlying security exceeds the conversion price.

***We may invest in or write options on securities, which may result in our bearing the risk of loss should the underlying security change in value during the life of the option.***

We may invest in options on securities, which may result in our bearing the risk of loss should the underlying security decline in value during the life of the option. There are several risks associated with transactions in options on securities. For example, there are significant differences between the securities and options markets that could result in an

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imperfect correlation between these markets, causing a given transaction not to achieve its objectives. A transaction in options or securities may be unsuccessful to some degree because of market behavior or unexpected events.

If we write a covered call option, we forgo, during the option's life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call, but retains the risk of loss should the price of the underlying security decline. The writer of an option has no control over the time when it may be required to fulfill its obligation and once an option writer has received an exercise notice, it must deliver the underlying security in exchange for the strike price.

If we write a covered put option, we bear the risk of loss if the value of the underlying stock declines below the exercise price minus the put premium. If the option is exercised, we could incur a loss if it is required to purchase the stock underlying the put option at a price greater than the market price of the stock at the time of exercise plus the put premium we received when we wrote the option. While our potential gain in writing a covered put option would be limited to distributions earned on the liquid assets securing the put option plus the premium received from the purchaser of the put option we risk a loss equal to the entire exercise price of the option minus the put premium.

***We may enter into reverse repurchase transactions, which are subject to the risk that the securities subject to such reverse repurchase transaction may decline in value or that securities purchased with the proceeds of such reverse repurchase transaction will decline in value below the market value of the securities we are required to repurchase.***

We may enter into reverse repurchase transactions with banks and securities dealers. A reverse repurchase transaction is a repurchase transaction in which we are the seller of, rather than the investor in, securities or other assets and agree to repurchase them at a date certain or on demand. Use of a reverse repurchase transaction may be preferable to a regular sale and later repurchase of securities or other assets because it avoids certain market risks and transaction costs. Reverse repurchase transactions involve the risk that the market value of securities and/or other assets purchased by us with the proceeds received by us in connection with such reverse repurchase transactions may decline below the market value of the securities we are obligated to repurchase under such reverse repurchase transactions. They also involve the risk that the counterparty liquidates the securities delivered to it by us under the reverse repurchase agreement following the occurrence of an event of default under the reverse repurchase agreement by us. At the time when we enter into a reverse repurchase transactions, liquid securities (cash, U.S. Government securities or other debt obligations) of ours having a value at least as great as the purchase price of the securities to be purchased are expected to be segregated on our books throughout the period of the obligation. The use of these investment strategies may increase NAV fluctuation.

***We may engage in the short sale of securities, which involves the risk of significant loss in the event the price of the borrowed securities appreciates before the short position closes out.***

We may engage in the short sale of securities, which involves the risk of significant loss in the event the price of the borrowed securities appreciates before the short position closes out. Short sales by us that are not made where there is an offsetting long position in the asset that it is being sold short theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase. Short selling allows us to profit from declines in market prices to the extent such decline exceeds the transaction costs and costs of borrowing the securities. However, since the borrowed securities must be replaced by purchases at market prices in order to close out the short position, any appreciation in the price of the borrowed securities would result in a loss. Purchasing securities to close out the short position can itself cause the price of securities to rise further, thereby exacerbating the loss. We may mitigate such losses by replacing the securities sold short before the market price has increased significantly. Under adverse market conditions, we might have difficulty purchasing securities to meet margin calls on its short sale delivery obligations, and might have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations would not favor such sales.

If other short positions of the same security are closed out at the same time, a "short squeeze" can occur where demand exceeds the supply for the security sold short. A short squeeze makes it more likely that we will need to replace the borrowed security at an unfavorable price.

***We may invest in structured finance securities, which are subject to the risk of default on the underlying obligation, increased sensitivity to defaults due to previous defaults and the disappearance of protecting tranches, market anticipation of defaults and aversion to certain structured finance securities as a class.***

A portion of our investments may consist of structured finance securities, such as CMBS, collateralized mortgage obligations, collateralized bond obligations, CLOs or similar instruments. Such structured finance securities are generally backed by an asset or a pool of assets, which serve as collateral. Depending on the type of security, the collateral may take the form of a portfolio of mortgage loans or bonds or other assets. We and other investors in structured finance securities ultimately bear the credit risk of the underlying collateral. In some instances, the structured finance securities are issued in

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multiple tranches, offering investors various maturity and credit risk characteristics, often categorized as senior, mezzanine and subordinated/equity according to their degree of risk. The riskiest securities are the equity tranche, which bears the bulk of defaults from the bonds or loans serving as collateral, and thus may protect the other, more senior tranches from default. If there are defaults or the relevant collateral otherwise underperforms, scheduled payments to senior tranches of such securities take precedence over those of mezzanine tranches, and scheduled payments to mezzanine tranches take precedence over those to subordinated/equity tranches. A senior tranche typically has higher ratings and lower yields than the underlying securities, and may be rated investment grade. Despite the protection from the equity tranche, other tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to previous defaults and the disappearance of protecting tranches, market anticipation of defaults and aversion to certain structured finance securities as a class.

***We may invest in emerging markets, where investments are subject to additional risks and price volatility.***

We may invest in emerging markets, where investments are subject to additional risks and price volatility. Any investments in issuers based in emerging market countries (countries in which the capital markets are developing), or in securities issued by foreign governments, may involve greater risks than investments in more developed markets and the prices of such investments may be more volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of our investments and the income they generate, as well as our ability to repatriate such amounts.

***We may be subject to risks involved in investment activity through joint ventures.***

We may acquire investments through joint ventures when we believe circumstances warrant the use of such structures. Joint venture investments involve risks, including: the possibility that joint venture partners might refuse to make capital contributions when due; that we may be responsible to joint venture partners for indemnifiable losses; that joint venture partners might at any time have business or economic goals which are inconsistent with ours; and that joint venture partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests. In some instances, joint venture partners may have competing interests in our markets that could create conflicts of interest. Further, joint venture partners may fail to meet their obligations to the joint venture as a result of financial distress or otherwise, and we would be forced to make contributions to maintain the value of the investments. To the extent joint venture partners do not meet their obligations to the joint venture or they take action inconsistent with the interests of the joint venture, we could be adversely affected.

If we acquire investments through joint ventures, we may be required to make decisions jointly with the other investors who have interests in the respective joint ventures. We might not have the same interests as the other investors in relation to these decisions or transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducements to the other investors to obtain a favorable resolution.

In addition, various restrictive provisions and third-party rights, including consent rights to certain transactions, may apply to sales or transfers of interests in joint ventures. Consequently, decisions to buy or sell interests in a property or properties relating to joint ventures may be subject to the prior consent of other investors. These restrictive provisions and third-party rights would potentially preclude us from achieving full value of the investments because of our inability to obtain the necessary consents to sell or transfer the interests.

***Our investments may be concentrated in terms of type of interest, geography, asset types, industry and sponsors and may continue to be so in the future.***

We intend to focus primarily on investing in various real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity. In addition to our commercial real estate focus, our investments may be concentrated in terms of property type (e.g. retail vs. office), geography, asset type, industry and sponsors, as we are not required to observe specific diversification criteria, except as may be set forth in the investment guidelines adopted by our Board. Any such concentration of our investments that are subject to relatively higher risk of issuer bankruptcy, default, foreclosure or other risks may cause our Portfolio to have overall higher risks than it otherwise would. A significant portion of our investments are currently in securities of issuers that are advised, directly or indirectly, by affiliates of our Adviser. In addition, our operating properties are currently all based in Texas. The Portfolio, based on net equity, is comprised of 91.9% investments in entities managed by or advised by affiliates of the Adviser. Any concentration of our investments may continue, vary from time to time or become more prevalent in the future.

Investment concentration may cause even modest changes in the value of the underlying assets to significantly impact the value of our investments. As a result of any high levels of concentration, any adverse economic, political or other conditions that disproportionately affects those geographic areas, asset classes or investments concentrated in other terms

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could have a magnified adverse effect on our results of operations and financial condition, and the value of our shareholders' investments could vary more widely than if we invested in a more diverse Portfolio.

***We operate in a competitive market for investment opportunities and competition may limit our ability to acquire desirable properties, loans and investments in commercial real estate and could also affect the yields of these assets.***

A number of entities compete with us to make the types of loans and investments, including the acquisition of real estate, that we make. Our profitability depends, in large part, on our ability to invest in commercial real estate on attractive terms. In investing in commercial real estate, we compete with a variety of institutional lenders and investors, including other REITs, specialty finance companies, public and private funds (including other funds managed by affiliates of our Adviser and Sponsor), commercial and investment banks, commercial finance and insurance companies and other financial institutions. Several other REITs have raised, or are expected to raise, significant amounts of capital, and may have investment objectives that overlap with ours, which may create additional competition for lending and investment opportunities. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. Many of our competitors are not subject to the operating constraints associated with REIT compliance or maintenance of an exclusion from regulation under the Investment Company Act. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments, offer more attractive pricing or other terms and establish more relationships than us. Furthermore, competition for investments in commercial real estate may lead to the yields of such assets decreasing, which may further limit our ability to generate satisfactory returns. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, desirable loans and investments in commercial real estate may be limited in the future, and we may not be able to take advantage of attractive lending and investment opportunities that may exist from time to time, as we can provide no assurance that we will be able to identify and invest in loans or make other investments that are consistent with our investment objectives.

***Prepayment rates may adversely affect the value of loans in which we invest.***

The value of our assets may be affected by prepayment rates on loans. If we invest in issuers that acquire or invest in mortgage-related securities or a pool of mortgage securities, we anticipate that the mortgage loans or the underlying mortgages will prepay at a projected rate generating an expected yield. If the assets are purchased at a premium to the par value or principal balance of the security or loans, when borrowers prepay their loans faster than expected, the corresponding prepayments on the mortgage-related securities may reduce the expected yield on such securities because the related premium will have to be amortized on an accelerated basis. Conversely, if the assets are purchased at a discount to either the principal balance of the loans or the par value of the loans underlying the securities, when borrowers prepay their mortgage loans slower than expected, the decrease in corresponding prepayments on the mortgage-related securities may reduce the expected yield on such securities because the related discount will not accrete as quickly as originally anticipated. Prepayment rates on loans may be affected by a number of factors including, but not limited to, the availability of mortgage credit, the relative economic vitality of the area in which the related properties are located, the servicing of the mortgage loans, possible changes in tax laws, changes in interest rates, other opportunities for investment, homeowner mobility and other economic, social, geographic, demographic and legal factors and other factors beyond our control. Consequently, such prepayment rates cannot be predicted with certainty and no strategy can completely insulate us from prepayment or other such risks. In periods of declining interest rates, prepayment rates on loans generally increase, though prepayment rates on loans are not guaranteed to remain the same or decrease in periods of increasing interest rates. If general interest rates decline at the same time, the proceeds of such prepayments received are likely to be reinvested by us in assets yielding less than the yields on the assets that were prepaid. In addition, as a result of the risk of prepayment, the market value of the prepaid assets may benefit less than other fixed income securities from declining interest rates. Prepayment rates could have an adverse effect on other of our portfolio investments, including any debt investments and preferred equity investments or on additional investments we may make in the future.

***The lack of liquidity in certain of our investments may adversely affect our business.*** 

The illiquidity of certain of our investments may make it difficult for us to sell such investments if the need or desire arises. Certain investments such as real property, debt securities (including participations) and preferred equity, in particular, may be relatively illiquid investments. Illiquidity may result from the absence of an established market for the investments as well as legal, contractual or other restrictions on their resale and other factors. In addition, certain of our investments may become less liquid after our investment as a result of periods of delinquencies or defaults by borrowers or tenants or turbulent market conditions, which may make it more difficult for us to dispose of such assets at advantageous times or in a timely manner. Moreover, many of the loans and securities we invest in will not be registered under the relevant securities laws, resulting in prohibitions against their transfer, sale, pledge or their disposition except in transactions that are exempt from registration requirements or are otherwise in accordance with such laws. Also, if in order to permit resale the securities are registered under the Securities Act at our expense, our expenses would be increased. As a result, we expect many of our investments may be illiquid, and if we are required to liquidate all or a portion of our

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Portfolio quickly, for example as a result of loan defaults, we may realize significantly less than the value at which we have previously recorded our investments. Further, we may face other restrictions on our ability to liquidate an investment to the extent that we or our Adviser and/or its affiliates has or could be attributed as having material, non-public information regarding such business entity. As a result, our ability to vary our Portfolio in response to changes in economic and other conditions may be relatively limited, which could adversely affect our results of operations and financial condition.

***Our success depends on the availability of attractive loans and investments and our Adviser***'***s ability to identify, structure, consummate, leverage, manage and realize returns on our loans and investments.***

Our operating results are dependent upon the availability of attractive loans and investments, as well as our Adviser's ability to identify, structure, consummate, leverage, manage and realize returns on our loans and investments. In general, the availability of favorable investment opportunities and, consequently, our returns, will be affected by the level and volatility of interest rates, conditions in the financial markets, general economic conditions, the demand for loan and investment opportunities in commercial real estate and the supply of capital for such opportunities. We cannot make any assurances that our Adviser will be successful in identifying and consummating loans and investments that satisfy our rate of return objectives or that such loans and investments, once made, will perform as anticipated.

***Any distressed loans or investments we make, or loans or investments that later become distressed, may subject us to losses and other risks relating to bankruptcy proceedings.*** 

Our loans and investments may include making distressed investments from time to time (e.g., investments in defaulted, out-of-favor or distressed bank loans and debt securities) or may involve investments that become "non-performing" following our acquisition thereof. Certain of our investments may include properties that typically are highly leveraged, with significant burdens on cash flow and, therefore, involve a high degree of financial risk. During an economic downturn or recession, loans or securities of financially or operationally troubled borrowers or issuers are more likely to go into default than loans or securities of other borrowers or issuers. Loans or securities of financially or operationally troubled issuers are less liquid and more volatile than loans or securities of borrowers or issuers not experiencing such difficulties. The market prices of such securities, if a market price is observable, are subject to erratic and abrupt market movements and the spread between bid and asked prices may be greater than normally expected. These securities are subject to a multitude of legal, industry, market, environmental and governmental forces that make analysis inherently difficult. Further, we rely on management, outside experts, market participants and the Adviser to analyze potential investments for us. There can be no assurance that any of these sources will prove credible, or that the resulting analysis will produce accurate conclusions. Investment in the loans or securities of financially or operationally troubled borrowers or issuers involves a high degree of credit and market risk.

In certain limited cases (e.g., in connection with a workout, restructuring and/or foreclosing proceedings involving one or more of our investments), the success of our investment strategy with respect thereto will depend, in part, on our ability to effectuate loan modifications and/or restructure and improve the operations of the borrower entities. The activity of identifying and implementing successful restructuring programs and operating improvements entails a high degree of uncertainty. There can be no assurance that we will be able to identify and implement successful restructuring programs and improvements with respect to any distressed loans or investments we may have from time to time.

These financial difficulties may not be overcome and may cause borrower entities to become subject to bankruptcy or other similar administrative proceedings. There is a possibility that we may incur substantial or total losses on our loans and investments and, in certain circumstances, become subject to certain additional potential liabilities that may exceed the value of our original investment therein. For example, under certain circumstances, a lender that has inappropriately exercised control over the management and policies of a debtor may have its claims subordinated or disallowed or may be found liable for damages suffered by parties as a result of such actions. In any reorganization or liquidation proceeding relating to our investments, we may lose our entire investment, may be required to accept cash or securities with a value less than our original investment and/or may be required to accept different terms, including payment over an extended period of time. In addition, under certain circumstances, payments to us may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance, preferential payment, or similar transaction under applicable bankruptcy and insolvency laws. Furthermore, bankruptcy laws and similar laws applicable to administrative proceedings may delay our ability to realize on collateral for loan positions held by us, may adversely affect the economic terms and priority of such loans through doctrines such as equitable subordination or may result in a restructuring of the debt through principles such as the "cramdown" provisions of the bankruptcy laws.

***We may not have control over certain of our loans and investments.***

Our ability to manage our Portfolio of loans and investments may be limited by the form in which they are made. In certain situations, we may:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquire investments subject to rights of senior classes and servicers under intercreditor or servicing agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquire only a minority and/or a non-controlling participation in an underlying investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• co-invest with others through partnerships, joint ventures or other entities, thereby acquiring non-controlling interests; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• rely on independent third-party management or servicing with respect to the management of an asset.

Therefore, we may not be able to exercise control over all aspects of our loans or investments. Such financial assets may involve risks not present in investments where senior creditors, junior creditors, servicers or third parties controlling investors are not involved. Our rights to control the process following a borrower default may be subject to the rights of senior or junior creditors or servicers whose interests may not be aligned with ours. A partner or co-venturer may have financial difficulties resulting in a negative impact on such asset, may have economic or business interests or goals that are inconsistent with ours, or may be in a position to take action contrary to our investment objectives. In addition, we may, in certain circumstances, be liable for the actions of our partners or co-venturers.

We may make preferred equity investments in entities over which we will not have voting control. We intend to ensure that the terms of our investments require that the respective entities take all actions necessary to preserve our REIT status and avoid taxation at the REIT level. However, because we will not control such entities, they may cause us to fail one or more of the REIT tests. In that event, we intend to take advantage of all available provisions in the REIT statutes and regulations to cure any such failure, which provisions may require payments of penalties. We believe that we will be successful in maintaining our REIT status, but no assurances can be given.

***Investments that are subordinated or otherwise junior in an issuer***'***s capital structure and that involve privately negotiated structures expose us to greater risk of loss.***

We may invest in debt and preferred equity that are subordinated or otherwise junior in an issuer's capital structure and that involve privately negotiated structures. Our investments in subordinated debt and preferred equity and our remedies with respect thereto, including the ability to foreclose on any collateral securing such investments, are subject to the rights of any senior creditors. Significant losses related to such loans or investments could adversely affect our results of operations and financial condition. Investments in subordinated debt and preferred equity also bear a greater risk of default than senior debt and may receive payments after the holders on the more senior tranches of debt instruments with respect to an issuer.

***We may invest in senior loans, a significant portion of which may be below investment grade, which the borrower may fail to repay or which may decline in value due to changes in interest rates.***

We may invest in senior loans, a significant portion of which may be below investment grade, which the borrower may fail to repay or which may decline in value due to changes in interest rates. Loans below investment grade are considered speculative because of the credit risk of their issuers. As with any debt instrument, senior loans are generally subject to the risk of price declines and to increases in interest rates, particularly long term rates. Senior loans are also subject to the risk that, as interest rates rise, the cost of borrowing increases, which may increase the risk of default. In addition, the interest rates of floating rate loans typically only adjust to changes in short-term interest rates; long-term interest rates can vary dramatically from short-term interest rates. Therefore, senior loans may not mitigate price declines in a rising long term interest rate environment. The secondary market for loans is generally less liquid than the market for higher grade debt. Less liquidity in the secondary trading market could adversely affect the price at which we could sell a loan, and could adversely affect our income. The volume and frequency of secondary market trading in such loans varies significantly over time and among loans. Although senior loans in which we may invest may often be secured by collateral, there can be no assurance that liquidation of such collateral would satisfy the borrower's obligation in the event of a default or that such collateral could be readily liquidated.

***We may not realize gains or income from our investments.***

We seek to generate both current income and capital appreciation from our investments. However, it is possible that our investments will not appreciate in value and some investments may decline in value. In addition, the obligors on any loans in which we invest may default on, or be delayed in making, interest and/or principal payments, especially given that we may invest in sub-performing and non-performing loans or in securitizations of loans or in transitional loans. Accordingly, we are subject to an increased risk of loss and may not be able to realize gains or income from our investments. Moreover, any gains that we do realize may not be sufficient to offset our losses and expenses.

***Real estate valuation is inherently subjective and uncertain.***

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The valuation of real estate, and therefore the valuation of any underlying security relating to loans and/or estate investments made by us is inherently subjective due to, among other factors, the individual nature of each property, its location, the expected future rental revenues from that particular property and the valuation methodology adopted. As a result, the valuations of the real estate assets against which we make loans and/or investments are subject to a large degree of uncertainty and are made on the basis of assumptions and methodologies that may not prove to be accurate, particularly in periods of volatility, low transaction flow or restricted debt availability in the commercial or residential real estate markets.

***Some of our portfolio investments may be recorded at fair value not readily available and, as a result, there will be uncertainty as to the value of these investments.***

Some or all of our portfolio investments may be in the form of positions or securities that are not publicly traded. The fair value of investments that are not publicly traded may not be readily determinable. Our Adviser will value these investments at fair value which may include unobservable inputs. Because such valuations are subjective, the fair value of certain of our assets may fluctuate over short periods of time and our Adviser's determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Our results of operations and financial condition could be adversely affected if our Adviser's determinations regarding the fair value of these investments were materially higher than the values that we ultimately realize upon their disposal.

***We may experience a decline in the fair value of our assets.***

A decline in the fair value of our assets may require us to recognize an "other-than-temporary" impairment against such assets under GAAP if we were to determine that, with respect to any assets in unrealized loss positions, we do not have the ability and intent to hold such assets to maturity or for a period of time sufficient to allow for recovery to the original acquisition cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write down the amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be other-than-temporarily impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted amortized cost of such assets at the time of sale. If we experience a decline in the fair value of our assets, it could adversely affect our results of operations and financial condition.

***The due diligence process that our Adviser undertakes in regard to investment opportunities may not reveal all facts that may be relevant in connection with an investment and if our Adviser incorrectly evaluates the risks of our loans and investments, we may experience losses.***

Before making investments for us, including in any loans, our Adviser will conduct due diligence that it deems reasonable and appropriate based on the facts and circumstances relevant to each potential investment. When conducting due diligence, our Adviser may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants and investment banks may be involved in the due diligence process in varying degrees depending on the type of potential investment. Relying on the resources available to it, our Adviser will evaluate our potential investments based on criteria it deems appropriate for the relevant investment. Our Adviser's loss estimates may not prove accurate, as actual results may vary from estimates. If our Adviser underestimates the asset-level losses relative to the price we pay for a particular investment, we may experience losses with respect to such investment.

***Insurance on investments may not cover all losses.***

There are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism, acts of war, social unrest and civil disturbances, which may be uninsurable or not economically insurable. Inflation, changes in building codes and ordinances, environmental considerations and other factors, also might result in insurance proceeds being insufficient to repair or replace a property if it is damaged or destroyed. Under these circumstances, the insurance proceeds received with respect to a property relating to one of our investments might not be adequate to restore our economic position with respect to our investment. Any uninsured loss could result in the corresponding nonperformance of or loss on our investment related to such property.

***Terrorist attacks, other acts of violence or war or a prolonged economic slowdown may affect the real estate industry generally and our business, financial condition and results of operations.***

We cannot predict the severity of the effect that potential future terrorist attacks or other acts of violence or war would have on us. We may suffer losses as a result of the adverse impact of any future attacks and these losses may

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adversely impact our performance and may cause the market value of our securities to decline or be more volatile. In addition, a prolonged economic slowdown, a recession or declining real estate values, including, among other things, as a result of pandemics, inflation or rising interest rates, could impair the performance of our investments and harm our financial condition and results of operations, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. Losses resulting from these types of events may not be fully insurable.

The absence of affordable insurance coverage may adversely affect the general real estate market, including lending volume, and the market's overall liquidity and may reduce the number of suitable investment opportunities available to us and the pace at which we are able to make investments. If the properties underlying our interests are unable to obtain affordable insurance coverage, the value of our interests could decline, and in the event of an uninsured loss, we could lose all or a portion of our investment.

**Risks Related to Our Industry**

***We may need to foreclose on certain loans and/or exercise our*** "***foreclosure option***" ***under the terms of investments we may acquire, which could result in losses that harm our results of operations and financial condition.***

We may find it necessary or desirable to foreclose on certain loans and/or exercise our "foreclosure option" under the terms of loans we acquire, and this process may be lengthy and expensive. We cannot assure you as to the adequacy of the protection of the terms of the applicable loan or investment, including the validity or enforceability of the loan and/or investments and the maintenance of the anticipated priority and perfection of the applicable security interests, if any. Furthermore, claims may be asserted by lenders or borrowers that might interfere with enforcement of our rights. Borrowers may resist foreclosure actions by asserting numerous claims, counterclaims and defenses against us, including, without limitation, lender liability claims and defenses, even when the assertions may have no basis in fact, in an effort to prolong the foreclosure action and seek to force the lender into a modification of the loan or a favorable buy-out of the borrower's position in the loan. In some states, foreclosure actions can take several years or more to litigate. At any time prior to or during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure actions and further delaying the foreclosure process and potentially result in a reduction or discharge of a borrower's debt. Foreclosure may create a negative public perception of the related property, resulting in a diminution of its value. Even if we are successful in foreclosing on a loan and/or investment, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to recover our cost basis in the loan and/or investment, resulting in a loss to us. Furthermore, any costs or delays involved in the foreclosure of the loan and/or investment or a liquidation of the underlying property will further reduce the net proceeds and, thus, increase the loss.

***Liability relating to environmental matters may impact the value of properties that we may acquire or the properties underlying our investments.***

Under various U.S. federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances.

The presence of hazardous substances may adversely affect an owner's ability to sell real estate or borrow using real estate as collateral. To the extent that an owner of a property underlying one of our investments becomes liable for removal costs, the ability of the owner to make payments to us may be reduced, which in turn may adversely affect the value of the relevant investment held by us and our ability to make distributions to our shareholders.

The presence of hazardous substances on a property may adversely affect our ability to sell the property upon a default and foreclosure of one of our investments and we may incur substantial remediation costs, thus harming our financial condition. The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition and our ability to make distributions to our shareholders.

***We may be subject to lender liability claims, and if we are held liable under such claims, we could be subject to losses.***

In recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively termed "lender liability." Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or stockholders. We cannot assure prospective investors that such claims will not arise or that we will not be subject to significant liability if a claim of this type did arise.

***Compliance with various laws and regulations, including accessibility, building and health and safety laws and regulations, may be costly, may adversely affect our operations or expose us to liability.***

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In addition to compliance with environmental regulations, we or underlying property owners for our investments must comply with various laws and regulations such as accessibility, building, zoning, landlord/tenant and health and safety laws and regulations, including, but not limited to, the ADA and the Fair Housing Act. Some of those laws and regulations may conflict with one another or be subject to limited judicial or regulatory interpretations. Under those laws and regulations, we or underlying property owners for our investments may be liable for, among other things, the costs of bringing our properties into compliance with the statutory and regulatory requirements. Noncompliance with certain of these laws and regulations may result in liability without regard to fault and the imposition of fines and could give rise to actions brought against us or the underlying property owners for our investments by governmental entities and/or third parties who claim to be or have been damaged as a consequence of an underlying property not being in compliance with the subject laws and regulations. As part of our due diligence procedures in connection with the acquisition of a property, we typically conduct an investigation of the property's compliance with known laws and regulatory requirements with which we must comply once we acquire a property, including a review of compliance with the ADA and local zoning regulations. Our investigations and these assessments may not have revealed, and may not with respect to future acquisitions reveal, all potential noncompliance issues or related liabilities and we can provide no assurance that our properties have been, or that our future projects will be, designed and built in accordance with all applicable legal requirements. In addition, there can be no guarantee that underlying property owners for our investments have conducted a similar or sufficient investigation of the property's compliance or liabilities, that they will in the future, or that any such properties will be designed, built and maintained in accordance with applicable legal requirements.

***Our ability to generate returns for our shareholders through our investment, finance and operating strategies is subject to then-existing market conditions, and we may make significant changes to these strategies in response to changing market conditions.***

We seek to provide attractive risk-adjusted returns to our shareholders over the long term. We intend to achieve this objective primarily by originating, structuring and investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity. In the future, to the extent that market conditions change and we have sufficient capital to do so, we may, depending on prevailing market conditions, change our investment guidelines in response to opportunities available in different interest rate, economic and credit environments. As a result, we cannot predict the percentage of our equity that will be invested in any commercial real estate property types at any given time.

***If we fail to develop, enhance and implement strategies to adapt to changing conditions in the real estate industry and capital markets, our financial condition and results of operations may be materially and adversely affected.***

The manner in which we compete and the types of assets in which we seek to invest will be affected by changing conditions resulting from sudden changes in our industry, regulatory environment, the role and structures of government-sponsored enterprises, the role of credit rating agencies or their rating criteria or process, or the U.S. and global economies generally. If we do not effectively respond to these changes, or if our strategies to respond to these changes are not successful, our financial condition and results of operations may be adversely affected. In addition, we may not be successful in executing our business strategies and, even if we successfully implement our business strategies, we may not generate revenues or profits after we implement them.

***Any credit ratings assigned to our loans and investments will be subject to ongoing evaluations and revisions and we cannot assure you that those ratings will not be downgraded.***

Our loans and investments may be rated by rating agencies such as Moody's Investors Service, Fitch Ratings or Standard & Poor's. Any credit ratings on our loans and investments are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. If rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our loans and investments in the future, the value and liquidity of our investments could significantly decline, which would adversely affect the value of our Portfolio and could result in losses upon disposition.

***We may invest in derivative instruments, which would subject us to increased risk of loss.***

Subject to maintaining our qualification as a REIT, we may invest in derivative instruments. Derivative instruments, especially when purchased in large amounts, may not be liquid in all circumstances, so that in volatile markets we may not be able to close out a position without incurring a loss. The prices of derivative instruments, including swaps, futures, forwards and options, are highly volatile, and such instruments may subject us to significant losses. The value of such derivatives also depends upon the price of the underlying instrument or commodity. Such derivatives and other customized instruments also are subject to the risk of non-performance by the relevant counterparty. In addition, actual or implied daily

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limits on price fluctuations and speculative position limits on the exchanges or over-the-counter ("OTC") markets in which we may conduct our transactions in derivative instruments may prevent prompt liquidation of positions, subjecting us to the potential of greater losses. Derivative instruments that may be purchased or sold by us may include instruments not traded on an exchange. The risk of nonperformance by the obligor on such an instrument may be greater, and the ease with which we can dispose of or enter into closing transactions with respect to such an instrument may be less than in the case of an exchange-traded instrument. In addition, significant disparities may exist between "bid" and "ask" prices for derivative instruments that are traded OTC and not on an exchange. Such OTC derivatives are also typically not subject to the same type of investor protections or governmental regulation as exchange-traded instruments.

In addition, we may invest in derivative instruments that are neither presently contemplated nor currently available, but which may be developed in the future, to the extent such opportunities are both consistent with our investment objectives and legally permissible. Any such investments may expose us to unique and presently indeterminate risks, the impact of which may not be capable of determination until such instruments are developed and/or we determine to make such an investment.

***The impact of financial reform legislation and legislation promulgated thereunder on us is uncertain.***

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") instituted a wide range of reforms that will have an impact on all financial institutions. Many of the requirements called for in the Dodd-Frank Act will be implemented over time, most of which will be subject to implementing regulations over the course of several years. Many of these regulations have yet to be promulgated or are only recently promulgated. In February 2017, former President Trump signed an executive order for a broad review of federal regulation of the U.S. financial system by the Secretary of the Treasury, in consultation with the heads of the member agencies of the Financial Stability Oversight Council ("FSOC"), a panel comprising top U.S. financial regulators. In May 2018, Congress passed, and former President Trump signed, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the "EGRRCPA"), which among other things, modified certain provisions of the Dodd-Frank Act related to mortgage lending, consumer protection, regulatory relief for large banks, regulatory relief for community banks and regulatory relief in securities markets. The EGRRCPA will relax or eliminate so-called "enhanced regulation" of banks falling into certain ranges of asset value and will impact the application of the Volcker Rule and the Basel III guidelines as to certain banks. Specifically, the EGRRCPA relaxed (or eliminated) certain risk-based capital and leverage requirements for community banks with less than $10 billion in assets that maintain a certain "community bank leverage ratio" that bank regulators are directed to develop, but the impact and effect of the foregoing on market liquidity is uncertain. It is possible that this or a future Congress will roll back some of the changes made by EGRRCPA to the Dodd-Frank Act and take a more active approach to banking and financial regulation than the prior Trump Administration, particularly to promote policy goals involving climate change, racial equity, environmental, social and governance matters, consumer financial protection and infrastructure, although it is not possible at this time to predict the nature or extent of any amendments.

In addition, the substance of regulatory supervision may be influenced through the appointment of individuals to the Board of Governors of the U.S. Federal Reserve and other financial regulatory bodies. Measures focused on deregulation of the U.S. financial services industry may, among other things, decrease the restrictions on banks and other financial institutions and allow them to compete with us for investment opportunities that were previously not available to them. Measures focused on deregulation of the U.S. financial services industry may have the effect of increasing competition for our business. Increased competition from banks and other financial institutions in the credit markets could have the effect of reducing credit spreads, which may adversely affect our revenues.

Given the uncertainty associated with financial reform legislation, including the implementation of the Dodd-Frank Act and any legislative and/or regulatory actions under this or a future executive administration or Congress, the full impact such requirements will have on our business, results of operations or financial condition is unclear. The changes resulting from the Dodd-Frank Act, the EGRRCPA, and other legislative actions may require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements or address resulting changes in the mortgage loan market. While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our business. In addition, failure to comply with any such laws, regulations or principles, or changes thereto, or to adapt to any changes in the marketplace, may have a material adverse effect on our results of operations, financial condition and cash flows.

***A change in the federal conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between Fannie Mae, Freddie Mac and Ginnie Mae and the U.S. government, may materially adversely affect our business, financial condition and results of operations.***

Fannie Mae and Freddie Mac are a major source of financing for multifamily real estate in the United States and provide guarantees for CMBS securitizations held by issuers in which we have invested, and for CMBS securitizations

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which we may further invest directly or indirectly in the future. Following significant credit losses and concerns of liquidity during the 2007-2008 global financial crisis, Fannie Mae and Freddie Mac were placed in the conservatorship of the U.S. Federal Housing Finance Agency (the "FHFA"), their federal regulator, pursuant to its powers under The Federal Housing Finance Regulatory Reform Act of 2008, which was a part of the Housing and Economic Recovery Act of 2008. Under this conservatorship, Fannie Mae and Freddie Mac issued equity and derivative securities to the U.S. government in exchange for capital infusions and were required to reduce the amount of mortgage loans they own or for which they provide guarantees. As conservator, the FHFA has assumed all the powers of the shareholders, directors and officers with the goal of preserving and conserving their assets.

Since the conservatorship began, the U.S. Congress has considered a substantial number of bills that include comprehensive or incremental approaches to ending the conservatorship, winding down Fannie Mae and Freddie Mac or changing their purposes, businesses or operations. U.S. government departments and agencies, including the U.S. Treasury and FHFA, have also published proposals which could lead to a release or exit from conservatorship. A decision by the U.S. government to eliminate or downscale Fannie Mae or Freddie Mac or to reduce government support for multifamily housing more generally may adversely affect the availability of CMBS securitizations as an investment or cause breaches in underlying loan covenants, and, as a result, may adversely affect our investments. It may also adversely affect underlying interest rates, capital availability, development of multifamily communities and the value of multifamily assets, which may also adversely affect our investments. In addition, reforms regarding Fannie Mae and Freddie Mac could negatively impact our ability to maintain an exclusion or exemption from the Investment Company Act.

Recent events related to the COVID-19 pandemic and the associated economic slowdown raised concerns that Fannie Mae and Freddie Mac may have needed additional capital in order to meet their obligations as guarantors on trillions of dollars of CMBS securitizations, and future events may generate similar concerns. The market value of CMBS securitizations guaranteed by Fannie Mae and Freddie Mac today are highly dependent on the continued support by the U.S. government. If such support is modified or withdrawn, if the U.S. Treasury fails to inject new capital as needed or if Fannie Mae and Freddie Mac are released from conservatorship, the market value of the CMBS securitizations they guaranteed could significantly decline, making it difficult to obtain repurchase agreement financing and could force holders of CMBS securitizations to sell assets at substantial losses. Furthermore, any policy changes to the relationship between Fannie Mae, Freddie Mac and the U.S. government may create market uncertainty and have the effect of reducing the actual or perceived credit quality of the CMBS securitizations. It may also interrupt the cash flow received by investors on the underlying CMBS.

All of the foregoing could materially adversely affect the availability, pricing, liquidity, market value and financing of our assets or investments and materially adversely affect our business, operations, financial condition and book value per common share.

***The securitization process is subject to an evolving regulatory environment that may affect certain aspects of our current business.***

As a result of the dislocation of the credit markets during the great recession from 2007-2009, and in anticipation of more extensive regulation, including regulations promulgated pursuant to the Dodd-Frank Act, the securitization industry has crafted and continues to craft changes to securitization practices, including changes to representations and warranties in securitization transaction documents, new underwriting guidelines and disclosure guidelines. Pursuant to the Dodd-Frank Act, various federal agencies, including the SEC, have promulgated regulations with respect to issues that affect securitizations.

As required by the Dodd-Frank Act, a collection of federal agencies have adopted a joint risk retention rule (the "Risk Retention Rule") that generally requires the sponsor of asset-backed securities to retain not less than 5% of the credit risk of the assets collateralizing the securities. The rule generally prohibits the sponsor or its affiliates from directly or indirectly hedging or otherwise selling or transferring the retained credit risk for a specified period of time, depending on the type of asset that is securitized. For purposes of the rule, the term "asset-backed security" means a fixed-income or other security collateralized by any type of self-liquidating financial asset (including a loan, a lease, a mortgage, or a secured or unsecured receivable) that allows the holder of the security to receive payments that depend primarily on cash flow from the asset, including, among other things, a collateralized mortgage obligation or a collateralized debt obligation. The Risk Retention Rule provides a variety of exemptions, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages," which are defined in turn as qualified mortgage loans under the Bureau of Consumer Financial Protection's Ability to Repay Rule. As part of our strategy, we may acquire investments in commercial real estate that are not qualified mortgage loans (such as loans made primarily for business purposes). If we sponsor the securitization of such assets, we may be required to retain 5% of the credit risk of those assets, which would expose us to loss and could increase the administrative and operational cost of asset securitization, and additionally may be required to comply with significant disclosure, review and reporting requirements applicable to asset securitization.

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On February 9, 2018, a three-judge panel of the United States Court of Appeals for the District of Columbia held, in The Loan Syndications and Trading Association v. Securities and Exchange Commission and Board of Governors of the U.S. Federal Reserve System (the "LSTA Decision"), that collateral managers of "open market CLOs" (described in the LSTA Decision as CLOs where assets are acquired from "arms-length negotiations and trading on an open market") are not "securitizers" or "sponsors" under the risk retention requirements of the Dodd-Frank Act and, therefore, are not subject to risk retention and do not have to comply with the Risk Retention Rule. In reaching this decision, the panel determined, among other things, that an asset manager that was not in the chain of title on the transferred assets nor possessed them could not be required to "retain" risk that it had never held. Although the LSTA Decision is limited by its terms to asset managers of open market CLOs, the court's analysis may have broader implications with respect to compliance with the Risk Retention Rule, especially in the context of managed funds that utilize securitizations. Even though we have an Adviser, we may be considered a securitizer or sponsor of securitizations, requiring us to hold risk retention in accordance with the Risk Retention Rule and to comply with disclosure, review and reporting requirements applicable to asset securitizations.

The current regulatory environment may be impacted by future legislative developments, such as amendments to key provisions of the Dodd-Frank Act, including provisions setting forth capital and risk retention requirements. In particular, the EGRRCPA makes certain modifications to post-financial crisis regulatory requirements, including, among other things, improving consumer access to mortgage credit and tailoring regulations for certain bank holding companies, including raising the relevant thresholds for the application of the U.S. Federal Reserve's enhanced prudential standards, as well as for the designation by the FSOC of non-bank financial companies as systemically important. The EGRRCPA has resulted and may further result in significant modifications to certain aspects of the Dodd-Frank Act and other post-financial crisis regulatory requirements.

These legislative developments, and other proposed regulations affecting securitization, could alter the structure of securitizations in the future, pose additional risks to our participation in future securitizations or reduce or eliminate the economic incentives for participating in future securitizations, increase the costs associated with our origination, securitization or acquisition activities, or otherwise increase the risks or costs of our doing business.

***Rapid changes in the values of our real estate investments may make it more difficult for us to maintain our qualification as a REIT or exclusion from regulation under the Investment Company Act.***

If the market value or income potential of real estate-related investments declines as a result of increased interest rates, prepayment rates or other factors, we may need to increase our real estate investments and income and/or liquidate our non-qualifying assets in order to maintain our REIT qualification or exclusion from Investment Company Act regulation. If a decline in real estate asset values and/or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-qualifying assets that we may own. We may have to make investment decisions that we otherwise would not make absent the REIT and Investment Company Act considerations.

As a consequence of our seeking to avoid registration under the Investment Company Act on an ongoing basis, we and/or our subsidiaries may be restricted from making certain investments or may structure investments in a manner that would be less advantageous to us than would be the case in the absence of such requirements. In particular, a change in the value of any of our assets could negatively affect our ability to avoid registration under the Investment Company Act and cause the need for a restructuring of our Portfolio. For example, these restrictions may limit our and our subsidiaries' ability to invest directly in mortgage-backed securities that represent less than the entire ownership in a pool of senior loans, debt and equity tranches of securitizations and certain asset-backed securities, non-controlling equity interests in real estate companies or in assets not related to real estate. In addition, seeking to avoid registration under the Investment Company Act may cause us and/or our subsidiaries to acquire or hold additional assets that we might not otherwise have acquired or held or dispose of investments that we and/or our subsidiaries might not have otherwise disposed of, which could result in higher costs or lower proceeds to us than we would have paid or received if we were not seeking to comply with such requirements. Thus, avoiding registration under the Investment Company Act may hinder our ability to operate solely on the basis of maximizing profits.

There can be no assurance that we and our subsidiaries will be able to successfully avoid operating as an unregistered investment company. If it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the SEC, that we would be unable to enforce contracts with third parties, that third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company, and that we would be subject to limitations on corporate leverage that would have an adverse impact on our investment returns.

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If we were required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act) and Portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan, which could materially adversely affect our ability to pay distributions to our shareholders.

***We are a*** "***smaller reporting company***" ***under the federal securities laws and will be subject to reduced public company reporting requirements.***

We are a "smaller reporting company," and as such we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "smaller reporting companies," including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will remain a smaller reporting company as long as, on each annual determination date, we either (a) have an unaffiliated public float of less than $250 million on the annual determination date or (b) had annual revenues of less than $100 million as of the previously completed fiscal year for which audited financial statements are available and on the annual determination date either (i) have no unaffiliated public float or (ii) have an unaffiliated public float of less than $700 million. If we fail to satisfy these conditions on the annual determination date in any year, we will cease to qualify as a smaller reporting company. Our revenue for the fiscal year ended December 31, 2022 exceeded the $100 million threshold specified in the smaller reporting company test. As a result, it is likely that we will not qualify as a smaller reporting company on the next annual determination date. If we do not qualify as a smaller reporting company, we may incur additional costs complying with enhanced reporting requirements that are applicable to other public companies that are not smaller reporting companies.

***Although we are a smaller reporting company, the requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and place additional demands on management, and we may be unable to comply with these requirements in a timely or cost-effective manner.***

As a public company with listed equity securities, we are required to comply with new laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act), related regulations of the SEC, including compliance with the reporting requirements of the Exchange Act of 1934, as amended (the "Exchange Act"), and the requirements of the NYSE. Complying with these statutes, regulations and requirements will occupy a significant amount of time of our Board and management and will require us to incur significant costs and expenses. As a result of being a public company, we are required to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• institute and maintain a more comprehensive compliance function;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• design, establish, evaluate and maintain a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board (the "PCAOB");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• comply with rules promulgated by the NYSE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prepare and distribute periodic public reports in compliance with our obligations under federal securities laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish and maintain new internal policies, such as those relating to disclosure controls and procedures and insider trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• involve and retain to a greater degree outside counsel and accountants in the above activities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish and maintain an investor relations function.

If our profitability is adversely affected because of these additional costs, it could have a negative effect on the trading price of our securities.

**Risks Related to Our Indebtedness and Financing Strategy**

***We have a substantial amount of indebtedness which may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.***

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As of December 31, 2022, we have approximately $171.3 million of indebtedness outstanding related to our Portfolio. Payments of principal and interest on borrowings may leave us with insufficient cash resources to acquire additional investments or pay the dividends necessary to maintain our REIT qualification. Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require us to dedicate a substantial portion of cash flow from operations to the payment of principal, and interest on, indebtedness, thereby reducing the funds available for other purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make it more difficult for us to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• force us to dispose of one or more of our investments, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject us to increased sensitivity to interest rate increases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limit our ability to withstand competitive pressures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• limit our ability to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduce our flexibility in planning for or responding to changing business, industry and economic conditions; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• place us at a competitive disadvantage to competitors that have relatively less debt than we have.

If any one of these events were to occur, our financial condition, results of operations, cash flow and trading price of our securities could be adversely affected.

***Any credit facilities (including term loans and revolving facilities), debt securities, repurchase agreements, warehouse facilities, securitizations or other debt arrangements may impose restrictive covenants, which may restrict our flexibility to determine our operating policies and investment strategy.***

We may enter into agreements with various counterparties to finance our operations, which may include entering into credit facilities (including term loans and revolving facilities), repurchase agreements, warehouse facilities, securitizations and/or issuing debt securities or other debt arrangements. The documents that govern these agreements may contain customary affirmative and negative covenants, including financial covenants applicable to us that may restrict our flexibility to determine our operating policies and investment strategy. For example, these agreements may require us to maintain a specific net debt to equity ratio, minimum NAV, senior debt service coverage ratio, consolidated unencumbered assets ratio, or, among others, specified minimum levels of capacity under our credit facilities and cash. As a result, we may not be able to leverage our assets as fully as we would otherwise choose, which could reduce our return on assets. If we are unable to meet these collateral obligations, our financial condition and prospects could deteriorate significantly. In addition, lenders may require that our Adviser continue to serve in such capacity. If we fail to meet or satisfy any of these covenants, we would be in default under these agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce their interests against existing collateral. We may also be subject to cross-default and acceleration rights in our other debt arrangements. Further, this could also make it difficult for us to satisfy the distribution requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.

***Inability to access funding could have a material adverse effect on our results of operations, financial condition and business.***

Our ability to fund our loans and investments may be impacted by our ability to secure bank credit facilities (including term loans and revolving facilities), warehouse facilities and structured financing arrangements, public and private debt issuances and derivative instruments, in addition to transaction or asset specific funding arrangements and additional repurchase agreements on acceptable terms. We may also rely on short-term financing that would be especially exposed to changes in availability. Our access to sources of financing will depend upon a number of factors, over which we have little or no control, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general economic or market conditions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the market's view of the quality of our assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the market's perception of our growth potential;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our current and potential future earnings and cash distributions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the market price of our securities.

We may need to periodically access the capital markets to raise cash to fund new loans and investments. Unfavorable economic or capital market conditions may increase our funding costs, limit our access to the capital markets or could result in a decision by our potential lenders not to extend credit. An inability to successfully access the capital markets could limit our ability to grow our business and fully execute our business strategy and could decrease our earnings and liquidity. In addition, any dislocation or weakness in the capital and credit markets could adversely affect our lenders and could cause one or more of our lenders to be unwilling or unable to provide us with financing or to increase the costs of that financing. In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price. We cannot make assurances that we will be able to obtain any additional financing on favorable terms or at all.

***We are subject to counterparty risk associated with our debt obligations.***

Our counterparties for critical financial relationships may include both domestic and international financial institutions. These institutions could be severely impacted by credit market turmoil, changes in legislation, allegations of civil or criminal wrongdoing and may as a result experience financial or other pressures. In addition, if a lender or counterparty files for bankruptcy or becomes insolvent, our borrowings under financing agreements with them may become subject to bankruptcy or insolvency proceedings, thus depriving us, at least temporarily, of the benefit of these assets. Such an event could restrict our access to financing and increase our cost of capital. If any of our counterparties were to limit or cease operation, it could lead to financial losses for us.

***Derivatives and hedging activity could adversely affect cash flow.***

Subject to qualifying and maintaining our qualification as a REIT, we may pursue various hedging strategies and use derivatives to manage our exposure to interest rate volatility on debt instruments, including hedging for future debt issuances. At other times, we may utilize derivatives to increase our exposure to floating interest rates. However, these hedging arrangements may not have the desired beneficial impact. Hedging arrangements, which can include a number of counterparties, may expose us to additional risks, including failure of any of our counterparties to perform under these contracts, and may involve extensive costs, such as transaction fees or, if we terminate them, breakage costs. No strategy can completely insulate us from the risks associated with interest rate fluctuations.

***Any credit facilities (including term loans and revolving facilities), repurchase agreements, warehouse facilities, securitizations or other debt arrangements that we may use to finance our assets may require us to provide additional collateral or pay down debt.***

We may utilize credit facilities, repurchase agreements, warehouse facilities, securitizations and other forms of financing to finance our assets if they are available on acceptable terms. In the event we utilize these financing arrangements, they would involve the risk that the market value of our assets pledged or sold by us to the repurchase agreement counterparty, provider of the credit facility, lender of the warehouse facility or the securitization counterparty may decline in value, in which case the applicable creditor may require us to provide additional collateral or to repay all or a portion of the funds advanced. We may not have the funds available to repay our debt at that time, which would likely result in defaults unless we are able to raise the funds from alternative sources, which we may not be able to achieve on favorable terms or at all. Posting additional collateral would reduce our liquidity and limit our ability to leverage our assets. If we cannot meet these requirements, the applicable creditor could accelerate our indebtedness, increase the interest rate on advanced funds and terminate our ability to borrow funds from them, which could materially and adversely affect our financial condition and ability to implement our business plan. In addition, in the event that the applicable creditor files for bankruptcy or becomes insolvent, our loans may become subject to bankruptcy or insolvency proceedings, thus depriving us, at least temporarily, of the benefit of these assets. Such an event could restrict our access to credit and increase our cost of capital. The applicable creditor may also require us to maintain a certain amount of cash or set aside assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would choose which could reduce our return on assets. In the event that we are unable to meet these collateral obligations, our financial condition and prospects could deteriorate rapidly.

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***If a counterparty to a repurchase agreement defaults on its obligation to resell the underlying security back to us at the end of the purchase agreement term, or if the value of the underlying asset has declined as of the end of that term, or if we default on our obligations under the repurchase agreement, we may incur losses.***

Under any repurchase agreements we enter into, we will sell the assets to lenders (i.e., repurchase agreement counterparties) and receive cash from the lenders. The lenders are obligated to resell the same assets back to us at the end of the term of the repurchase agreement. Because the cash that we receive from the lender when we initially sell the assets to the lender is less than the value of those assets (the difference being the "haircut"), if the lender defaults on its obligation to resell the same assets back to us, we would incur a loss on the repurchase agreement equal to the amount of the haircut (assuming there was no change in the value of the securities). We would also incur losses on a repurchase agreement if the value of the underlying assets has declined as of the end of the repurchase agreement term, because we would have to repurchase the assets for their initial value but would receive assets worth less than that amount. Further, if we default on our obligations under a repurchase agreement, the lender will be able to terminate the repurchase agreement and cease entering into any other repurchase agreements with us. Any repurchase agreements we enter into are likely to contain cross-default provisions, so that if a default occurs under any repurchase agreement, the lender can also declare a default with respect to all other repurchase agreements they have with us. If a default occurs under any of our repurchase agreements and a lender terminates one or more of its repurchase agreements, we may need to enter into replacement repurchase agreements with different lenders. There can be no assurance that we will be successful in entering into such replacement repurchase agreements on the same terms as the repurchase agreements that were terminated or at all. Any losses that we incur on our repurchase agreements could adversely affect our earnings and thus our cash available for distribution to stockholders.

**Risks Related to Our Corporate Structure**

***We have limited operating history as a REIT and may not be able to operate our business successfully, find suitable investments, or generate sufficient revenue to make or sustain distributions to our shareholders.***

We ceased being an investment company registered under the Investment Company Act on July 1, 2022 and have limited operating history as a REIT. We may not be able to operate our business successfully, find suitable investments or implement our operating policies and strategies. Our ability to provide attractive risk-adjusted returns to our shareholders over the long term depends on our ability both to generate sufficient cash flow to pay an attractive dividend and to achieve capital appreciation, and we may not be able to do either. Similarly, we may not be able to generate sufficient revenue from operations to pay our operating expenses and make distributions to stockholders. The results of our operations will depend on several factors, including the availability of opportunities for the acquisition or origination of investments in commercial real estate, the level and volatility of interest rates, the availability of equity capital as well as adequate short- and long-term financing, conditions in the financial markets and economic conditions.

In addition, our future operating results and financial data may vary materially from the historical operating results and financial data contained in this annual report because of a number of factors. Consequently, the historical financial statements contained in this annual report may not be useful in assessing our likely future performance.

***We depend upon key personnel of our Adviser and its affiliates.***

We are an externally managed REIT and therefore we do not have any internal management capacity and expect to only have accounting employees. We will depend to a significant degree on the diligence, skill and network of business contacts of the management team and other key personnel of our Adviser, including Messrs. Dondero, Goetz, Mitts, McGraner, Sauter, Norris, Richards and Willmore, all of whom may be difficult to replace. We expect that our Adviser will evaluate, negotiate, structure, close and monitor our loans and investments in accordance with the terms of the Advisory Agreement.

We will also depend upon the senior professionals of our Adviser to maintain relationships with sources of potential investments, and we intend to rely upon these relationships to provide us with potential investment opportunities. We cannot assure you that these individuals will continue to provide indirect investment advice to us. If these individuals, including the members of the management team of our Adviser, do not maintain their existing relationships with our Adviser, maintain existing relationships or develop new relationships with other sources of investment opportunities, we may not be able to grow our Portfolio. In addition, individuals with whom the senior professionals of our Adviser have relationships are not obligated to provide us with investment opportunities. Therefore, we can offer no assurance that these relationships will generate investment opportunities for us.

***We are dependent upon our Adviser and its affiliates to conduct our day-to-day operations; thus, adverse changes in their financial health or our relationship with them could cause our operations to suffer.***

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We are dependent on our Adviser and its affiliates to manage our operations and originate, structure and manage our loans and investments. All of our investment decisions are made by our Adviser, subject to general oversight by our Adviser's investment committee and our Board. Any adverse changes in the financial condition of our Adviser or its affiliates, or our relationship with our Adviser, could hinder our Adviser's ability to successfully manage our operations and our Portfolio, which could materially adversely affect our business, results of operations, financial condition and ability to make distributions to our shareholders.

***Our Adviser manages our Portfolio pursuant to very broad investment guidelines and is not required to seek the approval of our Board for each investment, financing, asset allocation or hedging decision made by it, which may result in our making riskier investments and which could materially and adversely affect us.***

Our Adviser is authorized to follow very broad investment guidelines that provide it with substantial discretion in investment, financing, asset allocation and hedging decisions. Our Board will periodically review our investment guidelines and our Portfolio but will not, and is not required to, review and approve in advance all of our proposed investments or our Adviser's financing, asset allocation or hedging decisions. In addition, in conducting periodic reviews, our trustees may rely primarily on information provided, or recommendations made, to them by our Adviser or its affiliates. Subject to qualifying and maintaining our REIT qualification and our exclusion from regulation under the Investment Company Act, our Adviser has significant latitude within the broad investment guidelines in determining the types of investments it makes for us, and how such investments are financed or hedged, which could result in investment returns that are substantially below expectations or losses, which could materially and adversely affect us.

***We may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Adviser and members of our Adviser***'***s management team or by our Sponsor or its affiliates.***

Our primary focus in making investments generally differs from that of existing investment funds, accounts or other investment vehicles that are or have been managed by affiliates of our Advisers, members of our Adviser's management team, our Sponsor or affiliates of our Sponsor. Past performance is not a guarantee of future results, and there can be no assurance that we will achieve comparable results of those Sponsor affiliates. In addition, investors in our securities are not acquiring an interest in any such investment funds, accounts or other investment vehicles that are or have been managed by members of our Adviser's management team or our Sponsor or its affiliates. We also cannot assure you that we will replicate the historical results achieved by members of the management team, and we caution you that our investment returns could be substantially lower than the returns achieved by them in prior periods. Additionally, all or a portion of the prior results may have been achieved in particular market conditions which may never be repeated.

***The Advisory Agreement may be terminated by (a) us, upon a cause event (as defined in the Advisory Agreement), on 30 days***' ***written notice, (b) either party, without cause, upon the expiration of the then-current term with at least 180 days***' ***written notice to the other party prior to the expiration of such term, (c) our Adviser, upon 30 days***' ***written notice if we materially breach the agreement and such breach continues for 30 days before we are given such notice or (d) automatically in the event of an Advisers Act Assignment unless we provide written consent. If the Advisory Agreement is terminated for any one of these reasons, we may not be able to find a suitable replacement, resulting in a disruption in our operations that could adversely affect our financial condition, business, results of operations and cash flows.***

The Advisory Agreement may be terminated by (a) us, upon a cause event (as defined in the Advisory Agreement), on 30 days' written notice, (b) either party, without cause, upon the expiration of the then-current term with at least 180 days' written notice to the other party prior to the expiration of such term, (c) our Adviser, upon 30 days' written notice if we materially breach the agreement and such breach continues for 30 days before we are given such notice or (d) automatically in the event of an Advisers Act Assignment unless we provide written consent. If the Advisory Agreement is terminated and no suitable replacement is found, we may not be able to execute our business plan. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by our Adviser and its affiliates. Even if we are able to retain comparable management, the integration of such management and its lack of familiarity with our investment objectives may result in additional costs and time delays that may adversely affect our business, financial condition, results of operations and cash flows. Furthermore, we may incur certain costs in connection with a termination or non-renewal of the Advisory Agreement, including a termination fee equal to three times the Adviser's annual Fee (unless the Advisory Agreement is terminated as a result of a cause event).

***Our Adviser maintains a contractual as opposed to a fiduciary relationship with us. Our Adviser***'***s liability is limited under the Advisory Agreement, and we have agreed to indemnify our Adviser against certain liabilities.***

Our Adviser maintains a contractual as opposed to a fiduciary relationship with us. Under the terms of the Advisory Agreement, our Adviser and its affiliates and their respective partners, members, officers, directors, employees and agents will not be liable to us (including but not limited to (1) any act or omission in connection with the conduct of our business

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that is determined in good faith to be in or not opposed to our best interest, (2) any act or omission based on the suggestions of certain professional advisors, (3) any act or omission by us, or (4) any mistake, negligence, misconduct or bad faith of certain brokers or other agents), unless any act or omission constitutes bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of duties. We have also agreed to indemnify our Adviser and its affiliates and their respective partners, members, officers, directors, employees and agents from and against any and all claims, liabilities, damages, losses, costs and expenses that are incurred and arise out of or in connection with our business or investments, or the performance by the indemnitee of its responsibilities under the Advisory Agreement, provided that the conduct at issue did not constitute bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of duties. As a result, we could experience poor performance or losses for which our Adviser would not be liable.

Under the terms of the Advisory Agreement, our Adviser will indemnify and hold us harmless from all claims, liabilities, damages, losses, costs and expenses, including amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and expenses of investigating or defending against any claim or alleged claim, of any nature whatsoever, known or unknown, liquidated or unliquidated, that are incurred by reason of our Adviser's bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of its duties; provided, however, that our Adviser will not be held responsible for any action of our Board in following or declining to follow any written advice or written recommendation given by our Adviser. However, the aggregate maximum amount that our Adviser may be liable to us pursuant to the Advisory Agreement will, to the extent not prohibited by law, never exceed the amount of the management fees received by our Adviser under the Advisory Agreement prior to the date that the acts or omissions giving rise to a claim for indemnification or liability have occurred. In addition, our Adviser will not be liable for special, exemplary, punitive, indirect, or consequential loss, or damage of any kind whatsoever, including without limitation lost profits. The limitations described in the preceding two sentences will not apply, however, to the extent such damages are determined in a final binding non-appealable court or arbitration proceeding to result from the bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of our Adviser's duties.

***We may change our targeted investments without shareholder consent.***

We focus primarily on investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity. Our target underlying property types primarily include, but are not limited to, SFR, multifamily, self-storage, life science, office, industrial, hospitality, net lease and retail. To a limited extent, we may also hold, acquire or transact in certain non-real estate securities. We may make adjustments to our target Portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our shareholders. Any such change could result in our making investments that are different from, and possibly riskier than, the investments described in this annual report. These policies may change over time. A change in our targeted investments or investment guidelines, which may occur without notice to you or without your consent, may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of our securities and our ability to make distributions to you. We intend to disclose any changes in our investment policies in our next required periodic report.

***We will pay substantial fees and expenses to our Adviser and its affiliates, which payments increase the risk that you will not earn a profit on your investment.***

Pursuant to the Advisory Agreement, we will pay significant fees to our Adviser and its affiliates. Those fees include management fees and obligations to reimburse our Adviser and its affiliates for expenses they incur in connection with their providing services to us, including certain personnel services. Additionally, on January 30, 2023, our shareholders approved a long-term incentive plan that provides us the ability to grant awards to employees of our Adviser and its affiliates. For additional information on these fees and the fees paid to our Adviser, see "Item 1. Business—Our Advisory Agreement" and Note 14 to our consolidated financial statements for more information.

***If we internalize our management functions, we may not achieve the perceived benefits of the internalization transaction.***

In the future, our Board may consider internalizing the functions performed for us by our Adviser by, among other methods, acquiring our Adviser's assets. The method by which we could internalize these functions could take many forms. There is no assurance that internalizing our management functions will be beneficial to us and our shareholders. An acquisition of our Adviser could result in dilution of your interest as a shareholder and could reduce earnings per share. Additionally, we may not realize the perceived benefits or we may not be able to properly integrate a new staff of managers and employees or we may not be able to effectively replicate the services provided previously by our Adviser or its affiliates. Internalization transactions, including, without limitation, transactions involving the acquisition of affiliated advisors have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be forced to spend significant amounts of money defending claims which would reduce the amount of funds available for us to invest

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and to pay distributions. All of these factors could have a material adverse effect on our results of operations, financial condition and ability to pay distributions.

***There are significant potential conflicts of interest that could affect our investment returns.***

As a result of our arrangements with our Sponsor and our Adviser, there may be times when our Sponsor and our Adviser or their affiliated persons have interests that differ from those of our shareholders, giving rise to a conflict of interest.

Our trustees and management team serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do, or of investment funds managed by our Adviser or its affiliates. Similarly, our Adviser or its affiliates may have other clients with similar, different or competing investment objectives, including, among others, NexPoint Residential Trust, Inc. ("NXRT"), a publicly traded multi-family REIT, VineBrook Homes Trust, Inc. ("VineBrook"), an SFR REIT, NREF, a publicly traded mortgage REIT, and NHT, a publicly traded hospitality REIT listed on the TSXV, each of which is also managed by members of our management team. In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best interest of us or our shareholders. For example, the management team of our Adviser has, and will continue to have, management responsibilities for other investment funds, accounts or other investment vehicles managed or sponsored by our Adviser and its affiliates. Our investment objectives may overlap with the investment objectives of such affiliated investment funds, accounts or other investment vehicles. As a result, those individuals may face conflicts in the allocation of investment opportunities among us and other investment funds or accounts advised by or affiliated with our Adviser and its affiliates. Our Adviser will seek to allocate investment opportunities among eligible accounts in a manner consistent with its allocation policy. However, we can offer no assurance that such opportunities will be allocated to us fairly or equitably in the short-term or over time.

***The Chapter 11 bankruptcy filing by Highland Capital Management, L.P. (***"***Highland***"***) may have materially adverse consequences on our business, financial condition and results of operations.***

On October 16, 2019, Highland, a former affiliate of our Sponsor, filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the District of Delaware (the "Highland Bankruptcy"), which was subsequently transferred to the United States Bankruptcy Court for the Northern District of Texas (the "Bankruptcy Court"). On January 9, 2020, the Bankruptcy Court approved a change of control of Highland, which involved the resignation of James Dondero as the sole director of, and the appointment of an independent board to, Highland's general partner. On September 21, 2020, Highland filed a plan of reorganization and disclosure statement with the Bankruptcy Court, which was subsequently amended (the "Fifth Amended Plan of Reorganization"). On October 9, 2020, Mr. Dondero resigned as an employee of Highland and as portfolio manager for all Highland-advised funds. As a result of these changes, our Sponsor is no longer under common control with Highland, and therefore Highland is no longer affiliated with us. On February 22, 2021, the Bankruptcy Court entered an order confirming Highlands's Fifth Amended Plan of Reorganization (the "Plan"), which became effective on August 11, 2021. On October 15, 2021, Marc S. Kirschner, as litigation trustee of a litigation subtrust formed pursuant to the Plan, filed a lawsuit (the "Bankruptcy Trust Lawsuit") against various persons and entities, including our Sponsor and James Dondero. The Bankruptcy Trust Lawsuit does not include claims related to our business or our assets or operations. The Highland Bankruptcy and lawsuits filed in connection therewith, including the Bankruptcy Trust Lawsuit, could expose our Sponsor, our Adviser, our affiliates, our management and/or us to negative publicity, which might adversely affect our reputation and/or investor confidence in us, and/or future debt or equity capital raising activities. In addition, the Highland Bankruptcy and the Bankruptcy Trust Lawsuit may be both time consuming and disruptive to our operations and cause significant diversion of management attention and resources which may materially and adversely affect our business, financial condition and results of operations. Further, the Highland Bankruptcy has and may continue to expose our Sponsor, our Adviser and our affiliates to claims arising out of our former relationship with Highland that could have an adverse effect on our business, financial condition and results of operations.

***Litigation against James Dondero and others may have materially adverse consequences on our business, financial condition and results of operations.***

On February 8, 2023, UBS Securities LLC and its affiliate (collectively, "UBS") filed a lawsuit in the Supreme Court of the State of New York, County of New York against Mr. Dondero and a number of entities currently or previously affiliated with Mr. Dondero, seeking to collect on $1.3 billion in judgments UBS obtained against entities that were managed indirectly by Highland (the "UBS Lawsuit"). The UBS Lawsuit does not include claims related to our business or our assets. While neither our Sponsor nor our Adviser are parties to the UBS Lawsuit, these proceedings could expose our Sponsor, our Adviser, our affiliates, our management and/or us to negative publicity, which might adversely affect our reputation and/or investor confidence in us, and/or future debt or equity capital raising activities. In addition, the UBS Lawsuit may be both time consuming and disruptive to our operations and cause significant diversion of management attention and resources which may materially and adversely affect our business, financial condition and results of

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operations. The Board has formed an independent special committee to oversee a review of the UBS Lawsuit and its potential impact on the Company.

***We may compete with other entities affiliated with our Adviser and our Sponsor for investments.***

Neither our Adviser nor our Sponsor and their affiliates are prohibited from engaging, directly or indirectly, in any other business or from possessing interests in any other business ventures that compete with ours. Our Adviser, our Sponsor and their affiliates may provide financing to similarly situated investments. Our Adviser and our Sponsor may face conflicts of interest when evaluating investment opportunities for us, and these conflicts of interest may have a negative impact on our ability to make attractive investments.

***Our Adviser, its affiliates and their respective affiliates, officers and employees face competing demands relating to their time, and this may cause our operating results to suffer.***

Our Adviser, its affiliates and their respective affiliates, officers and employees are key personnel, general partners, sponsors, managers, owners and advisors of other investment programs, including affiliate-sponsored investment products and investment programs focused on real estate, some of which have investment objectives and legal and financial obligations similar to ours and may have other business interests as well. Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. If this occurs, the returns on our investments may suffer.

Under the Advisory Agreement, our Adviser or its affiliates are entitled to fees based on our "Managed Assets." Because the Adviser's compensation is not directly based on our performance, our Adviser's interests are not wholly aligned with those of our shareholders. In that regard, our Adviser could be motivated to recommend riskier or more speculative investments that would entitle our Adviser to a higher fee. For example, because leverage other than accrued expenses incurred in the normal course of operations is included in the calculation of Managed Assets, our Adviser may have an incentive to utilize leverage more heavily than it otherwise would in order to increase its fees.

***Our declaration of trust permits our Board to issue shares with terms that may subordinate the rights of our shareholders or discourage a third party from acquiring us in a manner that could otherwise result in a premium price to our shareholders.***

Our Board may issue an unlimited number of shares of beneficial interest and may issue such other securities including preferred shares as it deems necessary, desirable or appropriate and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms or conditions of redemption of any such preferred shares. Thus, our Board could authorize the issuance of preferred shares with terms and conditions that could have priority as to distributions and amounts payable upon liquidation over the rights of the holders of our other shares. The issuance of such preferred shares could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our shares.

***Our declaration of trust contains certain provisions that may delay, defer or prevent an acquisition of our securities or a change in control.***

Certain provisions of our declaration of trust may have the effect of inhibiting a third party from acquiring us or of impeding a change of control under circumstances that otherwise could provide our shareholders with the opportunity to realize a premium over the then-prevailing market price of such shares.

Under our declaration of trust, certain transactions require the affirmative vote or consent of a majority of our trustees followed by the affirmative vote of the holders of not less than seventy-five percent (75%) of our shares of beneficial interest of each affected class or series outstanding, voting as separate classes or series (the "Principal Shareholder Requirements"), when a Principal Shareholder (defined generally to mean any corporation, person or other entity which is the beneficial owner, directly or indirectly, of 5% or more of our outstanding shares of beneficial interest of all outstanding classes or series and includes any affiliate or associate, as such terms are defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, of a Principal Shareholder) is a party to the transaction. These transactions include any:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• merger or consolidation of the Company or any subsidiary of the Company with or into any Principal Shareholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• issuance of any securities of the Company to any Principal Shareholder for cash (other than pursuant to any automatic dividend reinvestment plan);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sale, lease or exchange of all or any substantial part of the assets of the Company to any Principal Shareholder (except assets having an aggregate fair market value of less than 2% of the total assets of the Company, aggregating for the purpose of such computation all assets sold, leased or exchanged in any series of similar transactions within a twelve-month period); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sale, lease or exchange to the Company or any subsidiary thereof, in exchange for securities of the Company, of any assets of any Principal Shareholder (except assets having an aggregate fair market value of less than 2% of the total assets of the Company, aggregating for the purposes of such computation all assets sold, leased or exchanged in any series of similar transactions within a twelve-month period).

The Principal Shareholder Requirements are not applicable if (i) 80% of our trustees approve by resolution a memorandum of understanding with the Principal Shareholder with respect to and substantially consistent with such transaction followed by, subject to a resolution of the trustees specifying a greater or lesser requirement with respect to the vote or quorum, the affirmative vote of a majority of our shares of beneficial interest present in person or represented by proxy and entitled to vote thereon, at a meeting where the holders of a majority of our shares of beneficial interest entitled to vote on the matter are present in person or by proxy, or (ii) the transaction is with an entity of which a majority of the outstanding shares of all classes and series of a stock normally entitled to vote in elections of directors is owned of record or beneficially by the Company and its subsidiaries.

With respect to mergers or consolidations with a corporation, association, trust or organization, other than a Principal Shareholder, or the sale, lease or exchange of all or substantially all of the Company's property, including its good will, to other than a Principal Shareholder, our declaration of trust requires authorization by two-thirds of our trustees; provided that any merger or consolidation in which the Company is not the surviving entity, or sale, lease or exchange of all or substantially all of the Company's property (measured at the time that such transaction was originally approved by two-thirds of the trustees) will require the affirmative vote of the holders of not less than 75% of the shares of beneficial interest of each affected class or series outstanding, voting as separate classes or series, unless the transaction has been approved by 80% of the trustees, in which case, subject to a resolution of the trustees specifying a greater or a lesser requirement with respect to the vote or quorum, such transaction will require the affirmative vote of a majority our shares of beneficial interest present in person or represented by proxy and entitled to vote thereon, at a meeting where the holders of a majority of our shares of beneficial interest entitled to vote on the matter are present in person or by proxy.

**Risks Related to Our REIT Status and Other Tax Items**

***We have elected to be treated as a REIT commencing with our taxable year ended December 31, 2021. Our failure to qualify or maintain our qualification as a REIT for U.S. federal income tax purposes would reduce the amount of funds we have available for distribution and limit our ability to make distributions to our shareholders.***

We have elected to be treated as a REIT under the Code commencing with our taxable year ended December 31, 2021. However, we cannot assure you that we will qualify and remain qualified as a REIT. Our qualification as a REIT depends upon our ability to meet requirements, some on an annual and quarterly basis, regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets and other tests imposed by the Code. The REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT. We believe we have been and are organized and qualify as a REIT, and we intend to operate in a manner that will permit us to continue to qualify as a REIT. However, we cannot assure you that we have qualified as a REIT, or that we will remain qualified as a REIT in the future.

If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our shareholders because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we would not be allowed a deduction for dividends paid to shareholders in computing our taxable income and would be subject to U.S. federal income tax at the corporate tax rate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we could be subject to increased state and local taxes; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.

In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions to our shareholders. As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect the value of our securities.

Furthermore, we currently own and may acquire additional direct or indirect interests in one or more entities that will elect to be taxed as REITs under the Code (each, a "Subsidiary REIT"). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to us. If a Subsidiary REIT were to fail to qualify as a REIT, then (i) that Subsidiary REIT would become subject to U.S. federal income tax and (ii) the Subsidiary REIT's failure to qualify could have an adverse effect on our ability to comply with the REIT income and asset tests, and thus could impair our ability to qualify as a REIT unless we could avail ourselves of certain relief provisions.

***Even if we qualify as a REIT for U.S. federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to you.***

Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state and local or non-U.S. taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes. In addition, our TRSs or any TRS we form will be subject to U.S. federal income tax and applicable state and local taxes on their net income. State, local and non-U.S. income tax laws may differ substantially from the corresponding U.S. federal income tax laws. Any federal or state taxes we pay will reduce our cash available for distribution to you. Prospective investors are urged to consult their tax advisors regarding the effect of other U.S. federal, state, local and non-U.S. tax laws on an investment in our stock.

***To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions, and the unavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, which could adversely affect our financial condition, results of operations, cash flow and value of our securities.***

In order to qualify and maintain our qualification as a REIT, we must distribute annually to our shareholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. We will also be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (a) 85% of our ordinary income, (b) 95% of our capital gain net income and (c) 100% of our undistributed income from prior years. To maintain our REIT qualification and avoid the payment of U.S. federal income and excise taxes, we may need to borrow funds to meet the REIT distribution requirements, even if the then-prevailing market conditions are not favorable for these borrowings. These borrowing needs could result from differences in timing between the actual receipt of income and inclusion of income for U.S. federal income tax purposes. For example, we may be required to accrue interest and discount income on SFR mortgage loans, CMBS, and other types of debt securities or interests in debt securities before we receive any payments of interest or principal on such assets. Our access to third-party sources of capital depends on a number of factors, including the market's perception of our growth potential, our current debt levels, and our current and potential future earnings. We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could adversely affect our financial condition, results of operations, cash flow and the value of our securities. Alternatively, we may make taxable in-kind distributions of our own shares, which may cause our shareholders to be required to pay income taxes with respect to such distributions in excess of any cash they receive, or we may be required to withhold taxes with respect to such distributions in excess of any cash our shareholders receive.

***There is a lack of clear authority governing the characterization of our subordinated debt or preferred equity investments for REIT qualification purposes.***

There is limited case law and administrative guidance addressing whether instruments similar to any mezzanine loans or preferred equity investments that we may acquire will be treated as equity or debt for U.S. federal income tax purposes. We typically do not anticipate obtaining private letter rulings from the Internal Revenue Service ("IRS") or opinions of counsel on the characterization of those investments for U.S. federal income tax purposes. If the IRS successfully recharacterizes a mezzanine loan or preferred equity investment that we have treated as debt for U.S. federal income tax purposes as equity for U.S. federal income tax purposes, we would be treated as owning the assets held by the partnership or limited liability company that issued the security and we would be treated as receiving our proportionate share of the

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income of the entity. There can be no assurance that such an entity will not derive nonqualifying income for purposes of the 75% or 95% gross income test or earn income that could be subject to a 100% penalty tax. Alternatively, if the IRS successfully recharacterizes a mezzanine loan or preferred equity investment that we have treated as equity for U.S. federal income tax purposes as debt for U.S. federal income tax purposes, then that investment may be treated as producing interest income that would be qualifying income for the 95% gross income test, but not for the 75% gross income test. If the IRS successfully challenges the classification of our mezzanine loans or preferred equity investments for U.S. federal income tax purposes, no assurance can be provided that we will not fail to satisfy the 75% or 95% gross income test.

***The*** "***taxable mortgage pool***" ***rules may increase the taxes that we or our shareholders may incur and may limit the manner in which we effect future securitizations.***

Securitizations by us or our subsidiaries could result in the creation of taxable mortgage pools for U.S. federal income tax purposes. As a result, we could have "excess inclusion income." Certain categories of stockholders, such as non-U.S. stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, could be subject to increased taxes on a portion of their dividend income from us that is attributable to any such excess inclusion income. In addition, to the extent that our shares are owned by tax-exempt "disqualified organizations," such as certain government-related entities and charitable remainder trusts that are not subject to tax on unrelated business taxable income, we may incur a tax at the corporate rate on a portion of any excess inclusion income. Moreover, we could face limitations in selling equity interests in these securitizations to outside investors or selling any debt securities issued in connection with these securitizations that might be considered to be equity interests for tax purposes. These limitations may prevent us from using certain techniques to maximize our returns from securitization transactions.

***Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.***

To qualify as a REIT, we must ensure that we meet the REIT gross income tests annually and that, at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities, stock in REITs and other qualifying real estate assets, including certain mortgage loans and certain kinds of CMBS and debt instruments of publicly offered REITs. The remainder of our investments in securities (other than government securities, securities issued by a TRS and REIT qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, securities issued by a TRS and securities that are qualifying real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total securities can be represented by securities of one or more TRSs. In order to meet these tests, we may be required to forego investments we might otherwise make. Thus, compliance with the REIT requirements may hinder our performance. Moreover, if we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate from our Portfolio, or contribute to a TRS, otherwise attractive investments, and may be unable to pursue investments that would be otherwise advantageous to us in order to satisfy the income or asset requirements for qualifying as a REIT. These actions could have the effect of reducing our income and amounts available for distribution to our shareholders.

***If our OP failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT.***

We believe that our OP will be treated as a partnership for U.S. federal income tax purposes, and intends to take that position for all income tax reporting positions. As a partnership, our OP generally will not be subject to U.S. federal income tax on its income. Instead, each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of our OP's income. We cannot assure you, however, that the IRS will not challenge the status of our OP or any other subsidiary partnership in which we own an interest as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our OP or any other such subsidiary partnership as an entity taxable as a corporation for U.S. federal income tax purposes (including by reason of being classified as a publicly traded partnership, unless at least 90% of its income was qualifying income as defined in the Code, or a "taxable mortgage pool" for U.S. federal income tax purposes), we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT, unless we qualified for certain statutory savings provisions. A "publicly traded partnership" is a partnership whose partnership interests are traded on an established securities market or are readily tradable on a secondary market (or the substantial equivalent thereof). Although our OP's partnership units are not traded on an established securities market, the OP's units could be viewed as readily tradable on a secondary market (or the substantial equivalent thereof), and our OP may not qualify for one of the "safe harbors" under the applicable tax regulations. Qualifying income for the 90% test generally includes passive income, such as real property rents, dividends and interest. The income requirements applicable to REITs and the definition of qualifying income for purposes of this 90% test are similar in most respects. Our OP may not meet

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this qualifying income test. Also, the failure of our OP or any subsidiary partnerships to qualify as a partnership could cause it to become subject to U.S. federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.

***Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.***

Income from "qualified dividends" payable to U.S. stockholders that are individuals, trusts and estates is generally subject to tax at reduced rates. Currently, the maximum tax rate applicable to qualified dividend income payable to U.S. shareholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced rate. However, U.S. shareholders that are individuals, trusts and estates generally may deduct up to 20% of the ordinary dividends (e.g., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning before January 1, 2026. To qualify for this deduction, the U.S. shareholder receiving such dividends must hold the dividend-paying REIT stock for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days before the stock becomes ex-dividend and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property. Although this deduction reduces the effective U.S. federal income tax rate applicable to certain dividends paid by REITs (generally to 29.6% assuming the shareholder is subject to the 37% maximum rate), such tax rate is still higher than the tax rate applicable to corporate dividends that constitute qualified dividend income. Accordingly, investors who are individuals, trusts and estates may perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could materially and adversely affect the value of the stock of REITs, including the per share trading price of our securities. In addition, certain U.S. stockholders may be subject to a 3.8% Medicare tax on dividends payable by REITs.

***The share ownership restrictions of the Code for REITs and the 9.8% share ownership limits in our declaration of trust may inhibit market activity in our shares and restrict our business combination opportunities.***

In order to qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, actually or constructively, more than 50% in value of our issued and outstanding shares at any time during the last half of each taxable year, other than the first year for which a REIT election is made. Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares under this requirement. Additionally, at least 100 persons must beneficially own our shares during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made. To help ensure that we meet these tests, among other purposes, our declaration of trust includes restrictions on the acquisition and ownership of our shares.

To assist us in complying with the limitations on the concentration of ownership of a REIT imposed by the Code, among other purposes, our declaration of trust, including the statement of preferences setting forth the terms of the Series A Preferred Shares, prohibits, with certain exceptions, any shareholder from beneficially or constructively owning, applying certain attribution rules under the Code, more than 9.8% by value or number of shares, whichever is more restrictive, of the aggregate of our outstanding common shares, or 9.8% by value or number of shares, whichever is more restrictive, of the aggregate of our outstanding shares of any class or series.

Our Board may, in its sole discretion, subject to such conditions as it may determine and the receipt of certain representations and undertakings, waive the 9.8% ownership limit with respect to a particular shareholder if such ownership will not then or in the future jeopardize our qualification as a REIT. Our Board granted James Dondero and his affiliates a waiver allowing him to own up to 25% of our common shares and Series A Preferred Shares, combined. Our declaration of trust also prohibits any person from, among other things, beneficially or constructively owning our shares that would result in our being "closely held" under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise cause us to fail to qualify as a REIT (including, but not limited to, beneficial ownership or constructive ownership that would result in us owning (actually or constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by us from such tenant would cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Code) or a "domestically controlled qualified investment entity" within the meaning of Section 897(h) of the Code.

Our declaration of trust provides that any ownership or purported transfer of our shares in violation of the foregoing restrictions will result in the shares so owned or transferred being automatically transferred to a charitable trust for the benefit of a charitable beneficiary, and the purported owner or transferee acquiring no rights in such shares. If a transfer of our shares would result in our shares being beneficially owned by fewer than 100 persons or the transfer to a charitable trust would be ineffective for any reason to prevent a violation of the other restrictions on ownership and transfer of our shares, the transfer resulting in such violation will be void ab initio.

The Board granted waivers from the ownership limits to James Dondero, his affiliates and others and may grant additional waivers in the future. These waivers may be subject to certain initial and ongoing conditions designed to

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preserve our status as a REIT. These restrictions on transferability and ownership will not apply, however, if our Board determines that it is no longer in our best interest to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to so qualify as a REIT.

These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our securities or otherwise be in the best interest of the shareholders.

***Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.***

The REIT provisions of the Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets or to offset certain other positions, if properly identified under applicable Treasury regulations, does not constitute "gross income" for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a domestic TRS. This could increase the cost of our hedging activities because our TRSs would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses from hedges held in a TRS generally will not provide any tax benefit, except for being carried forward against future taxable income of such TRS.

***Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on your investment.***

For so long as we qualify as a REIT, our ability to dispose of assets may be restricted to a substantial extent as a result of our REIT qualification. Under applicable provisions of the Code regarding prohibited transactions by REITs, while we qualify as a REIT, we will be subject to a 100% penalty tax on any gain recognized on the sale or other disposition of any asset (other than foreclosure property) that we own or hold an interest in, directly or indirectly through any subsidiary entity, including our OP, but generally excluding TRSs, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of a trade or business. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. During such time as we qualify as a REIT, we intend to avoid the 100% prohibited transaction tax by (a) conducting activities that may otherwise be considered prohibited transactions through a TRS (but such TRS will incur corporate rate income taxes with respect to any income or gain recognized by it), (b) conducting our operations in such a manner so that no sale or other disposition of an asset we own or hold an interest in, directly or through any subsidiary, will be treated as a prohibited transaction, or (c) structuring certain dispositions to comply with the requirements of the prohibited transaction safe harbor available under the Code that, among other requirements, have been held for at least two years. No assurance can be given that any particular asset that we own or hold an interest in, directly or through any subsidiary entity, including our OP, but generally excluding TRSs, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business.

The 100% tax described above may limit our ability to enter into transactions that would otherwise be beneficial to us. For example, if circumstances make it not profitable or otherwise uneconomical for us to remain in certain states or geographical markets, the 100% tax could delay our ability to exit those states or markets by selling our assets in those states or markets other than through a TRS, which could harm our operating profits.

***We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.***

We may acquire debt instruments in the secondary market for less than their face amount. The amount of such discount will generally be treated as "market discount" for U.S. federal income tax purposes. Accrued market discount is reported as income when, and to the extent that, any payment of principal of the debt instrument is made, unless we elect to include accrued market discount in income as it accrues. Principal payments on certain loans are made monthly, and consequently accrued market discount may have to be included in income each month as if the debt instrument were assured of ultimately being collected in full. If we collect less on the debt instrument than our purchase price plus the market discount we had previously reported as income, we may not be able to benefit from any offsetting loss deductions.

Similarly, some of the debt instruments that we acquire may have been issued with original issue discount. We will be required to report such original issue discount based on a constant yield method and will be taxed based on the assumption that all future projected payments due on such debt instruments will be made. If such debt instrument turns out not to be fully collectible, an offsetting loss deduction will become available only in the later year that uncollectibility is

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provable. Finally, in the event that any debt instruments acquired by us are delinquent as to mandatory principal and interest payments, or in the event payments with respect to a particular debt instrument are not made when due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income as it accrues, despite doubt as to its ultimate collectability. Similarly, we may be required to accrue interest income with respect to subordinate debt instruments at their stated rate regardless of whether corresponding cash payments are received or are ultimately collectable. In each case, while we would in general ultimately have an offsetting loss deduction available to us when such interest was determined to be uncollectible, the utility of that deduction could depend on our having taxable income in that later year or thereafter.

The interest apportionment rules under Treasury Regulation Section 1.856-5(c) provide that, if a mortgage is secured by both real property and other property, a REIT is required to apportion its annual interest income to the real property security based on a fraction, the numerator of which is the value of the real property securing the loan, determined when the REIT commits to acquire the loan, and the denominator of which is the highest "principal amount" of the loan during the year. In IRS Revenue Procedure 2014-51, the IRS interprets the "principal amount" of the loan to be the face amount of the loan, despite the Code requiring taxpayers to treat any market discount, that is the difference between the purchase price of the loan and its face amount, for all purposes (other than certain withholding and information reporting purposes) as interest rather than principal.

If we invest in mortgage loans to which the interest apportionment rules described above would apply and the IRS were to assert successfully that our mortgage loans were secured by property other than real estate, the interest apportionment rules applied for purposes of our REIT testing, and that the position taken in IRS Revenue Procedure 2014-51 should be applied to our Portfolio, then depending upon the value of the real property securing our mortgage loans and their face amount, and the sources of our gross income generally, we may fail to meet the 75% gross income test. If we do not meet this test, we could potentially lose our REIT qualification or be required to pay a penalty to the IRS.

***The sale of certain properties could result in significant tax liabilities unless we are able to defer the taxable gain through 1031 Exchanges.***

We may structure asset sales for possible inclusion in 1031 Exchanges. The ability to complete a 1031 Exchange depends on many factors, including, among others, identifying and acquiring suitable replacement property within limited time periods, and the ownership structure of the properties being sold and acquired. Therefore, we are not always able to sell an asset as part of a 1031 Exchange. When successful, a 1031 Exchange enables us to defer the taxable gain on the asset sold. If we cannot defer the taxable gain resulting from the sales of certain properties, our business, financial condition, results of operations and cash flow, the market price per share of our common stock and our ability to satisfy our debt service obligations and make distributions to our stockholders could be materially and adversely affected.

***The ability of our Board to revoke our REIT qualification without shareholder approval may cause adverse consequences to our shareholders.***

Our declaration of trust provides that our Board may revoke or otherwise terminate our REIT election, without the approval of our shareholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to be a REIT, we will not be allowed a deduction for dividends paid to shareholders in computing our taxable income and will be subject to U.S. federal income tax at corporate rates and state and local taxes, which may have adverse consequences on our total return to our shareholders.

***Legislative or other actions affecting REITs could have a negative effect on our shareholders or us.***

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury. Changes to the tax laws, with or without retroactive application, could materially and adversely affect our investors or us. We cannot predict how changes in the tax laws might affect our investors or us. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify as a REIT or the U.S. federal income tax consequences of such qualification, or the U.S. federal income tax consequences of an investment in us. Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT. Prospective investors are urged to consult with their tax advisors regarding the effect of potential changes to the U.S. federal tax laws on an investment in our stock.

***We and our subsidiaries and stockholders may be subject to state, local or foreign tax filing and payment obligations taxation in various jurisdictions including those in which we or they transact business, own property or reside.***

We may own assets located in, or transact business in, numerous jurisdictions, and may be required to file tax returns in some or all of those jurisdictions. Our state, local or foreign tax treatment and that of our stockholders may not conform

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to the U.S. federal income tax treatment discussed above. Prospective investors should consult their tax advisors regarding the application and effect of state and local income and other tax laws on an investment in our stock.

***Foreign investors may be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax on distributions received from us and upon disposition of our common shares.***

Subject to certain exceptions, distributions received from us will be treated as dividends of ordinary income to the extent of our current or accumulated earnings and profits. Such dividends paid to a non-U.S. stockholder ordinarily will be subject to U.S. withholding tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty, unless the distributions are treated as "effectively connected" with the conduct by the non-U.S. stockholder of a U.S. trade or business. Pursuant to the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"), capital gain distributions attributable to sales or exchanges of "U.S. real property interests" ("USRPIs"), generally will be taxed to a non-U.S. stockholder as if such gain were effectively connected with a U.S. trade or business. However, a capital gain dividend will not be treated as effectively connected income if (1) the distribution is received with respect to a class of stock that is regularly traded on an established securities market located in the United States and (2) the non-U.S. stockholder does not own more than 10% of the class of our stock at any time during the one-year period ending on the date the distribution is received.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common shares generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA. Our common shares will not constitute a USRPI so long as we are a "domestically-controlled" REIT. A REIT is "domestically controlled" if less than 50% of the REIT's stock, by value, has been owned directly or indirectly by persons who are not qualifying U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT's existence. We cannot assure you that we will qualify as a "domestically controlled" REIT. If we were to fail to so qualify, gain realized by foreign investors on a sale of shares of our stock would be subject to FIRPTA tax, unless the shares of our stock were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common shares.

***Our ownership of interests in TRSs raises certain tax risks.***

A TRS is a corporation other than a REIT in which a REIT directly or indirectly holds stock, and that has made a joint election with such REIT to be treated as a TRS. A TRS also includes any corporation other than a REIT with respect to which a TRS owns securities possessing more than 35% of the total voting power or value of the outstanding securities of such corporation. Other than some activities relating to lodging and health care facilities, a TRS may generally engage in any business, including the provision of customary or non-customary services to tenants of its parent REIT. A TRS is subject to income tax as a C corporation. We currently own interests in multiple TRS entities and may acquire securities in additional TRSs in the future. As of December 31, 2022, the Company wholly owned and consolidated two TRSs, NREO TRS, LLC and NHF TRS, LLC.

We will be required to pay a 100% tax on any "redetermined rents," "redetermined deductions," "excess interest" or "redetermined TRS service income." In general, redetermined rents are rents from real property that are overstated as a result of services furnished to any of our tenants by a TRS of ours. Redetermined deductions and excess interest generally represent amounts that are deducted by a TRS of ours for amounts paid to us that are in excess of the amounts that would have been deducted based on arm's-length negotiations. Redetermined TRS service income generally represents amounts by which the gross income of a TRS attributable to its services for or on behalf of us (other than to a tenant of ours) would be increased based on arm's length negotiations.

Our TRSs are and any TRS we acquire in the future will be subject to corporate income tax at the U.S. federal, state and local levels, (including on the gain realized from the sale of property held by it, as well as on income earned while such property is operated by the TRS). This tax obligation, if material, would diminish the amount of the proceeds from the sale or operation of such property, or other income earned through the TRS that would be distributable to our shareholders. U.S. federal, state and local corporate income tax rates may be increased in the future, and any such increase would reduce the amount of the net proceeds available for distribution by us to our shareholders from the sale of property or other income earned through a TRS after the effective date of any increase in such tax rates. We anticipate income tax obligations in connection with our ownership of interests in TRSs for fiscal year 2022.

As a REIT, the value of our interests in our TRSs generally may not exceed 20% of the total value of our total assets at the end of any calendar quarter. If the IRS were to determine that the value of our interests in all of our TRSs exceeded this limit at the end of any calendar quarter, then we would fail to qualify as a REIT. If we determine it to be in our best interest to own a substantial number of our properties through one or more TRSs, then it is possible that the IRS may conclude that the value of our interests in our TRSs exceeds 20% of the value of our total assets at the end of any calendar quarter and therefore cause us to fail to qualify as a REIT. Additionally, as a REIT, no more than 25% of our gross income

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with respect to any year may, in general, be from sources other than certain real estate-related assets. Dividends paid to us from a TRS are typically considered to be non-real estate income. Therefore, we may fail to qualify as a REIT if dividends from all of our TRSs, when aggregated with all other non-real estate income with respect to any one year, are more than 25% of our gross income with respect to such year.

***Mortgage debt obligations associated with our real property investments expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt, as well as hinder our ability to meet REIT distribution requirements or trigger tax indemnification obligations.***

Mortgage and other secured debt obligations increase our risk of property losses because defaults on indebtedness secured by properties may result in foreclosure actions initiated by lenders and ultimately our loss of the property securing any loans for which we are in default. Any foreclosure on a mortgaged property or group of properties could adversely affect the overall value of our Portfolio of properties. For U.S. federal income tax purposes, a foreclosure on any of our properties that is subject to a nonrecourse mortgage loan would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. Foreclosures could also trigger tax indemnification obligations under the terms of any tax protection agreements with respect to the sales of properties subject to any such agreements.

**Risks Related to the Ownership of Our Common Shares**

***The concentration of our share ownership may limit your ability to influence corporate matters.***

James Dondero is the sole member of the general partner of our Sponsor and has relationships with certain holders of our common shares which may result in Mr. Dondero being deemed to have aggregate beneficial ownership of approximately 6,567,756.66 common shares (or 17.7% of our common shares) and 45,986 of our Series A Preferred Shares (or 1.4% of our Series A Preferred Shares) as of December 31, 2022.

The concentration of our share ownership may limit your ability to influence corporate matters. Mr. Dondero and his affiliates may exert substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our declaration of trust and approval of major corporate transactions, including the decision to enter into any corporate transaction. Such concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or other business combination, which could, in turn, have an adverse effect on the market price of our common shares or prevent our shareholders from realizing a premium over the then-prevailing market price for their common shares. Moreover, the interests of this concentration of ownership may not always coincide with our interests or the interests of other shareholders, and accordingly, they could cause us to enter into transactions or agreements that we would not otherwise consider.

In addition, sales of significant amounts of shares beneficially held by Mr. Dondero, his affiliates and other entities with which he has relationships, or the prospect of these sales, could adversely affect the market price of our common shares. This concentrated share ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our share price or prevent our shareholders from realizing a premium over our share price.

***Broad market fluctuations could negatively impact the market price of our common shares.***

The market price of our common shares may be volatile. In addition, the trading volume in our common shares may fluctuate and cause significant price variations to occur. We cannot assure you that the market price of our common shares will not fluctuate or decline significantly in the future. Some of the factors that could affect our share price or result in fluctuations in the price or trading volume of our common shares include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated variations in our quarterly operating results, financial condition, cash flow and liquidity, or changes in investment strategy or prospects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in our operations or earnings estimates or publication of research reports about us or the real estate industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• loss of a major funding source or inability to obtain new favorable funding sources in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our financing strategy and leverage;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated accounting problems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in market valuations of similar companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increases in interest rates that lead purchasers of our shares to demand a higher yield;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse market reaction to any increased indebtedness we incur in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additions or departures of key management personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actions by institutional shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• speculation in the press or investment community;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the realization of any of the other risk factors presented in this annual report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the extent of investor interest in our securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our underlying asset value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• investor confidence and price and volume fluctuations in the stock and bond markets, generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in laws, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future equity issuances by us, or share resales by our shareholders, or the perception that such issuances or resales may occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to meet income estimates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to meet and maintain REIT qualifications or exclusion from Investment Company Act regulations or listing on the NYSE; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general market and economic conditions.

In the past, class-action litigation has often been instituted against companies following periods of volatility in the price of their common stock. This type of litigation could result in substantial costs and divert our management's attention and resources, which could have an adverse effect on our financial condition, results of operations, cash flow and trading price of our common shares.

***The form, timing and/or amount of dividend distributions on our common shares in future periods may vary and be impacted by economic and other considerations.***

The form, timing and/or amount of dividend distributions on our common shares will be declared at the discretion of our Board and will depend on actual cash from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and other factors as our Board may consider relevant. Our Board may modify our dividend policy from time to time.

***We may be unable to make distributions on our common shares at expected levels, which could result in a decrease in the market price of our common shares.***

If sufficient cash is not available for distribution from our operations, we may have to fund distributions on our common shares from working capital, borrow to provide funds for such distributions, reduce the amount of such distributions, or issue share dividends. To the extent we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. If cash available for distribution generated by our assets is less than we expect, our inability to make the expected distributions could result in a decrease in the market price of our common shares.

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All distributions on our common shares will be made at the discretion of our Board and will be based upon, among other factors, our historical and projected results of operations, financial condition, cash flows and liquidity, maintenance of our REIT qualification and other tax considerations, and other expense obligations, debt covenants, contractual prohibitions or other limitations and applicable law and such other matters as our Board may deem relevant from time to time. We may not be able to make distributions in the future, and our inability to make distributions, or to make distributions at expected levels, could result in a decrease in the market price of our common shares.

***Future issuances of debt securities and equity securities may negatively affect the market price of our common shares and, in the case of equity securities, may be dilutive to owners of our common shares and could reduce the overall value of an investment in our common shares.***

In the future, we may issue debt or equity securities or incur other financial obligations, including share dividends and shares that may be issued in exchange for common shares. Upon liquidation, holders of our debt securities and other loans and preferred shares will receive a distribution of our available assets before common shareholders. We are not required to offer any such additional debt or equity securities to shareholders on a preemptive basis. Therefore, additional common shares issuances, directly or through convertible or exchangeable securities (including common shares and convertible preferred shares), warrants or options, will dilute the holdings of our existing common shareholders and such issuances or the perception of such issuances may reduce the market price of our common shares. Any convertible preferred shares would have, and any series or class of our preferred shares would likely have, a preference on distribution payments, periodically or upon liquidation, which could eliminate or otherwise limit our ability to make distributions to common shareholders.

Holders of our common shares do not have preemptive rights to any shares we issue in the future. Our declaration of trust authorizes us to issue an unlimited number of shares of beneficial interest. The statement of preferences of the Series A Preferred Shares designates a series of 4,800,000 preferred shares as Series A Preferred Shares, of which 3,359,593 are issued and outstanding as of December 31, 2022. In the future, our Board may elect to (1) sell additional shares in future public offerings; (2) issue equity interests in private offerings; (3) issue our common shares under a long-term incentive plan to our non-employee trustees or to employees of our Adviser or its affiliates; (4) issue shares to our Adviser, its successors or assigns, in payment of an outstanding fee obligation or as consideration in a related-party transaction; or (5) issue our common shares in connection with a redemption of Partnership Units of the OP. To the extent we issue additional equity interests in the future, the percentage ownership interest held by holders of our common shares will be diluted. Further, depending upon the terms of such transactions, most notably the offering price per share, holders of our common shares may also experience a dilution in the book value of their investment in us.

***Common shares eligible for future sale may have adverse effects on our share price.***

We cannot predict the effect, if any, of future sales of our common shares, or the availability of shares for future sales, on the market price of our common shares.

Sales of substantial amounts of common shares or the perception that such sales could occur may adversely affect the prevailing market price for our common shares.

We may issue additional shares in future public offerings or private placements to make new investments or for other purposes. We are not required to offer any such shares to shareholders on a preemptive basis. Therefore, it may not be possible for shareholders to participate in such future share issuances, which may dilute such shareholders' interests in us.

***The rights of our common shareholders are limited by and subordinate to the rights of the holders of Series A Preferred Shares and these rights may have a negative effect on the value of our common shares.***

The holders of shares of our Series A Preferred Shares have rights and preferences generally senior to those of the holders of our common shares. The existence of these senior rights and preferences may have a negative effect on the value of our common shares. These rights are more fully set forth in the statement of preferences setting forth the terms of the Series A Preferred shares, and include, but are not limited to the right to receive a liquidation preference, prior to any distribution of our assets to the holders of our common shares. In addition, the Series A Preferred Shares rank senior to our common shares with respect to priority of such dividend payments, which may limit our ability to make distributions to holders of our common shares.

**Risks Related to the Ownership of the Series A Preferred Shares**

***The market price and trading volume of the Series A Preferred Shares may fluctuate significantly and be volatile due to numerous circumstances beyond our control.***

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The Series A Preferred Shares are listed on the NYSE, but there can be no assurance that an active trading market will be maintained on the NYSE. Further, the Series A Preferred Shares may trade at prices lower than the public offering price, and the market price of the Series A Preferred Shares depends on many factors, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prevailing interest rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the market for similar securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general economic and financial market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our issuance, as well as the issuance by our subsidiaries, of additional preferred equity or debt securities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our financial condition, cash flows, liquidity, results of operations, funds from operations and prospects.

The trading prices of common and preferred equity securities issued by REITs and other real estate companies historically have been affected by changes in interest rates. One of the factors that may influence the market price of the Series A Preferred Shares is the annual yield from distributions on the Series A Preferred Shares as compared to yields on other financial instruments. An increase in interest rates may lead prospective purchasers of the Series A Preferred Shares to demand a higher annual yield, which could reduce the market price of the Series A Preferred Shares.

Future offerings of debt securities or our shares, including future offerings of traded or non-traded preferred shares, expressly designated as ranking senior to the Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up may adversely affect the market price of the Series A Preferred Shares.

***Our cash available for distribution may not be sufficient to pay dividends on the Series A Preferred Shares at expected levels, and we cannot assure you of our ability to pay dividends in the future. We may use borrowed funds or funds from other sources to pay dividends, which may adversely impact our operations.***

We intend to pay regular quarterly dividends to our preferred shareholders. Distributions declared by us will be authorized by our Board in its sole discretion out of assets legally available for distribution and will depend upon a number of factors, including our earnings, our financial condition, the requirements for qualification as a REIT, restrictions under applicable law, our need to comply with the terms of our existing financing arrangements, our capital requirements and other factors as our Board may deem relevant from time to time. We may have to fund distributions from working capital, borrow to provide funds for such distributions, use proceeds of future offerings or sell assets to the extent distributions exceed earnings or cash flows from operations. Funding distributions from working capital would restrict our operations. If we are required to sell assets to fund dividends, such asset sales may occur at a time or in a manner that is not consistent with our disposition strategy. If we borrow to fund dividends, our leverage ratios and future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been. We may not be able to pay dividends in the future. In addition, some of our distributions may be considered a return of capital for income tax purposes. If we decide to make distributions in excess of our current and accumulated earnings and profits, such distributions would generally be considered a return of capital for U.S. federal income tax purposes to the extent of the holder's adjusted tax basis in their shares. A return of capital is not taxable, but it has the effect of reducing the holder's adjusted tax basis in its investment. If distributions exceed the adjusted tax basis of a holder's shares, they will be treated as gain from the sale or exchange of such shares.

***The Series A Preferred Shares are subordinate to our existing and future debt, and such interests could be diluted by the issuance of additional shares of preferred stock and by other transactions.***

The Series A Preferred Shares rank junior to all of our existing and future indebtedness, any classes and series of our shares of beneficial interest expressly designated as ranking senior to the Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up, and other non-equity claims on us and our assets available to satisfy claims against us, including claims in bankruptcy, liquidation or similar proceedings. Our declaration of trust gives our Board the authority to authorize and issue such securities as they determine to be necessary desirable or appropriate, and the Board has authorized the issuance of up to 4,800,000 Series A Preferred Shares. Subject to limitations prescribed by Delaware law and our declaration of trust and the statement of preferences setting forth the terms of the Series A Preferred Shares, our Board is authorized to issue preferred shares in such classes or series as our Board may determine and to establish from time to time the number of preferred shares to be included in any such class or series. The issuance of additional shares of Series A Preferred Shares or additional shares of our beneficial interest ranking on parity with the Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up, would dilute the interests of the holders of Series A Preferred Shares, and the issuance of shares of any class or series of our shares of beneficial interest expressly designated as ranking senior to the Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up or the incurrence of additional indebtedness could affect our ability

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to pay dividends on, redeem or pay the liquidation preference on the Series A Preferred Shares. Other than the right to vote on matters which are submitted to a vote of our common shareholders, none of the provisions relating to the Series A Preferred Shares contain any terms relating to or limiting our indebtedness or affording the holders of Series A Preferred Shares protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets, that might adversely affect the holders of Series A Preferred Shares.

***The Series A Preferred Shares are not rated and may not be rated in the future.***

The Series A Preferred Shares were previously rated by Egan-Jones Rating Company ("Egan-Jones") and are not currently rated. We do not currently intend to seek or maintain a rating for our Series A Preferred Shares. No assurance can be given, however, that one or more rating agencies might not independently determine to issue such a rating or that such a rating, if issued, would not adversely affect the market price of the Series A Preferred Shares. In addition, we may elect in the future to again obtain a rating of the Series A Preferred Shares, which could adversely impact the market price of the Series A Preferred Shares. Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward or withdrawn entirely at the discretion of the issuing rating agency if in its judgment circumstances so warrant. Any such downward revision or withdrawal of a rating could have an adverse effect on the market price of the Series A Preferred Shares.

***Future offerings of debt securities or of our shares expressly designated as ranking senior to our Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up may adversely affect the market price of our Series A Preferred Shares.***

If we decide to issue debt securities or additional shares, including traded or non-traded preferred shares, expressly designated as ranking senior to the Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up in the future, it is possible that those securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable debt securities that we issue in the future may have rights, preferences and privileges more favorable than those of the Series A Preferred Shares and may result in dilution to owners of the Series A Preferred Shares. We and, indirectly, our shareholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt securities or shares expressly designated as ranking senior to the Series A Preferred Shares as to distribution rights and rights upon our liquidation, dissolution or winding up in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of the Series A Preferred Shares will bear the risk of our future offerings reducing the market price of the Series A Preferred Shares and diluting the value of their share holdings in us.

**General Risks**

***We are highly dependent on information technology and security breaches or systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our securities and our ability to pay dividends.***

Our business is highly dependent on information technology. In the ordinary course of our business, we may store sensitive data, including our proprietary business information and that of our business partners, on our networks. The secure maintenance and transmission of this information is critical to our operations. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, disrupt our trading activities, or damage our reputation, which could have a material adverse effect on our financial results and negatively affect the market price of our securities and our ability to pay dividends to shareholders.

The resources required to protect our information technology and infrastructure, and to comply with the laws and regulations related to data and privacy protection, are subject to uncertainty. Even in circumstances where we are able to successfully protect such technology and infrastructure from attacks, we may incur significant expenses in connection with our responses to such attacks. In addition, recent well-publicized security breaches have led to enhanced government and regulatory scrutiny of the measures taken by companies to protect against cyber-security attacks, and may in the future result in heightened cyber-security requirements and/or additional regulatory oversight. As cyber-security threats and government and regulatory oversight of associated risks continue to evolve, we may be required to expend additional resources to enhance or expand upon the security measures we currently maintain. Any such actions may adversely impact our results of operations and financial condition.

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Furthermore, if some of our or our Adviser's employees are required to work remotely in the future due to the COVID-19 pandemic or other pandemics or infectious diseases, or if we or our Adviser allow permanent or significant remote work by any of our or its employees, there may be an increased risk of disruption to our operations because they may be utilizing residential networks and infrastructure which may not be as secure as in our office environment.

***The current COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.***

The COVID-19 pandemic has had, and other pandemics in the future could have, repercussions across regional and global economies and financial markets. The outbreak of COVID-19 has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak evolved rapidly and continues to evolve. Additionally, the emergence of new variants of COVID-19 are unpredictable and current vaccines and treatments may not be effective against new variants.

As a result, the COVID-19 pandemic negatively impacted, and the COVID-19 pandemic or other pandemics or infectious diseases in the future could negatively impact, almost every industry directly or indirectly, which may adversely impact our performance or the ability of underlying real estate collateral relating to our investments, increase the default risk applicable to borrowers and making it relatively more difficult for us to generate attractive risk adjusted returns.

The COVID-19 pandemic, and other future pandemics, could also materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance due to, among other factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced economic activity may cause certain borrowers underlying our real estate related assets and senior loans to become delinquent or default on their loans, or seek to defer payment on, or refinance, their loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reduced economic activity could result in a prolonged recession, which could negatively impact the value of commercial and residential real estate, which further negatively impacts the value of our investments, potentially materially;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• difficulty accessing debt and equity capital on attractive terms, or at all, impacts to our credit ratings, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis, or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the financial impact of the COVID-19 or a future pandemic could negatively impact our future compliance with financial covenants in our debt obligations and result in a default and potentially an acceleration of indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a general decline in business activity and demand for real estate and real estate related transactions, which could adversely affect our ability to make new investments or to redeploy the proceeds from repayments of our existing investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the potential negative impact on the health of the employees of our Adviser, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the timing of the development and distribution of effective treatments for COVID-19 and future pandemics.

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business.

The extent to which COVID-19 continues to impact our business will depend on future developments, which are highly uncertain and cannot be predicted. The fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our financial condition, results of operations, cash flows and performance. Moreover, many risk factors set forth in this annual report should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic.

***Our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting.***

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The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weakness, in our internal control over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in the price of our securities, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.

***The direct and indirect impacts of climate change may adversely affect our business.*** 

We may be adversely impacted by the direct consequences of climate change, such as property damage due to increases in the frequency, duration and severity of extreme weather events, such as hurricanes and floods. Increases in property damage due to these events may contribute to increases in costs in property insurance. In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could result in delays and increased capital expenditures on our existing properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, and, as a result, adversely impact our financial results and operations.

**Item 1B. Unresolved Staff Comments**

None

**Item 2. Properties**

The following table provides a summary of the Company's material physical property as of December 31, 2022:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **Average Effective Monthly <br>Occupied Rent Per Square Foot <br>(1) as of** | **% Occupied (2) as of** |
|<br>**Property Name** |<br>**Rentable Square <br>Footage <br>(in thousands)** |<br>**Property Type** |<br>**Date <br>Acquired** | **December 31,<br>2022** | **December 31,<br>2022** |
| Cityplace Tower | 1353087 | Office and Hospitality | 8/15/2018 | 2.10 | 32.9% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;Average effective monthly occupied rent per square foot is equal to the average of the contractual rent for commenced leases as of December 31, 2022, minus any tenant concessions over the term of the lease, divided by the occupied square footage of commenced leases as of December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;Percent occupied is calculated as the rentable square footage occupied as of December 31, 2022, divided by the total rentable square footage, expressed as a percentage.

The Company's ownership of Cityplace Tower is subject to mortgage debt with an outstanding principal balance of approximately $144.7 million as of December 31, 2022. For further information on the Company's owned real properties, see Notes 4, 5 and 6 to our consolidated financial statements.

**Item 3. Legal Proceedings**

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by government agencies.

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**Item 4. Mine Safety Disclosures**

Not applicable.

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**PART II**

**Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

**Market Information**

Our common shares trade on the NYSE under the ticker symbol "NXDT."

**Shareholder Information**

On March 31, 2023 we had 37,171,807 common shares outstanding held by a total of approximately 900 record holders. The number of record holders is based on the records of American Stock Transfer & Trust Company, LLC, who serves as our transfer agent. The number of holders does not include individuals or entities who beneficially own shares but whose shares are held of record by a broker or clearing agency, but does include each such broker or clearing agency as one record holder.

**Repurchase of Shares**

On October 24, 2022, our Board authorized the Share Repurchase Program. For more information, see "Item 1. Business—2022 Highlights—Share Repurchase Program." As of December 31, 2022, we have not repurchased any of our common shares or Series A Preferred Shares under the Share Repurchase Program.

**Item 6. [Reserved]**

**Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following is a discussion and analysis of our financial condition and our historical results of operations. The following should be read in conjunction with our financial statements and accompanying notes included herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those projected, forecasted, or expected in these forward-looking statements as a result of various factors, including, but not limited to, those discussed below and elsewhere in this quarterly report. See* "*Cautionary Statement Regarding Forward-Looking Statements*" *in this report.*

**Overview**

As of December 31, 2022, our Portfolio consisted primarily of debt and equity investments in the single-family rental, self-storage, office, hospitality, life science and multifamily sectors. Substantially all of our business is conducted through the OP. The OP GP is the sole general partner of the OP and is owned 100% by the Company. As of December 31, 2022, there were 2,000 OP Units outstanding, of which 100%, were owned by us.

On July 1, 2022, or the Deregistration Date, the SEC issued the Deregistration Order pursuant to Section 8(f) of the Investment Company Act declaring that the Company has ceased to be an investment company under the Investment Company Act. The issuance of the Deregistration Order enables the Company to proceed with full implementation of its new business mandate to operate as a diversified REIT that focuses primarily on investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity (the "Business Change"). As a result of the Business Change, we have not provided a comparison of our financial statements to prior periods in which we were operating as a registered investment company because it would not be useful to our shareholders. The discussion herein is principally limited to our financial condition and results of operations during the period from the Deregistration Date to December 31, 2022.

As a diversified REIT, the Company's primary investment objective is to provide both current income and capital appreciation. The Company seeks to achieve this objective through the Business Change. Target underlying property types primarily include, but are not limited to, single-family rentals, multifamily, self-storage, life science, office, industrial, hospitality, net lease and retail. The Company may, to a limited extent, hold, acquire or transact in certain non-real estate securities. We are externally managed by the Adviser through the Advisory Agreement, by and among the Company and the Adviser. The Advisory Agreement was dated July 1, 2022, and amended on October 25, 2022, for an initial three-year

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term that will expire on July 1, 2025 and successive one-year terms thereafter unless earlier terminated. The Adviser is wholly owned by our Sponsor.

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our shareholders. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through one or more TRS entities and are subject to applicable federal, state, and local income and margin taxes.

On October 15, 2021, the Bankruptcy Trust Lawsuit was filed by a litigation subtrust formed in connection with the Highland Bankruptcy against various persons and entities, including our Sponsor and James Dondero. In addition, on February 8, 2023, the UBS Lawsuit was filed against Mr. Dondero and a number of other persons and entities. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit, and Mr. Dondero has informed us he believes the UBS Lawsuit has no merit; we have been advised that the defendants named in each of the lawsuits intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.

Macroeconomic trends, including increases in inflation and rising interest rates, may adversely impact our business, financial condition and results of operations. Inflation in the United States has recently accelerated and is currently expected to continue at an elevated level in the near-term. Rising inflation could have an adverse impact on our operating expenses and our floating rate mortgages and credit facilities, as these costs could increase at a rate higher than our rental and other revenue. There is no guarantee we will be able to mitigate the impact of rising inflation. The Federal Reserve has recently started raising interest rates to combat inflation and restore price stability and it is expected that rates will continue to rise. In addition, to the extent our exposure to increases in interest rates on any of our debt is not eliminated through interest rate swaps and interest rate protection agreements, such increases will result in higher debt service costs which will adversely affect our cash flows. We cannot make assurances that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. Such future constraints could increase our borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments, which could slow or deter future growth.

**Components of Our Revenues and Expenses**

***Revenues***

*Rental income*. Our rental income is primarily attributable to the rental revenue from our investment in Cityplace Tower, a 42-story, 1.35 million-square-foot, trophy office building acquired in 2018 as well as rental income from two retail properties (see Note 5 to our consolidated financial statements). Our rental income also includes utility reimbursements, late fees, common area maintenance reimbursements, and other rental fees charged to tenants.

*Interest income.* Interest income includes interest earned from our debt investments.

*Dividend income.* Dividend income includes dividends from our equity investments.

*Other income.* Other income includes ancillary income earned from tenants such as non-refundable fees, parking fees, and other miscellaneous fees charged to tenants and income items.

***Expenses***

*Property operating expenses.* Property operating expenses include property maintenance costs, salary and employee benefit costs, utilities, casualty-related expenses and recoveries and other property operating costs of property owned directly or indirectly by us.

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*Property management fees.* Property management fees include fees paid to NexVest, our property manager, for managing each property directly or indirectly owned by us (see Note 14 to our consolidated financial statements).

*Real estate taxes and insurance.* Real estate taxes include the property taxes assessed by local and state authorities depending on the location of each property owned directly or indirectly by us. Insurance includes the cost of commercial, general liability, and other needed insurance for each property owned directly or indirectly by us.

*Advisory and administrative fees.* Advisory and administrative fees include the fees paid to our Adviser pursuant to the Advisory Agreement (see Note 14 to our consolidated financial statements).

*Property general and administrative expenses.* Property general and administrative expenses include the costs of marketing, professional fees, general office supplies, and other administrative related costs of each property owned directly or indirectly by us.

*Corporate general and administrative expenses.* Corporate general and administrative expenses include, but are not limited to, audit fees, legal fees, listing fees, board of trustee fees, investor relations costs and payments of reimbursements to our Adviser for operating expenses. Corporate general and administrative expenses and the Advisory Fees and Administrative Fees paid to our Adviser will not exceed the Expense Cap for the 12 months subsequent to the Deregistration Date, calculated in accordance with the Advisory Agreement. The Expense Cap does not limit the reimbursement by us of expenses related to securities offerings paid by our Adviser. The Expense Cap also does not apply to legal, accounting, financial, due diligence, and other service fees incurred in connection with mergers and acquisitions, extraordinary litigation, or other events outside our ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. Additionally, in the sole discretion of the Adviser, the Adviser may elect to waive reimbursement for eligible out-of-pocket expenses paid on the Company's behalf. Once waived, such expenses are considered permanently waived and become non-recoupable in the future.

*Conversion expense*. In connection with the Deregistration Order, the Company has incurred legal fees and other fees in preparation for the Business Change. These conversion expenses are included in the consolidated statement of operations and comprehensive income (loss) as conversion expenses.

*Depreciation and amortization.* Depreciation and amortization costs primarily include depreciation of our real properties and amortization of acquired in-place leases on property owned directly or indirectly by us.

***Other Income and Expense***

*Interest Expense.* Interest expense primarily includes the cost of interest expense on debt, the amortization of deferred financing costs, if any, and the related impact of interest rate derivatives, if any, used to manage our interest rate risk.

*Equity in Earnings (Losses) of Unconsolidated Ventures*. Equity in earnings (losses) of unconsolidated ventures represents the change in our basis in equity method investments resulting from our share of the investments' income and expenses. Profit and loss from equity method investments for which we've elected the fair value option are classified in divided income, change in unrealized gains and realized gains as applicable.

*Income Tax Expense.* Income tax expense is primarily derived from taxable gains from asset sales and other income earned from investments held in our TRSs.

*Unrealized Gain (Loss) on Investments*. Unrealized gains and losses represent changes in fair value for equity method investments, CLO equity investments, bonds, common stock, convertible notes, LLC interests, LP interests, rights and warrants, and senior loans for which the fair value option has been elected.

*Realized Gain (Loss) on Investments.* The Company recognizes the excess, or deficiency, of net proceeds received, less the carrying value of such investments, as realized gains or losses, respectively. The Company reverses cumulative, unrealized gains or losses previously reported in its Consolidated Statements of Operations on both the Successor and Predecessor basis with respect to the investment sold at the time of the sale.

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**Results of Operations for the Six Months Ended December 31, 2022**

***The six months ended December 31, 2022***

As a result of the Business Change, we have not provided a comparison of our financial statements to prior periods in which we were operating as a registered investment company because it would not be useful to our shareholders. The discussion herein is principally limited to our financial condition and results of operations during the period from the Deregistration Date to December 31, 2022.

The following table sets forth a summary of our operating results for the six months ended December 31, 2022 (in thousands):

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| | |
|:---|:---|
| | **For the Six Months Ended December 31,** |
| | **2022** |
| Total revenues | $55130 |
| Total expenses | (24358) |
| Operating income | 30772 |
| Interest expense | (5759) |
| Equity in losses of unconsolidated ventures | (2257) |
| Income tax expense | (9975) |
| Change in unrealized losses | (92031) |
| Realized loss | (2323) |
| Net loss | (81573) |
| Net income attributable to preferred shareholders | (2310) |
| Net loss attributable to common shareholders | $(83883) |

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The net loss for the six months ended December 31, 2022 primarily relates to mark-to-market losses on our investments accounted for at fair value partially offset by interest and dividends.

***Revenues***

*Rental income*. Rental income was $10.1 million for the six months ended December 31, 2022. Rental income primarily consists of lease revenue from our investment in Cityplace Tower.

*Interest and dividends*. Interest and dividends totaled $45.0 million for the six months ended December 31, 2022. Interest and dividends consists primarily of dividends from CLO equity investments of $29.1 million, NREF OP distributions of $7.0 million and VineBrook Homes Operating Partnership, L.P. ("VB OP") distributions of $2.8 million.

*Other income.* Other income was approximately $32,000 for the six months ended December 31, 2022.

***Expenses***

*Property operating expenses.* Property operating expenses were $3.7 million for the six months ended December 31, 2022. Property operating expenses consist primarily of expenses from our investment in Cityplace Tower.

*Property management fees.* Property management fees were $0.3 million for the six months ended December 31, 2022. Property management fees are primarily based on gross revenues derived primarily from our investment in Cityplace Tower.

*Real estate taxes and insurance.* Real estate taxes and insurance costs were $2.7 million for the six months ended December 31, 2022. Real estate taxes and insurance expenses consist primarily of expenses from our investment in Cityplace Tower.

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*Advisory and administrative fees.* For the six months ended December 31, 2022, the Company incurred Administrative Fees and Advisory Fees of $5.5 million, inclusive of $1.8 million in expenses that were deferred to comply with the Expense Cap. Should the Company's Fees and expenses subject to the Expense Cap be less than the 1.5% limit for the twelve month period subsequent to the Deregistration Date, some or all of the deferred expenses could be recouped by the Adviser up to the Expense Cap.

*Property general and administrative expenses.* Property general and administrative expenses were $0.3 million for the six months ended December 31, 2022. Property general and administrative expenses consist primarily of expenses from our investment in Cityplace Tower.

*Corporate general and administrative expenses.* Corporate general and administrative expenses were $3.1 million for the six months ended December 31, 2022. Corporate general and administrative expenses were primarily driven by legal fees $0.8 million.

*Conversion expenses.* Conversion expenses were $1.6 million for the six months ended December 31, 2022. Conversion fees were primarily driven by legal fees related to the Deregistration Order of $0.9 million.

*Depreciation and amortization.* Depreciation and amortization costs were $7.2 million for the six months ended December 31, 2022. Depreciation and amortization expenses consist primarily of expenses from our investment in Cityplace Tower. Due to the Business Change, the fair value of our real estate properties as of July 1, 2022 became the new cost basis for the Company. This change reset the depreciable basis of our properties as well as caused the recognition of new intangible lease assets.

***Other Income and Expense***

*Interest expense.* Interest expense was $5.8 million for the six months ended December 31, 2022.

*Equity in losses of unconsolidated ventures*. Equity in losses of unconsolidated ventures was $2.3 million for the six months ended December 31, 2022 and was primarily driven by amortization of the basis difference on the SAFStor Ventures of approximately $2.2 million.

*Income tax expense*. The Company has recorded a current income tax expense of $10.7 million associated with the TRSs for the six months ended December 31, 2022, which is largely driven by income from the Company's legacy CLO investments. The tax expense is partially offset by removing the valuation allowance on a deferred tax asset of $2.2 million and increased by a 2021 return-to-provision adjustment of $1.5 million for a net expense of $10.0 million for the six months ended December 31, 2022, that is recorded on the Consolidated Statement of Operations.

*Change in unrealized losses*. Unrealized losses from our investments accounted for at fair value was $92.0 million for the six months ended December 31, 2022. Losses were primarily driven by mark-to-market losses on NREF OP Units of $21.3 million, mark-to-market losses on NSP OC Common Units and equity of $23.6 million and losses on our CLO equity portfolio of $27.9 million. Our CLO equity portfolio consists primarily of CLOs that are in the process of winding down operations and liquidating their remaining holdings. The losses on the CLO equity portfolio are offset by dividends received of $29.1 million which are shown in interest and dividends on the consolidated statement of operations.

*Realized gains (losses)*. Realized losses were $2.3 million for the six months ended December 31, 2022, driven primarily by a realized loss of $6.9 million on the contribution of the SAFStor Ventures to the NSP OC as discussed in Note 14 of the Company's consolidated financial statements. This was partially offset by gains on maturities in our life settlement portfolio of $3.5 million.

**Liquidity and Capital Resources**

Our short-term liquidity requirements consist primarily of funds necessary to pay for debt maturities, operating expenses and other expenditures including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• capital expenditures to continue the ongoing development of Cityplace Tower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interest expense and scheduled principal payments on outstanding indebtedness (see "—Obligations and Commitments" below);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recurring maintenance necessary to maintain our properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• distributions necessary to qualify for taxation as a REIT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• income taxes for taxable income generated by TRS entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquisition of additional properties or investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advisory and administrative fees payable to our Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general and administrative expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reimbursements to our Adviser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• property management fees.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations and existing cash balances. As of December 31, 2022, we had $13.4 million of cash available to meet our short-term liquidity requirements. As of December 31, 2022, we also had $35.3 million of restricted cash held in reserve by the lender on the Cityplace debt. These reserves include escrows for property taxes and insurance, reserves for tenant improvements as well as required excess collateral.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional properties, make additional accretive investments pursuant to our investment strategy, renovations and other capital expenditures to improve our properties and scheduled debt payments and distributions. We expect to meet our long-term liquidity requirements through various sources of capital, which may include a revolving credit facility and future debt or equity issuances, existing working capital, net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings, and property and non-real estate asset dispositions. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity, market perceptions about us and restrictions on sales of properties under the Code. The success of our business strategy will depend, in part, on our ability to access these various capital sources.

In addition to our ongoing renovation of Cityplace, our other properties will require periodic capital expenditures and renovation to remain competitive. We estimate an additional $190 million to $210 million of capital expenditures to complete the Cityplace renovation. Also, acquisitions, redevelopments, or expansions of our properties will require significant capital outlays. Long-term, we may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions, or redevelopment through retained earnings long-term is limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations, and prospects could be materially and adversely affected.

We believe that our available cash, expected operating cash flows, and potential debt or equity financings will provide sufficient funds for our operations, anticipated scheduled debt service payments and dividend requirements for the twelve-month period following December 31, 2022.

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***Cash Flows***

The following table presents selected data from our consolidated statements of cash flows for the six months ended December 31, 2022 (in thousands):

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| | |
|:---|:---|
| | **For the Six Months Ended December 31** |
| | **2022** |
| Net cash provided by operating activities | $31431 |
| Net cash used in investing activities | (14418) |
| Net cash used in financing activities | (19140) |
| Net decrease in cash, cash equivalents and restricted cash | (2127) |
| Cash, cash equivalents and restricted cash, beginning of period | 50776 |
| Cash, cash equivalents and restricted cash, end of period | $48649 |

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*Cash flows from operating activities.* During the six months ended December 31, 2022, net cash provided by operating activities was $31.4 million. Operating cash flows were primarily driven by dividends received from our CLO equity portfolio.

*Cash flows from investing activities.* During the six months ended December 31, 2022, net cash used in investing activities was $14.4 million. Cash flows from investing activities was primarily driven by acquisitions of new real estate investments of $26.5 million partially offset by proceeds from the redemption of our Caddo Sustainable Timberlands investment of $10.9 million in cash.

*Cash flows from financing activities.* During the six months ended December 31, 2022, net cash used in financing activities was $19.1 million. Cash flows from financing activities was primarily driven by borrowings of $9.5 million, offset by credit facility repayments of $12.5 million, prime brokerage repayments of $14.4 million and dividends paid to common shareholders of $11.2 million.

**Debt**

***Mortgage Debt***

As of December 31, 2022, our consolidated subsidiaries had aggregate mortgage debt outstanding to third parties of approximately $144.7 million at a weighted average interest rate of 7.3%. See Note 7 to our consolidated financial statements for additional information.

We intend to invest in additional real estate investments as suitable opportunities arise and adequate sources of equity and debt financing are available. We expect that future investments in properties, including any improvements or renovations of current or newly acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, future borrowings and the proceeds from additional issuances of common shares or other securities or investment and property dispositions.

Although we expect to be subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed. However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common shares or other debt or equity securities, on terms that are acceptable to us or at all.

Furthermore, following the completion of our renovation and development programs and depending on the interest rate environment at the applicable time, we may seek to refinance our floating rate debt into longer-term fixed rate debt at lower leverage levels.

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***Credit Facility***

On January 8, 2021, the Company entered into a $30.0 million credit facility (the "Credit Facility") with Raymond James Bank, N.A. and drew the full balance. As of December 31, 2022, the Credit Facility, as amended, bore interest at one-month LIBOR plus 3.5% and matures on November 6, 2023. On March 6, 2023, the interest rate on the Credit Facility increased to one-month LIBOR plus 4.25%. The Company paid down $9.0 million on the Credit Facility during the year ended December 31, 2022. During the six months ended December 31, 2022, the Company paid down $5.0 million on the Credit Facility. As of December 31, 2022, the Credit Facility had an outstanding balance of $11.0 million. For additional information regarding our Credit Facility, see Note 7.

**Obligations and Commitments**

The following table summarizes our contractual obligations and commitments as of December 31, 2022 for the next five calendar years subsequent to December 31, 2022.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | |
| | **Total** | **2023** | **2024** | **2025** | **2026** | **2027** | **Thereafter** | |
| **Property Level Debt** |  |  |  |  |  |  |  |  |
| Principal payments | $157918 | $144668 | $— | $13250 | $— | $— | $— |  |
| Interest expense | 5846 | 4517 | 830 | 499 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $163764 | $149185 | $830 | $13749 | $— | $— | $— |  |
| **Prime Brokerage Borrowing** |  |  |  |  |  |  |  |  |
| Principal payments | $2624 | $— | $— | $— | $— | $— | $2624 | (1) |
| Interest expense | 481 | 96 | 97 | 96 | 96 | 96 |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $3105 | $96 | $97 | $96 | $96 | $96 | $2624 |  |
| **Preferred Shares** |  |  |  |  |  |  |  |  |
| Dividend payments | $— | $9240 | $9240 | $9240 | $9240 | $9240 | N/A | (2) |
| **Credit Facility** |  |  |  |  |  |  |  |  |
| Principal payments | $11000 | $11000 | $— | $— | $— | $— | $— |  |
| Interest expense | 120 | 120 |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $11120 | $11120 | $— | $— | $— | $— | $— |  |
| **Total contractual obligations and commitments** | $177989 | $169641 | $10167 | $23085 | $9336 | $9336 | $2624 |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Assumes no additional borrowings or repayments. The Prime Brokerage balance has no stated maturity date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The Series A Preferred Shares are perpetual.

*Credit Facility*

The Credit Facility will mature on November 6, 2023 and is subject to monthly amortization payments through the maturity date. We believe we will have adequate liquidity to pay these obligations when they come due.

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*Cityplace Debt*

On November 8, 2022, we received lender consent to defer the maturity of the Cityplace debt to February 8, 2023. On February 8, 2023, the lenders agreed to defer the maturity of the debt by three months to May 8, 2023 with the possibility to extend for an additional four months to September 8, 2023 provided certain metrics are met. The purpose of the deferral was to allow for continued discussions around refinancing the debt. Management recognizes that finding an alternative source of funding is necessary to repay the debt by the maturity date. Management believes that there is sufficient time before the maturity date and that the Company has sufficient access to capital to ensure the Company is able to meet its obligations as they become due.

*Advisory Agreement*

As consideration for the Adviser's services under the Advisory Agreement, we pay our Adviser the Fees, which includes the Advisory Fee equal to 1.00% of Managed Assets and the Administrative Fee equal to 0.20% of the Company's Managed Assets. The Advisory Agreement provides that the first portion of the monthly installment of the Advisory Fee shall be paid in cash up to $1.0 million and the remainder of the monthly installment of the Advisory Fee, if any, shall be paid in common shares of the Company, subject to certain restrictions. For additional information, see Note 14 to our consolidated financial statements. The Advisory Agreement also provides that the Administrative Fee shall be paid in cash.

We also generally reimburse our Adviser for operating or offering expenses it incurs on our behalf or in connection with the services it performs for us. Direct payment of operating expenses by us together with reimbursement of operating expenses to the Adviser, plus compensation expenses relating to equity awards granted under a long-term incentive plan and all other corporate general and administrative expenses of the Company, including the Fees payable under the Advisory Agreement, may not exceed the Expense Cap of 1.5% of Managed Assets, calculated as of the end of each quarter, for the twelve-month period following the Company's receipt of the Deregistration Order; provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions or other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate-related investments; provided, further, in the event the Company consolidates another entity that it does not wholly own as a result of owning a controlling interest in such entity or otherwise, expenses will be calculated without giving effect to such consolidation and instead such entity's expenses will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of expenses. The Adviser may, at its discretion and at any time, waive its right to reimbursement for eligible out-of-pocket expenses paid on the Company's behalf. Once waived, these expenses are considered permanently waived and become non-recoupable in the future.

**Income Taxes**

We anticipate that we will continue to qualify to be taxed as a REIT for U.S. federal income tax purposes, and we intend to continue to be organized and to operate in a manner that will permit us to qualify as a REIT. However, we can give no assurance that we will maintain REIT qualification. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual "REIT taxable income", as defined by the Code, to stockholders. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. The Company has recorded an income tax expense of $2.0 million for the six months ended June 30, 2022, which is largely driven by income from the Company's legacy CLO investments. The Company has recorded a current income tax expense of $10.7 million associated with the TRSs for the six months ended December 31, 2022, which is largely driven by income from the Company's legacy CLO investments. The tax expense is partially offset by removing the valuation allowance on a deferred tax asset of $2.2 million and increased by a 2021 return-to-provision adjustment of $1.5 million, for a net expense of $10.0 million for the six months ended December 31, 2022, that is recorded on the Consolidated Statement of Operations.

If we fail to qualify as a REIT in any taxable year, we could be subject to U.S. federal income tax on our taxable income at regular corporate income tax rates, and dividends paid to our shareholders would not be deductible by us in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect our net income (loss) and net cash available for distribution to stockholders. Unless we were entitled to relief under certain

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Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT. As of December 31, 2022, we believe we are in compliance with all applicable REIT requirements.

We evaluate the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are "more-likely-than-not" (greater than 50% probability) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states. As of December 31, 2022 and to our knowledge, we have no examinations in progress and none are expected at this time.

We recognize our tax positions and evaluate them using a two-step process. First, we determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, we will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.

We had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 13, 2022. We and our subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2021, 2020 and 2019 tax years remain open to examination by tax jurisdictions to which our subsidiaries and we are subject. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our consolidated statements of operations and comprehensive income (loss).

**Dividends**

We intend to make regular quarterly dividend payments to holders of our common shares. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We intend to make regular quarterly dividend payments of all or substantially all of our taxable income to holders of our common shares out of assets legally available for this purpose, if and to the extent authorized by our Board. Before we make any dividend payments, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our debt payable. If our cash available for distribution is less than our taxable income, we could be required to sell assets, borrow funds or raise additional capital to make cash dividends or we may make a portion of the required dividend in the form of a taxable distribution of stock or debt securities.

We will make dividend payments based on our estimate of taxable earnings per share of common stock, but not earnings calculated pursuant to GAAP. Our dividends and taxable income and GAAP earnings will typically differ due to items such as depreciation and amortization, fair value adjustments, differences in premium amortization and discount accretion, investments held through our TRSs, book/tax differences on income derived from partnerships, and non-deductible general and administrative expenses. Our quarterly dividends per share may be substantially different than our quarterly taxable earnings and GAAP earnings per share. Our Board declared our tenth dividend of 2022 on our common shares of $0.15 per share which was paid on December 30, 2022 to shareholders of record on December 15, 2022. Our Board declared our fourth quarterly dividend of 2022 on our Series A Preferred Shares of $0.34375 per share which was sent to the transfer agent prior to December 31, 2022 and paid on January 3, 2023 to shareholders of record on December 23, 2022. Starting October 1, 2022, we expect that dividends on our common shares, when, if and as declared by our Board, will be declared on a quarterly basis.

**Off-Balance Sheet Arrangements**

As of December 31, 2022, we had the following off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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*Commitments*

The Company is the guarantor on three secured loans to, and dividend payments with respect to Series D Preferred Stock of NSP, an affiliate of the Adviser, with the secured loans having an aggregate principal amount of approximately $662.1 million outstanding as of December 31, 2022. NSP is current on all debt and dividend payments and in compliance with all debt compliance provisions. See Note 14 for additional information.

The Company is a limited guarantor and an indemnitor on one of NHT's loans with an aggregate principal amount of $77.4 million as of December 31, 2022. The obligations include a customary environmental indemnity and a so-called "bad boy" guarantee, which is generally only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper. NHT is current on all debt payments and in compliance with all debt compliance provisions.

**Critical Accounting Policies and Estimates**

Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts. These estimates are based on management's historical industry experience and on various other judgments and assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these judgments, assumptions and estimates. Below is a discussion of the accounting policies that we consider critical to understanding our financial condition or results of operations where there is uncertainty or where significant judgment is required.

See Note 2, "Summary of Significant Accounting Policies", for further discussion of our accounting estimates and policies.

*Valuation of Level 3 Fair Valued Investments*

As of December 31, 2022, approximately 56.3% of the total assets owned by the Company are comprised of fair valued level 3 investments. The Company elected the fair-value option in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 825-10-10. On an annual basis, the Company hires independent third-party valuation firms to provide updated fair values for subsequent measurement absent a readily available market price. The valuation is determined using widely accepted valuation techniques. See Note 10, "Fair Value of Derivatives and Financial Instruments", for further discussion of our valuation techniques of level 3 investments. The necessary inputs for these valuations includes a variety of valuation techniques and unobservable inputs. These inputs are subject to assumptions and estimates. As a result, the determination of fair value is uncertain because it involves subjective judgments and estimates that are unobservable. For the year ended December 31, 2022, the unrealized loss related to the change in fair value of level 3 investments is $58.8 million. See Notes 10 for additional disclosures regarding the valuation of level 3 fair valued investments.

*Purchase Price Allocation*

Upon acquisition of a property considered to be an asset acquisition, the purchase price and related acquisition costs ("total consideration") are allocated to land, buildings, improvements, furniture, fixtures, and equipment, and intangible lease assets based on relative fair value in accordance with FASB ASC 805, *Business Combinations.* Acquisition costs related to asset acquisitions are capitalized in accordance with FASB ASC 805.

The allocation of total consideration, which is determined using inputs that are classified within Level 3 of the fair value hierarchy established by FASB ASC 820 (see Note 10 to our consolidated financial statements), is based on management's estimate of the property's "as-if" vacant fair value and is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. If any debt is assumed in an acquisition, the difference between the fair value, which is estimated using inputs that are classified within Level 2 of the fair value hierarchy, and the face value of debt is recorded as a premium or discount and amortized as interest expense over the life of the debt assumed.

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*Impairment*

Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, we will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company's impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment.

**Inflation**

The real estate market has not been directly affected by inflation in the past several years due to increases in rents nationwide. Our lease terms are generally for a period of one year or more and rental rates reset to market if renewed. The majority of our leases also contain protection provisions applicable to reimbursement billings for utilities.

Inflation may also affect the overall cost of debt, as the implied cost of capital increases. The Federal Reserve has recently started raising interest rates to combat inflation and restore price stability and is expected to continue to raising interest rates in response to or in anticipation of continued inflation concerns. We intend to mitigate these risks through long-term fixed interest rate loans and interest rate hedges.

**REIT Tax Election**

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our "REIT taxable income," as defined by the Code, to our shareholders. Taxable income from certain non-REIT activities are managed through one or more TRS entities and is subject to applicable federal, state, and local income and margin taxes. The Company has recorded a current income tax expense of $2.0 million for the six months ended June 30, 2022 and $10.7 million associated with the TRSs for the six months ended December 31, 2022, which is largely driven by income from the Company's legacy CLO investments. The tax expense is partially offset by removing the valuation allowance on a deferred tax asset of $2.2 million and increased by a 2021 return-to-provision adjustment of $1.5 million for a net expense of $12.0 million for the twelve months ended December 31, 2022, that is recorded on the Consolidated Statement of Operations. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

Not required for smaller reporting companies

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**Item 8. Financial Statements and Supplementary Data**

**Index to Consolidated Financial Statements**

---

| | |
|:---|:---|
| | **Page** |
| <u>[Report of Independent Registered Public Accounting Firm](#idb0f7d426d0d4b68ae9f07790ad4450e_88)</u> | [71](#idb0f7d426d0d4b68ae9f07790ad4450e_88) |
| <u>[Consolidated Balance Sheet as of](#idb0f7d426d0d4b68ae9f07790ad4450e_91)[December 31, 2022](#idb0f7d426d0d4b68ae9f07790ad4450e_91)</u> | [74](#idb0f7d426d0d4b68ae9f07790ad4450e_91) |
| <u>[Consolidated Statement of Assets and Liabilities as of December 31, 2021 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_94)</u> | [76](#idb0f7d426d0d4b68ae9f07790ad4450e_94) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[Statement of Operations and Comprehensive Income (Loss) for the](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[Six](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[Months Ended](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[December](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[3](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[1](#idb0f7d426d0d4b68ae9f07790ad4450e_97)[, 2022](#idb0f7d426d0d4b68ae9f07790ad4450e_97)</u> | [78](#idb0f7d426d0d4b68ae9f07790ad4450e_97) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_100)[Statement of Operations for the Six Months Ended June 30, 2022 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_100)</u> | [79](#idb0f7d426d0d4b68ae9f07790ad4450e_100) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_103)[Statement](#idb0f7d426d0d4b68ae9f07790ad4450e_103)[of Operations for the](#idb0f7d426d0d4b68ae9f07790ad4450e_103)[Year](#idb0f7d426d0d4b68ae9f07790ad4450e_103)[Ended](#idb0f7d426d0d4b68ae9f07790ad4450e_103)[December 31](#idb0f7d426d0d4b68ae9f07790ad4450e_103)[, 2021 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_103)</u> | [80](#idb0f7d426d0d4b68ae9f07790ad4450e_103) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_106)[Statement of Shareholders' Equity for the](#idb0f7d426d0d4b68ae9f07790ad4450e_106)[Six](#idb0f7d426d0d4b68ae9f07790ad4450e_106)[Months Ended](#idb0f7d426d0d4b68ae9f07790ad4450e_106)[December 31](#idb0f7d426d0d4b68ae9f07790ad4450e_106)[, 2022](#idb0f7d426d0d4b68ae9f07790ad4450e_106)</u> | [81](#idb0f7d426d0d4b68ae9f07790ad4450e_106) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_109)[Statement of Changes in Net Assets for the Six Months Ended June 30, 2022 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_109)</u> | [82](#idb0f7d426d0d4b68ae9f07790ad4450e_109) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[Statement](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[of Changes in Net Assets for the](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[Year](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[Ended](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[December](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[3](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[1](#idb0f7d426d0d4b68ae9f07790ad4450e_112)[, 2021 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_112)</u> | [83](#idb0f7d426d0d4b68ae9f07790ad4450e_112) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_115)[Statement of Cash Flows for the](#idb0f7d426d0d4b68ae9f07790ad4450e_115)[Six](#idb0f7d426d0d4b68ae9f07790ad4450e_115)[Months Ended](#idb0f7d426d0d4b68ae9f07790ad4450e_115)[D](#idb0f7d426d0d4b68ae9f07790ad4450e_115)[ecember 31](#idb0f7d426d0d4b68ae9f07790ad4450e_115)[, 2022](#idb0f7d426d0d4b68ae9f07790ad4450e_115)</u> | [84](#idb0f7d426d0d4b68ae9f07790ad4450e_115) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_118)[Statement of Cash Flows for the Six Months Ended June 30, 2022 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_118)</u> | [86](#idb0f7d426d0d4b68ae9f07790ad4450e_118) |
| <u>[Consolidated](#idb0f7d426d0d4b68ae9f07790ad4450e_121)[Statement of Cash Flows for the](#idb0f7d426d0d4b68ae9f07790ad4450e_121)[Year](#idb0f7d426d0d4b68ae9f07790ad4450e_121)[Ended](#idb0f7d426d0d4b68ae9f07790ad4450e_121)[December 31,](#idb0f7d426d0d4b68ae9f07790ad4450e_121)[2021 (predecessor basis)](#idb0f7d426d0d4b68ae9f07790ad4450e_121)</u> | [88](#idb0f7d426d0d4b68ae9f07790ad4450e_121) |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

![nxdt-20221231_g2.jpg](nxdt-20221231_g2.jpg)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KPMG LLP

Suite 1400

2323 Ross Avenue

Dallas, TX 75201-2721

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors

NexPoint Diversified Real Estate Trust:

*Opinion on the Consolidated Financial Statements*

We have audited the accompanying consolidated balance sheet of NexPoint Diversified Real Estate Trust and subsidiaries (the Company) as of December 31, 2022 (successor basis), the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flows for the six month period ended December 31, 2022 (successor basis). We have also audited the statements of operations, changes in net assets, and cash flows for the six month period ended June 30, 2022 (predecessor basis), and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the six month periods ended December 31, 2022 (successor basis) and June 30, 2022 (predecessor basis), in conformity with U.S. generally accepted accounting principles.

*Change in Accounting Principle*

As discussed in Note 2 to the consolidated financial statements, the Company discontinued the application of investment company accounting guidance in Financial Accounting Standards Board Accounting Standard Codification Topic 946, Financial Services - Investment Companies as of July 1, 2022 due to its deregistration as an investment company, and prospectively applied other U.S. generally accepted accounting principles for companies which are not investment companies.

*Basis for Opinion*

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

*Critical Audit Matter*

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Fair value measurement of level 3 investments*

As discussed in Notes 2 and 3 to the consolidated financial statements as a result of the Company's deregistration as an investment company on July 1, 2022, certain of the Company's investments were recorded at fair value using inputs that are classified within Level 3 of the fair value hierarchy. Establishing fair values for these level 3 investments is inherently subjective and dependent upon significant unobservable inputs and assumptions.

We identified the evaluation of fair value measurements for certain level 3 investments as of July 1, 2022, as a critical audit matter. Evaluation of the Company's valuation assumptions for these level 3 investments involved a high degree of auditor judgment. Specifically, subjective auditor judgment was required to evaluate the capitalization rates, discount rates, and market rent. Changes in these assumptions could have a significant impact on the fair value of the level 3 investments.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of an internal control related to the significant assumptions of the capitalization rates, discount rates, and market rent. We involved valuation professionals with specialized skills and knowledge who assisted in:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Evaluating the Company's capitalization rates and discount rates, by comparing them against a range that was independently developed using publicly available market data for comparable entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Assessing the appropriateness of the market rent assumption by comparing it to independently researched transactions and current listings of comparable properties.

/s/ KPMG LLP

We have served as the Company's auditor since 2022.

Dallas, Texas

March 31, 2023

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

![nxdt-20221231_g3.jpg](nxdt-20221231_g3.jpg)

**<u>REPORT</u> <u>OF</u> <u>INDEPENDENT</u> <u>REGISTERED</u> <u>PUBLIC</u> <u>ACCOUNTING</u> <u>FIRM</u>**

To the Shareholders and Board of Trustees of

NexPoint Diversified Real Estate Trust

<u>Opinion on the Financial Statements</u>

We have audited the accompanying consolidated statement of assets and liabilities of NexPoint Diversified Real Estate Trust (formerly NexPoint Strategic Opportunities Fund) (the "Fund") as of December 31, 2021, the related consolidated statements of operations, changes in net assets and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2021, the results of its operations, changes in net assets and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

<u>Basis for Opinion</u>

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2021, by correspondence with the custodian, agent banks, transfer agents, issuers, and brokers; when replies were not received from brokers, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Fund's auditor since 2020.

![nxdt-20221231_g4.jpg](nxdt-20221231_g4.jpg)

COHEN & COMPANY, LTD.

Cleveland, Ohio

March 10, 2022

C O H E N & C O M P A N Y , L T D .

800.229.1099 \| 866.818.4538 fax \| cohencpa.com

&nbsp;&nbsp;&nbsp;&nbsp;Registered with the Public Company Accounting Oversight Board

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEET**

**(in thousands, except share and par value amounts)**

---

| | |
|:---|:---|
| | **December 31, 2022** |
| **ASSETS** | |
| Consolidated Real Estate Investments |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Land | $47708 |
| &nbsp;&nbsp;&nbsp;&nbsp;Buildings and improvements | 174469 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible lease assets | 10979 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction in progress | 39731 |
| &nbsp;&nbsp;&nbsp;&nbsp;Furniture, fixtures, and equipment | 354 |
| Total Gross Consolidated Real Estate Investments | 273241 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated depreciation and amortization | (7158) |
| Total Net Consolidated Real Estate Investments | 266083 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments, at fair value ($576,419 with related parties) | 754910 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method investments ($7,272 with related parties) | 70656 |
| &nbsp;&nbsp;&nbsp;&nbsp;Life insurance policies, at fair value | 67711 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 13360 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 35289 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 1903 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other assets | 6441 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest and dividends | 4302 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax asset, net | 2247 |
| **TOTAL ASSETS** | $1222902 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |
| Liabilities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgages payable, net | $144414 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable | 24250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage borrowing | 2624 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other accrued liabilities | 13865 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 10720 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued real estate taxes payable | 254 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 1115 |
| &nbsp;&nbsp;&nbsp;&nbsp;Security deposit liability | 416 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid rents | 1273 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible lease liabilities, net | 6027 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to affiliates | 112 |
| **Total Liabilities** | $205070 |
| Shareholders' Equity: |  |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred shares, $0.001 par value: 4,800,000 shares authorized; 3,359,593 shares issued and outstanding | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common shares, $0.001 par value: unlimited shares authorized; 37,171,807 shares issued and outstanding | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 999845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated earnings less dividends | 17947 |
| **Total Shareholders' Equity** | 1017832 |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $1222902 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES (Predecessor Basis)**

**(in thousands, except share and per share amounts)**

---

| | |
|:---|:---|
| | **December 31, 2021** |
| **Assets:** | |
| &nbsp;&nbsp;Investments, at fair value (a) | $169884 |
| &nbsp;&nbsp;Affiliated investments, at fair value | 872101 |
| &nbsp;&nbsp;Total investments, at fair value | 1041985 |
| &nbsp;&nbsp;Cash and cash equivalents | 2238 |
| &nbsp;&nbsp;Restricted cash - securities sold short | 440 |
| &nbsp;&nbsp;Foreign tax reclaim receivable | 1250 |
| &nbsp;&nbsp;Receivable for: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Due from custodian | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 277 |
| &nbsp;&nbsp;&nbsp;&nbsp;Company shares sold | 209 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends and interest | 913 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 510 |
| **TOTAL ASSETS** | $1048014 |
| **Liabilities:** |  |
| &nbsp;&nbsp;Notes payable | $42500 |
| &nbsp;&nbsp;Due to custodian | 110 |
| &nbsp;&nbsp;Securities sold short, at value | 430 |
| &nbsp;&nbsp;Due to broker | 9188 |
| &nbsp;&nbsp;Payable for: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment advisory fees | 1005 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense and commitment fee | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounting services fees | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 186 |
| **Total Liabilities** | $53554 |
| **Mezzanine equity** |  |
| &nbsp;&nbsp;Series A cumulative preferred shares, net of deferred financing costs | (83252) |
| **Net assets applicable to common shares** | $911208 |
| **Net assets consist of:** |  |
| Paid-in capital in excess of par | $913920 |
| Total accumulated loss | (2712) |
| **Net assets applicable to common shares** | $911208 |
| &nbsp;&nbsp;Investments, at cost | $279216 |
| &nbsp;&nbsp;Affiliated investments, at cost | 828659 |
| &nbsp;&nbsp;Cash equivalents, at cost | 2157 |
| &nbsp;&nbsp;Proceeds from securities sold short | 765 |
| **Common Shares** |  |
| &nbsp;&nbsp;Net assets | $911208 |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

---

| | |
|:---|:---|
| &nbsp;&nbsp;Shares outstanding (unlimited authorization) | 37080 |
| &nbsp;&nbsp;Net asset value per share (net assets/shares outstanding) | $24.57 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) includes fair value of securities on loan of $1,248

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF OPERATIONS** 

**AND COMPREHENSIVE INCOME (LOSS)** 

**(in thousands, except per share amounts)**

---

| | |
|:---|:---|
| | **For the Six Months Ended December 31,** |
| | **2022** |
| **Revenues** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income | $10070 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income ($1,332 with related parties) | 4428 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividend income ($10,881 with related parties) | 40600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 55130 |
| **Expenses** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses | 3682 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property management fees | 296 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 2695 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisory and administrative fees | 5514 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative expenses | 302 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative expenses | 3079 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion Expense | 1615 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 7175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 24358 |
| **Operating income** | 30772 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (5759) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in losses of unconsolidated equity method ventures | (2257) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gain (losses) | (92031) |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized gains (losses) | (2323) |
| **Net loss before income taxes** | (71598) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | (9975) |
| **Net loss** | (81573) |
| **Net income attributable to preferred shareholders** | (2310) |
| **Net loss attributable to common shareholders** | $(83883) |
| **Weighted average common shares outstanding - basic** | 37172 |
| **Weighted average common shares outstanding - diluted** | 37172 |
| **Loss per share - basic** | $(2.26) |
| **Loss per share - diluted** | $(2.26) |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF OPERATIONS (Predecessor Basis)**

**(in thousands)**

---

| | |
|:---|:---|
| | **For the Six Months Ended June 30,** |
| | **2022** |
| **Investment income:** |  |
| **Income:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends from unaffiliated issuers | $60178 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends from affiliated issuers | 15025 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest from unaffiliated issuers | 991 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest from affiliated issuers | 3002 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total income | 79196 |
| **Expenses:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment advisory | 6279 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | 2000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Legal fees | 987 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense and commitment fees | 696 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion expense | 471 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounting services fees | 334 |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance | 185 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reports to shareholders | 136 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trustees fees | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit and tax preparation fees | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer agent fees | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pricing fees | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;Registration fees | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 322 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 11792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investment income | 67404 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred dividend expenses | (2310) |
| **Net realized and unrealized gain (loss) on investments** |  |
| **Realized gain on:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from unaffiliated issuers | 28893 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities sold short | 253 |
| **Net change in unrealized gain on:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from unaffiliated issuers | (43752) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from affiliated issuers | 76346 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain on investments | 61740 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total increase in net assets resulting from operations | $126834 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF OPERATIONS (Predecessor Basis)**

**(in thousands)**

---

| | |
|:---|:---|
| | **For the Year Ended December 31,** |
| | **2021** |
| **Investment income:** |  |
| **Income:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends from unaffiliated issuers | $74727 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends from affiliated issuers | 24671 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities lending income | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest from unaffiliated issuers | 4747 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest from affiliated issuers | 2835 |
| &nbsp;&nbsp;&nbsp;&nbsp;ROC Reclass | (11850) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total income | 95136 |
| **Expenses:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment advisory | 11094 |
| &nbsp;&nbsp;&nbsp;&nbsp;Legal fees | 2206 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense and commitment fees | 2435 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conversion expense | 1397 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounting services fees | 558 |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance | 145 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reports to shareholders | 352 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trustees fees | 275 |
| &nbsp;&nbsp;&nbsp;&nbsp;Audit and tax preparation fees | 124 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer agent fees | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pricing fees | 279 |
| &nbsp;&nbsp;&nbsp;&nbsp;Registration fees | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 20029 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net investment income (loss) | 75107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred dividend expenses | (4555) |
| **Net realized and unrealized gain (loss) on investments** |  |
| **Realized loss on:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from unaffiliated issuers | (42530) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from affiliated issuers | 458 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities sold short | 351 |
| **Net change in unrealized appreciation on:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from unaffiliated issuers | 40480 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments from affiliated issuers | 175495 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities sold short | 649 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain on investments | 174903 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total increase in net assets resulting from operations | $245455 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF SHAREHOLDERS**' **EQUITY**

**(in thousands, except share and per share amounts)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Preferred Shares** | **Preferred Shares** | **Common Shares** | **Common Shares** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)<br>Less<br>Dividends** | **Total** |
|<br>**Six Months Ended December 31, 2022** | **Number of<br>Shares** | **Par Value** | **Number of<br>Shares** | **Par Value** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)<br>Less<br>Dividends** | **Total** |
| **Balances, July 1, 2022** | 3359593 | $3 | 37171807 | $37 | $999845 | $112983 | $1112868 |
| &nbsp;&nbsp;Net loss attributable to common shareholders |  |  |  |  |  | (83883) | (83883) |
| &nbsp;&nbsp;Net income attributable to preferred shareholders |  |  |  |  |  | 2310 | 2310 |
| &nbsp;&nbsp;Common share dividends declared ($0.30 per share) |  |  |  |  |  | (11153) | (11153) |
| &nbsp;&nbsp;Preferred share dividends declared ($0.68750 per share) |  |  |  |  |  | (2310) | (2310) |
| **Balances, December 31, 2022** | 3359593 | $3 | 37171807 | $37 | $999845 | $17947 | $1017832 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (Predecessor Basis)**

**(in thousands, except share amounts)**

---

| | |
|:---|:---|
| | **For the Six Months Ended June 30,** |
| | **2022** |
| **Increase (decrease) in net assets operations:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | $67404 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred dividend expenses | (2310) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated net realized gain (loss) on investments, securities sold short, written options, futures contracts, and foreign currency transactions | 29146 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized appreciation on investments, securities sold short, written options contracts and translation of assets and liabilities denominated in foreign currency | 32594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase from operations | 126834 |
| **Distributions declared to common shareholders:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distribution | (11139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total distributions declared to common shareholders: | (11139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in net assets from operations and distributions | 115695 |
| **Share transactions:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Value of distributions reinvested | 1425 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of shares | 1288 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase from shares transactions | 2713 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total increase in net assets | 118408 |
| **Net assets** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of period | 911208 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of period | $1029616 |
| **Change in Common Shares** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issued for distribution reinvested | 92067 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase in common shares | 92067 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (Predecessor Basis)**

**(in thousands, except share and par value amounts)**

---

| | |
|:---|:---|
| | **For the Year Ended December 31,** |
| | **2021** |
| **Increase in net assets operations:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | $75107 |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred dividend expenses | (4555) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated net realized loss on investments, securities sold short, written options, futures contracts, and foreign currency transactions | (41721) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized appreciation on investments, securities sold short, written options contracts and translation of assets and liabilities denominated in foreign currency | 216624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase from operations | 245455 |
| **Distributions declared to common shareholders:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distribution | (435) |
| &nbsp;&nbsp;&nbsp;&nbsp;Return of capital | (21766) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total distributions declared to common shareholders: | (22201) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in net assets from operations and distributions | 223254 |
| **Share transactions:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Value of distributions reinvested | 2131 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of shares redeemed | (152321) |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital gains from the retirement of tendered shares | 47319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net decrease from shares transactions | (102871) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total increase in net assets | 120383 |
| **Net assets** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of year | 790825 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of year | $911208 |
| **Change in Common Shares** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Issued for distribution reinvested | 162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares redeemed | (8750) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net decrease in common shares | (8588) |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CASH FLOWS**

**(in thousands)**

---

| | |
|:---|:---|
| | **For the Six Months Ended December 31,** |
| | **2022** |
| **Cash flows from operating activities** |  |
| Net loss | $(81573) |
| **Adjustments to reconcile net loss to net cash provided by operating activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 7175 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible lease liabilities | (743) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;Paid-in-kind interest ($844 with related parties) | (2872) |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized (gain) loss | 2323 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized (gain) loss on investments held at fair value ($(57847) with related parties) | 92031 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in losses of unconsolidated ventures ($(1935) with related parties) | 2257 |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions of earnings from unconsolidated ventures ($277 with related parties) | 2418 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for life settlement premiums | (2576) |
| Changes in operating assets and liabilities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax asset | (2247) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 10720 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes payable | (2069) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating assets | 606 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating liabilities | 5914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 31431 |
| **Cash flows from investing activities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions from CLO investments | 18105 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of investments | 14246 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of investments | (11276) |
| &nbsp;&nbsp;&nbsp;&nbsp;Contributions to equity method investments | (1382) |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions to consolidated real estate investments | (5966) |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisitions of consolidated real estate investments | (26500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of life settlement policies | (8700) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from life settlement policy maturities | 7055 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (14418) |
| **Cash flows from financing activities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds received from notes payable | 13250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage payments | (1181) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage borrowing | 9543 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit facilities payments | (12500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage payments | (14410) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred financing costs paid | (379) |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to preferred shareholders | (2310) |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends paid to common shareholders | (11153) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (19140) |
| Net decrease in cash, cash equivalents and restricted cash | (2127) |
| Cash, cash equivalents and restricted cash, beginning of period (Note 3) | 50776 |
| Cash, cash equivalents and restricted cash, end of period | $48649 |
| **Supplemental Disclosure of Cash Flow Information** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $5284 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax paid | $1501 |
| **Supplemental Disclosure of Noncash Activities** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capitalized construction costs included in accounts payable and other accrued liabilities | $3883 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value assets acquired from the contribution of equity method investments\* | $62510 |

---

\*For more information about this transaction, refer to Note 9. Equity Method Investments—NexPoint Storage Partners Operating Company, LLC

.

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CASH FLOWS (Predecessor Basis)**

**(in thousands)**

---

| | |
|:---|:---|
| | For the Six Months Ended June 30, |
| | **2022** |
| **Cash flows from operating activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase in net assets resulting from operations | $126834 |
| **Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of investment securities from unaffiliated issuers | (350369) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of investment securities from affiliated issuers | (105674) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the disposition of investment securities from unaffiliated issuers | 428007 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the disposition of investment securities from affiliated issuers | 2135 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of securities sold short | (177) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization (accretion) of premiums | (171) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain) loss on investments from unaffiliated issuers | (28893) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain) loss on securities sold short | (253) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation on unaffiliated investments | 43752 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized appreciation on investments in affiliated investments | (76346) |
| Changes in operating assets and liabilities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends and interest receivable | 741 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due from custodian | 192 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (1583) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclaim receivable | 1250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign tax reclaim receivable | (1274) |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to broker | (1695) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for administrative fees | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for investment advisory fees | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to custodian | (110) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for interest expense and commitment fees | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | (150) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 36336 |
| **Cash flows from financing activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on notes payable | (26500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions paid in cash | (9714) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from shares sold | 1288 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from dividend reinvestment | (44) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (34970) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase in cash | 1366 |
| **Cash, cash equivalents and restricted cash:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of period | 2678 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of period | $4044 |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

---

| | |
|:---|:---|
| **Supplemental disclosure of cash flow information** | |
| &nbsp;&nbsp;&nbsp;&nbsp;Reinvestment of distributions | $1425 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for interest expense and commitment fees | $614 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF CASH FLOWS (Predecessor Basis)**

**(in thousands)**

---

| | |
|:---|:---|
| | **For the Year Ended December 31,** |
| | **2021** |
| **Cash flows from operating activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase in net assets resulting from operations | $245455 |
| **Adjustments to reconcile increase in net assets to net cash provided by operating activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of investment securities from unaffiliated issuers | (690913) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of investment securities from affiliated issuers | (438578) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the disposition of investment securities from unaffiliated issues | 745929 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the disposition of investment securities from affiliated issues | 305977 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from return of capital of investment securities from affiliated issues | 52310 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of securities sold short | (414) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization/(accretion) of premiums | (490) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain)/loss on unaffiliated issuers | 42530 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain)/loss on affiliated issuers | (458) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain)/loss on securities sold short | (351) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation on unaffiliated investments | (41129) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized depreciation on investments in affiliated investments | (175495) |
| Changes in operating assets and liabilities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends and interest receivable | 202 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due from custodian | (192) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 743 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reclaim Receivable | (1250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to broker | (5687) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for admin fees | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for audit fees | (391) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for investment advisory fees | 103 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to custodian | 110 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payable for interest expense and commitment fees | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | (7) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash flow provided by operating activities | 38066 |
| **Cash flows from financing activities:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of cumulative preferred shares | 83252 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on notes payable | (2500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions paid in cash | (20070) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on shares redeemed | (105002) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from shares sold | (72) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flow used in financing activities | (44392) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net decrease in cash | (6326) |
| **Cash, cash equivalents, foreign currency and restricted cash:** |  |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning of period | 9004 |
| &nbsp;&nbsp;&nbsp;&nbsp;End of period | $2678 |
| **Supplemental disclosure of cash flow information** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Reinvestment of distributions | $2131 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for interest expense and commitment fees | $2371 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1. Organization and Description of Business**

NexPoint Diversified Real Estate Trust (the "Company", "we", "us", or "our") was formed in Delaware and has elected to be taxed as a real estate investment trust (a "REIT"). Substantially all of the Company's business is conducted through NexPoint Diversified Real Estate Trust Operating Partnership, L.P. (the "OP"), the Company's operating partnership. The Company conducts its business (the "Portfolio") through the OP and its wholly owned taxable REIT subsidiaries ("TRSs"). The Company's wholly owned subsidiary, NexPoint Diversified Real Estate Trust OP GP, LLC (the "OP GP"), is the sole general partner of the OP. As of December 31, 2022, there were 2,000 OP Units outstanding, of which 100.0% were owned by the Company.

On July 1, 2022 (the "Deregistration Date"), the Securities and Exchange Commission (the "SEC") issued an order pursuant to Section 8(f) of the Investment Company Act of 1940 (the "Investment Company Act") declaring that the Company has ceased to be an investment company under the Investment Company Act (the "Deregistration Order"). The issuance of the Deregistration Order enables the Company to proceed with full implementation of its new business mandate to operate as a diversified REIT that focuses primarily on investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity (the "Business Change").

The Company is externally managed by NexPoint Real Estate Advisors X, L.P. (the "Adviser"), through an agreement dated July 1, 2022, amended on October 25, 2022, (the "Advisory Agreement"), by and among the Company and the Adviser for an initial three-year term that will expire on July 1, 2025 and successive one-year terms thereafter unless earlier terminated. The Adviser manages the day-to-day operations of the Company and provides investment management services. The Company had no employees as of December 31, 2022. All of the Company's investment decisions are made by the Adviser, subject to general oversight by the Adviser's investment committee and our board of trustees (the "Board"). The Adviser is wholly owned by NexPoint Advisors, L.P. (the "Sponsor" or "NexPoint").

As a diversified REIT, the Company's primary investment objective is to provide both current income and capital appreciation. The Company seeks to achieve this objective through the Business Change. Target underlying property types primarily include, but are not limited to, single-family rentals, multifamily, self-storage, life science, office, industrial, hospitality, net lease and retail. The Company may, to a limited extent, hold, acquire or transact in certain non-real estate securities.

**2. Summary of Significant Accounting Policies**

*Basis of Accounting*

Prior to the Deregistration Date, the Company was accounted for as an investment company in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 946, Financial Services – Investment Companies, or the "Predecessor Basis." Upon the Deregistration Order, the Company discontinued the use of the guidance in FASB ASC 946 and prospectively applied the guidance under generally accepted accounting principles in the United States ("GAAP") required for companies that are not investment companies, or what we refer to as the "Successor Basis". As a result of these changes, our consolidated financial statements as of and for the six months ended December 31, 2022, are accounted for using the Successor Basis and are presented separately from our consolidated financial statements on the Predecessor Basis, as of and for the periods prior to the Deregistration Date. The fair value of the Company's investments and consolidated operating properties as of the Deregistration Date became the new basis in accordance with FASB ASC 946. Due to this change, the Company reallocated these fair values to the assets and liabilities of operating properties.

The accompanying consolidated financial statements are presented in accordance with GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the consolidated financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. All significant intercompany accounts and transactions have been eliminated in consolidation.

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

The accompanying consolidated financial statements have been prepared according to the rules and regulations of the SEC.

In the opinion of management, all adjustments and eliminations necessary for the fair presentation of the Company's financial position as of December 31, 2022, and December 31, 2021 (Predecessor Basis) and results of operations for the six months ended December 31, 2022, the six months ended June 30, 2022 (Predecessor Basis) and twelve months ended December 31, 2021 (Predecessor Basis) have been included. Such adjustments are normal and recurring in nature.

*Principles of Consolidation*

Upon the application for the historical cost accounting basis, the Company accounts for partnerships, joint ventures and other similar entities in which it holds an ownership interest in accordance with FASB ASC 810, *Consolidation*. The Company first evaluates whether each entity is a variable interest entity ("VIE"). Under the VIE model, the Company consolidates an entity when it has control to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest.

The consolidated financial statements include the accounts of the Company and its subsidiaries, including the OP and its subsidiaries. The Company's sole significant asset is its investment in the OP, and consequently, substantially all of the Company's assets and liabilities represent those assets and liabilities of the OP.

*Purchase Price Allocation*

Upon acquisition of a property considered to be an asset acquisition, the purchase price and related acquisition costs ("total consideration") are allocated to land, buildings, improvements, furniture, fixtures, and equipment, and intangible lease assets and liabilities in accordance with FASB ASC 805, *Business Combinations.* 

The allocation of total consideration, which is determined using inputs that are classified within Level 3 of the fair value hierarchy established by FASB ASC 820, *Fair Value Measurement and Disclosures* ("ASC 820") (see Note 10), is based on management's estimate of the property's "as-if" vacant fair value and is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. If any debt is assumed in an acquisition, the difference between the fair value, which is estimated using inputs that are classified within Level 2 of the fair value hierarchy, and the face value of debt is recorded as a premium or discount and amortized as interest expense over the life of the debt assumed.

Real estate assets, including land, buildings, improvements, furniture, fixtures and equipment, and intangible lease assets are stated at historical cost less accumulated depreciation and amortization. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. Expenditures for improvements, renovations, and replacements are capitalized at cost. Real estate-related depreciation and amortization are computed on a straight-line basis over the estimated useful lives as described in the following table:

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| | | | |
|:---|:---|:---|:---|
| | Years | Years | Years |
| Land | Not depreciated | Not depreciated | Not depreciated |
| Buildings | 30 | - | 40 |
| Improvements | 5 | - | 40 |
| Furniture, fixtures, and equipment | 5 | - | 10 |
| Intangible lease assets and liabilities | Over lease term | Over lease term | Over lease term |

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Construction in progress includes the cost of renovation projects being performed at the various properties. Once a project is complete, the historical cost of the renovation is placed into service in one of the categories above depending on the type of renovation project and is depreciated over the estimated useful lives as described in the table above.

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*Fair Value Measurements*

Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB ASC 820, *Fair Value Measurement and Disclosures* establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 inputs are the unobservable inputs for the asset or liability, which are typically based on an entity's own assumption, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on input from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company utilizes independent third parties to perform the allocation of value analysis for each property acquisition and to perform the market valuations on its derivative financial instruments and has established policies, as described above, processes and procedures intended to ensure that the valuation methodologies for investments and derivative financial instruments are fair and consistent as of the measurement date.

*Valuation of Investments*

As of December 31, 2022, the Company's fair valued investments consisted of senior loans, corporate bonds, collateralized loan obligations ("CLOs"), convertible notes, common stocks, rights, warrants, life settlement contracts, LP interests and LLC interests. The fair value of the Company's senior loans, bonds, and CLOs are generally based on quotes received from brokers or independent pricing services. Senior loans, bonds, and CLOs with quotes that are based on actual trades with a sufficient level of activity on or near the measurement date are classified as Level 2 assets. Senior loans, bonds, and CLOs that are priced using quotes derived from implied values, indicative bids, or a limited number of actual trades are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable. The Company has elected for certain of the equity method investments to be measured using fair value.

The fair value of the Company's common stocks, rights, and warrants that are not actively traded on national exchanges are generally priced using quotes derived from implied values, indicative bids, or a limited amount of actual trades and are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable. At the end of each calendar quarter, the Adviser evaluates the Level 2 and 3 assets and liabilities for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third party services, and the existence of contemporaneous, observable trades in the market. Additionally, the Adviser evaluates the Level 1 and 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values the Company may ultimately realize. Further, such investments may be subject to legal and other restrictions on resale or otherwise be less liquid than publicly traded securities.

The fair value of the Company's common stocks, exchange-traded funds, other registered investment companies and warrants that are not actively traded on national exchanges are generally priced using quotes derived from implied values, indicative bids, or a limited amount of actual trades and are classified as Level 3 assets because the inputs used by the

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brokers and pricing services to derive the values are not readily observable. The Company's real estate investments include equity interests in limited liability companies and equity issued by REITs that invest in commercial real estate. The fair value of real estate investments that are not actively traded on national exchanges are based on internal models developed by the Adviser. The significant inputs to the models include cash flow projections for the underlying properties, capitalization rates and appraisals performed by independent valuation firms. These inputs are not readily observable, and the Company has classified the investments as Level 3 assets. Exchange-traded options are valued based on the last trade price on the primary exchange on which they trade. If an option does not trade, the mid-price, which is the mean of the bid and ask price, is utilized to value the option.

The fair value of the Company's convertible notes are categorized as Level 3 assets in the fair value hierarchy. Convertible notes are valued using a discounted cash flow model using discount rates derived from observable market data applied to the internal rate of return implied by the expected contractual cash flows.

Upon initial acquisition, the Company's life settlement contracts are recognized at the transaction price. For each subsequent reporting period, the investments are measured at fair value by a third-party valuation specialist using a life settlement pricing model and are categorized as Level 3 assets in the fair value hierarchy. Key assumptions utilized in determining fair value include but are not limited to: (i) life expectancy estimates provided by independent third party underwriters based on actuarially developed mortality tables and industry life expectancy reports; (ii) future premium estimates; (iii) rates of return consistent with those sought by independent purchasers of life policies at the time of purchase; and (iv) offers and/or commitments from purchasers. In addition, the valuation agent will also consider recent sales as well as offers received for the life policies deemed likely to close in the near future in estimating fair value.

The assumptions used to value life policies are by nature, inherently uncertain and the effect of changes in estimates may be material. The fair value measurement used in estimating the present value calculations are derived from valuation techniques that include inputs that are not based on observable market data. Changes in the fair value of the life settlement contracts are reported as net unrealized gains or losses on the Consolidated Statement of Operations (Successor Basis). Upon the death of an insured or the sale of a life policy, the Company will recognize the difference between the proceeds received and the cost of the life policy as a realized gain or loss in the Company's Consolidated Statement of Operations (Successor basis).

*Impairment*

Real estate assets and equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, the Company will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company's impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. The Company recognizes its share of the investee's comprehensive income or loss for equity method investments. If the investee is loss-making, the Company recognizes its share of the losses until its equity interest is reduced to zero. As of December 31, 2022, the Company has not recorded any impairment on its real estate assets.

*Held for Sale*

The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with GAAP. At that time, the Company presents the net real estate assets and the net real estate liabilities associated with the real estate held for sale separately in its consolidated balance sheet, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of December 31, 2022, there are no properties held for sale.

*Income Taxes*

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), effective for our taxable year ended December 31, 2021. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement to distribute annually at least

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90% of its "REIT taxable income," as defined by the Code, to its shareholders. As a REIT, the Company will be subject to federal income tax on its undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions it pays with respect to any calendar year are less than the sum of (1) 85% of its ordinary income, (2) 95% of its capital gain net income and (3) 100% of its undistributed income from prior years. The Company intends to operate in such a manner so as to qualify as a REIT, but no assurance can be given that the Company will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes.

If the Company fails to meet these requirements, it could be subject to federal income tax on all of the Company's taxable income at regular corporate rates for that year. The Company would not be able to deduct distributions paid to shareholders in any year in which it fails to qualify as a REIT. Additionally, the Company will also be disqualified from electing to be taxed as a REIT for the four taxable years following the year during which qualification was lost unless the Company is entitled to relief under specific statutory provisions. As of December 31, 2022, the Company believes it is in compliance with all applicable REIT requirements.

The Company has recorded a current income tax expense of $2.0 million for the six months ended June 30, 2022 and $10.7 million associated with the TRSs for the six months ended December 31, 2022, which is largely driven by income from the Company's legacy CLO investments. The tax expense is partially offset by removing the valuation allowance on a deferred tax asset of $2.2 million and increased by a 2021 return-to-provision adjustment of $1.5 million for a net expense of $12.0 million for the twelve months ended December 31, 2022, that is recorded on the Consolidated Statement of Operations.

The Company evaluates the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" (greater than 50% probability) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. The Company's management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states. As of December 31, 2022 and to the knowledge of the Company, the Company has no examinations in progress and none are expected at this time.

The Company recognizes its tax positions and evaluates them using a two-step process. First, the Company determines whether a tax position is more-likely-than-not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, the Company will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.

The Company had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 31, 2022. The Company and its subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2021, 2020 and 2019 tax years remain open to examination by tax jurisdictions to which the Company and its subsidiaries are subject. When applicable, the Company recognizes interest and/or penalties related to uncertain tax positions on its consolidated statement of operations and comprehensive income (loss). The Company has not recorded any uncertain tax positions for the six months ended June 30, 2022 or six months ended December 31, 2022.

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*Deferred Tax Assets*

As of December 31, 2022, significant components of the net deferred tax assets ("DTA") of the Company's TRSs were as follows (in thousands):

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| | |
|:---|:---|
| | **Deferred Tax Asset** |
| Capital loss carryover from December 31, 2021 | $2050 |
| Capital loss carryover utilized in 2022 | (1924) |
| Net operating loss carryover from December 31, 2021 | 590 |
| Net operating loss carryover utilized in 2022 | (119) |
| Unrealized tax loss on investments | 16677 |
| Total deferred tax assets | $17274 |
| Valuation allowance | (15027) |
| Net deferred tax asset | $2247 |

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The Company may not offset tax assets or liabilities from one TRS with those of another TRS. NHF TRS, LLC, one of the Company's TRSs, is estimated to generate a net taxable capital gain of $16.4 million for the six months ended December 31, 2022. The Company believes it is more likely than not that it will be able to harvest capital losses within this TRS during the three succeeding taxable years to be eligible for a capital loss carryback refund claim and has therefore not applied a valuation allowance to the extent of the expected future refund claim. As such, the Company has recorded a valuation allowance of $15.0 million against the Company's gross deferred tax assets to arrive at a net DTA of $3.4 million to reflect the expected tax benefit associated with the unrealized tax losses at this TRS. NREO TRS, LLC ("NREO TRS"), one of the Company's TRSs, has an estimated net operating loss balance of $2.2 million as of December 31, 2022 that does not have an expiration date as well as an estimated $0.6 million capital loss balance as of December 31, 2022, that will expire if not utilized within the succeeding five taxable years. The Company believes that it will be able to fully utilize the tax assets from NREO TRS and has not therefore applied a valuation allowance to the $0.6 million DTA generated by this TRS.

*Cash, Cash Equivalents and Restricted Cash*

The Company considers all highly liquid investments purchased with an original maturity of six months or less to be cash equivalents. Cash and cash equivalents are stated at cost, which approximates fair value. Substantially all amounts on deposit with major financial institutions exceed insured limits. Restricted cash represents cash deposited in accounts related to security deposits, property taxes, insurance premiums and deductibles and other lender-required escrows. Amounts deposited in the reserve accounts associated with the loans can only be used as provided for in the respective loan agreements, and security deposits held pursuant to lease agreements are required to be segregated.

*Income Recognition*

*Rental Income* – The Company has made several investments in direct real estate. The primary operations of these direct real estate investments consist of rental income earned from its tenants under lease agreements. Rental income is recognized on the straight-line method over the related terms of the leases. Tenant and resident reimbursements and other income consist of charges billed to tenants for utilities, administrative, application and other fees and are recognized when earned which is included in rental income in the accompanying consolidated statements of operations.

In July 2018, the FASB issued Accounting Standards Update ("ASU") 2018-11, *Leases – Targeted Improvements* ("ASU 2018-11"), which provides entities with relief from the costs of implementing certain aspects of ASU 2016-02. ASU 2018-11 provides a practical expedient that allows lessors to not separate lease and non-lease components in a contract and allocate the consideration in the contract to the separate components if both (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease. The Company elected the practical expedient to account for lease and non-lease components as a single component in lease contracts where the Company is the lessor. The Company implemented the provisions of ASU 2018-11 and 2016-02, collectively Topic 842 Leases, effective July 1, 2022. The Company presents leases in the Consolidated Statements of Operations and began presenting all rentals and reimbursements from tenants as a single line item within rental income.

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*Interest Income* – Debt investments where the Company expects to collect the contractual interest and principal payments are considered to be performing. The Company recognizes income on performing debt investments in accordance with the terms of the investment on an accrual basis. Interest income also includes amortization of loan premiums or discounts and loan origination costs and prepayment penalties.

*Dividend Income* – Dividends and other corporate actions are recorded on the ex-dividend date except for certain foreign corporate actions, which are recorded as soon after ex-dividend date as such information becomes available and is verified.

*Realized Gain (Loss) on Investments* - The Company recognizes the excess, or deficiency, of net proceeds received, less the carrying value of such investments, as realized gains or losses, respectively. The Company reverses cumulative, unrealized gains or losses previously reported in its consolidated statement of operations on both the Successor and Predecessor basis with respect to the investment sold at the time of the sale.

*Unrealized Gain (Loss) on Investments* – Unrealized gains and losses represent changes in fair value for equity method investments, CLO equity investments, bonds, common stock, convertible notes, LLC interests, LP interests, rights and warrants, and senior loans for which the fair value option has been elected.

*Expense Recognition*

Interest expense, in accordance with the Company's financing agreements, is recorded on the accrual basis. General and administrative expenses are expensed as incurred.

*Property operating expenses -* Property operating expenses include property maintenance costs, salary and employee benefit costs, utilities, casualty-related expenses and recoveries and other property operating costs.

*Property management fees -* Property management fees include fees paid to NexVest, our property manager, for managing each property directly or indirectly owned by us (see Note 14 to our consolidated financial statements).

*Real estate taxes and insurance -* Real estate taxes include the property taxes assessed by local and state authorities depending on the location of each property. Insurance includes the cost of commercial, general liability, and other needed insurance for each property

*Advisory and administrative fees -* Advisory and administrative fees include the fees paid to our Adviser pursuant to the Advisory Agreement (see Note 14 to our consolidated financial statements).

*Property general and administrative expense* - Property general and administrative expenses include the costs of marketing, professional fees, general office supplies, and other administrative related costs of each property.

*Corporate general and administrative expenses* - Corporate general and administrative expenses include, but are not limited to, audit fees, legal fees, listing fees, board of director fees, equity-based compensation expense, investor relations costs and payments of reimbursements to our Adviser for operating expenses. Corporate general and administrative expenses and the advisory and administrative fees paid to our Adviser will not exceed 1.5% of Managed Assets (as defined below) per calendar year (or part thereof that the Advisory Agreement is in effect), calculated in accordance with the Advisory Agreement, or the Expense Cap (as defined below). The Expense Cap does not limit the reimbursement by us of expenses related to securities offerings paid by our Adviser. The Expense Cap also does not apply to legal, accounting, financial, due diligence, and other service fees incurred in connection with mergers and acquisitions, extraordinary litigation, or other events outside our ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. Additionally, in the sole discretion of the Adviser, the Adviser may elect to waive certain advisory and administrative fees otherwise due. If advisory and administrative fees are waived in a period, the waived fees for that period are considered to be waived permanently and the Adviser may not be reimbursed in the future.

*Conversion expense -* Conversion expenses include the costs of the Business Change in conjunction with the Deregistration Order, which primarily include legal fees and other fees in preparation of the conversion.

*Depreciation and amortization* - Depreciation and amortization costs primarily include depreciation of our properties and amortization of leases or expenses.

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*Recent Accounting Pronouncements*

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

*Investments*

The Company holds investments in publicly traded companies and privately held entities primarily involved in the life science, multifamily, self-storage, single-family rental, mortgage lending, and hospitality industries. Each investment is evaluated to determine whether the Company has the ability to exercise significant influence, but not control, over an investee. Investments are evaluated in which Company ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee's voting stock with a presumption that the Company has this ability. For our investments in limited partnerships and functional equivalents that maintain specific ownership accounts, we presume that such ability exists when our ownership interest exceeds 3% to 5%. In addition to the Company's ownership interest, the Company also considers whether it has a board seat or whether it participates in the policy-making process, among other criteria, to determine if we have an ability to exert significant influence, but not control, over an investee. If we determine that we have such ability, but we do not control, we account for the investment under the equity method of accounting, as described below.

*Investments that qualify for the equity method of accounting* – Under the equity method of accounting, the Company initially recognizes its investment at cost and subsequently adjusts the carrying amount of the investments for its share of earnings and losses reported by the investee, distributions received, and other-than-temporary impairments. The Company has elected the fair value option for several of its investments that would otherwise be accounted for under the equity method (See Note 10). Distributions from these investments are accounted for as Interest and Dividend income and mark-to-market gains and losses are included in Change in Unrealized Gains/(Losses) on the consolidated Statement of Operations. For more information about the Company's investments accounted for under the equity method, refer to Note 8 – Equity Method Investments. The Company has elected for certain of the equity method investments to be measured using fair value.

*Investments that do not qualify for the equity method of accounting* – For investees over which we determine that we do not have the ability to exercise significant influence or control, we account for each investment depending on whether it is an investment in a (i) publicly traded company, (ii) privately held entity that reports net asset value ("NAV") per share, or (iii) privately held entity that does not report NAV per share, as described below.

*Investments in publicly traded companies* – Our investments in publicly traded companies are classified as investments with readily determinable fair values and are presented at fair value in our consolidated balance sheets, with changes in fair value classified in change in unrealized gain (loss) in our consolidated statement of operations. The fair values of our investments in publicly traded companies are determined based on sales prices or quotes available on securities exchanges.

*Investments in privately held companies* – Our investments in privately held entities without readily determinable fair values consist of (i) investments in privately held entities that report NAV per share and (ii) investments in privately held entities that do not report NAV per share. These investments are accounted for as follows:

<u>Investments in privately held entities that report NAV per share</u> – Investments in privately held entities that elect the fair value option that report NAV per share, such as our privately held investments in limited partnerships, are presented at fair value using NAV, with changes in fair value recognized in net income. We use NAV per share reported by limited partnerships generally without adjustment, unless we are aware of information indicating that the NAV reported by a limited partnership does not accurately reflect the fair value of the investment at our reporting date.

<u>Investments in privately held entities that do not report NAV per share</u> – Investments in privately held entities that do not report NAV per share are accounted for using a valuation technique described further in Note 10 - Fair Value of Derivatives and Financial Instruments.

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*Impairment evaluation of equity method investments* – We monitor equity method investments not reported at fair value for indicators that a decrease in the value of the investment has occurred that is other than temporary. If such indicators are present, we are required to estimate the investment's fair value and immediately recognize an impairment charge in an amount equal to the investment's carrying value in excess of its estimated fair value.

*Distributions from equity method investments*

We use the "nature of the distribution" approach to determine the classification within our consolidated statements of cash flows of cash distributions received from equity method investments, including our unconsolidated real estate joint ventures and equity method non-real estate investments. Under this approach, distributions are classified based on the nature of the underlying activity that generated the cash distributions. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are classified as cash inflows from operating activities, and those in excess of that amount are classified as cash inflows from investing activities.

**3. Business Change**

As discussed in Note 1 and Note 2, on the Deregistration Date, the SEC issued an order pursuant to Section 8(f) of the Investment Company Act declaring that the Company has ceased to be an investment company under the Investment Company Act. The issuance of the Deregistration Order enables the Company to proceed with full implementation of the Business Change. Upon the Deregistration Order, the Company discontinued the use of guidance in FASB ASC 946. To effectuate this change, the fair values of the Company's investments became the July 1, 2022 cost basis. The change also required the consolidation of several investments that were previously not required to be consolidated under FASB ASC 946. The table below illustrates the changes from the June 30, 2022 balance sheet using the Predecessor Basis and the July 1, 2022 opening balance sheet using the Successor Basis (dollars in thousands).

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| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2022** | **Difference** | | **July 1, 2022** |
| | **(Predecessor Basis)** | | | **(Successor Basis)** |
| **ASSETS:** | | | | |
| Consolidated Real Estate Investments |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Land | $— | $21208 | (1) | $21208 |
| &nbsp;&nbsp;&nbsp;&nbsp;Buildings and improvements |  | 158304 | (1) | 158304 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible lease assets |  | 10979 | (1) | 10979 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction in progress |  | 46052 | (1) | 46052 |
| &nbsp;&nbsp;&nbsp;&nbsp;Furniture, fixtures, and equipment |  | 349 | (1) | 349 |
| Total Consolidated Real Estate Investments |  | 236892 |  | 236892 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments, at fair value | 1129544 | (324927) | (2) | 804617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method investments |  | 143264 | (3) | 143264 |
| &nbsp;&nbsp;&nbsp;&nbsp;Life insurance policies, at fair value |  | 56440 | (2) | 56440 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 4044 | 12092 | (1) | 16136 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash |  | 34640 | (1) | 34640 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net |  | 4849 | (1) | 4849 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest and dividends | 172 | 2644 | (1) | 2816 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other assets | 3896 | 2479 | (1) | 6375 |
| **TOTAL ASSETS** | $1137656 | $168373 |  | $1306029 |
| **Liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgages payable, net | $— | $145908 | (1) | $145908 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable, net | 16000 | 7500 | (1) | 23500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage borrowing | 7492 |  |  | 7492 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other accrued liabilities | 1296 | 2026 | (1) | 3322 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued real estate taxes payable |  | 2323 | (1) | 2323 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable |  | 639 | (1) | 639 |
| &nbsp;&nbsp;&nbsp;&nbsp;Security deposit liability |  | 434 | (1) | 434 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid rents |  | 1845 | (1) | 1845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible lease liabilities |  | 6770 | (1) | 6770 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to affiliates |  | 928 | (1) | 928 |
| **Total Liabilities** | 24788 | 168373 |  | 193161 |
| &nbsp;&nbsp;&nbsp;&nbsp;Series A cumulative preferred shares, net of deferred financing costs | 83252 | (83252) | (4) |  |
| Stockholders' Equity: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred shares, $0.001 par value: 4,800,000 shares authorized; 3,359,593 shares issued and outstanding |  | 3 |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common shares, $0.001 par value: unlimited shares authorized; 37,171,807 shares issued and outstanding | 37 |  |  | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 916596 | 83249 | (4) | 999845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated earnings less dividends | 112983 |  |  | 112983 |
| **Total Stockholders' Equity** | 1029616 | 83252 |  | 1112868 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $1137656 | $168373 |  | $1306029 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Change due to consolidation of subsidiaries that were previously accounted for at fair value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Change due to investments that were previously accounted for at fair value being consolidated or accounted for using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Change due to applying the equity method to investments that were previously carried at fair value. See Note 9 for more information on the Company's equity method investments.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The mandatory redemption feature of the Series A Preferred Shares (defined below) expired on the Deregistration Date. As such, the Series A Preferred Shares are now accounted for as a component permanent equity.

**4. Investments in Real Estate Subsidiaries**

The Company conducts its operations through the OP, which owns several real estate properties through single asset limited liability companies that are special purpose entities ("SPEs"). The Company consolidates the SPEs that it controls as well as any VIEs where it is the primary beneficiary. All of the properties the SPEs own are consolidated in the Company's consolidated financial statements. The assets of each entity can only be used to settle obligations of that particular entity, and the creditors of each entity have no recourse to the assets of other entities or the Company.

As of December 31, 2022, the Company, through the OP, owned four properties through SPEs. The following table represents the Company's ownership in each property by virtue of its 100% ownership of the SPEs that directly own the title to each property as of December 31, 2022:

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| | | | | |
|:---|:---|:---|:---|:---|
| | | | | **Effective Ownership Percentage at** |
|<br>**Property Name** | |<br>**Location** |<br>**Year Acquired** | **December 31, 2022** |
| White Rock Center |  | Dallas, Texas | 2013 | 100% |
| 5916 W Loop 289 |  | Lubbock, Texas | 2013 | 100% |
| Cityplace Tower |  | Dallas, Texas | 2018 | 100% |
| NexPoint Dominion Land, LLC | (1) | Plano, Texas | 2022 | 100% |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)NexPoint Dominion Land, LLC owns 100% of 21.5 acres of undeveloped land in Plano, Texas.<br>

**5. Real Estate Investments Statistics**

As of December 31, 2022, the Company was invested in two retail properties and one office and hospitality property (excluding investments in undeveloped land), as listed below:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | | **Average Effective Monthly <br>Occupied Rent Per Square Foot <br>\*(1) as of** | **% Occupied \*(2) as of** |
|<br>**Property Name** |<br>**Rentable Square <br>Footage\* <br>(in thousands)** |<br>**Property Type** | |<br>**Date <br>Acquired** | **December 31,<br>2022** | **December 31,<br>2022** |
| White Rock Center | 82793 | Retail |  | 6/13/2013 | $1.50 | 66.5% |
| 5916 W Loop 289 | 30140 | Retail |  | 7/23/2013 | $0.40 | 100.0% |
| Cityplace Tower | 1353087 | Office & Hospitality | (3) | 8/15/2018 | $2.10 | 32.9% |
|  | 1466020 |  |  |  |  |  |

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\*&nbsp;&nbsp;&nbsp;&nbsp;Information is unaudited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Average effective monthly occupied rent per square foot is equal to the average of the contractual rent for commenced leases as of December 31, 2022, minus any tenant concessions over the term of the lease, divided by the occupied square footage of commenced leases as of December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Percent occupied is calculated as the rentable square footage occupied as of December 31, 2022, divided by the total rentable square footage, expressed as a percentage.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Cityplace is currently under development and the Company is converting part of the property into a hotel, which was still under construction as of December 31, 2022.

**6. Consolidated Real Estate Investments**

As of December 31, 2022, the major components of the Company's investments in real estate held by SPEs the Company consolidates, which are included in "Consolidated Real Estate Investments" on the Consolidated balance sheet, were as follows (in thousands):

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Operating Properties** | **Land** | **Buildings and <br>Improvements** | **Intangible Lease Assets** | **Intangible Lease <br>Liabilities** | **Construction in Progress** | **Furniture, Fixtures, and <br>Equipment** | **Totals** |
| White Rock Center | $1315 | $10314 | $1921 | $(101) | $— | $5 | $13454 |
| 5916 W Loop 289 | 1081 | 2939 |  |  |  |  | 4020 |
| Cityplace Tower | 18812 | 161216 | 9058 | (6669) | 39731 | 349 | 222497 |
| NexPoint Dominion Land, LLC | 26500 |  |  |  |  |  | 26500 |
|  | 47708 | 174469 | 10979 | (6770) | 39731 | 354 | 266471 |
| Accumulated depreciation and amortization |  | (4114) | (2863) | 743 |  | (181) | (6415) |
| **Total Operating Properties** | $47708 | $170355 | $8116 | $(6027) | $39731 | $173 | $260056 |

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Depreciation expense was $4.3 million for the six months ended December 31, 2022. Amortization expense related to the Company's intangible lease assets was $2.9 million and $0.7 million for the Company's intangible lease liabilities for the six months ended December 31, 2022. The net amount amortized as an increase to rental revenue for capitalized above and below-market lease intangibles was $0.6 million for the six months ended December 31, 2022.

*Acquisitions*

On August 9, 2022, the Company purchased undeveloped land in Plano, Texas through a wholly owned SPE, as detailed in the table below (dollars in thousands). The details of the Company's acquisitions held by SPEs the Company consolidates for the six months ended December 31, 2022 were as follows (dollars in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investment Property** | **Location** | **Property Type** | **Date of <br>Acquisition** | **Purchase <br>Price** | **Debt** | **Effective <br>Ownership** |
| NexPoint Dominion Land, LLC | Plano, Texas | Land | August 9, 2022 | $26500 | $13250 | 100% |

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**7. Debt**

*Cityplace Debt*

The Company has debt on its office and hospitality real estate property. The debt is limited recourse to the Company and encumbers the property. The debt had an original maturity of September 8, 2022, and the Company has deferred the maturity date with the lender to May 8, 2023, with the possibility to extend for an additional four months to September 8, 2023 provided certain metrics are met. The purpose of the deferral was to allow for continued discussions around refinancing the debt. Management recognizes that finding an alternative source of funding is necessary to repay the debt by the maturity date. Management is evaluating multiple options to fund the repayment of the $144.7 million principal balance outstanding as of December 31, 2022, including refinancing the debt, securing additional equity or debt financing, selling a portion of the portfolio, or any combination thereof. Management believes that there is sufficient time before the maturity date and that the Company has sufficient access to capital to ensure the Company is able to meet its obligations as they

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become due. Due to the short term nature of the debt, the fair value of the debt is approximately the outstanding balance. The below table contains summary information related to the mortgages payable (dollars in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **Outstanding principal as of <br>December 31, 2022** | **Interest Rate** | **Maturity Date (1)** |
| &nbsp;&nbsp;&nbsp;Note A-1 | $102795 | 6.47% | 5/8/2023 |
| &nbsp;&nbsp;&nbsp;Note A-2 | 22486 | 10.47% | 5/8/2023 |
| &nbsp;&nbsp;&nbsp;Note B-1 | 12940 | 6.47% | 5/8/2023 |
| &nbsp;&nbsp;&nbsp;Note B-2 | 3212 | 10.47% | 5/8/2023 |
| &nbsp;&nbsp;&nbsp;Mezzanine Note 1 | 2831 | 10.47% | 5/8/2023 |
| &nbsp;&nbsp;&nbsp;Mezzanine Note 2 | 404 | 10.47% | 5/8/2023 |
| Mortgages payable | 144668 |  |  |
| Deferred financing costs, net | (254) |  |  |
| **Mortgages payable, net** | $144414 |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)If certain extension conditions are met based on the terms in the loan agreement, the maturity date will be extended to September 8, 2023.

The weighted average interest rate of the Company's debt related to its Cityplace investment was 7.3% as of December 31, 2022.

The loan agreements contain customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events. As of December 31, 2022, the Company believes it is in compliance with all covenants.

*Notes Payable*

On August 9, 2022, the Company borrowed approximately $13.3 million from the seller, Gabriel Legacy, LLC to finance its acquisition of 21.5 acres of land in Plano, Texas held through NexPoint Dominion Land, LLC, a wholly owned subsidiary of the OP. Due to the short term nature of the note, the fair value of the note is approximately the outstanding balance. The note bears interest at an annual rate equal to the WSJ Prime Rate and matures on August 8, 2025.

*Credit Facility*

On January 8, 2021, the Company entered into a $30.0 million credit facility (the "Credit Facility") with Raymond James Bank, N.A. and drew the full balance. As of December 31, 2022, the Credit Facility, as amended, bore interest at the one-month London Inter-Bank Offered Rate ("LIBOR") plus 3.50% and matures on November 6, 2023. On March 6, 2023, the interest rate on the Credit Facility increased to one-month LIBOR plus 4.25%. The Company paid down $10.0 million on the Credit Facility during the year ended December 31, 2021. During the twelve months ended December 31, 2022, the Company paid down $9.0 million on the Credit Facility. As of December 31, 2022, the Credit Facility had an outstanding balance of $11.0 million. Due to the short term nature of the debt, the fair value of the debt is approximately the outstanding balance. Management believes that the Company has sufficient access to capital to ensure the Company is able to meet its obligations as they become due.

*Deferred Financing Costs*

The Company defers costs incurred in obtaining financing and amortizes the costs over the terms of the related loans using the straight-line method, which approximates the effective interest method. Deferred financing costs, net of amortization, are recorded as a reduction from the related debt on the Company's consolidated balance sheet. Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs.

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*Prime Brokerage Borrowing*

As of October 4, 2022, the Company paid down all outstanding borrowings through its prime brokerage account with Merrill Lynch Professional Clearing Corp. Effective July 2, 2022, the Company entered a prime brokerage account with Jefferies to hold securities owned by the Company. The Company from time to time borrows against the value of these securities. As of December 31, 2022, the Company had a margin balance of approximately $2.6 million outstanding with Jefferies bearing interest at the Overnight Bank Funding Rate plus 0.50%. Securities with a fair value of approximately $19.6 million are pledged as collateral against this margin balance. This arrangement has no stated maturity date. Due to the floating interest rate nature of the debt, the fair value of the debt is approximately the outstanding balance.

*Schedule of Debt Maturities*

The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to December 31, 2022 are as follows (in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **Mortgages Payable** | **Notes Payable** | **Total** |
| 2023 | $144668 | $11000 | $155668 |
| 2024 |  |  |  |
| 2025 |  | 13250 | 13250 |
| 2026 |  |  |  |
| 2027 |  |  |  |
| Thereafter |  |  |  |
| Total | $144668 | $24250 | $168918 |

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**8. Variable Interest Entities**

*Consolidated VIEs*

At each reporting period, the Company reassesses whether it remains the primary beneficiary for VIEs consolidated under the VIE model.

As of December 31, 2022, the Company has accounted for the following investments as unconsolidated VIEs:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Entities** | **Instrument** | **Asset Type** | **Percentage Ownership as of December 31, 2022** | **Relationship as of December 31, 2022** |
| *Unconsolidated Entities:* |  |  |  |  |
| &nbsp;&nbsp;NexPoint Real Estate Finance Operating Partnership, L.P. | LP interest | Mortgage | 16.1% | VIE |
| &nbsp;&nbsp;VineBrook Homes Operating Partnership, L.P. | LP interest | Single-family rental | 11.1% | VIE |
| &nbsp;&nbsp;NexPoint Storage Partners Operating Company, LLC | LLC interest | Self-storage | 30.5% | VIE |
| &nbsp;&nbsp;NexPoint Storage Partners, Inc. | Common stock | Self-storage | 53.1% | VIE |
| &nbsp;&nbsp;Perilune Aero Equity Holdings One, LLC | LLC interest | Aircraft | 16.4% | VIE |
| &nbsp;&nbsp;SFR WLIF III, LLC | LLC interest | Single-family rental | 20.0% | VIE |
| &nbsp;&nbsp;IQHQ Holdings, LP | LP interest | Life science | 1.2% | VIE |

---

**9. Equity Method Investments**

As discussed in Note 2, investments are evaluated in which Company ownership is equal to or greater than 20%, but less than or equal to 50%, of an investee's voting stock with a presumption that the Company has the ability to exercise significant influence but not control, over an investee. For our investments in limited partnerships and functional equivalents that maintain specific ownership accounts, we presume that such ability exists when our ownership interest exceeds 3% to 5%. In addition to the Company's ownership interest, the Company also considers whether it has a board seat or whether it participates in the policy-making process, among other criteria, to determine if we have an ability to exert significant influence, but not control, over an investee. If we determine that we have such ability but do not have control, we account for the investment under the equity method of accounting.

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Below is a summary of the Company's equity method investments as of December 31, 2022 (dollars in thousands):

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investee Name** | **Instrument** | **Asset Type** | **NXDT Percentage Ownership** | | **Investment Basis** | | **Share of Investee's Net Assets (1)** | **Basis Difference (2)** | **Share of Earnings (Loss)** |
| Sandstone Pasadena Apartments, LLC | LLC interest | Multifamily | 50.0% |  | $13013 |  | $— | $13013 | $(217) |
| AM Uptown Hotel, LLC | LLC interest | Hospitality | 60.0% | (3) | 27136 |  | 21334 | 5802 | (227) |
| SFR WLIF III, LLC | LLC interest | Single-family rental | 20.0% |  | 7272 |  | 7466 | (194) | 280 |
| Las Vegas Land Owner, LLC | LLC interest | Land | 77.0% | (4) | 12312 |  | 12312 |  |  |
| Perilune Aero Equity Holdings One, LLC | LLC interest | Aircraft | 16.4% |  | 10923 |  | 8751 | 2172 | 665 |
| Claymore Holdings, LLC | LLC interest | N/A | 50.0% | (5) |  | (6) |  |  |  |
| Allenby, LLC | LLC interest | N/A | 50.0% | (5) |  | (6) |  |  |  |
|  |  |  |  |  | $70656 |  | $49863 | $20793 | $501 |

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Below is a summary of the Company's investments that qualify for equity method accounting but the Company has elected to account for using the fair value option. Amounts are included in "investments, at fair value" on the consolidated balance sheet.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investee Name** | **Instrument** | **Asset Type** | **NXDT Percentage Ownership** | | **Investment Basis** | |
| NexPoint Real Estate Finance Operating Partnership, L.P. | LP interest | Mortgage | 16.1% | (7) | 77370 | (6) |
| NexPoint Real Estate Finance, Inc. | Common stock | Mortgage | 12.3% | (7) | 33369 | (6) |
| VineBrook Homes Operating Partnership, L.P. | LP interest | Single-family rental | 11.1% | (7) | 169661 | (6) |
| NexPoint Storage Partners, Inc. | Common stock | Self-storage | 53.1% | (3) | 103695 | (6) |
| NexPoint Storage Partners Operating Company, LLC | LLC interest | Self-storage | 30.5% |  | $56505 | (6) |
| NexPoint SFR Operating Partnership, L.P. | LP interest | Single-family rental | 31.0% |  | $53480 | (6) |
| NexPoint Hospitality Trust | Common stock | Hospitality | 45.4% |  | $27685 | (6) |
| LLV Holdco, LLC | LLC interest | Land | 26.8% |  | 4331 | (6) |
|  |  |  |  |  | $526096 |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the Company's percentage share of net assets of the investee per the investee's books and records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents the difference between the basis at which the investments in unconsolidated ventures are carried by the Company and the Company's proportionate share of the equity method investee's net assets. To the extent that the Company's cost basis is different from the basis reflected at the joint venture level, the basis difference

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is generally amortized over the lives of the related assets and liabilities, and such amortization is included in the Company's share of equity in earnings of the joint venture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The Company owns greater than 50% of the outstanding common equity but is not deemed by the Company to be the primary beneficiary (for a VIE) or have a controlling financial interest of the investee and as such, accounts for the investee using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The Company owns 100% of Las Vegas Land Owner, LLC which owns 77% of a joint venture that owns an 8.5 acre tract of land (the "Tivoli North Property") as described below. Through the TIC (as defined below), the Company shares control and as such accounts for this investment using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)The Company has a 50% non-controlling interest in Claymore Holdings, LLC ("Claymore") and Allenby, LLC, ("Allenby"). The Company has determined it is not the primary beneficiary and does not consolidate these entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)The Company has elected the fair value option with respect to these investments. The basis in these investments is their December 31, 2022 fair value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)The Company owns less than 20% of the investee but has significant influence due to members of the management team serving on the board of the investee or its parent and as such, accounts for the investee using the equity method.

*Sandstone*

On May 29, 2015, the Company, via a wholly owned subsidiary, invested $12 million in Sandstone Pasadena Apartments, LLC ("Sandstone"), which beneficially owns a 696-unit multifamily property (the "Ashmore") located in Pasadena, TX. This contribution by the Company gave it an initial ownership percentage of 83.3%. Sandstone and the Ashmore are managed by Knightvest 2015, LLC (the "Sandstone Manager"). The LLC agreement of Sandstone vests the Sandstone Manager with the exclusive right, power, authority and discretion in conducting the business of Sandstone, subject to certain exceptions. Since the Company does not have a controlling financial interest, it does not consolidate Sandstone and therefore uses the equity method of accounting. Per the Sandstone organizational documents, the Company was entitled to a return on unreturned equity of 10%, which compounded annually. There was a capital event in 2018 which led to a full return of the Company's and the other member's equity in Sandstone. This triggered a change in the distribution-sharing percentage, which is now effectively 50% for the Company. The Sandstone Manager determines the monthly distributions at their discretion. As of December 31, 2022, the Company still maintains 50% ownership of Sandstone.

*Marriott Uptown*

On June 8, 2018, the Company, through a subsidiary, initially invested amounts in exchange for which it received an approximately 85% interest in AM Uptown Hotel, LLC, ("AM Uptown") which beneficially owns a 255-key upscale hotel (the "Marriott Uptown") located in Dallas, Texas. AM Uptown appointed Alamo Manhattan Properties, LLC ("Alamo Manhattan") as the manager to manage and operate the Marriott Uptown. The management, control and direction of AM Uptown and its operations, business and affairs is vested exclusively in Alamo Manhattan, which has the right, power, and authority, acting solely by itself to carry out all the purposes of AM Uptown. The Company does not participate in the management, control, or direction of AM Uptown's operations, business, or affairs and has no kickout rights over Alamo Manhattan. Since the Company does not have a controlling financial interest, it does not consolidate AM Uptown and therefore uses the equity method of accounting. As of December 31, 2022, the Company maintains 60% ownership interest of AM Uptown due to previous capital events that triggered a change in the distribution-sharing percentage and ownership percentage.

*SFR WLIF III*

On July 11, 2019, the Company initially invested amounts in exchange for which it received an approximately 20% interest in SFR WLIF III, LLC, an SPE designed to hold an investment in debt issued to VineBrook Homes Operating Partnership, L.P. (the "VB OP"), an entity that manages single family rental properties, whose parent is advised by an affiliate of the Adviser. The loan to the VB OP bears interest at 1-month LIBOR plus 155 basis points, matures on December 1, 2025, and has an outstanding principal balance of $241.2 million. SFR WLIF III, LLC is managed, directly or indirectly, by an affiliate of the Adviser. As the Company does not have a controlling financial interest in this entity, it is accounted for as an equity method investment.

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*Tivoli*

On March 30, 2022, the Company invested in Las Vegas Land Owner, LLC ("Tivoli"), a joint venture that owns the Tivoli North Property, comprised of an 8.5-acre tract of land, upon which site Tivoli plans to develop a 300-unit multifamily apartment community directly adjacent to Tivoli Village, a high-end mixed-use center in Las Vegas, Clark County, Nevada. On August 8, 2022 the joint venture was restructured to a tenants-in-common arrangement (the "TIC"). Post restructure, the Company owns 100% of Tivoli, and Tivoli owns 77% of the underlying land investment. Members of the TIC must unanimously agree on certain major decisions regarding the underlying investment giving the Company shared control, and as such, the Company accounts for the TIC investment using the equity method.

*Perilune*

The Company is a 16.4% member of Perilune Aero Equity Holdings One, LLC ("Perilune"). Perilune is a pooled investment vehicle created to finance, acquire, lease and/or sell two aircraft through subordinated or other lending arrangements and/or direct or indirect equity investments. Due to the timing of the receipt of financial statements from Perilune, the Company applies up to a 90 day lag reporting for this investment. In instances where the timing of the receipt of financial statements exceeds the 90 day window, earnings for the period are estimated. Since Perilune is a partnership-like LLC, and the Company holds more than an insignificant ownership percentage but not a controlling financial interest, the investment is accounted for using the equity method.

*Claymore and Allenby*

The Company owns noncontrolling interests in two LLCs, Claymore and Allenby, created to hold litigation claims. The probability, timing, and potential amount of recovery, if any, are unknown as of December 31, 2022. Since the Company does not have controlling financial interests in these entities, they are accounted for as equity method investments.

*NexPoint Real Estate Finance Operating Partnership, L.P.*

In February 2020, the Company contributed assets to certain subsidiaries of the then-newly formed NexPoint Real Estate Finance Operating Partnership, L.P. (the "NREF OP"), the operating partnership of a publicly traded mortgage REIT, in exchange for equity in those subsidiaries. The equity in the subsidiaries owned by the Company, including additional equity received upon receipt of liquidating distributions from other vehicles that contributed to the NREF OP, was subsequently contributed to the Company's wholly owned subsidiary NexPoint Real Estate Opportunities, LLC ("NREO") and redeemed for limited partnership units in the NREF OP. The NREF OP is the operating partnership of NexPoint Real Estate Finance, Inc. ("NREF"), a public mortgage REIT managed by an affiliate of the Adviser. The Company, through NREO, owns approximately 16.1% of the common units of limited partnership of the NREF OP ("NREF OP Units"), and is not considered the primary beneficiary. The Company owns less than 20% of the investee but has significant influence due to members of the management team serving on the board of NREF and as such, the investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option.

*NexPoint Real Estate Finance, Inc.*

On December 23, 2022, the Company, through NREO, redeemed 2,100,000 NREF OP Units for 2,100,000 shares of common stock of NREF. The Company, through NREO owns approximately 12.3%, of NREF's common stock. The Company owns less than 20% of the investee and does not have a controlling financial interest but has significant influence due to members of the management team serving on the board of the investee, and as such, the investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option.

*VineBrook Homes Operating Partnership, L.P.*

On November 1, 2018, the Company through NREO contributed $70.7 million to the VB OP in exchange for limited partnership units. The VB OP is the operating partnership of VineBrook Homes Trust ("VineBrook"), a private single-family rental REIT managed by an affiliate of the Adviser. The Company, through NREO, owns approximately 11.1% of the common units of VB OP as of December 31, 2022 and is not considered the primary beneficiary. The Company owns less than 20% of the investee but has significant influence due to members of the management team serving on the board of

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VineBrook and as such, the investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option.

*NexPoint Storage Partners, Inc.* 

In November 2020, the Company's preferred stock investment in Jernigan Capital, Inc. was converted into common shares of NexPoint Storage Partners, Inc. ("NSP") as part of a transaction where affiliates of the Adviser took Jernigan Capital, Inc. private. NSP is a privately owned self-storage REIT. As of December 31, 2022, the Company owns 53.1% of the outstanding common stock of NSP. The Company has determined that it is not the primary beneficiary of NSP. The investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option.

*NexPoint Storage Partners Operating Company, LLC.*

On December 8, 2022, the Company, through NREO, contributed all of its interests in the joint ventures (the "SAFStor Ventures") with SAFStor NREA GP – I, LLC, SAFStor NREA GP – II, LLC and NREA GP – III, LLC to NexPoint Storage Partners Operating Company, LLC (the "NSP OC") in exchange for 47,064 newly created Class B Units of the NSP OC. The NSP OC is the operating company of NSP. As of December 31, 2022, the Company owns approximately 30.5% of the outstanding combined classes of common units of the NSP OC (the "NSP OC Common Units") and is not the primary beneficiary, and as such, the investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option.

*NexPoint SFR Operating Partnership, L.P.*

On June 8, 2022, the Company, directly or through one or more subsidiaries, contributed $25.0 million to the newly formed NexPoint SFR Operating Partnership, L.P. (the "SFR OP") in exchange for common units of the SFR OP (the "SFR OP Units"). Additionally, on June 8, 2022, the Company, directly or through one or more subsidiaries, loaned $25.0 million to the SFR OP in exchange for $25.0 million of 7.50% convertible notes of the SFR OP (the "SFR OP Convertible Notes") that are interest only during the term and mature on June 30, 2027. The SFR OP is a subsidiary of NexPoint Homes Trust, Inc., a single-family rental REIT managed by an affiliate of the Adviser. Subsequent to June 8, 2022 and before December 31, 2022, the Company, directly or through one or more subsidiaries, contributed approximately an additional $27.5 million to the SFR OP in exchange for SFR OP Units. Subsequent to June 8, 2022 and through December 31, 2022, the Company, directly or through one or more subsidiaries, contributed approximately an additional $1.0 million to the SFR OP in exchange for SFR OP Units through distribution reinvestments. Additionally, subsequent to June 8, 2022 and before December 31, 2022, the Company, directly or through one or more subsidiaries, loaned an additional $5.0 million to the SFR OP in exchange for $5.0 million of SFR OP Convertible Notes. As of December 31, 2022, the Company, owns approximately 31.0% of the outstanding units of SFR OP and does not have a controlling financial interest. The investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option.

*NexPoint Hospitality Trust*

As of December 31, 2022, the Company owns 45.4% of the outstanding common stock of NexPoint Hospitality Trust ("NHT")and does not have a controlling financial interest. The investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option. NHT is a publicly traded hospitality REIT that owns 11 properties located throughout the United States. NHT is managed by an affiliate of the Adviser. NHT is listed on the TSX Venture Exchange under the ticker NHT.U.

*LLV Holdco, LLC*

As of December 31, 2022, the Company owns approximately 26.8% of the series A and B equity units of LLV Holdco, LLC ("LLV") and does not have a controlling financial interest. The investment qualifies to be accounted for using the equity method. However, management has elected to account for the investment using the fair value option. Additionally, the Company owns 12,127,369 par of LLV's senior revolving loan maturing December 31, 2023 and paying interest at a fixed rate of 5% per annum. LLV specializes in managing real estate assets, which are ultimately sold to both residential and commercial developers. LLV owns approximately 300 gross acres of undeveloped land, of which 115 acres are developable near Lake Las Vegas in Henderson, Nevada.

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*Significant Equity Method Investments*

The table below presents the unaudited summary balance sheets for the Company's significant equity method investments as of December 31, 2022 (dollars in thousands). NREF, NSP and VineBrook do not prepare standalone financials for their operating companies as all operations and investments are owned through their operating companies and are consolidated by the corporate entities. As such, only the financial information for NREF, NSP and VineBrook are presented below.

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| | | | |
|:---|:---|:---|:---|
| | **NREF** | **VineBrook** | **NSP** |
| **ASSETS** | | | |
| &nbsp;&nbsp;&nbsp;Investments | $7886370 | $2500 | $— |
| &nbsp;&nbsp;&nbsp;Real estate assets | 245222 | 3568567 | 1310059 |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 17671 | 114749 | 14665 |
| &nbsp;&nbsp;&nbsp;Other assets | 3011 | 150921 | 174952 |
| **TOTAL ASSETS** | $8152274 | $3836737 | $1499676 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| Liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Debt | $1345101 | $2601229 | $902659 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 6264026 | 131993 | 391356 |
| **Total Liabilities** | $7609127 | $2733222 | $1294015 |
| Redeemable noncontrolling interests in the operating company | 97567 | 475281 | 205114 |
| Noncontrolling interests in consolidated VIEs | $— | $6906 | $4035 |
| Total Shareholders' Equity | 445580 | 621328 | (3488) |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | $8152274 | $3836737 | $1499676 |

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The table below presents the unaudited summary statement of operations for the year ended December 31, 2022 for the Company's significant equity method investments (dollars in thousands).

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| | | | |
|:---|:---|:---|:---|
| | **NREF** | **VineBrook** | **NSP** |
| **Revenues** | | | |
| &nbsp;&nbsp;&nbsp;Rental income | $11116 | $262433 | $74639 |
| &nbsp;&nbsp;&nbsp;Net interest income | 37733 |  | 6125 |
| &nbsp;&nbsp;&nbsp;Other income |  | 6898 | 4119 |
| Total revenues | $48849 | $269331 | $84883 |
| **Expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;Total expenses | 20044 | 319835 | 85340 |
| Gain (loss) on sales of real estate | $— | $(519) | $(1406) |
| Other income (expense) | (14591) | 1361 | (77408) |
| Unrealized gain (loss) on derivatives |  | 52833 |  |
| Total comprehensive income (loss) | $14214 | $3171 | $(79271) |

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**10. Fair Value of Derivatives and Financial Instruments**

Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 inputs are the unobservable inputs for the asset or liability, which are typically based on an entity's own assumption, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on input from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company utilizes independent third parties to perform the allocation of value analysis for each property acquisition and to perform the market valuations on its derivative financial instruments and has established policies, as described above, processes and procedures intended to ensure that the valuation methodologies for investments and derivative financial instruments are fair and consistent as of the measurement date.

As of December 31, 2022, the Company's fair valued investments consisted of senior loans, corporate bonds, CLOs, convertible notes, common stocks, rights, warrants, life settlement contracts, LP interests and LLC interests. The fair value of the Company's senior loans, bonds, and CLOs are generally based on quotes received from brokers or independent pricing services. Senior loans, bonds, and CLOs with quotes that are based on actual trades with a sufficient level of activity on or near the measurement date are classified as Level 2 assets. Senior loans, bonds, and CLOs that are priced using quotes derived from implied values, indicative bids, or a limited number of actual trades are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable.

The fair value of the Company's common stocks, rights, and warrants that are not actively traded on national exchanges are generally priced using quotes derived from implied values, indicative bids, or a limited amount of actual trades and are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable. At the end of each calendar quarter, the Adviser evaluates the Level 2 and 3 assets and liabilities for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third party services, and the existence of contemporaneous, observable trades in the market. Additionally, the Adviser evaluates the Level 1 and 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values the Company may ultimately realize. Further, such investments may be subject to legal and other restrictions on resale or otherwise be less liquid than publicly traded securities.

The fair value of the Company's common stocks, exchange-traded funds, other registered investment companies and warrants that are not actively traded on national exchanges are generally priced using quotes derived from implied values, indicative bids, or a limited amount of actual trades and are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable. The Company's real estate investments include equity interests in limited liability companies and equity issued by REITs that invest in commercial real estate. The fair value of real estate investments that are not actively traded on national exchanges are based on internal models developed

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by the Adviser. The significant inputs to the models include cash flow projections for the underlying properties, capitalization rates and appraisals performed by independent valuation firms. These inputs are not readily observable, and the Company has classified the investments as Level 3 assets. Exchange-traded options are valued based on the last trade price on the primary exchange on which they trade. If an option does not trade, the mid-price, which is the mean of the bid and ask price, is utilized to value the option.

The fair value of the Company's convertible notes are categorized as Level 3 assets in the fair value hierarchy. Convertible notes are valued using a discounted cash flow model using discount rates derived from observable market data applied to the internal rate of return implied by the expected contractual cash flows.

Upon initial acquisition, the Company's life settlement contracts are recognized at the transaction price. For each subsequent reporting period, the investments are measured at fair value by a third-party valuation specialist using a life settlement pricing model and are categorized as Level 3 assets in the fair value hierarchy. Key assumptions utilized in determining fair value include but are not limited to: (i) life expectancy estimates provided by independent third-party underwriters based on actuarially developed mortality tables and industry life expectancy reports; (ii) future premium estimates; (iii) rates of return consistent with those sought by independent purchasers of life policies at the time of purchase; and (iv) offers and/or commitments from purchasers. In addition, the valuation agent will also consider recent sales as well as offers received for the life policies deemed likely to close in the near future in estimating fair value.

The assumptions used to value life policies are by nature, inherently uncertain and the effect of changes in estimates may be material. The fair value measurement used in estimating the present value calculations are derived from valuation techniques that include inputs that are not based on observable market data. Changes in the fair value of the life settlement contracts are reported as net unrealized gains or losses on the consolidated statement of operations (Successor Basis). Upon the death of an insured or the sale of a life policy, the Company will recognize the difference between the proceeds received and the cost of the life policy as a realized gain or loss in the Company's consolidated statement of operations (Successor Basis).

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available fair market value, the fair value of the Company's investments may fluctuate from period to period. Additionally, the fair value of investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values the Company may ultimately realize. Further, such investments may be subject to legal and other restrictions on resale or otherwise be less liquid than publicly traded securities.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The table below summarizes the inputs used to value the Company's assets carried at fair value on a recurring basis as of December 31, 2022 (in thousands):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| |<br>**Cost Basis** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | | |
| &nbsp;&nbsp;&nbsp;Bond | $17 | $— | $20 | $— | $20 |
| &nbsp;&nbsp;&nbsp;CLO | 34958 |  | 563 | 6412 | 6975 |
| &nbsp;&nbsp;&nbsp;Common stock | 325275 | 53872 |  | 234667 | 288539 |
| &nbsp;&nbsp;&nbsp;Convertible notes | 54802 |  |  | 50828 | 50828 |
| &nbsp;&nbsp;&nbsp;Life settlement | 64267 |  |  | 67711 | 67711 |
| &nbsp;&nbsp;&nbsp;LLC interest | 66492 |  |  | 60836 | 60836 |
| &nbsp;&nbsp;&nbsp;LP interest | 321026 |  | 77370 | 223141 | 300511 |
| &nbsp;&nbsp;&nbsp;Rights and warrants | 3947 |  | 3794 |  | 3794 |
| &nbsp;&nbsp;&nbsp;Senior loan | 43399 |  | 66 | 43341 | 43407 |
|  | $914183 | $53872 | $81813 | $686936 | $822621 |

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The table below sets forth a summary of changes in the Company's Level 3 assets (assets measured at fair value using significant unobservable inputs) for the six months ended December 31, 2022 (in thousands):

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **July 1, 2022** | **Contributions/ <br>Purchases** | **Paid in- <br>kind <br>dividends** | **Redemptions/ <br>Conversions** | **Return of capital** | **Realized <br>gain/(loss)** | **Unrealized gain/(loss)** | **December 31, 2022** |
| Common Equity | $257346 | $3363 | $— | $— | $(443) | $— | $(25599) | $234667 |
| Convertible Notes | 51858 | 2784 | 160 |  |  |  | (3974) | 50828 |
| Life settlement | 56440 | 11276 |  | (7055) |  | 3489 | 3561 | 67711 |
| LP Interests | 227309 | 5780 |  | (10872) |  | 113 | 811 | 223141 |
| CLO | 52500 |  |  |  | (18105) |  | (27983) | 6412 |
| LLC Interests | 3982 | 62510 |  |  |  |  | (5656) | 60836 |
| Senior Loans | 40997 | 443 | 2048 | (27) |  | (126) | 6 | 43341 |
| Total | $690432 | $86156 | $2208 | $(17954) | $(18548) | $3476 | $(58834) | $686936 |

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The following is a summary of the significant unobservable inputs used in the fair valuation of assets categorized within Level 3 of the fair value hierarchy as of December 31, 2022.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Category** | **Valuation Technique** | **Significant Unobservable Inputs** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Fair Value** |
| **CLO** | Discounted Net Asset Value | Discount |  | 70% |  |  | $**6412** |
| **Common Stock** | Market Approach | Unadjusted Price/MHz-PoP | $0.09% | - | $0.95% | (0.515%) | $**234667** |
|  |  | NAV / sh multiple | $1.10x | - | $1.45x | $(1.28)x |  |
|  | Discounted Cash Flow | Discount Rate | 8.63% | - | 14.5% | (9.98)% |  |
|  |  | Market Rent (per sqft) | $16 | - | $58 | $(23.38) |  |
|  |  | RevPAR | $75 | - | $189 | $110.4 |  |
|  |  | Capitalization Rates | 5.38% | - | 9.25% | (8.4)% |  |
|  | Recent Transaction | Implied Enterprise Value from Transaction Price ($mm) |  | $841 |  |  |  |
|  |  | N/A | $25.31 | - | $28 | $(26.66) |  |
| **Convertible Notes** | Discounted Cash Flow | Discount Rate |  | 8% |  |  | **50828** |
| **Life Settlement** | Discounted Cash Flow | Discount Rate |  | 14% |  |  | **67711** |
|  |  | Life Expectancy (Months) | 12 | - | 196 | 74 Months |  |
| **LLC Interest** | Discounted Cash Flow | Discount Rate | 8.75% | - | 30% | (19.38)% | **60836** |
|  |  | Market Rent (per sqft) | $16 | - | $58 | $(23.38) |  |
|  |  | Capitalization Rate |  | 5.38% |  |  |  |
| **LP Interest** | Discounted Cash Flow | Discount Rate | 6.4% | - | 9.1% | (7.75)% | **223141** |
|  |  | Capitalization Rate | 3.5% | - | 6.8% | (5.15)% |  |
|  | Recent Transaction | Cost Price per Share |  | $25 |  |  |  |
| **Senior Loan** | Discounted Cash Flow | Discount Rate | 11.5% | - | 20% | (15.75)% | $**43341** |
| **Total** |  |  |  |  |  |  | $**686936** |

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**11. Life Settlement Portfolio**

The Company owns 100% of the outstanding equity and debt of Specialty Financial Products, Ltd. ("SFP"), an Ireland domiciled private company with limited liability and a Designated Activity Company. SFP was formed for the purpose of and at the proposal of NexAnnuity Asset Management, L.P. ("NexAnnuity"), an affiliate of the Adviser, entering into acquisitions of U.S. life settlement policies approved by NexAnnuity and funded by the issuance of debt securities, or the Structured Note purchased by the Company. SFP utilizes proceeds from maturing life settlement contracts to repay the Structured Note and to further invest in life settlement contracts. As the Company owns the outstanding equity of and Structured Note issued by SFP, the Company consolidates SFP in its entirety. The Company did not elect the fair value option for SFP as of December 31, 2022. SFP's equity and the Structured Note are eliminated during consolidation and the financial assets held by SFP are measured at fair value.

As of December 31, 2022, the Company's life settlement portfolio consists of the following (dollars in thousands):

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Number of Policies** | **Face Value (Death Benefit)** | **Face Value (Death Benefit)** | **Acquisition Cost** | **Acquisition Cost** | **Premium Cost** | **Premium Cost** | | **Estimated Fair Value** | **Estimated Fair Value** |
| **Total** | **Range** | **Total** | **Range** | **Total** | **Range** | **Total** | | **Range** | **Total** |
| 28 | $1500 -$15000 | $142952 | $350 - $3895 | $48132 | $0 - $580 | $4589 | $0 | $117 - $6095 | $67711 |

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| | | | |
|:---|:---|:---|:---|
| **Remaining Life Expectancy (in years)** | **Number** | **Face Value** | **Fair Value** |
| 0 - 1 | 2 | $7000 | $5950 |
| 1 - 2 | 2 | 7350 | 4774 |
| 2 - 3 | 5 | 19061 | 11393 |
| 3 - 4 | 8 | 51351 | 27648 |
| 4 - 5 | 3 | 17100 | 7978 |
| Thereafter | 8 | 41090 | 9968 |
| Total | 28 | $142952 | $67711 |

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The premiums to be paid for each of the five succeeding calendar years to keep the life settlement contracts in force as of December 31, 2022, assuming no maturities occur in that period, are as follows (dollars in thousands):

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| | |
|:---|:---|
| **Year** | **Premiums** |
| 2023 | 5,279 |
| 2024 | 5,769 |
| 2025 | 6,295 |
| 2026 | 7,011 |
| 2027 | 7,675 |

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During the six months ended December 31, 2022, the Company purchased 3 policies with a combined face value of $28.0 million for $8.7 million, had 1 policy mature with an aggregate net death benefit of $7.0 million, and paid $2.6 million in premiums to keep the life settlement contracts in force.

**12. Shareholders**' **Equity**

*Common Shares*

During the six months ended June 30, 2022, the Company issued 92,067 common shares pursuant to its dividend reinvestment plan that was terminated on July 1, 2022. No shares were issued during the six months ended December 31, 2022.

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As of December 31, 2022, the Company had 37,171,807 common shares, par value $0.001 per share, issued and outstanding.

During the six months ended December 31, 2022, the Company paid distributions on its common shares on August 1, August 31, September 30 and December 30, 2022. For July, August and September, these distributions were paid in the amount of $0.05 per share. Beginning in October, the distribution was updated to $0.15 per share and payable quarterly.

*Preferred Shares*

On January 8, 2021, the Company issued 3,359,593 5.50% Series A Cumulative Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share ("Series A Preferred Shares") with an aggregate liquidation preference of approximately $84.0 million. The Series A Preferred Shares were issued as part of the consideration for an exchange offer for a portion of the Company's common shares. The Series A Preferred Shares are callable beginning on December 15, 2023 at a price of $25 per share. The Company has the option to exercise the callable function of the preferred shares at the Company's discretion. As a result, these are included in permanent equity.

During the six months ended December 31, 2022, the Company declared distributions on its Series A Preferred Shares on September 1, 2022 and December 6, 2022, in the amount of $0.34375 per share, respectively. The Company sent funding to the transfer agent prior to September 30, 2022 and December 31, 2022, which were then paid to shareholders on September 30, 2022 and January 3, 2023.

Dividends on the Series A Preferred Shares are cumulative from their original issue date at the annual rate of 5.5% of the $25 per share liquidation preference and are payable quarterly on March 31, June 30, September 30, and December 31 of each year, or in each case on the next succeeding business day.

**13. Earnings (Loss) Per Share**

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of the Company's common shares outstanding. The Company currently does not have any dilutive instruments outstanding.

The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share and share amounts):

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| | |
|:---|:---|
| | **For the Six Months ended December 31,** |
| | **2022** |
| **Numerator for loss per share:** |  |
| &nbsp;&nbsp;&nbsp;**Net income (loss) attributable to common shareholders** | $(83883) |
| **Denominator for loss per share:** |  |
| Weighted average common shares outstanding | 37171807 |
| &nbsp;&nbsp;&nbsp;Denominator for basic and diluted loss per share | 37171807 |
| **Loss per weighted average common share:** |  |
| &nbsp;&nbsp;&nbsp;Basic | $(2.26) |
| &nbsp;&nbsp;&nbsp;Diluted | $(2.26) |

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**14. Related Party Transactions**

*Advisory and Administration Services Fee*

Prior to the Deregistration Date, the Company was party to an investment advisory agreement (the "Former Advisory Agreement") with an affiliate of the Adviser (the "Former Adviser") pursuant to which the Former Adviser

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provided investment advisory services to the Company and certain of its subsidiaries. The Company's contractual fee under the Former Advisory Agreement was an annual fee, payable monthly, in an amount equal to 1.00% an amount (the "Former Managed Assets") equal to the total assets of the Company, including any form of investment leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to investment leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities), (ii) the issuance of preferred stock or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Company's investment objectives and policies, and/or (iv) any other means. The Former Adviser was permitted to waive a portion of its fees.

Prior to the Deregistration Date, the Company was also party to an administration services agreement (the "Administration Services Agreement") pursuant to which the Former Adviser previously performed administrative functions for us in connection with our operation as a closed-end investment company. For its services, the Former Adviser received an annual fee, payable monthly, in an amount equal to 0.20% of the average weekly value of the Former Managed Assets. For the six months ended June 30, 2022, the Company incurred fees under the Former Advisory Agreement and Former Administrative Services Agreement of $6.3 million prior to the Deregistration Date.

In connection with the Business Change and effective on the Deregistration Date, the Company terminated its investment advisory agreement and its administrative services agreement with NexPoint and entered into the Advisory Agreement with the Adviser, a subsidiary of NexPoint. The Company also terminated the investment advisory agreements between NexPoint and its wholly owned subsidiaries, NREO and NexPoint Real Estate Capital, LLC, effective on the Deregistration Date. Pursuant to the Advisory Agreement, subject to the overall supervision of our Board, the Adviser manages the day-to-day operations of the Company, and provides investment management services.

As of December 31, 2022, as consideration for the Adviser's services under the Advisory Agreement, we pay our Adviser an annual fee (the "Advisory Fee") of 1.00% of Managed Assets and an annual fee (the "Administrative Fee" and, together with the Advisory Fee, the "Fees") of 0.20% of the Company's Managed Assets (defined below). The Advisory Agreement provides that the first portion of the monthly installment of the Advisory Fee shall be paid in cash up to $1.0 million and the remainder of the monthly installment of the Advisory Fee, if any, shall be paid in common shares of the Company, subject to certain restrictions related to maintaining the Company's status as a REIT and compliance with federal securities laws and rules promulgated by the New York Stock Exchange. In addition, in no event will the common shares issued to the Adviser under the Advisory Agreement exceed five percent of the number of common shares or five percent of the voting power of the Company outstanding prior to the first such issuance. The number of common shares payable to the Adviser under the Advisory Agreement as a portion of the Advisory Fee shall equal (i) the total dollar amount of the monthly installment of the Advisory Fee payable minus the $1.0 million cash portion of the monthly installment of the Advisory Fee divided by (ii) the volume-weighted average price per share for the 10 trading days prior to the end of the month for which the Fees will be paid. The Fees shall be payable independent of the performance of the Company or its investments. The Advisory Agreement also provides that the Administrative Fee shall be paid in cash.

Under the Advisory Agreement, "Managed Assets" means an amount equal to the total assets of the Company, including any form of leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing to purchase or develop real estate or other investments, borrowing through a credit facility, or the issuance of debt securities), (ii) the issuance of preferred shares or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Company's investment objectives and policies, and/or (iv) any other means. In the event the Company holds collateralized mortgage-backed securities ("CMBS") where the Company holds the controlling tranche of the securitization and is required to consolidate under GAAP all assets and liabilities of a specific CMBS trust, the consolidated assets and liabilities of the consolidated trust will be netted to calculate the allowable amount to be included as Managed Assets. In addition, in the event the Company consolidates another entity it does not wholly own as a result of owning a controlling interest in such entity or otherwise, Managed Assets will be calculated without giving effect to such consolidation and instead such entity's assets, leverage, expenses, liabilities and obligations will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of Managed Assets. The Adviser computes Managed Assets as of the end of each fiscal quarter and then computes each installment of the Fees as promptly as possible after the end of the month with respect to which such installment is payable.

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*Reimbursement of Expenses; Expense Cap*

The Company is required to pay directly or reimburse the Adviser for all of the documented "operating expenses" (all out-of-pocket expenses of the Adviser in performing services for us, including but not limited to the expenses incurred by the Adviser in connection with any provision by the Adviser of legal, accounting, financial, due diligence, investor relations or other services performed by the Adviser that outside professionals or outside consultants would otherwise perform and our pro rata share of rent, telephone, utilities, office furniture, equipment, machinery or other office, internal and overhead expenses of the Adviser required for our operations) and any and all expenses (other than underwriters' discounts) paid or to be paid by us in connection with an offering of our securities, including, without limitation, our legal, accounting, printing, mailing and filing fees and other documented offering expenses (collectively, "Offering Expenses"), paid or incurred by the Adviser or its affiliates in connection with the services it provides to us pursuant to the Advisory Agreement. Direct payment of operating expenses by us together with reimbursement of operating expenses to the Adviser, plus compensation expenses relating to equity awards granted under a long-term incentive plan and all other corporate general and administrative expenses of the Company, including the Fees payable under the Advisory Agreement, may not exceed 1.5% (the "Expense Cap") of Managed Assets, calculated as of the end of each quarter, for the twelve-month period following the Company's receipt of the Deregistration Order; provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions or other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate-related investments; provided, further, in the event the Company consolidates another entity that it does not wholly own as a result of owning a controlling interest in such entity or otherwise, expenses will be calculated without giving effect to such consolidation and instead such entity's expenses will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of expenses. On occasion, the Adviser may waive additional fees to the extent assets are invested in certain affiliated investments. The Adviser may, at its discretion and at any time, waive its right to reimbursement for eligible out-of-pocket expenses paid on the Company's behalf. Once waived, these expenses are considered permanently waived and become non-recoupable in the future.

The Advisory Agreement has an initial term of three years that will expire on July 1, 2025, and successive additional one-year terms thereafter unless earlier terminated. We have the right to terminate the Advisory Agreement on 30 days' written notice upon the occurrence of a cause event (as defined in the Advisory Agreement). The Advisory Agreement can be terminated by us or the Adviser without cause upon the expiration of the then-current term with at least 180 days' written notice to the other party prior to the expiration of s term. The Adviser may also terminate the agreement with 30 days' written notice if we have materially breached the agreement and such breach has continued for 30 days before we are given such notice. In addition, the Advisory Agreement will automatically terminate in the event of Advisers Act Assignment (as defined in the Advisory Agreement) unless we provide written consent. A termination fee will be payable to the Adviser by us upon termination of the Advisory Agreement for any reason, including non-renewal, other than a termination by us upon the occurrence of a cause event or due to an Advisers Act Assignment. The termination fee will be equal to three times the Fees earned by the Adviser during the twelve month period immediately preceding the most recently completed calendar quarter prior to the effective termination date; provided, however, if the Advisory Agreement is terminated prior to the one year anniversary of the date of the Advisory Agreement, the Fees earned during such period will be annualized for purposes of calculating the Fees.

For the six months ended December 31, 2022, the Company incurred Administrative Fees and Advisory Fees of $5.5 million, inclusive of $1.1 million in expenses that were deferred to comply with the Expense Cap. Should the Fees and expenses and any other items subject to the Expense Cap be less than the 1.5% limit for the twelve-month period subsequent to the Deregistration Date, some or all of the deferred expenses could be recouped by the Adviser up to the Expense Cap.

*Guaranties of NexPoint Storage Partners, Inc. Debt*

On September 14, 2022, the Company entered into guaranties (the "BS Guaranties") for the benefit of JPMorgan Chase Bank, National Association ("JPM") and any additional or subsequent lenders from time to time (collectively, "BS Lender") under a loan agreement (the "BS Loan Agreement"), pursuant to which the Company guaranteed certain obligations of the borrowers ("BS Borrower") under the BS Loan Agreement. The Company, through its ownership in NSP, owns an indirect interest in BS Borrower and entered into the BS Guaranties as a condition of BS Lender lending to BS Borrower under the BS Loan Agreement. Pursuant to the BS Guaranties, the Company guaranteed certain carrying obligations, including interest payments, of BS Borrower and certain recourse obligations of BS Borrower pertaining to exculpation or indemnification of BS Lender. The BS Guaranties also provide that the Company may be required to repay

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principal amounts upon the occurrence of certain events, including certain action or inaction by BS Borrower, but does not provide for a full guarantee of repayment in all circumstances. The BS Loan Agreement provides for a single initial advance of the loan in the amount of $221.8 million to BS Borrower on the closing date, and provides BS Borrower the right to request additional advances in connection with subsequently acquired properties. Amounts outstanding under the BS Loan Agreement are due and payable on September 9, 2023 which date may, at the option of BS Borrower, be extended for two successive one-year terms upon the satisfaction of certain terms and conditions. Borrowings outstanding under the BS Loan Agreement are secured by mortgages on real property owned by one or more of the borrowers comprising BS Borrower and bear interest at the one-month secured overnight financing rate ("SOFR"), subject to a floor of 0.5%, plus an applicable spread of approximately 4.0% with respect to approximately $184.9 million of initial principal thereunder and approximately 5.4% with respect to approximately $36.9 million of initial principal thereunder.

In connection with the foregoing, the Company entered into a Sponsor Guaranty Agreement in favor of Extra Space Storage LP ("Extra Space") pursuant to which the Company and certain affiliates of the Adviser (the "Co-Guarantors") guaranteed obligations of NSP with respect to NSP's newly created Series D Preferred Stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space. The guaranties by the Company and the Co-Guarantors are capped at $97.6 million, which cap amount will be reduced as the guaranteed obligations of NSP are paid. Each of the Company and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP's common stock. The maximum liability of the Company under the guaranties is approximately $83.8 million. The Company has not recorded a contingent liability due to NSP being current on all debt and preferred dividend payments and in compliance with all debt compliance provisions of the Sponsor Guaranty Agreement.

Separately, on September 14, 2022, the Company entered into a Guaranty Agreement (Recourse Obligations), dated September 14, 2022 (the "CMBS Guaranty") for the benefit of JPM and any additional or subsequent lenders from time to time (collectively, the "CMBS Lender") under a loan agreement (the "CMBS Loan Agreement"), by and among the borrowers thereunder (collectively, "CMBS Borrower") and the CMBS Lender. The Company, through its ownership in NSP, owns an indirect interest in CMBS Borrower and entered into the CMBS Guaranty as a condition of CMBS Lender lending to CMBS Borrower under the CMBS Loan Agreement. Pursuant to the CMBS Guaranty, the Company guaranteed certain recourse obligations of CMBS Borrower pertaining to exculpation or indemnification of CMBS Lender. The CMBS Guaranty also provides that the Company may be required to repay principal amounts upon the occurrence of certain events, including certain action or inaction by CMBS Borrower, but does not provide for a full guarantee of repayment in all circumstances. The CMBS Loan Agreement provides for a loan of $356.5 million to CMBS Borrower. Amounts outstanding under the CMBS Loan Agreement are due and payable on September 9, 2024 which date may, at the option of CMBS Borrower, be extended for three successive one-year terms upon the satisfaction of certain terms and conditions. Borrowings outstanding under the CMBS Loan Agreement are secured by mortgages on real property owned by one or more of the borrowers comprising CMBS Borrower and bear interest at one-month SOFR plus a spread of approximately 3.6%, which will increase by 0.1% upon a second extension of the loan maturity and by an additional approximately 0.15% upon a third extension of the loan maturity.

*Subsidiary Investment Management Agreement*

SFP is a party to a management agreement (the "SFP IMA") with NexAnnuity pursuant to which NexAnnuity provides investment management services to SFP. Mr. Dondero serves as President of NexAnnuity, which is indirectly owned by a trust of which Mr. Dondero is the primary beneficiary.

In exchange for its services, the SFP IMA provides that NexAnnuity will receive a management fee (the "SFP Management Fee paid monthly in an amount equal to 1.0% of the average weekly value of an amount equal to the total assets of SFP, including any form of leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to investment leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing through a credit facility or the issuance of debt securities), (ii) the issuance of preferred stock or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the investment objective, investment guidelines and policies under the SFP IMA, and/or (iv) any other means, plus any value added tax or any other applicable tax, if any, thereon. NexAnnuity may waive all or a portion of the SFP Management Fee.

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*Other Related Party Transactions*

The Company has in the past, and may in the future, utilize the services of affiliated parties. The Company holds multiple operating accounts at NexBank an affiliate of the Adviser through common beneficial ownership. The Company's operating properties, other than undeveloped land, are managed by NexVest Realty Advisors, LLC ("NexVest"), an affiliate of the Adviser. For the six and twelve months ended December 31, 2022, the Company through its subsidiaries has paid approximately $0.3 million and $0.7 million, respectively, in property management fees to NexVest. The property management agreement with NexVest for the retail property in Lubbock, Texas is dated January 1, 2014 and has a fixed fee of $750 per month. The property management agreement with NexVest for Cityplace Tower is dated August 15, 2018, and the management fee is calculated on 3% of gross revenues, with a minimum fee of $20,000 per month. The property management agreement with NexVest for the White Rock Center is dated June 1, 2013, and the management fee is calculated on 4% of gross receipts, payable monthly.

The Company is a limited guarantor and an indemnitor on one of NHT's loans with an aggregate principal amount of $77.4 million as of December 31, 2022. The obligations include a customary environmental indemnity and a so-called "bad boy" guarantee, which is generally only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper. The Company has not recorded a contingent liability as NHT is current on all debt payments and in compliance with all debt compliance provisions.

On March 31, 2022, the Company, through an unconsolidated subsidiary, borrowed approximately $13.5 million from NREF, an entity advised by an affiliate of the Adviser, to finance its acquisition of a 77.0% interest in Tivoli North Property. The bridge note bore interest at an annual rate equal to the WSJ Prime Rate plus 1.5% and had a maturity date of October 1, 2022. The Company refinanced this bridge note with PNC Bank, N.A ("PNC Bank") on August 8, 2022. The new loan had a principal amount of $13.5 million, matures on August 7, 2023, and bears interest at an annual rate of daily simple SOFR plus 3.5%. Proceeds from the note with PNC Bank were used to repay in full the financing provided by NREF on August 9, 2022.

On December 8, 2022, the Company, through NREO, entered into a Contribution Agreement pursuant to which NREO contributed all of its interests in the SAFStor Ventures with SAFStor NREA GP – I, LLC, SAFStor NREA GP – II, LLC and NREA GP – III, LLC to NSP OC in exchange for approximately 47,064 newly created Class B Units of the NSP OC, representing 14.8% of NSP OC Common Units immediately after NREO's acquisition of Class B Units. The NSP OC is the operating company of NSP, of which the Company owns approximately 86,369 shares, or 53.1%, of the outstanding common stock as of December 31, 2022. In connection with the foregoing, the NSP OC acquired all of the other interests in the SAFStor Ventures from affiliates of the Adviser following which they were wholly owned by a subsidiary of the NSP OC. The SAFStor Ventures are invested, through subsidiaries, in various self-storage real estate development projects primarily located on the East Coast of the United States. As of December 31, 2022, the Company owns approximately 47,064 units, or 30.5%, of the outstanding NSP OC Common Units.

On December 23, 2022, the Company, through NREO, redeemed 2,100,000 NREF OP Units for 2,100,000 shares of common stock of NREF. The NREF OP is the operating partnership of NREF, a publicly traded mortgage REIT managed by an affiliate of the Adviser.

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*Related Party Investments*

The Company, from time to time, may invest in entities managed by affiliates of the Adviser. For the six months ended and as of December 31, 2022, the Company has the following investments in entities managed or advised by, or directly or indirectly owned by entities managed or advised by, affiliates of the Adviser (in thousands).

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Related Party** | **Investment** | **Fair <br>Value** | **Change in Unrealized <br>Gain/(Loss)** | **Realized<br>Gain/(Loss)** | **Interest and <br>Dividends** | **Total Income** |
| SFR WLIF III, LLC | LLC Units | $7272 | $315 | $— | $— | $315 |
| NexPoint Residential Trust, Inc. | Common Stock | 3825 | (1657) |  | 70 | (1587) |
| NexPoint Hospitality Trust | Common Stock | 27685 | 1086 |  |  | 1086 |
| NexPoint Hospitality Trust | Convertible Notes | 21479 | (3323) |  | 152 | (3171) |
| NexPoint Storage Partners, Inc. | Common Stock | 103695 | (17584) |  |  | (17584) |
| NexPoint Storage Partners Operating Company, LLC | LLC Units | 56505 | (6004) |  |  | (6004) |
| NexPoint SFR Operating Partnership, L.P. | Partnership Units | 53480 | 31 |  | 988 | 1019 |
| NexPoint SFR Operating Partnership, L.P. | Convertible Notes | 29350 | (650) |  | 1181 | 531 |
| Claymore Holdings, LLC | LLC Units |  |  |  |  |  |
| Allenby, LLC | LLC Units |  |  |  |  |  |
| NexPoint Real Estate Finance Operating Partnership, L.P. | Partnership Units | 77370 | (21327) |  | 6969 | (14358) |
| NexPoint Real Estate Finance, Inc. | Common Stock | 33369 | (9198) |  |  | (9198) |
| VineBrook Homes Operating Partnership, L.P. | Partnership Units | 169661 | 780 |  | 2853 | 3633 |
| Total |  | $583691 | $(57531) | $— | $12213 | $(45318) |

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**15. Commitments and Contingencies**

*Commitments*

On December 8, 2022 and in connection with a restructuring of NSP, the Company, together with the certain affiliates of the Adviser (the "Co-Guarantors"), as guarantors, entered into a Sponsor Guaranty Agreement in favor of Extra Space Storage LP ("Extra Space") pursuant to which the Company and the Co-Guarantors guaranteed obligations of NSP with respect to NSP's newly created Series D Preferred Stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space. The guaranties by the Company and the Co-Guarantors are capped at $97.6 million, which cap amount will be reduced as the guaranteed obligations of NSP are paid. Each of the Company and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP's common stock. The maximum liability of the Company under the guaranties is approximately $83.8 million. As of December 31, 2022, the Company owns approximately 53.1% of the total outstanding shares of common stock of NSP. NSP is current on all debt and dividend payments and in compliance with all debt compliance provisions. See Note 14 for additional information.

The Company is a limited guarantor and an indemnitor on one of NHT's loans with an aggregate principal amount of $77.4 million outstanding, as of December 31, 2022. The obligations include a customary environmental indemnity and a so-called "bad boy" guarantee, which is generally only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper. The Company has not recorded a contingent liability as NHT is current on all debt payments and in compliance with all debt compliance provisions.

*Contingencies*

In the normal course of business, the Company is subject to claims, lawsuits, and legal proceedings. While it is not possible to ascertain the ultimate outcome of all such matters, management believes that the aggregate amount of such liabilities, if any, in excess of amounts provided or covered by insurance, will not have a material adverse effect on the consolidated balance sheets or consolidated statements of operations and comprehensive income (loss) of the Company. The Company is not involved in any material litigation nor, to management's knowledge, is any material litigation currently threatened against the Company or its properties or subsidiaries.

Environmental liabilities could have a material adverse effect on the Company's business, assets, cash flows or results of operations. As of December 31, 2022, the Company was not aware of any environmental liabilities. There can be no assurance that material environmental liabilities do not exist.

Claymore and Allenby are engaged in ongoing litigation that could result in a possible gain contingency to the Company. The probability, timing, and potential amount of recovery, if any, are unknown.

**16. Operating Leases**

*Lessor Accounting*

We generate the majority of our revenue by leasing our operating properties to customers under operating lease agreements. The manner in which we recognize these transactions in our financial statements is described in the Income Recognition section of Footnote 1 to these consolidated financial statements.

The following table summarizes the future minimum lease payments to the Company as the lessor under the operating lease obligations at December 31, 2022 (in thousands). These amounts do not reflect future rental revenues from renewal or replacement of existing leases. Reimbursements of operating expenses and variable rent increases are excluded from the table below.

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| | |
|:---|:---|
| **Year:** | **Operating Leases** |
| 2023 | $10334 |
| 2024 | $6310 |
| 2025 | $6002 |
| 2026 | $4687 |
| 2027 | $3872 |
| Thereafter | $3320 |
| Total | $34525 |

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The following table lists the tenants where the rental revenue from the tenants during the period presented represented 10% or more of total rental income in the Company's consolidated statements of operations (in thousands):

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|:---|:---|
|<br>**Tenant** | **Six Months Ended December 31, 2022**<br>**Rental Income** |
| Hudson Advisors, LLC | $1424 |

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**17. Subsequent Events**

*Dividends Declared*

On February 22, 2023, the Board approved a quarterly dividend of $0.15 per common share, payable on March 31, 2023 to shareholders of record on March 15, 2023. Also on February 22, 2023, the Board approved a quarterly dividend of $0.34375 per Series A Preferred Share, payable on March 31, 2023 to shareholders of record on March 24, 2023.

*Adoption of Long Term Incentive Plan*

On January 30, 2023, we held a special meeting of shareholders, at which our shareholders approved our 2023 Long Term Incentive Plan (the "2023 LTIP"). The 2023 LTIP authorizes the Compensation Committee of the Board to provide equity-based compensation in the form of option rights, share appreciation rights, restricted shares, restricted shares units, performance shares, performance units, cash incentive awards, profits interest units and other awards based on or related to the Company's shares.

*Cityplace Debt Extension*

On February 8, 2023, the lenders agreed to defer the maturity of the Cityplace debt by three months to May 8, 2023, with the possibility to extend for an additional four months to September 8, 2023 provided certain metrics are met. The purpose of the deferral was to allow for continued discussions around refinancing the debt.

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**Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures**

None.

**Item 9A. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, including our President and Chief Financial Officer, evaluated, as of December 31, 2022, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022, to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

**Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) and for our assessment of the effectiveness of internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our President and our Chief Financial Officer, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our President and Chief Financial Officer, has conducted an assessment regarding the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the framework established in *Internal Control – Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment under the criteria described above, management has concluded that our internal control over financial reporting was effective as of December 31, 2022.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Item 9B. Other Information**

None.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**

Not applicable.

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**PART III**

**Item 10. Directors, Executive Officers and Corporate Governance**

The information required in response to this Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

**Item 11. Executive Compensation**

The information required in response to this Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

**Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters**

The information required in response to this Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

**Item 13. Certain Relationships and Related Transactions, and Director Independence** 

The information required in response to this Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

**Item 14. Principal Accounting Fees and Services**

The information required in response to this Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

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**PART IV**

**Item 15. Exhibit and Financial Statement Schedules** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.The following documents are filed as part of this Report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.*Financial Statements*. See Index to Consolidated Financial Statements and Schedules of NexPoint Diversified Real Estate Trust on page 70 of this Report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.*Financial Statement Schedules*. See Index to Consolidated Financial Statements and Schedules of NexPoint Diversified Real Estate Trust on page 70 of this Report. All other schedules are omitted because they are not required, are inapplicable, or the required information is included in the financial statements or notes thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.*Exhibits*. The exhibits filed with this Report are set forth in the Exhibit Index.

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Description** |
| 3.1 | <u>[Restated Certificate of Trust of NexPoint Diversified Real Estate Trust, effective July 1, 2022 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on July 1, 2022).](http://www.sec.gov/Archives/edgar/data/1356115/000143774922016455/ex_391476.htm)</u> |
| 3.2 | <u>[Declaration of Trust of NexPoint Diversified Real Estate Trust, dated July 1, 2022 (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on July 1, 2022).](http://www.sec.gov/Archives/edgar/data/1356115/000143774922016455/ex_391477.htm)</u> |
| 3.3 | <u>[Bylaws of NexPoint Diversified Real Estate Trust, dated July 1, 2022 (incorporated by reference to Exhibit 3.3 to the Company's Current Report on Form 8-K filed with the SEC on July 1, 2022).](http://www.sec.gov/Archives/edgar/data/1356115/000143774922016455/ex_391478.htm)</u> |
| 4.1\* | <u>[Statement of Preferences of 5.50% Series A Cumulative Preferred Shares.](a041nxdtnhfstatementofpref.htm)</u> |
| 4.2\* | <u>[Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Act.](nxdtdescriptionofsecuritie.htm)</u> |
| 10.1† | <u>[Advisory Agreement, dated July 1, 2022, by and between the Company and the Adviser (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on July 1, 2022).](http://www.sec.gov/Archives/edgar/data/1356115/000143774922016455/ex_391479.htm)</u> |
| 10.2† | <u>[First Amendment to Advisory Agreement, dated October 25, 2022, by and between the Company and the Adviser (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 26, 2022).](https://www.sec.gov/Archives/edgar/data/1356115/000143774922024805/ex_436958.htm)</u> |
| 10.3 | <u>[Limited Partnership Agreement of NexPoint Diversified Real Estate Trust Operating Partnership, L.P., dated July 1, 2022 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on July 1, 2022).](http://www.sec.gov/Archives/edgar/data/1356115/000143774922016455/ex_391480.htm)</u> |
| 10.4† | <u>[NexPoint Diversified Real Estate Trust 2023 Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 31, 2023).](https://www.sec.gov/Archives/edgar/data/1356115/000143774923002151/ex_469775.htm)</u> |
| 10.5\*† | <u>[Form of Restricted Shares Units Agreement (Trustee).](a105-formofrsuagreementtru.htm)</u> |
| 10.6\*† | <u>[Form of Restricted Shares Units Agreement (Key Employee).](a106-formofrsuagreementkey.htm)</u> |
| 10.7 | <u>[Guaranty Agreement (Carry Obligations), dated September 14, 2022, by the Company for the benefit of JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).](https://www.sec.gov/Archives/edgar/data/1356115/000143774922027273/ex_442307.htm)</u> |
| 10.8 | <u>[Guaranty Agreement (Recourse Obligations), dated September 14, 2022, by the Company for the benefit of JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).](https://www.sec.gov/Archives/edgar/data/1356115/000143774922027273/ex_442308.htm)</u> |

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|:---|:---|
| 10.9 | <u>[Guaranty Agreement (Recourse Obligations), dated September 14, 2022, by the Company for the benefit of JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022).](https://www.sec.gov/Archives/edgar/data/1356115/000143774922027273/ex_442309.htm)</u> |
| 10.10 | <u>[Second Amended and Restated Limited Partnership Agreement of NexPoint Real Estate Finance Operating Partnership, L.P., dated September 8, 2021 (incorporated by reference to Exhibit 10.1 to NexPoint Real Estate Finance, Inc.'s Current Report on Form 8-K filed with the SEC on September 9, 2021).](https://www.sec.gov/Archives/edgar/data/1786248/000143774921007914/ex_238450.htm)</u> |
| 10.11 | <u>[Second Amended and Restated Limited Partnership Agreement of VineBrook Homes Operating Partnership, Inc., dated as of September 7, 2021 (incorporated by reference to Exhibit 10.1 to VineBrook Homes Trust, Inc.'s Current Report on Form 8-K, filed with the SEC on September 9, 2021).](https://www.sec.gov/Archives/edgar/data/1755755/000143774921021710/ex_279170.htm)</u> |
| 10.12 | <u>[Amended and Restated Limited Partnership Agreement of NexPoint SFR Operating Partnership, L.P., dated as of June 8, 2022 (incorporated by reference to Exhibit 10.5 to VineBrook Homes Trust, Inc.'s Current Report on Form 8-K, filed with the SEC on June 14, 2022).](https://www.sec.gov/Archives/edgar/data/1755755/000143774922014986/vhti20220602_8k.htm)</u> |
| 10.13 | <u>[Form of 7.50% Convertible Notes of NexPoint SFR Operating Partnership, L.P., due June 30, 2027 (incorporated by reference to Exhibit 10.4 to VineBrook Homes Trust, Inc.'s Current Report on 8-K, filed with the SEC on June 14, 2022).](https://www.sec.gov/Archives/edgar/data/1755755/000143774922014986/ex_382989.htm)</u> |
| 10.14\* | <u>[Loan Agreement, dated as of August 15, 2018, by and among CP Tower Owner, LLC and CP Land Owner, LLC, as Borrower, Delphi CRE Funding LLC, AC IV CA Mortgage LLC and the other lenders from time to time party thereto, as Lenders, and Acore Capital Mortgage, LP, as Administrative Agent for the Lenders, as amended through February 8, 2023.](a1014nxdtcityplaceloanagre.htm)</u> |
| 10.15\* | <u>[Guaranty of Recourse Obligations, dated August 15, 2018, by the Company and HCRE Partners, LLC, to or for the benefit of Acore Capital Mortgage, LP.](a1015guarantyofrecourseobl.htm)</u> |
| 10.16\* | <u>[Completion Guaranty, dated August 15, 2018, by the Company and HCRE Partners, LLC, to or for the benefit of Acore Capital Mortgage, LP.](a1016guarantycompletion484.htm)</u> |
| 10.17\* | <u>[Guaranty of Required Equity, Required Pay Down and Master Lease, dated August 15, 2018, by the Company and HCRE Partners, LLC to or for the benefit of Acore Capital Mortgage, LP.](a1017guarantyofrequiredequ.htm)</u> |
| 10.18\* | <u>[Joinder Agreement of New Indemnitor, dated as of March 8, 2022, made by the Company and NexPoint Real Estate Advisors, L.P. in favor of Acore Capital Mortgage, LP.](a1018joinderagreementofnew.htm)</u> |
| 10.19\* | <u>[Omnibus Amendment Agreement, dated as of March 8, 2022, made and entered into by the Company, NexPoint Hospitality Trust and NexPoint Real Estate Advisors, L.P., as Guarantors, the Borrowers party thereto and Acore Capital Mortgage, LP.](a1019omnibusamendmentagree.htm)</u> |
| 10.20\* | <u>[Amended and Restated Sponsor Guaranty Agreement, dated December 8, 2022, by the Company, NREF OP IV REIT Sub, LLC, Highland Income Fund, NexPoint Real Estate Strategies Fund, and NexPoint Storage Partners, Inc., in favor of Extra Space Storage, LP.](a1020nsp-arsponsorfundguar.htm)</u> |
| 10.21\* | <u>[Contribution Agreement, dated December 8, 2022, by and among NexPoint Storage Partners Operating Company, LLC, NFRO REIT Sub II, LLC, GAF REIT, LLC, GAF REIT SUB II, LLC, and NexPoint Real Estate Opportunities, LLC.](a1021nsp-nexpointcontribut.htm)</u> |
| 10.22\* | <u>[Second Amended and Restated Limited Liability Company Agreement of NexPoint Storage Partners Operating Company, LLC, dated December 8, 2022.](a1022nsp-secondarllcagreem.htm)</u> |
| 10.23\* | <u>[Form of Notes of NHT Operating Partnership LLC, due between 2039 and 2042.](a1023nht-convertiblepromis.htm)</u> |
| 10.24\* | <u>[Form of 2.25% Notes of NHT Operating Partnership LLC, due between 2040 and 2042 (CDOR).](a1024nht-convertiblepromis.htm)</u> |

---

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

---

| | |
|:---|:---|
| 16.1\* | <u>[Letter of Cohen & Company, Ltd., dated July 1, 2022, to the Securities and Exchange Commission (incorporated by reference to Exhibit 16.1 of the Company's Current Report on Form 8-K filed with the SEC on July 1, 2022).](https://www.sec.gov/Archives/edgar/data/1356115/000143774922016455/ex_391481.htm?)</u> |
| 21.1\* | <u>[List of Subsidiaries of the Registrant](a211nxdt-ex211listofsubsid.htm)</u> |
| 23.1\* | <u>[Consent of KPMG LLP](a231-consentofkpmg.htm)</u> |
| 23.2\* | <u>[Consent of Cohen & Company, Ltd.](a232nxdt12312022_consentfo.htm)</u> |
| 31.1\* | <u>[Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](nxdt-ex311sox302certificat.htm)</u> |
| 31.2\* | <u>[Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](nxdt-ex312sox302certificat.htm)</u> |
| 32.1+ | <u>[Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](nxdt-ex321sox906certificat.htm)</u> |
| 101.INS\* | Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document) |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

_______________________

\*Filed herewith.

† Management contract, compensatory plan or arrangement.

+&nbsp;&nbsp;&nbsp;&nbsp;Furnished herewith.

**Item 16. Form 10-K Summary**

Not required.

------

<u>[**Table of Contents**](#idb0f7d426d0d4b68ae9f07790ad4450e_7)</u>

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

&nbsp;&nbsp;&nbsp;&nbsp;

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ Jim Dondero</u> 

March 31, 2023 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Jim Dondero&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President (Principal Executive Officer)&nbsp;&nbsp;&nbsp;&nbsp;

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Jim Dondero | President and Trustee | March 31, 2023 |
| Jim Dondero | (Principal Executive Officer) |  |
| /s/ Brian Mitts | Chief Financial Officer, Executive VP-Finance,<br>Treasurer, Assistant Secretary and Trustee | March 31, 2023 |
| Brian Mitts | (Principal Financial Officer and Principal<br>Accounting Officer) |  |
| /s/ Ed Constantino | Trustee | March 31, 2023 |
| Ed Constantino |  |  |
| /s/ Scott Kavanaugh | Trustee | March 31, 2023 |
| Scott Kavanaugh |  |  |
| /s/ Arthur Laffer | Trustee | March 31, 2023 |
| Arthur Laffer |  |  |
| /s/ Carol Swain | Trustee | March 31, 2023 |
| Carol Swain |  |  |
| /s/ Catherine Wood | Trustee | March 31, 2023 |
| Catherine Wood |  |  |

---

## Exhibit 4.1

**Exhibit 4.1**

**NEXPOINT STRATEGIC OPPORTUNITIES FUND**

**STATEMENT OF PREFERENCES OF**

**5.50% SERIES A CUMULATIVE PREFERRED SHARES**

NexPoint Strategic Opportunities Fund, a Delaware statutory trust (the "<u>Trust</u>"), hereby certifies that:

FIRST: The Board of Trustees of the Trust, at a meeting duly convened and held on October 13, 2020 (i) pursuant to authority expressly vested in it by the Amended and Restated Agreement and Declaration of Trust of the Trust, as amended from time to time, adopted resolutions classifying an unlimited amount of shares as authorized but unissued preferred shares of the Trust, par value $0.001 per share, and (ii) at a meeting duly convened and held on October 13, 2020 designated, and approved the issuance and sale of up to, $120 million in liquidation preference of such preferred shares.

SECOND: The preferences, rights, voting powers, restrictions, limitations as to dividends and distributions, qualifications, and terms and conditions of redemption of the Trust's 5.50% Series A Cumulative Preferred Shares, par value $0.001 per share, as set by the Board of Trustees, are as follows:

**DESIGNATION**

5.50% Series A Cumulative Preferred Shares: A series of up to 4,800,000 preferred shares, par value $0.001 per share, liquidation preference $25.00 per share, is hereby designated "5.50% Series A Cumulative Preferred Shares" (the "<u>Series A Preferred Shares</u>"). Each Series A Preferred Share may be issued on a date to be determined by the Board of Trustees or its delegates and as are set forth in this Statement of Preferences, and shall have such other preferences, rights, voting powers, restrictions, limitations as to dividends and distributions, qualifications and terms and conditions of redemption, in addition to those required by applicable law or set forth in the Governing Documents (as defined herein) applicable to preferred shares of the Trust ("<u>Preferred Shares</u>"), as are set forth in this Statement of Preferences. The Series A Preferred Shares shall constitute a separate series of Preferred Shares.

This Statement of Preferences sets forth the rights, powers, preferences and privileges of the holders of the Series A Preferred Shares and the provisions set forth herein shall operate either as additions to or modifications of the rights, powers, preferences and privileges of the holders of the Series A Preferred Shares under the Declaration (as defined herein), as the context may require. To the extent the provisions set forth herein conflict with the provisions of the Declaration with respect to any such rights, powers, preferences and privileges, this Statement of Preferences shall control. Except as contemplated by the immediately preceding sentence, the Declaration shall control as to the Trust generally and the rights, powers, preferences and privileges of the other shareholders of the Trust.

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**PART I DEFINITIONS**

Unless the context or use indicates another or different meaning or intent, each of the following

terms when used in this Statement of Preferences shall have the meaning ascribed to it below, whether such term is used in the singular or plural and regardless of tense:

"<u>1940 Act</u>" means the Investment Company Act of 1940, as amended, or any successor statute. References to the 1940 Act in this Statement of Preferences shall apply to the Trust for so long as, and only for so long as, the Trust shall remain registered as an investment company act under the 1940 Act.

"<u>1940 Act Asset Coverage</u>" means, for so long as, and only for so long as, the Trust shall remain registered as an investment company act under the 1940 Act, asset coverage, as determined in accordance with Section 18(h) of the 1940 Act, of at least 200% with respect to all outstanding senior securities of the Trust which are stock, including all Outstanding Series A Preferred Shares (or such other asset coverage as may in the future be specified in or under the 1940 Act as the minimum asset coverage for senior securities which are stock of a closed-end investment company as a condition of declaring dividends on its common stock), determined on the basis of values calculated as of a time within 48 hours (not including Saturdays, Sundays or holidays) next preceding the time of such determination. Effective immediately upon issuance of the Deregistration Order, the Trust shall have no obligation to comply with 1940 Act Asset Coverage or any provisions related thereto in this Statement of Preferences.

"<u>1940 Act Asset Coverage Cure Date</u>" means, with respect to the failure by the Trust to maintain 1940 Act Asset Coverage (as required by paragraph 6(a)(i) of Part II hereof) as of the last Business Day of each March, June, September and December of each year, 49 days following such Business Day.

"<u>1940 Act Voting Period</u>" has the meaning set forth in paragraph 5(b)(i) of Part II hereof.

"<u>Board of Trustees</u>" means the Board of Trustees of the Trust or any duly authorized committee thereof as permitted by applicable law.

"<u>Business Day</u>" means a day on which the NSYE is open for trading and that is neither a Saturday nor a Sunday.

"<u>By-Laws</u>" means the Amended and Restated By-Laws of the Trust, as amended from time to time.

"<u>Common Shares</u>" means the common shares of beneficial interest, par value $0.001 per share, of the Trust.

"<u>Date of Original Issue</u>" means December 15, 2020 with respect to the Series A Preferred Shares, and for the purposes of this Statement of Preferences shall have a correlative meaning with respect to any other class or series of Preferred Shares.

"<u>Declaration</u>" means the Amended and Restated Agreement and Declaration of Trust of the Trust, dated as of August 28, 2020, as amended, supplemented or restated from time to time (including by this Statement of Preferences or by way of any other supplement or Statement of Preferences authorizing or creating a class of shares of beneficial interest in the Trust).

"<u>Deregistration Order</u>" shall mean an order issued by the Securities and Exchange Commission declaring that the Trust has ceased to be an investment company, as defined in the 1940 Act.

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"<u>Deposit Assets</u>" means cash, Short Term Money Market Instruments and U.S. Government Obligations. Each Deposit Asset shall be deemed to have a value equal to its principal or face amount payable at maturity plus any interest payable thereon after delivery of such Deposit Asset but only if payable on or prior to the applicable payment date in advance of which the relevant deposit is made.

"<u>Dividend Disbursing Agent</u>" means, with respect to the Series A Preferred Shares, American Stock Transfer & Trust Company and its successors or any other dividend disbursing agent appointed by the Trust and, with respect to any other class or series of Preferred Shares, the Person appointed by the Trust as dividend disbursing or paying agent with respect to such class or series.

"<u>Dividend Payment Date</u>" means with respect to the Series A Preferred Shares, any date on which dividends and distributions declared by, or under authority granted by, the Board of Trustees thereon are payable pursuant to the provisions of paragraph 2(a) of Part II of this Statement of Preferences and shall for the purposes of this Statement of Preferences have a correlative meaning with respect to any other class or series of Preferred Shares.

"<u>Dividend Period</u>" shall have the meaning set forth in paragraph 2(a) of Part II hereof, and for the purposes of this Statement of Preferences shall have a correlative meaning with respect to any other class or series of Preferred Shares.

"<u>DSTA</u>" means the Delaware Statutory Trust Act. "<u>Egan-Jones</u>" means Egan-Jones Ratings Company.

"<u>Governing Documents</u>" means the Declaration and the By-Laws.

"<u>Liquidation Preference</u>" shall, with respect to the Series A Preferred Shares, have the meaning set forth in paragraph 3(a) of Part II hereof, and for the purposes of this Statement of Preferences shall have a correlative meaning with respect to any other class or series of Preferred Shares.

"<u>Notice of Redemption</u>" shall have the meaning set forth in paragraph 4(c)(i) of Part II hereof. "<u>NYSE</u>" means the New York Stock Exchange.

"<u>Outside Redemption Date</u>" means the 30<sup>th</sup> Business Day after a Cure Date.

"<u>Outstanding</u>" means, as of any date, Preferred Shares theretofore issued by the Trust except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)any such Preferred Share theretofore cancelled by the Trust or delivered to the Trust for cancellation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)any such Preferred Share as to which a notice of redemption shall have been given and for whose payment at the redemption thereof Deposit Assets in the necessary amount are held by the Trust in trust for, or have been irrevocably deposited with the relevant disbursing agent for payment to, the holder of such share pursuant to this Statement of Preferences with respect thereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)any such Preferred Share in exchange for or in lieu of which other shares have been issued and delivered.

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Notwithstanding the foregoing, for purposes of voting rights (including the determination of the number of shares required to constitute a quorum), any Preferred Shares as to which the Trust or any subsidiary of the Trust is the holder will be disregarded and deemed not Outstanding.

"<u>Person</u>" means and includes an individual, a partnership, the Trust, a trust, a corporation, a limited liability company, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.

"<u>Post-Deregistration Voting Period</u>" has the meaning set forth in paragraph 5(b)(ii) of Part II hereof.

"<u>Preferred Shares</u>" means all series of the preferred shares, par value $0.001 per share, of the Trust, and includes the Series A Preferred Shares.

"<u>Rating Agency</u>" means Egan-Jones, as long as Egan-Jones is then rating the Series A Preferred Shares at the Trust's request, or any rating agency then providing a rating for the Series A Preferred Shares at the request of the Trust, and for the purpose of this Statement of Preferences shall have a correlative meaning with respect to any other series of Preferred Shares.

"<u>Record Date</u>" shall have the meaning set forth in paragraph 2(a) of Part II hereof, and for the purposes of this Statement of Preferences shall have a correlative meaning with respect to any other class or series of Preferred Shares.

"<u>Redemption Price</u>" has the meaning set forth in paragraph 4(a) of Part II hereof, and for the purposes of this Statement of Preferences shall have a correlative meaning with respect to any other class or series of Preferred Shares.

"<u>Series A Preferred Shares</u>" means the 5.50% Series A Cumulative Preferred Shares, par value

$0.001 per share, of the Trust.

"<u>Short Term Money Market Instruments</u>" means the following types of instruments if, on the date of purchase or other acquisition thereof by the Trust, the remaining term to maturity thereof is not in excess of 180 days:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)commercial paper rated A-1 if such commercial paper matures in 30 days or A-1+ if such commercial paper matures in over 30 days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)demand or time deposits in, and banker's acceptances and certificates of deposit of (A) a depository institution or trust company incorporated under the laws of the United States of America or any state thereof or the District of Columbia or (B) a United States branch office or agency of a foreign depository institution (provided that such branch office or agency is subject to banking regulation under the laws of the United States, any state thereof or the District of Columbia);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)overnight funds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)U.S. Government Obligations.

"<u>Trust</u>" means NexPoint Strategic Opportunities Fund, a Delaware statutory trust.

"<u>U.S. Government Obligations</u>" means direct obligations of the United States or obligations issued by its agencies or instrumentalities that are entitled to the full faith and credit of the

4

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United States and that, other than United States Treasury Bills, provide for the periodic payment of interest and the full payment of principal at maturity or call for redemption.

"<u>Voting Period</u>" shall have the meaning set forth in paragraph 5(b)(ii) of Part II hereof.

5

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**PART II**

**5.50% SERIES A CUMULATIVE PREFERRED SHARES**

**1. Number of Shares; Ranking.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)**The initial number of authorized Shares constituting the Series A Preferred Shares to be issued is 4,800,000. No fractional Series A Preferred Shares shall be issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)**Series A Preferred Shares which at any time have been redeemed or purchased by the Trust shall, after such redemption or purchase, have the status of authorized but unissued Preferred Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)**The Series A Preferred Shares shall rank on a parity with any other series of Preferred Shares as to the payment of dividends, distributions and liquidation preference to which such Shares are entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)**No holder of Series A Preferred Shares shall have, solely by reason of being such a holder, any preemptive or other right to acquire, purchase or subscribe for any Preferred Shares or Common Shares or other securities of the Trust which it may hereafter issue or sell.

**2. Dividends and Distributions.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Holders of Series A Preferred Shares shall be entitled to receive, when, as and if declared by, or under authority granted by, the Board of Trustees, out of funds legally available therefor, cumulative cash dividends and distributions at the rate of 5.50% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months) of the Liquidation Preference on the Series A Preferred Shares and no more, payable quarterly on March 31, June 30, September 30 and December 31 in each year (each a "<u>Dividend Payment</u> <u>Date</u>") commencing on March 31, 2021 (or, if any such day is not a Business Day, then on the next succeeding Business Day). Dividends and distributions will be payable to holders of record of Series A Preferred Shares as they appear on the share register of the Trust at the close of business on the fifth preceding Business Day (each, a "<u>Record Date</u>") in preference to dividends and distributions on Common Shares and any other capital shares of the Trust ranking junior to the Series A Preferred Shares in payment of dividends and distributions. Dividends and distributions on Series A Preferred Shares that were originally issued on the Date of Original Issue shall accumulate from the Date of Original Issue. Dividends and distributions on all other Series A Preferred Shares shall accumulate from (i) the date on which such shares are originally issued if such date is a Dividend Payment Date, (ii) the immediately preceding Dividend Payment Date if the date on which such shares are originally issued is other than a Dividend Payment Date and is on or before a Record Date or (iii) the immediately following Dividend Payment Date if the date on which such shares are originally issued is during the period between a Record Date and a Dividend Payment Date. Each period beginning on and including a Dividend Payment Date (or the Date of Original Issue, in the case of the first dividend period after the issuance of such shares) and ending on but excluding the next succeeding Dividend Payment Date is referred to herein as a "Dividend Period." Dividends and distributions on account of arrears for any past Dividend Period or in connection with the redemption of Series A Preferred Shares may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date not exceeding 30 days preceding the payment date thereof as shall be fixed by the Board of Trustees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)**(i) No full dividends or distributions shall be declared or paid on Series A Preferred Shares for any Dividend Period or part thereof unless full cumulative dividends and

6

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distributions due through the most recent Dividend Payment Dates therefor for all series of Preferred Shares ranking on a parity with the Series A Preferred Shares as to the payment of dividends and distributions have been or contemporaneously are declared and paid through the most recent Dividend Payment Dates therefor. If full cumulative dividends and distributions due have not been paid on all such Outstanding Preferred Shares, any dividends and distributions being paid on such Preferred Shares (including the Series A Preferred Shares) will be paid as nearly pro rata as possible in proportion to the respective amounts of dividends and distributions accumulated but unpaid on each such series of Preferred Shares on the relevant Dividend Payment Date. No holders of Series A Preferred Shares shall be entitled to any dividends or distributions, whether payable in cash, property or shares, in excess of full cumulative dividends and distributions as provided in this paragraph 2(b)(i) on Series A Preferred Shares. No interest or sum of money in lieu of interest shall be payable in respect of any dividend payments on any Series A Preferred Shares that may be in arrears.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For so long as Series A Preferred Shares are Outstanding, the Trust shall not declare or pay any dividend or other distribution (other than a dividend or distribution paid in Common Shares, or options, warrants or rights to subscribe for or purchase Common Shares or other shares, if any, ranking junior to the Series A Preferred Shares as to dividends and distribution of assets upon liquidation) in respect of the Common Shares or any other shares of the Trust ranking junior to the Series A Preferred Shares as to the payment of dividends and the distribution of assets upon liquidation, or call for redemption, redeem, purchase or otherwise acquire for consideration any Common Shares or any other shares of the Trust ranking junior to the Series A Preferred Shares as to the payment of dividends and the distribution of assets upon liquidation (except by conversion into or exchange for shares of the Trust ranking junior to the Series A Preferred Shares as to dividends and distributions of assets upon liquidation), unless, in each case, (A) immediately thereafter, for so long as, and only for so long as, the Trust shall remain registered as an investment company under the 1940 Act, the Trust shall have 1940 Act Asset Coverage, (B) all cumulative dividends and distributions on all Series A Preferred Shares due on or prior to the date of the transaction have been declared and paid (or shall have been declared and sufficient funds for the payment thereof deposited with the applicable Dividend Disbursing Agent) and (C) the Trust has redeemed the full number of Series A Preferred Shares to be redeemed mandatorily pursuant to any provision contained herein for mandatory redemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Any dividend payment made on the Series A Preferred Shares shall first be credited against the dividends and distributions accumulated with respect to the earliest Dividend Period for which dividends and distributions have not been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)**Not later than the Business Day immediately preceding each Dividend Payment Date, the Trust shall deposit with the Dividend Disbursing Agent Deposit Assets having an initial combined value sufficient to pay the dividends and distributions that are payable on such Dividend Payment Date, which Deposit Assets shall mature (if such assets constitute debt securities or time deposits) on or prior to such Dividend Payment Date. The Trust may direct the Dividend Disbursing Agent with respect to the investment of any such Deposit Assets, provided that such investment consists exclusively of Deposit Assets and provided further that the proceeds of any such investment will be available at the opening of business on such Dividend Payment Date.

**3. Liquidation Rights.**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)**In the event of any liquidation, dissolution or winding up of the affairs of the Trust, whether voluntary or involuntary, the holders of Series A Preferred Shares shall be entitled to receive out of the assets of the Trust available for distribution to shareholders, after satisfying claims of creditors but before any distribution or payment shall be made in respect of the Common Shares or any other shares of the Trust ranking junior to the Series A Preferred Shares as to liquidation payments, a liquidation distribution in the amount of $25.00 per share (the "<u>Liquidation Preference</u>"), plus an amount equal to all unpaid dividends and distributions accumulated to and including the date fixed for such distribution or payment (whether or not earned or declared by the Trust, but excluding interest thereon), and such holders shall be entitled to no further participation in any distribution or payment in connection with any such liquidation, dissolution or winding up of the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)**If, upon any liquidation, dissolution or winding up of the affairs of the Trust, whether voluntary or involuntary, the assets of the Trust available for distribution among the holders of all Outstanding Series A Preferred Shares, and any other Outstanding class or series of Preferred Shares ranking on a parity with the Series A Preferred Shares as to payment upon liquidation, shall be insufficient to permit the payment in full to such holders of Series A Preferred Shares of the Liquidation Preference plus accumulated and unpaid dividends and distributions and the amounts due upon liquidation with respect to such other Preferred Shares, then such available assets shall be distributed among the holders of Series A Preferred Shares and such other Preferred Shares ratably in proportion to the respective preferential liquidation amounts to which they are entitled. Unless and until the Liquidation Preference plus accumulated and unpaid dividends and distributions has been paid in full to the holders of Series A Preferred Shares, no dividends or distributions will be made to holders of the Common Shares or any other shares of the Trust ranking junior to the Series A Preferred Shares as to liquidation.

**4. Redemption.**

The Series A Preferred Shares shall be redeemed by the Trust as provided below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**Mandatory Redemptions.** For so long as, and only for so long as, the Trust shall remain registered as an investment company under the 1940 Act, if the Trust is required to redeem any Preferred Shares (which may include Series A Preferred Shares) pursuant to paragraph 6(b) of Part II hereof, then the Trust shall, to the extent permitted by the DSTA and, if applicable, the 1940 Act, by the close of business on such 1940 Act Asset Coverage Cure Date fix a redemption date that is on or before the Outside Redemption Date and proceed to redeem shares as set forth in paragraph 4(c) hereof; provided, however, that the Trust may fix a redemption date that is after the Outside Redemption Date if the Board of Trustees determines in good faith that extraordinary market conditions exist as a result of which disposal by the Trust of securities owned by it is not reasonably practicable, or is not reasonably practicable at fair value. On such redemption date, the Trust shall redeem, out of funds legally available therefor, (i) the number of Preferred Shares, which, to the extent permitted by the DSTA and, if applicable, the 1940 Act, at the option of the Trust may include any proportion of Series A Preferred Shares or any other series of Preferred Shares, equal to the minimum number of shares the redemption of which, if such redemption had occurred immediately prior to the opening of business on such 1940 Act Asset Coverage Cure Date, would have resulted in the Trust having 1940 Act Asset Coverage immediately prior to the opening of business on such 1940 Act Asset Coverage Cure Date or (ii) if such 1940 Act Asset Coverage cannot be so restored, all of the Outstanding Series A Preferred Shares, at a price equal to $25.00 per share plus accumulated but unpaid dividends and distributions (whether or not earned or declared by the Trust) through, but not including, the date of redemption (the "Redemption Price"). In the event that Preferred Shares are redeemed pursuant to paragraph 6(b) of Part II hereof, the Trust may, but is not required to,

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redeem an additional number of Series A Preferred Shares pursuant to this paragraph 4(a)(i) which, when aggregated with other Preferred Shares redeemed by the Trust, permits the Trust to have with respect to the Preferred Shares (including the Series A Preferred Shares) remaining Outstanding after such redemption 1940 Act Asset Coverage of as much as 220%. In the event that all of the Series A Preferred Shares then Outstanding are required to be redeemed pursuant to paragraph 6(b) of Part II hereof, the Trust shall redeem such shares at the Redemption Price and proceed to do so as set forth in paragraph 4(c) hereof. Effective immediately upon issuance of the Deregistration Order, this paragraph 4(a)(i) shall be void and shall have no further effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Optional Redemptions.** Prior to December 15, 2023, the Series A Preferred Shares are not subject to optional redemption by the Trust unless such redemption is necessary, in the judgment of the Board of Trustees, to maintain the Trust's status as a regulated investment company ("RIC") or a real estate investment trust ("REIT"), as applicable, under Subchapter M of the Internal Revenue Code of 1986, as amended. Commencing December 15, 2023, and thereafter, and prior thereto to the extent necessary to maintain the Trust's status as a RIC or a REIT, as applicable, under Subchapter M of the Internal Revenue Code of 1986, as amended, to the extent permitted by DSTA and, if applicable, the 1940 Act, the Trust may at any time upon Notice of Redemption redeem the Series A Preferred Shares in whole or in part at the Redemption Price per share, which notice shall specify a redemption date of not fewer than 30 days nor more than 90 days after the date of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Procedures for Redemption.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)If the Trust shall determine or be required to redeem Series A Preferred Shares pursuant to this paragraph 4, it shall mail a written notice of redemption ("<u>Notice of</u> <u>Redemption</u>") with respect to such redemption by first class mail, postage prepaid, to each holder of the shares to be redeemed at such holder's address as the same appears on the share register of the Trust on the close of business on such date as the Board of Trustees or its delegatee may determine, which date shall not be earlier than the second Business Day prior to the date upon which such Notice of Redemption is mailed or delivered electronically to the holders of Series A Preferred Shares. Each such Notice of Redemption shall state: (A) the redemption date as established by the Board of Trustees or its delegatee; (B) the number of Series A Preferred Shares to be redeemed; (C) the CUSIP number(s) of such shares; (D) the Redemption Price (specifying the amount of accumulated dividends and distributions to be included therein); (E) the place or places where the certificate(s) for such shares (properly endorsed or assigned for transfer, if the Board of Trustees or its delegatee shall so require and the Notice of Redemption shall so state), if any, are to be surrendered for payment in respect of such redemption; (F) that dividends and distributions on the shares to be redeemed will cease to accrue on such redemption date; (G) the provisions of this paragraph 4 under which such redemption is made; and (H) in the case of a redemption pursuant to paragraph 4(b), any conditions precedent to such redemption. If fewer than all Series A Preferred Shares held by any holder are to be redeemed, the Notice of Redemption mailed or delivered electronically to such holder also shall specify the number or percentage of shares to be redeemed from such holder. No defect in the Notice of Redemption or the mailing thereof shall affect the validity of the redemption proceedings, except as required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If the Trust shall give a Notice of Redemption, then by the close of business on the Business Day preceding the redemption date specified in the Notice of Redemption (so long as any conditions precedent to such redemption have been met) or, if the Dividend Disbursing Agent so agrees, another date not later than the redemption date, the Trust

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shall (A) deposit with the Dividend Disbursing Agent Deposit Assets that shall mature (if such assets constitute debt securities or time deposits) on or prior to such redemption date having an initial combined value sufficient to effect the redemption of the Series A Preferred Shares to be redeemed and (B) give the Dividend Disbursing Agent irrevocable instructions and authority to pay the Redemption Price to the holders of the Series A Preferred Shares called for redemption on the redemption date. The Trust may direct the Dividend Disbursing Agent with respect to the investment of any Deposit Assets so deposited provided that the proceeds of any such investment will be available at the opening of business on such redemption date. Upon the date of such deposit (unless the Trust shall default in making payment of the Redemption Price), all rights of the holders of the Series A Preferred Shares so called for redemption shall cease and terminate except the right of the holders thereof to receive the Redemption Price thereof and such shares shall no longer be deemed Outstanding for any purpose. The Trust shall be entitled to receive, promptly after the date fixed for redemption, any cash in excess of the aggregate Redemption Price of the Series A Preferred Shares called for redemption on such date and any remaining Deposit Assets. Any assets so deposited that are unclaimed at the end of two years from such redemption date shall, to the extent permitted by law, be repaid to the Trust, after which the holders of the Series A Preferred Shares so called for redemption shall look only to the Trust for payment of the Redemption Price thereof. The Trust shall be entitled to receive, from time to time after the date fixed for redemption, any interest on the Deposit Assets so deposited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)On or after the redemption date, each holder of Series A Preferred Shares that are subject to redemption shall surrender such shares to the Trust as instructed in the Notice of Redemption and shall then be entitled to receive the cash Redemption Price, without interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)In the case of any redemption of less than all of the Series A Preferred Shares pursuant to this Statement of Preferences, such redemption shall be made pro rata from each holder of Series A Preferred Shares in accordance with the respective number of shares held by each such holder on the record date for such redemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Notwithstanding the other provisions of this paragraph 4, the Trust shall not redeem any Series A Preferred Shares unless all accumulated and unpaid dividends and distributions on all Outstanding Series A Preferred Shares and other Preferred Shares ranking on a parity with the Series A Preferred Shares with respect to dividends and distributions for all applicable past Dividend Periods (whether or not earned or declared by the Trust) shall have been or are contemporaneously paid or declared and Deposit Assets for the payment of such dividends and distributions shall have been deposited with the Dividend Disbursing Agent as set forth in paragraph 2(c) of Part II hereof, provided, however, that the foregoing shall not prevent the purchase or acquisition of Outstanding Preferred Shares pursuant to the successful completion of an otherwise lawful purchase or exchange offer made on the same terms to holders of all Outstanding Series A Preferred Shares.

If the Trust shall not have funds legally available for the redemption of, or is otherwise unable to redeem, all the Series A Preferred Shares or other Preferred Shares designated to be redeemed on any redemption date, the Trust shall redeem on such redemption date the number of Series A Preferred Shares and other Preferred Shares so designated as it shall have legally available funds, or is otherwise able, to redeem ratably on the basis of the Redemption Price from each holder whose shares are to be redeemed, and the remainder of the Series A Preferred Shares and other Preferred Shares designated to be redeemed shall be redeemed on the earliest practicable date on which the Trust shall have funds legally available for the redemption of, or is otherwise able to redeem, such shares upon Notice of Redemption.

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**5. Voting Rights.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)**General.** Except as otherwise provided in the Governing Documents or a resolution of the Board of Trustees, or as required by applicable law, holders of Series A Preferred Shares shall have no power to vote on any matter except matters submitted to a vote of the Common Shares. In any matter submitted to a vote of the holders of the Common Shares, each holder of Series A Preferred Shares shall be entitled to one vote for each Series A Preferred Share held and the holders of the Outstanding Preferred Shares, including Series A Preferred Shares, and the Common Shares shall vote together as a single class; provided, however, that the holders of the Outstanding Preferred Shares, including Series A Preferred Shares, shall be entitled, as a separate class, to the exclusion of the holders of all other securities and classes of capital shares of the Trust, to elect 2 of the Trust's trustees for so long as, and only for so long as, the Trust is registered as an investment company under the 1940 Act and such entitlement shall cease immediately upon the issuance of the Deregistration Order. Subject to paragraph 5(b) of Part II hereof, the holders of the outstanding capital shares of the Trust, including the holders of the Outstanding Preferred Shares, including the Series A Preferred Shares, voting as a single class, shall elect the balance of the trustees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Additional Voting Rights for Trustees**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)*Right to Elect Majority of Board of Trustees*. For so long as, and only for so long as, the Trust is registered as an investment company under the 1940 Act and such entitlement shall cease immediately upon the issuance of the Deregistration Order, during any period in which any one or more of the conditions described below shall exist (such period being referred to herein as a "<u>1940 Act Voting Period</u>"), the number and/or composition of trustees constituting the Board of Trustees shall be automatically adjusted as necessary to permit the holders of Outstanding Preferred Shares, including the Series A Preferred Shares, voting separately as one class (to the exclusion of the holders of all other securities and classes of capital shares of the Trust) to elect the number of trustees that, when added to the 2 trustees elected exclusively by the holders of Preferred Shares pursuant to paragraph 5(a) above, would constitute a simple majority of the Board of Trustees as so adjusted. The Trust and the Board of Trustees shall take all necessary actions, including effecting the removal of trustees or amendment of the Declaration, to effect an adjustment of the number and/or composition of trustees as described in the preceding sentence. A 1940 Act Voting Period shall commence:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)if at any time accumulated dividends and distributions (whether or not earned or declared, and whether or not funds are then legally available in an amount sufficient therefor) on the Outstanding Series A Preferred Shares equal to at least 2 full years' dividends and distributions shall be due and unpaid and sufficient Deposit Assets shall not have been deposited with the Dividend Disbursing Agent for the payment of such accumulated dividends and distributions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)if at any time holders of any other Preferred Shares are entitled to elect a majority of the trustees of the Trust under the 1940 Act or Statement of Preferences creating such shares.

Effective immediately upon issuance of the Deregistration Order, this paragraph 5(b)(i) shall be void and shall have no further effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)*Post-Deregistration Order Arrearages Trustee Voting Rights*. This paragraph 5(b)(ii) shall not be applicable, and shall have no effect, until the issuance of the Deregistration Order and, thereafter, shall confer the voting entitlement described herein only for so long as the rules of a national securities exchange on which any of the Trust's equity securities are listed requires holders of Series A Preferred Shares to have such voting entitlements. During any period in which accumulated dividends and distributions (whether or not earned or declared, and whether or not funds are then legally available in an amount sufficient therefor) on the outstanding Series A Preferred Shares equal to at least six full quarters' dividends and distributions shall be due and unpaid and sufficient Deposit Assets shall not have been deposited with the Dividend Disbursing Agent for the payment of such accumulated dividends and distributions (such period being referred to herein as a "Post-Deregistration Voting Period" and, together with a 1940 Act Voting Period, a "Voting Period"), holders of the Series A Preferred Shares, voting separately as one class (to the exclusion of the holders of all other securities and classes of capital shares of the Trust, except for any other series of Preferred Shares for which a like voting entitlement has arisen, with which the holders of the Series A Preferred Shares will vote together as one class for this purpose), shall be entitled to elect 2 of the Trust's trustees. The Trust and the Board of Trustees shall take all necessary actions, including effecting the removal of trustees or amendment of the Declaration, to effect an adjustment of the number and/or composition of trustees as described in the preceding sentence.

Upon the termination of a Voting Period, the voting rights described in this paragraph 5(b) shall cease, subject always, however, to the reverting of such voting rights in the holders of Preferred Shares upon the further occurrence of any of the events described in this paragraph 5(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**Right to Vote with Respect to Certain Other Matters.** Subject to paragraph 1 of Part III of this Statement of Preferences, so long as any Series A Preferred Shares are Outstanding, the Trust shall not, without the affirmative vote of the holders of at least two- thirds of the Preferred Shares Outstanding at the time, voting separately as one class, amend, alter or repeal the provisions of this Statement of Preferences so as to in the aggregate adversely affect the rights and preferences set forth in any Statement of Preferences, including the Series A Preferred Shares. To the extent permitted under the 1940 Act, if applicable, and the applicable exchange on which the Preferred Shares are listed, in the event that more than one series of Preferred Shares are Outstanding, the Trust shall not effect any of the actions set forth in the preceding sentence which in the aggregate adversely affects the rights and preferences set forth in the Statement of Preferences for a series of Preferred Shares differently than such rights and preferences for any other series of Preferred Shares without the affirmative vote of the holders of at least two-thirds of the Preferred Shares Outstanding of each series adversely affected (each such adversely affected series voting separately as a class to the extent its rights are affected differently). The holders of the Series A Preferred Shares shall not be entitled to vote on any matter that affects the rights or interests of only one or more other series of Preferred Shares. The Trust shall notify the relevant Rating Agency 10 Business Days prior to any such vote described above. Unless a higher percentage is required under the Governing Documents or applicable provisions of the DSTA or, if applicable, the 1940 Act, and for so long as, and only for so long, as the Trust is registered as an investment company under the 1940 Act, the affirmative vote of the holders of a majority of the Outstanding Preferred Shares, including Series A Preferred Shares, voting together as a single class, will be required to approve any plan of reorganization (as defined in the 1940 Act) adversely affecting the Preferred Shares or any action requiring a vote of security holders under Section 13(a) of the 1940 Act. Effective immediately upon issuance of the Deregistration Order, the immediately preceding sentence shall be void and

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shall have no further effect. For so long as, and only for so long as, the Trust remains registered as an investment company under the 1940 Act, the phrase "vote of the holders of a majority of the Outstanding Preferred Shares" (or any like phrase) as used in this paragraph 5(c) shall mean, in accordance with Section 2(a)(42) of the 1940 Act, the vote, at the annual or a special meeting of the shareholders of the Trust duly called (i) of 67 percent or more of the Preferred Shares present at such meeting, if the holders of more than 50 percent of the Outstanding Preferred Shares are present or represented by proxy; or (ii) of more than 50 percent of the Outstanding Preferred Shares, whichever is less. The class votes of holders of Preferred Shares described in this paragraph 5(c) will in each case be in addition to a separate vote of the requisite percentage of Common Shares and Preferred Shares, including Series A Preferred Shares, voting together as a single class, necessary to authorize the action in question. An increase in the number of authorized Preferred Shares pursuant to the Governing Documents or the issuance of additional shares of any series of Preferred Shares (including Series A Preferred Shares), pursuant to the Governing Documents shall not in and of itself be considered to adversely affect the rights and preferences of the Preferred Shares and holders of the Series A Preferred Shares, by virtue of their acquisition of Series A Preferred Shares, will be deemed to have authorized such issuances by the Board of Trustees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Voting Procedures.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)As soon as practicable after the accrual of any right of the holders of Preferred Shares to elect additional trustees as described in paragraph 5(b) above, the Trust shall call a special meeting of such holders and instruct the Dividend Disbursing Agent to mail a notice of such special meeting to such holders, such meeting to be held not less than 10 nor more than 40 days after the date of mailing of such notice. If the Trust fails to send such notice to the Dividend Disbursing Agent or if the Trust does not call such a special meeting, it may be called by any such holder on like notice. The record date for determining the holders entitled to notice of and to vote at such special meeting shall be the close of business on the day on which such notice is mailed or such other date as the Board of Trustees shall determine. At any such special meeting and at each shareholder meeting held during a Voting Period for the purpose of electing trustees, such holders of Preferred Shares, voting together as a class (to the exclusion of the holders of all other securities and classes of capital shares of the Trust), shall be entitled to elect the number of trustees prescribed in paragraph 5(b) above on a one-vote-per-share basis. At any such meeting, or adjournment thereof in the absence of a quorum, a majority of such holders present in person or by proxy shall have the power to adjourn the meeting without notice, other than by an announcement at the meeting, to a date not more than 120 days after the original record date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The terms of office of all persons who are trustees of the Trust at the time of a special meeting of holders of Preferred Shares to elect trustees and who remain trustees following such meeting shall continue, notwithstanding the election at such meeting by such holders of the number of trustees that they are entitled to elect, and the persons so elected by such holders, together with the 2 incumbent trustees elected by the holders of Preferred Shares (to the extent such election right exists in accordance with the terms of paragraph 5(a), above) and the remaining incumbent trustees elected by the holders of the Common Shares and Preferred Shares, shall constitute the duly elected trustees of the Trust.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Upon the expiration of a Voting Period, the terms of office of the additional trustees elected by the holders of Preferred Shares pursuant to paragraph 5(b) above shall expire at the earliest time permitted by law and the remaining trustees shall constitute the trustees of the Trust and the voting rights of such holders of Preferred Shares, including Series A Preferred Shares, to elect additional trustees pursuant to paragraph 5(b) above shall cease, subject to the provisions of the last sentence of paragraph 5(b). Upon the expiration of the terms of the trustees elected by the holders of Preferred Shares pursuant to paragraph 5(b) above, the number of trustees shall be automatically reduced to the number of trustees on the Board of Trustees immediately preceding such Voting Period if the number of trustees on the Board of Trustees was increased in connection with a Voting Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)Exclusive Remedy.** Unless otherwise required by law, the holders of Series A Preferred Shares shall not have any rights or preferences other than those specifically set forth herein. The holders of Series A Preferred Shares shall have no preemptive rights or rights to cumulative voting. In the event that the Trust fails to pay any dividends and distributions on the Series A Preferred Shares, the exclusive remedy of the holders shall be the right to vote for trustees pursuant to the provisions of this paragraph 5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)Notification to Rating Agency**. In the event a vote of holders of Series A Preferred Shares is required pursuant to the provisions of Section 13(a) of the 1940 Act, as long as the Series A Preferred Shares are then rated by a Rating Agency at the Trust's request, the Trust shall, not later than 10 Business Days prior to the date on which such vote is to be taken, notify the relevant Rating Agency that such vote is to be taken and the nature of the action with respect to which such vote is to be taken and, not later than 10 Business Days after the date on which such vote is taken, notify such Rating Agency of the result of such vote. Effective immediately upon issuance of the Deregistration Order, this paragraph 5(e) shall be void and shall have no further effect.

**6. Coverage Tests.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)Determination of Compliance.** For so long as, and only for so long as, the Trust shall remain registered as an investment company under the 1940 Act, the Trust shall make the following determination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 1940 Act Asset Coverage. The Trust shall have 1940 Act Asset Coverage as of the last Business Day of each March, June, September and December of each year in which any Series A Preferred Shares are Outstanding; provided, however, that, effective immediately upon issuance of the Deregistration Order, the Trust shall have no obligation to make any determination with respect to 1940 Act Asset Coverage and this paragraph 6(a)(i) shall be void and shall have no further effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)Failure to Meet 1940 Act Asset Coverage.** For so long as, and only for so long as, the Trust shall remain registered as an investment company under the 1940 Act, if the Trust fails to have 1940 Act Asset Coverage as provided in paragraph 6(a)(i) hereof and such failure is not cured as of the related 1940 Act Asset Coverage Cure Date, (i) the Trust shall give a Notice of Redemption as described in paragraph 4 of Part II hereof with respect to the redemption of a sufficient number of Preferred Shares, which at the Trust's determination (to the extent permitted by the 1940 Act and the DSTA) may include any proportion of Series A Preferred Shares, to enable it to meet the requirements of paragraph 6(a)(i) above, and, at the Trust's discretion, such additional number of Series A Preferred Shares or other Preferred Shares in order that the Trust have 1940 Act Asset Coverage with respect to the Series A Preferred Shares and any other Preferred Shares remaining

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Outstanding after such redemption as great as 220%, and (ii) deposit with the Dividend Disbursing Agent Deposit Assets having an initial combined value sufficient to effect the redemption of the Series A Preferred Shares or other Preferred Shares to be redeemed, as contemplated by paragraph 4 of Part II hereof. Effective immediately upon issuance of the Deregistration Order, this paragraph 6(b) shall no longer apply and shall be void and shall have no further effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)Status of Shares Called for Redemption.** For purposes of determining whether the requirements of paragraph 6(a)(i) hereof are satisfied, (i) no Series A Preferred Share shall be deemed to be Outstanding for purposes of any computation if, prior to or concurrently with such determination, sufficient Deposit Assets to pay the full Redemption Price for such share shall have been deposited in trust with the Dividend Disbursing Agent (or applicable paying agent) and the requisite Notice of Redemption shall have been given, and (ii) such Deposit Assets deposited with the Dividend Disbursing Agent (or paying agent) shall not be included.

**7. Limitation on Incurrence of Additional Indebtedness and Issuance of Additional Preferred Shares**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)**For so long as, and only for so long as, the Trust shall remain registered as an investment company act under the 1940 Act and any Series A Preferred Shares are Outstanding, the Trust may issue and sell one or more series of a class of senior securities of the Trust representing indebtedness under Section 18 of the 1940 Act and/or otherwise create or incur indebtedness, provided that, immediately after giving effect to the incurrence of such indebtedness and to its receipt and application of the proceeds thereof, the Trust shall have an "asset coverage" for all senior securities representing indebtedness, as defined in Section 18(h) of the 1940 Act, of at least 300% of the amount of all indebtedness of the Trust then outstanding and no such additional indebtedness shall have any preference or priority over any other indebtedness of the Trust upon the distribution of the assets of the Trust or in respect of the payment of interest. Any possible liability resulting from lending and/or borrowing portfolio securities, entering into reverse repurchase agreements, entering into futures contracts and writing options, to the extent such transactions are made in accordance with the investment restrictions of the Trust then in effect, shall not be considered to be indebtedness limited by this paragraph 7(a) if such liabilities are covered in accordance with the requirements of the 1940 Act and applicable guidance. Effective immediately upon issuance of the Deregistration Order, this paragraph 7(a) shall be void and shall have no further effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)**For so long as, and only for so long as, the Trust shall remain registered as an investment company act under the 1940 Act and any Series A Preferred Shares are Outstanding, the Trust may issue and sell shares of one or more other series of Preferred Shares constituting a series of a class of senior securities of the Trust representing stock under Section 18 of the 1940 Act in addition to the Series A Preferred Shares and other Preferred Shares then Outstanding, provided that (i) the Trust shall, immediately after giving effect to the issuance of such additional Preferred Shares and to its receipt and application of the proceeds thereof, including, without limitation, to the redemption of Preferred Shares for which a Notice of Redemption has been mailed or delivered electronically prior to such issuance, have an "asset coverage" for all senior securities which are stock, as defined in Section 18(h) of the 1940 Act, of at least 200% of the sum of the Liquidation Preference of the Series A Preferred Shares and all other Preferred Shares then Outstanding, and (ii) no such additional Preferred Shares shall have any preference or priority over any other Preferred Shares upon liquidation or the distribution of the assets of the Trust or in respect of the payment of dividends. Effective immediately upon issuance of the Deregistration Order, this paragraph 7(b) shall be void and shall have no further effect.

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**8. Restrictions on Ownership and Transfer**

Effective immediately upon the Trust's election to qualify as a REIT for federal income tax purposes, the Series A Preferred Shares and any other series of Preferred Shares Outstanding shall be subject to the provisions of Article XII of the Declaration. Pursuant to Article XII of the Declaration, and without limitation of any provisions of such Article XII, Series A Preferred Shares together with Common Shares beneficially or constructively owned (as defined in the Declaration) by a shareholder in excess of the Aggregate Share Ownership Limit (as defined in the Declaration), shall automatically be transferred to a Charitable Trust (as defined in the Declaration) for the benefit of one or more Charitable Beneficiaries (as defined in the Declaration) in accordance with and subject to the provisions of such Article XII (including, without limitation, any applicable exceptions or any additional remedies provided to the Board pursuant to such Article XII). Section 12.2.9 of the Declaration providing for a legend on certificates will also apply to shares of Series A Preferred Shares with such changes as are appropriate to refer to the Series A Preferred Shares and restrictions applicable thereto.

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**PART III**

**ABILITY OF THE BOARD OF TRUSTEES TO MODIFY THE STATEMENT OF PREFERENCES**

**1. Modification to Prevent Ratings Reduction or Withdrawal.** The Board of Trustees, without further action by the shareholders, may amend, alter, add to or repeal any provision of this Statement of Preferences that has been adopted by the Trust pursuant to the Rating Agency guidelines or add covenants and other obligations of the Trust to this Statement of Preferences, if the applicable Rating Agency confirms that such amendments or modifications are necessary to prevent a reduction in, or the withdrawal of, a rating of the Preferred Shares and such amendments and modifications do not adversely affect the rights and preferences of and are in the aggregate in the best interests of the holders of the Preferred Shares.

**2. Other Modification.** The Board of Trustees, without further action by the shareholders, may amend, alter, add to or repeal any provision of this Statement of Preferences including provisions that have been adopted by the Trust pursuant to the Rating Agency guidelines, if such amendments or modifications will not in the aggregate adversely affect the rights and preferences of the holders of any series of the Preferred Shares, provided, that the Trust has received confirmation from each applicable Rating Agency that such amendment or modification would not adversely affect such Rating Agency's then-current rating of such series of the Trust's Preferred Shares.

Notwithstanding the provisions of the preceding paragraph, to the extent permitted by law, the Board of Trustees or its delegatee, without the vote of the holders of the Series A Preferred Shares or any other shares of the Trust, may amend the provisions of this Statement of Preferences to resolve any inconsistency or ambiguity or to remedy any formal defect so long as the amendment does not in the aggregate adversely affect the rights and preferences of the Series A Preferred Shares.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, NexPoint Strategic Opportunities Fund has caused this Statement of Preferences to be signed in its name and on its behalf by a duly authorized officer, who acknowledges said instrument to be the statutory trust act of the Trust, and states that, to the best of such officer's knowledge, information and belief under penalty of perjury, the matters and facts herein set forth with respect to approval are true in all material respects, as of December 15, 2020.

By: <u>/s/ Lauren Thedford&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Lauren Thedford Title: Secretary

Attest,

<u>/s/ Dustin Norris&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Dustin Norris

Title: Executive Vice President

## Exhibit 4.2

**Exhibit 4.2**

**DESCRIPTION OF THE REGISTRANT'S SECURITIES<br>REGISTERED PURSUANT TO SECTION 12 OF THE<br>SECURITIES EXCHANGE ACT OF 1934**

*The following description summarizes the material provisions of the shares of beneficial interests of NexPoint Diversified Real Estate Trust (the "Company", "we", "our") registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This description is not complete and is subject to, and is qualified in its entirety by reference to, our restated certificate of trust, agreement and declaration of trust (the "Declaration"), statement of preferences (the "Statement of Preferences" and, together with the Declaration, the "Governing Instrument") designating the 5.50% Series A Cumulative Preferred Shares (the "Series A Preferred Shares") and bylaws (together with the Governing Instrument, the "Governing Documents") and applicable provisions of Delaware law, including the Delaware Statutory Trust Act (the "DSTA").*

**Authorized Beneficial Interests**

The Company is authorized to issue an unlimited number of its shares of beneficial interest, or capital shares, in multiple classes and series thereof as determined from time to time by the Board of Trustees (the "Board"). The Company's authorized shares of beneficial interest consist of an unlimited number of its common shares, par value par value $0.001 per share, and an unlimited number of its preferred shares, par value $.001 per share. The Board has designated a series of up to 4,800,000 preferred shares, par value $0.001 per share, liquidation preference $25.00 per share (the "Liquidation Preference"), as the Series A Preferred Shares. As of December 31, 2022, there were 37,171,807 common shares and 3,359,593 Series A Preferred Shares issued and outstanding. All the outstanding common shares and Series A Preferred Shares are fully paid and nonassessable.

Subject to the terms of the Statement of Preferences, the Board, in its discretion, may from time to time without vote of the shareholders issue shares of beneficial interest, including any preferred shares, in addition to the then issued and outstanding shares of beneficial interest and shares of beneficial interest held in the treasury. The Board may also authorize and issue such other securities of the Company as it determines to be necessary, desirable or appropriate, having such terms, rights, preferences, privileges, limitations and restrictions as the Board sees fit, including multiple classes of common shares, preferred interests, debt securities or other senior securities. To the extent the Board authorizes and issues additional shares of beneficial interest of any class or series, the Board is authorized, without shareholder approval, subject to the terms of the Statement of Preferences, to amend or supplement the Declaration as it deems necessary or appropriate. Issuances and redemptions of shares of beneficial interest may be made in whole shares of beneficial interest and/or l/l,000ths of a share of beneficial interest or multiples thereof as the Board may determine. Except as otherwise provided by a majority of the Board, the Company's shares of beneficial interest are not redeemable by the holders. The Declaration provides that no shareholder of the Company will be subject in such capacity to any personal liability whatsoever to any person in connection with Company property or the acts, obligations or affairs of the Company, and that the shareholders of the Company will have the limitation of personal liability provided under the DSTA.

The Declaration provides that shareholders will have no power to vote on any matter except matters on which a vote of shareholders is required by the Declaration or by resolution of the Board. The Declaration expressly provides that no matter for which voting is required by the DSTA in the absence of the contrary provision in the Declaration will require any vote. Except as otherwise provided in the Declaration, any matter required to be submitted to shareholders and affecting one or more classes or series of shares of beneficial interest will require approval by the required vote of all the affected classes and series of shares of beneficial interest voting together as a single class; provided, however, that as to any matter with respect to which a separate vote of any class or series of shares of beneficial interest is provided for by resolution of the Board, such requirement as to a separate vote by that class or series of shares of beneficial interest will apply in addition to a vote of all the affected classes and series voting together as a single class. Subject to the Statement of Preferences, shareholders of a particular class or series of shares of beneficial interest will not be entitled to vote on any matter that affects only one or more other classes or series of shares of beneficial interest.

**Common Shares** 

***Dividends***

Subject to the preferential rights, if any, of holders of any other class or series of our shares of beneficial interest and to the provisions of the Declaration relating to the restrictions on ownership and transfer of our shares of beneficial interest, the holders of our common shares are entitled to receive dividends and other distributions on such common shares when, as and if authorized by the Board and declared by us out of assets legally available for distribution to our shareholders. In addition, subject to the preferential rights, if any, of holders of any other class or series of the our shares of beneficial interest, the holders of our common shares will be entitled to share ratably in the Company's

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property legally available for distribution to our shareholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for payment all liabilities and upon receipt of such releases, indemnities and refunding agreements, as the Board deems necessary for protection of the trustees.

***Voting***

Subject to the provisions of our Declaration regarding restrictions on ownership and transfer of our shares of beneficial interest and except as may be otherwise specified in the terms of any class or series of our common shares, each outstanding common share entitles the holder to one vote on all matters submitted to a vote of common shareholders, including the election of trustees. Our Governing Instrument provides that the holders of preferred shares, including the Series A Preferred Shares, are entitled to vote on matters submitted to a vote of the common shares, voting together as a single class.

The Statement of Preferences provides that, except the Preferred Shares Trustees (defined below), the holders of the outstanding capital shares of the Company, voting as a single class, will elect the trustees. There is no cumulative voting in the election of trustees. Consequently, other than the Preferred Shares Trustees, the holders of a majority of the outstanding capital shares can elect all of the trustees then standing for election, and the holders of the remaining capital shares will not be able to elect any trustees. Trustees will be elected by a plurality of all of the votes cast in the election of trustees.

With respect to matters other than the election of trustees, (i) the affirmative vote of a majority of our shares of beneficial interest present in person or represented by proxy and entitled to vote thereon, at a meeting where the holders of a majority of our shares of beneficial interest entitled to vote on the matter are present in person or represented by proxy (a "Quorum"), will be the act of the shareholders with respect to such matters, and (ii) where a separate vote of one or more classes or series of shares of beneficial interest is required on any matter, the affirmative vote of a majority of the shares of beneficial interest of such class or series present in person or represented by proxy at a meeting where a Quorum is present will be the act of the shareholders of such class or series with respect to such matter, in each case subject to any provisions of the Declaration or a resolution of the Board specifying a greater or lesser requirement with respect to the vote or Quorum (the "Voting Requirement").

Under the DSTA, an agreement of merger or consolidation must be approved by all of the trustees and beneficial owners of the Company, unless otherwise provided in the Company's governing instrument. In addition, a conversion into another business entity must be approved by all of the trustees and beneficial owners of the Company, except that if the Company's governing instrument specifies a different manner of authorization with respect to approving such conversion or, if it does not so specify, does not prohibit such conversion and specifies a manner of authorization with respect to an agreement of merger or consolidation, that manner of authorization will be required. The DSTA further provides that the governing instrument of a statutory trust may be amended with the approval of all of the beneficial owners and trustees or as otherwise permitted by law, unless otherwise provided in the governing instrument of the statutory trust. In addition, under the DSTA, a statutory trust may not be terminated or revoked except in accordance with the governing instrument of the statutory trust and, except to the extent otherwise provided in the certificate of trust or in the governing instrument, the certificate of trust may be amended by the trustees.

The Declaration provides that a merger or consolidation requires approval by two-thirds of the trustees without a requirement for approval by our shareholders, except that any merger or consolidation in which the Company is not the surviving entity requires approval of 75% of the holders of shares of beneficial interest of each affected class or series outstanding, voting as separate classes or series, unless such amendment has been approved by 80% of the trustees, in which case the Voting Requirement will apply (such voting exception and alternative, subject to the terms of the Statement of Preferences, the "Required Voting Alternatives"). The Declaration provides that the Company may be dissolved with approval of 80% of the trustees without a requirement for approval by our shareholders, except that the Required Voting Alternatives will apply to the sale, conveyance, assignment, exchange, merger in which the Company is not the survivor, transfer or other disposition of all or substantially all of the Company's property in winding up the affairs of the Company. In addition, the Declaration provides that it may only be amended if such amendment is approved by a majority of the trustees and that the Required Voting Alternatives also apply to certain amendments of the Declaration and the sale, lease or exchange of all or substantially all of the Company's property. The Declaration does not specify approval requirements with respect to a conversion of the Company to another business entity. Neither the Declaration nor the restated certificate of trust specify approval requirements with respect to an amendment to the Company's restated certificate of trust.

In addition, notwithstanding the foregoing, the Declaration provides that approval by a majority of the trustees followed by the approval of 75% of the holders of shares of beneficial interest of each affected class or series outstanding, voting as separate classes or series (subject to the Statement of Preferences, the "Principal Shareholder Requirements") will be required for certain transactions when a Principal Shareholder (defined generally to mean

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any corporation, person or other entity which is the beneficial owner, directly or indirectly, of 5% or more of our outstanding shares of beneficial interest of all outstanding classes or series and includes any affiliate or associate, as such terms are defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, of a Principal Shareholder) is a party to the transaction. These transactions include any:

• merger or consolidation of the Company or any subsidiary of the Company with or into any Principal Shareholder;

• issuance of any securities of the Company to any Principal Shareholder for cash (other than pursuant to any automatic dividend reinvestment plan);

• sale, lease or exchange of all or any substantial part of the assets of the Company to any Principal Shareholder (except assets having an aggregate fair market value of less than 2% of the total assets of the Company, aggregating for the purpose of such computation all assets sold, leased or exchanged in any series of similar transactions within a twelve-month period); or

• sale, lease or exchange to the Company or any subsidiary thereof, in exchange for securities of the Company, of any assets of any Principal Shareholder (except assets having an aggregate fair market value of less than 2% of the total assets of the Company, aggregating for the purposes of such computation all assets sold, leased or exchanged in any series of similar transactions within a twelve-month period).

The Principal Shareholder Requirements are not applicable if (i) 80% of the trustees approve by resolution a memorandum of understanding with the Principal Shareholder with respect to and substantially consistent with such transaction followed by an approval by shareholders consistent with the Voting Requirement, or (ii) the transaction is with any entity of which a majority of the outstanding shares of all classes and series of a stock normally entitled to vote in elections of directors is owned of record or beneficially by the Company and its subsidiaries.

***Other Matters***

Holders of our common shares have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for any securities of the Company. Subject to the provisions of our Declaration regarding the restrictions on ownership and transfer of our shares of beneficial interest, our common shares will have equal distribution, liquidation and other rights.

The Declaration generally excludes The Corporation Trust Company or its successor from the meaning of the term trustees. The Corporation Trust Company is the Company's Delaware trustee and does not have any management responsibilities with respect to the Company other than certain administrative matters required by the DSTA.

**Series A Preferred Shares** 

***General***

The Company is authorized to issue an unlimited number of preferred shares in one or more classes or series. The Board has designated a series of up to 4,800,000 preferred shares as the Series A Preferred Shares. As of December 31, 2022, there were 3,359,593 Series A Preferred Shares issued and outstanding.

Each class or series of the preferred shares will have such terms, rights, preferences, privileges, limitations and restrictions as the Board sees fit. Our Board may increase the number of authorized preferred shares or cause the issuance of additional shares of any series of preferred shares, including Series A Preferred Shares, subject to the terms of the Statement of Preferences. The Statement of Preferences provides that an increase in the number of authorized preferred shares or the issuance of additional shares of any series of preferred shares, including Series A Preferred Shares, pursuant to the Governing Documents will not in and of itself be considered to adversely affect the rights and preferences of the preferred shares and holders of the Series A Preferred Shares, by virtue of their acquisition of Series A Preferred Shares, will be deemed to have authorized such issuances by the Board. The Governing Instrument does not require the consent of holders of preferred shares, including the Series A Preferred Shares, for the Board to authorize and issue additional shares of beneficial interest ranking junior to the Series A Preferred Shares with respect to distribution rights and rights upon our liquidation, dissolution or winding up.

***Ranking***

The Series A Preferred Shares, with respect to distribution rights and rights upon our liquidation, dissolution or winding up, ranks senior to our common shares and any other shares of beneficial interest ranking junior to the Series A Preferred Shares as to such rights, and on a parity with any other series of preferred shares as to such rights

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to which such shares are entitled. The Series A Preferred Shares effectively rank junior in right of payment to all of our existing and future indebtedness.

***Dividends***

Holders of Series A Preferred Shares are entitled to receive, when, as and if declared by, or under authority granted by, the Board, out of funds legally available therefor, cumulative cash dividends and distributions at the rate of 5.50% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months) of the Liquidation Preference on the Series A Preferred Shares and no more, payable quarterly on March 31, June 30, September 30 and December 31 in each year (each a "Dividend Payment Date") commencing on March 31, 2021 (or, if any such day is not a business day, then on the next succeeding business day). Dividends and distributions will be payable to holders of record of Series A Preferred Shares as they appear on the share register of the Company at the close of business on the fifth preceding business day (each, a "Record Date") in preference to dividends and distributions on common shares and any other capital shares ranking junior to the Series A Preferred Shares in payment of dividends and distributions. Dividends and distributions on Series A Preferred Shares that were originally issued on the Date of Original Issue (as defined in the Statement of Preferences) will accumulate from the Date of Original Issue. Dividends and distributions on all other Series A Preferred Shares will accumulate from (i) the date on which such shares are originally issued if such date is a Dividend Payment Date, (ii) the immediately preceding Dividend Payment Date if the date on which such shares are originally issued is other than a Dividend Payment Date and is on or before a Record Date or (iii) the immediately following Dividend Payment Date if the date on which such shares are originally issued is during the period between a Record Date and a Dividend Payment Date. Each period beginning on and including a Dividend Payment Date (or the Date of Original Issue, in the case of the first dividend period after the issuance of such shares) and ending on but excluding the next succeeding Dividend Payment Date is a "Dividend Period." Dividends and distributions on account of arrears for any past Dividend Period or in connection with the redemption of Series A Preferred Shares may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date not exceeding 30 days preceding the payment date thereof as will be fixed by the Board.

No full dividends or distributions will be declared or paid on Series A Preferred Shares for any Dividend Period or part thereof unless full cumulative dividends and distributions due through the most recent Dividend Payment Dates therefor for all series of preferred shares ranking on a parity with the Series A Preferred Shares as to the payment of dividends and distributions have been or contemporaneously are declared and paid through the most recent Dividend Payment Dates therefor. If full cumulative dividends and distributions due have not been paid on all such Outstanding (as defined in below) preferred shares, any dividends and distributions being paid on such preferred shares (including the Series A Preferred Shares) will be paid as nearly pro rata as possible in proportion to the respective amounts of dividends and distributions accumulated but unpaid on each such series of preferred shares on the relevant Dividend Payment Date. No holders of Series A Preferred Shares will be entitled to any dividends or distributions, whether payable in cash, property or shares, in excess of full cumulative dividends and distributions as provided in this paragraph on Series A Preferred Shares. No interest or sum of money in lieu of interest will be payable in respect of any dividend payments on any Series A Preferred Shares that may be in arrears.

For so long as Series A Preferred Shares are Outstanding, the Company will not declare or pay any dividend or other distribution (other than a dividend or distribution paid in common shares, or options, warrants or rights to subscribe for or purchase common shares or other shares, if any, ranking junior to the Series A Preferred Shares as to dividends and distribution of assets upon liquidation) in respect of the common shares or any other shares of the Company ranking junior to the Series A Preferred Shares as to the payment of dividends and the distribution of assets upon liquidation, or call for redemption, redeem, purchase or otherwise acquire for consideration any common shares or any other shares of the Company ranking junior to the Series A Preferred Shares as to the payment of dividends and the distribution of assets upon liquidation (except by conversion into or exchange for shares of the Company ranking junior to the Series A Preferred Shares as to dividends and distributions of assets upon liquidation), unless, in each case, all cumulative dividends and distributions on all Series A Preferred Shares due on or prior to the date of the transaction have been declared and paid (or have been declared and sufficient funds for the payment thereof deposited with the applicable Dividend Disbursing Agent (as defined in the Statement of Preferences)).

Any dividend payment made on the Series A Preferred Shares will first be credited against the dividends and distributions accumulated with respect to the earliest Dividend Period for which dividends and distributions have not been paid.

Not later than the business day immediately preceding each Dividend Payment Date, the Company will deposit with the Dividend Disbursing Agent Deposit Assets (as defined in the Statement of Preferences) having an initial combined value sufficient to pay the dividends and distributions that are payable on such Dividend Payment Date, which Deposit Assets will mature (if such assets constitute debt securities or time deposits) on or prior to such

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Dividend Payment Date (the "Requisite Deposit"). The Company may direct the Dividend Disbursing Agent with respect to the investment of any such Deposit Assets, provided that such investment consists exclusively of Deposit Assets and provided further that the proceeds of any such investment will be available at the opening of business on such Dividend Payment Date.

***Liquidation Rights***

In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of Series A Preferred Shares will be entitled to receive out of the assets of the Company available for distribution to shareholders, after satisfying claims of creditors but before any distribution or payment will be made in respect of the common shares or any other shares of the Company ranking junior to the Series A Preferred Shares as to liquidation payments, the Liquidation Preference plus an amount equal to all unpaid dividends and distributions accumulated to and including the date fixed for such distribution or payment (whether or not earned or declared by the Company, but excluding interest thereon), and such holders will be entitled to no further participation in any distribution or payment in connection with any such liquidation, dissolution or winding up of the Company.

If, upon any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the assets of the Company available for distribution among the holders of all Outstanding Series A Preferred Shares, and any other Outstanding class or series of preferred shares ranking on a parity with the Series A Preferred Shares as to payment upon liquidation, will be insufficient to permit the payment in full to such holders of Series A Preferred Shares of the Liquidation Preference plus accumulated and unpaid dividends and distributions and the amounts due upon liquidation with respect to such other preferred shares, then such available assets will be distributed among the holders of Series A Preferred Shares and such other preferred shares ratably in proportion to the respective preferential liquidation amounts to which they are entitled. Unless and until the Liquidation Preference plus accumulated and unpaid dividends and distributions has been paid in full to the holders of Series A Preferred Shares, no dividends or distributions will be made to holders of the common shares or any other shares of the Company ranking junior to the Series A Preferred Shares as to liquidation.

***Redemption***

*Generally*

The Series A Preferred Shares are not subject to mandatory redemption. Prior to December 15, 2023, the Series A Preferred Shares are not subject to optional redemption by the Company unless such redemption is necessary, in the judgment of the Board, to maintain the Company's status as a real estate investment trust ("REIT") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). Commencing December 15, 2023, and thereafter, and prior thereto to the extent necessary to maintain the Company's status as a REIT under Subchapter M of the Code, to the extent permitted by DSTA, the Company may at any time upon Notice of Redemption (defined below) redeem the Series A Preferred Shares in whole or in part at a price equal to $25.00 per share plus accumulated but unpaid dividends and distributions (whether or not earned or declared by the Company) through, but not including, the date of redemption (the "Redemption Price"), which notice will specify a redemption date of not fewer than 30 days nor more than 90 days after the date of such notice.

*Redemption Procedures*

If the Company determines to redeem Series A Preferred Shares, it will mail a written notice of redemption ("Notice of Redemption") with respect to such redemption by first class mail, postage prepaid, to each holder of the shares to be redeemed at such holder's address as the same appears on the share register of the Company on the close of business on such date as the Board or its delegatee may determine, which date will not be earlier than the second business day prior to the date upon which such Notice of Redemption is mailed or delivered electronically to the holders of Series A Preferred Shares. Each such Notice of Redemption will state: (A) the redemption date as established by the Board or its delegatee; (B) the number of Series A Preferred Shares to be redeemed; (C) the CUSIP number(s) of such shares; (D) the Redemption Price (specifying the amount of accumulated dividends and distributions to be included therein); (E) the place or places where the certificate(s) for such shares (properly endorsed or assigned for transfer, if the Board or its delegatee so require and the Notice of Redemption so states), if any, are to be surrendered for payment in respect of such redemption; (F) that dividends and distributions on the shares to be redeemed will cease to accrue on such redemption date; (G) the provisions of paragraph 4 of the Statement of Preferences under which such redemption is made; and (H) any conditions precedent to such redemption. If fewer than all Series A Preferred Shares held by any holder are to be redeemed, the Notice of Redemption mailed or delivered electronically to such holder also will specify the number or percentage of shares to be redeemed from such holder. No defect in the Notice of Redemption or the mailing thereof will affect the validity of the redemption proceedings, except as required by applicable law.

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If the Company will give a Notice of Redemption, then by the close of business on the business day preceding the redemption date specified in the Notice of Redemption (so long as any conditions precedent to such redemption have been met) or, if the Dividend Disbursing Agent so agrees, another date not later than the redemption date, the Company will (A) deposit with the Dividend Disbursing Agent Deposit Assets that will mature (if such assets constitute debt securities or time deposits) on or prior to such redemption date having an initial combined value sufficient to effect the redemption of the Series A Preferred Shares to be redeemed and (B) give the Dividend Disbursing Agent irrevocable instructions and authority to pay the Redemption Price to the holders of the Series A Preferred Shares called for redemption on the redemption date. The Company may direct the Dividend Disbursing Agent with respect to the investment of any Deposit Assets so deposited provided that the proceeds of any such investment will be available at the opening of business on such redemption date. Upon the date of such deposit (unless the Company defaults in making payment of the Redemption Price), all rights of the holders of the Series A Preferred Shares so called for redemption will cease and terminate except the right of the holders thereof to receive the Redemption Price thereof and such shares will no longer be deemed Outstanding for any purpose. The Company will be entitled to receive, promptly after the date fixed for redemption, any cash in excess of the aggregate Redemption Price of the Series A Preferred Shares called for redemption on such date and any remaining Deposit Assets. Any assets so deposited that are unclaimed at the end of two years from such redemption date will, to the extent permitted by law, be repaid to the Company, after which the holders of the Series A Preferred Shares so called for redemption will look only to the Company for payment of the Redemption Price thereof. The Company will be entitled to receive, from time to time after the date fixed for redemption, any interest on the Deposit Assets so deposited.

On or after the redemption date, each holder of Series A Preferred Shares that are subject to redemption will surrender such shares to the Company as instructed in the Notice of Redemption and will then be entitled to receive the cash Redemption Price, without interest.

In the case of any redemption of less than all of the Series A Preferred Shares pursuant to the Statement of Preferences, such redemption will be made pro rata from each holder of Series A Preferred Shares in accordance with the respective number of shares held by each such holder on the record date for such redemption.

*Limitations*

Notwithstanding the provisions with respect to redemption in the Statement of Preferences, the Company will not redeem any Series A Preferred Shares unless all accumulated and unpaid dividends and distributions on all Outstanding Series A Preferred Shares and other preferred shares ranking on a parity with the Series A Preferred Shares with respect to dividends and distributions for all applicable past Dividend Periods (whether or not earned or declared by the Company) have been or are contemporaneously paid or declared and the Requisite Deposit with the Dividend Disbursing Agent has been made; provided, however, that the foregoing will not prevent the purchase or acquisition of Outstanding preferred shares pursuant to the successful completion of an otherwise lawful purchase or exchange offer made on the same terms to holders of all Outstanding Series A Preferred Shares.

If the Company does not have funds legally available for the redemption of, or is otherwise unable to redeem, all the Series A Preferred Shares or other preferred shares designated to be redeemed on any redemption date, the Company will redeem on such redemption date the number of Series A Preferred Shares and other preferred shares so designated as it has legally available funds, or is otherwise able, to redeem ratably on the basis of the Redemption Price from each holder whose shares are to be redeemed, and the remainder of the Series A Preferred Shares and other preferred shares designated to be redeemed will be redeemed on the earliest practicable date on which the Company will have funds legally available for the redemption of, or is otherwise able to redeem, such shares upon Notice of Redemption.

***Voting Rights***

The Statement of Preferences provides that, except as otherwise provided in the Governing Documents or a resolution of the Board, or as required by applicable law, holders of Series A Preferred Shares will have no power to vote on any matter except matters submitted to a vote of the common shares. In any matter submitted to a vote of the holders of the common shares, each holder of Series A Preferred Shares will be entitled to one vote for each Series A Preferred Share held, and the holders of preferred shares, including the Series A Preferred Shares, and the common shares will vote together as a single class.

In addition, so long as the rules of a national securities exchange on which any of the Company's equity securities are listed requires holders of Series A Preferred Shares to have such right, during any period in which accumulated dividends and distributions (whether or not earned or declared, and whether or not funds are then legally available in an amount sufficient therefor) on the Outstanding Series A Preferred Shares equal to at least six full quarters' dividends and distributions will be due and unpaid and sufficient Deposit Assets will not have been deposited with

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the Dividend Disbursing Agent for the payment of such accumulated dividends and distributions (a "Voting Period"), holders of the Outstanding Series A Preferred Shares, voting separately as one class (to the exclusion of the holders of all other securities and classes of capital shares of the Company, except for any other series of Outstanding preferred shares for which a like voting entitlement has arisen, with which the holders of the Outstanding Series A Preferred Shares will vote together as one class for this purpose), will be entitled to elect two of the Company's trustees (the "Preferred Shares Trustees"). As soon as practicable after the accrual of any right of the holders of preferred shares to elect the Preferred Shares Trustees, the Company will call a special meeting of such holders and instruct the Dividend Disbursing Agent to mail a notice of such special meeting to such holders, such meeting to be held not less than 10 nor more than 40 days after the date of mailing of such notice. If the Company fails to send such notice to the Dividend Disbursing Agent or if the Company does not call such a special meeting, it may be called by any such holder on like notice. The record date for determining the holders entitled to notice of and to vote at such special meeting will be the close of business on the day on which such notice is mailed or such other date as the Board will determine. At any such special meeting and at each shareholder meeting held during a Voting Period for the purpose of electing trustees, such holders of preferred shares, voting together as a class (to the exclusion of the holders of all other securities and classes of capital shares of the Company), will be entitled to elect the Preferred Shares Trustees on a one-vote-per-share basis. At any such meeting, or adjournment thereof in the absence of a quorum, a majority of such holders present in person or by proxy will have the power to adjourn the meeting without notice, other than by an announcement at the meeting, to a date not more than 120 days after the original record date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any such preferred share theretofore cancelled by the Company or delivered to the Company for cancellation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any such preferred share as to which a notice of redemption shall have been given and for whose payment at the redemption thereof Deposit Assets in the necessary amount are held by the Company in trust for, or have been irrevocably deposited with the relevant disbursing agent for payment to, the holder of such share pursuant to the Statement of Preferences with respect thereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any such preferred share in exchange for or in lieu of which other shares have been issued and delivered.

Notwithstanding the foregoing, for purposes of voting rights (including the determination of the number of shares required to constitute a quorum), any preferred share as to which the Company or any subsidiary of the Company is the holder will be disregarded and deemed not Outstanding.

The Company and the Board will take all necessary actions, including effecting the removal of trustees or amendment of the Declaration, to effect an adjustment of the number and/or composition of trustees as described with respect to the entitlement to elect the Preferred Shares Trustees. Upon the expiration of a Voting Period, the terms of office of the Preferred Shares Trustees will expire at the earliest time permitted by law and the voting rights with respect to the Preferred Shares Trustees will cease, subject, however, to the preferred shares' voting rights upon the further occurrence of any of the events described with respect to a Voting Period. Upon the expiration of the terms of office of the Preferred Share Trustees, the number of trustees will be automatically reduced to the number of trustees on the Board immediately preceding such Voting Period if the number of trustees on the Board was increased in connection with a Voting Period.

Subject to a Rating Agency Amendment (defined below), so long as any Series A Preferred Shares are Outstanding, we will not:

(a) amend, alter or repeal the provisions of the Statement of Preferences so as to in the aggregate adversely affect the rights and preferences set forth in any statement of preferences, including with respect to the Series A Preferred Shares, without the affirmative vote of the holders of at least two-thirds of the preferred shares Outstanding at the time, voting separately as one class; or

(b) to the extent permitted by the applicable exchange on which the preferred shares are listed, in the event that more than one series of preferred shares are Outstanding, amend, alter or repeal the provisions of the Statement of Preferences which in the aggregate adversely affects the rights and preferences set forth in the statement of preferences for a series of preferred shares differently than such rights and preferences for any other series of

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preferred shares without the affirmative vote of the holders of at least two-thirds of the preferred shares Outstanding of each series adversely affected (each such adversely affected series voting separately as a class to the extent its rights are affected differently).

The class votes of holders of preferred shares described (a) and (b) above will in each case be in addition to a separate vote of the requisite percentage of common shares and preferred shares, including Series A Preferred Shares, voting together as a single class, necessary to authorize the action in question. An increase in the number of authorized preferred shares pursuant to the Governing Documents or the issuance of additional shares of any series of preferred shares (including Series A Preferred Shares), pursuant to the Governing Documents will not in and of itself be considered to adversely affect the rights and preferences of the preferred shares and holders of the Series A Preferred Shares, by virtue of their acquisition of Series A Preferred Shares, will be deemed to have authorized such issuances by the Board.

The Board, without further action by the shareholders, may amend, alter, add to or repeal any provision of the Statement of Preferences that has been adopted by the Company pursuant to the guidelines of a rating agency providing a rating for the Series A Preferred Shares at the request of the Company (the "Rating Agency") or add covenants and other obligations of the Company to the Statement of Preferences, if the applicable Rating Agency confirms that such amendments or modifications are necessary to prevent a reduction in, or the withdrawal of, a rating of the preferred shares and such amendments and modifications do not adversely affect the rights and preferences of and are in the aggregate in the best interests of the holders of the preferred shares (collectively, a "Rating Agency Amendment").

The Board, without further action by the shareholders, may amend, alter, add to or repeal any provision of the Statement of Preferences including provisions that have been adopted by the Company pursuant to the Rating Agency guidelines, if such amendments or modifications will not in the aggregate adversely affect the rights and preferences of the holders of any series of the preferred shares, provided, that the Company has received confirmation from each applicable Rating Agency that such amendment or modification would not adversely affect such Rating Agency's then-current rating of such series of the Company's preferred shares.

Notwithstanding the provisions of the preceding paragraph, to the extent permitted by law, the Board or its delegatee, without the vote of the holders of the Series A Preferred Shares or any other shares of the Company, may amend the provisions of the Statement of Preferences to resolve any inconsistency or ambiguity or to remedy any formal defect so long as the amendment does not in the aggregate adversely affect the rights and preferences of the Series A Preferred Shares.

***Restrictions on Ownership and Transfer***

For information regarding restrictions on ownership and transfer of the Series A Preferred Shares, see "Restrictions on Ownership and Transfer" below.

***Preemptive Rights***

No holders of Series A Preferred Shares will, as the holders, have any preemptive rights to purchase or subscribe for our common shares, preferred shares or any other security of the Company.

**Information Rights**

Shareholders have the right to inspect the records of the Company, including, without limitation, shareholder lists, documents, accounts and books of the Company only to the extent inalienably granted under the DSTA; all other such rights whether or not provided in the DSTA are expressly precluded. All shareholders' requests to inspect the records of the Company will be submitted by shareholders to the Board in writing. Upon receipt of such requests, the Board may in its discretion establish procedures for any permitted inspections. To preserve the integrity of the Company's records, the Board may provide certified copies of Company records rather than originals. The Board will not be required to create records or obtain records from third parties to satisfy shareholders' requests. The Company may require shareholders to pay in advance or otherwise indemnify the Company for the costs and expenses of shareholders' inspection of records. None of the foregoing is intended nor will be construed to permit shareholders to inspect the records of the Company except as may be required by the DSTA or permitted by the Board in its discretion.

**Power to Increase or Decrease Authorized Shares of Beneficial Interest, Reclassify Unissued Shares of Beneficial Interest and Issue Additional Common and Preferred Shares**

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The Company is authorized to issue an unlimited number of its shares of beneficial interest, or capital shares, in multiple classes and series thereof as determined from time to time by the Board. The Board, in its discretion, may from time to time without vote of the shareholders issue shares of beneficial interest, including any preferred shares, in addition to the then issued and outstanding shares of beneficial interest and shares of beneficial interest held in the treasury, subject to the terms of the Statement of Preferences. The Board may also authorize and issue such other securities of the Company as it determines to be necessary, desirable or appropriate, having such terms, rights, preferences, privileges, limitations and restrictions as the Board sees fit, including multiple classes of common shares, preferred interests, debt securities or other senior securities. To the extent the Board authorizes and issues additional shares of beneficial interest of any class or series, the Board is authorized, without shareholder approval, subject to the terms of the Statement of Preferences, to amend or supplement the Declaration as it deems necessary or appropriate. The Board may from time to time divide or combine the shares of beneficial interest into a greater or lesser number without thereby changing the proportionate beneficial interest in such shares.

Our Board may increase the number of authorized preferred shares or cause the issuance of additional shares of any series of preferred shares, including Series A Preferred Shares, subject to the terms of the Statement of Preferences. The Statement of Preferences provides that an increase in the number of authorized preferred shares or the issuance of additional shares of any series of preferred shares, including Series A Preferred Shares, pursuant to the Governing Documents will not in and of itself be considered to adversely affect the rights and preferences of the preferred shares and holders of the Series A Preferred Shares, by virtue of their acquisition of Series A Preferred Shares, will be deemed to have authorized such issuances by the Board. The Governing Instrument does not require the consent of holders of preferred shares, including the Series A Preferred Shares, for the Board to authorize and issue additional shares of beneficial interest ranking junior to the Series A Preferred Shares with respect to distribution rights and rights upon our liquidation, dissolution or winding up.

As a result of the above, although our Board does not currently intend to do so, it could authorize the issuance of shares of beneficial interest with terms and conditions that could have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our shares.

**Restrictions on Ownership and Transfer**

In order for us to qualify as a REIT under the Code, our shares of beneficial interest must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to qualify as a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities such as private foundations) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). To qualify as a REIT, we must satisfy other requirements as well.

The Declaration contains restrictions on the ownership and transfer of shares of beneficial interest. The relevant sections of the Declaration provide that, subject to the exceptions described below, no person or entity may own, or be deemed to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, more than 9.8%, in value or in number of shares, whichever is more restrictive, of the outstanding common shares (the "common share ownership limit"), or 9.8%, in value or in number of shares, whichever is more restrictive, of the aggregate of the outstanding shares of beneficial interest of any class or series (the "aggregate share ownership limit"). We refer to the common share ownership limit and the aggregate share ownership limit collectively as the "ownership limits."

The constructive ownership rules under the Code are complex and may cause our shares of beneficial interest owned beneficially or constructively by a group of related individuals and/or entities to be owned beneficially or constructively by one individual or entity. As a result, the acquisition of less than 9.8%, in value or in number of the shares, of the outstanding common shares or the outstanding shares of beneficial interest of any class or series (or the acquisition by an individual or entity of an interest in an entity that owns, beneficially or constructively, any such shares), could, nevertheless, cause that individual or entity, or another individual or entity, to own beneficially or constructively our shares of beneficial interest in excess of the ownership limits.

The ownership limits apply during the period commencing on the date on which the shareholders approved the conversion of the Company from an investment company registered under the Investment Company Act of 1940, as amended, to a REIT (the "Initial Date") and prior to the date on which the Board may determine that compliance with the restrictions and limitations on beneficial ownership, constructive ownership and transfers set forth below (the "Restrictions") are no longer in the best interests of the Company (the "Restriction Termination Date"), but subject to the provision of the Declaration providing that such Restrictions will not preclude the settlement of any

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transaction entered into the facilities of the New York Stock Exchange (the "NYSE") or any other national securities exchange or automated inter-dealer quotation system. During such period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (1) No person, other than a person (an "Excepted Holder") for whom a percentage limit (subject to the terms of the Declaration, an "Excepted Holder Limit") is established by the Board in accordance with the Declaration, will beneficially own or constructively own shares of beneficial interest in excess of the aggregate share ownership limit, or such other percentage determined by the Board in accordance with provisions in the Declaration pertaining to the increase or decrease of such percentage, (2) no person, other than an Excepted Holder, will beneficially own or constructively own shares of beneficial interest in excess of the common share ownership limit, or such other percentage determined by the Board in accordance with provisions in the Declaration pertaining to the increase or decrease of such percentage, and (3) no Excepted Holder will beneficially own or constructively own shares of beneficial interest in excess of the Excepted Holder Limit for such Excepted Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) No person will beneficially own or constructively own shares of beneficial interest to the extent that such beneficial ownership or constructive ownership of shares of beneficial interest would result in the Company being "closely held" within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, but not limited to, beneficial ownership or constructive ownership that would result in Company (or any subsidiary REIT thereof, as applicable) owning (actually or constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by Company (or such subsidiary) from such tenant would cause Company (or such subsidiary) to fail to satisfy any of the gross income requirements of Section 856(c) of the Code, taking into account any other income of Company (or such subsidiary) that would not constitute qualifying income under such requirements).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Any transfer of shares of beneficial interest that, if effective, would result in such shares being beneficially owned by less than 100 persons (determined under the principles of Section 856(a)(5) of the Code) will be void ab initio, and the intended transferee will acquire no rights in such shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) No person will beneficially own or constructively own shares of beneficial interest to the extent that such beneficial ownership or constructive ownership of shares of beneficial interest would result in the Company failing to qualify as a "domestically controlled qualified investment entity" within the meaning of Section 897(h)(4)(B) of the Code.

In addition, if any transfer of shares of beneficial interest (whether or not such transfer is the result of a transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system) occurs which, if effective, would result in any person beneficially owning or constructively owning shares of beneficial interest in violation of the Restrictions, then that number of shares of beneficial ownership the beneficial ownership or constructive ownership of which otherwise would cause such person to violate the Restrictions (rounded up to the nearest whole share) will be automatically transferred to a charitable trust for the benefit of a charitable beneficiary, effective as of the close of business on the business day prior to the date of such transfer (a "Charitable Transfer"), and such person will acquire no rights in such shares; provided, that if the transfer to the charitable trust described by the foregoing would not be effective for any reason to prevent the violation of the Restrictions, then the transfer of that number of shares of beneficial interest that otherwise would cause any person to violate the Restrictions will be void ab initio, and the intended transferee will acquire no rights in such shares of beneficial interest.

To the extent that, upon a Charitable Transfer, a violation of any provision of the Declaration governing restrictions on transfer and ownership of shares would nonetheless be continuing (for example where the ownership of shares of beneficial interest by a single charitable trust would violate the 100 shareholder requirement applicable to REITs), then shares of beneficial interest will be transferred to that number of charitable trusts, each having a distinct charitable trustee and a charitable beneficiary or charitable beneficiaries that are distinct from those of each other trust, such that there is no violation of any such provisions.

In determining which shares of beneficial interest should be subject to a Charitable Transfer, shares of beneficial interest will be so transferred to a charitable trust in such manner that minimizes the aggregate value of the shares of beneficial interest that are transferred to the charitable trust (except to the extent that the Board determines that the shares of beneficial interest transferred to the charitable trust will be those directly or indirectly held or beneficially owned or constructively owned by a person or persons that caused or contributed to the application of the provision of the Declaration requiring a Charitable Transfer), and to the extent not inconsistent therewith, on a pro rata basis.

If the Board at any time determines that a transfer or other event has taken place that results in a violation of the Restrictions or the terms relating to a Charitable Transfer, or that a person intends to acquire or has attempted to

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acquire beneficial ownership or constructive ownership of any shares in violation the same (whether or not such violation is intended), the Board will take such action as it deems advisable to refuse to give effect to or to prevent such transfer or other event, including, without limitation, causing the Company to redeem shares of beneficial interest, refusing to give effect to such transfer on the books of the Company or instituting proceedings to enjoin such transfer or other event; provided, however, that any transfer or attempted transfer or other event in violation of the Restrictions will automatically result in the transfer to the charitable trust described above, and, where applicable, such transfer (or other event) will be void ab initio as provided above irrespective of any action (or non-action) by the Board.

The Declaration requires that any person who acquires or attempts or intends to acquire beneficial ownership or constructive ownership of shares of beneficial ownership that will or may violate the Restrictions or any person who would have owned shares of beneficial interest that resulted in a Charitable Transfer will immediately give written notice to the Company of such event or, in the case of such a proposed or attempted transaction, give at least 15 days prior written notice, and will provide to the Company such other information as the Company may request in order to determine the effect, if any, of such transfer on Company's status as a REIT.

The Declaration also requires that, from the Initial Date and prior to the Restriction Termination Date, (a) every owner of five percent or more (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) in number or value of the outstanding shares of beneficial interest, within 30 days after the end of each taxable year, shall give written notice to the Company stating the name and address of such owner, the number of shares of beneficial interest beneficially owned and a description of the manner in which such shares are held. Each such owner must provide to the Company such additional information as the Company may request in order to determine the effect, if any, of such beneficial ownership on the Company's status as a REIT and to ensure compliance with the aggregate share ownership limit and the common share ownership limit and the other restrictions set forth herein; and (b) each person who is a beneficial owner or constructive owner of shares of beneficial interest and each person (including the shareholder of record) who is holding shares of beneficial interest for a beneficial owner or constructive owner shall provide to the Company such information as the Company may request in good faith in order to determine the Company's status as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.

Subject to the Restrictions (ii), (iii) and (iv), the Board may exempt (prospectively or retroactively) a person from the aggregate share ownership limit or the common share ownership limit, as the case may be, and may establish or increase an Excepted Holder Limit for such person if the Company obtains such representations and undertakings from such person as are reasonably necessary for the Board to determine that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)no person's beneficial or constructive ownership of shares of beneficial interest will violate (ii), (iii) and (iv) of the Restrictions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)such person does not and will not own, actually or constructively, an interest in a tenant of the Company (or a tenant of any entity owned or controlled by the Company, including a subsidiary REIT) that would cause the Company (or such subsidiary REIT) to own, actually or constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant (for this purpose, a tenant shall not be treated as a tenant of the Company if the Company (or an entity owned or controlled by the Company, including such subsidiary REIT) derives (and is expected to continue to derive) a sufficiently small amount of revenue from such tenant such that, in the judgment of the Board, rent from such tenant would not adversely affect the Company's (or such subsidiary REIT's) ability to qualify as a REIT).

Any violation or attempted violation of any such representations or undertakings (or other action which is contrary to the Restrictions) will result in such shares of beneficial interest being automatically subject to a Charitable Transfer.

Prior to granting any exception pursuant to the foregoing (a "Representation Exception"), the Board may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board as it may deem necessary or advisable in order to determine or ensure the Company's status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.

Subject to the Restriction (ii), an underwriter or placement agent that participates in a public offering or a private placement of the shares of beneficial interest (or securities convertible into or exchangeable for shares of beneficial interest) may beneficially own or constructively own shares of beneficial interest (or securities convertible into or exchangeable for shares of beneficial interest) in excess of the aggregate share ownership limit, the common share

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ownership limit, or both such limits, but only to the extent necessary to facilitate such public offering or private placement.

The Board may only reduce the Excepted Holder Limit for an Excepted Holder with the written consent of such Excepted Holder or pursuant to the terms and conditions of the agreements and undertakings entered into with such Excepted Holder in connection with the establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted Holder Limit will be reduced to a percentage that is less than the aggregate share ownership limit or the common share ownership limit, as the case may be.

In addition, subject to Restriction (ii) and the following, the Board may from time to time increase or decrease the common share ownership limit or the aggregate share ownership limit for one or more persons and increase or decrease the common share ownership limit or the aggregate share ownership limit for all other persons. No decreased common share ownership limit or aggregate share ownership limit will be effective for any person whose percentage of ownership of shares of beneficial interest is in excess of such decreased common share ownership limit or aggregate share ownership limit, as applicable, until such time as such person's percentage of ownership of shares of beneficial interest equals or falls below the decreased common share ownership limit or aggregate share ownership limit, as applicable; provided, however, any further acquisition of shares of beneficial interest by any such person (other than a person for whom an Representation Exception has been granted or an Excepted Holder) in excess of the shares of beneficial interest owned by such person on the date the decreased common share ownership limit or aggregate share ownership limit, as applicable, became effective will be in violation of the common share ownership limit or aggregate share ownership limit. No increase to the common share ownership limit or aggregate share ownership limit may be approved if the new common share ownership limit and/or aggregate share ownership limit would allow five or fewer persons to beneficially own, in the aggregate more than 49.8% in value of the outstanding shares of beneficial interest.

Any certificates representing our shares of beneficial interest will bear a legend referring to the restrictions on ownership and transfer of our stock described above.

These restrictions on ownership and transfer of our shares of beneficial interest will not apply upon the Restriction Termination Date.

The restrictions on ownership and transfer of our shares of beneficial interest described above, including in Article XII of the Declaration, could delay, defer or prevent a transaction or a change in control that might involve a premium price for our common shares or otherwise be in the best interest of our shareholders.

**Listing**

Our common shares are listed on the NYSE under the symbol "NXDT." The Series A Preferred Shares are listed on the NYSE under the symbol "NXDT PA."

**Transfer Agent and Registrar**

The transfer agent and registrar for our common shares and Series A Preferred Shares is American Stock Transfer & Trust Company, LLC.

## Exhibit 10.5

***<u>Exhibit 10.5</u>***

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**<u>FORM OF RESTRICTED SHARES UNITS AGREEMENT (Trustee)</u>**

This RESTRICTED SHARES UNITS AGREEMENT (this "<u>Agreement</u>") is made as of _______, 20__, by and between NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the "<u>Company</u>"), and __________ (the "<u>Grantee</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Certain Definitions</u>**. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company's 2023 Long Term Incentive Plan (as amended from time to time, the "<u>Plan</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Grant of RSUs</u>**. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Grantee as of _______, 20__ (the "<u>Date of Grant</u>") _______ Restricted Stock Units ("<u>RSUs</u>"). Each RSU shall represent the right of the Grantee to receive one Share subject to and upon the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Restrictions on Transfer of RSUs</u>**. Subject to Section 16 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Grantee pursuant to <u>Section 5</u> hereof other than (i) by transfer by the Participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members, or (ii) by will or pursuant to the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Vesting of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to <u>Section 5</u> hereof ("<u>Vest</u>," or similar terms) _____________________________, conditioned upon the Grantee's continuous service on the Board through such date (the period from the Date of Grant until the __________ anniversary of the Date of Grant, the "<u>Vesting Period</u>"). Any RSUs that do not so Vest will be forfeited, including, except as provided in <u>Section 4(b)</u> or <u>Section 4(c)</u> below, if the Grantee ceases to continuously serve on the Board prior to the end of the Vesting Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding <u>Section 4(a)</u> above, the RSUs shall Vest upon the Grantee's cessation of service on the Board if such service should cease prior to the end of the Vesting Period due to the Grantee's death or Disability (to the extent the RSUs have not previously become Vested or been forfeited) in accordance with <u>Section 5</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding <u>Section 4(a)</u> above, if at any time before the end of the Vesting Period or forfeiture of the RSUs, and while the Grantee is continuously serving on the Board, a Change in Control occurs, then all of the RSUs will become Vested and payable to the Grantee in accordance with <u>Section 5</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)For purposes of this Agreement, "<u>Disability</u>" shall mean a medically determinable physical or mental impairment expected to result in death or to continue for a period of not less than 12 months that causes the Grantee to be unable to engage in any substantial gainful activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Form and Time of Payment of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Payment for the RSUs, after and to the extent they have become Vested, shall be made in the form of Shares. Payment shall be made as soon as administratively

&nbsp;&nbsp;&nbsp;&nbsp;1

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practicable following (but no later than thirty (30) days following) the date that the RSUs become Vested pursuant to <u>Section 4</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company's obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Dividend Equivalents; Other Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Grantee shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Grantee pursuant to <u>Section 5</u> above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with <u>Section 5</u> hereof or (ii) the time when the Grantee's right to receive Shares in payment of the RSUs is forfeited in accordance with <u>Section 4</u> hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Adjustments</u>**. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 12 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Taxes</u>**. The Grantee will be solely responsible for the payment of all taxes that arise with respect to the granting and payment of the RSUs, including the payment of any Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Compliance With Law</u>**. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; <u>provided</u>, <u>however</u>, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Compliance With Section 409A of the Code</u>**. To the extent applicable, it is intended that this Agreement and the Plan comply with or be exempt from the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail

&nbsp;&nbsp;&nbsp;&nbsp;2

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to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>No Right to Future Awards or Board Membership</u>**. The grant of the RSUs under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. Nothing contained in this Agreement shall confer upon the Grantee any right to continued service as a member of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Amendments</u>**. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; <u>provided</u>, <u>however</u>, that (a) no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee's written consent, and (b) the Grantee's consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Severability</u>**. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Relation to Plan</u>**. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Electronic Delivery</u>**. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Grantee's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee's consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Governing Law</u>.** This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of incorporation or formation of the Company, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Successors and Assigns</u>**. Without limiting <u>Section 3</u> hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Acknowledgement</u>**. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement

&nbsp;&nbsp;&nbsp;&nbsp;3

------

and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**<u>Counterparts</u>**. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

**[SIGNATURES ON FOLLOWING PAGE]**

&nbsp;&nbsp;&nbsp;&nbsp;4

------

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <br>Title:

**Grantee Acknowledgment and Acceptance** 

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:

[Signature Page to NXDT RSU Award Agreement]

## Exhibit 10.6

***Exhibit 10.6***

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**<u>FORM OF RESTRICTED SHARES UNITS AGREEMENT (Key Employee)</u>**

This RESTRICTED SHARES UNITS AGREEMENT (this "***Agreement***") is made as of ______ __, 20__, by and between NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the "***Company***"), and ______ (the "***Grantee***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Certain Definitions</u>**. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company's 2023 Long Term Incentive Plan (as amended from time to time, the "***Plan***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Grant of RSUs</u>**. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Grantee as of _____ ___, 20__ (the "***Date of Grant***") _____ Restricted Shares Units ("***RSUs***"). Each RSU shall represent the right of the Grantee to receive one Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Restrictions on Transfer of RSUs</u>**. Subject to Section 16 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Grantee pursuant to **<u>Section 5</u>** hereof other than (i) by transfer by the Participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members, or (ii) by will or pursuant to the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Vesting of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to **<u>Section 5</u>** hereof ("***Vest***" or similar terms) as provided in this **<u>Section 4(a)</u>**. The RSUs covered by this Agreement shall Vest _____________________________________, in each case, conditioned upon the Grantee's continuous employment with the Company, the Adviser or its Affiliates through each such date (the period from the Date of Grant until the _____ anniversary of the Date of Grant, the "***Vesting Period***"). Any RSUs that do not so Vest will be forfeited, including, except as provided in **<u>Section 4(b)</u>** or **<u>Section 4(c)</u>** below, if the Grantee ceases to be continuously employed by the Company, the Adviser or its Affiliates prior to the end of the Vesting Period. For purposes of this Agreement, "continuously employed" (or substantially similar terms) means the absence of any interruption or termination of the Grantee's employment with the Company, the Adviser or its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding **<u>Section 4(a)</u>** above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period upon the Grantee's termination of employment by the Company, the Adviser or its Affiliates, as applicable, without Cause or by the Grantee for Good Reason or due to the Grantee's death or Disability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) &nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding **<u>Section 4(a)</u>** above, in the event of a Change in Control that occurs prior to the end of the Vesting Period, the RSUs shall become Vested and payable in accordance with this **<u>Section 4(c)</u>**. If at any time before the end of the Vesting Period or

&nbsp;&nbsp;&nbsp;&nbsp;1

------

forfeiture of the RSUs, and while the Grantee is continuously employed by the Company, the Adviser or its Affiliates, a Change in Control occurs, then all of the RSUs will become Vested and payable to the Grantee in accordance with **<u>Section 5</u>** hereof, except to the extent that a Replacement Award is provided to the Grantee in accordance with **<u>Section 4(c)(ii)</u>** to continue, replace or assume the RSUs covered by this Agreement (the "***Replaced Award***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For purposes of this Agreement, a "***Replacement Award***" means an award (A) of the same type (*e.g.*, time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this **<u>Section 4(c)(ii)</u>** are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company, the Adviser or its Affiliates (or any of their successors) (as applicable, the "***Successor***") by reason of a termination by the Successor without Cause or by the Grantee for Good Reason, in each case within a period of two years after the Change in Control and during the remaining vesting period for the Replacement Award, the Replacement Award shall fully Vest upon such termination of employment to the extent not previously Vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)For purposes of this Agreement, the following definitions apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)***"Affiliates"*** has the meaning set forth in the Plan, including the clarification that the term includes the Adviser and Operating Partnership, except that for avoidance of doubt under this Agreement the term also includes any corporation, partnership, joint venture or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)"***Cause***" shall mean any of the following: (A) a material breach by the Grantee of any written agreement then in effect between the

------

Grantee and, as applicable, the Company, the Adviser or its Affiliates or Successor, (B) the Grantee's conviction of or plea of "guilty" or "no contest" to a felony under the laws of the United States or any state thereof; or (C) a final, non-appealable order of a court of competent jurisdiction finding gross negligence or gross misconduct by Grantee with respect to the Company, the Adviser or its Affiliates or Successor.&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)"***Disability***" shall mean a medically determinable physical or mental impairment expected to result in death or to continue for a period of not less than 12 months that causes the Grantee to be unable to engage in any substantial gainful activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)"***Good Reason***" shall mean (A) a material diminution in the Grantee's duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Company, the Adviser or its Affiliates or the Successor; or (C) a reassignment of the Grantee to another primary office more than 50 miles from the Grantee's current office location. The Grantee must notify the Company, the Adviser or its Affiliates or the Successor of the Grantee's intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event and provide, as applicable, the Company, the Manager or its Affiliates or the Successor 30 days' opportunity for cure, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Form and Time of Payment of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. Subject to **<u>Section 4</u>** and **<u>Section 5(b)</u>**, payment for Vested RSUs will be made in Shares within 10 days following the Vesting dates specified in **<u>Section 4(a)</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Other Payment Events</u>. Notwithstanding **<u>Section 5(a)</u>**, to the extent that the RSUs are Vested on the dates set forth below, payment with respect to the RSUs will be made as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Change in Control</u>. Upon a Change in Control, and if no Replacement Award is granted, the Grantee is entitled to receive payment for Vested RSUs in Shares on the date of the Change in Control; <u>provided</u>, <u>however</u>, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, the Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to **<u>Sections</u> <u>5(a)</u>** or **<u>5(b)(ii)</u>** as though such Change in Control had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Terminations resulting in Vesting</u>. Within 10 days following the date of the Grantee's termination of employment with the Company, the Adviser or its Affiliates, as applicable, by the Company without Cause, by the Grantee for Good Reason or due to the Grantee's

------

death or Disability, the Grantee is entitled to receive payment for Vested RSUs in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Termination Following Change in Control</u>. With respect to Replacement Awards, within 10 days following the Grantee's termination of employment with the Company, the Adviser or its Affiliates, as applicable, within two years following a Change in Control by the Company, the Adviser or its Affiliates, as applicable, without Cause or by the Grantee for Good Reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company's obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Dividend Equivalents; Other Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Grantee shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Grantee pursuant to **<u>Section 5</u>** above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with **<u>Section 5</u>** hereof or (ii) the time when the Grantee's right to receive Shares in payment of the RSUs is forfeited in accordance with **<u>Section 4</u>** hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Adjustments</u>**. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 12 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Withholding Taxes</u>**. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with the delivery to the Grantee of Shares or any other payment to the Grantee or any other payment or Vesting

------

event under this Agreement, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the obligation of the Company to make any such delivery or payment that the Grantee make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. The Grantee may elect that all or any part of such withholding requirement be satisfied by retention by the Company of a portion of the Shares to be delivered to the Grantee or by delivering to the Company other Shares held by the Grantee. If such election is made, the Shares so retained shall be credited against such withholding requirement at the market value of such Shares on the date of such delivery. In no event will the market value of the Shares to be withheld and/or delivered pursuant to this **<u>Section 8</u>** to satisfy applicable withholding taxes exceed the minimum amount of taxes required to be withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Compliance With Law</u>**. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; <u>provided</u>, <u>however</u>, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Compliance With Section 409A of the Code</u>**. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>No Right to Future Awards or Employment</u>**. The grant of the RSUs under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. The grant of the RSUs and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing contained in this Agreement shall confer upon the Grantee any right to be employed or remain employed by the Company, the Adviser or its Affiliates, nor limit or affect in any manner the right of the Company, the Adviser or its Affiliates to terminate the employment or adjust the compensation of the Grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Relation to Other Benefits</u>**. Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company, the Adviser or its Affiliates and shall not affect the amount of any life insurance coverage in respect of the Grantee under any life insurance plan covering employees of the Company, the Adviser or its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Amendments</u>**. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto;

------

<u>provided</u>, <u>however</u>, that (a) no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee's written consent, and (b) the Grantee's consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Severability</u>**. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Relation to Plan</u>**. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Electronic Delivery</u>**. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Grantee's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee's consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Governing Law</u>.** This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of incorporation or formation of the Company, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Successors and Assigns</u>**. Without limiting **<u>Section 3</u>** hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**<u>Acknowledgement</u>**. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.**<u>Counterparts</u>**. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

**[SIGNATURES ON FOLLOWING PAGE]**

------

------

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <br>Title:

**Grantee Acknowledgment and Acceptance** 

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:

[Signature Page to NXDT RSU Award Agreement]

## Exhibit 10.14

**Exhibit 10.14**

**LOAN AGREEMENT**

Dated as of August 15, 2018

Among

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company, and **CP LAND OWNER, LLC**, a Delaware limited liability company,<br>collectively, as Borrower

and

**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company, <br>**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company, <br>and the other Lenders from time to time party hereto,<br>as Lenders,

and

**ACORE CAPITAL MORTGAGE, LP**,<br>a Delaware limited partnership,<br>as Administrative Agent for the Lenders

Property: Cityplace Tower<br>Loan Amount: $153,683,400.00

------

**<u>**TABLE OF CONTENTS**</u>**

<u>Page</u>

---

| | |
|:---|:---|
| ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION | [1](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 1.1. &nbsp;&nbsp;&nbsp;&nbsp;Definitions | [1](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 1.2. &nbsp;&nbsp;&nbsp;&nbsp;Location of Additional Defined Terms | [32](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 1.3. &nbsp;&nbsp;&nbsp;&nbsp;Principles of Construction | [33](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE II GENERAL TERMS | [33](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 2.1. &nbsp;&nbsp;&nbsp;&nbsp;The Loan | [33](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 2.2. &nbsp;&nbsp;&nbsp;&nbsp;Interest Rate | [42](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 2.3. &nbsp;&nbsp;&nbsp;&nbsp;Loan Payment | [42](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE III CASH MANAGEMENT; RESERVE ACCOUNTS | [50](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 3.1. &nbsp;&nbsp;&nbsp;&nbsp;Cash Management | [50](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 3.2. &nbsp;&nbsp;&nbsp;&nbsp;Required Deposits | [52](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 3.3. &nbsp;&nbsp;&nbsp;&nbsp;Disbursements from the Reserve Accounts | [56](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 3.4. &nbsp;&nbsp;&nbsp;&nbsp;Accounts Generally | [57](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES | [58](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.1. &nbsp;&nbsp;&nbsp;&nbsp;Organization | [58](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.2. &nbsp;&nbsp;&nbsp;&nbsp;Authority; Enforceability | [58](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.3. &nbsp;&nbsp;&nbsp;&nbsp;No Conflicts | [59](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.4. &nbsp;&nbsp;&nbsp;&nbsp;Litigation; Judgments | [59](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.5. &nbsp;&nbsp;&nbsp;&nbsp;Agreements | [59](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.6. &nbsp;&nbsp;&nbsp;&nbsp;Title | [59](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.7. &nbsp;&nbsp;&nbsp;&nbsp;Solvency | [60](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.8. &nbsp;&nbsp;&nbsp;&nbsp;Compliance | [60](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.9. &nbsp;&nbsp;&nbsp;&nbsp;Condemnation | [60](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.10. &nbsp;&nbsp;&nbsp;&nbsp;Utilities and Public Access | [60](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.11. &nbsp;&nbsp;&nbsp;&nbsp;Separate Tax Lots; Assessments | [61](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.12. &nbsp;&nbsp;&nbsp;&nbsp;Insurance | [61](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.13. &nbsp;&nbsp;&nbsp;&nbsp;Use of Property; Licenses | [61](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.14. &nbsp;&nbsp;&nbsp;&nbsp;Flood Zone | [61](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.15. &nbsp;&nbsp;&nbsp;&nbsp;Physical Condition | [61](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.16. &nbsp;&nbsp;&nbsp;&nbsp;Boundaries; Survey | [62](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.17. &nbsp;&nbsp;&nbsp;&nbsp;Leases | [62](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.18. &nbsp;&nbsp;&nbsp;&nbsp;Filing and Recording Taxes | [63](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.19. &nbsp;&nbsp;&nbsp;&nbsp;Special Purpose Entity | [63](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.20. &nbsp;&nbsp;&nbsp;&nbsp;Financial Information; Disclosure | [63](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.21. &nbsp;&nbsp;&nbsp;&nbsp;Certain Regulations | [63](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.22. &nbsp;&nbsp;&nbsp;&nbsp;Sanctions; Anti-Money Laundering; Anti-Corruption | [64](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.23. &nbsp;&nbsp;&nbsp;&nbsp;Construction Matters | [64](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 4.24. &nbsp;&nbsp;&nbsp;&nbsp;Required Equity | [66](#i048d9e1105a3445fb610e1b18feb126e_7) |

---

------

---

| | |
|:---|:---|
| Section 4.25. &nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Loan Matters | [66](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE V BORROWER COVENANTS | [66](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 5.1. &nbsp;&nbsp;&nbsp;&nbsp;Affirmative Covenants | [66](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 5.2. &nbsp;&nbsp;&nbsp;&nbsp;Negative Covenants | [81](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE VI EVENTS OF DEFAULT; REMEDIES; EXCULPATION | [92](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 6.1. &nbsp;&nbsp;&nbsp;&nbsp;Events of Default | [92](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 6.2. &nbsp;&nbsp;&nbsp;&nbsp;Remedies | [95](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 6.3. &nbsp;&nbsp;&nbsp;&nbsp;Limitation on Remedies | [98](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE VII SECONDARY MARKET TRANSACTIONS; SERVICING | [102](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 7.1. &nbsp;&nbsp;&nbsp;&nbsp;Secondary Market Transactions | [102](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 7.2. &nbsp;&nbsp;&nbsp;&nbsp;Borrower Cooperation | [102](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 7.3. &nbsp;&nbsp;&nbsp;&nbsp;Securitization Indemnification | [105](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 7.4. &nbsp;&nbsp;&nbsp;&nbsp;Rating Agency Confirmations | [108](#i048d9e1105a3445fb610e1b18feb126e_7) |
| ARTICLE VIII MISCELLANEOUS | [108](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.1. &nbsp;&nbsp;&nbsp;&nbsp;Survival | [108](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.2. &nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent Matters | [109](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.3. &nbsp;&nbsp;&nbsp;&nbsp;Governing Law | [110](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.4. &nbsp;&nbsp;&nbsp;&nbsp;Modification, Waiver in Writing | [112](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.5. &nbsp;&nbsp;&nbsp;&nbsp;Delay Not a Waiver | [112](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.6. &nbsp;&nbsp;&nbsp;&nbsp;Notices | [112](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.7. &nbsp;&nbsp;&nbsp;&nbsp;Trial by Jury | [114](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.8. &nbsp;&nbsp;&nbsp;&nbsp;Headings | [114](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.9. &nbsp;&nbsp;&nbsp;&nbsp;Severability | [114](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.10. &nbsp;&nbsp;&nbsp;&nbsp;Preferences | [114](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.11. &nbsp;&nbsp;&nbsp;&nbsp;Waiver of Notice | [115](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.12. &nbsp;&nbsp;&nbsp;&nbsp;Remedies of Borrower | [115](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.13. &nbsp;&nbsp;&nbsp;&nbsp;Schedules Incorporated | [115](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.14. &nbsp;&nbsp;&nbsp;&nbsp;Offsets, Counterclaims and Defenses | [115](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.15. &nbsp;&nbsp;&nbsp;&nbsp;No Joint Venture or Partnership; No Third Party Beneficiaries | [115](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.16. &nbsp;&nbsp;&nbsp;&nbsp;Publicity | [116](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.17. &nbsp;&nbsp;&nbsp;&nbsp;Waiver of Marshalling of Assets | [116](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.18. &nbsp;&nbsp;&nbsp;&nbsp;Conflict; Construction of Documents; Reliance | [116](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.19. &nbsp;&nbsp;&nbsp;&nbsp;Brokers and Financial Advisors | [117](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.20. &nbsp;&nbsp;&nbsp;&nbsp;Prior Agreements | [117](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.21. &nbsp;&nbsp;&nbsp;&nbsp;Time is of the Essence | [117](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.22. &nbsp;&nbsp;&nbsp;&nbsp;Certain Additional Rights of Administrative Agent (VCOC) | [117](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.23. &nbsp;&nbsp;&nbsp;&nbsp;Duplicate Originals, Counterparts | [117](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.24. &nbsp;&nbsp;&nbsp;&nbsp;Prepayment Charges | [118](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.25. &nbsp;&nbsp;&nbsp;&nbsp;Registrar | [118](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.26. &nbsp;&nbsp;&nbsp;&nbsp;Multiple Property Provisions | [119](#i048d9e1105a3445fb610e1b18feb126e_7) |

---

------

---

| | |
|:---|:---|
| Section 8.27. &nbsp;&nbsp;&nbsp;&nbsp;Multiple Borrower Provisions | [120](#i048d9e1105a3445fb610e1b18feb126e_7) |
| Section 8.28. &nbsp;&nbsp;&nbsp;&nbsp;Condominium Provisions | [124](#i048d9e1105a3445fb610e1b18feb126e_7) |

---

------

**<u>SCHEDULES</u>**

Exhibit A&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Legal Description of Property

Exhibit B-1&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Form of Officer's Certificate

Exhibit B-2&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Form of Certificate of Authority

Exhibit C&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Initial Approved Annual Budget

Exhibit D&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Project Budget

Exhibit E&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Permitted Fund Managers

Schedule I&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Immediate Repairs, Deadlines for Completion, Funds Reserved

Schedule II&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Organizational Structure

Schedule III&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Definition of Special Purpose Entity and Related Terms

Schedule IV&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Lease Requirements

Schedule V&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Disclosures

Schedule VI&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Required Policies and Related Terms

Schedule VII&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Required Reports

Schedule VIII&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Post-Closing Obligations

Schedule IX&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Intentionally Omitted

Schedule X&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Plans and Specifications

Schedule XI&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Project Schedule

Schedule XII&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;&nbsp;Allocated Loan Amounts

------

**<u>LOAN AGREEMENT</u>**

THIS LOAN AGREEMENT, dated as of August 15, 2018 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this "<u>Agreement</u>"), is made by and among the entity or entities identified on the signature page hereto as Borrower (together with its permitted successors and assigns, "<u>Borrower</u>"), the entity or entities identified on the signature page hereto as Lender and the other Lenders from time to time party hereto, and **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for the Lenders (in such capacity, together with its successors and assigns, "<u>Administrative Agent</u>").

WHEREAS, Borrower desires to obtain a loan from Lender in the original principal amount of ONE HUNDRED FIFTY-THREE MILLION SIX HUNDRED EIGHTY-THREE THOUSAND FOUR HUNDRED AND 00/100 DOLLARS ($153,683,400.00) (the "<u>Loan</u>"), and Lender is willing to make the Loan on the terms and conditions set forth in this Agreement and the other Loan Documents.

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

ARTICLE I<u><br>DEFINITIONS; PRINCIPLES OF CONSTRUCTION</u>

Section 1.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Definitions</u>. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

"<u>Acceptable Counterparty</u>" means a counterparty to an Interest Rate Cap Agreement, or the guarantor of such counterparty's obligations under an Interest Rate Cap Agreement (provided that the form and substance of such guaranty is acceptable to Administrative Agent) that has a long-term unsecured debt rating of not less than "A" by S&P and "A2" from Moody's, which rating shall not include a "t" or otherwise reflect a termination risk.

"<u>Additional Advance Lender</u>" means, individually and collectively, either (a) the Lender identified by name in each applicable Additional Advance Note, or (b) if such Lender has assigned all or any portion of its right, title or interest in and to such Additional Advance Note, the Person(s) to whom such Lender has assigned such right, title, and interest in such Additional Advance Note (to the extent of such right, title, and interest so assigned) from time to time.

"<u>Additional Advance End Date</u>" shall mean the Payment Date in September, 2020.

"<u>Additional Advance Note</u>" means each of Note A-1F, Note A-2F, Note B-1F and Note B-2F.

"<u>Advance Item</u>" means, individually and collectively as the context may require, Project Expenditures, Leasing Expenditures and Hotel Predevelopment Expenditures.

"<u>Affiliate</u>" means, as to any Person, any other Person that (a) directly or indirectly owns twenty percent (20%) or more of the ownership interests in such Person, and/or (b) is in Control of, is Controlled by or is under common Control with such Person, and/or (c) is a director, partner, officer or employee of such Person or of an Affiliate of such Person, and/or (d) is the spouse, issue, or parent of such Person or an Affiliate of such Person.

LOAN AGREEMENT – Page 6

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"<u>Affiliated Manager</u>" means any Manager that is (a) owned, directly or indirectly, by any Person that owns a direct or indirect ownership interest in Borrower, or (b) Controls, is Controlled by, or is under common Control with Borrower or any Person that owns a direct or indirect ownership interest in Borrower.

"<u>Allocated Loan Amount</u>" means, with respect to the Tower Unit and the Future Development Unit, as applicable, the amount set forth with respect to such Individual Component on <u>Schedule XII</u> to this Agreement.

"<u>Alternative Rate</u>" means, for any Interest Period for which an Alternative Rate Condition exists, with respect to that portion of the Outstanding Principal Balance evidenced by a Note, the greater of (a) the sum of (i) the Alternative Spread applicable to such Note, <u>plus</u> (ii) the Alternative Rate Index for such Interest Period, and (b) the sum of (i) the Spread applicable to such Note, <u>plus</u> (ii) the number of basis points described in <u>clause (a)</u> of the definition of LIBOR.

"<u>Alternative Rate Conditions</u>" means the existence of any of the following conditions, as determined by Administrative Agent in good faith: (a) adequate and reasonable means do not exist for ascertaining LIBOR or that a contingency has occurred which materially and adversely affects the London Interbank Eurodollar Market at which a Lender prices loans (which determination by Administrative Agent shall be conclusive and binding on Borrower in the absence of manifest error), or (b) a Change in Law has made it unlawful for a Lender to maintain the LIBOR rate with respect to the Loan, or any portion thereof, (c) LIBOR does not adequately and fairly reflect the cost to a Lender of making or maintaining the Loan or (d) the Alternative Rate Conditions (LIBOR Replacement) exist.

"<u>Alternative Rate Conditions (LIBOR Replacement)</u>" means that Administrative Agent determines in good faith that one or more replacements to LIBOR as an index for determining the interest rate payable for floating rate commercial real estate loans has been broadly adopted by the commercial real estate finance industry and Administrative Agent elects to convert this Loan to the Alternative Rate Index (LIBOR Replacement).

"<u>Alternative Rate Index</u>" means the Alternative Rate Index (Prime) unless and until the Alternative Rate Conditions (LIBOR Replacement) exist, in which case the Alternative Rate Index means the Alternative Rate Index (LIBOR Replacement). If any applicable Alternative Rate Index ceases to be generally published or is limited, regulated or administered by a governmental or quasi-governmental body, then Administrative Agent shall select a reasonably comparable interest rate index. Administrative Agent's determination of the Alternative Rate Index shall be binding and conclusive on Borrower absent manifest error. The Alternative Rate Index may or may not be the lowest rate at which Administrative Agent or any Lender prices loans on the date which the Alternative Rate Index is determined by Administrative Agent as set forth above.

"<u>Alternative Rate Index (LIBOR Replacement)</u>" means an index for determining the interest rate payable for floating rate commercial real estate loans that has been broadly adopted by the commercial real estate finance industry as a replacement for LIBOR as an index for determining the interest rate payable for floating rate commercial real estate loans as determined by Administrative Agent in good faith.

"<u>Alternative Rate Index (Prime)</u>" means the annual rate of interest published in *The Wall Street Journal* from time to time as the "prime rate" as of the date that is prior to (but most near) the date which is two (2) Business Days prior to the Payment Date on which the applicable Interest Period commences. If *The Wall Street Journal* ceases to publish the "Prime Rate," Administrative Agent shall select an equivalent publication that publishes such "prime rate."

LOAN AGREEMENT – Page 7

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"<u>Alternative Spread</u>" means with respect to that portion of the Outstanding Principal Balance evidenced by a Note, the number of basis points determined as the sum of (a) the LIBOR Interest Rate last in effect for the Interest Period immediately prior to the date on which Administrative Agent has determined that the Alternative Rate is in effect with respect to the Loan, <u>plus</u> (b) the Spread applicable to such Note, <u>less</u> (c) the Alternative Rate Index in effect as of the last date of its determination pursuant to the definition thereof immediately prior to the date on which Administrative Agent has determined that the Alternative Rate is in effect with respect to the Loan; <u>provided</u>, <u>however</u>, in no event shall such difference be a negative number.

"<u>AON</u>" means AON SERVICE CORPORATION, together with its permitted successors and/or assigns.

"<u>AON Lease Relocation or Replacement</u>" means, either, the relocation of the AON lease premises to a higher floor in the Tower Unit or the execution of a replacement Lease with a tenant other than AON for the demised space on such higher floor in the Tower Unit.

"<u>Approved Accounting Method</u>" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such entity as may be in general use by significant segments of the U.S. accounting profession, to the extent such principles are applicable to the facts and circumstances on the date of determination, consistently applied, or such other accounting methods used by Guarantor to prepare the financial statements delivered to Administrative Agent in contemplation of the Loan, consistently applied.

"<u>Approved Capital Expenditures</u>" means costs and expenses incurred by Borrower in connection with the completion by Borrower of the capital improvements made with respect to the Property (a) in accordance with the applicable Approved Annual Budget, or (b) as may otherwise be approved by Administrative Agent from time to time, such approval not to be unreasonably withheld.

"<u>Assignment of Leases</u>" means that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as assignor, to Administrative Agent, as assignee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

"<u>Assignment of Management Agreement</u>" means that certain Assignment and Subordination of Management Agreement, dated as of the date hereof, among Borrower, Manager, and Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

"<u>Bail-In Action</u>" means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

"<u>Bail-In Legislation</u>" means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

"<u>Bankruptcy Action</u>" means 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; (c) such Person filing an answer consenting

LOAN AGREEMENT – Page 8

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to or otherwise colluding or 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) the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; (e) 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; or (f) such Person commencing (or have commenced against it) a proceeding for the dissolution or liquidation of it.

"<u>Bankruptcy Code</u>" means 11 U.S.C. § 101 et seq., as the same may be amended from time to time.

"<u>Borrower Party</u>" means, individually and collectively, Borrower, Required SPE Entity (if any), Guarantor, Mezzanine Borrower, Mezzanine Borrower Required SPE Entity (if any), any Affiliated Manager, any Affiliate of any of the foregoing, and any officers, directors, employees, or agents of any of the foregoing.

"<u>Business Day</u>" means any day other than a Saturday, Sunday or any other day on which national banks in New York, New York, are not open for business.

"<u>Capital Expenditures</u>" means, for any period, the amount expended for items required under Approved Accounting Method to be capitalized.

"<u>Cash Management Account</u>" means the deposit account established pursuant to the Cash Management Agreement.

"<u>Cash Management Agreement</u>" means that certain Cash Management Agreement dated as of the date hereof by and among Cash Management Bank, Borrower and Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time (or any other agreement among Borrower, Administrative Agent, and any other Cash Management Bank as may be applicable from time to time).

"<u>Cash Management Bank</u>" means, initially, Wells Fargo Bank, National Association, or such other bank or banks selected by Administrative Agent to maintain the Cash Management Account (or any Reserve Accounts to the extent they are not subaccounts of the Cash Management Account).

"<u>Cash Management Event</u>" means the existence of any of the following: (a) the existence of an Event of Default; (b) the Debt Service Coverage Ratio being less than 1.15:1.00 at any time (until the Debt Service Coverage Ratio is at least 1.25:1.00 for two (2) consecutive quarters); (c) the Debt Yield being less than (i) six and 00/100 percent (6.00%) at any time from the Closing Date up to (but not including) the Payment Date in September, 2019, (until the Debt Yield is at least six and 50/100 percent (6.50%) for two (2) consecutive quarters) (ii) seven and 00/100 percent (7.00%) at any time from the Payment Date in September, 2019 up to (but not including) the Payment Date in September, 2020 (until the Debt Yield is at least seven and 50/100 percent (7.50%) for two (2) consecutive quarters), and (iii) eight and 00/100 percent (8.00%) at any time from and after the Payment Date in September, 2020 (until the Debt Yield is at least eight and 50/100 percent (8.50%) for two (2) consecutive quarters); (<u>provided</u>, that in the event of a failure of Borrower to deliver the information and documentation required under <u>Section 5.1.6</u> by the required delivery date hereunder, at Administrative Agent's option the Debt Service Coverage Ratio and Debt Yield will be presumed to be less than the levels required above unless and until such information and documentation are provided to Administrative Agent and demonstrate otherwise); or (d) the occurrence of a Mezzanine Loan Event of Default (until the receipt by Administrative Agent of a Mezzanine Loan Event of Default Revocation

LOAN AGREEMENT – Page 9

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Notice); (e) the occurrence of a Cash Sweep Tenant Event (until the Cash Sweep Tenant that was the subject of the Cash Sweep Tenant Event has vacated its demised premises at the Property); or (f) the occurrence of a Key Tenant Reduction Event (until the occurrence of a Key Tenant Reduction Event Cure).

"<u>Cash Sweep Lease</u>" means any Lease pursuant to which the tenant thereunder has a right or option to terminate such Lease prior to its scheduled expiration date (other than a right to terminate for a default by the landlord or a casualty or condemnation).

"<u>Cash Sweep Tenant</u>" means any tenant under a Cash Sweep Lease.

"<u>Cash Sweep Tenant Event</u>" means the date on which a Cash Sweep Tenant gives written notice of its intent to terminate its Cash Sweep Lease pursuant to a right or option thereunder (other than a right to terminate for a default by the landlord or a casualty or condemnation).

"<u>Certificate of Authority</u>" means a certificate delivered to Administrative Agent by Borrower that is signed by an authorized senior officer of Borrower or of the entity that Controls Borrower, as applicable, in the form attached hereto as <u>Exhibit B-2</u>.

"<u>Change in Law</u>" means 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 (whether or not having the force of law) by any Governmental Authority; <u>provided</u> that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (ii) 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.

"<u>Change Order</u>" means any amendment, supplement or other modification in any respect to any Project Documents.

"<u>Clearing Account</u>" means the deposit account established pursuant to the Clearing Account Agreement.

"<u>Clearing Account Agreement</u>" means that certain Deposit Account Control Agreement dated as of the date hereof by and among Clearing Bank, Borrower, Manager and Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

"<u>Clearing Bank</u>" means Wells Fargo Bank, National Association or any successor or permitted assigns thereof permitted hereunder.

"<u>Closing Certificate</u>" means that certain Closing Certificate executed by Borrower as of the date hereof.

"<u>Closing Date</u>" means the date of this Agreement.

"<u>Closing Date Debt Yield</u>" means 6.0%.

LOAN AGREEMENT – Page 10

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"<u>Code</u>" means the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

"<u>Commitment Percentage</u>" means (a) with respect to the initial Additional Advance Lender party to this Agreement, 100%, and (b) from and after any assignment by any Additional Advance Lender of its obligation to make Additional Advances, (i) with respect to any assignee of such obligation, the percentage of such obligation so assigned to such transferee as indicated in the applicable assignment agreement by which such assignee acquires its interest in the Loan, and (ii) with respect to any such assigning Additional Advance Lender, the percentage of such obligation so retained by such Additional Advance Lender.

"<u>Complete</u>" (and the lower-case version thereof) means, with respect to any of the work constituting the Project, that (a) such work is substantially completed in accordance with the Administrative Agent-approved Plans and Specifications, the Project Documents, the Loan Documents, and all Legal Requirements, subject only to the completion of minor punch-list items that do not limit the use or occupancy of any portion of the Property for its intended purposes, (b) if required by Legal Requirements, a final certificate of occupancy (or similar) has been obtained evidencing that full use of the Property for its intended purposes has been authorized by all applicable Governmental Authorities, (c) the Property is open for business, (d) subject to any contest rights contained herein, the Property is free of all mechanics', materialmen's, and other similar liens (or such liens have otherwise been bonded over to Administrative Agent's satisfaction), and (e) Administrative Agent has received copies of all warranties from suppliers covering materials, equipment and appliances included within the applicable component of the work. The terms "Completed" and "Completion" (and lower-case versions thereof) shall have the same meaning when used in the Loan Documents.

"<u>Concourse Renovation Work</u>" means the ongoing work and repairs to the concourse for which Borrower is receiving a credit from the seller of the Property at closing.

"<u>Condominium Certification</u>" means that certain Certification as to Condominium Documents executed by Matt McGraner, as the Authorized Signatory of the Association, to Administrative Agent as of the date hereof.

"<u>Condominium Declaration</u>" means that certain Master Condominium Declaration for Uptown at Cityplace Condominium made and established on November 1, 2016 by Uptown Cityplace, LLC, a Delaware limited liability company, as Declarant, and recorded as Instrument No. 201600308343 in the real property records of Dallas County, Texas, as affected by the Partial Assignment of Declarant's Rights.

"<u>Condominium Expenses</u>" means fees and assessments under the Condominium Documents.

"<u>Condominium Regime</u>" means the condominium regime governed by the Condominium Documents.

"<u>Condominium Unit</u>" means a "Unit" as such term is defined in the Condominium Declaration.

"<u>Construction Contract</u>" means each Design Professional Agreement, the General Contractor Agreement, and each Trade Contract, in each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and conditions of this Agreement.

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"<u>Control</u>" means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. "<u>Controlled</u>" and "<u>Controlling</u>" shall have correlative meanings.

"<u>CP Land Owner</u>" means CP Land Owner, LLC, a Delaware limited liability company.

"<u>CP Tower Owner</u>" means CP Tower Owner, LLC, a Delaware limited liability company.

"<u>Dean Foods</u>" means Dean Foods Company, together with its permitted successors and/or assigns.

"<u>Debt</u>" means the Outstanding Principal Balance, together with all interest accrued and unpaid thereon, the Exit Fee, the Minimum Multiple, and all other sums due from Borrower under the Loan Documents.

"<u>Debt Service</u>" means, with respect to any particular period of time, scheduled principal and/or interest payments due under this Agreement.

"<u>Debt Service Coverage Ratio</u>" means a ratio as of the date of calculation in which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;the numerator is the UNOI; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the denominator is the sum of (i) the projected aggregate Debt Service that would become due during the twelve (12) calendar month period immediately following the date of calculation, calculated assuming that (A) the Interest Rate will be the Interest Rate then in effect for the Interest Period in which such calculation occurs, and (B) the Outstanding Principal Balance remains the same during such 12-month period, plus (ii) the projected aggregate Mezzanine Loan Debt Service that would become due during the twelve (12) calendar month period immediately following the date of calculation, calculated assuming that (A) the Interest Rate (as defined in the Mezzanine Loan Agreement) will be the Interest Rate (as defined in the Mezzanine Loan Agreement) then in effect for the Interest Period in which such calculation occurs, and (B) the Mezzanine Loan Outstanding Principal Balance remains the same during such 12-month period.

"<u>Debt Yield</u>" means, as of any date of determination, the amount (expressed as a percentage) determined by dividing the UNOI by the sum of (a) the Outstanding Principal Balance, <u>plus</u> (b) the Mezzanine Loan Outstanding Principal Balance.

"<u>Deemed Approval Requirements</u>" means, with respect to any applicable matter for which Administrative Agent's approval is requested, that (a) no Event of Default shall have occurred and be continuing (either at the date of any notices specified below or as of the effective date of any deemed approval), (b) Borrower shall have sent Administrative Agent a written request for approval with respect to such matter in accordance with the applicable terms and conditions hereof, (c) Administrative Agent shall have failed to either approve or deny such request, or request any information and/or documentation relating to such request as may be required in order to approve or disapprove such matter within ten (10) Business Days of receipt of the foregoing initial notice (or within ten (10) Business Days of Administrative Agent's receipt of such requested information and/or documentation, whichever is later), (d) Borrower shall have submitted a second request for approval with respect to such matter in accordance with the applicable terms and conditions hereof, which second notice shall have been marked in bold lettering with the following language: "ADMINISTRATIVE AGENT'S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF THE LOAN AGREEMENT BETWEEN THE

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UNDERSIGNED AND ADMINISTRATIVE AGENT. ADMINISTRATIVE AGENT'S FAILURE TO RESPOND TO THIS NOTICE WITHIN SUCH FIVE (5) BUSINESS DAY PERIOD MAY RESULT IN ADMINISTRATIVE AGENT'S APPROVAL OF THE MATTERS DISCUSSED HEREIN BEING DEEMED GRANTED PURSUANT TO THE LOAN AGREEMENT" and the envelope containing such second notice shall have been marked "PRIORITY" in bold letters, (e) Administrative Agent has not requested additional information and/or documentation that has not been received by Administrative Agent, and (f) Administrative Agent shall have failed to respond to such second notice with a disapproval or request for additional information and/or documentation within such five (5) Business Day period. For purposes of clarification, Administrative Agent requesting additional and/or clarified information, in addition to approving or denying any request (in whole or in part), shall be deemed a response by Administrative Agent for purposes of the foregoing.

"<u>Default</u>" means 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.

"<u>Default Rate</u>" means a rate per annum equal to five hundred (500) basis points (i.e., 5%) above the Interest Rate that would otherwise be in effect.

"<u>Design Professional</u>" means any architect, engineer, and/or other design professions engaged by (or on behalf of) Borrower with respect to the design and/or engineering of the Project.

"<u>Design Professional Agreement</u>" means any agreement between Borrower and any Design Professional, each as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and conditions of this Agreement.

"<u>Design Professional Consent</u>" means a consent agreement in form and content reasonably acceptable to Administrative Agent executed by any applicable Design Professional with respect to the related Design Professional Agreement.

"<u>Designated Person</u>" means any Person (a) named on the Specially Designated Nationals And Blocked Persons List maintained by the Office of Foreign Assets Control ("<u>OFAC</u>") (see <u>https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx</u>) or its replacement, (b) named on the Consolidated Sanctions List maintained by OFAC (see <u>https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/consolidated.aspx</u>) or its replacement, (c) named in the regulations adopted under the Special Economic Measures Act (Canada) (see <u>http://laws-lois.justice.gc.ca/eng/acts/S-14.5/index.html</u>) or its replacement, (d) named on any other list of terrorists, terrorist organizations, narcotics traffickers or other sanctioned Persons maintained by OFAC, or on any similar lists maintained by any other Governmental Authority, (e) that is a senior foreign political figure (defined as a senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a senior official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned corporation, and includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure), or any immediate family member (including parents, siblings, spouse, children and in-laws) or close associate (meaning a Person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial U.S. and non-U.S. financial transactions on behalf of the senior foreign political figure) of a senior foreign political figure, (f) with whom transacting business (whether directly or indirectly, or with any entity in which such Person owns a direct or indirect ownership interest) is or would be prohibited by any Legal Requirement, (g) that has

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been previously indicted for or convicted of, or is currently indicted for, any felony involving a crime or crimes of moral turpitude or for any violation of any Legal Requirements relating to terrorism, trade restrictions, narcotics trafficking, money laundering, or criminal organizations, or is currently under investigation by any Governmental Authority for alleged criminal activity; or (h) owned or Controlled by, or acting for or on behalf of, any such Person listed in clauses (a) through (g) above.

"<u>Designated Jurisdiction</u>" means any country or territory (a) which is designated as high risk or monitored jurisdictions by the Financial Action Task Force on Money Laundering (see: <u>http://www.fatf-gafi.org/countries/#high-risk</u>), (b) that has been designated by the U.S. Secretary of the Treasury under Section 311 of the USA PATRIOT Act as of primary money laundering concern (see <u>https://www.fincen.gov/resources/statutes-and-regulations/311-special-measures</u>), (c) has been designated as noncooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the United States is a member, if the United States has concurred in such designation, (c) is subject to trade or economic sanctions administered and/or enforced by OFAC (see <u>https://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx</u>) or otherwise pursuant to Economic Sanctions and Anti-Money Laundering Laws, or (d) for which Canadian Sanctions are in place (see <u>http://www.international.gc.ca/sanctions/countries-pays/index.aspx?lang=eng</u>).

"<u>EEA Financial Institution</u>" means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

"<u>EEA Member Country</u>" means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

"<u>EEA Resolution Authority</u>" means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

"<u>Elevator Modernization and Interiors Work</u>" means the "Elevator Modernization" and "Elevator Interiors" described on the "Immediate Repairs" page to the Project Budget.

"<u>Eligibility Requirements</u>" means, with respect to any Person, that such Person (a) has total assets (in name or under management) in excess of $600,000,000 and capital/statutory surplus or shareholder's equity of $250,000,000 (but, for the avoidance of doubt, an advisory firm, Permitted Fund Manager, or similar fiduciary need not satisfy such total assets and capital/statutory surplus or shareholder's equity requirements); and (ii) is regularly engaged in the business of making or owning (or, in the case of a fund advisor or manager, advising or managing with respect to a fund that is regularly engaged in the business of making or owning) commercial real estate loans (including mezzanine loans with respect to commercial real estate), originating preferred equity investments or owning or operating commercial properties.

"<u>Environmental Indemnity</u>" means 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 Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974, as amended.

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"<u>EU Bail-In Legislation Schedule</u>" means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

"<u>Excess Disbursement</u>" means, with respect to any applicable Payment Date, the amount received by Borrower pursuant to <u>Sections 3.1(f)</u> and <u>(h)</u> hereof (if any) on or about the Payment Date that is two (2) months prior to such Payment Date (i.e., for a Payment Date in June, the relevant Payment Date is the one occurring in April), less the amount thereof actually spent on the Operating Expenses (or other applicable expenditures) for which such disbursement was made.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended.

"<u>Exit Fee</u>" means an amount equal to (a) the Exit Fee Mortgage Share multiplied by (b) the Exit Fee (Aggregate).

"<u>Exit Fee (Aggregate)</u>" shall be calculated on an aggregate basis for the Loan and the Mezzanine Loan and shall be equal to (a) in the case of a partial payment of the Loan and/or the Mezzanine Loan (without implying that Borrower has a right to partially prepay the Loan other than as expressly provided in this Agreement), the Exit Fee Percentage multiplied by the sum of (i) the amount of the Loan being prepaid, plus (ii) the amount of the Mezzanine Loan being prepaid, and (b) in the case of payment of the Loan in full or in the event of the acceleration of the Loan in connection with an Event of Default, the sum of (i) the Exit Fee Percentage multiplied by the sum of (A) the Loan Amount, plus (B) the Mezzanine Loan Amount, less (ii) all amounts previously paid under <u>clause (a)</u> under this Agreement and the Mezzanine Loan Agreement.

"<u>Exit Fee Mortgage Share</u>" means the quotient obtained by dividing (a) the Loan Amount (Note B) by (b) the sum of (i) the Loan Amount (Note B), plus (ii) the Mezzanine Loan Amount.

"<u>Exit Fee Percentage</u>" means twenty-five hundredths percent (0.25%).

"<u>Extension Conditions</u>" means each of the following: (a) Borrower shall have given at least thirty (30) days' prior written notice to Administrative Agent of its intention to extend the Maturity Date; (b) no Event of Default shall exist as of the applicable Maturity Date; (c) the Debt Yield (after giving effect to any voluntary prepayment made in compliance with this Agreement) shall be at least (i) with respect to the first extension of the Maturity Date permitted hereunder, nine and 00/100 percent (9.00%) as of the applicable Maturity Date, and (ii) with respect to the second extension of the Maturity Date, permitted hereunder, ten and 00/100 percent (10.00%) as of the applicable Maturity Date; (d) intentionally omitted; (e) Borrower shall have paid to Administrative Agent a fee in the amount of 0.25% of the Outstanding Principal Balance (including the amount of any Additional Advance funded by Administrative Agent on such Maturity Date and any Additional Advance that Borrower remains eligible to receive pursuant to this Agreement), for each extension and shall have paid or reimbursed all of Administrative Agent's outstanding fees and expenses; (f) Borrower shall have obtained (and collaterally assigned to Administrative Agent pursuant to such documents as Administrative Agent may require) an interest rate cap complying with the requirements of <u>Section 5.1.4</u> hereof, expiring no earlier than the extended Maturity Date, capping the applicable Index at the applicable Strike Rate, and has a notional principal amount not less than the Outstanding Principal Balance; (g) Mezzanine Borrower shall have extended the Maturity Date (as defined in the Mezzanine Loan Agreement) of the Mezzanine Loan to a date not sooner than the extended Maturity Date hereunder (including that all conditions precedent to such extension shall have been satisfied by Mezzanine Borrower or waived in writing by Mezzanine Loan Administrative Agent); and (h) Guarantor shall then exist and be in good standing under the laws of the State of its

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formation, and its governing documents shall not contain provisions requiring the termination of its existence prior to the date that is five (5) years following the extended Maturity Date.

"<u>Extraordinary Lease Payments</u>" means, collectively, (a) payments made in connection with any rejection, termination or cancellation of any Lease (including in any bankruptcy case), Lease buy-out, and surrender payments from tenants or any holdover rents or use and occupancy fees from tenants or former tenants, or reimbursements for tenant improvements and leasing commissions, (b) all sums paid with respect to a modification of any Lease or otherwise paid in connection with Borrower taking any action under any Lease (e.g., granting a consent) or waiving any provision thereof, and (c) all sums paid by a tenant to reimburse Borrower for capital expenditures made with respect to the Property.

"<u>FATCA</u>" means (a) Sections 1471 through 1474 of the Code, in effect as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to the foregoing, and (b) any similar law adopted by any non-U.S. Governmental Authority pursuant to an intergovernmental agreement between such non-U.S. jurisdiction and the United States.

"<u>Fire Alarm Upgrades</u>" means the "Fire Alarm Upgrade" described on the "Immediate Repairs" page to the Project Budget.

"<u>Fitch</u>" means Fitch, Inc.

"<u>Force Majeure</u>" means any event, circumstance or condition beyond the reasonable control of Borrower, including strikes, labor disputes, acts of God, the elements, governmental restrictions, regulations or controls, enemy action, civil commotion, fire, casualty, accidents, mechanical breakdowns or shortages of, or inability to obtain, labor, utilities or materials, or which causes delay; provided, however, that (a) neither any lack of funds (unless due to Administrative Agent, Lender or Servicer non-compliance with this Agreement) nor any illiquidity or disruption affecting capital markets or other general economic conditions, shall be deemed to be a condition beyond the control of Borrower; (b) Borrower promptly notifies Administrative Agent of the existence of such event, circumstance or condition after Borrower becomes aware that such event, circumstance or condition constitutes Force Majeure (but in no event more than ten (10) days after Borrower becomes aware of the same); and (c) the delay that could result from such Force Majeure shall not cause or result in a default or violation by Borrower under any material contracts or licenses and permits affecting the Property or under any applicable Legal Requirements.

"<u>Future Development Unit</u>" means the "Future Development Unit" as such term is defined in the Condominium Declaration.

"<u>General Contractor</u>" means a general contractor with a valid contractor's license in the State where the Property is located and that has been approved by Administrative Agent, which approval shall not be unreasonably withheld.

"<u>General Contractor Agreement</u>" means a guaranteed maximum price construction contract between Borrower and General Contractor for the completion of the Project in accordance with the Plans and Specifications, in the full amount of the Project Budget, in form and content reasonably acceptable to Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms and conditions of this Agreement.

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"<u>General Contractor Consent</u>" means a consent agreement in form and content reasonably acceptable to Administrative Agent executed by the General Contractor with respect to the General Contractor Agreement.

"<u>Governmental Authority</u>" means any court, board, agency, bureau, department, commission, office or other authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise), whether now or hereafter in existence.

"<u>Guarantor</u>" means, individually and collectively as the context may require, NexPoint SOF and HCRE Partners, together with their respective successors and permitted assigns.

"<u>Guaranty</u>" means individually and collectively as the context may require: (i) that certain Guaranty of Recourse Obligations dated as of the date hereof, from Guarantor to and for the benefit of Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time (the "<u>Recourse Guaranty</u>"); (ii) that certain Completion Guaranty dated as of the date hereof, from Guarantor to and for the benefit of Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time (the "<u>Completion Guaranty</u>"); and (iii) that certain Guaranty of Required Equity, Required Pay Down and Master Lease dated as of the date hereof, from Guarantor to and for the benefit of Administrative Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time (the "<u>Required Equity Guaranty</u>").

"<u>Hard Costs</u>" means, collectively, all costs and expenses set forth in the Project Budget which are denominated therein as "hard costs".

"<u>HCRE Partners</u>" means HCRE Partners, LLC, a Delaware limited liability company.

"<u>Hotel Component</u>" means the portion of the Tower Unit constituting floors 4 through 9 thereof, together with all access, entry and other rights appurtenant thereto.

"<u>Hotel Improvements</u>" means the improvements proposed to be made to the Hotel Component as are necessary or appropriate to convert the Hotel Component to a franchised hotel.

"<u>Hotel Preconstruction Services</u>" means pre-construction services provided in connection with the planning, design and/or franchising of the Hotel Component (including, without limitation, architect and design fees and franchise fees or deposits).

"<u>Hotel Predevelopment Expenditures</u>" means, individually and collectively as the context may require, costs and expenses incurred in connection with (a) the AON Lease Relocation or Replacement, (b) the Schmidt & Stacy Lease Relocation, and (c) Hotel Preconstruction Services, but specifically excluding any hard costs in connection with the construction of improvements related to the Hotel Component.

"<u>Hudson Advisors</u>" Hudson Advisors L.P., a Delaware limited liability company, together with its permitted successors and/or assigns.

"<u>HVCRE Loan</u>" means a loan classified as a "Highly Volatile Commercial Real Estate Loan" by the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) including, without limitation, the rules, guidelines and directives promulgated pursuant to Basel III.

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"<u>Immediate Repairs</u>" means the repairs and upgrades to the Property described on <u>Schedule I</u> hereto.

"<u>Indebtedness</u>" means for any Person, on a particular date, the sum (without duplication) at such date of (a) all indebtedness or liability of such Person (including 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 for which such Person is liable); (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 entity, or otherwise to assure a creditor against loss; (g) obligations secured by any liens granted by such Person, whether or not the obligations have been assumed or are those of any other Person, and (h) without duplication of the foregoing, any contingent obligations of such Person (determined in accordance with the Approved Accounting Method).

"<u>Indemnified Taxes</u>" means (a) Taxes imposed on or with respect to any payment made by or on account of any obligation of Borrower under any Loan Document, and (b) to the extent not otherwise described in <u>clause (a)</u>, Other Taxes; <u>provided</u>, <u>however</u>, Indemnified Taxes shall not include any of the following Taxes imposed on or with respect to a Lender or required to be withheld or deducted from a payment to a Lender: (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (A) imposed as a result of such Lender being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (B) that are Other Connection Taxes; (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan pursuant to a law in effect on the date on which (A) such Lender acquires such interest in the Loan, or (B) such Lender changes its lending office, except in each case to the extent that, pursuant to <u>Section 2.3.6(a)</u>, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office; (iii) Taxes attributable to such Lender's failure to comply with <u>Section 2.3.6(b)</u>; and (iv) any U.S. federal withholding Taxes imposed under FATCA.

"<u>Independent Accountant</u>" means a "Big Four" accounting firm or another accounting firm of nationally recognized, certified public accountants which is selected by Borrower and acceptable to Administrative Agent and (a) does not have any direct financial interest or any material indirect financial interest in Borrower, Guarantor, or in any Affiliate thereof, (b) with respect to which the personnel dedicated to such matter is not connected with Borrower, Guarantor, or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, member, manager, creditor, director, supplier, customer, or person performing similar functions, and (c) with respect to which the personnel dedicated to such matter is not a member of the immediate family of a Person described in clause (a) or (b) above. Administrative Agent hereby acknowledges that KPMG is an approved accounting firm so long as such firm satisfies the foregoing clauses (a) through (c) and is in good standing with respect to any applicable licenses required in order to perform accountancy services.

"<u>Index</u>" means (a) while LIBOR is the index upon which the Interest Rate is determined, LIBOR, and (b) while LIBOR is not the index upon which the Interest Rate is determined, the Alternative Rate Index.

"<u>Individual Component</u>" means each of the Tower Unit and the Future Development Unit.

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"<u>Interest Period</u>" means, with respect to any Payment Date, the period commencing on and including the eighth (8th) day of the preceding calendar month and ending on and including the seventh (7th) day of the calendar month in which such Payment Date occurs.

"<u>Interest Rate</u>" means, for any Interest Period, the sum of (a) the Spread, <u>plus</u> (b) the LIBOR Interest Rate for such Interest Period (<u>provided</u>, <u>however</u>, that during any period in which an Alternative Rate Condition exists, "Interest Rate" means, for any Interest Period, the Alternative Rate for such Interest Period).

"<u>Key Tenant</u>" means each of Dean Foods, Hudson Advisors and Zix Corporation.

"<u>Key Tenant Lease</u>" means any Lease with a Key Tenant.

"<u>Key Tenant Reduction Event</u>" means the date on which (a) any Key Tenant enters into an agreement with Borrower (or otherwise exercises an option or right set forth in its Key Tenant Lease) to reduce the square footage of the demised premises under such Key Tenant Lease below the square footage constituting the demised premises under such Key Tenant Lease as of the Closing Date, and (b) Administrative Agent determines in good faith that the Extraordinary Lease Payment (if any) made by such Key Tenant in conjunction with such reduction of the demised premises and deposited into the TI/LC Reserve Account pursuant to <u>Section 3.2(e)</u> hereof is less than the product of (i) $55.00 and (ii) the positive difference between (A) the total square footage of the demised premises under such Key Tenant Lease as of the Closing Date and (B) the total square footage of the demised premises under such Key Tenant Lease following said reduction.

"<u>Key Tenant Reduction Event Cure</u>" means, following the occurrence of one or more Key Tenant Reduction Events, that the aggregate sum of (a) the portion of the Extraordinary Lease Payments paid by the applicable Key Tenant(s) that remains on deposit in the TI/LC Reserve Account, <u>plus</u> (b) the remaining funds in Key Tenant Reserve Account, is equal to or greater than the product of (i) $55.00 and (ii) the positive difference between (A) the total square footage of the demised premises as of the Closing Date under all such applicable Key Tenant Lease(s) that are the subject of a Key Tenant Reduction Event, and (B) the total square footage of the demised premises under all such Key Tenant Lease(s) following the applicable Key Tenant Reduction Event(s).

"<u>Lease</u>" means any lease, sublease or sub-sublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and (a) every modification, amendment or other agreement relating to such lease, sublease, sub-sublease, or other agreement entered into in connection with such lease, sublease, sub-sublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

"<u>Lease Requirements</u>" means the criteria for Leases described on <u>Schedule IV</u> attached hereto.

"<u>Leasing Expenditures</u>" means actual out-of-pocket expenses incurred by Borrower and payable to third parties in connection with the completion of tenant improvements required to be made pursuant to, and/or tenant improvement allowances required to be paid pursuant to, Leases entered into in accordance with the Loan Documents, and for leasing commissions payable in connection with Leases entered into in accordance with the Loan Documents, which expenses (a) are (i) specifically approved by Administrative Agent in connection with approving the applicable Lease, or (ii) incurred in the ordinary course of business and on market terms and

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conditions in connection with Leases which do not require Administrative Agent's approval under the Loan Documents (but in no event in excess of the amounts set forth in the Lease Requirements and excluding any expenses paid to Affiliates of Borrower or Guarantor (other than expenses paid to any Affiliate of Borrower or Guarantor in accordance with the terms of the Management Agreement), or (iii) otherwise approved by Administrative Agent, and (b) are substantiated by executed Lease documents or other documentary support reasonably acceptable to Administrative Agent.

"<u>Legal Requirements</u>" means all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, building codes, land laws, judgments, decrees and injunctions of Governmental Authorities affecting the Loan, any Secondary Market Transaction with respect to the Loan, Borrower, Guarantor and/or the Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, including the Securities Act, the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (or any statute replacing or amending the same), the Americans with Disabilities Act of 1990, all laws, regulations, and executive orders relating to terrorism, economic or financial sanctions or trade embargoes or restrictions, narcotics trafficking, money laundering, criminal organizations, bribery, or corruption, 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, Guarantor, the Property or any part thereof, including 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.

"<u>Lender" or, collectively, "Lenders</u>" means the Lender(s) initially party to this Agreement and each and every successor or assign of such Lender(s) that becomes a Lender hereunder.

"<u>Letter of Credit</u>" means an irrevocable, unconditional, freely transferable (without cost to Administrative Agent), clean sight draft letter of credit that (a) names a Person other than Borrower as the account party, (b) either does not expire sooner than, or can be renewed for successive one (1) year periods ending not sooner than, thirty (30) days after the then-applicable scheduled Maturity Date (or such earlier date as is thirty (30) days after such Letter of Credit is no longer required pursuant to the terms of this Agreement), (c) entitles Administrative Agent to draw thereon in San Francisco, California, or New York, New York, based solely on a statement purportedly executed by an officer of Administrative Agent stating that it has the right to draw thereon, (d) is issued by a domestic bank (or the U.S. agency or branch of a foreign bank that has a minimum long term unsecured debt rating of at least "A" by S&P or "A2" by Moody's (or if there are no domestic banks or U.S. agencies or branches of a foreign bank then issuing letters of credit, then such letter of credit may be issued by a domestic bank, the long term unsecured debt rating of which is single "A" or better (or an equivalent rating) then given by at least one Rating Agency to a domestic commercial bank), in any event having an office in San Francisco, California, or New York, New York, where presentation may be made by Administrative Agent, and (e) is otherwise in form and substance acceptable to Administrative Agent. If at any time the bank issuing any such Letter of Credit shall cease to satisfy the above-described criteria, or if Borrower fails to cause such Letter of Credit to be renewed or replaced no later than thirty (30) days prior to any stated expiration thereof, then, Administrative Agent shall have the immediate right, to draw down the same in full (or in part) and hold the proceeds of such draw as collateral for the Debt in a Reserve Account.

"<u>LIBOR</u>" means, with respect to each Interest Period, the higher of (a) two hundred (200) basis points (i.e., 2.00%), and (b) the rate determined by Administrative Agent to be the per annum rate for deposits in U.S. Dollars for a period of thirty (30) days which appears on Reuters Screen LIBOR01 Page (or the successor thereto) as the London Interbank Offering Rate as of 11:00 a.m., London time, on the date that is two (2) Business Days (on which commercial banks

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in London, England, are open for business) prior to the day on which such Interest Period commences (rounded upwards, if necessary, to the nearest 1/1,000th of 1%); <u>provided</u>, <u>however</u>, if such rate does not appear on said Reuters Screen LIBOR01 Page (or the successor thereto), Administrative Agent shall use the arithmetic mean (rounded as aforesaid) of the offered quotations of rates obtained by Administrative Agent from four (4) major banks in the London interbank market selected by Administrative Agent for deposits in U.S. Dollars for a period of thirty (30) days to prime banks in the London interbank market as of approximately 11:00 a.m., London time, on the above-described determination date and in an amount that is representative for a single transaction in the relevant market at the relevant time; or if fewer than two (2) such banks provide Administrative Agent with such quotations, Administrative Agent shall use the rate per annum which Administrative Agent determines to be the arithmetic mean (rounded as aforesaid) of the offered quotations of rates which major banks in New York, New York selected by Administrative Agent are quoting at approximately 11:00 a.m., New York City time, on the above-described determination date for loans in U.S. Dollars to leading European banks for a period of thirty (30) days in amounts of not less than U.S. $1,000,000.00. Administrative Agent's determination of LIBOR shall be binding and conclusive on Borrower absent manifest error. LIBOR may or may not be the lowest rate based upon the market for U.S. Dollar deposits in the London Interbank Eurodollar Market at which Administrative Agent prices loans on the date which LIBOR is determined by Administrative Agent as set forth above. Upon not less than thirty (30) days prior written notice to Borrower, Administrative Agent may elect to use a different reference source for determining LIBOR (which source shall remain in effect until Administrative Agent notifies Borrower otherwise).

"<u>LIBOR Interest Rate</u>" means with respect to each Interest Period, the quotient of (a) LIBOR applicable to such Interest Period, <u>divided by</u> (b) a percentage equal to 100% <u>minus</u> the Reserve Requirement (if any) applicable to such Interest Period.

"<u>Loan Amount</u>" means $153,683,400.00.

"<u>Loan Amount (Note B)</u>" means $27,584,200.00.

"<u>Loan Documents</u>" means, collectively, this Agreement, the Note, the Security Instrument, the Assignment of Leases, the Guaranty, the Environmental Indemnity, the Assignment of Management Agreement, the Cash Management Agreement, the Clearing Account Agreement, the Condominium Certification, the Master Lease, each acknowledgment of an assignment of any Interest Rate Cap Agreement, and all other certificates, documents, agreements or instruments now or hereafter executed and/or delivered in connection with the Loan (as each may be amended, modified, extended, consolidated or supplemented from time to time).

"<u>Loss</u>" or "<u>Losses</u>" means, with respect to any Person, all liabilities, obligations, losses, damages, fines, penalties, actions, proceedings, judgments, suits, claims, debts, costs, expenses, charges, fees, awards, amounts paid in settlement, demands, and disbursements of any kind or nature whatsoever (including attorneys' fees) of or suffered or incurred by such Person in connection with or relating to the Loan, the Property, or any other collateral for the Loan (but not including (a) special, speculative, exemplary, or punitive damages, or (b) consequential damages in the nature of alleged "lost profits" or "lost opportunities", or (c) unrealized loss in the nature of diminution in value of the Property (for clarity, if Administrative Agent, any Lender or any nominee thereof acquires title to the Property via foreclosure, its winning bid at such foreclosure sale shall not form a basis for realizing a loss for diminution in value of the Property), in each case with respect to the foregoing clauses (a), (b), and (c) except to the extent that a party seeking indemnification of such amount has paid or is required to pay such measure of damages other than as a result of (and to the extent of) its own gross negligence willful misconduct or fraud).

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"<u>Major Lease</u>" means any Lease or Leases with respect to the Property, (a) in which a Person together with one or more of its Affiliates, is leasing in the aggregate, in excess of 54,000 square feet (inclusive of expansion options), (b) has a term of ten (10) years or longer (inclusive of extension options), (c) which (together with any Lease to one or more of such tenant's Affiliates) constitutes more than five percent (5.0%) of the total annual Revenues of the Property, or (d) with respect to which the tenant is an Affiliate of Borrower or Guarantor.

"<u>Management Agreement</u>" means that certain Property Management Agreement between CP Tower Owner and Manager, or such other property management agreement between Borrower and a Manager as may be approved from time to time by Administrative Agent.

"<u>Manager</u>" means **Nexbank Securities, Inc.**, a Delaware corporation, d/b/a Nexbank Realty Advisors, or, if the context requires, a property manager approved by Administrative Agent in accordance with the terms and provisions of this Agreement.

"<u>Master Lease</u>" means that certain Lease Agreement dated of even date herewith between Borrower and Guarantor with respect to the Property.

"<u>Material Adverse Effect</u>" means a material adverse effect on (a) the Property or the value or use thereof, (b) the business, profits, management, operations or condition (financial or otherwise) of Borrower, Required SPE Entity, Guarantor, or the Property, taken as a whole, (c) the enforceability, validity, perfection or priority of the lien of the Security Instrument or the other Loan Documents, or (d) the ability of any party to the Loan Documents to perform its obligations under the Loan Documents to which it is a party.

"<u>Maturity Date</u>" means (a) the Scheduled Maturity Date, (b) if the applicable Extension Conditions have been satisfied as of the Scheduled Maturity Date, the Payment Date in September, 2022, (c) if the applicable Extension Conditions have been satisfied as of the Maturity Date described in the foregoing clause, the Payment Date in September, 2023, or (d) the date on which the Debt has been accelerated as herein provided.

"<u>Maximum Additional Advance Amount</u>" means the sum of Twenty-Three Million Eight Hundred Eighty-Six Thousand and 00/100ths Dollars ($23,886,000.00).

"<u>Mezzanine Borrower</u>" means the Borrower as defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Borrower Required SPE Entity</u>" means the Required SPE Entity defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Lender</u>" means the Lender as defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Loan</u>" means the Loan as defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Loan Additional Advance</u>" means an Additional Advance under and as defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Loan Administrative Agent</u>" means the Administrative Agent as defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Loan Agreement</u>" means that certain Mezzanine Loan Agreement, dated as of the date hereof, by and between Mezzanine Borrower, Mezzanine Loan Administrative Agent, and Mezzanine Lender, as the same may be amended, modified and/or supplemented from time to time.

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"<u>Mezzanine Loan Amount</u>" means the Loan Amount as defined in the Mezzanine Loan Agreement.

"<u>Mezzanine Loan Debt Service</u>" means, with respect to any particular period of time, scheduled principal and/or interest payments due under the Mezzanine Loan Agreement.

"<u>Mezzanine Loan Documents</u>" means all documents evidencing and/or securing the Mezzanine Loan and all documents executed and/or delivered in connection therewith, as the same may be amended, modified and/or supplemented from time to time.

"<u>Mezzanine Loan Event of Default</u>" means an Event of Default under and as defined in the Mezzanine Loan Documents.

"<u>Mezzanine Loan Event of Default Revocation Notice</u>" means a written notice from Mezzanine Loan Administrative Agent, with respect to the Mezzanine Loan (upon which Administrative Agent may conclusively rely without any inquiry into the validity thereof) that a Mezzanine Loan Event of Default of which Administrative Agent was previously notified no longer exists.

"<u>Mezzanine Loan Monthly Debt Service Notice Letter</u>" means a written notice delivered by Mezzanine Loan Administrative Agent (or by Borrower if Mezzanine Loan Administrative Agent fails to do so) setting forth (a) the Mezzanine Loan Monthly Payment Amount payable by Mezzanine Borrower on the first Payment Date occurring after the date such notice is delivered, and (b) the account to which Mezzanine Loan Administrative Agent requires funds to be sent and wiring instructions for such payment (upon which letter Administrative Agent may conclusively rely without any inquiry into the validity thereof).

"<u>Mezzanine Loan Monthly Payment Amount</u>" means, for each Payment Date, an amount equal to the amount of interest (at the non-default rate) and principal (as applicable) which is due on the Mezzanine Loan under the Mezzanine Loan Documents for the Interest Period immediately preceding such Payment Date.

"<u>Mezzanine Loan Outstanding Principal Balance</u>" means, as of any date, the outstanding principal balance of the Mezzanine Loan.

"<u>Minimum Multiple Amount</u>" shall be calculated in the aggregate for the Loan and the Mezzanine Loan and shall equal $7,447,000.00

"<u>Monthly Payment Amount</u>" means, as of any Payment Date, (a) all accrued and unpaid interest that has accrued on the Outstanding Principal Balance at the Interest Rate for the Interest Period in effect as of the day immediately preceding such Payment Date, plus (b) for each Payment Date from and after the Payment Date in October, 2021, but excluding any Payment Date for which the applicable Amortization Waiver Condition has been satisfied for the period covering such Payment Date, a principal sum of ONE HUNDRED NINETY-TWO THOUSAND NINETY-ONE AND00/100 DOLLARS ($192,091.00); provided, however, if (y) as of the Payment Date in September, 2021, the Debt Yield exceeds 10.00%, the Monthly Payment Amount for the Payment Date in October, 2021 through and including the Payment Date in September, 2022 (unless such Payment Date in September, 2022 is also the Maturity Date, in which case the entire Debt shall be due and payable) shall be interest-only (and shall exclude any principal sum) and (z) as of the Payment Date in September, 2022, the Debt Yield exceeds 10.50%, the Monthly Payment Amount for the Payment Date in October, 2022 up to, but not including, the Payment Date in September, 2023 shall be interest-only (and shall exclude any principal sum) (each of <u>sub-item</u> <u>(y)</u> and <u>(z)</u> above shall be referred to herein as an "<u>Amortization Waiver Condition</u>").

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"<u>Moody's</u>" means Moody's Investors Service, Inc.

"<u>National Securities</u>" means National Securities Corporation.

"<u>Net Proceeds</u>" means (a) with respect to the occurrence of a Casualty, the net amount of all insurance proceeds payable under the Required Policies as a result of the applicable damage or destruction, after deduction of Administrative Agent's and Lender's costs and expenses (including, but not limited to, reasonable legal fees), if any, in collecting same (but not including the proceeds of any business interruption insurance), and (b) with respect to the occurrence of a Condemnation, the net amount of any payments received from the applicable Governmental Authority on account of such Condemnation, or in any transaction or proceeding in lieu thereof, after deduction of Borrower's, Lender's and Administrative Agent's costs and expenses (including reasonable legal fees and costs), if any, in collecting same.

"<u>Net Proceeds Threshold</u>" means the sum of Three Million One Hundred Fifty-Two Thousand Four Hundred Eighty and No/100ths Dollars ($3,152,480.00).

"<u>NexPoint Advisors</u>" means NexPoint Advisors, L.P., a Delaware limited partnership.

"<u>NexPoint SOF</u>" means NexPoint Strategic Opportunities Fund, a Delaware statutory trust.

"<u>Note</u>" or "<u>Notes</u>" means each Promissory Note (however denominated) executed by Borrower in favor of a Lender in connection with the Loan, individually or collectively, as the context may require.

"<u>Note A</u>" means, individually and collectively, each of Note A-1, Note A-1F, Note A-2 and Note A-2F.

"<u>Note A-1</u>" means that certain Promissory Note A-1 of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Note A-1F</u>" means that certain Promissory Note A-1F of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Note A-2</u>" means that certain Promissory Note A-2 of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Note A-2F</u>" means that certain Promissory Note A-2F of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Note B</u>" means, individually and collectively, each of Note B-1, Note B-1F, Note B-2 and Note B-2F.

"<u>Note B-1</u>" means that certain Promissory Note B-1 of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

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"<u>Note B-1F</u>" means that certain Promissory Note B-1F of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Note B-2</u>" means that certain Promissory Note B-2 of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Note B-2F</u>" means that certain Promissory Note B-2F of even date herewith made by Borrower to the Lender identified therein, as the same may be amended, restated, replaced, supplemented, extended or otherwise modified from time to time.

"<u>Obligations</u>" means, collectively, Borrower's obligations for the payment of the Debt and the performance of all obligations of Borrower contained in the Loan Documents.

"<u>Officer's Certificate</u>" means a certificate delivered to Administrative Agent by Borrower that is signed by an authorized senior officer of Borrower or of the entity that Controls Borrower, as applicable, in the form attached hereto as <u>Exhibit B-1</u>.

"<u>Operating Expenses</u>" means, for any period, the total of all expenditures, computed in accordance with the Approved Accounting Method, of whatever kind during such period relating to the operation, maintenance and/or management of the Property that are incurred on a regular monthly or other periodic basis (including utilities, ordinary repairs and maintenance, insurance, license fees, property taxes and assessments, advertising expenses, management fees, payroll and related taxes, computer processing charges, operational equipment or other lease payments, and other similar costs), but excluding (a) non-cash charges such as depreciation and amortization, (b) Debt Service and Mezzanine Loan Debt Service, (c) Capital Expenditures, (d) tenant improvements and leasing commissions, (e) any amounts in the Reserve Accounts required under the Loan Documents, (f) costs of restoration following a Casualty or Condemnation, (g) any payment or expense for which Borrower or Mezzanine Borrower was or is to be reimbursed from proceeds of the Loan or the Mezzanine Loan (respectively), by insurance, or by any third party, and (h) federal, state or local income taxes.

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

"<u>Other Taxes</u>" means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that 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, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

"<u>Outstanding Principal Balance</u>" means, as of any date, the outstanding principal balance of the Loan.

"<u>PACE Loan</u>" means any "property-assessed clean energy loan" or any other indebtedness (without regard to the name given to such indebtedness) which is (a) incurred for improvements to the Property for the purpose of increasing energy efficiency, increasing use of renewable energy sources, resource conservation, or a combination of the foregoing, and (b) repaid through multi-year assessments against such Property.

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"<u>Partial Assignment of Declarant's Rights</u>" means that certain Partial Assignment of Declarant's Rights dated November 1, 2016, made by and between Uptown CityPlace, LLC, a Delaware limited liability company, and Uptown TRS, LLC, a Delaware limited liability company and recorded as Instrument No. 201600308352 in the real property records of Dallas County, Texas.

"<u>Payment Date</u>" means the eighth (8<sup>th</sup>) day of each calendar month during the term of the Loan or, if such day is not a Business Day, the immediately preceding Business Day.

"<u>Permitted Fund Manager</u>" means as of any date of determination, any Person, or any Affiliate of such Person, that is then (a) an entity listed on <u>Exhibit E</u> (or an Affiliate thereof) or another nationally-recognized manager of investment funds (or an Affiliate thereof) investing in debt or equity interests relating to commercial real estate; (b) investing through a fund with committed capital of at least $200,000,000; and (c) not subject to a Bankruptcy Action.

"<u>Permitted Indebtedness</u>" means (a) in the case of Borrower, (i) the Debt, and (ii) unsecured trade and operational debt incurred in the ordinary course of business relating to the ownership and operation of the Property and the routine administration of Borrower, in amounts not to exceed two percent (2%) of the sum of the Loan Amount and the Mezzanine Loan Amount, which liabilities are not due more than sixty (60) days past the date incurred, are not evidenced by a note, and are paid when due; and (b) in the case of any applicable Required SPE Entity, unsecured trade and operational debt incurred in the ordinary course of business relating to the ownership of its ownership interest in Borrower, in amounts not to exceed $10,000.00, which liabilities are not due more than sixty (60) days past the date incurred, are not evidenced by a note, and are paid when due.

"<u>Permitted Transfer</u>" means any of the following Transfers: (a) Transfers of up to forty-nine percent (49%) of the direct or indirect interests (in the aggregate of all such Transfers) in Borrower; (b) Transfers of direct or indirect ownership interests in an entity that owns a direct or indirect ownership interest in Borrower for bona fide estate planning purposes by any natural person to one or more of such natural person's family members or trusts (or other entities) established for the benefit of one or more of such natural person's immediate family members (but subject in all cases to the terms and conditions of the Guaranty); (c) Transfers of direct or indirect ownership interests in Borrower that occur by operation of law upon the death of a natural person that was the holder of such interest to a member of the immediate family of such interest holder or a trust (or other entity) or family conservatorship established for the benefit of

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such immediate family member; (d) Transfers of the direct or indirect interests in a Restricted Party to and among the holders thereof as of the date hereof; (e) Permitted Encumbrances; (f) Transfers of worn out or obsolete Personal Property that are promptly replaced with property of equivalent value and functionality if reasonably necessary or which is no longer necessary in connection with the operation of any Property; (g) Leases that have been approved by Administrative Agent (or that do not require Administrative Agent's approval) in accordance with this Agreement; (h) the Transfer of the direct and/or indirect ownership interests in Borrower pursuant to a foreclosure or voluntary transfer in lieu thereof or other exercised remedies under the Mezzanine Loan Documents; (i) any Transfer in respect of, or of a direct or indirect interest in, any Person listed on the New York Stock Exchange or another nationally recognized stock exchange; and (j) a Release consummated in accordance with the terms and conditions of Section 5.2.10 hereof; <u>provided</u>, <u>however</u>, no such Transfer described in <u>clauses (a)</u> through <u>(d)</u> above shall result in: (i) (A) NexPoint SOF failing to own at least fifty-one percent (51%) of the direct or indirect ownership interests in CP Tower Owner, or HCRE Partners failing to own at least fifty-one percent (51%) of the direct or indirect ownership interests in CP Land Owner, or (B) a change in Control of a Restricted Party; or (C) with respect to any Transfer described in <u>clause (i)</u> above only, NexPoint Advisors failing to remain the investment advisor of NexPoint SOF; (ii) the termination or dissolution of a Restricted Party (by operation of law or otherwise); (iii) the representations contained in <u>Sections 4.21</u> or <u>4.22</u> being untrue if made immediately following such Transfer; (iv) Borrower or any Required SPE Entity failing to be a Special Purpose Entity; (v) the Transfer by any Required SPE Entity of its ownership interest in Borrower; and (vi) other than a Transfer described in <u>clause (i)</u> above, if such Transfer would cause the transferee to increase its direct or indirect interest in Borrower to an amount which equals or exceeds 10% of the direct or indirect ownership interests in Borrower (and such transferee did not hold at least a 10% interest prior to such Transfer), such proposed transferee shall have complied with all of Administrative Agent's "know your customer" requirements, all Legal Requirements, and Borrower shall, prior to such Transfer, deliver to Administrative Agent (at Borrower's sole cost and expense) customary searches (credit, judgment, lien, etc.) acceptable to Administrative Agent with respect to such transferee.

"<u>Person</u>" means 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.

"<u>Plans and Specifications</u>" means each of the plans and specifications for the completion of the Project listed on <u>Schedule X</u> attached hereto, if any, and any other plans and specifications for the completion of the Project prepared or to be prepared by (or on behalf of) Borrower after the Closing Date, including without limitation, a description of the materials, equipment and fixtures necessary for the completion of the Project, any other architectural, structural, foundation and elevator plans and specifications prepared by a Design Professional and any other mechanical, electrical, plumbing and fire protection plans and specifications prepared by any Person retained or to be retained by Borrower, the applicable Design Professional or General Contractor, approved in writing by Administrative Agent (to the extent such approval is required by the terms of this Agreement), in each case, as the same may be amended by Change Orders applicable thereto that are permitted under this Agreement.

"<u>Pro Rata Share</u>" means (a) with respect to the Additional Advance Lenders, one hundred percent (100%) and (b) with respect to Mezzanine Lender, zero percent (0%).

"<u>Project</u>" means the Completion of all capital improvements to the Property described in the Project Budget, all in accordance with the Plans and Specifications that have been submitted to and approved by Administrative Agent, the Project Budget, and all Legal Requirements.

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"<u>Project Budget</u>" means the budget of costs and expenses to be incurred in connection with the Completion by Borrower of the Project, attached hereto as Exhibit D.

"<u>Project Documents</u>" means, collectively, all Construction Contracts, the Plans and Specifications, the Project Budget, the Project Permits, the Project Schedule, as any of the foregoing may be amended, replaced, supplemented or otherwise modified from time to time in accordance with the terms and conditions of this Agreement.

"<u>Project Expenditures</u>" means costs and expenses incurred in connection with the completion by Borrower of the Project in accordance with the Project Budget, including Hard Costs and Soft Costs, but not including Leasing Expenditures.

"<u>Project Permits</u>" means, collectively, all authorizations, consents and approvals, licenses and permits given or issued by Governmental Authorities which are required for the completion of the Project in accordance with all Legal Requirements and the Plans and Specifications, and for the performance and observance of all obligations and agreements of Borrower contained herein or in the other Loan Documents relating to the completion of the Project, as the same may be amended, replaced, supplemented, assigned or otherwise modified from time to time in accordance with the terms of this Agreement and applicable Legal Requirements.

"<u>Project Schedule</u>" means the schedule for the projected progress of the completion of the Project attached as <u>Schedule XI</u> hereto.

"<u>Project</u>" means each parcel of real property described on <u>Exhibit A</u> attached hereto, the Improvements thereon and all Personal Property owned or leased 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 of the Security Instrument and referred to therein as the "Property".

"<u>Property Taxes</u>" means all real estate and personal property taxes, assessments, water rates or sewer rents (excluding income taxes), now or hereafter levied or assessed or imposed against the Property or part thereof, together with all interest and penalties thereon. In no event shall any PACE Loan be considered a Property Tax for the purposes of this Agreement.

"<u>Qualified Transferee</u>" means one or more of the following that is not an Embargoed Person: (a) ACORE Capital, LP, Delphi CRE Funding LLC, Tokio Marine Holdings, Inc., Reliance Standard Life Insurance Company, Philadelphia Indemnity Insurance Company, Safety National Casualty Corporation, Tokio Millennium RE AG, Houston Casualty Corporation, U.S. Specialty Insurance Company, Global Investment Fund I, a Delaware statutory trust, on behalf of TRE ACR Portfolio, a series of the trust, American Family Life Assurance Company of Columbus, a Nevada corporation, or any Affiliate of any of the foregoing; (b) a real estate investment trust, bank, saving and loan association, investment bank, insurance company, trust company, commercial credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan that satisfies the Eligibility Requirements; (c) an investment company, money management firm or "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, as amended, that satisfies the Eligibility Requirements; (d) an institution substantially similar to any of the foregoing entities described in <u>clauses (b)</u> and <u>(c)</u> (including, without limitation, any CLO or CDO entity or vehicle (or trustee therefor)) that satisfies the Eligibility Requirements; (e) an investment fund, limited liability company, limited partnership or general partnership with committed capital of at least $200,000,000 where a Permitted Fund Manager or an entity that is otherwise a Qualified Transferee under <u>clauses (a)</u> through <u>(d)</u> of this definition acts as the general partner, managing member or fund manager and at least fifty percent (50%) of the equity

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interests in such investment vehicle are directly owned by one or more entities that are otherwise Qualified Transferees under <u>clauses (a)</u> through <u>(d)</u> of this definition or by one or more institutional "accredited investors" within the meaning of Regulation D promulgated under the Securities Act of 1933, as amended, or by one or more "qualified institutional buyer" (or both) within the meaning of Rule 144A promulgated under the Exchange Act, as amended (<u>provided</u> such institutional Qualified Transferee(s), "accredited investor(s)" and/or "qualified institutional buyer(s)" that are used to satisfy such fifty percent (50%) test satisfy the financial tests set forth in <u>clause (a)</u> of the definition of Eligibility Requirements but such Persons need not satisfy the experience test set forth in <u>clause (b)</u> of the definition of Eligibility Requirements so long as the Permitted Fund Manager does); (f) any Person that is acting in any agency capacity in connection with a lending syndicate, so long as more than fifty percent (50%) of the lenders in the lending syndicate (by loan balance or committed loan amounts) are Qualified Transferees (<u>provided</u> that such Qualified Transferees that are used to satisfy the fifty percent (50%) test set forth above in this <u>clause (f)</u> do not need to satisfy the experience test set forth in <u>clause (b)</u> of the definition of Eligibility Requirements so long as the Qualified Transferee acting in such agency capacity satisfies such experience test); or (g) Credit Suisse Group AG, Wells Fargo Bank, N.A., Goldman, Sachs & Co., Citibank, N.A., Bank of America, N.A., Morgan Stanley, Deutsche Bank AG, Bank of the Ozarks, MetLife, Inc., Prudential Financial, Inc., any Federal Home Loan Bank (or branch or division thereof) or Barclays Plc (or any Affiliate of any of the foregoing).

"<u>Rating Agencies</u>" means (a) prior to a Securitization, each of S&P, Moody's, Fitch, DBRS, Inc., Morningstar, Inc., or Kroll Bond Ratings, or any other nationally recognized statistical rating agency which has been approved by Administrative Agent, and (b) after a Securitization has occurred, each such Rating Agency which has rated the Securities in the Securitization.

"<u>Related Loan</u>" means a loan to an Affiliate of Borrower or secured by a parcel of real property, together with improvements thereon and personal property related thereto, that is "related" (within the meaning of the definition of Significant Obligor) to the Property, which loan is included in a Securitization with the Loan (or any portion thereof or interest therein).

"<u>Release Amount</u>" means an amount equal to (a) the Mortgage Share multiplied by (b) the Release Amount (Aggregate).

"<u>Release Amount (Aggregate)</u>" means the sum of $14,000,000.00.

"<u>Required Pay Down</u>" means an amount equal to (a) the Mortgage Share multiplied by (b) the Release Amount (Aggregate).

"<u>Mortgage Share</u>" means the quotient obtained by dividing (a) the Loan Amount by (b) the sum of (i) the Loan Amount, plus (ii) the Mezzanine Loan Amount.

"<u>Reserve Accounts</u>" means, collectively, the Tax Reserve Account, the Insurance Reserve Account, the Immediate Repair Reserve Account, the Capital Expenditure Reserve Account, the Project Expenditure Reserve Account, the TI/LC Reserve Account, the Hotel Predevelopment Expenditure Reserve Account, the Cash Sweep Tenant Reserve Account, the Key Tenant Reserve Account, the National Securities Outstanding TI Reserve Account, the Fire Alarm Upgrade Reserve Account, the Elevator Modernization and Interiors Reserve Account, the Concourse Renovation Reserve Account, the Excess Cash Flow Reserve Account, the Net Proceeds Reserve Account, and any other reserve or escrow account established under the Loan Documents from time to time.

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"<u>Reserve Item</u>" means, individually and collectively as the context may require, Immediate Repairs, Approved Capital Expenditures, Leasing Expenditures, Fire Alarm Upgrades, Elevator Modernization and Interiors Work, and Concourse Renovation Work.

"<u>Reserve Requirement</u>" means with respect to any Interest Period, the maximum rate of all reserve requirements (including all basic, marginal, emergency, supplemental, special or other reserves and taking into account any transitional adjustments or other schedule changes in reserve requirements during the Interest Period) which are imposed under Regulation D of the Board of Governors of the Federal Reserve System from time to time in effect (including any successor or other Regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System) on eurocurrency liabilities (or against any other category of liabilities which includes deposits by reference to which LIBOR is determined or against, any category of extensions of credit or other assets which includes loans by a non-United States office of a depository institution to United States residents or loans which charge interest at a rate determined by reference to such deposits) during the Interest Period and which are applicable to member banks of the Federal Reserve System with deposits exceeding one billion dollars, but without benefit or credit of proration, exemptions or offsets that might otherwise be available from time to time under the said Regulation D, to the extent the same is applicable to any holder of a Note or other interest in the Loan (including participation interests in the Loan). The determination of the Reserve Requirement shall be based on the assumption that Lender funded 100% of the Loan in the interbank eurodollar market. In the event of any change in the rate of such Reserve Requirement under said Regulation D during the applicable Interest Period, or any variation in such requirements based upon amounts or kinds of assets or liabilities, or other factors, including the imposition of Reserve Requirement, or differing Reserve Requirement, on one or more but not all of the holders of the Loan or any participation therein, such Lender may use any reasonable averaging and/or attribution methods which it deems appropriate and practical for determining the rate of such Reserve Requirement which shall be used in the computation of the Reserve Requirement. Administrative Agent's computation of same shall be final absent manifest error.

"<u>Restoration</u>" means the repair and restoration of the Property after a Casualty or, if the same results in repairable damage to the Property, a Condemnation, in either case as nearly as possible to the condition the Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be approved by Administrative Agent.

"<u>Restricted Party</u>" means, collectively Borrower, any Required SPE Entity, Mezzanine Borrower, any Mezzanine Borrower Required SPE Entity, Guarantor, and any Affiliated Manager.

"<u>Revenues</u>" means all rents (including percentage rents), rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents (including payments by reason of the rejection of a Lease in a Bankruptcy Action), all income and proceeds from judgments, settlements and other resolutions of disputes with respect to matters which would be includable in this definition of "Revenues" if received in the ordinary course of the Property operation, royalties (including 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, fees, charges for services rendered, all other amounts payable as rent under any Lease or other agreement relating to the Property (including utility charges, escalations, forfeited security deposits, interest on credit accounts, service fees or charges, license fees, parking fees, rent concessions or credits), other required pass-throughs or reimbursements paid by tenants under Leases of any nature, and interest on amounts in the Reserve Accounts, if any, business interruption or other loss of income or rental insurance proceeds, and other income or consideration of whatever form or nature received by or paid to or for the account of or benefit of

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Borrower, Manager or any of their respective agents or employees from any and all sources arising from or attributable to the Property.

"<u>S&P</u>" means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC company.

"<u>Schmidt & Stacy Lease Relocation</u>" means the relocation of the Schmidt & Stacy lease premises within the Tower Unit.

"<u>Sanctions and Anti-Money Laundering Laws</u>" means any Legal Requirements in force or hereinafter enacted related to sanctions, terrorism, money laundering or similar activities, including, without limitation, (a) (i) the USA Patriot Act, (ii) Executive Order No. 13224 on Terrorist Financing, (iii) Trading with the Enemy Act, (iv) the economic or financial sanctions or trade embargoes imposed, administered or enforced by OFAC and its regulations or the U.S. Department of State, and (b) (i) Canadian laws relating to Sanctions and anti-terrorism, including the Criminal Code (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada), the Special Economic Measures Act (Canada) and the United Nations Act (Canada) and the regulations, orders and guidelines issued under such statutes, including any statute, regulation, order, rule or guideline that amends, supplements or supersedes any of them (the "<u>Canadian Sanctions</u>").

"<u>Scheduled Maturity Date</u>" means the Payment Date in September, 2021.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended.

"<u>Security Instrument</u>" means that certain first priority Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement dated the date hereof, executed and delivered by Borrower as security for the Loan and encumbering the Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

"<u>Significant Obligor</u>" has the meaning set forth in Item 1101(k) of Regulation AB under the Securities Act.

"<u>Soft Costs</u>" means, collectively, all costs and expenses set forth in the Project Budget which are denominated therein as "soft costs".

"<u>Spread</u>" means (a) with respect to that portion of the Outstanding Principal Balance evidenced by Note A, Two Hundred Twenty-Five (225) basis points (i.e., 2.250000%), and (b) with respect to that portion of the Outstanding Principal Balance evidenced by Note B, Six Hundred Twenty-Five (625) basis points (i.e., 6.250000%).

"<u>Strike Rate</u>" means (a) with respect to the Interest Rate Cap Agreement required pursuant to <u>Section 5.1.4</u> hereof, (i) while LIBOR is the index upon which the Interest Rate is determined, three and 50/100 percent (3.50%), or (ii) while LIBOR is not the index upon which the Interest Rate is determined, the number of basis points established at the time the Alternative Rate is first established with each change in Index that, when added to the Alternative Spread then in effect, would equal the sum of (a) three and 50/100 percent (3.50%), plus (b) the Weighted Average LIBOR Spread in effect as of such date, and (b) with respect to the Interest Rate Cap Agreement required pursuant to the definition of Extension Conditions, the lesser of (y) the rate determined pursuant to the foregoing clause (a), and (z) the rate determined by Administrative Agent such that, if it were then the Index component of the Interest Rate under the Loan and under the Mezzanine Loan, would result in a Debt Service Coverage Ratio (after giving effect to any voluntary prepayment made in compliance with this Agreement and the

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Mezzanine Loan Agreement) of at least 1.10:1.00 based on the then Outstanding Principal Balance and the Mezzanine Loan Outstanding Principal Balance.

"<u>Taxes</u>" means 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.

"<u>Title Insurance Policy</u>" means the title insurance policy obtained by Administrative Agent in connection with the closing of the Loan.

"<u>Tower Unit</u>" means the "Tower Unit" as such term is defined in the Condominium Declaration.

"<u>Trade Contract</u>" means any agreement, contract or purchase order between Borrower, an Affiliate of Borrower or General Contractor, on the one hand, and any Trade Contractor, on the other hand, pursuant to which such Trade Contractor agrees to provide labor, materials, equipment and/or services in connection with the completion of the Project, in each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.

"<u>Trade Contractor</u>" means any Person that is a contractor, subcontractor, sub-subcontractor, supplier or provider of labor, materials, equipment and/or services in connection with the completion of the Project.

"<u>Transfer</u>" means any sale, conveyance, transfer, lease, assignment, grant, mortgage, hypothecation, pledge, lien, security interest, charge, option, encumbrance, easement, or restrictive covenant, on or affecting the Property or any portion thereof or any interest therein (including any action which shall subject the Property or any collateral for the Loan to the lien or charge of a PACE Loan), or on or affecting any direct or indirect interest in Borrower, in each case whether by operation of law or otherwise (and with respect to an entity shall include the merger of such entity with or into any other entity); <u>provided</u>, <u>however</u>, this definition shall not include any Condemnation. For all purposes under the Loan Documents, a Transfer of the Property or Borrower shall include, but not be limited to: (a) an installment sales agreement wherein Borrower agrees to sell the Property, or any part thereof, for a price to be paid in installments; (b) an agreement by Borrower leasing all or substantially all of the Property for other than actual occupancy by a space tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower's right, title and interest in and to any Leases or any Revenues; (c) if a Restricted Party is a corporation, any merger, consolidation or Transfer of such corporation's stock or the creation or issuance of new stock; (d) 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 Transfer of the general partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Transfer 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; (e) 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 Transfer of the limited liability company interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such limited liability company interest, or the Transfer of non-managing limited liability company interests or the creation or issuance of new non-managing limited liability company interests; and (f) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Transfer of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests.

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"<u>UCC</u>" means the Uniform Commercial Code as in effect in the State of New York.

"<u>UNOI</u>" means the underwritten net operating income for the Property determined in good faith by Administrative Agent as the sum of (a) verifiable recurring rental income and tenant recoveries based on actual Leases in effect as of the date of calculation (not including Leases where (i) the tenant or any guarantor thereunder is the subject of a Bankruptcy Action, (ii) a monetary or other material default exists thereunder, (iii) the stated expiration date thereof occurs within six (6) months of the date of calculation, or (iv) the tenant has vacated or given notice of its intent to vacate or terminate its Lease (pursuant to a right or option of its Lease)) and other verifiable recurring income, <u>less</u> (b) mark-to-market adjustments based on comparable leases, and further adjusted to assume a vacancy factor equal to the greater of (A) the actual vacancy rate for the Property, and (B) a vacancy rate of fifteen and 00/100 percent (15.00%), and <u>less</u> (c) actual Operating Expenses incurred in connection with the Property during the twelve (12) month period preceding the date of calculation, with adjustments for any anticipated increases in such Operating Expenses (including those projected to occur as a result of higher occupancy) and assuming (i) base property management fees equal to the greater of (A) the actual amount paid by Borrower during such prior 12-month period, and (B) three and 00/100 percent (3.00%) of Revenues during such prior 12-month period.

"<u>Weighted Average LIBOR Spread</u>" means (a) initially, three hundred five (305) basis points (i.e., 3.05%), or (b) at any time after the Outstanding Principal Balance has been partially repaid after the occurrence of an Event of Default or from the application of Net Proceeds in accordance with this Agreement (in either case without a *pro rata* principal payment with respect to the Mezzanine Loan Outstanding Principal Balance having been made concurrently therewith, the actual weighted average spread in effect with respect to the Loan and the Mezzanine Loan based on the Spread applicable hereunder and the Spread applicable under (and as defined in) the Mezzanine Loan Agreement).

"<u>Write-Down and Conversion Powers</u>" means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

"<u>Zix Corporation</u>" means Zix Corporation, a Texas corporation, together with its permitted successors and/or assigns.

Section 1.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Location of Additional Defined Terms</u>.

Defined Term&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Location

"1992 Lease Agreement"&nbsp;&nbsp;&nbsp;&nbsp;Schedule VIII

"Act"&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Special Purpose Entity

"Additional Advance" &nbsp;&nbsp;&nbsp;&nbsp;Section 2.1(b)

"Additional Elevator Contributions"&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.14

"Administrative Agent" &nbsp;&nbsp;&nbsp;&nbsp;Introductory Paragraph

"Advance Request" &nbsp;&nbsp;&nbsp;&nbsp;Section 2.1(b)

"Affected Property" &nbsp;&nbsp;&nbsp;&nbsp;Section 8.26(c)

"Agreement" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Introductory Paragraph

"Amortization Waiver Condition"&nbsp;&nbsp;&nbsp;&nbsp;Definition of Monthly Payment Amount

"Anti-Corruption of Laws"&nbsp;&nbsp;&nbsp;&nbsp;Section 4.29

"Applicable Sections" &nbsp;&nbsp;&nbsp;&nbsp;Section 7.3(a)

"Approved Annual Budget" &nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.6(b)

"Balancing Event" &nbsp;&nbsp;&nbsp;&nbsp;Section 2.1(b)(x)(F)

"Borrower" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Introductory Paragraph

"Borrower Group" &nbsp;&nbsp;&nbsp;&nbsp;Section 7.3(a)

"Canadian Sanctions"&nbsp;&nbsp;&nbsp;&nbsp;Definition of Sanctions and Anti-Money Laundering Laws

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"Capital Expenditure Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(d)

"Cash Sweep Tenant Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(g)

"Casualty" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.12(a)

"Concourse Renovation Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(l)

"Condemnation" &nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.12(a)

"Condominium Documents"&nbsp;&nbsp;&nbsp;&nbsp;Section 8.28

"Construction Management Fee Cap"&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1(e)

"Disclosure Document" &nbsp;&nbsp;&nbsp;&nbsp;Section 7.3(a)

"Elevator Modernization and Interiors Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(k)

"Event of Default" &nbsp;&nbsp;&nbsp;&nbsp;Section 6.1

"Excess Cash Flow" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.1(i)

"Excess Cash Flow Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.1(i)

"Excess Disbursement" &nbsp;&nbsp;&nbsp;&nbsp;Schedule VII

"FCPA"&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.22

"Fire Alarm Upgrade Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(j)

"Hotel Predevelopment Expenditure Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1(d)(C)

"Immediate Repair Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(c)

"Improvements"&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Security Instrument

"Indemnified Party" &nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.15(b)

"Independent Director/Independent Manager" &nbsp;&nbsp;&nbsp;&nbsp;Schedule III

"Individual Borrower"&nbsp;&nbsp;&nbsp;&nbsp;Section 8.27

"Insurance Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(b)

"Insurance Premiums" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(b)

"Interest Rate Cap Agreement" &nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.4(a)

"Key Tenant Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(h)

"Land" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security Instrument

"Lender Group" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.3(a)

"Loan" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Second Paragraph

"Minimum Multiple" &nbsp;&nbsp;&nbsp;&nbsp;Section 2.3.4(a)

"Misrepresentation" &nbsp;&nbsp;&nbsp;&nbsp;Section 6.1(e)

"National Securities Outstanding TI Reserve Account"&nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(i)

"Net Proceeds Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.12(b)

"OFAC"&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Designated Person

"Participant Register" &nbsp;&nbsp;&nbsp;&nbsp;Section 8.25

"Permitted Construction Management Fees"&nbsp;&nbsp;&nbsp;&nbsp;Section 2.1(e)

"Personal Property" &nbsp;&nbsp;&nbsp;&nbsp;Security Instrument

"Prepaid Revenues" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.1

"Project Expenditure Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(f)

"Recourse Guaranty"&nbsp;&nbsp;&nbsp;&nbsp;Definition of Guaranty

"Recourse Liabilities" &nbsp;&nbsp;&nbsp;&nbsp;Section 6.3(b)

"Register"&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.25

"Registrar"&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.25

"Registration Statement" &nbsp;&nbsp;&nbsp;&nbsp;Section 7.3(a)

"Required Equity"&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.14

"Required Pay Down"&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.19

"Required Report"&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.6(d)

"Required Policy"&nbsp;&nbsp;&nbsp;&nbsp;Section 5.1.11

"Required SPE Entity" &nbsp;&nbsp;&nbsp;&nbsp;Definition of Special Purpose Entity

"Secondary Market Transaction" &nbsp;&nbsp;&nbsp;&nbsp;Section 7.1

"Securities" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.1

"Securitization" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.1

"Servicer" &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.5

"Special Member" &nbsp;&nbsp;&nbsp;&nbsp;Schedule III

"Special Mezzanine Loan Advance" &nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Loan Agreement

"Special Purpose Entity" &nbsp;&nbsp;&nbsp;&nbsp;Schedule III

"Springing Recourse Event" &nbsp;&nbsp;&nbsp;&nbsp;Section 6.3(c)

"Tax Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(a)

"Terrorism Coverage" &nbsp;&nbsp;&nbsp;&nbsp;Schedule VI

"TI/LC Reserve Account" &nbsp;&nbsp;&nbsp;&nbsp;Section 3.2(e)

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"Underwriter Group" &nbsp;&nbsp;&nbsp;&nbsp;Section 7.3(a)

Section 1.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Principles of Construction</u>. 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" means "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<u><br>GENERAL TERMS</u>

Section 2.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>The Loan</u>. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees (on a several basis, if the Notes are held by more than one (1) Lender) to make, and Borrower hereby agrees to borrow and accept, the Loan. Any amount borrowed and repaid hereunder may not be reborrowed. Borrower shall use the proceeds of the Loan only to (a) acquire the Property, (b) make initial deposits into the Reserve Accounts on the Closing Date in the amounts provided herein, (c) pay costs, fees and expenses incurred in connection with the closing of the Loan, as approved by Administrative Agent, and (d) fund tenant improvements and leasing expenses and other property improvements relating to the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Initial Advance</u>. Borrower shall receive, on the date hereof, one (1) borrowing hereunder with respect to the Notes in the amount for each Note shown on Administrative Agent's settlement statement executed by Borrower in connection with the closing of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Advances</u>. Each Additional Advance Lender agrees to fund additional advances of the Loan requested by Borrower from time to time (each, an "<u>Additional Advance</u>"), on a several basis, up to the amount of such Additional Advance Lender's Commitment Percentage of such requested Additional Advance. Each Additional Advance shall be subject to the satisfaction of the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;no Default or Event of Default exists at the time the Additional Advance is requested or on the date such Additional Advance is requested to be made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;no more than one (1) Additional Advance shall be permitted in a thirty (30) day period (and for the avoidance of doubt each Advance Request shall contain a request for all Advance Items requested by Borrower for such 30-day period) (not including Additional Advances made pursuant to Section 2.3.1 with respect to the Monthly Payment Amount);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;no Additional Advance shall be requested or advanced for an amount less than $250,000.00 (other than the last requested Additional Advance with respect to any given Advance Item if less and other than Additional Advances made pursuant to Section 2.3.1 with respect to the Monthly Payment Amount);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall have obtained (or shall have obtained a commitment to issue) from the title company that issued the Title Insurance Policy (A) to the extent available in the applicable jurisdiction, a continuation of title endorsement (and if such endorsement is not available, such other evidence as may be required by Administrative Agent, including an updated title report) showing title to the Property to be vested in Borrower, with no subordinate items and with no exceptions to title of the Property other than Permitted Encumbrances (with affirmative insurance that no Property Taxes are delinquent, no mechanic's or supplier's liens have attached

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(or if inchoate mechanic's or supplier's liens have, that they are subordinate to the lien of the Security Instrument), and, if available and applicable, that neither public nor private conditions, covenants or restrictions, if any, affecting the Property have been violated); and (B) if the insured amount under the Title Insurance Policy is not the maximum amount of the Loan, an endorsement insuring the continued priority of the lien of the Security Instrument, subject only to the Permitted Encumbrances, increasing the coverage amount of the Title Insurance Policy by an amount equal to such Additional Advance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;(A) the Property shall comply in all material respects with all Legal Requirements, (B) if any Restoration is then continuing, Borrower is diligently pursuing such Restoration and Administrative Agent has determined that the non-completion of such Restoration prior to the making of the Additional Advance is not reasonably likely to have a Material Adverse Effect, and (C) no Casualty or Condemnation shall have occurred that permits any tenant party to a Major Lease a termination right (or such right shall have been waived or lapsed);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have received (A) prior to the first request for an Additional Advance (and prior to any subsequent request for an Additional Advance where the authorized representative of Borrower has changed), a Certificate of Authority indicating the representative of Borrower that is authorized to make such request, and (B) for each request for an Additional Advance, an Officer's Certificate with all blanks completed and applicable attachments included;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall have paid to Administrative Agent a draw fee of $1,500 paid or reimbursed all of Additional Advance Lender's and Administrative Agent's outstanding fees and expenses (including the out-of-pocket fees and expenses of Administrative Agent's construction consultant(s)), and all other out-of-pocket fees, costs and expenses (including fees and expenses of outside legal counsel) relating to the Loan to the extent then due and payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;except as expressly permitted herein, such Additional Advance shall be requested no later than the Additional Advance End Date (and Lender shall have no obligation to make any further Additional Advances in the event that all applicable conditions precedent to the making of any such Additional Advance are not satisfied as of the Additional Advance End Date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;with respect to each Additional Advance requested for the payment of Project Expenditures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;at least ten (10) Business Days (but not more than sixty (60) days) prior to the date on which Borrower requests that the Additional Advance be made, Borrower shall have delivered to Administrative Agent a written request indicating the requested amount of the Additional Advance, and specifying the Project Expenditure for which such Additional Advance is sought (an "<u>Advance Request</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have (1) approved of all Plans and Specifications for the Project; (2) received copies of all necessary Project Permits and evidence that the same are in full force and effect; (3) approved of the Project Schedule; (4) approved of all Project Documents relating to the Project; and (5) if required by Administrative Agent, received a written status report detailing the progress of the completion of the Project;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined that the applicable work with respect to which the Additional Advance has been requested has been completed in good and workmanlike manner in accordance with all applicable Legal Requirements and the Administrative Agent-approved plans and specifications;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;in no event shall the amount of any Additional Advance requested with respect to any Project Expenditure be for an amount more than the lowest of (1) the Lenders' aggregate Pro Rata Share of forty percent (40%) of the amount set forth in the Project Budget with respect to such Project Expenditure, (2) the Lenders' aggregate Pro Rata Share of forty percent (40%) of the actual cost incurred by Borrower for such Project Expenditure, (3) the amount that, together with all previous Additional Advances for Project Expenditures, equals $11,636,000.00, and (4) the amount that, together with all previous Additional Advances, equals the Maximum Additional Advance Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have received evidence reasonably satisfactory to it that Borrower has paid (or will pay concurrently with the funding of the Additional Advance), from its own funds, at least the greater of (A) sixty percent (60%) of the cost of such Project Expenditure, and (B) the actual cost of the applicable Project Expenditure, less the amount to be advanced by Lender hereunder for such Project Expenditure (it being agreed that if required by Administrative Agent, such amounts shall be paid to Administrative Agent and Administrative Agent shall pay the applicable invoice from such funds and the Additional Advance);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined in good faith that the sum of the amount of unfunded Additional Advances available for the payment of Project Expenditures, and any amounts then held in the Project Expenditure Reserve Account, and the amount of unfunded Mezzanine Loan Additional Advances available to Mezzanine Borrower under the Mezzanine Loan Agreement for the payment of Project Expenditures, in each case that are available to Borrower hereunder and Mezzanine Borrower under the Mezzanine Loan Agreement (as applicable) for the payment of all of the work comprising the Project (including all hard and soft costs related thereto) that has not been completed, <u>plus</u> (2) an amount equal to sixty percent (60%) of the amount set forth in the Project Budget with respect to such work comprising the Project that has not been completed, <u>is not less than</u> the amount actually necessary (as determined by Administrative Agent in good faith) to pay for the cost of all such work comprising the Project (including all hard and soft costs related thereto) that has not been completed through the completion thereof (the failure of the foregoing to be true, a "<u>Balancing Event</u>") (or Borrower shall have delivered immediately available funds to Administrative Agent in the amount of such difference, which funds shall be held in a Reserve Account and disbursed to Borrower for the payment of Project Expenditures prior to the making of any further Additional Advances for the payment of Project Expenditures);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)&nbsp;&nbsp;&nbsp;&nbsp;No Additional Advance for the payment of any developer fee or construction management fee (or similar) set forth in the Project Budget shall be paid in excess of the amounts permitted to be paid pursuant to <u>Section 2.1(e)</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent has determined that the Project is progressing in material compliance with the Project Schedule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;with respect to Additional Advances requested for Leasing Expenditures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;at least ten (10) Business Days (but not more than sixty (60) days) prior to the date on which Borrower requests that the Additional Advance be made, Borrower shall have delivered to Administrative Agent a written request indicating the requested amount of the Additional Advance and specifying the Leasing Expenditure for which such Additional Advance is sought (also an "<u>Advance Request</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have either approved the proposed Lease to which the Additional Advance relates (including any applicable commission/fee agreements) if such Lease requires Administrative Agent's approval hereunder, or verified that

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the proposed Lease to which the Additional Advance relates satisfies the Lease Requirements with respect to Leases which do not require Administrative Agent's approval hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall have delivered to Administrative Agent concurrently with the Advance Request (1) copies of all Leases (if not previously delivered) and other documents and materials requested by Administrative Agent evidencing the actual Leasing Expenditures with respect to which Borrower is seeking either payment or reimbursement, (2) copies of all bills, invoices, receipts and other similar documentation reasonably required by Administrative Agent to evidence that the relevant expenses are due and owing, and (3) for any Advance Request for the payment of the last ten percent (10%) of the total cost of tenant improvements with respect to any applicable Lease, an executed tenant estoppel or such other written evidence satisfactory to Administrative Agent with respect to the applicable Lease confirming that the tenant has accepted the premises demised under such Lease, that all applicable tenant improvement obligations under such Lease have been satisfied, that Borrower has no future tenant improvement obligations under such Lease (other than routine recurring obligations, such as periodic painting of the leased premises, or in connection with an expansion or extension of such Lease), and such other matters as Administrative Agent may require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;in no event shall the amount of any Additional Advance requested with respect to any Leasing Expenditure be for an amount more than the lowest of (1) the Lenders' aggregate Pro Rata Share of the maximum amount of the applicable Leasing Expenditure approved by Administrative Agent hereunder (or, where Administrative Agent's approval was not required, the maximum amount permitted pursuant to the Lease Requirements), (2) the Lenders' aggregate Pro Rata Share of the actual cost incurred by Borrower for such Leasing Expenditure, (3) the amount that, together with all previous Additional Advances for Leasing Expenditures, equals $7,250,000.00, and (4) the amount that, together with all previous Additional Advances, equals the Maximum Additional Advance Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have received evidence satisfactory to it that Borrower has paid (or will pay concurrently with the funding of the Additional Advance), from its own funds, the actual cost of the applicable Leasing Expenditure, less the amount to be advanced by Lender hereunder for such Leasing Expenditure (it being agreed that if required by Administrative Agent, such amounts shall be paid to Administrative Agent, and Administrative Agent shall pay the applicable invoice from such funds and the Additional Advance);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)&nbsp;&nbsp;&nbsp;&nbsp;the Debt Yield shall (after giving effect to any Additional Advance for Leasing Expenditures) equal or exceed the greater of (i) the Closing Date Debt Yield and (ii) the Debt Yield immediately prior to making such Additional Advance for Leasing Expenditures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;&nbsp;with respect to Additional Advances requested for Hotel Predevelopment Expenditures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;at least ten (10) Business Days (but not more than sixty (60) days) prior to the date on which Borrower requests that the Additional Advance be made, Borrower shall have delivered to Administrative Agent a written request indicating the requested amount of the Additional Advance and specifying the Leasing Expenditure for which such Additional Advance is sought (also an "<u>Advance Request</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;If the Additional Advances requested are for costs and expenses incurred in connection with (i) the AON Lease Relocation or Replacement, or (b) the Schmidt & Stacy Lease Relocation:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have either approved the proposed Lease to which the Additional Advance relates (including any applicable commission/fee agreements) if such Lease requires Administrative Agent's approval hereunder, or verified that the proposed Lease to which the Additional Advance relates satisfies the Lease Requirements with respect to Leases which do not require Administrative Agent's approval hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(II)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall have delivered to Administrative Agent concurrently with the Advance Request (1) copies of all Leases (if not previously delivered) and other documents and materials requested by Administrative Agent evidencing the actual Leasing Expenditures with respect to which Borrower is seeking either payment or reimbursement, (2) copies of all bills, invoices, receipts and other similar documentation reasonably required by Administrative Agent to evidence that the relevant expenses are due and owing, and (3) for any Advance Request for the payment of the last ten percent (10%) of the total cost of tenant improvements with respect to any applicable Lease, an executed tenant estoppel or such other written evidence satisfactory to Administrative Agent with respect to the applicable Lease confirming that the tenant has accepted the premises demised under such Lease, that all applicable tenant improvement obligations under such Lease have been satisfied, that Borrower has no future tenant improvement obligations under such Lease (other than routine recurring obligations, such as periodic painting of the leased premises, or in connection with an expansion or extension of such Lease), and such other matters as Administrative Agent may require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;If the Additional Advances requested are for costs and expenses incurred in connection with Hotel Preconstruction Services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have approved of any applicable Predevelopment Document to which the Hotel Predevelopment Expenditures relate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(II)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined in good faith that the applicable work with respect to which the Additional Advance has been requested has been completed in good and workmanlike manner in accordance in all material respects with all applicable Legal Requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(III)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not have made any request for a Release of the Hotel Component pursuant to <u>Section 5.2.10(c)</u> hereof and no such Release shall have been previously consummated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;in no event shall the amount of any Additional Advance requested with respect to any Hotel Predevelopment Expenditure be for an amount more than the lowest of (1) the Lenders' aggregate Pro Rata Share of the maximum amount of the applicable Hotel Predevelopment Expenditures approved by Administrative Agent hereunder (or, where Administrative Agent's approval was not required, the maximum amount permitted pursuant to the Lease Requirements, if applicable), (2) the Lenders' aggregate Pro Rata Share of the actual cost incurred by Borrower for such Hotel Predevelopment Expenditure, (3) the amount that, together with all previous Additional Advances for Hotel Predevelopment Expenditures, equals $5,000,000.00, and (4) the amount that, together with all previous Additional Advances, equals the Maximum Additional Advance Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)&nbsp;&nbsp;&nbsp;&nbsp;in no event shall the amount of any Additional Advance requested with respect to any Hotel Predevelopment Expenditure be for any amount greater than (i) with respect to the AON Lease Relocation or Replacement, $1,500,000.00, (ii) with respect to the Schmidt & Stacy Lease Relocation, $500,000.00, and (iii) with respect to the Hotel Preconstruction Services, $3,000,000.00;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have received evidence satisfactory to it that Borrower has paid (or will pay concurrently with the funding of the Additional Advance), from its own funds, the actual cost of the applicable Hotel Predevelopment Expenditure, less the amount to be advanced by Lender hereunder for such Hotel Predevelopment Expenditure (it being agreed that if required by Administrative Agent, such amounts shall be paid to Administrative Agent, and Administrative Agent shall pay the applicable invoice from such funds and the Additional Advance);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;&nbsp;&nbsp;In the event that a portion of the Additional Advance is to be funded by Mezzanine Lender, Mezzanine Lender shall have made (or shall make concurrently with the making of the Additional Advance hereunder) Mezzanine Lender's Pro Rata Share of the total amount requested by Borrower hereunder and by Mezzanine Borrower under the Mezzanine Loan Agreement; provided, however, in the event that Mezzanine Lender has failed to make the required Mezzanine Loan Additional Advance in breach of the Mezzanine Loan Agreement, this condition shall be deemed satisfied so long as Administrative Agent shall have received evidence satisfactory to it that Borrower has paid or will pay concurrently with the funding of the Additional Advance, from its own funds, the amount that was otherwise required to be paid by Mezzanine Lender.

The requesting of an Additional Advance shall constitute, without necessity of specifically containing a written statement to such effect, a confirmation, representation and warranty by Borrower to Administrative Agent that all of the applicable conditions to be satisfied in connection with the making of such Additional Advance have been satisfied (unless waived in writing by Administrative Agent) and that all of the representations and warranties of Borrower set forth in the Loan Documents are true and correct as if made on (and with respect to facts and circumstances existing as of) the date on which such Additional Advance is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Separate Contracts for Additional Advances; Several Obligations</u>. Borrower covenants and agrees not to take any action whatsoever, at law or in equity (including the assertion of any right of rescission, set-off, counterclaim or defense) against Administrative Agent or the holder of a Note on account of an Additional Advance Lender failing to fund any portion of the Additional Advance in violation of this Agreement (except, with respect to the holder of a Note, to the extent that the holder of such Note is also the holder of the Note with respect to which such Additional Advance is required, and then in such case, such Lender(s) shall only have such liability in its capacity as holder of such Note to the extent of such required Additional Advances). In the event Borrower breaches the foregoing covenant, Borrower shall indemnify, defend and hold Administrative Agent and each Lender harmless from any and all Losses incurred by Administrative Agent and such Lender in any way related to such breach. Borrower acknowledges and agrees that (i) the holder of each Note shall have no obligation to make any Additional Advance except to the extent that the holder of such Note is also the holder of a Note with respect to which such Additional Advance is required, and then in such case, such Lender(s) shall only have such liability in its capacity as holder of such Note to the extent of such required Additional Advances, and that such obligation shall be the several, sole and exclusive obligation of each Additional Advance Lender, (ii) each Additional Advance Lender's respective obligations to make Additional Advances in accordance with <u>Section 2.1(b)</u> are a several obligation of such Additional Advance Lender, and an independent contract made by and between such Additional Advance Lender and Borrower separate and apart from any other obligation of any other Lender under the other provisions of the Loan Documents, and (iii) each Lender may, in its sole and absolute discretion, waive one or more conditions precedent to the making of an Additional Advance, but that no such waiver shall be binding upon any other Lender, nor shall any such waiver constitute a course of conduct or otherwise obligate such Lender to grant such wavier or any other waiver in the future. The obligations of Borrower under this Agreement and the other Loan Documents shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of Borrower, or any other

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party, against any Additional Advance Lender by reason of an Additional Advance Lender's failure to make any Additional Advance. Borrower agrees that it shall not assert (and shall not have) any defense (including the assertion of any right of rescission, set-off, counterclaim or defense) to the payment of Debt owed to an Additional Advance Lender in the event such Additional Advance Lender breaches any obligation to make an Additional Advance that it is required to make hereunder. The making of any Additional Advance by an Additional Advance Lender at the time when an Event of Default exists shall not be deemed a waiver or cure by any Additional Advance Lender of that Event of Default, nor shall an Additional Advance Lender's rights and remedies be prejudiced in any manner thereby. Nothing in this <u>Section 2.1(c)</u> shall be deemed to be a release of any claim that Borrower may have against any Additional Advance Lender for its failure to perform its obligations under this Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Advancing on the Additional Advance End Date</u>. Notwithstanding anything to the contrary contained in this Agreement, if the aggregate amount of the Notes has not been fully disbursed to Borrower in accordance with this Agreement by the Additional Advance End Date, then so long as all conditions precedent to the making of an Additional Advance described in <u>Section 2.1(b)</u> shall then be satisfied (not including <u>clauses (vi)</u>, <u>(vii)</u>, <u>(viii</u>), <u>(ix)</u>, <u>(x)</u> and <u>(xi)</u> thereof) or waived by Administrative Agent, and (iii) Mezzanine Lender shall have delivered to Administrative Agent its Pro Rata Share of the applicable amount requested by Borrower hereunder and the amount requested by Mezzanine Borrower under the Mezzanine Loan Agreement (which sums shall be held by Administrative Agent in the applicable Reserve Account described below and disbursed as provided herein), and unless Borrower has notified Administrative Agent in writing at least ten (10) Business Days prior to the Additional Advance End Date that Borrower has elected to waive its right to receive any further Additional Advances (and if Borrower does so indicate in writing, such waiver shall be irrevocable), on the Additional Advance End Date each Lender agrees (on a several basis, up to the amount of its Commitment Percentage of the total amount being funded) to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;&nbsp;&nbsp;make an Additional Advance in the amount for which Borrower then remains eligible to pay for Project Expenditures for purposes of depositing funds into the Project Expenditure Reserve Account in an amount not in excess of the amount that Borrower otherwise remains eligible to receive pursuant to <u>Section 2.1(b)</u> above with respect to Project Expenditures but for the existence of the Additional Advance End Date, which funds (together with any applicable funds received from Mezzanine Lender for such purpose) shall be held in the Project Expenditure Reserve Account and disbursed by Administrative Agent only for the payment of Project Expenditures on and subject to the same terms and conditions applicable to the making of Additional Advances for Project Expenditures (other than conditions contained in <u>clauses (iv)</u> (to the extent satisfied in connection with the making of the entire Additional Advance on the Additional Advance End Date) and <u>(viii)</u> of <u>Section 2.1(b)</u> hereof); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;&nbsp;&nbsp;make an Additional Advance in the amount for which Borrower then remains eligible to pay for Leasing Expenditures for purposes of depositing funds into the TI/LC Reserve Account in an amount not in excess of the amount that Borrower otherwise remains eligible to receive pursuant to <u>Section 2.1(b)</u> above with respect to Leasing Expenditures but for the existence of the Additional Advance End Date, which funds (together with any applicable funds received from Mezzanine Lender for such purpose) shall be held in the TI/LC Reserve Account and disbursed by Administrative Agent only for the payment of Leasing Expenditures on and subject to the same terms and conditions applicable to the making of Additional Advances for Leasing Expenditures (other than conditions contained in <u>clauses (iv)</u> (to the extent satisfied in connection with the making of the entire Additional Advance on the Additional Advance End Date) and <u>(viii)</u> of <u>Section 2.1(b)</u> hereof); and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;&nbsp;&nbsp;make an Additional Advance in the amount for which Borrower then remains eligible to pay for Hotel Predevelopment Expenditures for purposes of depositing funds into a deposit account established by Administrative Agent (which account shall be a Reserve Account for all purposes under the Loan Documents, and which Reserve Account shall be referred to herein as the "<u>Hotel Predevelopment Expenditure Reserve Account</u>") in an amount not in excess of the amount that Borrower otherwise remains eligible to receive pursuant to <u>Section 2.1(b)</u> above with respect to Hotel Predevelopment Expenditures but for the existence of the Additional Advance End Date, which funds (together with any applicable funds received from Mezzanine Lender for such purpose) shall be held in the Hotel Predevelopment Expenditure Reserve Account and disbursed by Administrative Agent only for the payment of Hotel Predevelopment Expenditures on and subject to the same terms and conditions applicable to the making of Additional Advances for Hotel Predevelopment Expenditures (other than conditions contained in <u>clauses (iv)</u> (to the extent satisfied in connection with the making of the entire Additional Advance on the Additional Advance End Date) and <u>(viii)</u> of <u>Section 2.1(b)</u> hereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fees Payable to Borrower Parties</u>. Notwithstanding anything to the contrary herein, prior to the date that the Project is Complete, no Borrower Party shall be paid any fee with respect to the Property or the Project or from any proceeds of the Loan, any Reserve Accounts or any Revenues with respect to the Property, other than those portions of the Permitted Construction Management Fees that are permitted to paid prior to Completion of the Project and any ongoing property management fees paid to the Manager pursuant to the Management Agreement. As used herein, "<u>Permitted Construction Management Fees</u>" means construction management fees (or similar) to be paid to Manager pursuant to the Management Agreement in connection with the Project in an amount not to exceed $1,280,000.00 in the aggregate (the "<u>Construction Management Fee Cap</u>") while the Loan is outstanding, payable solely at the following times and in the following amounts (i) a fee in the amount not to exceed fifty percent and 00/100 percent (50.00%) of such aggregate fees due or to become due under the Management Agreement to be paid from Additional Advances for Project Expenditures prior to Completion of the Project, on a percentage of completion basis, and (ii) from and after the date that the Project is Complete, the remaining fees due or to become due under the Management Agreement, subject to the Construction Management Fee Cap.

Section 2.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Interest Rate</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Interest Calculation</u>. Subject to <u>Section 2.2.2</u>, interest on the Outstanding Principal Balance shall accrue from the Closing Date until the Debt is repaid in full at the Interest Rate, and during the continuance of an Event of Default, at the Default Rate. 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 <u>by</u> (b) a daily rate based on the Interest Rate (or the Default Rate, if applicable) and a three hundred sixty (360) day year, <u>by</u> (c) the Outstanding Principal Balance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Usury Savings</u>. 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 Outstanding Principal Balance at a rate which could subject Lender or Administrative Agent to either civil or criminal liability as a result of being in excess of 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 Loan and as provided for herein or the other Loan Documents, under the laws of the state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest at a rate in excess of the amount allowed pursuant to this Section, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the rate that is

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not in excess of the amount allowed pursuant to this Section and all previous payments in excess of such maximum 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 any Lender or Administrative Agent for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable Legal Requirements, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the maximum legal rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

Section 2.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Loan Payment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Required Payments</u>. Borrower shall pay to Administrative Agent, for the account of the Lenders, on the Closing Date an amount equal to interest only on the Outstanding Principal Balance from the Closing Date up to but not including September 8, 2018. Borrower shall pay to Administrative Agent, for the account of the Lenders, on the Payment Date in October, 2018 (which shall be the first Payment Date hereunder) and on each Payment Date thereafter up to and including the Maturity Date, the Monthly Payment Amount, which payments (prior to an Event of Default) shall be applied (i) first to amounts due and payable with respect to the Loan other than principal and interest (but including interest at the Default Rate), and then (ii) to accrued and unpaid interest at the Interest Rate, and then (iii) to the Outstanding Principal Balance. Borrower shall pay the entire Debt to Administrative Agent on the Maturity Date. So long as no Event of Default then exists and except in respect of Net Proceeds, all payments received by Administrative Agent with respect to the Loan shall be applied by each Lender to amounts due with respect to each Note on a *pro rata* and *pari passu* basis, based on the outstanding principal amount due under each Note and the interest rate applicable thereto; <u>provided</u>, <u>however</u>, that (A) all payments received by Administrative Agent and any amounts applied by each Lender during the continuance of an Event of Default and (B) any Net Proceeds applied to repay the Loan as provided herein, shall, in each case, be applied by Administrative Agent to amounts due with respect to the Notes in such order and priority as Administrative Agent shall determine in its sole discretion. It is acknowledged that Lender intends for Note A to be a senior note and Note B to be a junior note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Late Payment Charge</u>. If any principal, interest or any other sums due under the Loan Documents is not paid by Borrower by the date on which it is due, Borrower shall pay to Administrative Agent upon demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by applicable Legal Requirements in order to defray the expense incurred by Administrative Agent and Lender in handling and processing such delinquent payment and to compensate Administrative Agent and 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 Legal Requirements. Notwithstanding the foregoing, no late payment charge shall apply to the failure to pay the entire Outstanding Principal Balance of the Loan when due, whether upon acceleration, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Payments Generally</u>. For purposes of making payments hereunder, but not for purposes of calculating Interest Periods, if the day on which such payment is due is not a Business Day, then amounts due on such date shall be due on the immediately preceding 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. Except as otherwise specifically provided herein, all payments and prepayments under the Loan Documents shall be made to Administrative Agent not later than 1:00 P.M., New York City time, on the date when due and shall be made in lawful money of the United States of America in immediately available funds at Administrative Agent's office or as otherwise directed by Administrative Agent, and any funds received by Administrative Agent after such time shall, for

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all purposes hereof, be deemed to have been paid on the next succeeding Business Day. While an Event of Default exists, any prepayment shall be applied to payments of principal of the Loan and other amounts due under the Loan Documents in such order and priority as Administrative Agent may determine in its sole discretion. All payments received by Administrative Agent during the existence of an Event of Default on any day other than a Payment Date (other than an Event of Default resulting from a failure to repay the Debt on the Maturity Date) shall be deemed to have been made on the next occurring Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.4&nbsp;&nbsp;&nbsp;&nbsp;<u>Voluntary Prepayments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise expressly provided herein, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Scheduled Maturity Date. On any Business Day Borrower may, at its option and upon at least twenty (20) days prior written notice to Administrative Agent specifying the Business Day on which such prepayment is to be made (which notice may be revoked by Borrower at any time prior to such date provided that Borrower shall reimburse Administrative Agent and Lender for any costs incurred by Administrative Agent and Lender as a result of such revocation), prepay the Debt in whole, but not in part (except as otherwise expressly permitted under this Agreement), <u>provided</u> that such prepayment is accompanied by (i) all interest accrued on the amount of the Loan being so prepaid through and including the last day of the Interest Period in effect as of such date on which the prepayment is made, (ii) all other sums due and payable under this Agreement and the other Loan Documents, including, but not limited to all of Administrative Agent's and Lender's costs and expenses (including reasonable attorney's fees and disbursements) incurred thereby in connection with such prepayment, and (iii) the Exit Fee applicable to such payment and, if paying the Debt in full, the Minimum Multiple, if applicable (provided that the payment of the principal portion of the Monthly Payment Amount shall not require the concurrent payment of the Exit Fee otherwise applicable thereto, and such portion of the Exit Fee shall be due and payable on the Maturity Date). Administrative Agent shall execute and deliver to or at the direction of Borrower, upon the written request and at the expense of Borrower, upon payment in full of the Debt in accordance with the terms and provisions of this Agreement, such documents as may be necessary to release the lien of the Security Instrument in form and content reasonably acceptable to Administrative Agent. Irrespective of the time of the final repayment of the Loan in full, whether on the Maturity Date, by prepayment, or in connection with an acceleration of the Loan after the occurrence of an Event of Default, the Loan shall be subject to the requirement (the "<u>Minimum Multiple</u>") that the cumulative amount received by Lender and Mezzanine Lender of the Spread component of all interest payments for the Loan and the Mezzanine Loan (which Spread component shall exclude, without limitation, any amount paid on account of LIBOR, any increase in interest rate to the Default Rate, any origination fee paid, any Exit Fee paid, any extension fee paid by Borrower or Mezzanine Borrower at any time and any similar amounts) shall not be less than the Minimum Multiple Amount. If the Minimum Multiple has not been satisfied as of the date of final repayment of the Loan, Borrower's final prepayment or repayment shall, in addition to all other amounts required to be paid hereunder, include the amount necessary to satisfy the Minimum Multiple. For the avoidance of doubt, the Exit Fee and the Minimum Multiple are earned as of the Closing Date, and immediately due and payable in connection with the repayment in full of the Debt and/or in the event the Debt is accelerated after the occurrence of an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Special Mezzanine Loan Advance</u>. In addition, Borrower shall be permitted to partially prepay the Loan at any time from the proceeds of one or more Special Mezzanine Loan Advances, which prepayment shall (i) be applied solely to the repayment of that portion of the Outstanding Principal Balance (and accrued interest thereon) evidenced by such Note(s) as elected by Mezzanine Loan Administrative Agent and with respect to which the holder thereof has agreed to accept such repayment (it being acknowledged that Borrower has no obligation to force any such Lender to accept such repayment), (ii) not require the payment of any Minimum

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Multiple or Exit Fee, and (iii) not require any act on the part of Borrower (it being agreed that each applicable Lender shall accept such payment directly from Mezzanine Loan Administrative Agent and shall have the right to rely on any notice from Mezzanine Loan Administrative Agent indicating that Mezzanine Lender is making a Special Mezzanine Loan Advance directly to such Lender for the purposes described above without having to determine whether Mezzanine Lender has made such Special Mezzanine Loan Advance in accordance with the requirements of the Mezzanine Loan Agreement); provided that Borrower shall nonetheless cooperate with respect to any Special Mezzanine Loan Advance as set forth in <u>Article VII</u>. In connection with the making of a Special Mezzanine Loan Advance, if Mezzanine Loan Administrative Agent elects to repay any Additional Advance Note (even if such Additional Advance Note balance is currently zero), Mezzanine Lender shall be deemed to assume the obligation of the Additional Advance Lenders to make additional advances of the Mezzanine Loan (on the terms and conditions contained in the Mezzanine Loan Agreement) in the amount of the unfunded Additional Advances evidenced by such Additional Advance Note and the holder of such Note hereunder shall have no further obligations to make such Additional Advances so assumed. From and after the making of any Special Mezzanine Loan Advance, (A) the Loan Amount shall be reduced (and such term deemed to be modified to reflect such reduction) by that portion of the Special Mezzanine Loan Advance that has repaid a portion of the Outstanding Principal Balance, and the amount of the Additional Advances required hereunder that have been assumed by Mezzanine Lender; (B) the Loan Amount (Note B) shall be reduced (and such term deemed to be modified to reflect such reduction) by that portion of the Special Mezzanine Loan Advance that has repaid a portion of the Outstanding Principal Balance evidenced by Note B, and the amount of the Additional Advances required hereunder with respect to Note B that have been assumed by Mezzanine Lender; (C) the Maximum Additional Advance Amount shall be reduced (and such term deemed to be modified to reflect such reduction) by the amount of the Additional Advances required hereunder that have been assumed by Mezzanine Lender; and (D) the term Pro Rata Share shall be deemed to be revised to mean, (1) with respect to the Additional Advance Lenders, a fraction (expressed as percentage) where the numerator is the amount of Additional Advances that the Additional Advance Lenders remain obligated to make under this Agreement, and the denominator is the sum of (y) the amount of Additional Advances that the Additional Advance Lenders remain obligated to make under this Agreement, plus (z) the amount of Mezzanine Loan Additional Advances that the Mezzanine Lender remains obligated to make under the Mezzanine Loan Agreement, and (2) with respect to Mezzanine Lender, a fraction (expressed as percentage) where the numerator is the amount of Mezzanine Loan Additional Advances that Mezzanine Lender remains obligated to make under the Mezzanine Loan Agreement, and the denominator is the sum of (y) the amount of Additional Advances that the Additional Advance Lenders remain obligated to make under this Agreement, plus (z) the amount of Mezzanine Loan Additional Advances that the Mezzanine Lender remains obligated to make under the Mezzanine Loan Agreement. From and after the making of any Special Mezzanine Loan Advance, all references in the Loan Documents to any Note that has been repaid (or with respect to which the obligation to make Additional Advances has been assumed by Mezzanine Lender, as the case may be) shall be of no further force or effect, and, if applicable, the Monthly Payment Amount shall be recalculated to account for such prepayment. Borrower and Lender acknowledge and agree that Mezzanine Loan Administrative Agent and Mezzanine Lender are each an intended third-party beneficiary of the right to prepay the Loan from the proceeds of a Special Mezzanine Loan Advance as described above, and that such provisions shall not be modified or waived without Mezzanine Loan Administrative Agent's and Mezzanine Lender's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.5&nbsp;&nbsp;&nbsp;&nbsp;<u>Mandatory Prepayments</u>. On the next occurring Payment Date following the date on which Administrative Agent actually receives any Net Proceeds, if Administrative Agent is not obligated, or does not elect pursuant to the terms hereof (to the extent it has a right to such election under the Loan Documents), to make such Net Proceeds available to Borrower for Restoration, Borrower is hereby deemed to have authorized Administrative Agent to apply such Net Proceeds as a prepayment of the Outstanding Principal Balance, together with unpaid

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interest thereon, and any other portion of the Debt, in an amount equal to the lesser of one hundred percent (100%) of such Net Proceeds or the amount of the Debt, and to remit any remaining Net Proceeds, if any, to Mezzanine Loan Administrative Agent to be applied in accordance with the terms of the Mezzanine Loan Documents. Notwithstanding anything to the contrary contained in the Loan Documents, so long as no Event of Default then exists, no Minimum Multiple shall be due in connection with any prepayment made pursuant to this <u>Section 2.3.5</u> (but, for the avoidance of doubt, the parties agree that the Exit Fee is a deferred financing fee and is applicable to any such prepayment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment of Taxes</u>. Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable Legal Requirements. If any Legal Requirement requires the deduction or withholding of any Tax from any such payment, 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 Legal Requirements and, if such Tax is an Indemnified Tax, the sum payable by Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this <u>Section 2.3.6(a)</u>) the applicable Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made. Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable Legal Requirements any Other Taxes. Borrower shall pay to Administrative Agent within ten (10) days after demand therefor, the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this <u>Section 2.3.6(a)</u>) payable or paid by such Lender or required to be withheld or deducted from a payment to such Lender and any expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by Administrative Agent shall be conclusive absent manifest error. As soon as practicable after any payment of Taxes by Borrower to a Governmental Authority pursuant to this <u>Section 2.3.6(a)</u>, Borrower shall deliver to Administrative Agent 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 satisfactory to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Status of Lender</u>. Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Loan Document shall deliver to Borrower, (i) prior to becoming a party to this agreement or obtaining any interest in the Loan, (ii) at the time or times requested by Borrower, and (iii) if any form or certification previously delivered expires or becomes obsolete or inaccurate in any respect, 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. In addition, if reasonably requested by Borrower, any Lender shall deliver such other documentation prescribed by applicable Legal Requirements (or reasonably requested by Borrower) as will enable Borrower to determine whether or not such Lender is subject to backup withholding or information reporting requirements. If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower at the time or times prescribed by law and at such time or times reasonably requested by Borrower such documentation prescribed by applicable Legal Requirements (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower as may be necessary for Borrower to comply with its obligations under FATCA and

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to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment (and solely for purposes of this <u>clause (b)</u>, "FATCA" shall include any amendments made to FATCA after the date of this Agreement and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with FATCA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Treatment of Certain Refunds</u>. If any party determines, in its sole discretion exercised in good faith, that it has received a refund in respect of any Taxes as to which it has been indemnified pursuant to this <u>Section 2.3.6</u> (including by the payment of additional amounts pursuant to this <u>Section 2.3.6(c)</u>), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this <u>Section 2.3.6</u> with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this <u>Section 2.3.6(c)</u> (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this <u>Section 2.3.6(c)</u>, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this <u>Section 2.3.6(c)</u> the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This <u>Section 2.3.6(c)</u> shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the indemnifying party or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Survival</u>. Each party's obligations under this <u>Section 2.3.6</u> shall survive any assignment of rights by, or the replacement of, a Lender and/or Administrative Agent, the termination of the commitments to make Additional Advances, and the repayment, satisfaction or discharge of all obligations under any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Designation of a Different Lending Office</u>. If any Lender requests compensation under <u>Section 2.3.8</u>, or requires Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Section 2.3.6(a)</u>, then such Lender shall (at the request of Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loan hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to such <u>Sections 2.3.6</u> or <u>2.3.8</u>, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay all costs and expenses incurred by any Lender in connection with any such designation or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.7&nbsp;&nbsp;&nbsp;&nbsp;<u>Breakage Indemnity</u>. Borrower shall indemnify Administrative Agent and Lenders against any Losses which Administrative Agent and/or any 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 (i) any payment or prepayment of the Loan or any portion thereof made on a date other than a Payment Date and (ii) any failure to pay the Debt 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). Administrative Agent shall deliver to Borrower a statement for any such sums which it or any Lender is entitled to receive pursuant to this <u>Section 2.3.7</u>, which statement shall be binding and conclusive absent manifest error.

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Borrower's obligations under this <u>Section 2.3.7</u> are in addition to Borrower's obligations to pay any Minimum Multiple and Exit Fee applicable to a payment or prepayment of the Outstanding Principal Balance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.8&nbsp;&nbsp;&nbsp;&nbsp;<u>Legal Requirements</u>. If any Change in Law shall (a) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the determination of the LIBOR rate hereunder), (b) subject any Lender to any Taxes (other than (i) Indemnified Taxes, (ii) Taxes described in clauses (ii) through (iv) of the definition of Indemnified Taxes, and (iii) Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or (c) impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loan made by such Lender or participation therein, and the result of any of the foregoing circumstances described in <u>clauses (a)</u> through <u>(c)</u> shall be to increase the cost to such Lender of making, converting to, continuing or maintaining the Loan or of maintaining its obligation to make the Loan, or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, in any such case, upon request of such Lender, Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered. If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender's holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement or the Loan made by such Lender, to a level below that which such Lender or such Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital adequacy), then from time to time Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction suffered. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in this <u>Section 2.3.8</u> and delivered to Borrower shall be conclusive absent manifest error. Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof. Failure or delay on the part of any Lender to demand compensation pursuant to this <u>Section 2.3.8</u> shall not constitute a waiver of such Lender's right to demand such compensation; <u>provided</u> that Borrower shall not be required to compensate a Lender pursuant to this <u>Section 2.3.8</u> for any increased costs incurred or reductions suffered more than twelve (12) months prior to the date that such Lender notifies Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the twelve-month period referred to above shall be extended to include the period of retroactive effect thereof). Borrower will not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Property 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 property tax purposes by reason of the Security Instrument or the Debt. If such claim, credit or deduction shall be required by law, or if payment of any Tax by Borrower required hereunder is unlawful, unenforceable, taxable to Lender, or provides the basis for a defense of usury, then in either such case Administrative Agent shall have the option by written notice of not less than one hundred eighty (180) days to declare the Debt immediately due and payable (and any failure to repay the Debt by the end of such 180-day period shall be an Event of Default).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.9&nbsp;&nbsp;&nbsp;&nbsp;<u>Allocation of Fees among Noteholders</u>. Notwithstanding anything to the contrary contained herein, the following amounts will be allocated as set forth in this Section:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Exit Fee</u>. The entire Exit Fee is allocated to the holders of Note B (on a pro rata basis among such holders).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Minimum Multiple</u>. The Minimum Multiple paid by Borrower will be allocated among Note A, Note B, and the Mezzanine Loan as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;<u>First</u>, the Minimum Multiple Amount will be allocated among Note Class A-1 (as defined below), Note Class A-2 (as defined below), Note Class B-1 (as defined below), Note Class B-2 (as defined below), and Mezzanine Loan using the following proportions: the numerators shall be (i) Note Class A-1: the product of (x) the full commitment amount of the Note Class A-1 multiplied by (y) the Spread applicable to the Note Class A-1; (ii) Note Class A-2: the product of (x) the full commitment amount of the Note Class A-2 multiplied by (y) the Spread applicable to the Note Class A-2; (iii) Note Class B-1: the product of (x) the full commitment amount of the Note Class B-1 multiplied by (y) the Spread applicable to the Note Class B-1; (iv) Note Class B-2: the product of (x) the full commitment amount of the Note Class B-2 multiplied by (y) the Spread applicable to the Note Class B-2; and (v) with respect to the Mezzanine Loan, the product of (x) the full commitment amount of the Mezzanine Loan multiplied by (y) the Spread (as defined in the Mezzanine Loan Agreement) applicable to the Mezzanine Loan. The denominator shall be in all cases the sum of all of the numerators above. For the purposes of this <u>Section 2.3.9(b)</u>, "<u>Note Class A-1</u>" shall mean collectively Note A-1 and Note A-1F, "<u>Note Class A-2</u>" shall mean collectively Note A-2 and Note A-2F, "<u>Note Class B-1</u>" shall mean collectively Note B-1 and Note B-1F, and "<u>Note Class B-2</u>" shall mean collectively Note B-2 and Note B-2F.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;<u>Second</u>, the Minimum Multiple shall be calculated with respect to Note Class A-1 using the formula set forth in the definition thereof, but substituting the Minimum Multiple Amount that is allocated to the Note Class A-1 as determined in paragraph (1) above and only including payments made for the benefit of Note Class A-1; the process will be repeated for Note Class A-2, Note Class B-1 and Note Class B-2 and the Minimum Multiple paid by Borrower will be paid to Note Class A-1 up to the allocated amount, then to Note Class A-2 up to the allocated amount, then to Note Class B-1 up to the allocated amount, then to Note Class B-2 up to the allocated amount and then the remainder to the Mezzanine Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;<u>Third</u>, the Minimum Multiple payable to the Note Class A-1 will be allocated between the holders of Note A-1 and Note A-1F by repeating the process described in clauses (1) and (2) above with respect to such Notes, with the Minimum Multiple paid first to Note A-1 and then Note A-1F. The Minimum Multiple will be allocated between the notes that comprise Note Class A-2, Note Class B-1, Note Class B-2 and the Mezzanine Loan in a similar fashion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Required Pay Down</u>. The Required Pay Down is allocated to the Notes on a *pro rata* and *pari passu* basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Release Amount</u>. The Release Amount is allocated to the Notes on a *pro rata* and *pari passu* basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Administration Fees</u>. Any processing or administration fees (if applicable) and any fee(s) payable in connection with the making of an Additional Advance or the release of any portion of the Property from the liens of the Loan Documents as may be permitted hereunder or other similar fees payable to Lender hereunder in connection with the granting of requests for

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approvals (but not including assumption fees, which shall be paid to the Lenders on a pro rata basis, if applicable), shall be allocated to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.10&nbsp;&nbsp;&nbsp;&nbsp;<u>Acknowledgement and Consent to Bail-In of EEA Financial Institutions</u>. Notwithstanding anything to the contrary in any of the Loan Documents or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any of the Loan Documents, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and (b) the effects of any Bail-in Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

ARTICLE III<u><br>CASH MANAGEMENT; RESERVE ACCOUNTS</u>

Section 3.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Cash Management</u>. Concurrently herewith, Borrower (a) shall establish the Clearing Account and execute and deliver to Administrative Agent the Clearing Account Agreement and the Cash Management Agreement, and (b) shall (or shall cause Manager to) (i) deliver a written instruction to all tenants under Leases in a form reasonably acceptable to Administrative Agent instructing that all Revenues be paid directly to the Clearing Account, and (ii) deposit all Revenues received by Borrower or Manager into the Clearing Account within one (1) Business Day after receipt (other than security deposits paid by tenants pursuant to any Leases, except to the extent any such security deposit has become forfeited to Borrower pursuant to the terms and conditions of any Lease). Borrower shall send a copy of each such instruction letter sent as provided above, together with evidence that the same has been sent, to Administrative Agent within five (5) Business Days after delivery of such notice. Without the consent of Administrative Agent, neither Borrower nor Manager shall terminate, amend, revoke or modify any such instruction letter in any manner whatsoever, or direct or cause any Person to pay any amount in any manner other than as provided in the related instruction letter. On each Business Day, funds on deposit in the Clearing Account shall be transferred to the account of Borrower designated in the Clearing Account Agreement until such time as Administrative Agent (or its Servicer) has notified Clearing Bank of the existence of a Cash Management Event, from and after which time (until Administrative Agent (or its Servicer) has notified Clearing Bank that no Cash Management Event exists), on each Business Day all such funds shall be transferred to the Cash Management Account (or as otherwise directed by Administrative Agent or its Servicer). So long as no Event of Default shall have occurred and be continuing (and thereafter at Administrative Agent's sole option and discretion) funds on deposit in the Cash Management Account (other than any (y) Revenues paid more than one (1) month in advance ("<u>Prepaid Revenues</u>"), which shall be retained in the Cash Management Account until payment thereof is due under the applicable Lease, and (z) Extraordinary Lease Payments, which shall be held and disbursed in accordance with <u>Section 3.2(e)</u> below), shall be applied on each Payment Date in the following amounts and order of priority:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>First</u>, to the Tax Reserve Account the amount required pursuant to <u>Section 3.2(a)</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Second</u>, to the Insurance Reserve Account the amount required pursuant to <u>Section 3.2(b)</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Third</u>, to (or as directed by) Administrative Agent the Monthly Payment Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fourth</u>, to the other Reserve Accounts the amounts required pursuant to the applicable clauses in <u>Section 3.2</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fifth</u>, to Administrative Agent to pay any other amounts then due Administrative Agent and/or Lenders under the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Sixth</u>, to Borrower for payments of monthly Operating Expenses in the amount described in the Approved Annual Budget for the month in which such Payment Date occurs (less the amount of any Excess Disbursement received by Borrower for any prior Payment Date that has not already been deducted pursuant to this <u>clause (f)</u>, the amount of which Excess Disbursement (if any) shall be certified to Administrative Agent in writing by Borrower) (<u>provided</u>, <u>however</u>, at Administrative Agent's discretion, Administrative Agent shall reduce the amount to be disbursed to Borrower pursuant to this <u>clause (f)</u> by the amount that Borrower demonstrates to Administrative Agent's satisfaction that Borrower has paid (or will pay) from its own funds toward the payment of such monthly Operating Expenses up the amount then payable to Mezzanine Loan Administrative Agent pursuant to <u>clause (g)</u> below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Seventh</u>, to (or as directed by) Mezzanine Loan Administrative Agent the amount specified in the Mezzanine Loan Monthly Debt Service Notice Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Eighth</u>, to Borrower for payments of Operating Expenses and Capital Expenditures not set forth in the Approved Annual Budget that are approved by Administrative Agent and by Mezzanine Loan Administrative Agent pursuant to the Mezzanine Loan Documents, if any (less the amount of any Excess Disbursement received by Borrower for any prior Payment Date that has not already been deducted pursuant to <u>clause (f)</u> above or this <u>clause (h)</u>, the amount of which Excess Disbursement (if any) shall be certified to Administrative Agent in writing by Borrower);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>Ninth</u>, (A) if a Cash Management Event exists other than one described in <u>clause (d)</u>, <u>(e)</u> or <u>(f)</u> of the definition thereof, any amounts remaining in the Cash Management Account ("<u>Excess Cash Flow</u>") shall be held by Administrative Agent in a deposit account established by Administrative Agent from time to time ("<u>Excess Cash Flow Reserve Account</u>") as additional collateral for the Obligations, or (B) if a Cash Management Event described in <u>clause (d)</u> of the definition thereof exists (but no other Cash Management Event exists), all Excess Cash Flow shall be paid to or as directed by Mezzanine Loan Administrative Agent, (C) if a Cash Management Event described in <u>clause (e)</u> of the definition thereof exists (but no other Cash Management Event exists), all Excess Cash Flow shall be held by Administrative Agent in the Cash Sweep Tenant Reserve Account, or (D) if a Cash Management Event described in <u>clause (f)</u> of the definition thereof exists (but no other Cash Management Event exists), all Excess Cash Flow shall be held by Administrative Agent in the Key Tenant Reserve Account. So long as no Event of Default then exists, Administrative Agent shall disburse to Borrower (or, if Administrative Agent has been notified of the existence of a Mezzanine Loan Event of Default, to Mezzanine Loan Administrative Agent) any funds held by Administrative Agent in the Excess Cash Flow Reserve Account on the Payment Date next following the end of the applicable Cash Management Event.

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Section 3.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Required Deposits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Tax Reserve Account</u>. Borrower shall (i) on the Closing Date, deposit with Administrative Agent the applicable amount shown on Administrative Agent's settlement statement (if any), and (ii) on each Payment Date commencing with the Payment Date in October, 2018 deposit with Administrative Agent the amount that Administrative Agent estimates will be necessary in order to accumulate (together with the initial deposit made on the Closing Date and projected monthly deposits thereafter) sufficient funds to pay, at least thirty (30) days prior to their respective due dates, all Property Taxes due within the ensuing twelve (12) months. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Tax Reserve Account</u>"). Provided no Event of Default shall then exist, Administrative Agent will apply the funds in the Tax Reserve Account to payments of the Property Taxes for which such funds have been reserved. In making any such payment, Administrative Agent may do so according to any bill, statement or estimate procured from the appropriate public office without inquiry into the accuracy thereof. If Administrative Agent so elects at any time, Borrower shall provide, at Borrower's expense, a tax service contract for the term of the Loan issued by a tax reporting agency acceptable to Administrative Agent. If Administrative Agent does not so elect, Borrower shall reimburse Administrative Agent for the cost of making annual tax searches throughout the term of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance Reserve Account</u>. Borrower shall (i) on the Closing Date, deposit with Administrative Agent the applicable amount shown on Administrative Agent's settlement statement (if any), and (ii) on each Payment Date commencing with the Payment Date in October, 2018 deposit with Administrative Agent the amount that Administrative Agent estimates will be necessary in order to accumulate (together with the initial deposit made on the Closing Date and projected monthly deposits thereafter) sufficient funds to pay, at least thirty (30) days prior to its expiration, all premiums payable for the Required Policies ("<u>Insurance Premiums</u>") due within the ensuing twelve (12) months. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Insurance Reserve Account</u>"). Provided no Event of Default shall then exist, Administrative Agent will apply the funds in the Insurance Reserve Account to payments of Insurance Premiums for Required Policies. In making any such payment, Administrative Agent may do so according to any bill, statement or estimate procured from an insurer or agent without inquiry into the accuracy thereof. Notwithstanding the foregoing, Borrower's obligation to make the monthly deposits for Insurance Premiums required above shall be suspended as long as the following conditions remain satisfied: (A) no Event of Default then exists; (B) Borrower or an Affiliate thereof maintains a blanket insurance policy that provides the coverages required by <u>Section 5.1.11</u> of this Agreement with respect to the Property; and (C) Borrower delivers to Administrative Agent, evidence that the premium due for such blanket insurance policy has been paid and that such blanket insurance policy is in full force and effect at least thirty (30) days prior to the date on which such policy is scheduled to expire. If at any time any one of the foregoing conditions is not satisfied, Borrower shall, within five (5) Business Days after Administrative Agent's written demand, deposit with Administrative Agent immediately available funds in the amount determined in good faith by Administrative Agent to be sufficient (together with projected monthly deposits) to pay the Insurance Premium due for the coverages required hereunder at least thirty (30) days prior to the date the same is payable, and commence making monthly deposits for on the immediately following Payment Date in the amounts described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Immediate Repair Reserve Account</u>. On the Closing Date, Borrower shall deposit with Administrative Agent the amount(s) set forth on <u>Schedule I</u>. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Immediate Repair Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of costs and expenses incurred in connection with the completion by Borrower of the Immediate Repairs.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Capital Expenditures Reserve Account</u>. Borrower shall (i) on the Closing Date, deposit with Administrative Agent the applicable amount shown on Administrative Agent's settlement statement (if any), and (ii) on each Payment Date commencing with the Payment Date in October, 2021 deposit with Administrative Agent $24,689.00. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Capital Expenditure Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of Approved Capital Expenditures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;<u>TI/LC Reserve Account</u>. Borrower shall (i) on the Closing Date, deposit with Administrative Agent the applicable amount shown on Administrative Agent's settlement statement (if any), and (ii) deposit with Administrative Agent all Extraordinary Lease Payments paid to Borrower or Manager. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>TI/LC Reserve Account</u>"). Amounts so deposited with Administrative Agent pursuant to this <u>Section 3.2(e)</u> shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of Leasing Expenditures; <u>provided</u>, <u>however</u>, (A) the amount of any Extraordinary Lease Payments described in <u>clauses (a)</u> and <u>(b)</u> of the definition thereof that are deposited in the TI/LC Reserve Account shall only be released to Borrower upon satisfaction of the following conditions: (1) Borrower shall have entered into one or more replacement Leases for the space previously demised pursuant to the Lease with respect to which such Extraordinary Lease Payment was paid that either has been approved by Administrative Agent or, if Administrative Agent's approval was not required, comply with the Lease Requirements, and which Lease(s) provide (in the aggregate) for rent and recoveries at least equal to the lesser of (y) that which would have been payable under the Lease that has been terminated and (z) the rent and recoveries set forth in the Lease Requirements applicable to such demised space; and (2) the tenant(s) under such replacement Lease(s) have delivered to Administrative Agent an estoppel certificate reasonably acceptable to Administrative Agent, certifying among other things, that its Lease is in effect and such tenant is in occupancy, and (B) so long as no Event of Default then exists, the amount of any Extraordinary Lease Payments described in clause (c) of the definition thereof shall, to the extent the same are to reimburse Borrower or pay for capital improvement costs with respect to the Property pursuant to the applicable Lease that were paid by Borrower from its own funds and are not capital expenditures for which Borrower has received (nor for which Borrower will request) an Additional Advance and/or a disbursement from any applicable Reserve Account to reimburse Borrower for the same, be disbursed to Borrower upon delivery to Administrative Agent of reasonably acceptable evidence that such amounts paid by any applicable tenant satisfy the foregoing requirement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;<u>Project Expenditure Reserve Account</u>. At any time Administrative Agent shall have determined in good faith that a Balancing Event exists, Borrower shall deliver to Administrative Agent immediately available funds in the amount necessary to cause such Balancing Event to no longer exist within five (5) Business Days after Administrative Agent's written demand therefor. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Project Expenditure Reserve Account</u>"). So long as no Event of Default then exists, the funds in the Project Expenditure Reserve Account shall be disbursed by Administrative Agent in the same manner, and subject to the same terms and conditions applicable to, the making of Additional Advances, but solely for purposes of paying for the applicable line items for which such funds were deposited into the Project Expenditure Reserve Account on account of the applicable Balancing Event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;<u>Cash Sweep Tenant Reserve Account</u>. All Excess Cash Flow held by Administrative Agent pursuant to <u>clause (C)</u> of <u>Section 3.1(i)</u> shall be deposited in an account established by Administrative Agent from time to time (the "<u>Cash Sweep Tenant Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) to Borrower only for the payment of Leasing Expenditures with respect to the space previously demised under the Cash Sweep Lease that was the subject to the applicable Cash Sweep Tenant

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Event upon satisfaction of (i) the conditions set forth in <u>Section 3.3</u> below applicable to Leasing Expenditures and (ii) the following additional conditions: (1) Borrower shall have entered into one or more Leases for the space previously demised pursuant to the Cash Sweep Lease that was the subject of the applicable Cash Sweep Tenant Event, which Lease(s) have either been approved by Administrative Agent or, if Administrative Agent's approval was not required, comply with the Lease Requirements; and (2) each tenant under each such Lease has delivered to Administrative Agent an estoppel certificate reasonably acceptable to Administrative Agent, certifying among other things, that its Lease is in effect and such tenant is in occupancy. Notwithstanding anything to the contrary set forth herein, if the balance of funds in the Cash Sweep Tenant Reserve Account exceed the amount necessary to pay for all of the outstanding Leasing Expenditures for all of the space previously demised under any Cash Sweep Lease that was the subject of a Cash Sweep Tenant Event, as determined by Administrative Agent in good faith, Borrower shall have the right to request, and Administrative Agent shall disburse, funds from the Cash Sweep Tenant Reserve Account for the payment of Leasing Expenditures for other space at the Property, upon satisfaction of the applicable disbursement conditions set forth in <u>Section 3.3</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;<u>Key Tenant Reserve Account</u>. All Excess Cash Flow held by Administrative Agent pursuant to <u>clause (D)</u> of <u>Section 3.1(i)</u> shall be deposited in an account established by Administrative Agent from time to time (the "<u>Key Tenant Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) to Borrower only for the payment of Leasing Expenditures with respect to the space previously demised under the Key Tenant Lease that was the subject to the applicable Key Tenant Reduction Event upon satisfaction of (i) the conditions set forth in <u>Section 3.3</u> below applicable to Leasing Expenditures and (ii) the following additional conditions: (1) Borrower shall have entered into one or more Leases for the space previously demised pursuant to the Key Tenant Lease that was the subject of the applicable Key Tenant Reduction Event, which Lease(s) have either been approved by Administrative Agent or, if Administrative Agent's approval was not required, comply with the Lease Requirements; and (2) each tenant under each such Lease has delivered to Administrative Agent an estoppel certificate reasonably acceptable to Administrative Agent, certifying among other things, that its Lease is in effect and such tenant is in occupancy. Notwithstanding anything to the contrary set forth herein, if the balance of funds in the Key Tenant Reserve Account exceed the amount necessary to pay for all of the outstanding Leasing Expenditures for all of the space previously demised under any Key Tenant Lease that was the subject of a Key Tenant Reduction Event, as determined by Administrative Agent in good faith, Borrower shall have the right to request, and Administrative Agent shall disburse, funds from the Key Tenant Reserve Account for the payment of Leasing Expenditures for other space at the Property, upon satisfaction of the applicable disbursement conditions set forth in <u>Section 3.3</u> below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;<u>National Securities Outstanding TI Reserve Account</u>. Borrower shall on the Closing Date, deposit with Administrative Agent the sum of $638,913.78. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>National Securities Outstanding TI Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of Leasing Expenditures pursuant to the Lease with National Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;<u>Fire Alarm Upgrade Reserve Account</u>. Borrower shall on the Closing Date, deposit with Administrative Agent the sum of $160,348.00. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Fire Alarm Upgrade Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of costs and expenses incurred in connection with the completion by Borrower of the Fire Alarm Upgrades. Borrower shall complete the Fire Alarm Repairs on or before November 30, 2018 (which deadline shall be

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extended on a day-for-day basis for each day during which performance of such obligations was prevented on account of an event or circumstance constituting a Force Majeure; <u>provided</u>, <u>however</u>, in no event shall such deadline be extended for a period longer than sixty (60) days in the aggregate). At Administrative Agent's option, it shall be an Event of Default (if Administrative Agent so notifies Borrower in writing) if Borrower does not complete the Fire Alarm Upgrades by such required deadline (as extended as provided above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;<u>Elevator Modernization and Interiors Reserve Account</u>. Borrower shall on the Closing Date, deposit with Administrative Agent the sum of $810,919.50. In addition, Borrower shall deposit with Administrative Agent the amounts set forth in <u>Section 5.1.14</u> hereof with respect to the Elevator Modernization and Interiors Work, when required pursuant to <u>Section 5.1.14</u> hereof. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Elevator Modernization and Interiors Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of costs and expenses incurred in connection with the completion by Borrower of the Elevator Modernization and Interiors Work. Borrower shall complete the Elevator Modernization and Interiors Work on or before May 30, 2020 (which deadline shall be extended on a day-for-day basis for each day during which performance of such obligations was prevented on account of an event or circumstance constituting a Force Majeure; <u>provided</u>, <u>however</u>, in no event shall such deadline be extended for a period longer than sixty (60) days in the aggregate). At Administrative Agent's option, it shall be an Event of Default (if Administrative Agent so notifies Borrower in writing) if Borrower does not complete the Elevator Modernization and Interiors Work by such required deadline (as extended as provided above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;<u>Concourse Renovation Reserve Account</u>. Borrower shall on the Closing Date, deposit with Administrative Agent the sum of $199,999.53. Such amounts will be held in a deposit account established by Administrative Agent from time to time (the "<u>Concourse Renovation Reserve Account</u>"). Amounts so deposited with Administrative Agent shall be disbursed (if at all) as provided in <u>Section 3.3</u> below only for the payment of costs and expenses incurred in connection with the completion by Borrower of the Concourse Renovation Work. Borrower shall complete the Concourse Renovation Work on or before July 31, 2019 (which deadline shall be extended on a day-for-day basis for each day during which performance of such obligations was prevented on account of an event or circumstance constituting a Force Majeure; <u>provided</u>, <u>however</u>, in no event shall such deadline be extended for a period longer than sixty (60) days in the aggregate). At Administrative Agent's option, it shall be an Event of Default (if Administrative Agent so notifies Borrower in writing) if Borrower does not complete the Concourse Renovation Work by such required deadline (as extended as provided above).

Section 3.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Disbursements from the Reserve Accounts</u>. Administrative Agent shall disburse funds from the applicable Reserve Account for the payment of costs and expenses incurred in connection with an applicable Reserve Item, but not more frequently than once in any thirty (30) day period, upon satisfaction by Borrower of each of the following conditions: (a) Borrower shall submit a written request for payment to Administrative Agent (together with evidence reasonably required by Administrative Agent to evidence satisfaction of the conditions set forth in this <u>Section 3.3</u>) at least ten (10) Business Days prior to the date on which Borrower requests such payment be made and specifies the Reserve Item for which such payment is requested; (b) on the date such request is received by Administrative Agent and on the date such payment is to be made, no Event of Default exists; (c) Administrative Agent shall have received (i) prior to the first request for a disbursement from a Reserve Account (and prior to any subsequent request for a disbursement where the authorized representative of Borrower has changed), a Certificate of Authority indicating the representative of Borrower that is authorized to make such request, and (ii) for each request for disbursement from a Reserve Account, an Officer's Certificate with all blanks completed and applicable attachments included; (d) Borrower

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shall have delivered to Administrative Agent copies of all applicable Leases, commission/fee agreements, bills, invoices, receipts and other documentation reasonably required by Administrative Agent with respect to the Reserve Item for which the disbursement is sought; (e) with respect to Leasing Expenditures (i) Administrative Agent shall have either approved the proposed Lease to which the requested disbursement relates (including any applicable commission/fee agreements) if such Lease requires Administrative Agent's approval hereunder, or verified that the proposed Lease to which the requested disbursement relates satisfies the Lease Requirements with respect to Leases which do not require Administrative Agent's approval hereunder, and (ii) for the disbursement of the final ten percent (10%) of any amount payable with respect to tenant improvement costs or a tenant allowance applicable to a given Lease, Borrower shall have delivered to Administrative Agent an executed tenant estoppel from the tenant under such Lease confirming that the tenant has accepted the premises demised under such Leases, that all tenant improvement obligations under such Lease have been satisfied, that Borrower has no future tenant improvement obligations under such Lease, and that the tenant has commenced paying rent, and is not entitled to any further tenant improvements, rental abatements or offsets; and (f) at Administrative Agent's option, if the disbursement request is from a Reserve Account other than the Tax Reserve Account or the Insurance Reserve Account, Borrower shall furnish Administrative Agent with a title search indicating that the Property is free from all liens, claims and other encumbrances not previously approved by Administrative Agent. Administrative Agent shall not be required to make disbursements from the Reserve Accounts (other than the Tax Reserve Account or the Insurance Reserve Account, which shall not be so limited) unless such requested disbursement is in an amount greater than $10,000 (or a lesser amount if the total amount in the applicable Reserve Account is less than $10,000, in which case only one disbursement of the amount remaining in the account shall be made). No funds shall be disbursed from a Reserve Account for the payment of a Reserve Item for which funds have been reserved in a different Reserve Account (or for a Reserve Item for which no funds have been reserved). Any amount remaining in a Reserve Account after the Debt has been paid in full shall be returned to Borrower (<u>provided</u>, <u>however</u>, if at such time Administrative Agent has received written notice that a Mezzanine Loan Event of Default then exists, such funds shall instead be deemed distributed to Borrower and shall be paid to Mezzanine Loan Administrative Agent).

Section 3.4. &nbsp;&nbsp;&nbsp;&nbsp;<u>Accounts Generally</u>. If at any time Administrative Agent determines that the funds available in any Reserve Account will not be sufficient to pay for the cost or expense for which such funds have been required to be deposited with Administrative Agent hereunder by the date required therefor, or if Administrative Agent determines in good faith (based on the then-current Approved Annual Budget or on review of a physical conditions report for the Property, among other sources) to reassess its estimate of the amount reasonably necessary to be reserved for any such costs or expenses, then, at Administrative Agent's option, Borrower shall increase its monthly payments to Administrative Agent with respect to the applicable Reserve Account(s) by the amount that Administrative Agent so notifies Borrower is required and/or deposit the shortfall amount determined by Administrative Agent into the applicable Reserve Account(s) within ten (10) Business Days of notice from Administrative Agent. The insufficiency of any balance in any Reserve Account shall not relieve Borrower from its obligations under the Loan Documents. Subject to the terms and conditions of this Agreement, the Cash Management Account, the Clearing Account, and the Reserve Accounts shall be under the sole dominion and control of Administrative Agent (which dominion and control may be exercised by Servicer), Administrative Agent and Servicer shall have the sole right to make withdrawals from such accounts (without limiting the terms and conditions of this Agreement or the Clearing Account Agreement), and all costs and expenses for establishing and maintaining such accounts shall be paid by Borrower. Administrative Agent may replace such accounts or establish new accounts from time to time in its sole discretion, and Borrower hereby agrees that it shall take all action necessary to facilitate the transfer of the respective obligations, duties and rights of any applicable bank to the successor thereof selected by Administrative Agent in its sole

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discretion. Interest or other earnings that may accrue with respect to any funds held in a Reserve Account (if any) shall not be required to be remitted to Borrower or any Reserve Account and shall instead be retained by Administrative Agent (or at Administrative Agent's election, its Servicer or any other designee of Administrative Agent). The funds in the Reserve Accounts shall not constitute trust funds and may be held in Administrative Agent's name and commingled with other monies held by Administrative Agent.

ARTICLE IV<u><br>REPRESENTATIONS AND WARRANTIES</u>

Borrower represents and warrants as of the Closing Date (or as of such other date on which the representations and warranties contained herein are required under this Agreement to be made) that, except as set forth on <u>Schedule V</u> attached hereto:

Section 4.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Organization</u>. Borrower and each Required SPE Entity has been duly formed and is validly existing and in good standing in the jurisdiction in which it is formed and has the requisite power and authority to own its properties and to transact the businesses in which it is now engaged. Borrower is duly qualified to do business in, and is in good standing in, the State in which the Property is located and each other jurisdiction where it is required to be so qualified in connection with its properties, businesses and operations. The organizational chart attached hereto as <u>Schedule II</u> shows all Persons that (a) own ten percent (10%) or more of the direct or indirect ownership interests in Borrower, and (b) Control Borrower. As of the date hereof, CP Tower Owner is Controlled by NexPoint SOF, and NexPoint SOF is Controlled by NexPoint Advisors, and NexPoint Advisors is Controlled by James D. Dondero, and CP Land Owner, LLC is Controlled by HCRE Partners, and HCRE Partners is Controlled by James D. Dondero.

Section 4.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Authority; Enforceability</u>. 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). The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Borrower, Required SPE Entity or Guarantor, 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).

Section 4.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>No Conflicts</u>. The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower, Required SPE Entity, and/or Guarantor, as applicable, will not (a) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any of such Person's organizational or governing documents, (b) conflict with or result in a breach of any, 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 such Person pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement, partnership agreement, management agreement or other agreement or instrument to which such Person is a party or by which any of such Person's property or assets is subject, or (c) result in any violation of the provisions of any Legal Requirement. Any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Borrower, Required SPE Entity, and/or

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Guarantor, as applicable, of the Loan Documents has been obtained and is in full force and effect.

Section 4.4. &nbsp;&nbsp;&nbsp;&nbsp;<u>Litigation; Judgments</u>. To the best of Borrower's knowledge, there are no actions, suits or proceedings at law or in equity by or before any Governmental Authority now pending or threatened against or affecting Borrower, Required SPE Entity, Guarantor, Manager, or the Property that, if determined adversely to such party, would be reasonably likely to have a Material Adverse Effect. Borrower, Required SPE Entity, Guarantor, and Manager are not in default or violation with respect to any order, writ, injunction, decree or demand of any Governmental Authority that is reasonably likely to have a Material Adverse Effect.

Section 4.5. &nbsp;&nbsp;&nbsp;&nbsp;<u>Agreements</u>. Borrower is not in default in any material respect under any agreement to which it is a party or by which Borrower or the Property are bound which would reasonably be expected to have a Material Adverse Effect. Borrower and Required SPE Entity have no material financial obligations other than Permitted Indebtedness.

Section 4.7. &nbsp;&nbsp;&nbsp;&nbsp;<u>Solvency</u>. Borrower has (a) not entered into the transaction contemplated by this Agreement or executed the Loan Documents 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. The fair saleable value of Borrower's assets exceeds and will, immediately following the making of the Loan, exceed Borrower's total liabilities, including subordinated, unliquidated, disputed and contingent liabilities. 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. No petition in bankruptcy has been filed against Borrower or Required SPE Entity, and neither Borrower nor Required SPE Entity has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. None of Borrower, Required SPE Entity, or any of their respective direct or indirect owners is contemplating either the filing of a Bankruptcy Action by Borrower or Required SPE Entity or the liquidation of all or a major portion of its assets or properties, and Borrower has no knowledge of any Person contemplating the filing of any such petition against it or Required SPE Entity.

Section 4.8. &nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance</u>. To the best of Borrower's knowledge, Borrower and the Property (including the use thereof) comply in all material respects with all applicable Legal Requirements. To the best of Borrower's knowledge, there has not been committed by Borrower or, to Borrower's knowledge, any other Person in occupancy of or involved with the operation or use of the Property 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

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Borrower's obligations under any of the Loan Documents. To the best of Borrower's knowledge and except as otherwise set forth in the PZR Report prepared by The Planning & Zoning Resource Company and delivered to Administrative Agent in contemplation of the Loan, in the event that all or any part of the Improvements are destroyed or damaged, said Improvements can be legally reconstructed to their condition prior to such damage or destruction, and thereafter exist for the same use without violating any zoning or other ordinances applicable thereto and without the necessity of obtaining any variances or special permits, and neither the zoning nor any other right to construct, use or operate the Property is in any way dependent upon or related to any property other than the Property. The use being made of the Property is in conformity with the certificate of occupancy issued for the Property and, to the best of Borrower's knowledge, all other restrictions, covenants and conditions affecting the Property. The Loan is solely for the business purpose of Borrower, and is not for personal, family, household, or agricultural purposes.

Section 4.9. &nbsp;&nbsp;&nbsp;&nbsp;<u>Condemnation</u>. 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.

Section 4.10. &nbsp;&nbsp;&nbsp;&nbsp;<u>Utilities and Public Access</u>. The Property is located on or adjacent to a public road and has direct legal access to such road (or has access to it via an irrevocable easement or irrevocable right of way permitting ingress and egress to and from such public road), 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 easements, cross easements, licenses, air rights and rights-of-way or other similar property interests, if any, necessary for the full utilization of the Improvements for their intended purposes have been obtained, are described in the Title Insurance Policy and are in full force and effect without default thereunder.

Section 4.11. &nbsp;&nbsp;&nbsp;&nbsp;<u>Separate Tax Lots; Assessments</u>. The Property is comprised of one (1) or more parcels that constitute one (1) or more separate tax lots and do not constitute a portion of any other tax lot that is not a part of the Property. There are no pending or, to Borrower's knowledge, proposed special or other assessments for public improvements or otherwise affecting the Property, nor, to Borrower's knowledge, are there any contemplated improvements to the Property that may result in such special or other assessments.

Section 4.12. &nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. Borrower has obtained and has delivered to Administrative Agent certificates for all Required Policies required hereunder, with all premiums currently payable thereunder having been paid, reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. No claims have been made under any such Required Policies, and no Person has done, by act or omission, anything that would impair the coverage of any such Required Policies.

Section 4.13. &nbsp;&nbsp;&nbsp;&nbsp;<u>Use of Property; Licenses</u>. Other than the projected use of Hotel Component as a hotel, the Property is used exclusively as an office building and other appurtenant and related uses. All certifications, permits, licenses and approvals (including certificates of completion and occupancy permits (or its equivalent)) required for the current legal use, occupancy and operation of the Property, have been obtained and are in full force and effect.

Section 4.14. &nbsp;&nbsp;&nbsp;&nbsp;<u>Flood Zone</u>. Except as may be shown on the survey delivered to Administrative Agent in connection with the closing of the Loan, none of the Improvements on

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the Property are located in an area identified by the Federal Emergency Management Agency as an area having special flood hazards (or, if so located, the flood insurance required pursuant to <u>Section 5.1.11</u> hereof is in full force and effect with respect to the Property).

Section 4.15. &nbsp;&nbsp;&nbsp;&nbsp;<u>Physical Condition</u>. To the best of Borrower's knowledge, the Property (including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components) is in good condition, order and repair in all material respects. To the best of Borrower's knowledge, there exists no structural or other material defects or damages in 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. The Improvements have suffered no material casualty or damage which has not been fully repaired and the cost thereof fully paid.

Section 4.16. &nbsp;&nbsp;&nbsp;&nbsp;<u>Boundaries; Survey</u>. Except as may be otherwise shown on the survey of the Property delivered to Administrative Agent in contemplation of the Loan, all of the improvements which were included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvements on adjoining properties encroach upon the Property (other than Permitted Encumbrances), and no easements or other encumbrances upon the Property encroach upon any of the Improvements, so as to affect the value or marketability of the Property except those which are insured against by the Title Insurance Policy. To Borrower's knowledge, the survey for the Property delivered to Administrative Agent in connection with the Loan does not fail to reflect any material matter affecting the Property or the title thereto.

Section 4.17. &nbsp;&nbsp;&nbsp;&nbsp;<u>Leases</u>. (a) The Property is not subject to any Leases other than the Leases described in the rent roll attached to the Closing Certificate, and no Person has any possessory interest in the Property or right to occupy the same except under and pursuant to the provisions of the Leases described in said rent roll, (b) to the best of Borrower's knowledge, except as otherwise set forth on said rent roll or the estoppels delivered to Administrative Agent in contemplation of the Loan, the tenants under the Leases listed on the rent roll have accepted possession of and are in occupancy of all of their respective demised premises, are open for business, and are paying full, unabated rent, and no tenant under any such Lease has given Borrower notice of its intent to terminate such lease or vacate the leased premises (and Borrower has no knowledge that any such tenant intends to so terminate or vacate), (c) Borrower has not received written notice from any tenant under the Leases claiming that Borrower (or any prior landlord) is in default thereunder, and to the knowledge of Borrower there are no defaults under said Leases by any party thereto, (d) except as set forth on the rent roll, no Revenue has been paid more than one (1) month in advance of its due date, (e) to Borrower's knowledge, except as set forth on the rent roll or the estoppels delivered to Administrative Agent in contemplation of the Loan, all work to be performed by Borrower (or any prior landlord) under each Lease has been performed as required 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 Borrower to any tenant has already been received by such tenant, (f) said rent roll accurately describes all security deposits made by the tenants at the Property which have not been applied (including accrued interest thereon), all of which are held by Borrower in accordance with the terms of the applicable Lease and applicable Legal Requirements, (g) no tenant under any Lease (or any sublease) is an Affiliate of Borrower, (h) to Borrower's knowledge as of the Closing Date, except as otherwise set forth on said rent roll or the estoppels delivered to Administrative Agent in contemplation of the Loan, no tenant listed on said rent roll has assigned its Lease or sublet all or any portion of the premises demised thereby, no such

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tenant holds its leased premises under assignment or sublease, nor does anyone except such tenant and its employees occupy such leased premises, (i) except as otherwise set forth on the rent roll delivered to Administrative Agent in contemplation of the Loan and except for items which Borrower has received a credit at closing in the amount set forth on <u>Schedule V</u> hereto, to the best of Borrower's knowledge, there are no brokerage fees or commissions now due and payable in connection with the leasing of space at the Property, and no such fees or commissions will become due and payable in the future in connection with the Leases in effect as of the date hereof (including by reason of any extension of such Lease or expansion of the space leased thereunder), and (j) to Borrower's knowledge, except as set forth on the rent roll or the estoppels delivered to Administrative Agent in contemplation of the Loan, no tenant under any Lease has a right to purchase all or any part of the Property, or any right to expand into additional space in the Improvements.

Section 4.18. &nbsp;&nbsp;&nbsp;&nbsp;<u>Filing and Recording Taxes</u>. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the transfer of the Property to Borrower have been paid. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents have been paid.

Section 4.19. &nbsp;&nbsp;&nbsp;&nbsp;<u>Special Purpose Entity</u>. Borrower and each Required SPE Entity (if any) are each (and have been, at all times since their formation) a Special Purpose Entity.

Section 4.20. &nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Information; Disclosure</u>. To the best of Borrower's knowledge, all information submitted to Administrative Agent (including 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 in this Agreement or in any other Loan Document) (a) are accurate, complete and correct in all material respects, (b) accurately represent the financial condition of Borrower, Guarantor, and/or Property as of the date of such reports (as applicable), (c) to the extent prepared, audited or reviewed by an independent certified public accounting firm, have been prepared, audited or reviewed in accordance with the Approved Accounting Method throughout the periods covered (except as disclosed therein), and (d) do not omit to state any material fact necessary to make statements contained herein or therein not misleading. 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, except as referred to or reflected in such financial statements. 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 would be reasonably likely to have a Material Adverse Effect. Borrower has disclosed to Administrative Agent all material facts that would cause any information provided to Administrative Agent or any representation or warranty made in any of the Loan Documents concerning Borrower, any Required SPE Entity, Guarantor, Manager, or the Property, to be materially misleading. To Borrower's knowledge, no statement of fact made by Borrower or Guarantor in any of the Loan Documents to which such Person is a party contains any untrue statement of a material fact or omits to state any material fact presently known to such Person and necessary to make statements contained herein or therein not misleading.

Section 4.21. &nbsp;&nbsp;&nbsp;&nbsp;<u>Certain Regulations</u>. 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"

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within the meaning of the Public Utility Holding Company Act of 1935, as amended; (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money; (d) a "bank holding company" or a direct or indirect subsidiary of a "bank holding company" as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal Reserve System; (e) a "foreign person" within the meaning of § 1445(f)(3) of the Code; (f) a sponsor of (nor obligated to contribute to) an "employee benefit plan" (within the meaning of §3(3) of ERISA) which is subject to Title I of ERISA or §4975 of the Code, and none of the assets of Borrower constitute "plan assets" (within the meaning of 29 C.F.R. §2510.3-101) for purposes of §3(42) of ERISA, or (g) a "governmental plan" (within the meaning of §3(32) of ERISA) or subject to any state statute regulating investments of, or fiduciary obligations with respect to, such "governmental plans" which is similar to the provisions of §406 of ERISA or §4975 of the Code and which prohibit or otherwise restrict the transactions contemplated by this Agreement (including the exercise by Administrative Agent of any of its rights under the Loan Documents). No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by any Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents.

Section 4.22. &nbsp;&nbsp;&nbsp;&nbsp;<u>Sanctions; Anti-Money Laundering; Anti-Corruption</u>. 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, no Restricted Party, no Affiliate of any Restricted Party, and, to the Borrower's knowledge, no agent of the foregoing or other Person holding any direct or indirect ownership or beneficial interest in Borrower or its funds or other assets (a) is a Designated Person, (b) is located, organized, resident or has a place of business in a Designated Jurisdiction, (c) is a Person with whom Administrative Agent or any Lender is restricted from doing business under Sanctions and Anti-Money Laundering Laws, (d) has engaged or currently engages in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any Sanctions and Anti-Money Laundering Laws or (e) is otherwise in violation of Sanctions and Anti-Money Laundering Laws. The Restricted Parties, their respective Affiliates, and to the Borrower's knowledge, their agents and other Persons holding any direct or indirect ownership or beneficial interest in Borrower, are in compliance with Sanctions and Anti-Money Laundering Laws and the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the "<u>FCPA</u>") and any other applicable anti-corruption law (together, the "<u>Anti-Corruption Laws</u>"). The Borrower has instituted and maintains policies and procedures designed to promote and achieve compliance with applicable Sanctions and Anti-Money Laundering Laws and Anti-Corruption Laws.

Section 4.23. &nbsp;&nbsp;&nbsp;&nbsp;<u>Construction Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower has all necessary power and authority to enter into and perform its respective obligations under the Project Documents to which Borrower is a party, and all other agreements and instruments to be executed by Borrower in connection with the construction and the development of the Project. The Project Documents to which Borrower is a party have been duly executed and delivered by Borrower. The Project Documents to which Borrower is a party constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with its terms, subject only to applicable bankruptcy, insolvency and similar laws generally affecting rights of creditors and the enforcement of debtors' obligations, and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). The completion of the Project and the execution, delivery and performance by Borrower of its obligations under, and the consummation of the transactions contemplated by, each of the Project Documents to which Borrower is, or will be, a party, and all other agreements and

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instruments to be executed by Borrower in connection therewith do not and will not (i) violate any Legal Requirement applicable to Borrower in any material respect, (ii) result in a breach of any of the terms, conditions or provisions of, or constitute a default under the organizational documents of Borrower, or result in a material breach of the terms, conditions or provisions of any mortgage, indenture, agreement, permit, franchise, license, note or instrument to which Borrower is a party or by which it or any of its properties is bound, or (iii) result in the creation or imposition of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the assets of Borrower (except as contemplated by this Agreement and by the Permitted Encumbrances). All consents, approvals, orders or authorizations of, or registrations, declarations or filings with, or other actions in respect of or by, any Governmental Authorities that are required in connection with the execution, delivery and performance by Borrower of the Project Documents and all other agreements and instruments to be executed by Borrower in connection therewith and the construction and operation of the Project have been obtained or will be obtained when required for the then applicable stage of completion of the Project and are or will be in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Borrower has delivered to Administrative Agent true, correct, and complete copies of all Project Documents. All permits, licenses, and other approvals from any applicable Governmental Authorities, adjacent property owners, or any other Person necessary for Borrower to commence and Complete the Project in accordance with the Administrative Agent-approved Plans and Specifications have been obtained and are in full force and effect. All utility services and facilities necessary for the completion of the Project and, upon completion of construction, the operation, use and occupancy of the Project for its intended purposes are or will be available at the boundaries of the Land, including, without limitation, water supply, storm and sanitary sewer facilities, gas and electric and telephone facilities and means of access between the Land and public ways.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Except for the Project Documents approved by Administrative Agent, Borrower has not made, assumed or been assigned any contract or arrangement of any kind, the performance of which by the other party thereto would give rise to a lien (other than Permitted Encumbrances) against all or any portion of the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The current land use, zoning law, regulations and declarations covering the Property permit on an as-of-right basis, the completion of the Project substantially in accordance with the Plans and Specifications, the current zoning law and declarations covering the Property permit the Project to be operated and used as contemplated by this Agreement, and no additional variance, conditional use permit, special use permit or other similar approval is required for such construction, use and occupancy of the Project that has not been or will not, if and when required, be obtained. The Property currently and, upon completion of the Project substantially in accordance with the Plans and Specifications, the use thereof will be in all material respects in compliance with all Project Permits then required and all other applicable Legal Requirements, and such compliance is not dependent on any land, improvements or facilities that are not a part of the Property. There are no pending, or to Borrower's knowledge, threatened actions, suits or proceedings to revoke, attach, invalidate, rescind or modify the zoning applicable to the Property or any part thereof or any of the Project Permits, as currently existing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;As of the Closing Date and as of each date on which this representation is deemed remade, the Project Budget (as the same may be amended from time to time in accordance with this Agreement) accurately reflects Borrower's good faith estimate of all anticipated Hard Costs, Soft Costs, and any other costs and expenses reasonably anticipated to be incurred in connection with the Completion of the Project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;No Balancing Event exists as of the date hereof.

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Section 4.24. &nbsp;&nbsp;&nbsp;&nbsp;<u>Required Equity</u>. Borrower has invested in the Property cash equity in the amount of not less than $72,088,000.00.

Section 4.25. &nbsp;&nbsp;&nbsp;&nbsp;<u>Mezzanine Loan Matters</u>. No Default or Event of Default (each as defined in the Mezzanine Loan Agreement) has occurred under the Mezzanine Loan Documents which remains uncured or unwaived.

ARTICLE V<u><br>BORROWER COVENANTS</u>

Section 5.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Affirmative Covenants</u>. From the date hereof and until payment and performance in full of all Obligations in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Administrative Agent that it shall comply with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Existence; Compliance with Legal Requirements</u>. 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, franchises, and trade names required for the operation of the Property in the manner presently being conducted. Borrower shall comply with all Legal Requirements applicable to it and the Property (subject to Borrower's right to contest the applicability of any such Legal Requirement in accordance with <u>Section 5.1.2</u> below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Taxes, Other Charges, and Liens; Contests</u>. Borrower shall pay all Property Taxes, liens, assessments, maintenance charges, and any other charges (including vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property) now or hereafter levied or assessed or imposed against the Property or any part thereof prior to the delinquency thereof. Borrower will deliver to Administrative Agent receipts for payment or other evidence satisfactory to Administrative Agent that the Property Taxes and such other charges have been so paid no later than ten (10) days prior to the date on which the same would otherwise be delinquent if not paid. Notwithstanding the foregoing, Borrower's obligation to directly pay Property Taxes for which Administrative Agent is reserving funds pursuant to <u>Section 3.2(a)</u> hereof (and to provide evidence of the same) shall be suspended for so long as Borrower complies with the terms and provisions of said <u>Section 3.2(a)</u>. Borrower, at its own expense, may contest (after prior written notice to Administrative Agent) by appropriate legal proceeding, promptly initiated and conducted in good faith and with reasonable diligence, the amount or validity or application in whole or in part of any Property Taxes or any lien or other charge on the Property, and/or the applicability of any Legal Requirement, provided that: (a) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower, the Property or any collateral for the Loan, as applicable, is subject and shall not constitute a default thereunder, and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (b) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (c) Borrower shall promptly, upon final non-appealable determination thereof, pay the amount of any such contested matter (together with all costs, interest and penalties which may be payable in connection therewith) and/or comply with such contested Legal Requirement; and (d) such proceeding shall suspend the collection of such contested matter (unless Borrower shall have paid all such amounts so demanded under protest), and with respect to liens, Borrower shall have caused any such lien to be discharged (by bonding or otherwise) within thirty (30) days (or sooner if required to avoid a forfeiture of the Property) of the filing thereof, or Borrower shall furnish such security as may be requested by Administrative Agent (not to exceed one hundred ten percent (110%) of the amount of such lien being contested), to insure the payment of any such contested matter, together with all interest and penalties thereon (and Administrative Agent may pay over any such security to the claimant

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entitled thereto at any time when, in the judgment of Administrative Agent, the entitlement of such claimant is established or the Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost, or there shall be any danger of the lien of the Security Instrument being primed by any related lien).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Access to Property</u>. Borrower shall permit agents, representatives and employees of Administrative Agent to inspect the Property or any part thereof at reasonable hours upon reasonable advance notice (and subject to the rights of tenants under Leases). Borrower agrees to pay or reimburse Administrative Agent within ten (10) Business Days after written demand for all out-of-pocket costs and expenses incurred by Administrative Agent in connection with the inspections described in this <u>Section 5.1.3</u>; <u>provided</u>, <u>however</u>, Borrower shall not be required to pay for the cost of more than one (1) such inspection in any twelve (12) month period unless (a) an Event of Default exists, (b) Borrower has undertaken capital improvements with respect to the Property, or (c) Administrative Agent has a reasonable basis to believe that the Property has been damaged in any material respect, in which case with respect to any of the foregoing circumstances, the foregoing limitation shall not apply.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.4&nbsp;&nbsp;&nbsp;&nbsp;<u>Interest Rate Cap Agreement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;On the date hereof, Borrower shall obtain an agreement from (or guaranteed by) an Acceptable Counterparty, which agreement (an "<u>Interest Rate Cap Agreement</u>") shall (i) be in the form and substance satisfactory to Administrative Agent, (ii) contain the agreement of such counterparty to make payments to Borrower in the event the applicable Index exceeds the applicable Strike Rate, (iii) require payments based on a notional amount at least equal to the Loan Amount, (iv) not terminate prior to the Payment Date in September, 2020, (v) require payments to be made on the date that is three (3) Business Days prior to the applicable Payment Date, and (vi) contain a one-time right to reallocate notional amounts between the Interest Rate Cap Agreement obtained in connection with the Loan and the Interest Rate Cap Agreement obtained in connection with the Mezzanine Loan at no cost to Administrative Agent or any Lender. Borrower shall not waive or amend any of the material terms of any such required Interest Rate Cap Agreement. In addition, not later than the date that is sixty (60) days prior to the date on which the Interest Rate Cap Agreement obtained by Borrower pursuant to the preceding sentence is scheduled to expire, Borrower shall obtain an Interest Rate Cap Agreement that complies with the foregoing requirements, except that it shall not terminate prior to the Scheduled Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the event of any downgrade or withdrawal of the rating of an Acceptable Counterparty below "A-" by S&P or "A3" from Moody's (or such other lower rating levels as are acceptable to Administrative Agent), or in the event of any default by an Acceptable Counterparty under an Interest Rate Cap Agreement required hereunder, Borrower shall, not later than thirty (30) days following the receipt by Borrower of notice of such downgrade, withdrawal, or default (whether received from Administrative Agent, the Acceptable Counterparty, or otherwise) (or such later period with respect to the following clause (ii) if such Acceptable Counterparty has a longer period of time to provide such collateral) either (i) replace such Interest Rate Cap Agreement with an Interest Rate Cap Agreement satisfying the requirements of clause (a) above, (ii) provide a guaranty from a guarantor who is an Acceptable Counterparty, or (iii) to the extent required of such Acceptable Counterparty in such Interest Rate Cap Agreement, cause the Acceptable Counterparty to deliver cash collateral to secure 100% of the mark-to-market value of Borrower's exposure under such Interest Rate Cap Agreement; <u>provided</u>, <u>however</u>, notwithstanding the foregoing, if the Acceptable Counterparty ceases to have a long term rating of at least "BBB" or "Baa2" by S&P and Moody's respectively, then Borrower shall replace the Interest Rate Cap Agreement with an Interest Rate Cap Agreement satisfying the requirements in <u>clause (a)</u> above, not later than fifteen (15) days following the receipt by

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Borrower of notice of such downgrade (whether received from Administrative Agent, the Acceptable Counterparty, or otherwise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall collaterally assign any such required Interest Rate Cap Agreement to Administrative Agent, and shall cause the counterparty to such Interest Rate Cap Agreement to consent to such collateral assignment and deliver an opinion of counsel regarding the enforceability of the Interest Rate Cap Agreement, in each case in form and substance reasonably satisfactory to Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.5&nbsp;&nbsp;&nbsp;&nbsp;<u>Further Assurances</u>. Borrower shall, at Borrower's sole cost and expense, (a) furnish to Administrative Agent all information with respect to the Property in Borrower's possession or control promptly upon Administrative Agent's request therefor; (b) execute and deliver to Administrative Agent such documents, instruments, certificates, assignments and other writings, and do such other acts reasonably 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, and to establish, maintain, and perfect Administrative Agent's security interest therein free of all other liens and security interests (other than Permitted Encumbrances); and (c) do and execute all and such further lawful 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, in each case as Administrative Agent shall require from time to time. Borrower authorizes Administrative Agent, at the expense of Borrower, to file any financing statement or statements (and amendments thereto and continuations thereof) deemed necessary or desirable by Administrative Agent in good faith to perfect its security interest in any of the collateral for the Loan (including an "all assets" financing statement within the meaning of the UCC). Borrower hereby irrevocably constitutes and appoints Administrative Agent as Borrower's true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver any instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower with respect to the collateral for the Loan, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower, which Borrower is required to do under the Loan Documents or which Administrative Agent may deem necessary or desirable to more fully vest in Administrative Agent the rights and remedies provided for in the Loan Documents and to accomplish the purposes of this Agreement, including any amendment to the Loan Documents which may be required hereunder, in each case upon Borrower's failure to take any of the foregoing actions or any other applicable action required under the Loan Documents within five (5) Business Days after notice from Administrative Agent. The foregoing powers of attorney are irrevocable and coupled with an interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Reporting</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower will keep and maintain or will cause to be kept and maintained on a fiscal year basis (commencing January 1 of each year), in accordance with the Approved Accounting Method, proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower. Borrower will furnish to Administrative Agent the reports described on <u>Schedule VII</u> attached hereto not later than the applicable date set forth opposite such required report, accompanied by an Officer's Certificate with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Not later than forty-five (45) days prior to the commencement of each fiscal year, Borrower shall submit to Administrative Agent its proposed annual budget for the Property detailing all anticipated operating expenses, operating income, and planned Capital Expenditures for the Property for the ensuing fiscal year in form satisfactory to Administrative Agent. Such proposed budget shall be subject to Administrative Agent's written approval (when so approved, an "<u>Approved Annual Budget</u>"), which approval shall not be unreasonably withheld. Until such time that Administrative Agent approves a proposed budget, the most recently Approved Annual

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Budget shall apply; <u>provided</u>, <u>however</u>, that such Approved Annual Budget shall be deemed adjusted to reflect actual increases in Property Taxes, Insurance Premiums and utilities expenses. The approved Annual Budget for the remainder of calendar year 2018 is attached hereto as <u>Exhibit C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any reports, statements or other information required to be delivered under this Agreement shall be provided to Administrative Agent as an electronic Excel file and as a .pdf file (or otherwise in a form reasonably acceptable to Administrative Agent), in English, and shall be delivered electronically unless Administrative Agent requests that the same be delivered in paper form, and accompanied by a certificate of Borrower stating that such information is accurate and complete in all material respects and does not intentionally omit a material fact necessary in order to make the same not misleading in any material respect. Borrower agrees that Administrative Agent and Lender may disclose all documents, materials, and information regarding the Property, Borrower, Guarantor, their constituent direct and indirect owners, and/or the Loan that is now or hereafter becomes in Administrative Agent's or Lender's possession and/or is or may be provided to Administrative Agent pursuant to this <u>Section 5.1.6</u> and/or pursuant to <u>Article VII</u> hereof to any applicable parties requesting such information in connection with a Secondary Market Transaction (including each actual or potential purchaser, transferee, assignee, servicer, participant or investor in the Loan or in any Securities, any Rating Agency, any organization maintaining databases on the underwriting and performance of commercial loans, trustees, counsel, and accountants). Administrative Agent shall have the right from time to time at all times during normal business hours upon reasonable prior notice (which may be given verbally) 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 Administrative Agent shall desire.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;If any report, statement or other information required to be delivered to Administrative Agent pursuant to this <u>Section 5.1.6</u> (a "<u>Required Report</u>") is not timely delivered (and without limiting the terms and conditions of <u>Article 6</u> hereof), Borrower shall promptly pay to Administrative Agent, as a late charge, (i) the sum of $250.00 with respect to any such Required Report not timely delivered; provided, however, with respect to the first such Required Report that is not timely delivered in any calendar year, such fee shall only be due if the Required Report is not delivered on or prior to the date that is ten (10) Business Days after the due date thereof; and (ii) if any such Required Report is not delivered within five (5) Business Days after written notice from Administrative Agent, the sum of $250.00 per day with respect to any such Required Report until the same is delivered. Borrower acknowledges that Administrative Agent and Lender will incur additional expenses as a result of any such late deliveries, which expenses would be impracticable to quantify, and that Borrower's payments under this <u>Section 5.1.6(d)</u> are a reasonable estimate of such expenses. Borrower acknowledges further that the payment by Borrower of this late charge does not in any manner affect or otherwise impair or waive any rights and remedies Administrative Agent and Lender may have hereunder, under the Loan Documents or under applicable Legal Requirements for any Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.7&nbsp;&nbsp;&nbsp;&nbsp;<u>Title to the Property</u>. Borrower will warrant and defend (a) the title to the Property and every part thereof, and (b) the validity and priority of the lien of the applicable Loan Documents, in each case against the claims of all Persons (subject only to the Permitted Encumbrances).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.8&nbsp;&nbsp;&nbsp;&nbsp;<u>Estoppel Statements</u>. After request by Administrative Agent, Borrower shall within ten (10) Business Days furnish Administrative Agent 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 Note, (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses to the payment of the Debt or

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the performance of the Obligations, if any, (vi) that the Note, this Agreement, the Security Instrument and the other Loan Documents are valid, legal and binding obligations of such party and have not been modified or if modified, giving particulars of such modification and such other things as Administrative Agent may request, and (vii) such other matters as Administrative Agent may reasonably require. Borrower shall use commercially reasonable efforts to deliver to Administrative Agent, promptly after Administrative Agent's written request, tenant estoppel certificates from each commercial tenant leasing space at the Property in form and substance satisfactory to Administrative Agent, <u>provided</u>, <u>however</u>, that Borrower shall not be required to deliver such certificates more frequently than one (1) time in any calendar year, absent the continuance of an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.9&nbsp;&nbsp;&nbsp;&nbsp;<u>Operation of the Property</u>. Borrower shall cause the Property to be maintained in a good and safe condition and repair in all material respects, and at all times keep the Property in good working order and repair (subject to ordinary wear and tear and casualty damage). Borrower shall cause the Property to be operated, in all material respects, in accordance with the Management Agreement. If the Management Agreement expires or is terminated (without limiting any obligation of Borrower to obtain Administrative Agent'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 Management Agreement in form and content reasonably acceptable to Administrative Agent with a Manager approved by Administrative Agent. Borrower shall: (a) 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 and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (b) promptly notify Administrative Agent of any material default under the Management Agreement of which it is aware; (c) promptly deliver to Administrative Agent a copy of each financial statement, business plan, capital expenditures plan, notice, report and estimate received by it under the Management Agreement; and (d) 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. If (i) an Event of Default exists, (ii) the Manager shall become the subject of a Bankruptcy Action, (iii) a default occurs under the Management Agreement on the part of either Borrower or Manager, beyond any applicable grace and cure periods, (iv) Administrative Agent determines that the Debt Service Coverage Ratio is less than 1.05:1.00 for any two (2) consecutive calendar quarters, or (v) Manager shall commit gross negligence, fraud, illegal acts, or willful misconduct, Borrower shall, at the request of Administrative Agent, terminate the Management Agreement and replace Manager with a Manager approved by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.10&nbsp;&nbsp;&nbsp;&nbsp;<u>Immediate Repairs</u>. Borrower shall complete the Immediate Repairs on or before the required deadline for each as set forth on <u>Schedule I</u> (which deadlines shall be extended on a day-for-day basis for each day during which performance of such obligations was prevented on account of an event or circumstance constituting a Force Majeure; <u>provided</u>, <u>however</u>, in no event shall such deadlines be extended for a period longer than sixty (60) days in the aggregate). At Administrative Agent's option, it shall be an Event of Default (if Administrative Agent so notifies Borrower in writing) if Borrower does not complete the Immediate Repairs by such required deadline (as extended as provided above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.11&nbsp;&nbsp;&nbsp;&nbsp;<u>Insurance</u>. Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Property providing at least the coverages described on <u>Schedule VI</u> attached hereto (each, a "<u>Required Policy</u>"). Borrower shall provide complete copies of the Required Policies to Administrative Agent promptly upon Administrative Agent's request. Borrower shall be permitted to obtain the Required Policies under a "blanket" insurance policy so long as such policy specifically allocates to the Property the amount of coverage from time to time required hereunder and otherwise provides the same protection as would a separate policy insuring only the Property in compliance with the provisions of this <u>Section 5.1.11</u>. If at

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any time all Required Policies are not in full force and effect, Administrative Agent shall have the right, without notice to Borrower, to take such action as Administrative Agent deems necessary to protect its interest in the Property, including the obtaining of such insurance coverage as Administrative Agent in its sole discretion deems appropriate. All premiums incurred by Administrative Agent in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Administrative Agent within ten (10) Business Days after written demand and, until paid, shall be secured by the Security Instrument and shall bear interest at the Default Rate. Borrower shall promptly forward to Administrative Agent a copy of each written notice received by Borrower of any modification, reduction or cancellation of any of the Required Policies or of any of the coverages afforded under any of the Required Policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.12&nbsp;&nbsp;&nbsp;&nbsp;<u>Casualty and Condemnation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a "<u>Casualty</u>"), or any temporary or permanent taking of (or affecting) the Property by any Governmental Authority pursuant to the exercise of the right of condemnation or eminent domain (a "<u>Condemnation</u>") shall occur, be commenced or be threatened in writing, Borrower shall (i) give prompt notice of the same to Administrative Agent (and deliver to Administrative Agent copies of any and all papers served in connection with any Condemnation proceeding), and (ii) diligently prosecute a Restoration so that the Property resembles, as nearly as possible, the condition the Property was in immediately prior to such event, and (iii) pay all costs of such Restoration whether or not such costs are covered by insurance. Administrative Agent may participate in any settlement discussions with any insurance companies concerning a Casualty, and any settlement discussions with any Governmental Authority with respect to a Condemnation (and shall have the right to approve any final settlement with respect to either) with respect to any Casualty or Condemnation in which the Net Proceeds or the costs of completing the Restoration are reasonably expected to exceed the Net Proceeds Threshold. Borrower shall execute and deliver to Administrative Agent all instruments required by Administrative Agent to permit such participation. Borrower shall cooperate with Administrative Agent in obtaining for Administrative Agent and Lender the benefits of any condemnation proceeds or insurance proceeds lawfully or equitably payable in connection with the Property, and Administrative Agent and Lender shall be reimbursed by Borrower for any expenses incurred in connection therewith (including reasonable attorneys' fees and disbursements, and the payment by Borrower of the expense of an appraisal on behalf of Administrative Agent in case of Casualty or Condemnation affecting the Property or any part thereof) from such condemnation proceeds or insurance proceeds, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;All proceeds or awards payable in connection with any Casualty or Condemnation shall be due and payable solely to Administrative Agent and shall be held by Administrative Agent in a deposit account established by Administrative Agent from time to time (the "<u>Net Proceeds Reserve Account</u>") as additional collateral for the Obligations, subject to the terms and conditions of this Agreement. In the event Borrower or any party other than Administrative Agent is a payee on any check representing such proceeds or awards, Borrower shall immediately endorse (and cause all such third parties to endorse) such check payable to the order of Administrative Agent. Borrower hereby irrevocably appoints Administrative Agent as its attorney-in-fact, coupled with an interest, to endorse any such check payable to the order of Administrative Agent in the event Borrower has not done so within five (5) days after Administrative Agent's demand therefor. The expenses incurred by Administrative Agent and Lender in the adjustment and collection of such proceeds or awards shall become part of the Debt and shall be reimbursed by Borrower to Administrative Agent within five (5) days after Administrative Agent's written demand. Borrower hereby releases Administrative Agent from any and all liability with respect to the settlement and adjustment by Administrative Agent of any claims in respect of any Casualty or Condemnation unless caused by Administrative Agent's

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gross negligence or willful misconduct. If the Net Proceeds shall be less than the Net Proceeds Threshold and the costs of completing Restoration shall be less than the Net Proceeds Threshold, the Net Proceeds will be disbursed by Administrative Agent to Borrower upon receipt, provided that no Event of Default then exists and Borrower delivers to Administrative Agent a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration of the Property (if applicable) in accordance with the terms of this Agreement. If the Net Proceeds are equal to or greater than the Net Proceeds Threshold or the costs of completing Restoration is equal to or greater than the Net Proceeds Threshold, Borrower shall not be permitted to use the Net Proceeds for a Restoration (or to retain Net Proceeds in the event no Restoration is required) unless the following conditions are satisfied:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;(A) in the event the Net Proceeds are insurance proceeds, less than thirty percent (30%) of the total floor area of the Improvements on the Property has been damaged, destroyed or rendered unusable as a result of such Casualty, or (B) in the event the Net Proceeds are Condemnation proceeds, less than fifteen percent (15%) of the land constituting the Property is taken, and such land is located along the perimeter or periphery of the Property, and no portion of the Improvements on the Property is located on such land or is being taken;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Leases demising in the aggregate at least seventy-five percent (75%) of the total rentable space in the Property which has been demised under executed and delivered Leases in effect as of the date of the occurrence of such Casualty or Condemnation shall remain in full force and effect during and after the completion of the Restoration, without abatement of rent beyond the time required for Restoration, notwithstanding the occurrence of any such Casualty or Condemnation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined in good faith that the proceeds of any applicable business interruption insurance (together with any projected Revenues and any additional funds to be deposited with Administrative Agent for such purposes) are sufficient to pay all Debt Service coming due under the Loan Documents and all Operating Expenses through the end of the Restoration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined in good faith that the Restoration will be completed on or before the earliest to occur of (A) six (6) months prior to the Maturity Date, (B) the earliest date required for such completion under the terms of any Major Leases, (C) such time as may be required under applicable Legal Requirements, and (D) the expiration of any applicable business interruption insurance coverage (unless, with respect to this <u>clause (D)</u>, Borrower provides to Administrative Agent its own funds upon the expiration of such coverage to keep operating deficits current (including all scheduled payments of Debt Service));

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined that, after giving effect to the Restoration, the Debt Yield shall be equal to or greater than the lesser of (a) 10.5% and (b) Debt Yield in effect immediately prior to the applicable Casualty or Condemnation (including, without limitation for purposes of such calculation of the Debt Yield, any Additional Advances that Borrower remains eligible to receive pursuant to this Agreement and any Mezzanine Loan Additional Advances that Mezzanine Borrower remains eligible to receive pursuant to the Mezzanine Loan Agreement);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;intentionally omitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have determined that, after giving effect to the Restoration, the ratio (expressed as a percentage) in which the numerator is the Outstanding Principal Balance plus the Mezzanine Loan Outstanding Principal Balance, plus any Additional Advances that Borrower remains eligible to receive pursuant to this Agreement and any Mezzanine Loan Additional Advances that Mezzanine Borrower remains eligible to receive pursuant to the Mezzanine Loan Agreement, and the denominator is equal to the appraised value of the Property (as reasonably determined by Administrative Agent) and based upon assumptions reasonably acceptable to Administrative Agent, and otherwise acceptable to Administrative Agent in its sole discretion, shall not be greater than such ratio in effect immediately prior to the applicable Casualty or Condemnation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall deliver to Administrative Agent a detailed budget for the cost of completing the Restoration, which budget shall be subject to Administrative Agent's approval, such approval not to be unreasonably withheld; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;&nbsp;&nbsp;the Net Proceeds together with any cash or cash equivalent deposited by Borrower with Administrative Agent are sufficient in Administrative Agent's discretion to cover the cost of Restoration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;All Net Proceeds received by Administrative Agent and not disbursed to Borrower shall be held by Administrative Agent in the Net Proceeds Reserve Account and shall be applied (i) to the repayment of Debt if Administrative Agent so elects and is not required to allow Borrower to use the same as provided in <u>Section 5.1.12(b)</u> above, or (ii) toward the cost of Restoration to the extent so required pursuant to <u>Section 5.1.12(b)</u> above; <u>provided</u>, <u>however</u>, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the Debt on the respective dates of payment provided for, or perform the Obligations as required under, this Agreement and the other Loan Documents, except to the extent such amounts are actually paid out of such Net Proceeds. If the conditions described in <u>Section 5.1.12(b)</u> have been satisfied, Borrower shall commence any applicable Restoration as soon as reasonably practicable (but in no event later than ninety (90) days after Administrative Agent has informed Borrower as to whether such conditions have been satisfied) and shall complete the same in an expeditious and diligent fashion and in compliance with all applicable Legal Requirements in all material respects. If such conditions have not been satisfied, Borrower shall not be deemed to be in Default hereunder for failing to diligently pursue a Restoration for a period of ninety (90) days thereafter so long as the Debt is repaid in full within such 90-day period (provided that the foregoing shall not be deemed a waiver of any other Default or Event of Default that may occur during such 90-day period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary in this Agreement, all insurance proceeds received by Borrower or Administrative Agent in respect of business interruption coverage shall be held by Administrative Agent in the Net Proceeds Reserve Account and, so long as no Event of Default then exists, shall be applied (i) first to the Debt then due and payable and the Debt under (and as defined in) the Mezzanine Loan Agreement that is then due and payable, and (ii) then to Operating Expenses approved by Administrative Agent in its sole but reasonable discretion; <u>provided</u>, <u>however</u>, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the Debt on the respective dates of payment provided for, or perform its Obligations as required under, this Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Funds in the Net Proceeds Reserve Account shall be disbursed by Administrative Agent to pay the costs of the Restoration, to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence satisfactory to Administrative Agent that (i) all materials installed and work and labor performed (except to the extent that they

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are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and (ii) there exist no notices of pendency, stop orders, mechanic's or materialman's liens or notices of intention to file same (other than notices related to any retainage that is not yet due and payable per any applicable construction contract), or any other liens or encumbrances of any nature whatsoever on the Property which have not been fully bonded or insured to the satisfaction of Administrative Agent. All plans and specifications required in connection with Restoration shall be subject to prior review and acceptance in all respects by Administrative Agent and by an independent consulting engineer selected by Administrative Agent, in each cash such acceptance not to be unreasonably withheld. 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 approval by Administrative Agent, such approval not to be unreasonably withheld. All out-of-pocket costs and expenses incurred by Administrative Agent in connection with making the Net Proceeds available for Restoration shall be paid by Borrower. In no event shall Administrative Agent 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, <u>minus</u> an amount equal to ten percent (10%) (or such higher amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in Restoration) of the direct construction "hard" costs actually incurred for work in place as part of Restoration, until Restoration has been completed. Such retained amount shall not be released until Administrative Agent has determined in good faith that Restoration has been completed in accordance with the provisions of this <u>Section 5.1.12(e)</u> and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate Governmental Authorities, and Administrative Agent receives evidence satisfactory to Administrative Agent that the costs of Restoration have been paid in full or will be paid in full out of such retained amount; <u>provided</u>, <u>however</u>, that Administrative Agent will release the portion of such retained amount being held with respect to any Person upon Administrative Agent determining that such Person has satisfactorily completed all work and/or has supplied all materials required of such Person and such Person has waived any right to lien the Property. Administrative Agent shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the good faith opinion of Administrative Agent, be sufficient to pay in full the balance of the costs which are estimated in good faith by Administrative Agent to be incurred in connection with the completion of the Restoration, Borrower shall deposit the deficiency with Administrative Agent before any further disbursement of the Net Proceeds shall be made, and such sums shall be held by Administrative Agent 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 <u>Section 5.1.12(e)</u> shall constitute additional security for the Debt and the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;The excess, if any, of the funds in the Net Proceeds Reserve Account after Administrative Agent has determined that the Restoration has been completed in accordance with the provisions of <u>Section 5.1.12(e)</u>, and the receipt by Administrative Agent of evidence satisfactory to Administrative Agent that all costs incurred in connection with the Restoration have been paid in full, shall be applied in the same manner as Revenues are applied pursuant to <u>Section 3.1</u> hereof (or if not applicable, first shall be disbursed to Mezzanine Loan Administrative Agent for application in accordance with the Mezzanine Loan Documents if the Mezzanine Loan is outstanding, and then shall be disbursed to Borrower so long as no Event of Default then exists).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary set forth in this Agreement, if the Loan or any portion thereof is included in a Securitization and, immediately following a release of any portion of the Property following a Casualty or Condemnation, the ratio of the unpaid principal

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balance of the Loan to the value of the remaining Property is greater than 125% (such value to be determined, in Administrative Agent's sole discretion), Administrative Agent shall not be required to release any Net Proceeds for Restoration of the Property, and the principal balance of the Loan must be paid down by Borrower by the greater of (i) such amount as may be required such that the Securitization will not fail to maintain its status as a "real estate mortgage investment conduit" within the meaning of Section 860D of the Code as a result of the related release of lien, and (ii) the least of the following amounts: (A) the Net Proceeds, (B) the fair market value of the portion of the Property released following such Casualty or Condemnation at the time of the release, and (C) an amount such that the loan-to-value ratio of the Loan (as so determined by Administrative Agent) does not increase after the release, unless Administrative Agent receives an opinion of counsel that a different application of the Net Proceeds will not cause the Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to tax. All other Net Proceeds not required to be made available for Restoration or to be returned to Borrower as excess Net Proceeds pursuant to this <u>Section 5.1.12</u> hereof shall be either retained and applied by Administrative Agent in accordance with <u>Section 2.3.5</u> hereof toward reduction of the Debt whether or not then due and payable in such order, priority and proportions as Administrative Agent in its sole discretion shall deem proper, or, at the discretion of Administrative Agent, the same may be paid, either in whole or in part, to Borrower for such purposes as Administrative Agent shall approve, in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.13&nbsp;&nbsp;&nbsp;&nbsp;<u>The Project</u>. Borrower shall complete the Project on or before the Payment Date in September, 2020 (which date shall be extended on a day-for-day basis for each day during which performance of such obligations was prevented on account of an event or circumstance constituting a Force Majeure, but in any event not past the Payment Date in December, 2020). At Administrative Agent's option, it shall be an Event of Default (if Administrative Agent so notifies Borrower in writing) if Borrower does not complete such work in accordance with all Administrative Agent-approved plans and specifications by such required deadline. Borrower acknowledges and agrees that Administrative Agent may retain a construction consultant and other consultants deemed necessary or desirable by Administrative Agent, at Borrower's expense, to make periodic inspections of the Property and to review all change orders relating to the Project. Administrative Agent may request such consultants before making any Additional Advance to inspect all work and materials for which payment is requested and all other work upon the Property and/or submit to Administrative Agent a progress inspection report. Administrative Agent may also retain such other consultants as Administrative Agent deems necessary or convenient to perform such services as may, from time to time, be required by Administrative Agent in connection with the Loan, this Agreement, the other Loan Documents or the Property. Borrower agrees to bear and shall pay or reimburse Administrative Agent on demand for all costs and expenses incurred by Administrative Agent in connection with the matters described in this <u>Section 5.1.13</u> (subject to the limitation, if any, set forth in <u>Section 2.1(b)</u> with respect to the making of Additional Advances). Borrower further acknowledges and agrees that neither Borrower nor any third party shall have the right to use or rely upon the reports of Administrative Agent's consultants or any other reports generated by Administrative Agent or its consultants for any purpose whatsoever, whether made prior to or after commencement of construction. Borrower shall be responsible for making its own inspections of the Property during the course of construction and shall determine to its own satisfaction that the work done and materials supplied are in accordance with applicable contracts with its contractors. By advancing funds after any inspection of the Property by Administrative Agent or its consultants, Administrative Agent shall not be deemed to waive any Event of Default, waive any right to require construction defects or any other work to be corrected, or acknowledge that all construction conforms to the Administrative Agent-approved plans and specifications. Notwithstanding any provision of this Agreement to the contrary, in the event that Administrative Agent should determine that the actual quality or value of the work performed or the materials furnished does not correspond with the quality or value of the work required by the Administrative Agent-approved plans and specifications, upon Administrative

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Agent's demand Borrower shall immediately correct the conditions to which Administrative Agent objects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.14&nbsp;&nbsp;&nbsp;&nbsp;<u>Required Equity</u>. Borrower shall contribute and invest in the Property required cash equity in an amount not less than $91,991,785.50 (the "<u>Required Equity</u>"), comprised of not less than $70,900,000.00 as of the Closing Date and $21,091,758.50 to be contributed from and after the Closing Date. Amounts contributed consisting of Borrower's 60% share of budgeted Project Expenditures contributed pursuant to <u>Section 2.1(b)(ix)</u> hereof shall be counted as contributions of Required Equity. In addition, Borrower shall contribute and deposit with Administrative Agent (to be held in the Elevator Modernization and Interiors Reserve Account and disbursed as provided in <u>Section 3.2(k)</u> hereof) the following amounts at the following times with respect to the remaining budgeted costs of the Elevator Modernization and Interiors Work (and such amounts shall be counted as contributions of Required Equity): (a) on the Payment Date in April, 2019, the sum of $810,919.50; and (b) on the Payment Date in October, 2019, the sum of $810,919.50; and (c) on the Payment Date in April, 2020, the sum of $810,919.50 (collectively, the "<u>Additional Elevator Contributions</u>"). No other payments by Borrower shall count as contributions of Required Equity, including, without limitation, any payments in connection with a Balancing Event or costs in excess of budgeted expenditures. During the existence of an Event of Default, notwithstanding the amount of Project Expenditures incurred to the date of any demand by Administrative Agent under this <u>Section 5.1.14</u>, Borrower will be required to deposit the balance of the Required Equity with Administrative Agent upon Administrative Agent's demand therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.15&nbsp;&nbsp;&nbsp;&nbsp;<u>Expenses; Indemnity</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Administrative Agent upon receipt of written notice from Administrative Agent for all out-of-pocket costs and expenses (including reasonable attorneys' fees and disbursements) incurred by Administrative Agent or 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 Administrative Agent as to any legal matters arising under this Agreement or the other Loan Documents with respect to the Property); (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 confirming compliance with environmental and insurance requirements and obtaining updated or new appraisals of the Property (<u>provided</u>, <u>however</u>, so long as no Event of Default exists, Borrower shall not be required to pay for more than one appraisal in any twelve (12) month period); (iii) Administrative Agent's and 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 Borrower; (v) securing Borrower**'**s compliance with any requests made pursuant to the provisions of this Agreement and the other Loan Documents; (vi) the filing and recording fees and expenses, title insurance and reasonable fees and expenses of counsel for providing to Administrative Agent all required legal opinions, and other similar expenses incurred in creating and perfecting the liens in favor of Administrative Agent 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, Guarantor, this Agreement, the other Loan Documents, the Property, 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

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Loan Documents or with respect to the Property or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "work-out" or of any insolvency or bankruptcy proceedings; <u>provided</u>, <u>however</u>, 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 or illegal acts or willful misconduct of Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall indemnify, defend and hold harmless Administrative Agent, any Lender, any Servicer, their respective Affiliates, and their respective directors, managers, officers, partners, members, shareholders, participants, employees, professionals and agents of any of the foregoing, and the successors and assigns of the foregoing (each, an "<u>Indemnified Party</u>"), from and against any and all Losses that may be imposed on, incurred by, or asserted against an Indemnified Party in any manner relating to or arising out of (i) any Defaults or Events of Default under the Loan and/or in connection with the enforcement of the Loan Documents, (ii) any breach by Borrower of its Obligations under, or any misrepresentation by any Borrower Party contained in the Loan Documents, (iii) the use or intended use of the proceeds of the Loan, (iv) out-of-pocket costs incurred by Administrative Agent or Lender in connection with any amendment to, or restructuring of, the Debt or the Loan Documents, (v) any accident, injury to, or death of, Persons or loss of or damage to the Property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or rights of way, (vi) any use, non-use or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or rights of way, (vii) performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof, (viii) any failure of the Property to be in compliance with any Legal Requirements, (ix) any and all third-party claims and demands whatsoever which may be asserted against an Indemnified Party by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease or other agreement relating to the Property, and (x) all Recourse Liabilities; <u>provided</u>, <u>however</u>, that Borrower shall not have any obligation to an Indemnified Party hereunder to the extent that the applicable indemnified liabilities arise from the gross negligence or illegal acts 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 Legal Requirements to the payment and satisfaction of all such indemnified liabilities incurred by an Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Upon written request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals reasonably approved by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in any such claim or proceeding include both Borrower and any Indemnified Party and Borrower and such Indemnified Party shall have reasonably concluded that there are any legal defenses available to it and/or other Indemnified Parties that are different from or in addition to those available to Borrower, such Indemnified Party shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Party, provided that no compromise or settlement shall be entered without Borrower's consent, which consent shall not be unreasonably withheld or delayed. Upon demand, Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The indemnifications made pursuant to this <u>Section 5.1.15</u> shall continue indefinitely in full force and effect and shall survive and shall in no way be impaired by any of the following: (i) any satisfaction, release or other termination of this Agreement, the Security

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Instrument or any other Loan Document, (ii) any assignment or other transfer of all or any portion of this Agreement, the Security Instrument or any other Loan Document or Administrative Agent's or Lender's interest in the Property (but, in such case, such indemnifications shall benefit both the Indemnified Parties and any such assignee or transferee), (iii) any exercise of Administrative Agent's or Lender's rights and remedies pursuant hereto, under the Security Instrument or under any other Loan Document, including, but not limited to, foreclosure or acceptance of a deed in lieu of foreclosure, (iv) any exercise of any rights and remedies pursuant to this Agreement, the Note or any of the other Loan Documents, (v) any transfer of all or any portion of the Property (whether by Borrower or by Administrative Agent or Lender following foreclosure or acceptance of a deed in lieu of foreclosure or at any other time), (vi) any amendment to this Agreement, the Security Instrument, the Note or any other Loan Documents, and/or (vii) any act or omission that might otherwise be construed as a release or discharge of Borrower from the Obligations or any portion thereof. Notwithstanding the foregoing, in no event will Borrower's indemnity under this <u>Section 5.1.15</u> extend to events or occurrences Borrower proves in a nonappealable court of competent jurisdiction (or in an appealable court of competent jurisdiction if Administrative Agent irrevocably waives its right to an appeal thereof) first occurred after the date such Indemnified Parties took title to the Property, through a foreclosure, Administrative Agent's or Lender's acceptance of a deed in lieu of foreclosure or otherwise, so long as such Loss does not result from (i) any act or circumstance occurring prior to the date such Indemnified Parties took title to the Property through a foreclosure, Administrative Agent's or Lender's acceptance of a deed in lieu of foreclosure or otherwise (as applicable), or (ii) any act of Borrower or any of its agents, Affiliates or employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.16&nbsp;&nbsp;&nbsp;&nbsp;<u>Post-Closing Obligations</u>. Attached hereto as <u>Schedule VIII</u> is a list of specific requirements which must be satisfied by Borrower within the time period set forth opposite the description of such requirement. If said requirements are not satisfied within said time periods, the same shall constitute, at Administrative Agent's option, an Event of Default. Borrower acknowledges and agrees that the Loan Documents are being executed at this time and the Loan is being disbursed without said requirements being satisfied on the express condition that such requirements be satisfied within the applicable time periods, and that the execution of the Loan Documents and funding of the Loan shall not constitute any waiver by Administrative Agent that such requirements have been met. For the avoidance of doubt, with respect to any obligation for which Borrower is required to use commercially reasonable efforts to satisfy the same pursuant to <u>Schedule VIII</u>, the mere failure to timely obtain the applicable post-closing item shall not result in an Event of Default so long as Borrower uses commercially reasonable efforts to obtain the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.17&nbsp;&nbsp;&nbsp;&nbsp;<u>Sanctions; Anti-Money Laundering; Anti-Corruption</u>. The Restricted Parties, their respective Affiliates, and to Borrower's knowledge, their agents and other Persons holding any direct or indirect ownership or beneficial interest in Borrower, shall comply with Sanctions and Anti-Money Laundering Laws and Anti-Corruption Laws and maintain in effect policies and procedures designed to promote and achieve compliance with applicable Sanctions and Anti-Money Laundering Laws and Anti-Corruption Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.18&nbsp;&nbsp;&nbsp;&nbsp;<u>Right of First Negotiation</u>. Borrower shall, prior to discussing the proposed financing of the Hotel Improvements with any third party lender, afford Administrative Agent the right of first negotiation with respect to the terms upon which Lenders would be willing to provide additional financing for the Hotel Improvements (the "<u>Right of First Negotiation</u>"), subject to the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall negotiate in good faith with Administrative Agent for a period of not less than thirty (30) days from and after the date that Borrower has presented Administrative Agent with all of the following items related to the Hotel Improvements: (i) a project budget;

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(ii) a project schedule; (iii) plans and specifications; (iv) the name of the franchisor or hotel "flag" under which the proposed hotel would operate (together with any proposed terms upon which Borrower would operate under such franchise); and (v) any other documents and instruments with respect to the Hotel Improvements as reasonably requested by Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;The terms of any proposed financing would include the following requirements (among others):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;The proposed hotel to be operated in the Hotel Component shall be under one of the following "flags": Hyatt, Hilton, Marriott or IHG;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Highgate, or another strong regional or national hotel operator and/or manager, shall be engaged by Borrower to manage and operate the hotel within the Hotel Component; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;The Loan Agreement and other Loan Documents would be modified to, among other things, account for (A) the terms of such additional financing (B) the requirements related to the completion of the Hotel Improvements, (C) covenants, conditions and restrictions related to the operation of the hotel following completion of the Hotel Improvements and (D) all other terms and conditions in the Loan Documents impacted by the addition of a hotel to the Property.

If Borrower affords Administrative Agent the Right of First Negotiation pursuant to the terms of this <u>Section 5.1.18</u> and Borrower and Administrative Agent are unable to reach agreeable terms for Lenders to finance the Hotel Improvements, Borrower shall have the right to Release the Hotel Component, subject to all of the terms and conditions set forth in <u>Section 5.2.10(c)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.19&nbsp;&nbsp;&nbsp;&nbsp;<u>Release, Complete or Pay Down</u>. If, as of the Payment Date in September, 2020, Borrower shall not have (a) completed the Release of the Hotel Component in accordance with <u>Section 5.2.10(c)</u> hereof, or (b) commenced construction of the improvements to the Hotel Component (i) pursuant to a project budget, a project schedule, plans and specifications, a general contractor agreement and major trade contracts that have been approved by Administrative Agent in its sole discretion, and (ii) with an anticipated date for completion of such improvements to the Hotel Component being no later than one hundred twenty (120) days after the Payment Date in September, 2020, then Borrower shall on or prior to the Payment Date in September, 2020, pay to Administrative Agent the sum of (w) the Required Pay Down, which amount shall be applied to the repayment of the Debt in accordance with <u>Section 2.3.1</u> hereof, <u>plus</u> (x) all accrued and unpaid interest on the principal being prepaid pursuant to <u>clause (w)</u> above, <u>plus</u> (y) the Exit Fee due on the portion of principal being so prepaid hereunder, <u>plus</u> (z) all of Administrative Agent's out of pocket costs and expenses incurred in connection with such prepayment (including reasonable attorneys' fees).

Section 5.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Negative Covenants</u>. From the date hereof and until payment and performance in full of all Obligations in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Administrative Agent that it shall not do, directly or indirectly, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Management Agreement</u>. Borrower shall not, without Administrative Agent's prior written consent: (a) surrender, terminate or cancel the Management Agreement; (b) reduce or consent to the reduction of the term of the Management Agreement; (c) increase the amount of any base management fees payable to Manager under the Management Agreement in excess of three percent (3%) of Revenues per annum or otherwise agree to pay any incentive fees (or

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similar compensation) to Manager in excess of amounts set forth in the Management Agreement as of the Closing Date or otherwise approved by Administrative Agent in writing; or (d) otherwise modify, change, supplement, alter or amend, or waive or release any of its material rights and remedies under, the Management Agreement in any material respect. Borrower shall not permit Manager to assign or subcontract Manager's rights, duties or responsibilities under the Management Agreement to any other Person without the express written consent of Administrative Agent. 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 Administrative Agent, which consent may be granted, conditioned or withheld in Administrative Agent's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.2&nbsp;&nbsp;&nbsp;&nbsp;<u>Indebtedness</u>. Borrower shall not (directly or indirectly) create, incur, assume, or allow to exist any Indebtedness with respect to Borrower or any Required SPE Entity, other than Permitted Indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.3&nbsp;&nbsp;&nbsp;&nbsp;<u>Leasing Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Except as provided in <u>Section 5.2.3(b)</u> below, without the prior written consent of Administrative Agent, Borrower shall not (i) enter into any Lease; (ii) cancel or terminate (including by exercise of any landlord recapture rights) any Lease; (iii) approve any assignment of any Lease that releases the original tenant from its obligations under such Lease, (iv) amend, modify or waive the provisions of any Lease; or (v) cancel or modify any guaranty, or release any security deposit, letter of credit, or other item constituting security pertaining to any Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of <u>Section 5.2.3(a)</u> above, provided that no Event of Default shall have occurred and be continuing, Administrative Agent's consent shall not be required as provided above for the creation, assignment (by a tenant), termination, amendment or modification of any Lease which is not a Major Lease provided that: (i) the applicable Lease (or amendment or modification of a Lease if such amendment or modification adjusts or otherwise affects rent) provides for payment of a net effective rent (after taking into account any free rent, construction allowances or other concessions granted by landlord) and other material amounts payable no less than the then effective fair market rent then prevailing for similar properties and leases in the market area (and taking into account the type and creditworthiness of the tenant, the length of the term including any renewals, and the location and size of the premises covered thereby); (ii) the applicable Lease (or amendment or modification) is otherwise on commercially reasonable terms and satisfies the Lease Requirements; (iii) a copy of such Lease is delivered to Administrative Agent promptly after execution thereof together with Borrower's certification that such Lease satisfies the foregoing conditions of this <u>Section 5.2.3</u>; (iv) such Lease, amendment or modification does not contain any options to purchase or other rights with respect to the ownership of the Property, does not contain any restrictions on landlord's rights to lease remaining portions of the Property, except upon terms satisfying the other requirements of this <u>Section 5.2.3(b)</u>, and does not contain any options for the tenant thereunder to terminate such Lease, other than in the event of a material casualty or condemnation; (v) such Lease, amendment or modification is entered into on an arm's-length basis; and (vi) such amendment or modification of the applicable Lease is required to be entered into pursuant to the terms of such Lease or each of the following conditions are satisfied: (A) such Lease, as so amended or modified, would not constitute a Major Lease and would, after such amendment or modification, satisfy the conditions of this <u>Section 5.2.3(b)</u>, as applicable; (B) to the extent that any additional space is demised pursuant to such amendment or modification, with respect thereto, such amendment or modification satisfies the provisions of this <u>Section 5.2.3(b)</u>, as applicable; (C) such amendment or modification does not reduce the rent payable under the Lease so amended or modified; and (D) such amendment or modification does not otherwise have a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any request for approval of a Lease, or assignment, termination, amendment or modification of any Lease requiring approval as set forth above shall be made to Administrative Agent in writing and together with such request Borrower shall furnish to Administrative Agent: (i) such biographical and financial information about the proposed tenant and any guarantor of such proposed Lease as Administrative Agent may reasonably require; (ii) a copy of the proposed form of Lease (or amendment or modification); and (iii) a summary of the material terms of such proposed Lease (or amendment or modification) including rental terms and the term of the proposed Lease and any options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall observe and perform the obligations imposed upon the lessor under the Major Leases in a commercially reasonable manner. Borrower shall promptly send Administrative Agent copies of any notices of default received from the tenant under any Lease, and will enforce (short of terminating a Major Lease, unless Administrative Agent consents thereto) the performance by each tenant of the tenant's obligations under any Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;Any rents (expressly excluding security deposits) collected more than one (1) month in advance by Borrower shall be delivered to Administrative Agent to be held as Prepaid Revenues and (i) if a Cash Management Event exists, applied in accordance with <u>Section 3.1</u> and (ii) if no Cash Management Event exists, disbursed to Borrower when payment thereof is due under the applicable Lease. Borrower, at Administrative Agent's request, shall furnish Administrative Agent with executed copies of all Leases hereafter made (to the extent not theretofore provided to Administrative Agent). All Leases executed after the date hereof (including any renewal or expansion options) shall provide that they are subordinate to the Security Instrument and that the lessee agrees to attorn to Administrative Agent or any purchaser at a sale by foreclosure or power of sale. Borrower shall hold all security deposits delivered by tenants pursuant to the Leases in accordance with the terms of the applicable Leases and applicable Legal Requirements, and shall take such steps as Administrative Agent may require in order to properly perfect Administrative Agent's lien on any non-cash security deposit held by or on behalf of Borrower when requested by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;If the Deemed Approval Requirements set forth herein are fully satisfied in connection with Borrower's request for Administrative Agent's approval with respect to a leasing matter pursuant to this <u>Section 5.2.3</u>, Administrative Agent's approval shall be deemed given with respect to such matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.4&nbsp;&nbsp;&nbsp;&nbsp;<u>Alterations</u>. Borrower shall not (a) commit or suffer any material waste of the Property, (b) make any change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the operation of the Property, or intentionally take any action that might invalidate or allow the cancellation of any Required Policy, or do or permit to be done thereon anything that may in any way materially impair the value of the Property or the security of the Security Instrument or otherwise cause a Material Adverse Effect, (c) permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof, or (d) permit or cause any alterations to any Improvements that (i) would reasonably be likely to have a Material Adverse Effect, (ii) result in a decrease of annualized net operating income for the Property by two percent (2%) or more for a period of thirty (30) days or longer, (iii) violate the terms of any Lease, (iv) concern any structural component of any Improvements, any utility or HVAC system contained in the Improvements, or the exterior of any building constituting a part of any Improvements, or (v) cost, in the aggregate of all related alterations, Two Hundred Thousand and No/100ths Dollars ($200,000) or more; <u>provided</u>, <u>however</u>, that the foregoing limitations shall not apply to alterations consisting of (A) tenant improvement work performed pursuant to any Lease existing on the date hereof or entered into hereafter in accordance with the provisions of this Agreement, (B) any Immediate Repairs, (C) any Project Expenditures, or (D) alterations performed as part of

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a Restoration required hereunder. Without limiting the foregoing, if the total unpaid amounts due and payable with respect to alterations to the Improvements (other than such amounts to be paid or reimbursed by tenants under the Leases, and other than with respect to the alterations described in the foregoing <u>clauses (A)</u> though <u>(D)</u>) shall at any time exceed Four Hundred Thousand and No/100ths Dollars ($400,000), Borrower shall promptly deliver to Administrative Agent as security for the payment of such amounts (and as additional security for the Debt) cash, a Letter of Credit, or a completion and performance bond (issued by a surety acceptable to Administrative Agent) (or a combination thereof), in an amount equal to the excess of the total unpaid amounts with respect to such alterations (other than such amounts to be paid or reimbursed by tenants under the Leases), and Administrative Agent may apply such security from time to time at the option of Administrative Agent to pay for such alterations (or, upon an Event of Default, to the payment of the Debt). If the Deemed Approval Requirements set forth herein are fully satisfied in connection with Borrower's request for Administrative Agent's approval with respect to a matter pursuant to this <u>Section 5.2.4</u>, Administrative Agent's approval shall be deemed given with respect to such matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.5&nbsp;&nbsp;&nbsp;&nbsp;<u>Debt Cancellation</u>. Borrower shall not cancel or otherwise forgive or release any 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.6&nbsp;&nbsp;&nbsp;&nbsp;<u>Zoning; Restrictive Covenants; Assessments</u>. Without the prior consent of Administrative Agent, Borrower shall not (a) initiate or consent to any subdivision or condominiumization of the Property or any portion thereof, or 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, (b) fail to exercise any option or right to renew or extend the term of any easements or restrictive covenants benefitting the Property, the failure of which could reasonably be expected to have a Material Adverse Effect (if applicable) (and if Borrower shall fail to exercise any such option or right as aforesaid, Administrative Agent may exercise the option or right as Borrower's agent and attorney-in-fact as provided above in Administrative Agent's own name or in the name of and on behalf of a nominee of Administrative Agent, as Administrative Agent may determine in the exercise of its sole and absolute discretion), (c) waive, excuse, condone or in any way release or discharge any party to any such easement or restrictive covenants of or from their material obligations, covenant and/or conditions under any such restrictive covenants, (d) surrender, terminate, forfeit, or suffer or permit the surrender, termination or forfeiture of, or change, modify or amend in a material or adverse manner, any easement or restrictive covenants affecting the Property, or (e) suffer, permit or initiate the joint assessment of all or any portion of the Property (i) with any other real property constituting a tax lot separate from the Property, or (ii) 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.7&nbsp;&nbsp;&nbsp;&nbsp;<u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.8&nbsp;&nbsp;&nbsp;&nbsp;<u>Organization; Compliance with Legal Requirements; Special Purpose Entity</u>. Borrower shall not: (a) change its principal place of business or state of organization without first giving Administrative Agent thirty (30) days' prior notice; (b) violate (and shall take commercially reasonable efforts to prevent any other Person in occupancy of or involved with the operation or use of the Property to violate) any Legal Requirements, (c) fail to cause any of the representations and warranties contained in <u>Section 4.21</u> hereof to be true in any material respect at any time; (d) fail to be a Special Purpose Entity, or fail to cause any Required SPE Entity required hereunder to be a Special Purpose Entity; (e) remove or replace any Independent

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Director or Independent Manager except for Cause, and in any event not without providing at least five (5) Business Days' advance written notice thereof to Administrative Agent; (f) to the fullest extent permitted by applicable Legal Requirements, engage (nor permit any Required SPE Entity required hereunder to engage) in any dissolution, liquidation, or consolidation or merger with or into any other business entity; (g) modify, amend, waive or terminate (nor permit any Required SPE Entity required hereunder to modify, amend, waive or terminate) its organizational documents; (h) fail to maintain qualification to do business in any jurisdiction to the extent the same is required for the ownership, maintenance, management and operation of the Property; or (i) cease to operate the Property in the manner in which it is presently being operated (other than temporary cessation in connection with any continuous and diligent renovation or restoration of the Property following a Casualty or Condemnation), or change the trade name or names under which it operates the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.9&nbsp;&nbsp;&nbsp;&nbsp;<u>ERISA</u>. Borrower shall not engage in any transaction that would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Administrative Agent or Lender of any of its rights under the Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA, or otherwise cause Borrower to be unable to make the representations contained in <u>Section 4.21(f)</u> and <u>(g)</u> hereof. Borrower further covenants and agrees to deliver to Administrative Agent such certifications or other evidence from time to time throughout the term of the Loan, as requested by Administrative Agent in its sole discretion, that (a) the representations contained in <u>Section 4.21(f)</u> and <u>(g)</u> hereof are true and correct as of the date of such certification, and (b) one or more of the following circumstances is true: (i) ownership interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R §2510.3-101(b)(2); (ii) less than twenty-five percent (25%) of each outstanding class of ownership interests in Borrower are held by "benefit plan investors" within the meaning of 29 C.F.R §2510.3-101(f)(2); (iii) Borrower qualifies as an "operating company" or a "real estate operating company" within the meaning of 29 C.F.R §2510.3-101(c) or (e); or (iv) the assets of Borrower are not otherwise "plan assets" (within the meaning of 29 C.F.R. §2510.3-101) of one or more "employee benefit plans" (as defined in §3(3) of ERISA) subject to Title I of ERISA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.10&nbsp;&nbsp;&nbsp;&nbsp;<u>Transfers</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not, and shall not permit to occur, any Transfer (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) of the Property, any part thereof, or any legal or beneficial interest therein, or any direct or indirect ownership interest in any Restricted Party, or any change of Control of a Restricted Party, in each case, other than Permitted Transfers, which shall be permitted without Administrative Agent's consent (but subject to the satisfaction of the terms and conditions of this <u>Section 5.2.10</u>). Borrower shall give Administrative Agent written notice of any Transfer, together with copies of all instruments effecting such Transfer, and certificate of Borrower certifying that the requirements of this Agreement have been satisfied, not less than ten (10) Business Days prior to the date of such Transfer (other than with respect to Transfers described in <u>clause (c)</u> of the definition of Permitted Transfer, notice of which shall be delivered not more than thirty (30) days after such Transfer). If any such Transfer results in a Person owning more than forty-nine percent (49%) of the direct or indirect interests in Borrower that did not own such amount prior to such Transfer or results in a change of Control of Borrower, then Borrower shall deliver to Administrative Agent a substantive consolidation opinion in form and content acceptable to Administrative Agent. Borrower shall reimburse Administrative Agent for all of its expenses incurred by Administrative Agent and Lender in connection with any Transfer. Neither Administrative Agent nor Lender shall 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 in violation of this Agreement. This <u>Section 5.2.10</u> shall apply to every such Transfer regardless of whether voluntary or not, or whether or not Administrative

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Agent has consented to any previous such Transfer. Borrower acknowledges that Administrative Agent and Lender have examined and relied on the experience of Borrower and its direct and indirect owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on such Persons' ownership of Borrower and the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Obligations contained in the Loan Documents. Borrower acknowledges that Administrative Agent and Lender have 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 Obligations, Administrative Agent and Lender can recover the Debt by a sale of the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the event that Borrower desires to sell the Property to another party and have such party assume all of Borrower's obligations under the Loan Documents, or cause a sale of direct or indirect ownership interests in Borrower that results in a change of Control of Borrower, or in the event Borrower requests Administrative Agent's approval for a Transfer or change of Control that is not otherwise permitted hereunder, Borrower may make a written application to Administrative Agent for Administrative Agent's consent thereto, and the following terms and conditions shall apply: (i) Borrower shall pay to Administrative Agent a non-refundable review fee in the amount of $10,000 (payable upon Borrower's request for approval); (ii) Borrower shall pay on demand all of the out-of-pocket costs and expenses incurred by Administrative Agent and Lender in connection with its review such request (including Administrative Agent's and Lender's attorneys' fees and expenses) regardless as to whether such request is approved; (iii) Administrative Agent may grant or withhold its consent to such request in its sole and absolute discretion, and may condition such consent on the satisfaction of such requirements as Administrative Agent may determine, including (A) the transferee (or Borrower after the Transfer of a Controlling interest therein) shall be Controlled by a reputable entity or person of good character, creditworthy, with sufficient financial worth considering the obligations assumed and undertaken, as evidenced by financial statements and other information requested by Administrative Agent, (B) an assumption of this Agreement and the other Loan Documents (or, in the case of a Transfer of the Controlling interest in Borrower, such reaffirmations of this Agreement and the other Loan Documents) as so modified as Administrative Agent may require, (C) the payment of an assumption fee equal to seventy-five one hundredths of one percent (0.75%) of the Outstanding Principal Balance, (D) the proposed transferee (or Borrower after the Transfer of a Controlling interest therein) can make (and shall be deemed to have made) the representations and warranties of Borrower set forth herein, (E) the delivery of evidence satisfactory to Administrative Agent that the single purpose nature and bankruptcy remoteness of transferee (or Borrower after the Transfer of a Controlling interest therein) following such transfers are in accordance with the then current standards of Administrative Agent, (F) one or more substitute Person(s) acceptable to Administrative Agent shall have executed and delivered to Administrative Agent a guaranty and an environmental indemnity agreement in substantially the same form as the Guaranty and the Environmental Indemnity executed by Guarantor in connection herewith, (G) the delivery to Administrative Agent of opinions in form and substance satisfactory to Administrative Agent as to substantially the same matters for which opinions were required in connection with the origination of the Loan, including an opinion concerning substantive consolidation if one was delivered in connection with the closing of the Loan, (H) delivery to Administrative Agent of an endorsement to the Title Insurance Policy in form and substance acceptable to Administrative Agent relating to, among other things, the change in the identity of the vestee and execution and delivery of the documents required herein and the continuing priority of the Security Instrument and the continuing effect of the title insurance and all endorsements thereto, and (I) such other conditions as Administrative Agent shall determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Borrower may obtain the release of the Hotel Component from the lien of the Loan Documents (a "<u>Release</u>") upon satisfaction of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;no Event of Default shall then exist;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall have given Administrative Agent at least thirty (30) days' prior written notice of such proposed Release; provided, however, the initiation of discussions pursuant to the Right of First Negotiation set forth in <u>Section 5.1.18</u> shall satisfy the notice requirements hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall have completed discussions with Administrative Agent pursuant to the Right of First Negotiation set forth in <u>Section 5.1.18</u> hereof, and Borrower and Administrative Agent shall have failed to establish mutually agreeable terms for Lenders to finance the Hotel Improvements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall submit to Administrative Agent for execution by Administrative Agent, not less than five (5) Business Days prior to the date of such Release, a form for release of the lien appropriate in the State where the Property is located (which form shall be subject to the reasonable approval of Administrative Agent);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall pay to Administrative Agent (i) the Release Amount, (ii) all accrued and unpaid interest on the principal being prepaid pursuant to clause (i) above, (iii) the Exit Fee due on the portion of principal being so prepaid, and (iv) all of Administrative Agent's out of pocket costs and expenses incurred in connection with such Release (including reasonable attorneys' fees);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent shall have obtained on the date of the Release an endorsement to the policy or policies of title insurance insuring the Security Instrument reflecting the release of the Hotel Component, and confirming no change in the priority of the Security Instrument on the Property remaining collateral for the Loan or except pursuant to the conditions or stipulations of the policy or policies, in the amount of the insurance or the coverage under the policy or policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;Borrower and Guarantor shall have executed and delivered to Administrative Agent an agreement in form and content reasonably acceptable to Administrative Agent reaffirming their respective obligations under the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;If applicable, the Management Agreement shall have been amended to remove the Hotel Component from the scope thereof in a manner reasonable acceptable to Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;After giving effect to the Release, the Debt Yield shall be greater than the Debt Yield in effect immediately prior to the Release;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;(i) a separate Condominium Unit shall have been created for the Hotel Component pursuant to the Condominium Declaration, (ii) the size, shape, and configuration of such Condominium Unit for the Hotel Component and the Property that is not being released shall have been approved by Administrative Agent; (iii) following such Release, the Property shall (A) constitute one or more separate tax parcels and the remaining Property shall not be subject to any liens for taxes attributable to the Hotel Component (or Borrower shall have provided evidence that such separate tax parcel designation has been approved by any applicable Governmental Authority and a title endorsement to Administrative Agent's title policy insuring Administrative Agent against any loss it may suffer as a result of the Property being released not being a separate tax parcel in form and content acceptable to Administrative Agent), (B) comply in all material respects with all Legal Requirements (including all applicable subdivision, parking, zoning, and land use laws), the requirements of any Leases, and all covenants, conditions and restrictions encumbering the Property, (C) benefit from appropriate facilities and/or easements for access, circulation, utilities, and parking as may be necessary for the continued use of the Property in the manner in which it was used prior to such Release, all as approved by

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Administrative Agent, and (D) contain Improvements that are leaseable independent of (and without the need to rely on any facilities, equipment, or other Improvements that are part of) any portion of the Property constituting the Hotel Component; (iv) any easement or similar instrument entered into in connection with the Release shall have been approved by Administrative Agent; and (v) if the survey delivered to Administrative Agent in connection with the closing of the Loan does not depict the Hotel Component and the remaining Property as separate parcels, an updated survey satisfactory to Administrative Agent separately depicting the remaining Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;&nbsp;if the Loan is included in a "real estate mortgage investment conduit" within the meaning of Section 860D of the Code (a "<u>REMIC Trust</u>") and the Loan to value ratio as determined by Administrative Agent in its reasonable discretion using any commercially reasonable method permitted to a REMIC Trust exceeds 125% immediately after the Release, no Release will be permitted unless the principal balance of the Loan is paid down by the greater of (A) the Release Amount or (B) the least of one of the following amounts: (i) the fair market value of the Hotel Component at the time of the Release, or (ii) an amount such that such Loan to value ratio as so determined by Administrative Agent after the Release is not greater than the Loan to value ratio of the entire Property immediately prior to the Release, unless the Administrative Agent receives an opinion of counsel that, if (B) is not followed, the REMIC Trust will not fail to maintain its status as a REMIC Trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower shall have satisfied all conditions precedent to the Release of the Hotel Component contained in the Mezzanine Loan Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall deliver to Administrative Agent an Officer's Certificate certifying that the requirements set forth in this Section 5.2.10 have been satisfied.

Upon payment of the Release Amount and satisfaction of all other conditions to a Release in this <u>Section 5.2.10(c)</u>, the Hotel Component shall be released from the lien of the Loan Documents and the term "Property" shall thereafter no longer include the Hotel Component. Nothing in this <u>Section 5.2.10</u> shall release any Borrower or Guarantor from any liability or obligation relating to (A) any environmental matters arising under the Loan Documents with respect to the Hotel Component, and (B) any Recourse Liabilities relating to the Hotel Component arising from events or circumstances occurring prior to such Release. For the avoidance of doubt, Borrower shall not have any right to separately release the Tower Unit or the Future Development Unit from the lien of the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.11&nbsp;&nbsp;&nbsp;&nbsp;<u>The Project</u>. Without Administrative Agent's prior written approval, Borrower shall not amend, modify or terminate the Project Budget or any Project Document, nor request, initiate, agree to, accept, cause or suffer directly or indirectly any Change Order. Notwithstanding the foregoing, however, so long as no Event of Default then exists, Borrower shall be permitted to amend the Project Budget or any Project Document to implement the following: (a) reallocate verifiable cost savings achieved with respect to any applicable line items of Project Expenditures within the Project Budget to any other line item of Project Expenditures in amounts not in excess of $150,000.00 for any single reallocation, or $1,000,000.00 in the aggregate during the term of the Loan, and (b) apply funds allocated to any Hard Cost contingency line item to cost overruns incurred with respect to any other line item of Hard Costs within the Project Budget (provided, however, Borrower may not apply such funds allocated to the contingency line item unless Administrative Agent has determined that the remaining funds allocated to the Hard Cost contingency line item are at least equal to ten percent (10%) of the estimated remaining Hard Costs to complete the Project), (c) apply funds allocated to any Soft Cost contingency line item to cost overruns incurred with respect to any other line item of Soft Costs within the Project Budget, and (d) implement a Change Order so long as the same will not (i) reduce the gross leasable area of the Property, or modify the general layout of

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the Improvements (or any component thereof), (ii) require or permit the use of materials, furniture, fixtures, or equipment that are lower in quality than the materials, furniture, fixtures, and equipment originally specified in or required by the Plans and Specifications approved by Administrative Agent, or (iii) result in an increase or decrease in the cost of the Project of greater than $150,000.00 with respect to a single item, or $1,000,000.00 with respect to the aggregate cost of all such Change Orders which were either previously approved by Administrative Agent or which did not require Administrative Agent approval. Borrower shall submit to Administrative Agent copies of each proposed Change Order at least ten (10) Business Days prior to the same becoming effective, together with documentation reasonably satisfactory to Administrative Agent, setting forth all changes proposed to be made to any Project Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.12&nbsp;&nbsp;&nbsp;&nbsp;<u>Mezzanine Loan Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. Borrower shall deliver to Administrative Agent, promptly after the receipt or delivery, a copy of any notice of default received or sent by Mezzanine Borrower with respect to the Mezzanine Loan and of any other material written correspondence (including electronically transmitted items) given or received by Mezzanine Borrower or Guarantor to or from the Mezzanine Loan Administrative Agent or its agents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Independent Approval Rights</u>. If any action, proposed action or other decision is consented to or approved by Mezzanine Loan Administrative Agent, such consent or approval shall not be binding or controlling on Administrative Agent or Lender. Borrower hereby acknowledges and agrees that (i) the risks of Mezzanine Lender in making the Mezzanine Loan are different from the risks of Administrative Agent in making the Loan, (ii) in determining whether to grant, deny, withhold or condition any requested consent or approval, Mezzanine Loan Administrative Agent and Administrative Agent may reasonably reach different conclusions, and (iii) Administrative Agent has an absolute independent right to grant, deny, withhold or condition any requested consent or approval based on its own point of view, but subject to the standards of consent set forth herein. Furthermore, the denial by Administrative Agent of a requested consent or approval shall not create any liability or other obligation of Administrative Agent if the denial of such consent or approval results directly or indirectly in a default under the Mezzanine Loan Documents, and Borrower hereby waives any claim of liability against Administrative Agent arising from any such denial unless Administrative Agent has not complied with any applicable standard for consent. The rights described above may be exercised by any entity which owns and controls, directly or indirectly, substantially all of the interests in Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Intercreditor Agreement</u>. Borrower hereby acknowledges and agrees that any intercreditor agreement entered into between Administrative Agent and Mezzanine Loan Administrative Agent will be solely for the benefit of Administrative Agent and Mezzanine Loan Administrative Agent, and that neither Borrower nor Mezzanine Borrower shall be third-party beneficiaries (intended or otherwise) of any of the provisions therein, have any rights thereunder, or be entitled to rely on any of the provisions contained therein. Administrative Agent and Mezzanine Loan Administrative Agent have no obligation to disclose to Borrower or Mezzanine Borrower the contents of any such intercreditor agreement. Borrower's obligations hereunder are and will be independent of any such intercreditor agreement and shall remain unmodified by the terms and provisions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.13&nbsp;&nbsp;&nbsp;&nbsp;<u>Sanctions; Anti-Money Laundering; Anti-Corruption</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;At all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, no Restricted Party, no Affiliate of any Restricted Party, and, to the Borrower's knowledge, no agent of the foregoing or other Person holding any direct or indirect ownership or beneficial interest in Borrower or its funds or other

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assets (a) shall be a Designated Person, (b) shall be located, organized, resident or have a place of business in a Designated Jurisdiction, (c) shall be a Person with whom Administrative Agent or any Lender is restricted from doing business under Sanctions and Anti-Money Laundering Laws, (d) shall engage in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any Sanctions and Anti-Money Laundering Laws or (e) otherwise violate Sanctions and Anti-Money Laundering Laws, and Borrower shall not engage in any dealings or transactions or otherwise be associated with such Persons. Borrower covenants and agrees that in the event Borrower receives any notice of any of the foregoing, Borrower shall promptly notify Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Borrower will not, directly or indirectly, use the proceeds of the Loan, or lend, contribute or otherwise make available such proceeds to any Person, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of Anti-Corruption Laws, (ii) to fund any activities or business of or with any Designated Person, or in any Designated Jurisdiction, or (iii) in any other manner that would violate Sanctions and Anti-Money Laundering Laws by any Person. The Restricted Parties shall not make any repayment of the Debt out of proceeds derived from a transaction that would be prohibited under applicable Sanctions and Anti-Money Laundering Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;To help the US Government fight the funding of terrorism and money laundering activities, The Sanctions and Anti-Money Laundering Laws require Administrative Agent and Lenders to obtain, verify and record information that identifies its customers. Upon the request of Administrative Agent, Borrower shall provide Administrative Agent and each Lender with any additional information that Administrative Agent or any Lender deems necessary from time to time in order to ensure compliance with this <u>Section 5.2.13</u> and with Sanctions and Anti-Money Laundering Laws and any other applicable Legal Requirements concerning sanctions, terrorism, anti-corruption, money-laundering and similar activities, and shall re-make the representations contained in <u>Section 4.22</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.14&nbsp;&nbsp;&nbsp;&nbsp;<u>HVCRE Matters</u>. Notwithstanding anything herein to the contrary, Borrower shall not make any distribution of cash or other property to its constituent direct and indirect owners which could cause the Loan to be classified as an HVCRE Loan, and in any event shall at all times maintain sufficient cash equity invested in the Property to ensure that the Loan is not categorized as an HVCRE Loan. Within ten (10) Business Days after Administrative Agent's request Borrower shall to provide to Administrative Agent a certification in form and substance acceptable to Administrative Agent setting forth in reasonable detail Borrower's compliance with the foregoing requirements and provide documentation in support thereof if requested by Administrative Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.15&nbsp;&nbsp;&nbsp;&nbsp;<u>Master Lease</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not waive, excuse, condone or in any way release or discharge Guarantor of or from Guarantor's obligations, covenants and/or conditions under the Master Lease without the prior written consent of Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not, without Administrative Agent's prior written consent, surrender, terminate, forfeit, or suffer or permit the surrender, termination or forfeiture of, or change, modify or amend in a material or adverse manner, the Master Lease. Consent to one amendment, change, agreement or modification shall not be deemed to be a waiver of the right to require consent to other, future or successive amendments, changes, agreements or modifications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not, without Administrative Agent's prior written consent, elect to treat the Master Lease as terminated under subsection 365(h)(l) of the Bankruptcy Code. Any such election made without Administrative Agent's prior written consent shall be void.

ARTICLE VI<u><br>EVENTS OF DEFAULT; REMEDIES; EXCULPATION</u>

Section 6.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Events of Default</u>. Each of the following events shall constitute an event of default hereunder (an "<u>Event of Default</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;if (i) any payment of principal or interest due with respect to the Loan is not paid on the Payment Date when due, or (ii) the entire Debt is not paid in full on the Maturity Date, or (iii) any payment required to be made to a Reserve Account under this Agreement is not paid on the Payment Date when due, or (iv) any other monetary sum required to be paid hereunder or under any other Loan Document is not paid within ten (10) days after written demand from Administrative Agent (in each case with respect to the foregoing unless such failure results from Administrative Agent failing to timely apply, or instruct its Servicer to apply, funds held by Administrative Agent or such Servicer specifically to pay such amount due in accordance with the terms and conditions of this Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;if any of the Property Taxes or other liens or charges against the Property are not paid prior to delinquency (unless the same are being contested by Borrower in accordance with the terms and conditions of this Agreement, or unless such failure results from Administrative Agent failing to timely pay, or instruct its Servicer to pay, Property Taxes when required hereunder, to the extent sufficient funds are then held in the Tax Reserve Account);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;if the Required Policies are not kept in full force and effect pursuant to the terms hereof (unless such failure results from Administrative Agent failing to timely pay, or instruct its Servicer to pay, such premiums when required hereunder, to the extent sufficient funds are then held in the Insurance Reserve Account);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of a Transfer or change of Control of a Restricted Party in violation of <u>Section 5.2.10</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;if (i) any representation or warranty made by Borrower herein or by Borrower or Guarantor in any other Loan Document as of the date such representation or warranty was made or is deemed to have been remade is, or (ii) any financial statement, report, certificate or other instrument, agreement or document furnished to Administrative Agent by or on behalf of Borrower or Guarantor after the date hereof shall have been (or contained statements or information that is), false or misleading in any material respect as of the date the same was

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delivered, unless with respect to the foregoing misrepresentations or false or misleading information (each, a "<u>Misrepresentation</u>") (A) such Misrepresentation was not knowingly or intentionally made, (B) Lender has suffered no material Loss on account thereof (or Borrower shall have reimbursed Lender for the amount of such Loss) nor has the same resulted in a Material Adverse Effect, (C) such Misrepresentation can be cured (meaning that the facts and circumstances underlying the applicable Misrepresentation can be changed such that the applicable representation or information as made or delivered will be true and correct), and (D) such Misrepresentation has been so cured within thirty (30) days after the earlier of (1) the date on which Borrower first has actual knowledge that such Misrepresentation exists, and (2) the date on which Administrative Agent first notifies Borrower that such Misrepresentation exists;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;if a Bankruptcy Action occurs with respect to Borrower, any Required SPE Entity, or Guarantor; <u>provided</u>, <u>however</u>, if such Bankruptcy Action was involuntary and not consented to by such Person, the same shall constitute an Event of Default hereunder only upon the same not being discharged, stayed or dismissed within ninety (90) days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;if Borrower or any Required SPE Entity fails to be a Special Purpose Entity, or if any of the assumptions contained in any opinion concerning substantive consolidation delivered to Administrative Agent in connection with the Loan fail to be true and correct in any material respect; <u>provided</u>, <u>however</u>, the same shall not be an Event of Default if (i) such breach was inadvertent and non-recurring, (ii) such breach is not reasonably expected to have a Material Adverse Effect, (iii) Borrower cures such breach within ten (10) Business Days of the earlier to occur of (A) Borrower obtaining actual knowledge of same, and (B) notice from Administrative Agent, and (iv) within thirty (30) days of the request by Administrative Agent, Borrower shall cause counsel to Borrower to deliver an opinion of counsel opining that Borrower and its assets will not be consolidated into or with any other Person or such Person's Bankruptcy Action regardless as to the existence of such breach, which opinion shall be acceptable to Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;if Borrower breaches any of the negative covenants contained in <u>Section 5.2</u> hereof; <u>provided</u>, <u>however</u>, the same shall not be an Event of Default if (i) such breach was not knowingly or intentionally made, (ii) Lender has suffered no material Loss on account thereof (or Borrower shall have reimbursed Lender for the amount of such Loss) nor has the same resulted in a Material Adverse Effect, (iii) such breach can be cured, and (iv) such breach has been so cured within thirty (30) days after the earlier of (A) the date on which Borrower first has actual knowledge that such breach exists, and (B) the date on which Administrative Agent first notifies Borrower that such breach exists);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;if Borrower breaches any of its covenants contained in <u>Section 5.1.6</u> hereof and such breach continues for a period of ten (10) Business Days following Administrative Agent's notice to Borrower of the same;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;if Guarantor breaches any of its net worth or liquidity requirements under the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;if Borrower fails to terminate any applicable Management Agreement if requested by Administrative Agent (when Administrative Agent has the right to so require a termination of the Management Agreement pursuant to this Agreement) within five (5) Business Days' after Administrative Agent's request therefor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;if (i) for any reason there is a discontinuance of construction of the Project for a period in excess of thirty (30) days and/or a period in excess of five (5) consecutive Business Days more than once in any sixty (60) calendar day period, in each case, other than on account of

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a Force Majeure, or (ii) the Project is not Completed by the date required pursuant to <u>Section 5.1.13</u> hereof (as such date may be extended pursuant to said <u>Section 5.1.13</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of (i) any amendment to or termination or cancellation of any of the Project Documents without Administrative Agent's prior written approval, (ii) any of the Project Documents not being in full force or effect for any reason, or (iii) any default by Borrower under any of the Project Documents beyond any applicable notice or cure period available thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;if a Balancing Event is not cured within five (5) business days after written notice thereof from Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of any prepayment of the Mezzanine Loan Outstanding Principal Balance without the Loan being repaid concurrently therewith on a pro rata basis (based on the respective Outstanding Principal Balance and the Mezzanine Loan Outstanding Principal Balance) in accordance with (and subject to) the requirements of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of (A) any amendment to or termination or cancellation of any of the Condominium Documents without Administrative Agent's prior written approval, (B) any of the Condominium Documents not being in full force or effect for any reason, or (C) any default by Borrower under any of the Condominium Documents beyond any applicable notice or cure periods available thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;the failure to pay Administrative Agent the full amount of the Required Pay Down when due pursuant to <u>Section 5.1.19</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;any failure by Guarantor to pay any amount due from Guarantor under the Master Lease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;the failure to pay Administrative Agent the full amount of the Additional Elevator Contributions when due pursuant to <u>Section 5.1.14</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;if (i) a breach or default by Borrower or Guarantor under any condition or obligation contained in the Master Lease is not cured within any applicable cure period provided therein, or (ii) any Property subject to a Master Lease shall be surrendered or the Master Lease shall be terminated or cancelled for any reason or under any circumstances whatsoever, or (iii) any of the terms, covenants or conditions of the Master Lease shall in any manner be modified, changed, supplemented, altered, or amended without the prior written consent of Administrative Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;if there shall exist an "Event of Default" under and as defined in any other Loan Document, or with respect to any term, covenant or provision set forth in the Loan Documents 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; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;if a Default not specified in the clauses enumerated above continues to exist for ten (10) days after notice to Borrower from Administrative Agent, 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 Administrative Agent in the case of any other Default; <u>provided</u>, <u>however</u>, 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 or Guarantor (as applicable) 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

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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.

Section 6.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;During the continuance of an Event of Default, 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, Administrative Agent may, at its election, take such action, without notice or demand, that Administrative Agent deems advisable to protect and enforce its rights against Borrower and in and to the Property, including declaring the Debt to be immediately due and payable, and Administrative Agent may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and the Property, including all rights or remedies available at law or in equity; provided that during the continuance of any Event of Default described in <u>Section 6.1(f)</u> above, the Debt 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Lender and Administrative Agent shall have the right from time to time to sever the Notes and the other Loan Documents into one or more separate notes, mortgages and other security documents in such denominations as Lender and Administrative Agent shall determine

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in its sole discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall execute and deliver to Administrative Agent from time to time, promptly after the request of Administrative Agent, a severance agreement and such other documents as Administrative Agent shall request in order to effect the severance described in the preceding sentence, all in form and substance satisfactory to Administrative Agent. Borrower hereby absolutely and irrevocably appoints Administrative Agent 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, Administrative Agent shall not make or execute any such documents under such power until three (3) days after notice has been given to Borrower by Administrative Agent of Administrative Agent's intent to exercise its rights under such power. The costs or expenses incurred in connection with the preparation, execution, recording or filing of the foregoing Loan Documents (and amendments thereto) shall be paid by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;With respect to Borrower and the Property, nothing contained herein or in any other Loan Document shall be construed as requiring Administrative Agent or Lender to resort to the Property for the satisfaction of any of the Debt in any preference or priority, and Administrative Agent may seek satisfaction out of the Property, or any part thereof, in its absolute discretion in respect of the Debt. Except as limited by applicable Legal Requirements, Administrative Agent 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 Administrative Agent, including the following circumstances: (i) during the continuance of an Event of Default in the payment of one or more scheduled payments of principal and/or interest, Administrative Agent may foreclose the Security Instrument to recover such delinquent payments, or (ii) during the continuance of an Event of Default, in the event Administrative Agent elects to accelerate less than the entire Debt, Administrative Agent may foreclose the Security Instrument to recover so much of the Debt as Administrative Agent may accelerate and such other sums secured by the Security Instrument as Administrative Agent 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;In addition to all remedies conferred it by law and by the terms of this Agreement and the other Loan Documents, during the continuance of an Event of Default, Administrative Agent may pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any other, and with full rights to reimbursement from Borrower and any Guarantor: (i) take possession of the Property and complete any construction work at the Property, including the right to avail itself of and procure performance of existing contracts or let any contracts with the same contractors or others and to employ watchmen to protect the Property from injury (and without restricting the generality of the foregoing and for the purposes aforesaid to be exercised during the existence and continuance of an Event of Default, Borrower hereby appoints and constitutes Administrative Agent its lawful attorney-in-fact with full power of substitution to complete any construction work at the Property in the name of Borrower); (ii) use amounts in the Reserve Accounts to complete any construction work at the Property; (iii) make changes to the plans and specifications which shall be necessary or desirable to complete any construction work at the Property in substantially the manner contemplated by such plans and specifications; (iv) retain or employ new general contractors, subcontractors, architects, engineers and inspectors as shall be required for said purposes; to pay, settle or compromise all existing bills and claims which may be liens or security interests, or to avoid such bills and claims becoming liens against the Property, or as may be necessary or desirable for the completion of any construction work at the Property or for the clearance of title to the Property; (v) execute all applications and certificates in the name of Borrower which may be required by any of the contract documents; (vi) prosecute and defend all actions or proceedings in connection with any construction work at the Property;

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and (vii) take any action and require such performance as it deems necessary to be furnished hereunder and to make settlements and compromises with the surety or sureties thereunder, and in connection therewith, to execute instruments of release and satisfaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Any amounts recovered from the Property or any other collateral for the Loan during the existence of an Event of Default may be applied by Administrative Agent toward the payment of the Debt in such order, priority and proportions as Administrative Agent determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;The rights, powers and remedies of Administrative Agent and Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Administrative Agent or Lender may have against Borrower or Guarantor pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Administrative Agent's rights, powers and remedies may be pursued singularly, concurrently or otherwise, at such time and in such order as Administrative Agent may determine in Administrative Agent's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;During the existence of an Event of Default, Administrative Agent may, but without any obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any obligation hereunder or under the other Loan Documents or being deemed to have cured any Event of Default, make, do or perform any obligation of Borrower hereunder or under the other Loan Documents in such manner and to such extent as Administrative Agent may deem necessary (which, for the avoidance of doubt shall include curing any default under or breach of the Management Agreement, regardless of whether a Default or Event of Default exists hereunder). Administrative Agent is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property for such purposes. All out-of-pocket costs and expenses incurred by Administrative Agent or Lender in remedying or attempting to remedy such Event of Default or such other breach or default by Borrower or in appearing in, defending, or bringing any action or proceeding shall bear interest at the Default Rate from the date such costs and expenses were incurred to the date reimbursement payment is received by Administrative Agent. All such costs and expenses incurred by Administrative Agent and Lender, together with interest thereon calculated at the Default Rate, shall be deemed to constitute a portion of the Obligations, shall be secured by the liens and security interests provided to Administrative Agent under the Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of any Event of Default (irrespective of whether or not the same consists of an ongoing condition, a one-time occurrence, or otherwise), the same shall be deemed to continue at all times thereafter; provided, however, that such Event of Default shall cease to continue only if Administrative Agent shall accept payment or performance of the defaulted obligation or shall execute and deliver a written confirmation that such Event of Default has ceased to continue. Administrative Agent shall not be obligated under any circumstances whatsoever to accept such payment or performance or execute and deliver any such writing. Without limitation, this Section shall govern in any case where reference is made in this Agreement or elsewhere in the Loan Documents to (i) any "cure" (whether by use of such word or otherwise) of any Event of Default, (ii) "during an Event of Default," "the continuance of an Event of Default" or "after an Event of Default has ceased" (in each case, whether by use of such words or otherwise), or (iii) any condition or event which continues beyond the time when the same becomes an Event of Default.

Section 6.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation on Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Exculpation</u>. Subject to the qualifications set forth in this <u>Section 6.3</u>, Administrative Agent shall not enforce the liability and obligation of Borrower to perform and

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observe the obligations contained in the Notes, this Agreement, the Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, or its direct or indirect owners (other than pursuant to any separate agreement, indemnity or guaranty, including pursuant to the Guaranty and the Environmental Indemnity), except that Administrative Agent may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Administrative Agent to enforce and realize upon its interest under the Notes, this Agreement, the Security Instrument and the other Loan Documents, or in the Property, the Revenues, or any other collateral given to Administrative Agent pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment awarded in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower's interest in the Property, in the Revenues and in any other collateral given to Administrative Agent as collateral security for the Debt, and Administrative Agent, without limitation of the foregoing and in addition thereto, agrees for itself and its successors and assigns that it and its successors and assigns 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 Notes, this Agreement, the Security Instrument or the other Loan Documents. The provisions of this <u>Section 6.3(a)</u> shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (ii) impair the right of Administrative Agent to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Security Instrument; (iii) affect the validity or enforceability of any separate agreement, indemnity or guaranty (including the Guaranty and the Environmental Indemnity), or any of the rights and remedies of Administrative Agent or Lender thereunder; (iv) impair the right of Administrative Agent to obtain the appointment of a receiver; (v) impair the enforcement of the Assignment of Leases; or (vi) constitute a prohibition against Administrative Agent seeking a deficiency judgment against Borrower not otherwise prohibited by this <u>Section 6.3(a)</u> in order to fully realize the security granted by the Security Instrument or commencing any other appropriate action or proceeding in order for Administrative Agent to exercise its remedies against the Property, provided, that, the liability and obligation of Borrower in connection with any such deficiency action shall be limited (Y) to the Recourse Liabilities and (Z) if a Springing Recourse Event has occurred, to the Debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Recourse for Losses</u>. Nothing contained in this Agreement or any of the other Loan Documents shall in any manner or way release, affect or impair the right of Administrative Agent to recover, and Borrower shall be fully and personally liable for and subject to legal action to the extent of, any Losses actually suffered or incurred by Administrative Agent and/or Lender arising out of or in connection with the following (all such liability and obligation for any or all of the following being referred to herein as the "<u>Recourse Liabilities</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;fraud, intentional misrepresentation, or intentional failure to disclose a material fact concerning the Property, Borrower, any Required SPE Entity, Guarantor, or the Loan by any of the Borrower Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;willful misconduct or illegal acts of any of the Borrower Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;intentional material physical waste of the Property by any Borrower Party or any Person at the direction of any of the foregoing; provided, however, Borrower shall have no liability under this subsection (b)(iii) if sufficient revenues are not available to Borrower from the Property to prevent such material physical waste;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;the removal or disposal of any portion of the Property during the existence of an Event of Default in violation of this Agreement unless such Property is promptly replaced with property of equivalent value and functionality if reasonably necessary or which is no longer necessary in connection with the operation of the Property;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;the misappropriation, conversion, or application in a manner prohibited by the Loan Documents by or on behalf of any Borrower Party of (A) any insurance proceeds, (B) any condemnation proceeds, (C) any funds disbursed from the Reserve Accounts or advanced to Borrower as an Additional Advance, or (D) any Revenues;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;failure to pay charges for labor or materials or other charges that create a lien on any portion of the Property (not including liens relating to capital improvements that were specifically approved by Administrative Agent and for which either (A) Administrative Agent did not require that Borrower deposit funds with Administrative Agent sufficient to pay for such work, or (B) sufficient amounts have been deposited with Administrative Agent to specifically pay for such work);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Administrative Agent upon a foreclosure of the Property or transfer 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 transfer in lieu thereof and permitted hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;failure of Borrower to purchase and maintain any Interest Rate Cap Agreement as required pursuant to this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp;Borrower's failure to obtain and maintain the fully paid for Required Policies in accordance with <u>Section 5.1.11</u> attributable to the time that Borrower owns the Property (provided that Borrower shall not have liability pursuant to this <u>clause (x)</u> to the extent that (A) the Property fails to generate sufficient Revenue during the prior twelve (12) month period to pay such Required Policies or (B) sufficient amounts have been deposited with Administrative Agent to specifically pay the same);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;Borrower's failure to pay all Property Taxes attributable to the time that Borrower owns the Property prior to the same becoming delinquent (provided that Borrower shall not have liability pursuant to this <u>clause (x)</u> to the extent that (A) the Property fails to generate sufficient Revenue during the prior twelve (12) month period to pay such Property Taxes or (B) sufficient amounts have been deposited with Administrative Agent to specifically pay the same);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;&nbsp;the failure of Borrower or any Required SPE Entity to be a Special Purpose Entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;&nbsp;&nbsp;intentionally omitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)&nbsp;&nbsp;&nbsp;&nbsp;any default by Borrower under, or failure by Borrower to comply with, any of the provisions of the Condominium Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of any Transfer in violation of this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv)&nbsp;&nbsp;&nbsp;&nbsp;the exercise by any party to the 1992 Lease Agreement of the right to access or enter onto the Property for the purposes set forth in such 1992 Lease Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Full Recourse</u>. Notwithstanding anything to the contrary in this Agreement, the Notes or any of the Loan Documents, Administrative Agent shall not be deemed to have waived any right which Administrative Agent 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

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the Obligations in accordance with the Loan Documents, and the Debt shall be fully recourse to Borrower in the event of any of the following (each, a "<u>Springing Recourse Event</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Borrower or Required SPE Entity (A) filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or (B) making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding (other than in writing to Administrative Agent, or as may be required by law in connection with any legal proceeding), its insolvency or inability to pay its debts as they become due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Any Borrower Party colluding with or otherwise assisting in, or soliciting or causing to be solicited petitioning creditors for, or consenting to, acquiescing (in writing) in, or joining in (A) any involuntary petition filed against Borrower or Required SPE Entity, by any Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or (B) an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or Required SPE Entity or all or any portion of the Property (other than an application by Administrative Agent in connection with the enforcement of Administrative Agent's remedies under the Loan Documents) (it being acknowledged that the mere failure to oppose or defend an involuntary petition where no meritorious defense exists shall not be deemed acquiescing for purposes hereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;the failure of Borrower or any Required SPE Entity to be a Special Purpose Entity, if such failure is cited as a material factor in any order for substantive consolidation of Borrower or Required SPE Entity with any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;the occurrence of a Transfer in violation of this Agreement; provided, however, the foregoing shall not apply to any Transfer resulting directly and solely from a condemnation, the filing of a mechanic's lien affidavit or entering into a Lease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;the incurrence by Borrower or Required SPE Entity of any Indebtedness in violation of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;if any Borrower Party, in any judicial or quasi-judicial case, action or proceeding contests (or any Borrower Party colludes with or otherwise assists any other Person, or solicits or causes to be solicited any other Person to contest) the validity or enforceability of the Loan Documents or contests or intentionally hinders, delays or obstructs (or any Borrower Party colludes with or otherwise assists any other Person, or solicits or causes to be solicited any other Person to contest, hinder, delay or obstruct) the pursuit of any rights or remedies by Administrative Agent (including the commencement and/or prosecution of a foreclosure action, judicial or non-judicial, the appointment of a receiver for the Property or any portion thereof or any enforcement of the terms of the Assignment of Leases), unless a court of competent jurisdiction finds that such actions by any such Borrower Party were undertaken in good faith, and were not based on a frivolous or meritless position; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;if any Borrower Party shall make a counterclaim against Administrative Agent, a Lender, Servicer or their Affiliates in violation of <u>Section 8.14</u> hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;the modification or termination of the Project Documents in violation hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;&nbsp; the modification or termination of the Master Lease made in violation of this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;the modification or termination of the Condominium Documents in violation of this Agreement.

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ARTICLE VII<u><br>SECONDARY MARKET TRANSACTIONS; SERVICING</u>

Section 7.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Secondary Market Transactions</u>. Borrower acknowledges and agrees that any Lender may (a) sell, transfer, pledge, and/or encumber all or any portion of the Loan and the Loan Documents, (b) grant or issue one or more participations therein, and/or (c) consummate one or more private or public securitizations of rated single- or multi-class securities (the "<u>Securities</u>") secured by or evidencing ownership interests in all or any portion of the Loan and the Loan Documents or a pool of assets that include all or any portion of the Loan and the Loan Documents (a "<u>Securitization</u>", and together with any other such sales, transfers, and/or participations described in the foregoing clauses, and any Special Mezzanine Loan Advance, collectively, a "<u>Secondary Market Transaction</u>"). Notwithstanding the foregoing, so long as no Event of Default has occurred, Lender agrees that it will not sell or transfer any unadvanced portion of the Loan prior to Completion of the Project (other than a participation interest in connection with which the holder of the applicable Note remains liable to make Additional Advances as provided herein) to any Person other than a Qualified Transferee without Borrower's consent, not to be unreasonably withheld, delayed or conditioned; provided, however, that the foregoing shall not be deemed to limit the rights of Lender and Mezzanine Lender with respect to the making of a Special Mezzanine Loan Advance.

Section 7.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Borrower Cooperation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;In connection with any Secondary Market Transaction, Borrower shall execute and deliver to Administrative Agent such documents, instruments, certificates, financial statements, assignments and other writings, do such other acts and provide such information, provide a non-consolidation opinion to Administrative Agent in a form reasonably acceptable to Administrative Agent, and participate in such meetings and discussions, in each case that are necessary to facilitate the consummation of each Secondary Market Transaction, including executing and delivering such documents and agreements (and deliver such opinions of counsel with respect thereto as Administrative Agent may require) necessary to (i) restructure the Loan into multiple notes (which may include component notes and/or senior and junior notes), issue additional or replacement Notes, and/or reduce the number of Notes, and/or (ii) restructure the Loan into a mortgage loan and one or more mezzanine loans (to be made to one or more Special Purpose Entities that will be the direct and/or indirect owners of the ownership interests in Borrower, and secured by a pledge of such ownership interests, in each case including that such notes and/or mezzanine loans), and/or (iii) establish different interest rates with respect to, and reallocate the amortization and principal balances applicable to, each note or tranche of the Loan, and/or (iv) assign to each such note or tranche or to each tranche of the restructured Loan such order of priority as may be designated by Administrative Agent, and/or (v) modify any operative dates within the Loan Documents (including the Payment Date and the Interest Period); <u>provided</u>, <u>however</u>, that (A) the aggregate principal amount of all such notes or tranches as of their date of creation shall equal the Outstanding Principal Balance immediately prior to their creation, (B) the weighted average interest rate of all such notes or tranches shall on the date created equal the interest rate that was applicable to the Loan immediately prior to the creation of such notes or tranches, (C) the debt service payments on all such notes or tranches shall on the date they are created equal the debt service payment that was due under the Loan immediately prior to the creation of such notes or tranches, (D) no such amendment to the Loan Documents shall decrease in any material manner the rights of Borrower or Guarantor under the Loan Documents, or result in any additional material liability or material obligation to Borrower or Guarantor under the Loan Documents (except to the extent related to having different interest rates apply to the notes or tranches upon partial paydown thereof following the occurrence of an Event of Default, or the extent related to having separate mortgage and mezzanine loans); it being further agreed that the mere reduction of the Outstanding Principal Balance and

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commensurate increases in the Mezzanine Loan Outstanding Principal Balance shall not be deemed to violate this clause (D) so long as the requirements of clauses (A), (B), and (C) above are satisfied, and (E) no such amendment described in <u>clause (v)</u> above shall be effective sooner than thirty (30) days after notice thereof from Administrative Agent, nor shall it cause the Maturity Date to be an earlier date. In connection with the creation of any mezzanine loan as described above, Borrower shall cause the formation of one or more Special Purpose Entities as required by Administrative Agent in order to serve as the borrower under any such mezzanine loan (and the applicable organizational documents of Borrower and such new entity shall be acceptable to Administrative Agent in form and content), and Borrower shall deliver to Administrative Agent a "UCC-9" insurance policy and a mezzanine endorsement to the owner's policy of title insurance held by Borrower, and such opinions of legal counsel as Administrative Agent may require. If Borrower fails to cooperate with Administrative Agent within ten (10) Business Days of written request by Administrative Agent, Administrative Agent is hereby appointed as Borrower's attorney in fact, coupled with an interest, to execute any and all documents necessary to accomplish such modifications (but in any event the Loan Documents shall be deemed to have been modified to incorporate any such modifications as Administrative Agent may so notify Borrower of in writing) and at Administrative Agent's option, declare such failure to be an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;At the request of Administrative Agent, Borrower shall provide information regarding Borrower, the Guarantor or the Property which is not in the possession of Administrative Agent or which may be required by Administrative Agent in order to satisfy the market standards to which Administrative Agent or Lender customarily adheres or which may be required by prospective investors and/or the Rating Agencies or required by applicable Legal Requirements in connection with any such Secondary Market Transaction, including to: (i) provide additional and/or updated information concerning Borrower, any Required SPE Entity, Guarantor, Manager, or the Property, together with appropriate verification and/or consents related to such information through letters of auditors or opinions of counsel of independent attorneys acceptable to Administrative Agent and the Rating Agencies; (ii) assist in preparing descriptive materials for presentations to any or all of the Rating Agencies, and work with, and if requested, supervise, third-party service providers engaged by Borrower, any Required SPE Entity and their respective Affiliates to obtain, collect, and deliver information requested or required by Administrative Agent or the Rating Agencies; (iii) deliver (1) new or updated opinions of counsel as to non-consolidation, due execution and enforceability with respect to the Property, Borrower, any Required SPE Entity, Guarantor and their respective Affiliates, and the Loan Documents (including a so-called "10b-5" opinion), and (2) revised organizational documents for Borrower and any Required SPE Entity and certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower and Required SPE Entity as of the date of the Secondary Market Transaction, which counsel opinions and revisions to organizational documents shall be satisfactory to Administrative Agent and the Rating Agencies; (iv) use commercially reasonable efforts to deliver such additional tenant estoppel letters and subordination, non-disturbance and attornment agreements or, if applicable, estoppels from parties to agreements that affect the Property and who are required to provide the same, which estoppel letters and subordination non-disturbance and attornment agreements shall be satisfactory to Administrative Agent and the Rating Agencies; (v) make such representations and warranties as of the closing date of the Secondary Market Transaction with respect to the Property, Borrower, any Required SPE Entity, Guarantor and the Loan Documents as may be requested by Administrative Agent or the Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, including the representations and warranties made in the Loan Documents; (vi) if requested by Administrative Agent, review and certify as to the accuracy of any information regarding the Property, Borrower, any Required SPE Entity, Guarantor, Manager, and the Loan which is contained in a preliminary or final private placement memorandum, prospectus, prospectus supplement (including any amendment or supplement to

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either thereof), or other disclosure document to be used by Administrative Agent, Lender or any Affiliate thereof; and (vii) supply to Administrative Agent such documentation, financial statements and reports in form and substance required in order to comply with any applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;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 or the Property and any related properties (within the meaning of Regulation AB under the Securities Act), collectively, will be a Significant Obligor, Borrower shall furnish to Administrative Agent upon request (i) the selected financial data or, if applicable, net operating income, required under Item 1112(b)(1) of Regulation AB under the Securities Act and the Exchange Act, 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 said 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 Administrative Agent (A) within ten (10) Business Days after notice from Administrative Agent 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 is not required. If requested by Administrative Agent, Borrower shall furnish to Administrative Agent, within ten (10) Business Days after Administrative Agent's request, (1) a list of tenants (if any) (including all affiliates of such tenants) that in the aggregate (y) occupy ten percent (10%) or more (but less than twenty percent (20%)) of the total floor area of the improvements or represent ten percent (10%) or more (but less than twenty percent (20%)) of aggregate base rent, and (z) occupy 20% or more of the total floor area of the improvements or represent twenty percent (20%) or more of aggregate base rent, (2) financial data and/or financial statements for any tenant of the Property (in form and substance sufficient to satisfy the requirements of Item 1112 of said Regulation AB as determined by Lender) 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, and (3) such other or additional financial statements, or financial, statistical or operating information, and/or other forms of such information as has been previously provided, as Lender shall determine to be required pursuant to Regulation AB, Regulation S-K, or Regulation S-X (each under the Securities Act and the Exchange Act), as applicable, or any amendment, modification or replacement thereto or other Legal Requirements applicable to the Loan or any such Secondary Market Transaction in connection with any Disclosure Document or any Exchange Act filing in connection with or relating to a Secondary Market Transaction or as shall otherwise be requested by Administrative Agent. All financial statements provided by Borrower pursuant to this <u>Section 7.2</u> shall be prepared in accordance with GAAP and shall meet the requirements of said Regulation AB, S-K, and Regulation S-X, as applicable, and all other applicable Legal Requirements applicable to the Loan or any such Secondary Market Transaction, and shall be

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accompanied by the manually executed report of the independent accountants thereon, which report shall meet all such requirements, and shall be further accompanied by a manually executed written consent of such independent accountants, in form and substance acceptable to Administrative Agent, to the inclusion of such financial statements in any Disclosure Document and any filing pursuant to the Exchange Act 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 any such 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 statements shall be certified by the chief financial officer of Borrower, which certification shall state that such financial statements meet the requirements set forth in this <u>Section 7.2</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Borrower will reimburse Administrative Agent for Administrative Agent's and Lender's out-of-pocket costs and expenses (including fees and expenses of outside legal counsel) relating to any Secondary Market Transaction, subject to a maximum of $15,000.00.

Section 7.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Securitization Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower understands that information provided to Administrative Agent and Lender by Borrower and its agents, counsel and representatives may be included in disclosure documents in connection with the Securitization, including an offering circular, a prospectus, prospectus supplement, private placement memorandum or other offering document (each, a "<u>Disclosure Document</u>") and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act or Exchange Act, and may be made available to investors or prospective investors in the Securities, rating agencies, investment banking firms, any credit rating agency that has elected to be treated as a nationally recognized statistical rating organization for purposes of Section 15E of the Exchange Act (without regard to whether or not such credit rating agency has been engaged by Administrative Agent, Lender or its respective designees in connection with, or in anticipation of, a Securitization), accounting firms, law firms and other third party advisory and service providers relating to the Securitization. Borrower also understands that the findings and conclusions of any third-party due diligence report obtained by the Lender or Administrative Agent, the issuer of any Securitization or any Securitization placement agent or underwriter may be made publicly available if required, and in the manner prescribed, by Section 15E(s)(4)(A) of the Exchange Act and any rules promulgated thereunder. Borrower shall provide in connection with each of (i) a preliminary and a final private placement memorandum or (ii) a preliminary and final prospectus or prospectus supplement, as applicable, delivered to Borrower for its review and comment specifying the sections thereof that Lender desires Borrower to review, an agreement (A) certifying that Borrower has examined such sections of the Disclosure Documents specified by Lender relating to Borrower, its Affiliates, the Property, any Affiliated Manager, and Guarantor (collectively, the "<u>Borrower Group</u>"), and/or the Loan (such sections, "<u>Applicable Sections</u>") and that no such Applicable Sections contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in such Applicable Sections, in the light of the circumstances under which they were made, not misleading in any material respect (and provided further that any corrections or updates provided by Borrower to such Applicable Sections shall have been incorporated therein to the extent true and accurate), (B) indemnifying Lender, the other Indemnified Parties, and any Person that has filed the registration statement relating to the Securitization (the "<u>Registration Statement</u>"), each of its directors and officers who have signed the Registration Statement, and each Person that controls any such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "<u>Lender Group</u>"), and any other placement agent or underwriter with respect to the Securitization, each of their respective directors and officers, each Person who controls a member of the Lender Group or such placement agent or underwriter within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the "<u>Underwriter Group</u>") (for the avoidance of doubt, all of the foregoing Persons are referred to in this <u>Section 7.3</u> as "Indemnified Parties") for

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any Losses to which the Lender Group or the Underwriter Group may become subject insofar as such liabilities arise out of or are based upon any untrue statement of any material fact contained in the Applicable Sections so certified by Borrower or arise out of or are based upon the omission by Borrower to state in such Applicable Sections a material fact required to be stated in such Applicable Sections or necessary in order to make the statements in such Applicable Sections, in light of the circumstances under which they were made, not misleading in any material respect (and provided further that any corrections or updates provided by Borrower to such Applicable Sections shall have been incorporated therein to the extent true and accurate), and (C) agreeing to reimburse the Lender Group and/or the Underwriter Group for any legal or other expenses incurred by the Lender Group and the Underwriter Group in connection with investigating or defending such liabilities; <u>provided</u>, <u>however</u>, that Borrower will be liable in any such case under clauses (B) or (C) above only to the extent that any such Loss arises out of or is based upon any such untrue statement or omission made in the Applicable Sections so certified by Borrower in reliance upon and in conformity with information furnished to Administrative Agent or Lender by Borrower, Guarantor, or any of their Affiliates in connection with the preparation of such Applicable Sections or in connection with the underwriting or closing of the Loan, including financial statements of Borrower, operating statements and rent rolls with respect to the Property (and provided further that any corrections or updates provided by Borrower to such Applicable Sections shall have been incorporated therein to the extent true and accurate), and shall not be liable to any Indemnified Party for losses to the extent resulting from such Indemnified Party's gross negligence, willful misconduct, or illegal acts. The indemnification provided for in clauses (B) and (C) above shall be effective whether or not the indemnification agreement described above is provided. The aforesaid indemnity will be in addition to any liability which Borrower may otherwise have. In connection with any filing pursuant to the Exchange Act in connection with or relating to a Securitization, Borrower shall (i) indemnify the Lender Group and the Underwriter Group for the above-described liabilities to which the Lender Group or the Underwriter Group may become subject insofar as such liabilities arise out of or are based upon the omission to state in the Applicable Sections so certified by Borrower a material fact required to be stated in such Applicable Sections in order to make the statements in such Applicable Sections, in light of the circumstances under which they were made, not misleading in any material respect, and (ii) reimburse the Lender Group and the Underwriter Group for any legal or other expenses incurred by the Lender Group or the Underwriter Group in connection with defending or investigating such liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Promptly after receipt by an Indemnified Party under this <u>Section 7.3</u> of notice of the commencement of any action, such Indemnified Party will, if a claim in respect thereof is to be made against the indemnifying party under this <u>Section 7.3</u>, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any Indemnified Party hereunder except to the extent that failure to notify causes prejudice to the indemnifying party. In the event that any action is brought against any Indemnified Party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the Indemnified Party promptly after receiving the aforesaid notice from such Indemnified Party, to assume the defense thereof with counsel satisfactory to such Indemnified Party. After notice from the indemnifying party to such Indemnified Party under this <u>Section 7.3</u>, such indemnifying party shall pay for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than costs of investigation; provided, however, if the defendants in any such action include both the Indemnified Party and the indemnifying party and the Indemnified Party shall have reasonably concluded that there are any legal defenses available to it and/or other Indemnified Parties that are different from or additional to those available to the indemnifying party, the Indemnified Party or Indemnified Parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf

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of such Indemnified Party at the cost of the indemnifying party. The indemnifying party shall not be liable for the expenses of more than one separate counsel unless an Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to another Indemnified Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this <u>Section 7.3</u> is for any reason held to be unenforceable as to an Indemnified Party in respect of any Losses (or action in respect thereof) referred to therein which would otherwise be indemnifiable under this <u>Section 7.3</u>, the indemnifying party shall contribute to the amount paid or payable by the Indemnified Party as a result of such Losses (or action in respect thereof); <u>provided</u>, <u>however</u>, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) the relative knowledge of Borrower and the applicable issuer(s) of the Securities in connection with the Securitization, and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances. Administrative Agent and Borrower hereby agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;The liabilities and obligations of Borrower, Lender and Administrative Agent under this <u>Section 7.3</u> shall survive the termination of this Agreement and the satisfaction and discharge of the Debt.

Section 7.4. &nbsp;&nbsp;&nbsp;&nbsp;<u>Rating Agency Confirmations</u>. Borrower acknowledges and agrees that if the Loan is part of a Securitization, Administrative Agent may be required to obtain confirmation from one or more Rating Agencies that the granting of certain consents, approvals, or waivers (and certain other actions of Administrative Agent) will not cause a downgrade, withdrawal or qualification of any ratings of the Securities or any class thereof, and that any such consent or approval by Administrative Agent may be conditioned upon receipt of such confirmation and the satisfaction of any conditions precedent thereto required by such Rating Agencies (and any use of the phrase "approval of Administrative Agent " (or similar) shall be deemed to mean and include receipt of such confirmation by Administrative Agent from such Rating Agencies). The circumstances under which this might arise include, but are not limited to, request to approve the replacement of a property manager, and requests for approvals of Transfers. Borrower shall be responsible for any and all fees and costs incurred in order to obtain any such Rating Agency confirmation (and Administrative Agent 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).

ARTICLE VIII<u><br>MISCELLANEOUS</u>

Section 8.1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Survival</u>. This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as all or any of the Obligations are outstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the legal representatives, successors and assigns of such party. All covenants,

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promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Administrative Agent and Lender.

Section 8.2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Administrative Agent Matters</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Appointment; Resignation</u>. Each Lender irrevocably appoints and authorizes Administrative Agent to act on its behalf as Administrative Agent hereunder to take such action as Administrative Agent on its behalf and to exercise such powers under this Agreement as are delegated to Administrative Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto. Neither Administrative Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of Lenders, or (ii) in the absence of its own gross negligence or willful misconduct. Administrative Agent may resign at any time by giving written notice thereof to Lenders and Borrower. Upon any such resignation, Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by Lenders, or no successor Administrative Agent shall have accepted such appointment, within thirty (30) days after the resigning Administrative Agent gives notice of resignation, then the resigning Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder first accruing or arising after the effective date of such retirement. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent. Borrower acknowledges and agrees that the provisions of this <u>Section 8.2(a)</u> are intended to govern the relationship among Lenders and Administrative Agent and may be modified or amended without Borrower's consent, written or otherwise. At the option of Administrative Agent, the Loan may be serviced by a servicer/trustee (the "Servicer") selected by Administrative Agent and Administrative Agent may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to the Servicer pursuant to a servicing agreement between Administrative Agent and Servicer. Borrower shall be responsible for any set-up fees or any other initial costs relating to or arising under such servicing agreement, as well as for the payment of any "special servicing", "workout", and "liquidation" fees incurred by Administrative Agent in connection with any default or workout of the Loan; <u>provided</u>, <u>however</u>, that Borrower shall not be responsible for payment of the non-special servicing monthly servicing fee due to the Servicer under such servicing agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Administrative Agent's Discretion</u>. Whenever pursuant to this Agreement, Administrative Agent exercises any right given to it to approve or disapprove, or to make any election, waiver, or request, or to make any determination, or find that any arrangement or term is to be satisfactory to Administrative Agent, the decision of Administrative Agent to approve or disapprove, or to make such election, waiver, request, or determination, decision, or finding shall (except as is otherwise specifically herein provided) be in the sole and absolute discretion of Administrative Agent and shall be final and conclusive. Whenever pursuant to this Agreement, Administrative Agent exercises any right given to it to "reasonably" approve or disapprove, or to make any election, waiver, or request, or to make any determination "reasonably", or find that any arrangement or term is to be "reasonably" satisfactory to Administrative Agent, during the continuance of an Event of Default, the decision of Administrative Agent to approve or disapprove, or to make such election, waiver, request, or determination, decision, or finding shall be in the sole and absolute discretion of Administrative Agent and shall be final and conclusive and the use of the word "reasonably" (or terms of similar meaning) shall have no force or effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Right to Request and Act on Instructions; Liability of Administrative Agent.</u> Administrative Agent may at any time request instructions from Lender with respect to any actions or approvals which by the terms of this Agreement or of any of the Loan Documents Administrative Agent is permitted or desires to take or to grant, and if such instructions are requested, Administrative Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Loan Documents until it shall have received such written instructions from Lender. Neither Administrative Agent nor any of its affiliates nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of Borrower; or (iii) the validity, effectiveness or genuineness of this Agreement, the other Loan Documents or any other instrument or writing furnished in connection herewith. Administrative Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a Lender wire, electronic transmission, portable document format or other similar writing) believed by it to be genuine or to be signed by the proper party or parties. As to any matters not expressly provided for by this Agreement or any other Loan Document, Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by Lenders, and such instructions of the Lenders and any action taken or not taken pursuant thereto shall be binding on all Lenders. Notwithstanding any provision to the contrary in the Loan Documents, Administrative Agent shall not have any duties or responsibilities to Lender, except those expressly set forth herein or therein, or any fiduciary relationship with Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into the Loan Documents or otherwise exist against Administrative Agent and in favor of Lender. Notwithstanding any provision to the contrary in the Loan Documents, Administrative Agent shall not have any obligation whatsoever to incur any costs or make any protective advances with respect to the Loan, the Property or any other collateral for the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Conflicts</u>. As between Administrative Agent and Lender, in the event of any conflict, ambiguity or inconsistency between the terms and conditions of this Agreement and the terms and conditions of any co-lender agreement entered into by Lender and Administrative Agent, the terms and conditions of such co-lender agreement shall control.

Section 8.3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Governing Law</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(A)&nbsp;&nbsp;&nbsp;&nbsp;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 AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW)) AND ANY APPLICABLE LEGAL REQUIREMENTS OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND** 

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**ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT TO THE SECURITY INSTRUMENT AND THE ASSIGNMENT OF LEASES SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE 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 ALL LOAN DOCUMENTS 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 THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(B)&nbsp;&nbsp;&nbsp;&nbsp;ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER, ADMINISTRATIVE AGENT OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT ADMINISTRATIVE AGENT'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:**

**TUAN OLONA, LLP<br>ONE ROCKEFELLER PLAZA, ELEVENTH FLOOR<br>NEW YORK, NEW YORK 10020<br>ATTENTION: HAN-HSIEN TUAN**

**AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT 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 ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE** 

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**LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.**

Section 8.4. &nbsp;&nbsp;&nbsp;&nbsp;<u>Modification, Waiver in Writing</u>. 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 8.5. &nbsp;&nbsp;&nbsp;&nbsp;<u>Delay Not a Waiver</u>. Neither any failure nor any delay on the part of Administrative Agent or 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 under 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, neither Lender nor Administrative Agent shall 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. A waiver of one Default or Event of Default shall not be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or power consequent thereon.

Section 8.6. &nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. 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 (with a copy of any notice delivered by the methods described in clause (a) or clause (b) to be sent by electronic mail), 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 written notice to the other parties hereto in the manner provided for in this <u>Section 8.6</u>) (any inclusion of an e-mail address below is for informational purposes only, and communication via e-mail alone shall not be an effective method of notice for purposes of this Agreement):

If to Administrative Agent

or any Lender:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP <br>80 E. Sir Francis Drake Blvd., Suite 2A<br>Larkspur, California 94939 <br>Attention: Stew Ward, Managing Partner<br>Email: notices@acorecapital.com

with a copy to:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP<br>Sterling Plaza<br>5949 Sherry Lane, St. 1255<br>Dallas, Texas 75225<br>Attention No.: David Homsher, Director / Head of Asset Management<br>Email: dhomsher@acorecapital.com

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with a copy to:&nbsp;&nbsp;&nbsp;&nbsp;Winstead PC<br>500 Winstead Building<br>2728 N. Harwood Street<br>Dallas, Texas 75201<br>Attention: Christopher T. Nixon, Esq.<br>Email: cnixon@winstead.com

If to Borrower:&nbsp;&nbsp;&nbsp;&nbsp;CP Tower Owner, LLC<br>CP Land Owner, LLC<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>Email: <u>mmcgraner@highlandcapital.com</u>&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;CP Tower Owner, LLC<br>CP Land Owner, LLC<br>c/o Highland Capital Management, L.P.<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: General Counsel

With a copy to:&nbsp;&nbsp;&nbsp;&nbsp;Wick Phillips Gould & Martin, LLP<br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D.C. Sauter, Esq.<br>Email. d.c.sauter@wickphillips.com

A notice shall be deemed to have been given: (i) in the case of hand delivery or delivery by a reputable overnight courier, at the time of delivery; (ii) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; (iii) or in the case of expedited prepaid delivery, upon the first attempted delivery on a Business Day. Any failure to deliver a notice by reason of a change of address not given in accordance with this <u>Section 8.6</u>, or any refusal to accept notice, shall be deemed to have been given when the 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 counsel and any notice required or permitted to be given by Administrative Agent hereunder or under any other Loan Document may also be given by a Servicer.

Section 8.7. &nbsp;&nbsp;&nbsp;&nbsp;<u>Trial by Jury</u>. **BORROWER, ADMINISTRATIVE AGENT AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE 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, ADMINISTRATIVE AGENT AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER, ADMINISTRATIVE AGENT AND BORROWER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.**

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Section 8.8. &nbsp;&nbsp;&nbsp;&nbsp;<u>Headings</u>. 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 8.9. &nbsp;&nbsp;&nbsp;&nbsp;<u>Severability</u>. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Legal Requirements, but if any provision of this Agreement shall be prohibited by or invalid under applicable Legal Requirements, 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 8.10. &nbsp;&nbsp;&nbsp;&nbsp;<u>Preferences</u>. Administrative Agent 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 Administrative Agent, 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 Administrative Agent.

Section 8.11. &nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Notice</u>. Borrower hereby expressly waives, and shall not be entitled to, any notices of any nature whatsoever from Administrative Agent or 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 Administrative Agent to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Administrative Agent or Lender with respect to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of notice by Administrative Agent to Borrower.

Section 8.12. &nbsp;&nbsp;&nbsp;&nbsp;<u>Remedies of Borrower</u>. If a claim or adjudication is made that Administrative Agent, Lender or their agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the other Loan Documents, Administrative Agent, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Administrative Agent, Lender nor their 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 Administrative Agent or Lender has acted reasonably shall be determined by an action seeking declaratory judgment.

Section 8.13. &nbsp;&nbsp;&nbsp;&nbsp;<u>Schedules Incorporated</u>. The Schedules and Exhibits annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

Section 8.14. &nbsp;&nbsp;&nbsp;&nbsp;<u>Offsets, Counterclaims and Defenses</u>. Any assignee of Administrative Agent's or a Lender's interest in and to the Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower. Borrower hereby waives the right to assert (and agrees not to assert) a counterclaim of any nature, other than a compulsory counterclaim, in any action or proceeding

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brought against it by Administrative Agent or its agents or otherwise to offset any Obligations. No failure by Administrative Agent or a Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents. Notwithstanding the foregoing, Borrower does not waive any of its rights to assert any claim which would constitute a defense, setoff, counterclaim or crossclaim of any nature whatsoever against Administrative Agent or a Lender, in either case, in any separate action or proceeding.

Section 8.15. &nbsp;&nbsp;&nbsp;&nbsp;<u>No Joint Venture or Partnership; No Third Party Beneficiaries</u>. Borrower, Administrative Agent and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of debtor and creditor. Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrower, Administrative Agent and Lender, nor to grant Administrative Agent or Lender any interest in the Property other than that of mortgagee, beneficiary or lender (as applicable). This Agreement and the other Loan Documents are solely for the benefit of Administrative Agent, Lender and Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Administrative Agent 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 (or that Administrative Agent will refuse to make any disbursement of amounts from the Reserve Accounts) 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 Administrative Agent or Lender (as applicable) if, in Administrative Agent's or Lender's (as applicable) sole discretion, Administrative Agent or Lender (as applicable) deems it advisable or desirable to do so.

Section 8.16. &nbsp;&nbsp;&nbsp;&nbsp;<u>Publicity</u>. All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, Administrative Agent, or to any of its Affiliates shall be subject to the prior approval of Administrative Agent.

Section 8.17. &nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver of Marshalling of Assets</u>. 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 Administrative Agent 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 Administrative Agent to the payment of the Debt out of the net proceeds of the Property in preference to every other claimant whatsoever.

Section 8.18. &nbsp;&nbsp;&nbsp;&nbsp;<u>Conflict; Construction of Documents; Reliance</u>. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party 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 Administrative Agent, or any parent, subsidiary or Affiliate of Lender or

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Administrative Agent. Administrative Agent shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by Lender, it or any parent, subsidiary or Affiliate of Lender or Administrative Agent 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 Administrative Agent's exercise of any such rights or remedies. Borrower acknowledges that Administrative Agent and Lender engage 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 8.19. &nbsp;&nbsp;&nbsp;&nbsp;<u>Brokers and Financial Advisors</u>. Borrower hereby represents that, except for JLL, the fees of which shall be paid solely by Borrower,] it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Borrower shall indemnify, defend and hold Administrative Agent and Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including attorneys' fees and expenses) in any way relating to or arising from a claim by any Person that such Person acted directly or indirectly, by or on behalf of Guarantor, Borrower or any Affiliate thereof or was retained directly or indirectly, by or on behalf of Guarantor, Borrower or any Affiliate thereof in connection with the transactions contemplated herein. The provisions of this <u>Section 8.19</u> shall survive the expiration and termination of this Agreement and the payment of the Debt.

Section 8.20. &nbsp;&nbsp;&nbsp;&nbsp;<u>Prior Agreements</u>. 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 among or between such parties or their Affiliates or representatives concerning the transactions contemplated hereby, whether oral or written, are superseded by the terms of this Agreement and the other Loan Documents.

Section 8.21. &nbsp;&nbsp;&nbsp;&nbsp;<u>Time is of the Essence</u>. Time is of the essence of each provision of this Agreement and the other Loan Documents.

Section 8.22. &nbsp;&nbsp;&nbsp;&nbsp;<u>Certain Additional Rights of Administrative Agent (VCOC)</u>. Notwithstanding anything to the contrary contained in this Agreement, Administrative Agent shall have: (a) the right to routinely consult with and advise Borrower's management regarding the significant business activities and business and financial developments of Borrower; <u>provided</u>, <u>however</u>, that such consultations shall not include discussions of environmental compliance programs or disposal of hazardous substances. Consultation meetings should occur on a regular basis (no less frequently than quarterly) with Administrative Agent having the right to call special meetings at any reasonable times and upon reasonable advance notice; (b) the right, in accordance with the terms of this Agreement, to examine the books and records of Borrower at any reasonable times upon reasonable notice; (c) the right, in accordance with the terms of this Agreement, including <u>Section 5.1.6</u> hereof, to receive monthly, quarterly and year-end financial reports, including balance sheets, statements of income, shareholder's equity and cash flow, a management report and schedules of outstanding Indebtedness; and (d) the right, without restricting any other rights of Administrative Agent under this Agreement (including any similar right), to approve any acquisition by Borrower of any other significant property (other than personal property required for the day to day operation of the Property). The rights described above in this <u>Section 8.22</u> may be exercised by Lender or any entity which owns and Controls, directly or indirectly, substantially all of the interests in Lender or Administrative Agent.

Section 8.23. &nbsp;&nbsp;&nbsp;&nbsp;<u>Duplicate Originals, Counterparts</u>. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original

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and all of which together shall constitute a single agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall relieve the other signatories from their obligations hereunder.

Section 8.24. &nbsp;&nbsp;&nbsp;&nbsp;<u>Prepayment Charges</u>. Borrower acknowledges that (a) Lender is making the Loan in consideration of the receipt by Lender of all interest and other benefits intended to be conferred by the Loan Documents that is not prepayable except as provided in <u>Sections 2.3.4</u> and <u>2.3.5</u>, and (b) if payments of principal are made to a Lender prior to the regularly scheduled due date for such payment, for any reason whatsoever, whether voluntary, as a result of Administrative Agent's acceleration of the Loan during the existence of an Event of Default, by operation of law or otherwise, Lender will not receive all such interest and other benefits and may, in addition, incur costs and expenses. For these reasons, and to induce Lender to make the Loan, Borrower expressly waives any right or privilege to prepay the Loan except as otherwise may be specifically permitted herein and agrees that, except for any prepayment that is expressly permitted to be made pursuant to this Agreement without the payment of the Exit Fee and Minimum Multiple (as applicable), all prepayments, if any, whether voluntary or involuntary, will be accompanied by the Exit Fee and Minimum Multiple (as applicable), which shall constitute additional interest. Such Exit Fee and Minimum Multiple (as applicable) shall be required whether payment is made by Borrower, by a Person on behalf of Borrower, or by the purchaser at any foreclosure sale, and may be included in any bid by Lender at such sale. Borrower further acknowledges that (i) it is a knowledgeable real estate developer or investor, (ii) it fully understands the effect of the provisions of this Section 8.24, as well as the other provisions of this Agreement and the other Loan Documents, (iii) the making of the Loan by Lender at the Interest Rate and other terms set forth in the Loan Documents are sufficient consideration for Borrower's obligation to pay the Exit Fee and Minimum Multiple (as applicable), and (iv) Lender would not make the Loan on the terms set forth herein without the inclusion of such provisions. Borrower also acknowledges that the provisions of this Agreement limiting the right of prepayment and providing for the payment of the Exit Fee and Minimum Multiple (as applicable) and other charges specified herein were independently negotiated and bargained for and constitute a specific material part of the consideration given by Borrower to Lender for the making of the Loan except as expressly permitted hereunder.

Section 8.25. &nbsp;&nbsp;&nbsp;&nbsp;<u>Registrar</u>. Borrower (or its duly authorized agent; Borrower hereby appointing Administrative Agent as its agent for such purpose) (the "<u>Registrar</u>") shall maintain or cause to be maintained a registry of the ownership of the Note(s) at its principal office. The Registrar shall act solely as an agent of Borrower and shall maintain, subject to such reasonable regulations as it shall provide, such books and records (the "<u>Register</u>") as are necessary for the registration and transfer of the Note in a manner that shall cause the Note(s) to be considered to be in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations (and any other relevant or successor provisions of the Code or such regulations). In connection with the foregoing: (i) the Register shall reflect the applicable Lender as the original owner of the Note(s), (ii) the Register shall reflect such subsequent transferees as the Registrar shall receive notice of, by delivery to it of a notice of an assignment of such Note, duly executed by the then current owner thereof, (iii) the Registrar shall record the name and address of Lender and the amount of principal (and stated interest) owing to Lender under this Agreement, (iv) Borrower and Administrative Agent shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Failure to make any such recordation, or any error in such recordation, shall not affect Borrower's or Lender's obligations in respect of such Loan. Any Lender that sells a participation under <u>Section 7.1</u> shall, acting solely for this purpose as an agent of Borrower, maintain or cause to be maintained a registry including 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 "<u>Participant Register</u>"); provided that no Lender shall have any obligation to

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disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. Failure to make any such recordation, or any error in such recordation, shall not affect Borrower's or any Lender's obligations in respect of such Loan. Administrative Agent shall treat the person in whose name any participation is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes.

Section 8.26. &nbsp;&nbsp;&nbsp;&nbsp;<u>Multiple Property Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Waivers</u>. 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 all or any of the Security Instruments, 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 Administrative Agent under the Loan Documents to a sale of the Property for the collection of the Loan without any prior or different resort for collection or of the right of Administrative Agent to the payment of the Debt out of the net proceeds of the Property in preference to every other claimant whatsoever. In addition, to the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Security Instruments, any equitable right otherwise available to Borrower which would require the separate sale of any portion of the Property or require Administrative Agent to exhaust its remedies against any Individual Component or any combination of the Individual Components before proceeding against any other Individual Component or combination of Individual Components; and further in the event of such foreclosure Borrower does hereby expressly consent to and authorize, at the option of Administrative Agent, the foreclosure and sale either separately or together of any combination of the Individual Components.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Cross-Collateralization</u>. Borrower acknowledges that Lender has made the Loan to Borrower upon the security of its collective interest in the Property and in reliance upon the aggregate of the Property taken together being of greater value as collateral security than the sum of each Individual Component taken separately. Borrower agrees that the Security Instruments are and will be cross-collateralized and cross-defaulted with each other so that (i) an Event of Default under any of the Security Instruments shall constitute an Event of Default under each of the other Security Instruments which secure the Note; (ii) an Event of Default under the Note or this Agreement shall constitute an Event of Default under each Security Instrument; (iii) each Security Instrument shall constitute security for the Note as if a single blanket lien were placed on all of the Individual Components as security for the Obligations; and (iv) such cross-collateralization shall in no event be deemed to constitute a fraudulent conveyance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Portfolio Loan</u>. Borrower agrees that at any time Administrative Agent shall have the unilateral right to elect to remove the cross-collateralization of the liens of the Security Instrument encumbering any one (1) or more of the Individual Components (individually or collectively, as the context may require, the "<u>Affected Property</u>"). In furtherance thereof, Administrative Agent shall have the right to (i) sever or divide the Note and the other Loan Documents in order to allocate to such Affected Property the Allocated Loan Amount evidenced by one (1) or more new notes and secured by such other loan documents (individually or collectively, as the context may require, the "<u>New Note</u>") having a principal amount equal to the Allocated Loan Amount applicable to such Affected Property, (ii) segregate the applicable portion of each of the Reserve Accounts relating to the Affected Property, (iii) release any cross-

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default and/or cross-collateralization provisions applicable to such Affected Property, and (iv) take such additional action consistent therewith; provided, that such New Note secured by such Affected Property, together with the Loan Documents secured by the remaining Individual Components, shall not increase in the aggregate (A) any monetary obligation of Borrower under the Loan Documents or (B) any other obligation of Borrower under the Loan Documents in any material respect. In connection with the transfer of any such Affected Property as provided for in this Section, the Loan shall be reduced by an amount equal to amount of the New Note applicable to such Affected Property and the new loan secured by such Affected Property and evidenced by the New Note shall be in an amount equal to such Allocated Loan Amount. Subsequent to the release of the Affected Property from the lien of the Loan pursuant to this Section, the balances of the components of the Loan shall be the same as they would have been had a prepayment occurred in an amount equal to the Allocated Loan Amount of the Affected Property.

Section 8.27. &nbsp;&nbsp;&nbsp;&nbsp;<u>Multiple Borrower Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;<u>References</u>. All references to "<u>Borrower</u>" in this Agreement shall be deemed to refer to one or more Borrowers (each, an "<u>Individual Borrower</u>"), as the context requires. It is the intent of the parties hereto in making any determination under the Loan Documents (including, without limitation, in determining whether (a) a breach of a representation, warranty or a covenant has occurred, (b) there has occurred an Event of Default, and (c) an event has occurred which would create recourse obligations under <u>Article 6</u> hereof) that any breach, occurrence or event with respect to any Individual Borrower shall be deemed to be a breach, occurrence or event with respect to all Individual Borrowers, and that all Individual Borrowers need not have been involved with or be the subject of such breach, occurrence or event in order for the same to be deemed such a breach, occurrence or event with respect to every Individual Borrower and the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;<u>Joint and Several Liability</u>. Each Individual Borrower shall be jointly and severally liable for payment of the Debt and performance of all other obligations of all Borrowers (or any of them) under this Agreement and any other Loan Document, and the making of each of the representations, warranties, covenants and obligations under the Loan Document by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Contribution</u>. Each Individual Borrower will benefit, directly and indirectly, from each Individual Borrower's obligation to pay the Debt and perform its obligations under the Loan Documents. In consideration therefor, Individual Borrowers desire to enter into an allocation and contribution agreement among themselves as set forth in this <u>Section 8.27</u> to allocate such benefits among themselves and to provide a fair and equitable agreement to make contributions among each of the Individual Borrowers in the event any payment is made by any Individual Borrower hereunder to Administrative Agent (any such payment, a "<u>Contribution</u>"). In order to provide for a fair and equitable contribution among Individual Borrowers in the event that any Contribution is made by an Individual Borrower (a "<u>Funding Borrower</u>"), such Funding Borrower shall be entitled to a reimbursement Contribution ("<u>Reimbursement Contribution</u>") from all other Individual Borrowers for all payments, damages and expenses incurred by such Funding Borrower in discharging any of the Debt, in the manner and to the extent set forth in this <u>Section 8.27</u>. Each Individual Borrower shall be liable to a Funding Borrower in an amount equal to the greater of (i) (A) the ratio of the Benefit Amount (as defined below) of such Individual Borrower to the total amount of Debt, multiplied by (B) the amount of the Debt paid by such Funding Borrower, and (ii) ninety-five percent (95%) of the excess of (A) the fair saleable value of such Individual Borrower's interest in the Property and the other collateral for the Loan, over (B) the total liabilities of such Individual Borrower (including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined as of the date on which the payment made by a Funding Borrower is deemed made for purposes hereof

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(giving effect to all payments made by other Funding Borrowers as of such date in a manner to maximize the amount of such Contributions). For purposes hereof, the "<u>Benefit Amount</u>" of any Individual Borrower as of any date of determination shall be the net value of the benefits to such Individual Borrower and its Affiliates from extensions of credit made by Lender to (1) such Individual Borrower and (2) the other Individual Borrowers hereunder and the other Loan Document. In addition:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;If at any time there exists more than one Funding Borrower with respect to any Contribution (in any such case, the "<u>Applicable Contribution</u>"), then Reimbursement Contributions from other Individual Borrowers shall be allocated among such Funding Borrowers in proportion to the total amount of the Contribution made for or on account of the other Individual Borrowers by each such Funding Borrower pursuant to the Applicable Contribution. If at any time any Individual Borrower pays an amount hereunder in excess of the amount calculated pursuant to this <u>Section 8.27</u>, such Individual Borrower shall be deemed to be a Funding Borrower to the extent of such excess and shall be entitled to a Reimbursement Contribution from the other Individual Borrowers in accordance with the provisions of this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;Each Individual Borrower acknowledges that the right to Reimbursement Contribution hereunder shall constitute an asset in favor of such Individual Borrower to which such Reimbursement Contribution is owing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;No Reimbursement Contribution payments payable by an Individual Borrower pursuant to the terms of this <u>Section 8.27</u> shall be paid until all amounts then due and payable by all of Individual Borrowers to Administrative Agent, pursuant to the terms of the Loan Documents, are paid in full. Nothing contained in this <u>Section 8.27</u> shall limit or affect the Debt of any Individual Borrower to Administrative Agent or Lender under the Note or any other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Any indebtedness of a Borrower now or hereafter owed to any other Borrower (the "<u>Surety</u>") is hereby is subordinated to the Obligations owed to Administrative Agent and Lender under the Loan Documents. Upon the occurrence and during the continuance of an Event of Default, if Administrative Agent so requests, any such indebtedness of a Borrower now or hereafter owed to any Surety shall be collected, enforced and received by such Surety as trustee for Administrative Agent and shall be paid over to Administrative Agent in kind on account of the Obligations, but without reducing or affecting in any manner the obligations of such Surety under the other provisions of this Agreement. Upon the occurrence and during the continuance of an Event of Default, should such Surety fail to collect or enforce any such indebtedness of a Borrower now or hereafter owed to such Surety and pay the proceeds thereof to Administrative Agent in accordance with this subsection, Administrative Agent as such Surety's attorney in fact may do such acts and sign such documents in such Surety's name as Administrative Agent considers necessary or desirable to effect such collection, enforcement and/or payment. Until the Obligations shall have been paid and performed in full, all the rights, privileges, powers and remedies granted to Administrative Agent hereunder shall continue to exist and may be exercised by Administrative Agent at any time and from time to time irrespective of the fact that any of the Obligations may have become barred by any statute of limitations. Each Borrower, in its capacity as Surety, expressly waives the benefit of any and all statutes of limitation, and any and all laws providing for exemption of property from execution or for evaluation and appraisal upon foreclosure, to the maximum extent permitted by applicable Legal Requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Each Borrower, in its capacity as a Surety, acknowledges that the obligations undertaken herein involve the payment of obligations of persons or entities other than such Surety and, in full recognition of that fact, consents and agrees (and waives any right to

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object) that Administrative Agent may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof, in accordance with the terms of the Loan Documents: (A) 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; (B) 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 to which such Surety is not a party or any additional security or guaranties, or any condition, covenant, default, remedy, right, representation or term thereof or thereunder; (C) 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; (D) accept partial payments on the Obligations; (E) receive and hold additional security or guaranties for the Obligations or any part thereof; (F) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or enforce any security or guaranties, and apply any security and direct the order or manner of sale thereof as Administrative Agent in its sole and absolute discretion may determine; (G) release any party from any personal liability with respect to the Obligations or any part thereof; (H) settle, release on terms satisfactory to Administrative Agent or by operation of applicable Legal Requirements or otherwise liquidate or enforce any Obligations and any security or guaranty therefor in any manner, consent to the transfer of any security and bid and purchase at any sale; and/or (I) consent to the merger, change or any other restructuring or termination of the entity existence of other Borrowers or any other party, and correspondingly restructure the Obligations, and any such merger, change, restructuring or termination shall not affect the liability of any Borrower or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;In the event, on account of the Bankruptcy Reform Act of 1978, as amended, the Uniform Fraudulent Conveyance Act, or any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, including, without limitation, Section 548 of the Bankruptcy Code and any state fraudulent transfer or fraudulent conveyance act or statute applied in such proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise (collectively, "<u>Bankruptcy Laws</u>"), now or hereafter in effect, which may be or become applicable, any Borrower shall be relieved of or fail to incur any debt, obligation or liability as provided herein or in any other Loan Documents to which such Borrower is a party, the other Borrowers shall nevertheless be fully liable therefor. Each Borrower, Lender and Administrative Agent hereby confirm that it is the intention of all parties hereto that the obligations of each Borrower hereunder, under each Security Instrument, and each other Loan Documents not constitute a fraudulent transfer or fraudulent conveyance for the purposes of any Bankruptcy Laws (a "<u>Fraudulent Conveyance</u>"). To give effect to the foregoing intention of the parties, each of such parties hereby irrevocably agrees that the obligations of each Borrower to Administrative Agent and Lender shall at all times be limited to (but shall not be less than) such maximum amount as will, after giving effect to the maximum amount of such obligations and all other liabilities (whether contingent or otherwise) of such Borrower that are relevant under such Bankruptcy Laws, result in the obligations of such Borrower not constituting a Fraudulent Conveyance as of the date of execution and delivery of this Agreement and the other documents contemplated hereby (provided, however, that the foregoing shall not in any way limit the obligations of any Borrower to Administrative Agent and Lender pursuant to the Loan Documents in effect prior to the Effective Date). The provisions of this <u>clause (vi)</u> are intended solely to preserve the rights of Administrative Agent and Lender hereunder to the maximum extent that would not cause the obligations of any Borrower hereunder to be subject to avoidance as a Fraudulent Conveyance, and no Borrower or any other Person shall have any right or claim under this <u>clause (vi)</u> as against Administrative Agent or Lender that would not otherwise be available to such Person under Bankruptcy Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;Each Borrower warrants and agrees that each of the waivers and consents set forth herein are made with full knowledge of their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which such Borrower otherwise may have against other Borrowers, Lender, Administrative Agent or others, or against any collateral, and that, under the circumstances, the waivers and consents herein given are reasonable and not contrary to public policy or law. Each Borrower acknowledges that it has either consulted with legal counsel regarding the effect of this Agreement and the waivers and consents set forth herein, or has made an informed decision not to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;<u>Additional Waivers</u>. Each Individual Borrower waives, to the extent permitted by applicable Legal Requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any right to require Administrative Agent to proceed against any other Individual Borrower or any other person or to proceed against or exhaust any security held by Administrative Agent at any time or to pursue any other remedy in Administrative Agent's power before proceeding against such Individual Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;any defense or rights based upon or arising out of: (A) any legal disability or other defense of any other Individual Borrower, any guarantor of any other person or by reason of the cessation or limitation of the liability of any other Individual Borrower or any guarantor from any cause other than full payment of all sums payable under the Note and the other Loan Documents; (B) any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of any other Individual Borrower or any principal of any other Individual Borrower or any defect in the formation of any other Individual Borrower or any principal of any other Individual Borrower; (C) any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; (D) any failure by Administrative Agent and/or Lender to obtain collateral for the Debt or failure by Administrative Agent and/or Lender to perfect a lien on the Property (or any portion thereof); (E) presentment, demand, protest and notice of any kind; (F) any failure of Administrative Agent and/or Lender to give notice of sale or other disposition of the Property (or any portion thereof) to any other Individual Borrower or to any other Person or any defect in any notice that may be given in connection with any such sale or disposition; (G) any failure of Administrative Agent and/or Lender to comply with applicable Legal Requirements in connection with the sale or other disposition of the Property (or any portion thereof), including any failure of Administrative Agent and/or Lender to conduct a commercially reasonable sale or other disposition of the Property (or any portion thereof); (H) any use of cash collateral under Section 363 of the Federal Bankruptcy Code, and any defense based upon any election by Administrative Agent and/or Lender, in any bankruptcy proceeding, of the application or non-application of Section 1111(6)(2) of the Bankruptcy Code or any successor statute; (I) any agreement or stipulation entered into by Administrative Agent and/or Lender with respect to the provision of adequate protection in any bankruptcy proceeding; (J) any borrowing or any grant of a security interest under Section 364 of the Federal Bankruptcy Code; (K) the avoidance of any security interest in favor of Administrative Agent and/or Lender for any reason; (L) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding, including any discharge of, or bar or stay against collecting, all or any of the obligations evidenced by the Note or owing under any of the Loan Documents; (M) such Individual Borrower's, or any other party's, resignation of the portion of any obligation secured by the Security Instrument to be satisfied by any payment from any other Individual Borrower or any such party; or (N) an election of remedies by Administrative Agent and/or Lender even though the election of remedies, such as non-judicial foreclosure with respect to security for the Loan or any other amounts owing under the Loan Documents, has destroyed such Individual Borrower's rights of subrogation and reimbursement against any other Individual Borrower; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;except as may be expressly and specifically permitted herein, any claim or other right which such Individual Borrower might now have or hereafter acquire against any other Individual Borrower or any other person that arises from the existence or performance of any obligations under the Note or the other Loan Documents, including any of the following: (A) any right of subrogation, reimbursement, exoneration, contribution, or indemnification; or (B) any right to participate in any claim or remedy of Administrative Agent and/or Lender against any other Individual Borrower or any collateral security therefor, whether or not such claim, remedy or right arises in equity or under contract, statute or common law.

Section 8.28. &nbsp;&nbsp;&nbsp;&nbsp;<u>Condominium Provisions</u>. In addition to the other representations, warranties and covenants of Borrower set forth elsewhere herein, Borrower hereby represents, warrants and covenants to and with Administrative Agent that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Condominium Declaration, any articles of incorporation or association agreements and any bylaws governing the Property and the Association (all such applicable documents, as amended and restated to date, being referred to herein collectively as the "<u>Condominium Documents</u>"), have not been amended or modified in any material respect from the form or substance of such documents provided to Administrative Agent and attached as Exhibit D to that certain Closing Certificate dated of even date herewith delivered by Borrower to Administrative Agent and such Condominium Documents continue in full force and effect as of the date hereof. Borrower shall not give, without the prior written consent of Administrative Agent, its consent or approval to any amendment, modification, waiver or rescission of any of the terms, conditions or provisions of any such Condominium Documents or of Borrower's rights thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;To Borrower's knowledge, the initial creation of the condominium units and the transfer of the Property to the Borrower was made in compliance with all applicable Legal Requirements, and there is no investigation or administrative or judicial proceeding or action pending relative thereto by any governmental authority having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Borrower is and shall continue to be the "Declarant" as described in the Condominium Declaration and, other than the Partial Assignment of Declarant's Rights, no rights of Declarant have been assigned or will be assigned to any other party whatsoever except as to those rights given to the Association as described in the Condominium Declaration. No party other than Borrower has any rights or interests as "Declarant," "Sponsor," or "Developer" or as any similar party pursuant to the Condominium Declaration, including, without limitation, any right to designate any board members of Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Borrower is the sole unit owner of all units and shall be the sole party responsible for the any action taken by a unit owner with respect to the Condominium Declaration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;To Borrower's knowledge, no interest in, or consent or approval to use or occupy the common areas of the condominium has been granted by the Association except as expressly set forth in the Condominium Declaration or otherwise disclosed in writing to Administrative Agent and except for any easements of record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;To Borrower's knowledge, to the extent the Association (and/or its members or shareholders, as the case may be) has been granted the right to use property or facilities not part of the Condominium Regime, all such rights are in full force and effect and have not been terminated, modified, rescinded or waived and all assessments or other charges payable to any person or entity in connection with such rights which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for such assessments and charges which remains unpaid and which has been assessed, but is not yet due and payable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;To Borrower's knowledge, the Association is a duly formed, validly existing corporation and is in good standing in the state of its formation and, as applicable, is duly qualified to do business and in good standing in the state in which the Property is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;The lien of the Association for assessments and interest thereon, if any, made after the date of recordation of the Security Instrument, is subject to the Security Instrument and to the title to the Property obtained as a result of foreclosure or conveyance in lieu of foreclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;To Borrower's knowledge, no person or entity, including without limitation, any tenant or occupant of the Property, has a valid and currently existing right of first refusal relative to any unit within or any other part of the Property which has not terminated or been validly waived. No person or entity has any option to acquire any unit within or any other part of the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Each condominium unit constituting the Property shall be a separate parcel of real property for real property tax purposes, and has been assigned a tax lot number by the taxing authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall comply with each of the terms and conditions of the Condominium Declaration, including, without limitation, the payment of all fees and assessments, if any, required to be paid by Borrower thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall further not consent to or approve any further annexation of any real property under the Condominium Declaration absent obtaining the prior written consent of Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not consent to the Association making any capital additions, alterations or improvements of or to any common areas or similar facilities as may be described in the Condominium Declaration which would be in violation of this Agreement if directly effectuated by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not consent to the Association entering into any service contracts, trade arrangements and/or other agreements or otherwise allowing the Property to become directly or indirectly burdened by any such service contract, trade arrangement and/or other agreements if such service contract, trade arrangement and/or other agreement would be in violation of this Agreement if directly effectuated by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall provide Administrative Agent with copies of all notices received by the Association within three (3) Business Days of Borrower's receiving same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;&nbsp;To the extent that the insurance required pursuant to the Condominium Declaration does not satisfy the requirements imposed by <u>Section 5.1.11</u> hereof, Borrower shall provide supplemental insurance such that the insurance requirements hereof and of the Condominium Declaration are at all times satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;&nbsp;To Borrower's knowledge, there is no defense, offset, claim or counterclaim by or in favor of any association (former or otherwise) against Borrower or all or any portion of the Property under the Condominium Declaration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;To the best of Borrower's knowledge, there is no suit, action, proceeding or audit pending or, to Borrower's knowledge, threatened against or affecting the Borrower or the Property under the Condominium Declaration at law or in equity or before or by any court, administrative agency, or other governmental authority which brings into question that the

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validity of the Condominium Declaration or which, if determined adversely against the Borrower, would reasonably be expected to result in any Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;&nbsp;&nbsp;Within ten (10) Business Days after written request by Administrative Agent, from time to time made, Borrower will execute and deliver to Administrative Agent or to such other person or entity as may be specified by Administrative Agent an estoppel certificate containing such information concerning the Condominium Declaration as Administrative Agent may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;&nbsp;&nbsp;Borrower further agrees that it shall not make any claims as a unit owner or as Declarant under the Condominium Declaration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;&nbsp;&nbsp;&nbsp;So long as any Affiliate of Borrower owns or controls ownership of any other units in the Condominium Regime, Borrower shall cause such Affiliate to act (or to refrain from acting, as the case may be) in such a manner necessary to ensure that (i) actions being taken with regard to the Association as a whole do not have a disproportionate effect on the Property and (ii) vote consistently with Borrower on all matters affecting the Association or the Condominium Regime and in a manner consistent with the terms of this <u>Section 8.28</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall not, except with the prior written consent of Administrative Agent, (i) institute any action or proceeding for partition of the Condominium Regime; (ii) vote for or consent to any modification of, amendment to or relaxation in the enforcement of any provision of the Condominium Declaration or the other Condominium Documents which would reasonably be expected to have a Material Adverse Effect; or (iii) except as otherwise specified in <u>Section 5.1.12</u> hereof, in the event of damage to or destruction of the Improvements, vote in opposition to a motion to repair, restore, or rebuild the Improvements.

**[NO FURTHER TEXT ON THIS PAGE; SIGNATURE PAGE FOLLOWS]**

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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.

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| |
|:---|
| **<u>BORROWER</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company<br>By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Matt McGraner<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CP LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Matt McGraner<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>

[Signatures Continued on Next Page]

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Steven A. Rivers&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp; Steven A. Rivers<br>Title:&nbsp;&nbsp;&nbsp;&nbsp; Authorized Signatory |

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Steven A. Rivers&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name: Steven A. Rivers<br>Title:&nbsp;&nbsp;&nbsp;&nbsp; Authorized Signatory |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Steven A. Rivers&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp; Steven A. Rivers<br>Title:&nbsp;&nbsp;&nbsp;&nbsp; Authorized Signatory |

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**<u>LIMITED CONSENT AND OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Omnibus Amendment Agreement (this "**Agreement**"), dated November 10, 2020 (the "**Execution Date**"), but effective as of September 8, 2020 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the "**Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the "**Mezzanine Loan Agreement**", and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested that, subject to the terms and conditions of this Agreement, Administrative Agent permit Borrower to deposit the Right of First Negotiation

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Deposit (as defined herein) into a Reserve Account in order to facilitate the negotiation between Administrative Agent and Borrower of the Hotel Component Financing (as defined herein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter dated September 18, 2020, but effective as of the Effective Date, in connection with the Loan and in anticipation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to permit Borrower to deposit the Right of First Negotiation Deposit (as defined herein) into a Reserve Account in order to facilitate the negotiation between Administrative Agent and Borrower of the Hotel Component Financing (as defined herein), subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the deposit of the Right of First Negotiation Deposit into a Reserve Account with Lender to be held by Administrative Agent while Administrative Agent and Borrower discuss the potential terms of the Hotel Component Financing. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default (other than, subject to the terms and conditions of this Agreement, any Default or Event of Default that would result solely from the failure to make any of the Deferred Payments, as and to the extent expressly permitted under this Agreement), or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Hotel Component Financing; Reserve Deposit</u>.** Obligor acknowledges and agrees that as of the Effective Date, Borrower has not (a) completed the Release of the Hotel Component in accordance with Section 5.2.10(c) of the Loan Agreement, or (b) commenced construction of the improvements to the Hotel Component in accordance with Section 5.1.19 of the Loan Agreement. Notwithstanding anything to the contrary in Section 5.1.19 of the Loan Agreement, Borrower shall not be required to pay to Administrative Agent the Required Pay Down and other sums otherwise due under Section 5.1.19 of the Loan Agreement, and Borrower shall, in lieu of paying the Required Pay Down and other sums otherwise due thereunder, deposit with Administrative Agent the sum of $14,000,000.00 (the "**Right of First Negotiation** 

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**Deposit**") to be held in the Project Expenditures Reserve Account as collateral for the Loan, to be applied pursuant to this Section 1.2. Administrative Agent acknowledges receipt of the Right of First Negotiation Deposit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall deliver to Administrative Agent all of the Hotel Component Financing Due Diligence (as defined below) no later than October 30, 2020 (the "**Hotel Component Due Diligence Deadline**"). Pursuant to <u>Section 5.1.18</u> of the Loan Agreement, Borrower shall in good faith negotiate the terms of proposed financing of the Hotel Improvements (the "**Hotel Component Financing**") with Administrative Agent for a period of not more than thirty (30) days from and after the Hotel Component Due Diligence Deadline (the "**Hotel Component Financing Agreement Deadline**"). For purpose of this Agreement, the "**Hotel Component Financing Due Diligence**" shall mean all of the following related to the Hotel Improvements: (i) a project budget; (ii) a project schedule; (iii) plans and specifications; (iv) a copy of the General Contractor Agreement, (v) if applicable, copies of any Design Professional Agreements, (v) a final, executed operating lease by and between an Affiliate of Mortgage Borrower, as landlord, and an Affiliate of Mortgage Borrower, as tenant, pursuant to which the parties thereunder would operate the Hotel Component upon terms acceptable to Administrative Agent, (vi) a final, executed Management Agreement by and between Mortgage Borrower or an Affiliate of Mortgage Borrower and IGH Management (Maryland) LLC, containing the terms (including arrangements with respect to "key money" required to be repaid any other fees thereunder) acceptable to Administrative Agent under which Mortgage Borrower or such Affiliate of Mortgage Borrower would operate under such franchise; and (vii) any other documents and instruments with respect to the Hotel Improvements as reasonably requested by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as of the Hotel Component Financing Agreement Deadline, Borrower and Administrative Agent have not reached agreeable terms for the Hotel Component Financing, Borrower shall be afforded up to an additional thirty (30) days from and after the Hotel Component Financing Deadline within which to secure and close a refinance of the Loan with an alternate third party lender (the "**Loan Refinancing Deadline**"), and upon the earlier to occur of (i) the date of the closing of any refinancing of the Loan, or (ii) the Loan Refinancing Deadline (whether or not Borrower is able to secure and close a refinance of the Loan with an alternate third party lender), Administrative Agent shall have the absolute right to apply the Right of First Negotiation Deposit to the repayment of the Debt in accordance with <u>Section 2.3.1</u> of the Loan Agreement, and Borrower shall pay (x) all accrued and unpaid interest on the amount of the principal being repaid, plus (y) the Exit Fee due on the portion of principal being so prepaid hereunder, plus (z) all of Administrative Agent's out of pocket costs and expenses incurred in connection with such prepayment (including reasonable attorneys' fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as of the Hotel Component Financing Deadline, Borrower and Administrative Agent have reached agreeable terms for the Hotel Component Financing, then (i) the Loan Agreement and other Loan Documents shall be modified to, among other things, account for (A) the terms of the Hotel Component Financing, (B) the requirements related to the completion of the Hotel Improvements, (C) covenants, conditions and restrictions related to the operation of the hotel following completion of the Hotel Improvements, and (D) all other terms and conditions in the Loan Documents impacted by the addition of a hotel to the Property, and (ii) the funds comprising the Right of First Offer Deposit shall, so long as no Event of Default then exists, be disbursed by Administrative Agent from the Project Expenditure Reserve Account for the payment of budgeted expenditures for the completion of the Hotel Improvements and shall be counted as a direct contribution of equity by Borrower for such budgeted expenditures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents.</u>**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;the Right of First Negotiation Deposit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**1.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Execution Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties, including, without limitation, those identified in <u>Section 3.1</u> below, in relation to the Deferred Payments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent on the Execution Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Legal Fees; Rubicon Catering Lawsuit</u>**. Additionally, Borrower shall pay in full directly to Duane Morris on the Execution Date all out-of-pocket costs and expenses, including, without limitation, all fees of Duane Morris in the amount of $20,600.00, incurred by Administrative Agent in connection with, arising out of, or related to, that certain lawsuit filed in the Dallas County District Court, styled *Rubicon Catering, Inc. v. CP Tower Owner, LLC and NexBank Securities Inc. d/b/a NexBank Realty Advisors*, Cause Number DC-19-06206.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this

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Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>.** This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified,

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reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO EXTEND THE HOTEL COMPONANT FINANCINTG AGREEMENT DEADLINE OR THE LOAN REFINANCING DEADLINE OR FURTHER MODIFY THE LOAN OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>.** At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>.**5.9&nbsp;&nbsp;&nbsp;&nbsp; Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to <u>notices@acorecapital.com</u> and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**.5.10&nbsp;&nbsp;&nbsp;&nbsp; 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>&nbsp;&nbsp;&nbsp;&nbsp; Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By:<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By:<u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By:<u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Hotel Component Financing Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Hotel Component Financing Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Hotel Component Financing Covenant or other obligation of Obligors set forth in this Agreement.

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**<u>LIMITED CONSENT AND SECOND OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Second Omnibus Amendment Agreement (this "**Agreement**"), dated as of February 1, 2021, but effective as of December 30, 2020 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement date as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**," and together with the Original Mortgage Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent (such First Limited Consent, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as

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of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested that, subject to the terms and conditions of this Agreement, Administrative Agent permit Borrower to extend each of the Hotel Component Financing Agreement Deadline and the Loan Refinance Deadline in order to facilitate the continued negotiation between Administrative Agent and Borrower of the Hotel Component Financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to permit Borrower to extend each of the Hotel Component Financing Agreement Deadline and the Loan Refinance Deadline in order to facilitate the continued negotiation between Administrative Agent and Borrower of the Hotel Component Financing, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the extension of each of the Hotel Component Financing Agreement Deadline and the Loan Refinance Deadline while Administrative Agent and Borrower continue to discuss the potential terms of the Hotel Component Financing. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Hotel Component Financing; Reserve Deposit</u>**. Obligor acknowledges and agrees that as of the Effective Date, Borrower has not (a) completed the Release of the Hotel Component in accordance with Section 5.2.10(c) of the Loan Agreement, or (b) commenced construction of the improvements to the Hotel Component in accordance with Section 5.1.19 of the Loan Agreement, and that pursuant to the First Limited Consent, Borrower, in lieu of paying the Required Pay Down and other sums otherwise due under Section 5.1.19 of the Loan

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Agreement, deposited with Administrative Agent the Right of First Negotiation Deposit to be held in the Project Expenditures Reserve Account as collateral for the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to <u>Section 5.1.18</u> of the Loan Agreement, Borrower shall in good faith negotiate the Hotel Component Financing with Administrative Agent for a period to end no later than January 31, 2021 (the "**Extended Hotel Component Financing Agreement Deadline**"), and Borrower shall continue to deliver to Administrative Agent any additional Hotel Component Financing Due Diligence as reasonably requested by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as of the Extended Hotel Component Financing Agreement Deadline, Borrower and Administrative Agent have not reached agreeable terms for the Hotel Component Financing, Borrower shall be afforded until no later than February 28, 2021, within which to secure and close a refinance of the Loan with an alternate third party lender (the "**Extended Loan Refinancing Deadline**"), and upon the earlier to occur of (i) the date of the closing of any such refinancing of the Loan, or (ii) the Extended Loan Refinancing Deadline (whether or not Borrower is able to secure and close a refinance of the Loan with an alternate third party lender), Administrative Agent shall have the absolute right to apply the Right of First Negotiation Deposit to the repayment of the Debt in accordance with <u>Section 2.3.1</u> of the Loan Agreement, and Borrower shall pay (x) all accrued and unpaid interest on the amount of the principal being repaid, plus (y) the Exit Fee due on the portion of principal being so prepaid hereunder, plus (z) all of Administrative Agent's out of pocket costs and expenses incurred in connection with such prepayment (including reasonable attorneys' fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as of the Extended Hotel Component Financing Deadline, Borrower and Administrative Agent have reached agreeable terms for the Hotel Component Financing, then (i) the Loan Agreement and other Loan Documents shall be modified to, among other things, account for (A) the terms of the Hotel Component Financing, (B) the requirements related to the completion of the Hotel Improvements, (C) covenants, conditions and restrictions related to the operation of the hotel following completion of the Hotel Improvements, and (D) all other terms and conditions in the Loan Documents impacted by the addition of a hotel to the Property, and (ii) the funds comprising the Right of First Negotiation Deposit shall, so long as no Event of Default then exists, be disbursed by Administrative Agent from the Project Expenditure Reserve Account for the payment of budgeted expenditures for the completion of the Hotel Improvements and shall be counted as a direct contribution of equity by Borrower for such budgeted expenditures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**2.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND** 

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**ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO EXTEND THE EXTENDED HOTEL COMPONANT FINANCING AGREEMENT DEADLINE OR THE EXTENDED LOAN REFINANCING DEADLINE OR FURTHER MODIFY THE LOAN OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any

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interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness.</u>** This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**.Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to <u>notices@acorecapital.com</u> and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**. 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member<br>By: <u>/s / James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>&nbsp;&nbsp;&nbsp;&nbsp; Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s / James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

LIMITED CONSENT AND SECOND OMNIBUS AMENDMENT AGREEMENT – Signature Page

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Hotel Component Financing Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Hotel Component Financing Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Hotel Component Financing Covenant or other obligation of Obligors set forth in this Agreement.

SCHEDULE 2, Additional Loan Document Modifications – Solo Page

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**<u>LIMITED CONSENT AND THIRD OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Third Omnibus Amendment Agreement (this "**Agreement**"), dated as of March 19, 2021 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**," and together with the Original Mortgage Loan Agreement and the First Limited Consent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent and thereafter further amended by the Second Limited Consent (such First Limited Consent and Second Limited Consent, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested that, subject to the terms and conditions of this Agreement, Administrative Agent permit Borrower to extend each of the Extended Hotel Component Financing Agreement Deadline and the Extended Loan Refinance Deadline in order to facilitate the continued negotiation between Administrative Agent and Borrower of the Hotel Component Financing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to permit Borrower to extend each of the Extended Hotel Component Financing Agreement Deadline and the Extended Loan Refinance Deadline in order to facilitate the continued negotiation between Administrative Agent and Borrower of the Hotel Component Financing, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the extension of each of the Extended Hotel Component Financing Agreement Deadline and the Extended Loan Refinance Deadline while Administrative Agent and Borrower continue to discuss the potential terms of the Hotel Component Financing. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Hotel Component Financing; Reserve Deposit</u>**. Obligor acknowledges and agrees that as of the Effective Date, Borrower has not (a) completed the Release of the Hotel Component in accordance with Section 5.2.10(c) of the Loan Agreement, or (b) commenced construction of the improvements to the Hotel Component in accordance with Section 5.1.19 of the Loan Agreement, and that pursuant to the First Limited Consent, Borrower, in lieu of paying the Required Pay Down and other sums otherwise due under Section 5.1.19 of the Loan Agreement, deposited with Administrative Agent the Right of First Negotiation Deposit to be held in the Project Expenditures Reserve Account as collateral for the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to <u>Section 5.1.18</u> of the Loan Agreement, Borrower shall in good faith negotiate the Hotel Component Financing with Administrative Agent for a period to end no later than March 31, 2021 (the "**Second Extended Hotel Component Financing Agreement Deadline**"), and Borrower shall continue to deliver to Administrative Agent any additional Hotel Component Financing Due Diligence as reasonably requested by Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as of the Second Extended Hotel Component Financing Agreement Deadline, Borrower and Administrative Agent have not reached agreeable terms for the Hotel Component Financing, Borrower shall be afforded until no later than April 30, 2021, within which to secure and close a refinance of the Loan with an alternate third party lender (the "**Second Extended Loan Refinancing Deadline**"), and upon the earlier to occur of (i) the date of the closing of any such refinancing of the Loan, or (ii) the Second Extended Loan Refinancing Deadline (whether or not Borrower is able to secure and close a refinance of the Loan with an alternate third party lender), Administrative Agent shall have the absolute right to apply the Right of First Negotiation Deposit to the repayment of the Debt in accordance with <u>Section 2.3.1</u> of the Loan Agreement, and Borrower shall pay (x) all accrued and unpaid interest on the amount of the principal being repaid, plus (y) the Exit Fee due on the portion of principal being so prepaid hereunder, plus (z) all of Administrative Agent's out of pocket costs and expenses incurred in connection with such prepayment (including reasonable attorneys' fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;In the event that, as of the Second Extended Hotel Component Financing Deadline, Borrower and Administrative Agent have reached agreeable terms for the Hotel Component Financing, then (i) the Loan Agreement and other Loan Documents shall be modified to, among other things, account for (A) the terms of the Hotel Component Financing, (B) the requirements related to the completion of the Hotel Improvements, (C) covenants, conditions and restrictions related to the operation of the hotel following completion of the Hotel Improvements, and (D) all other terms and conditions in the Loan Documents impacted by the addition of a hotel to the Property, and (ii) the funds comprising the Right of First Negotiation Deposit shall, so long as no Event of Default then exists, be disbursed by Administrative Agent from the Project Expenditure Reserve Account for the payment of budgeted expenditures for the completion of the Hotel Improvements and shall be counted as a direct contribution of equity by Borrower for such budgeted expenditures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

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**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**3.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY** 

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**AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO EXTEND THE SECOND EXTENDED HOTEL COMPONANT FINANCING AGREEMENT DEADLINE OR THE SECOND EXTENDED LOAN REFINANCING DEADLINE OR FURTHER MODIFY THE LOAN OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**.**<u>3.3.1&nbsp;&nbsp;&nbsp;&nbsp;</u>** Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to <u>notices@acorecapital.com</u> and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**.**<u>3.3.2&nbsp;&nbsp;&nbsp;&nbsp;</u>** 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>&nbsp;&nbsp;&nbsp;&nbsp; Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp; <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Hotel Component Financing Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Hotel Component Financing Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Hotel Component Financing Covenant or other obligation of Obligors set forth in this Agreement.

4839-1538-5045v.3 59940-92

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**<u>FOURTH AMENDMENT TO LOAN AGREEMENT</u>**

This Fourth Amendment to Loan Agreement (this "<u>Amendment</u>"), dated as of September 8, 2021 (the "<u>Effective Date")</u>, is made by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("<u>CP Tower Borrower</u>"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("<u>CP Land Borrower</u>," and together with CP Tower Borrower, collectively, "<u>Borrower</u>"), (ii) **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "<u>Guarantor</u>," and together with Borrower, the "<u>Obligors</u>"), (iii) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "<u>Initial Lenders</u>," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "<u>Lender</u>"), and (iv) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "<u>Administrative Agent</u>").

<u>RECITALS</u>

WHEREAS, Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement, dated as of August 15, 2018 (the "<u>Original Loan Agreement</u>"), pursuant to which the Lender made a loan (the "<u>Loan</u>") to Borrower in the original principal amount of $153,683,400.00, which Loan is evidenced by the Original Loan Agreement and the other Loan Documents (as defined in the Original Loan Agreement), which Original Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Obligors, **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "<u>Mezzanine Borrower</u>"), Administrative Agent, and the Initial Lenders (the "<u>First Limited Consent</u>"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Obligors, Mezzanine Borrower, Administrative Agent, and the Initial Lenders (the "<u>Second Limited Consent</u>"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Obligors, Mezzanine Borrower, Administrative Agent, and the Initial Lenders (the "<u>Third Limited Consent</u>," and together with the Original Loan Agreement, the First Limited Consent, and the Second Limited Consent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "<u>Loan Agreement</u>");

WHEREAS, Guarantor executed, in connection with the Loan, (i) each of that certain Guaranty of Recourse Obligations, Completion Guaranty, and Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "<u>Guaranties</u>"), and (ii) together with Borrower and Administrative Agent, that certain Environmental Indemnity Agreement dated as of August 15, 2018 (the "<u>Environmental Indemnity</u>"); and

WHEREAS, Obligors have requested certain amendments to the terms of the Loan, as set forth below, and Administrative Agent and Lender are willing to amend the Loan Agreement and the Loan Documents to accept such amendments to the terms of the Loan on the terms and conditions set forth herein.

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NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**NOW THEREFORE**, in consideration of the covenants, agreements, representations and warranties set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant, agree, represent and warrant as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;<u>Definitions</u>. Unless defined in this Amendment, all capitalized terms used in this Amendment shall have the meanings ascribed to them in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendments to Loan Agreement</u>. Effective as of the date of this Amendment the Loan Agreement is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;The definition of "<u>Extension Conditions</u>" in <u>Section 1.1</u> of the Loan Agreement shall be deleted in its entirety and replaced with the following:

"<u>Extension Conditions</u>" means each of the following: (a) Borrower shall have given at least thirty (30) days' prior written notice to Administrative Agent of its intention to extend the Maturity Date; (b) no Event of Default shall exist as of the applicable Maturity Date; (c) the Debt Yield (after giving effect to any voluntary prepayment made in compliance with this Agreement) shall be at least (i) with respect to the extension of the Maturity Date from the Payment Date in March, 2022 to the Payment Date in September, 2022, nine and 00/100 percent (9.00%) as of the applicable Maturity Date, and (ii) with respect to the extension of the Maturity Date from the Payment Date in September, 2022 to the Payment Date in September, 2023, ten and 00/100 percent (10.00%) as of the applicable Maturity Date; (d) Borrower shall have paid or reimbursed all of Administrative Agent's outstanding fees and expenses for each extension; (e) with respect to the extension of the Maturity Date from the Payment Date in September, 2022 to the Payment Date in September, 2023, Borrower shall have paid to Administrative Agent a fee in the amount of 0.25% of the Outstanding Principal Balance (including the amount of any Additional Advance funded by Administrative Agent on such Maturity Date and any Additional Advance that Borrower remains eligible to receive pursuant to this Agreement); (f) Borrower shall have obtained (and collaterally assigned to Administrative Agent pursuant to such documents as Administrative Agent may require) an interest rate cap complying with the requirements of <u>Section 5.1.4</u> hereof, expiring no earlier than the extended Maturity Date, capping the applicable Index at the applicable Strike Rate, and has a notional principal amount not less than the Outstanding Principal Balance; (g) Mezzanine Borrower shall have extended the Maturity Date (as defined in the Mezzanine Loan Agreement) of the Mezzanine Loan to a date not sooner than the extended Maturity Date hereunder (including that all conditions precedent to such extension shall have been satisfied by Mezzanine Borrower or waived in writing by Mezzanine Loan Administrative Agent); and (h) Guarantor shall then exist and be in good standing under the laws of the State of its formation, and its governing documents shall not contain provisions requiring the termination of its existence prior to the date that is five (5) years following the extended Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;The definition of "<u>Maturity Date</u>" in <u>Section 1.1</u> of the Loan Agreement shall be deleted in its entirety and replaced with the following:

"<u>Maturity Date</u>" means (a) the Scheduled Maturity Date, (b) if the September 2021 Extension Conditions have been satisfied, the Payment Date in

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December, 2021, (c) if the December 2021 Extension Conditions have been satisfied as of the Payment Date in December, 2021, the Payment Date in March, 2022, (d) if the applicable Extension Conditions have been satisfied as of the Payment Date in March, 2022, the Payment Date in September, 2022, (e) if the applicable Extension Conditions have been satisfied as of the Payment Date in September, 2022, the Payment Date in September, 2023, or (f) the date on which the Debt has been accelerated as herein provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;<u>Extension of the Maturity Date</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Concurrently herewith, and notwithstanding anything to the contrary in the Loan Agreement, Borrower hereby elects to extend the Maturity Date up to the Payment Date in December, 2021, which extension is subject to (and expressly conditioned upon) the satisfaction of the following conditions (collectively, the "<u>September 2021 Extension Conditions</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall, no later than the Effective Date, prepay the Outstanding Principal Balance and the Mezzanine Loan Outstanding Principal Balance in an aggregate amount equal to the sum of $5,000,000.00;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall pay an extension fee with respect to the Loan and the Mezzanine Loan in the aggregate amount of $394,060.00;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.&nbsp;&nbsp;&nbsp;&nbsp;No Event of Default shall exist as of the Effective Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv.&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall pay of all of Administrative Agent's outstanding fees and expenses (including attorneys' fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;As of the Payment Date in December, 2021, and notwithstanding anything to the contrary in the Loan Agreement, Borrower may elect, by providing not less than five (5) Business Days' notice to Administrative Agent, to extend the Maturity Date from the Payment Date in December, 2021 to the Payment Date in March, 2022, which subsequent extension is subject to (and expressly conditioned upon) the satisfaction of the following conditions (collectively, the "<u>December 2021 Extension Conditions</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall, no later than the Payment Date in December, 2021, prepay the Outstanding Principal Balance and the Mezzanine Loan Outstanding Principal Balance in an aggregate amount equal to the sum of $5,000,000.00;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.&nbsp;&nbsp;&nbsp;&nbsp;No Event of Default shall exist as of the Payment Date in December, 2021; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall pay of all of Administrative Agent's outstanding fees and expenses (including attorneys' fees).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;If, and solely to the extent that, Borrower shall have satisfied the September 2021 Extension Conditions and the December 2021 Extension Conditions, Borrower shall retain the right to extend the term of the Loan from the Payment Date in March, 2022 until the Payment Date in September 2022, subject to Borrower's satisfaction of all of the applicable Extension Conditions with respect thereto. For the avoidance of doubt, Borrower shall not be required to extend or maintain an Interest Rate Cap

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Agreement in order to satisfy the September 2021 Extension Conditions or the December 2021 Extension Conditions, but obtaining an Interest Rate Cap Agreement shall be required, as specified in the definition of Extension Conditions, in order to exercise any further extension of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendment to Loan Documents</u>. All references in the Loan Documents to the Loan Agreement shall hereinafter be deemed to be a reference to the Loan Agreement as amended by this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;<u>Ratification; No Novation</u>. Borrower hereby unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Loan Agreement and each of the other Loan Documents, as amended hereby, and acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against it in accordance with the terms, covenants and conditions of the Loan Agreement and the Loan Documents, as amended hereby, in each case, without impairment. The execution and delivery of this Amendment will not constitute a novation or accord and satisfaction, or a modification of the lien, encumbrance or security title of the Loan Agreement or other Loan Documents. Except as amended herein, the Loan Documents shall remain unmodified and shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;<u>Representations and Warranties</u>. Borrower and/or Guarantor hereby represents and warrants that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Borrower and Guarantor each have the power and requisite authority to execute, deliver and perform their respective obligations under this Amendment and any other document executed in connection herewith and are duly authorized to, and have taken all action necessary to authorize such party to, execute, deliver and perform their respective obligations under this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;This Amendment constitutes legal, valid and binding obligations of Borrower and Guarantor (as applicable) enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditors generally, and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;No consent, approval, authorization or order of any court or Governmental Authority or any third party is required in connection with the execution and delivery by Borrower or Guarantor of this Amendment or to consummate the transactions contemplated hereby, which consent has not been obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;<u>No Impairment</u>. This Amendment shall become a part of the Loan Agreement by reference and nothing herein contained shall impair the security now held for the Obligations, nor waive, annul, vary or affect any provision, condition, covenant or agreement contained in the Loan Agreement except as herein amended, nor affect or impair any rights, powers or remedies under the Loan Agreement as hereby amended. Furthermore, Lender and Administrative Agent reserve all rights and remedies they may have as provided in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. All notices, demands, consents, or requests which are either required or desired to be given or furnished hereunder shall be sent and shall be effective in the manner set forth in <u>Section 8.6</u> of the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;<u>Governing Law</u>. This Amendment shall be governed in accordance with the terms and provisions of <u>Section 8.3</u> of the Loan Agreement, which provisions are hereby incorporated into this Amendment as if fully set forth herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;**<u>RELEASE</u>**. **EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "<u>OBLIGOR GROUP RELEASORS</u>") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "<u>LENDER GROUP RELEASEES</u>") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AMENDMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH THE OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF THE LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;<u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this Amendment shall be binding upon Borrower, Guarantor, Lender and Administrative Agent, and their respective successors and assigns, and all persons claiming under or through Borrower, Guarantor, Lender or Administrative Agent or any such successor or assign, and shall inure to the benefit of and be enforceable by Lender, Administrative Agent, Borrower and Guarantor and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Neither this Amendment nor any provision hereof may be changed, waived or terminated orally, but only by an instrument in writing signed by Administrative Agent and Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;If any of the provisions of this Amendment, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Amendment, or the application of such provision or provisions to persons or circumstances other than those to whom or which it is held invalid or unenforceable, shall not be affected thereby and every provision of this Amendment shall be valid and enforceable to the fullest extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;This Amendment may be executed in any number of counterparts and by different parties to this Amendment on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute one and the same instrument. Any signature delivered by a party by facsimile, email or other electronic transmission shall be deemed to be an original signature to this Amendment.

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

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|:---|
| **<u>BORROWER</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Strategic Opportunities Fund, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager |

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CAPITAL MORTGAGE, GP, LLC, a Delaware limited liability company, its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory  |

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory  |

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**<u>JOINDER TO FOURTH AMENDMENT TO LOAN AGREEMENT</u>**

By their execution of this Joinder to Fourth Amendment to Loan Agreement (this "<u>Joinder</u>"), each of **NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust ("<u>NexPoint SOF</u>"), and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (together with Nexpoint SOF, collectively, "<u>Guarantor</u>") (i) hereby acknowledges that it has reviewed, and consents to, the terms of the Amendment, (ii) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Guaranty and the Environmental Indemnity, and (iii) acknowledges and agrees that such obligations under the Guaranty and the Environmental Indemnity remain in full force and effect, binding on and enforceable against it in accordance with their respective terms, covenants and conditions, without impairment.

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**<u>GUARANTOR:</u>**<br>**NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Officer<br>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>GUARANTOR:</u>**<br>**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name: James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager<br>

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**<u>LIMITED CONSENT AND FIFTH OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Fifth Omnibus Amendment Agreement (this "**Agreement**"), dated as of March 8, 2022 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT DIVERSIFIED REAL ESTATE TRUST f/k/a NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Third Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Fourth Amendment to Loan Agreement dated as of September 8, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mortgage Loan Amendment**," and together with the Original Mortgage Loan Agreement, the First Limited Consent, the Second Limited Consent, and the Third Limited Consent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent, the

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Second Limited Consent, the Third Limited Consent, that certain Fourth Amendment to Mezzanine Loan Agreement dated as of September 8, 2021, by and between Mezzanine Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mezzanine Loan Amendment**") (such First Limited Consent, Second Limited Consent, Third Limited Consent, Fourth Mezzanine Loan Amendment, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested a deferral of the Maturity Date occurring on the Payment Date in March, 2022, under and pursuant to (and as defined in) each of the Mortgage Loan Agreement the Mezzanine Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to defer the Maturity Date under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein (provided that, for purposes of this Agreement, the use of "Maturity Date" shall mean each of or either of the "Maturity Date" under and as defined in the Mortgage Loan Agreement and the "Maturity Date" under and as defined in the Mezzanine Loan Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter ("**PNL**") dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the deferral of the Maturity Date as set forth herein. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any

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applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Deferral of Maturity Date</u>**. Borrower acknowledges and agrees that it has not satisfied the Extension Conditions (under and as defined in each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement). Notwithstanding anything to the contrary in the Loan Agreement, and subject to the terms and conditions of this Agreement, and without waiving any of the Borrower's obligations in the Loan Documents except as expressly set forth herein, Administrative Agent hereby agrees to defer of the Maturity Date occurring on the Payment Date in March, 2022 (the "**March 2022 Maturity Date**"), until no later than the Payment Date in May, 2022 (the "**Deferred Maturity Date**"). Notwithstanding anything to the contrary in the Loan Agreement, Borrower shall not otherwise be required as of the March 2022 Maturity Date to either (i) extend or maintain an Interest Rate Cap Agreement or (ii) achieve a Debt Yield of at least nine percent (9.0%), in each case, as a condition to Administrative Agent's agreement to defer the March 2022 Maturity Date. In Administrative Agent's sole and absolute discretion, Administrative Agent may agree, upon the prior written request from Borrower, and subject to terms and conditions in Administrative Agent's sole and absolute discretion, further defer the Deferred Maturity Date until no later than the Payment Date in June, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**4.&nbsp;&nbsp;&nbsp;&nbsp;.

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<br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent by the Effective Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS,** 

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**DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO DEFER THE MATURITY DATE OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**.5.9&nbsp;&nbsp;&nbsp;&nbsp; Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to <u>notices@acorecapital.com</u> and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 &nbsp;&nbsp;&nbsp;&nbsp;**Singular/Plural**.5.10&nbsp;&nbsp;&nbsp;&nbsp; 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, &nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Deferred Maturity Date Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Deferred Maturity Date Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Deferred Maturity Date Covenant or other obligation of Obligors set forth in this Agreement.

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**<u>LIMITED CONSENT AND SIXTH OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Sixth Omnibus Amendment Agreement (this "**Agreement**"), dated as of June 8, 2022 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT DIVERSIFIED REAL ESTATE TRUST f/k/a NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Third Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Fourth Amendment to Loan Agreement dated as of September 8, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mortgage Loan Amendment**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Fifth Omnibus Amendment Agreement dated as of March 8, 2021, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fifth Limited Consent**", and together with the Original Mortgage Loan Agreement, the First Limited Consent, the Second Limited Consent, the Third Limited Consent, and the Fourth Mortgage Loan Amendment, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original

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principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent, the Second Limited Consent, the Third Limited Consent, that certain Fourth Amendment to Mezzanine Loan Agreement dated as of September 8, 2021, by and between Mezzanine Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mezzanine Loan Amendment**"), and the Fifth Limited Consent (such First Limited Consent, Second Limited Consent, Third Limited Consent, Fourth Mezzanine Loan Amendment, Fifth Limited Consent, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested a deferral of the Maturity Date occurring on the Payment Date in June, 2022, under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to defer the Maturity Date under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein (provided that, for purposes of this Agreement, the use of "Maturity Date" shall mean each of or either of the "Maturity Date" under and as defined in the Mortgage Loan Agreement and the "Maturity Date" under and as defined in the Mezzanine Loan Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter ("**PNL**") dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the deferral of the Maturity Date as set forth herein. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or

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course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Deferral of Maturity Date</u>**. Borrower acknowledges and agrees that it has not satisfied the Extension Conditions (under and as defined in each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement). Notwithstanding anything to the contrary in the Loan Agreement, and subject to the terms and conditions of this Agreement, and without waiving any of the Borrower's obligations in the Loan Documents except as expressly set forth herein, Administrative Agent hereby agrees to defer of the Maturity Date occurring on the Payment Date in June, 2022 (the "June 2022 Maturity Date"), until no later than the Payment Date in July, 2022 (the "Deferred Maturity Date"). Notwithstanding anything to the contrary in the Loan Agreement, Borrower shall not otherwise be required as of the June 2022 Maturity Date to either (i) extend or maintain an Interest Rate Cap Agreement or (ii) achieve a Debt Yield of at least nine percent (9.0%), in each case, as a condition to Administrative Agent's agreement to defer the June 2022 Maturity Date. In Administrative Agent's sole and absolute discretion, Administrative Agent may agree, upon the prior written request from Borrower, and subject to terms and conditions in Administrative Agent's sole and absolute discretion, further defer the Deferred Maturity Date until no later than the Payment Date in August, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**5.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and

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expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent by the Effective Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR** 

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**RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>5.1&nbsp;&nbsp;&nbsp;&nbsp;Integration</u>. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO DEFER THE MATURITY DATE OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be

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deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**.1.1.2&nbsp;&nbsp;&nbsp;&nbsp; Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to <u>notices@acorecapital.com</u> and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**.1.1.3&nbsp;&nbsp;&nbsp;&nbsp; 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, &nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp; James Dondero&nbsp;&nbsp;&nbsp;&nbsp;

Title:&nbsp;&nbsp;&nbsp;&nbsp; Manager&nbsp;&nbsp;&nbsp;&nbsp;

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name: Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Deferred Maturity Date Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Deferred Maturity Date Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Deferred Maturity Date Covenant or other obligation of Obligors set forth in this Agreement.

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**<u>LIMITED CONSENT AND SEVENTH OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Seventh Omnibus Amendment Agreement (this "**Agreement**"), dated as of August 8, 2022 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT DIVERSIFIED REAL ESTATE TRUST f/k/a NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Third Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Fourth Amendment to Loan Agreement dated as of September 8, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mortgage Loan Amendment**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Fifth Omnibus Amendment Agreement dated as of March 8, 2021, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fifth Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Sixth Omnibus Amendment Agreement dated as of June 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Sixth Limited Consent**", and together with the Original Mortgage Loan Agreement, the First Limited Consent, the Second Limited Consent, the Third Limited Consent, the Fourth Mortgage Loan Amendment and the Fifth Limited Consent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

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&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent, the Second Limited Consent, the Third Limited Consent, that certain Fourth Amendment to Mezzanine Loan Agreement dated as of September 8, 2021, by and between Mezzanine Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mezzanine Loan Amendment**"), the Fifth Limited Consent and the Sixth Limited Consent (such First Limited Consent, Second Limited Consent, Third Limited Consent, Fourth Mezzanine Loan Amendment, Fifth Limited Consent, Sixth Limited Consent, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested a deferral of the Maturity Date occurring on the Payment Date in August, 2022, under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to defer the Maturity Date under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein (provided that, for purposes of this Agreement, the use of "Maturity Date" shall mean each of or either of the "Maturity Date" under and as defined in the Mortgage Loan Agreement and the "Maturity Date" under and as defined in the Mezzanine Loan Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter ("**PNL**") dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the deferral of the Maturity Date as set forth herein. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be

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relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Deferral of Maturity Date</u>.** Borrower acknowledges and agrees that it has not satisfied the Extension Conditions (under and as defined in each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement). Notwithstanding anything to the contrary in the Loan Agreement, and subject to the terms and conditions of this Agreement, and without waiving any of the Borrower's obligations in the Loan Documents except as expressly set forth herein, Administrative Agent hereby agrees to defer of the Maturity Date occurring on the Payment Date in August, 2022 (the "August 2022 Maturity Date"), until no later than the Payment Date in November, 2022 (the "Deferred Maturity Date"). Notwithstanding anything to the contrary in the Loan Agreement, Borrower shall not otherwise be required as of the August 2022 Maturity Date to either (i) extend or maintain an Interest Rate Cap Agreement or (ii) achieve a Debt Yield of at least ten percent (10.0%), in each case, as a condition to Administrative Agent's agreement to defer the August 2022 Maturity Date. If, and solely to the extent that, as of the Deferred Maturity Date, Borrower shall have satisfied all of the Extension Conditions, Borrower shall retain the right to extend the term of the Loan from the Payment Date in November, 2022 until no later than the Payment Date in September, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**6.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent by the Effective Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Extension Fee</u>**. Borrower shall pay to Administrative Agent by the Effective Date an extension fee with respect to the Mortgage Loan and Mezzanine Loan in the aggregate amount of $364,000.00.

**<u>ARTICLE III REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 &nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS,** 

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**MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>.** This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO DEFER THE MATURITY DATE OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**. Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to notices@acorecapital.com and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**. 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, &nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp; <u>James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title:&nbsp;&nbsp;&nbsp;&nbsp; <u>Manager&nbsp;&nbsp;&nbsp;&nbsp;</u>

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name: Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Deferred Maturity Date Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Deferred Maturity Date Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Deferred Maturity Date Covenant or other obligation of Obligors set forth in this Agreement.

SCHEDULE 2, Additional Loan Document Modifications – Solo Page

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**<u>EIGHTH OMNIBUS AMENDMENT AGREEMENT</u>**

This Eighth Omnibus Amendment Agreement (this "**Agreement**"), dated as of September 22, 2022 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT DIVERSIFIED REAL ESTATE TRUST f/k/a NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Third Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Fourth Amendment to Loan Agreement dated as of September 8, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mortgage Loan Amendment**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Fifth Omnibus Amendment Agreement dated as of March 8, 2021, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fifth Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Sixth Omnibus Amendment Agreement dated as of June 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Sixth Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Seventh Omnibus Amendment Agreement dated as of August 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Seventh Limited Consent**", and together with the Original Mortgage Loan Agreement, the First Limited Consent, the Second Limited Consent, the Third Limited Consent, the Fourth Mortgage Loan Amendment, the Fifth Limited Consent and the Sixth Limited

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Consent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent, the Second Limited Consent, the Third Limited Consent, that certain Fourth Amendment to Mezzanine Loan Agreement dated as of September 8, 2021, by and between Mezzanine Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mezzanine Loan Amendment**"), the Fifth Limited Consent, the Sixth Limited Consent and the Seventh Limited Consent (such First Limited Consent, Second Limited Consent, Third Limited Consent, Fourth Mezzanine Loan Amendment, Fifth Limited Consent, Sixth Limited Consent, Seventh Limited Consent, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested Administrative Agent's consent to certain changes to its organizational structure and Administrative Agent has agreed to such changes as reflected on the new organizational chart depicted on Schedule II-A to this Agreement, which organizational chart shall replace the organizational chart attached as Schedule II to the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter ("**PNL**") dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>AMENDMENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Adoption of Organizational Chart</u>**. Obligors acknowledge and agree that Schedule II (Organizational Structure) to the Loan Agreement is deleted and hereby replaced with the true, complete and accurate organizational chart attached hereto as Schedule II-A and Administrative Agent hereby consents to the changes to the organizational structure of Borrower reflected on such organizational chart.

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**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**7.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent by the Effective Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS,** 

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**SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO DEFER THE MATURITY DATE OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that

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Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**. Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to notices@acorecapital.com and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**. 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

EIGHTH OMNIBUS AMENDMENT AGREEMENT – Signature Page

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, &nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title: Manager<br>

EIGHTH OMNIBUS AMENDMENT AGREEMENT – Signature Page

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**<u>GUARANTOR:</u>**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp; <u>James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title:&nbsp;&nbsp;&nbsp;&nbsp; <u>Manager&nbsp;&nbsp;&nbsp;&nbsp;</u>

EIGHTH OMNIBUS AMENDMENT AGREEMENT – Signature Page

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name: Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>

EIGHTH OMNIBUS AMENDMENT AGREEMENT – Signature Page

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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EIGHTH OMNIBUS AMENDMENT AGREEMENT – Signature Page

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**SCHEDULE II-A**

**<u>ORGANIZATIONAL STRUCTURE</u>**

[attached]

SCHEDULE II-A, Organizational Structure – Cover Page

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**<u>LIMITED CONSENT AND NINTH OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Ninth Omnibus Amendment Agreement (this "**Agreement**"), dated as of November 8, 2022 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT DIVERSIFIED REAL ESTATE TRUST f/k/a NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Third Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Fourth Amendment to Loan Agreement dated as of September 8, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mortgage Loan Amendment**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Fifth Omnibus Amendment Agreement dated as of March 8, 2021, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fifth Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Sixth Omnibus Amendment Agreement dated as of June 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Sixth Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Limited Consent and Seventh Omnibus Amendment Agreement dated as of August 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Seventh Limited Consent**"), which Original Loan Agreement was thereafter further amended by that certain Eighth Omnibus Amendment dated as of September 22, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Eighth Omnibus Amendment**," and together with the Original Mortgage Loan

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Agreement, the First Limited Consent, the Second Limited Consent, the Third Limited Consent, the Fourth Mortgage Loan Amendment, the Fifth Limited Consent, the Sixth Limited Consent, and the Seventh Limited Consent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan was thereafter amended by the First Limited Consent, the Second Limited Consent, the Third Limited Consent, that certain Fourth Amendment to Mezzanine Loan Agreement dated as of September 8, 2021, by and between Mezzanine Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mezzanine Loan Amendment**"), the Fifth Limited Consent, the Sixth Limited Consent, the Seventh Limited Consent, and the Eighth Omnibus Amendment (such First Limited Consent, Second Limited Consent, Third Limited Consent, Fourth Mezzanine Loan Amendment, Fifth Limited Consent, Sixth Limited Consent, Seventh Limited Consent, and Eighth Omnibus Amendment, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested a deferral of the Maturity Date occurring on the Payment Date in November, 2022, under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to defer the Maturity Date under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein (provided that, for purposes of this Agreement, the use of "Maturity Date" shall mean each of or either of the "Maturity Date" under and as defined in the Mortgage Loan Agreement and the "Maturity Date" under and as defined in the Mezzanine Loan Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter ("**PNL**") dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

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**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the deferral of the Maturity Date as set forth herein. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Deferral of Maturity Date</u>**. Borrower acknowledges and agrees that it has not satisfied the Extension Conditions (under and as defined in each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement). Notwithstanding anything to the contrary in the Loan Agreement, and subject to the terms and conditions of this Agreement, and without waiving any of the Borrower's obligations in the Loan Documents except as expressly set forth herein, Administrative Agent hereby agrees to defer of the Maturity Date occurring on the Payment Date in November, 2022 (the "**November 2022 Maturity Dat**e"), until no later than the Payment Date in February, 2023 (the "**Deferred Maturity Date**"). Notwithstanding anything to the contrary in the Loan Agreement, Borrower shall not otherwise be required as of the November 2022 Maturity Date to either (i) extend or maintain an Interest Rate Cap Agreement or (ii) achieve a Debt Yield of at least ten percent (10.0%), in each case, as a condition to Administrative Agent's agreement to defer the November 2022 Maturity Date. If, and solely to the extent that, as of the Deferred Maturity Date, Borrower shall have satisfied all of the Extension Conditions, Borrower shall retain the right to extend the term of the Loan from the Payment Date in February, 2023, until no later than the Payment Date in September, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp; Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp; Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp; this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp; such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**8.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent by the Effective Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Intentionally Omitted</u>**.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY** 

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**AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT TO DEFER THE MATURITY DATE OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**. Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to notices@acorecapital.com and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**. 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, &nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name: Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4.1.1.1.1.1.1.1&nbsp;&nbsp;&nbsp;&nbsp;<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Deferred Maturity Date Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Deferred Maturity Date Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Deferred Maturity Date Covenant or other obligation of Obligors set forth in this Agreement.

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**<u>LIMITED CONSENT AND TENTH OMNIBUS AMENDMENT AGREEMENT</u>**

This Limited Consent and Tenth Omnibus Amendment Agreement (this "**Agreement**"), dated as of February 8, 2023 (the "**Effective Date**"), is made and entered into by and among (i) **CP TOWER OWNER, LLC**, a Delaware limited liability company ("**CP Tower Mortgage Borrower**"), and **CP LAND OWNER, LLC**, a Delaware limited liability company ("**CP Land Mortgage Borrower,**" and together with CP Tower Mortgage Borrower, collectively, "**Mortgage Borrower**"), (ii) **CP EQUITY OWNER, LLC**, a Delaware limited liability company, and **CP EQUITY LAND OWNER, LLC**, a Delaware limited liability company (collectively, "**Mezzanine Borrower**", and together with the Mortgage Borrower, collectively, the "**Borrower**"), (iii) **NEXPOINT DIVERSIFIED REAL ESTATE TRUST f/k/a NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **NEXPOINT REAL ESTATE PARTNERS, LLC**, a Delaware limited liability company (formerly known as **HCRE PARTNERS, LLC**, a Delaware limited liability company) (collectively, "**Guarantor**," and together with Borrower, the "**Obligors**"), (iv) **DELPHI CRE FUNDING LLC**, a Delaware limited liability company, and **AC IV CA MORTGAGE LLC**, a Delaware limited liability company (collectively, the "**Initial Lenders**," and together with the other Lenders from time to time party to the Loan Agreement (defined below), and their respective successors and assigns and participants, "**Lender**"), and (v) **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, as administrative agent for and on behalf of Lender (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Mortgage Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Loan Agreement dated as of August 15, 2018 (the "**Original Mortgage Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mortgage Loan**") to Mortgage Borrower in the original principal amount of $153,683,400.00, which Mortgage Loan is evidenced by the Mortgage Loan Agreement and the other Loan Documents (as defined in the Mortgage Loan Agreement), which Original Mortgage Loan Agreement was thereafter amended by that certain Limited Consent and Omnibus Amendment Agreement dated as of November 10, 2020, but effective as of September 8, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**First Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Second Omnibus Amendment Agreement dated as of February 1, 2021, but effective as of December 30, 2020, by and between Mortgage Borrower, Administrative Agent, and the Initial Lenders (the "**Second Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Third Omnibus Amendment Agreement dated as of March 19, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Third Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Fourth Amendment to Loan Agreement dated as of September 8, 2021, by and between Mortgage Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mortgage Loan Amendment**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Fifth Omnibus Amendment Agreement dated as of March 8, 2021, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fifth Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Sixth Omnibus Amendment Agreement dated as of June 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Sixth Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Seventh Omnibus Amendment Agreement dated as of August 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Seventh Limited Consent**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Eighth Omnibus Amendment Agreement dated as of September 22, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the

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"**Eighth Omnibus Amendment**"), which Original Mortgage Loan Agreement was thereafter further amended by that certain Limited Consent and Ninth Omnibus Amendment Agreement dated as of November 8, 2022, by and between Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Ninth Omnibus Amendment**", together with the Original Mortgage Loan Agreement, the First Limited Consent, the Second Limited Consent, the Third Limited Consent, the Fourth Mortgage Loan Amendment, the Fifth Limited Consent, the Sixth Limited Consent, the Seventh Limited Consent and the Eighth Omnibus Amendment, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mortgage Loan Agreement**").

&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;Mezzanine Borrower, Administrative Agent, and the Initial Lenders are parties to that certain Mezzanine Loan Agreement dated as of August 15, 2018 (the "**Original Mezzanine Loan Agreement**"), pursuant to which the Lender made a loan (the "**Mezzanine Loan**", and collectively, with the Mortgage Loan, the "**Loan**") to Mezzanine Borrower in the original principal amount of $3,940,600.00, which Mezzanine Loan is evidenced by the Mezzanine Loan Agreement and the other Loan Documents (as defined in the Mezzanine Loan Agreement), which Original Mezzanine Loan Agreement was thereafter amended by the First Limited Consent, the Second Limited Consent, the Third Limited Consent, that certain Fourth Amendment to Mezzanine Loan Agreement dated as of September 8, 2021, by and between Mezzanine Borrower, Guarantor, Administrative Agent, and the Initial Lenders (the "**Fourth Mezzanine Loan Amendment**"), the Fifth Limited Consent, the Sixth Limited Consent, the Seventh Limited Consent, the Eighth Omnibus Amendment and the Ninth Omnibus Amendment (such First Limited Consent, Second Limited Consent, Third Limited Consent, Fourth Mezzanine Loan Amendment, Fifth Limited Consent, Sixth Limited Consent, Seventh Limited Consent, Eighth Omnibus Amendment and Ninth Omnibus Amendment, together with the Original Mezzanine Loan Agreement, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, collectively, the "**Mezzanine Loan Agreement**," and together with the Mortgage Loan Agreement, as and where applicable, the "**Loan Agreement**"). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Guarantor executed (a) in connection with the Mortgage Loan, each of that certain Guaranty of Recourse Obligations, Completion Guaranty, Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mortgage Loan Guaranties**"), and (b) in connection with the Mezzanine Loan, each of that certain Mezzanine Guaranty of Recourse Obligations, Mezzanine Completion Guaranty, Mezzanine Guaranty of Required Equity, Required Pay Down and Master Lease, each dated as of August 15, 2018 (collectively, the "**Mezzanine Loan Guaranties**," and together with the Mortgage Loan Guaranties, collectively, the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested a deferral of the Maturity Date occurring on the Payment Date in February, 2023, under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent is willing to provide its limited consent to defer the Maturity Date under and pursuant to (and as defined in) each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement, subject to the terms and conditions of this Agreement, including the amendments of the Loan Documents as set forth herein (provided that, for purposes of this Agreement, the use of "Maturity Date" shall mean each of or either of the "Maturity Date" under and as defined in the Mortgage Loan Agreement and the "Maturity Date" under and as defined in the Mezzanine Loan Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent and Obligors have executed a Reservation of Rights and Pre-Negotiation Letter ("**PNL**") dated September 18, 2020, but effective as of November 10, 2020, in connection with the Loan.

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NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, Obligors, Administrative Agent, and Lender, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>LIMITED CONSENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 &nbsp;&nbsp;&nbsp;&nbsp;**<u>Limited Consent</u>**. Upon satisfaction of the conditions set forth in this Agreement, Administrative Agent hereby consents to the deferral of the Maturity Date as set forth herein. The consent contained in this <u>Section 1.1</u> is a one-time limited consent and (a) shall only be relied upon and used solely for the specific purposes set forth herein, (b) shall not constitute nor be deemed to constitute a waiver of (1) any Default or Event of Default, or (2) any other term or condition of the Loan Agreement and the other Loan Documents, (c) shall not constitute nor be deemed to constitute a consent by Administrative Agent to, or a waiver by Administrative Agent of, anything other than as expressly set forth herein, and (d) shall not constitute a custom or course of dealing among the parties hereto. Upon the failure by any Obligor whatsoever to perform any obligation or condition in this Agreement (beyond any applicable notice and cure period, if any), Obligors shall immediately and automatically (without any notice or demand from Administrative Agent) cease to be entitled to any privileges set forth in this Agreement and Administrative Agent shall have the right to pursue all rights and remedies hereunder, and under the Loan Documents and/or applicable law and equity, as if no such privileges were ever provided (such that an Event of Default shall be deemed to exist as of the date upon which Obligors were first provided with such privileges hereunder (i.e., as of September 8, 2020) (the "**Deferral Commencement Date**"), and such rights and remedies shall include, without limitation, charging interest at the Default Rate retroactively from and after the Deferral Commencement Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Deferral of Maturity Date</u>**. Borrower acknowledges and agrees that it has not satisfied the Extension Conditions (under and as defined in each of the Mortgage Loan Agreement and the Mezzanine Loan Agreement). Notwithstanding anything to the contrary in the Loan Agreement, and subject to the terms and conditions of this Agreement, and without waiving any of the Borrower's obligations in the Loan Documents except as expressly set forth herein, Administrative Agent hereby agrees to defer of the Maturity Date occurring on the Payment Date in February, 2023 (the "**February 2023 Maturity Date**"), until no later than the Payment Date in May, 2023 (the "**Deferred Maturity Date**"). Notwithstanding anything to the contrary in the Loan Agreement, Borrower shall not otherwise be required as of the February 2023 Maturity Date to either (i) extend or maintain an Interest Rate Cap Agreement or (ii) achieve a Debt Yield of at least ten percent (10.0%), in each case, as a condition to Administrative Agent's agreement to defer the February 2023 Maturity Date. If, and solely to the extent that, as of the Deferred Maturity Date, Borrower shall have satisfied all of the Extension Conditions, Borrower shall retain the right to extend the term of the Loan from the Payment Date in May, 2023, until no later than the Payment Date in September, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendments to Loan Documents</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that <u>Section 5.1</u> of each Loan Agreement (Affirmative Covenants) is hereby amended to insert all of the covenants set forth in <u>Schedule 1</u> to this Agreement as additional affirmative covenants under such section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Obligors acknowledge and agree that the Loan Documents are further amended as set forth in <u>Schedule 2</u> to this Agreement.

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**<u>ARTICLE II - CONDITIONS PRECEDENT</u>**

The effectiveness of this Agreement and Administrative Agent's obligations hereunder are conditioned upon the fulfillment by Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**. Obligors shall deliver, or cause to be delivered to Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement in form and substance satisfactory to Administrative Agent, duly executed by all of Obligors; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;such other Obligor-related or Property-related information and/or documentation as may be required by Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Liability for Payment of Fees and Expenses; Indemnification for Losses</u>**9.&nbsp;&nbsp;&nbsp;&nbsp;. <br>Borrower must pay Administrative Agent on the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement. Additionally, Borrower shall pay all fees, costs, expenses and penalties, if any, to the extent charged by any third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Administrative Agent Processing Fee</u>**. Additionally, Obligors shall pay to Administrative Agent by the Effective Date a processing fee in the amount of $2,500.00 in connection with the negotiation and execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Intentionally Omitted</u>**.

**<u>ARTICLE III - REPRESENTATIONS AND WARRANTIES</u>**

To induce Administrative Agent, for and on behalf of Lender, to enter into this Agreement and as consideration for the terms and conditions contained herein, Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Approvals and Authority from Third Parties</u>**. Obligors have obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Exclusive and First Priority Perfected Lien</u>**. Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>No Untrue or Misleading Statements</u>**. Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

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**<u>ARTICLE IV - RELEASE BY OBLIGORS</u>**

**EACH OBLIGOR, FOR AND ON BEHALF OF SUCH OBLIGOR AND ALL PERSONS AND/OR ENTITIES CLAIMING BY, THROUGH AND/OR UNDER SUCH OBLIGOR INCLUDING, BUT NOT LIMITED TO, ALL OF SUCH OBLIGOR'S PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN, JOINTLY AND SEVERALLY, AS THE "OBLIGOR GROUP RELEASORS") HEREBY UNCONDITIONALLY REMISES, RELEASES, ACQUITS AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDER AND ALL OF THEIR RESPECTIVE PAST AND PRESENT PARTNERS, DIRECTORS, SHAREHOLDERS, MEMBERS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, ADMINISTRATORS, AGENTS, PARENT CORPORATIONS, SUBSIDIARIES, AFFILIATES, REPRESENTATIVES, PREDECESSORS, SUCCESSORS, AND ASSIGNS (COLLECTIVELY REFERRED TO HEREIN AS THE "LENDER GROUP RELEASEES") OF, FROM AND WITH RESPECT TO ANY AND ALL GRIEVANCES, DISPUTES, MANNER OF ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS, LIABILITIES, LOSSES, DEBTS, DAMAGES, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, CONTROVERSIES, AGREEMENTS, CLAIMS, DEMANDS, COUNTERCLAIMS AND CROSSCLAIMS, INCLUDING, BUT NOT LIMITED TO ALL CLAIMS AND CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE LOAN DOCUMENTS AND/OR ALL TRANSACTIONS RELATED THERETO, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, DIRECT, INDIRECT OR CONTINGENT, ARISING IN LAW OR EQUITY, WHICH OBLIGOR GROUP RELEASORS (OR ANY OF THEM) EVER HAD, NOW HAVE, OR MAY EVER HAVE AGAINST ANY ONE OR MORE OF LENDER GROUP RELEASEES, FROM THE BEGINNING OF TIME THROUGH THE EFFECTIVE DATE.**

**<u>ARTICLE V - MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NOTWITHSTANDING ADMINISTRATIVE AGENT AND LENDER CONSENTING TO ANY PRIOR AMENDMENT TO THE LOAN AGREEMENT, NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER IS MAKING ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO ENTER INTO ANY FURTHER AGREEMENT, TO FURTHER DEFER THE MATURITY DATE OR TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the

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Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Written Agreement Contemplated by PNL</u>**. This Agreement is a written agreement as contemplated by the PNL.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, thereto and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, thereto and their respective successors or assigns; <u>provided</u>, <u>however</u>, that Obligors may not assign or delegate any rights hereunder or thereunder or any interest herein or therein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**. Any notices or other communications sent or transmitted pursuant to this Agreement by any of Obligors to Administrative Agent shall be by electronic email sent to notices@acorecapital.com and to Kimberly May at <u>kmay@acorecapital.com</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**. 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.

**<u>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]</u>**

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the Effective Date.

**<u>MORTGAGE BORROWER</u>**<u>:</u>

**CP TOWER OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President

**CP LAND OWNER, LLC**,<br>a Delaware limited liability company

By:&nbsp;&nbsp;&nbsp;&nbsp;CP Equity Land Owner, LLC, its sole member

By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC, its sole member

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

[Signatures Continued on Next Page]

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**<u>MEZZANINE BORROWER:</u>**<br>**CP EQUITY OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NREO Special Purpose, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Opportunities, LLC, &nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Diversified Real Estate Trust,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>**CP EQUITY LAND OWNER, LLC**,<br>a Delaware limited liability company<br>By:&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Real Estate Partners, LLC,<br>&nbsp;&nbsp;&nbsp;&nbsp;its sole member<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>Title: Manager<br>

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**<u>GUARANTOR:</u>**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executed Officer

**NEXPOINT REAL ESTATE PARTNERS, LLC**,<br>a Delaware limited liability company

<br>By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;Manager

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| |
|:---|
| **<u>ADMINISTRATIVE AGENT</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**ACORE CAPITAL MORTGAGE, LP**, <br>a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, <br>a Delaware limited liability company, <br>its general partner<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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| |
|:---|
| **<u>INITIAL LENDERS</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DELPHI CRE FUNDING LLC**,<br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage, LP,<br>a Delaware limited partnership,<br>its authorized agent<br>By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware limited liability company, its general partner<br>By:<u>&nbsp;&nbsp;&nbsp;&nbsp; /s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name: Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**AC IV CA MORTGAGE LLC**, <br>a Delaware limited liability company<br>By&nbsp;&nbsp;&nbsp;&nbsp;ACORE CREDIT IV REIT, INC.,<br>a Maryland corporation,<br>its sole member<br>By: <u>/s/ Kimberly May&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Kimberly May<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory<br>

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**SCHEDULE 1**

**<u>ADDITIONAL AFFIRMATIVE COVENANTS</u>**

Notwithstanding the anything set forth in this Agreement to the contrary, Borrower shall perform all of the below covenants, each of which is a "**Deferred Maturity Date Covenant**":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Continue to comply with all covenants under the Loan Agreement, except as specifically modified pursuant to this Agreement. For avoidance of doubt, except as expressly set forth in this Agreement, this Agreement does not modify or suspend any requirement under any Loan Document to pay any carrying costs associated with the Property, including, without limitation, any (a) real estate taxes, (b) insurance premiums for the Required Policies, and (c) any amounts due under the Master Lease.

SCHEDULE 1, Additional Affirmative Covenants – Solo Page

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**SCHEDULE 2**

**<u>ADDITIONAL LOAN DOCUMENT MODIFICATIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The term "Event of Default" as used in each Loan Agreement shall be expanded to include Borrower's breach of any of its covenants under this Agreement, including, without limitation, any Deferred Maturity Date Covenant. For the avoidance of doubt, Administrative Agent shall not be required to provide Obligors with notice of any such Event(s) of Default stemming from any breach of any Deferred Maturity Date Covenant or other obligation of Obligors set forth in this Agreement.

SCHEDULE 2, Additional Loan Document Modifications – Solo Page

## Exhibit 10.15

**Exhibit 10.15**

**<u>GUARANTY OF RECOURSE OBLIGATIONS</u>**

THIS GUARANTY OF RECOURSE OBLIGATIONS (this "<u>Guaranty</u>") is executed as of August 15, 2018, by **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **HCRE PARTNERS, LLC**, a Delaware limited liability company (individually and collectively, "<u>Guarantor</u>"), for the benefit of **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as Administrative Agent for and on behalf of the Lenders from time to time party to the Loan Agreement defined below (together with its successors and/or assigns, "<u>Administrative Agent</u>").

<u>RECITALS</u>:

WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith among **CP TOWER OWNER, LLC**, a Delaware limited liability company, and **CP LAND OWNER, LLC**, a Delaware limited liability company (collectively, "<u>Borrower</u>"), the Lenders from time to time party thereto, and Administrative Agent (as the same may be amended, the "<u>Loan Agreement</u>"), Lender has agreed to make a Loan to Borrower on the terms and conditions described therein; capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement; and

WHEREAS, Lender is not willing to make the Loan to Borrower unless Guarantor executes and delivers this Guaranty.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Guaranty of Obligation</u>. Guarantor hereby irrevocably and unconditionally guarantees to Administrative Agent (for the benefit of the Lenders) the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is fully and personally liable for the Guaranteed Obligations as a primary obligor as set forth herein. As used herein, the term "<u>Guaranteed Obligations</u>" means (a) the payment to Administrative Agent (for the benefit of the Lenders) of all of the Recourse Liabilities, and (b) upon the occurrence of a Springing Recourse Event, the payment to Administrative Agent (for the benefit of the Lenders) of the Debt. Notwithstanding anything to the contrary contained herein, Guarantor shall have no liability under this Guaranty for Recourse Liabilities or Springing Recourse Events to the extent that Guarantor can prove that such Recourse Liabilities or Springing Recourse Events arose from acts or omissions caused by Mezzanine Administrative Agent or its Affiliates (i) in connection with the exercise of remedies under the Mezzanine Loan Documents (including, without limitation, a foreclosure on, or assignment in lieu of foreclosure of, the equity interests in Borrower pursuant to the Mezzanine Loan Documents), or (ii) after completion of such foreclosure or assignment in lieu of foreclosure under the Mezzanine Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Nature of Guaranty</u>. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by Guarantor and if Guarantor is a natural person, shall continue to be effective after Guarantor's death (in which event this Guaranty shall be binding upon Guarantor's estate and heirs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Waivers</u>. Guarantor agrees and acknowledges that it has received copies of the Loan Documents, and hereby waives notice of (a) any loans or advances made by Lender to Borrower, (b) acceptance of this Guaranty, (c) any amendment or extension of the Loan

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Documents, (d) the execution and delivery by Borrower and Administrative Agent and/or Lender of any other loan or credit agreement or of Borrower's execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property, (e) the occurrence of any Default or Event of Default, (f) Administrative Agent's transfer or disposition of the Guaranteed Obligations, or any part thereof, to any Person acquiring all or any portion of (or any interest in) the Loan, (g) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (h) protest, proof of non-payment or default by Borrower, and (i) any other action at any time taken or omitted by Lender or Administrative Agent, and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations, except such notices and demands expressly required in the Loan Documents. In addition Guarantor hereby expressly waives: (i) any right to revoke this Guaranty; (ii) any right to require Lender or Administrative Agent to do any of the following before Guarantor is obligated to pay or perform the Guaranteed Obligations or before Administrative Agent may proceed against Guarantor: (A) sue or exhaust remedies against Borrower or any other person liable for the Guaranteed Obligations or any portion thereof; (B) sue on an accrued right of action in respect of any of the Guaranteed Obligations or bring any other action, exercise any other right, or exhaust any other remedy; (C) enforce rights against Borrower's assets or the collateral pledged by Borrower to secure the Guaranteed Obligations; (D) join Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty; or (E) mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations; (iii) any right relating to the timing, manner or conduct of Administrative Agent's enforcement of rights against Borrower's assets or the collateral pledged by Borrower to secure the Guaranteed Obligations; (iv) if Guarantor and/or Borrower (or any other person) have each pledged assets to secure the Guaranteed Obligations, any right to require Lender or Administrative Agent to proceed first against collateral pledged by Borrower (or any other person) before proceeding against the collateral pledged by Guarantor; (v) promptness, diligence, notice of any default, notice of nonpayment or nonperformance, notice of acceleration or intent to accelerate, demand for payment or performance, acceptance or notice of acceptance of this Guaranty, presentment, notice of protest, notice of dishonor, notice of the incurring by Borrower of additional indebtedness, notice of any suit or other action by Administrative Agent against Borrower or any other person, any notice to any person liable for the obligation which is the subject of the suit or action, and all other notices and demands with respect to the Guaranteed Obligations and this Guaranty; and (vi) any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating the Guarantor to the rights of Lender or Administrative Agent), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by Guarantor under or in connection with this Guaranty or otherwise prior to satisfaction in full of Guarantor's obligations hereunder (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Payment of Expenses</u>. In the event that Guarantor should fail to timely perform any provisions of this Guaranty, Guarantor shall, within ten (10) days of written demand by Administrative Agent, pay Administrative Agent all out-of-pocket costs and expenses (including court costs and reasonable attorneys' fees) actually incurred by Lender or Administrative Agent in the enforcement hereof or the preservation of Lender or Administrative Agent's rights hereunder, together with interest thereon at the Default Rate from the date of demand by Administrative Agent until the date of payment to Administrative Agent. Any amounts payable to Administrative Agent hereunder shall be due and payable on written demand and, if not paid within ten (10) days of such demand therefor, shall bear interest at the Default Rate from the date payment was due. This <u>Section 4</u> shall survive the payment and performance of the Guaranteed Obligations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Effect of Bankruptcy</u>. In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, Lender or Administrative Agent must rescind or restore any payment, or any part thereof, received by Lender or Administrative Agent in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to Guarantor by Lender or Administrative Agent shall be without effect, Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment has been due but not made at such time, and this Guaranty shall remain in full force and effect. It is the intention of Borrower and Guarantor that Guarantor's obligations hereunder shall not be discharged except by Guarantor's performance of such obligations and then only to the extent of such performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>No Discharge</u>. Except as otherwise expressly provided in this Guaranty, Guarantor agrees that its obligations under this Guaranty shall not be released, diminished, or adversely affected by any of the following, and waives any common law, equitable, statutory or other rights (including without limitation rights to notice) which Guarantor might otherwise have as a result of or in connection with any of the following: (a) any modification, extension, or increase of all or any part of the Guaranteed Obligations or the Loan Documents; (b) any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender or Administrative Agent to Borrower or Guarantor; (c) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower, Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations, or any dissolution of Borrower or Guarantor, or any payment by Borrower to Lender or Administrative Agent being held to constitute a preference under bankruptcy laws or for any reason Lender or Administrative Agent is required to refund such payment or pay such amount to Borrower or someone else pursuant to any applicable Federal or State bankruptcy or insolvency law relating to the bankruptcy or insolvency of Borrower or Guarantor; (d) any sale, lease or transfer of any or all of the assets of Borrower or Guarantor, or any changes in the shareholders, partners or members of Borrower or Guarantor; or any reorganization of Borrower or Guarantor, or the reorganization, merger or consolidation of Borrower into or with any other corporation or entity; (e) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with or evidencing the Guaranteed Obligations, for any reason whatsoever, including without limitation the fact that (i) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (ii) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the officers or representatives executing the Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v) the Borrower (or any other Person) has valid defenses (except the defense of payment or performance of the applicable Guaranteed Obligation), claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially reduced or uncollectible from Borrower (whether such right of offset, claim or defense arises in connection with the Guaranteed Obligations, the transactions creating the Guaranteed Obligations or otherwise), (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (vii) the Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that Guarantor shall remain liable hereon regardless of whether Borrower or any other Person be found not liable on the Guaranteed Obligations or any part thereof for any reason; (f) any full or partial release of the liability of Borrower for any part of the Guaranteed Obligations, or of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by Guarantor that

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Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations, or that Lender or Administrative Agent will look to other Persons to pay or perform the Guaranteed Obligations; (g) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations; (h) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations; (i) the failure of Lender or Administrative Agent or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not limited to any neglect, delay, omission, failure; or (j) any other action taken or omitted to be taken with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed Obligations (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Representations and Warranties</u>. To induce Administrative Agent and Lender to enter into the Loan Documents, Guarantor represents and warrants to Administrative Agent and Lender as follows: (a) Guarantor has received, or will receive, direct or indirect benefit from the making of the Loan to Borrower; (b) Guarantor is familiar with the financial condition of the Borrower and is familiar with the value of any and all collateral intended to be created as security for the payment of the Guaranteed Obligations (however, Guarantor is not relying on such financial condition or the collateral as an inducement to enter into this Guaranty); (c) neither Administrative Agent nor any Lender or other party has made any representation, warranty or statement to Guarantor in order to induce the Guarantor to execute this Guaranty; (d) as of the date hereof, giving effect to this Guaranty and the contingent obligation evidenced hereby, Guarantor is solvent, and has assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and has property and assets sufficient to satisfy and repay its obligations and liabilities; and (e) this Guaranty is a legal and binding obligation of Guarantor and is enforceable in accordance with its terms, except as limited by general principles of equity and bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors' rights. All representations and warranties made by Guarantor herein shall survive the execution hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Financial Covenants; Reporting</u>. Guarantor (together with all Persons that constitute Guarantor) shall at all times (a) maintain a Guarantor Net Worth (as defined on <u>Schedule 1</u>) of at least ONE HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000.00), and (b) own Liquid Assets (as defined on <u>Schedule 1</u>), in its own name, of at least FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00). Guarantor shall deliver to Administrative Agent: (i) within ninety (90) days after the end of each calendar year, a complete copy of Guarantor's annual financial statements prepared by an Independent Accountant in accordance with the Approved Accounting Method (<u>provided</u>, <u>however</u>, audited statements shall be delivered to Administrative Agent within sixty (60) days of Administrative Agent's request therefor during the existence of an Event of Default or at any other time up to two (2) times during the term of the Loan in the event that Administrative Agent reasonably determines that the financial statements delivered by Guarantor are incomplete, inconsistent, or

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inaccurate, and Guarantor has not corrected any such deficiencies within fifteen (15) days of written notice thereof from Administrative Agent); (ii) not later than June 30 and December 31 of each calendar year, a Guarantor Certificate (as defined below), with the "Financial Covenants Certification" section completed in full; (iii) within ten (10) Business Days after Administrative Agent's request (but not sooner than the date on which the same is actually filed), a copy of Guarantor's filed federal income tax return for the preceding year; (iv) within five (5) Business Days after the filing of Guarantor's federal tax return, a certificate from an Independent Accountant confirming that such income tax return was properly filed and attaching evidence that all tax obligations stated therein to be due have been paid; and (v) within thirty (30) days after request by Administrative Agent, such other financial information with respect to Guarantor as Administrative Agent may reasonably request. Guarantor shall deliver to Administrative Agent a Guarantor Certificate with each items delivered pursuant to the foregoing clauses. As used herein, "<u>Guarantor Certificate</u>" means a certificate in the form attached hereto as <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Subordination of All Guarantor Claims</u>. In the event of receivership, bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency proceedings involving Guarantor as debtor, Administrative Agent and Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims (as defined below). Guarantor hereby assigns such dividends and payments to Administrative Agent. Should Administrative Agent receive, for application upon the Guaranteed Obligations, any such dividend or payment which is otherwise payable to Guarantor, and which, as between Borrower and Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment to Administrative Agent in full of the Guaranteed Obligations, Guarantor shall become subrogated to the rights of Administrative Agent to the extent that such payments to Administrative Agent on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with respect to that proportion of the Guaranteed Obligations which would have been unpaid if Administrative Agent had not received dividends or payments upon the Guarantor Claims. As used herein, the term "<u>Guarantor Claims</u>" shall mean all debts and liabilities of Borrower to Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise (including, without limitation, all rights and claims of Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of Guarantor's payment of all or a portion of the Guaranteed Obligations). In the event that Guarantor should receive any payment which is prohibited by this Guaranty, Guarantor agrees to hold such payment in trust for Administrative Agent and promptly pay the same to Administrative Agent to the extent of any unpaid Guaranteed Obligations. Guarantor agrees that until the Debt is repaid in full and Guarantor's obligations hereunder have been paid and performed in full, any liens, security interests, judgment liens, charges or other encumbrances upon Borrower's assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower's assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of Guarantor or Administrative Agent presently exist or are hereafter created or attached. Without the prior written consent of Administrative Agent, until the Debt is indefeasibly repaid in full and Guarantor's obligations hereunder have been indefeasibly paid and performed in full (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt), Guarantor shall not (a) exercise or enforce any creditor's right it may have against Borrower or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of Borrower held by Guarantor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>GOVERNING LAW; VENUE</u>. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN §§ 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT THAT THE APPLICABILITY OF ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT, LENDER OR GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT ADMINISTRATIVE AGENT'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GUARANTOR 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 GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. GUARANTOR DOES HEREBY DESIGNATE AND APPOINT:**

**TUAN OLONA, LLP<br>ONE ROCKEFELLER PLAZA, ELEVENTH FLOOR<br>NEW YORK, NEW YORK 10020<br>ATTENTION: HAN-HSIEN TUAN**

**AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT 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 OR ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST GUARANTOR IN ANY OTHER JURISDICTION. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS GUARANTY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>WAIVER OF RIGHT TO TRIAL BY JURY</u>. GUARANTOR, ADMINISTRATIVE AGENT, AND LENDER (BY THEIR ACCEPTANCE OF THIS GUARANTY) HEREBY AGREE 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 THIS GUARANTY, THE NOTE, THE LOAN AGREEMENT, THE SECURITY INSTRUMENT, OR THE OTHER LOAN** 

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**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 GUARANTOR, ADMINISTRATIVE AGENT, AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. THE PARTIES HERETO ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Miscellaneous</u>. All notices, consents, approvals and requests required or permitted hereunder shall be given (and shall be deemed effective) in the manner described in Section 8.6 of the Loan Agreement, and Guarantor's address for such purposes shall be the address of Guarantor set forth on the signature page hereof. No failure to exercise, and no delay in exercising, on the part of Lender or Administrative Agent, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. This Guaranty shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; <u>provided</u>, <u>however</u>, Guarantor may not assign any of its rights, powers, duties or obligations hereunder. This Guaranty embodies the entire agreement of Guarantor, Lender and Administrative Agent with respect to Guarantor's guaranty of the Guaranteed Obligations and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof. There are no oral agreements between Guarantor, Lender and Administrative Agent. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable and all other provisions of this Guaranty shall remain in full force and effect. This Guaranty may be amended only by an instrument in writing executed by the party or an authorized representative of the party against whom such amendment is sought to be enforced. If Guarantor consists of more than one Person, the obligations and liabilities of each such Person shall be joint and several. This Guaranty may be executed in counterparts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Intercreditor Agreement</u>. Guarantor hereby acknowledges and agrees that any intercreditor agreement entered into between Administrative Agent and Mezzanine Loan Administrative Agent will be solely for the benefit of Administrative Agent and Mezzanine Loan Administrative Agent, and that none of Guarantor, Borrower, or Mezzanine Borrower shall be third-party beneficiaries (intended or otherwise) of any of the provisions therein, have any rights thereunder, or be entitled to rely on any of the provisions contained therein. Administrative Agent and Mezzanine Loan Administrative Agent have no obligation to disclose to Guarantor the contents of any such intercreditor agreement. Guarantor's obligations hereunder are and will be independent of any such intercreditor agreement and shall remain unmodified by the terms and provisions thereof.

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EXECUTED as of the day and year first above written.

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| |
|:---|
| **<u>GUARANTOR</u>:** |
| **NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executed Officer |

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 Address for purposes of notice:<br>NexPoint Strategic Opportunities Fund<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>

 With a copy to:<br>Wick Phillips<br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D. C. Sauter, Esq.<br>Email: d.c.sauter@wickphillips.com

[Signatures continued on next page]

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| |
|:---|
| **<u>GUARANTOR</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**HCRE PARTNERS, LLC**,<br>a Delaware limited liability company<br>By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u><br>&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;Matt McGraner<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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 Address for purposes of notice:<br>HCRE Partners, LLC<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>

 With a copy to:<br>Wick Phillips<br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D. C. Sauter, Esq.<br>Email: d.c.sauter@wickphillips.com

GUARANTY OF RECOURSE OBLIGATIONS – Signature Page

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<u>SCHEDULE 1</u>

For purposes hereof, the following terms shall have the following respective meanings:

"<u>Contingent Liabilities</u>" means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person (but without duplication) (i) with respect to any debt or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Liability is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings, (iii) under completion guaranties, or (iv) under hedge contracts, and shall include, without limitation: (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (A) to purchase, repurchase or otherwise acquire such obligation or any security therefore, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (B) to maintain the solvency of any balance sheet item, level of income or financial condition of another. The amount of any Contingent Liability shall be determined in accordance with GAAP. For the avoidance of doubt, "Contingent Liabilities" shall not include the obligations of a Person under a non-recourse carve-out ("bad acts") guaranty or an environmental indemnity agreement until the occurrence of an event that causes the obligations of such Person thereunder to be a liquidated sum (e.g., the entry of a judgment the amount of which is subject to such guaranty, the triggering of full or partial recourse upon the filing of a bankruptcy, etc.).

"<u>Guarantor Net Worth</u>" means, at any time: (i) the fair market value of the total assets of a Guarantor (excluding goodwill, patents, trademarks, trade names, organization expense, treasury stock, unamortized debt discount and expense, deferred research and development costs, deferred marketing expenses, and other like intangibles) determined in accordance with GAAP, <u>minus</u> (ii) the total liabilities of such Guarantor (including, without limitation, such Guarantor's Contingent Liabilities that would be disclosed under GAAP, accrued and deferred income taxes, and any reserves against assets) determined in accordance with GAAP; <u>provided</u>, <u>however</u>, in no event shall Guarantor's Net Worth be calculated to include the value of the Property or the value of any retirement plan or account that is protected from creditors.

"<u>Liquid Assets</u>" shall mean the fair market value of unrestricted, unencumbered assets in the form of (i) cash, (ii) cash equivalents, (iii) certificates of deposit or time deposits with terms of six (6) months or less issued by a bank or trust company which is organized under the laws of the United States of America or any state thereof having capital, surplus and undivided profits aggregating in excess of $500,000,000 and whose long-term debt is rated "A-3" or higher, "A–" or higher or "A–" or higher according to Moody's, S&P or Fitch Ratings (or such similar equivalent rating by at least one "nationally recognized statistical rating organization" (as defined in Rule 436 under the Securities Act)), respectively, (iv) investments in commercial paper, maturing not more than six (6) months after the date of acquisition, issued by a corporation (other than an Affiliate of Borrower or Guarantor) organized and in existence under the laws of the United States of America or any State thereof with a rating at the time as of which any Investment therein is made of "P-1" (or higher) according to Moody's, "A-1" (or higher) according to S&P or "A-1" (or higher) according to Fitch Ratings (or such similar equivalent rating by at least one "nationally recognized statistical rating organization" (as defined in Rule 436 under the Securities Act)), (v) U.S. treasury bills and other obligations of the United States

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of America, all with terms of six (6) months or less, and (vi) readily marketable securities (excluding "margin stock" (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), restricted stock and stock subject to the provisions of Rule 144 of the Securities and Exchange Commission) listed and traded on a recognized stock exchange or traded over the counter and listed in the National Association of Securities Dealers Automatic Quotations.

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EXHIBIT A

<u>FORM OF GUARANTOR CERTIFICATE</u>

EXHIBIT A, Form of Guarantor Certificate – Page 1

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## Exhibit 10.16

**Exhibit 10.16**

**<u>COMPLETION GUARANTY</u>**

THIS COMPLETION GUARANTY (this "<u>Guaranty</u>") is executed as of August 15, 2018, by **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **HCRE PARTNERS, LLC**, a Delaware limited liability company (individually and collectively, "<u>Guarantor</u>"), for the benefit of **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders from time to time party to the Loan Agreement defined below (together with its successors and/or assigns, "<u>Administrative Agent</u>").

<u>RECITALS</u>:

WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith among **CP TOWER OWNER, LLC**, a Delaware limited liability company, and **CP LAND OWNER, LLC**, a Delaware limited liability company (collectively, "<u>Borrower</u>"), the Lenders from time to time party thereto, and Administrative Agent (as the same may be amended, the "<u>Loan Agreement</u>"), Lender has agreed to make a Loan to Borrower on the terms and conditions described therein; capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement; and

WHEREAS, Lender is not willing to make the Loan to Borrower unless Guarantor executes and delivers this Guaranty.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Guaranty of Obligation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Guarantor hereby irrevocably and unconditionally guarantees to Administrative Agent (for the benefit of the Lenders) the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is fully and personally liable for the Guaranteed Obligations as a primary obligor as set forth herein. As used herein, the term "<u>Guaranteed Obligations</u>" means the complete payment and performance (as applicable) when due of Borrower's obligations pursuant to the Loan Agreement to: (i) Complete the Project in its entirety in accordance with the Project Documents, the Administrative Agent-approved Plans and Specifications, all Legal Requirements, and the Loan Documents, free and clear of all Liens (other than Permitted Encumbrances not consisting of liens for labor or materials) (collectively, the "<u>Requirements</u>"); (ii) pay all expenses, charges, costs and fees of, or relating to, the Completion of the Project (including, without limitation, hard costs, soft costs, all permitting fees, licensing fees, amounts payable under all construction contracts and all subcontracts, amounts payable to the general contractor, all architects, engineers and other consultants engaged in connection with the Completion of the Project (and including, without limitation, any amount necessary to remove any Lien (other than Permitted Encumbrances not consisting of liens for labor or materials) filed against the Property in connection with the Completion of the Project), in the amount specified pursuant to <u>Section 1(b)</u> or <u>Section 1(c)</u> below, whichever is applicable (as elected by Administrative Agent in its sole and absolute discretion); and (iii) pay to Administrative Agent the amount necessary to cure any Balancing Event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Without limiting any of Administrative Agent's or Lender's right hereunder or under any of the other Loan Documents, during the existence of an Event of Default, Administrative Agent shall have the option to (i) cause the Completion of the Project;

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(ii) pay any expenses described herein as part of the Guaranteed Obligations; and/or (iii) cause the removal of any Lien on the Property (other than Permitted Encumbrances not consisting of liens for labor or materials). In each such instance, Guarantor shall within ten (10) Business Days of Administrative Agent's written demand, reimburse Administrative Agent and Lender for all sums paid by Administrative Agent or Lender with respect thereto, including any reasonable attorney's fees in connection therewith; <u>provided</u>, <u>however</u>, that Guarantor's payment obligations with respect to this <u>Section 1(b)</u> shall be limited to the sum of (A) all Actual Cost Overruns (as defined below), less (B) any amounts then held by Administrative Agent and delivered by Borrower in connection with curing of any Balancing Event. Nothing in this <u>Section 1(b)</u> shall limit Guarantor's obligations under <u>Section 4</u> below. As used herein, the term "<u>Actual Cost Overruns</u>" means the excess, if any, of (1) all costs actually incurred in connection with the Completion of the Project free of Liens (other than the Liens of the Loan Documents), <u>minus</u> (2) without duplication of amounts deducted above, the amounts then contained in any Reserve Account pursuant to the Loan Agreement that would have otherwise been available to Borrower to pay for the cost of the Project, <u>minus</u> (3) the unadvanced amount of funds that would have otherwise been available to Borrower as an Additional Advance to pay for the cost of the Project pursuant to the terms and conditions of the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Without limiting any of Administrative Agent's or Lender's rights hereunder or under any of the other Loan Documents, whether or not Administrative Agent shall elect to exercise its rights under the Loan Documents to Complete the Project, Administrative Agent shall have the option, in its sole and absolute discretion, exercisable from and after the date when Administrative Agent shall be entitled to cause Guarantor to pay or perform the Guaranteed Obligations hereunder, to require Guarantor to pay to Administrative Agent, as Guarantor's sole liability for payment and performance of the Guaranteed Obligations and as liquidated damages, an amount equal to the sum of (i) all Projected Cost Overruns (as defined below), less (ii) any amounts then held by Administrative Agent and delivered by Borrower in connection with curing of any Balancing Event. Such payment shall be due no later than ten (10) Business Days following Administrative Agent's written demand therefor. If Administrative Agent elects to receive such payment under this <u>Section 1(c)</u>, such payment shall be as liquidated damages, and not as a penalty, the parties agreeing the estimation of Administrative Agent's and Lender's actual damages on account of Borrower's and Guarantor's failure to Complete the Project would be difficult to estimate. Nothing in this <u>Section 1(c)</u> shall limit Guarantor's obligations under <u>Section 4</u> below. As used herein, the term "<u>Projected Cost Overruns</u>" means the excess, if any, of (A) all costs of Completing the applicable Project estimated by Administrative Agent as of the date Administrative Agent demands payment by Guarantor under this Guaranty (even if Administrative Agent does not intend to Complete the Project) free of Liens (other than the Liens of the Loan Documents), <u>minus</u> (B) without duplication of amounts deducted above, the amounts then contained in any Reserve Account pursuant to the Loan Agreement that would have otherwise been available to Borrower to pay for the cost of the Project, <u>minus</u> (C) the unadvanced amount of funds that would have otherwise been available to Borrower as an Additional Advance to pay for the cost of the Project pursuant to the terms and conditions of the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Guarantor acknowledges and agrees that the unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u>, if not paid when due pursuant to this Guaranty and the other Loan Documents, shall, at Administrative Agent's election in its sole and absolute discretion, be deemed to be added to and form a part of the Debt for all purposes under the Loan Documents. For the avoidance of doubt, Guarantor's obligation to pay the unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u> shall survive any foreclosure or the giving of any deed-in-lieu of foreclosure with respect to the Property, and shall not be reduced or limited by any repayment of the Loan or by any amount bid by Administrative Agent in connection with any foreclosure under the Loan Documents. Guarantor acknowledges and agrees that its obligations under this Guaranty to pay to Administrative Agent the unpaid amount

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of the Guaranteed Obligations as described in this <u>Section 1</u> are separate and distinct from any obligation of Borrower to repay the Debt, and that such obligation does not constitute a guaranty of the Loan or of any of Borrower's obligations with respect to the Loan except to the extent that such unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u> are actually added to and form a part of the Debt as provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)By its acceptance of this Guaranty, Administrative Agent and Lender each agrees to the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)As used in this Guaranty, the term "<u>Completion Guaranty Event of Default</u>" shall mean the existence of any of the following events: (A) the failure by Guarantor to cause a Balancing Event not to exist within the time period (with all applicable time periods commencing as of the applicable dates on which notice thereof is delivered to Guarantor in accordance with the requirements of this Guaranty) during which Borrower is required to cause the same not to exist pursuant to the Loan Agreement; (B) the failure by Guarantor at any time to be diligently pursuing the Completion of the Project; (C) the failure by Guarantor to pay any amount then due to Administrative Agent and Lender under this Guaranty within ten (10) Business Days after written notice thereof from Administrative Agent; (D) the existence of an Event of Default as described in Sections 6.1(a), (b), (c), (d), (f), (j), or (m) of the Loan Agreement; and (E) the existence of any other Event of Default that is susceptible of being cured by Guarantor on the Borrower's behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)In the event that Administrative Agent demands that Guarantor undertake the Completion of the Project, then so long as a Completion Guaranty Event of Default does not then exist, Lender agrees to continue to make Additional Advances to Guarantor and make disbursements to Guarantor from any applicable Reserve Account, in either case for the payment or reimbursement of applicable Project Expenditures, subject to the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Guarantor shall have satisfied all of the other Borrower obligations which are conditions precedent to the making of an Additional Advance or the disbursement of funds from any applicable Reserve Account for the payment or reimbursement of Project Expenditures, as applicable (but for the avoidance of doubt, the existence of an Event of Default that is not a Completion Guaranty Event of Default shall not preclude Guarantor from obtaining such Additional Advance or disbursement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Borrower and Guarantor shall have executed an acknowledgement in form and content reasonably acceptable to Administrative Agent that (1) such Additional Advance or disbursement has been made to or for the benefit of Borrower pursuant to the Loan Agreement, and (2) the agreement by Lender to make such further Additional Advances or disbursements to Guarantor pursuant to this <u>Section 1(e)</u> shall not prejudice or impair the right of Administrative Agent to demand performance by Borrower or Guarantor of any of their respective obligations under the Loan Documents, to declare Defaults or Events of Default under the Loan Documents, to exercise any rights and remedies thereunder, or be deemed to be a waiver, estoppel, acceptance of course of conduct or forbearance by Administrative Agent under the Loan Documents; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)all Additional Advances and disbursements made to Guarantor pursuant to this <u>Section 1(e)</u> shall be used only for the purpose of paying or performing the Guaranteed Obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Nothing contained in this <u>Section 1(e)</u> shall in any way limit, impair or affect the rights, remedies and options of Administrative Agent or Lender under any of the Loan Documents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Nature of Guaranty</u>. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by Guarantor and if Guarantor is a natural person, shall continue to be effective after Guarantor's death (in which event this Guaranty shall be binding upon Guarantor's estate and heirs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Waivers</u>. Guarantor agrees and acknowledges that it has received copies of the Loan Documents, and hereby waives notice of (a) any loans or advances made by Lender to Borrower, (b) acceptance of this Guaranty, (c) any amendment or extension of the Loan Documents, (d) the execution and delivery by Borrower and Administrative Agent and/or Lender of any other loan or credit agreement or of Borrower's execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property, (e) the occurrence of any Default or Event of Default, (f) Administrative Agent's transfer or disposition of the Guaranteed Obligations, or any part thereof, to any Person acquiring all or any portion of (or any interest in) the Loan, (g) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (h) protest, proof of non-payment or default by Borrower, and (i) any other action at any time taken or omitted by Lender or Administrative Agent, and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations, except such notices and demands expressly required in the Loan Documents. In addition Guarantor hereby expressly waives: (i) any right to revoke this Guaranty; (ii) any right to require Lender or Administrative Agent to do any of the following before Guarantor is obligated to pay or perform the Guaranteed Obligations or before Administrative Agent may proceed against Guarantor: (A) sue or exhaust remedies against Borrower or any other person liable for the Guaranteed Obligations or any portion thereof; (B) sue on an accrued right of action in respect of any of the Guaranteed Obligations or bring any other action, exercise any other right, or exhaust any other remedy; (C) enforce rights against Borrower's assets or the collateral pledged by Borrower to secure the Guaranteed Obligations; (D) join Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty; or (E) mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations; (iii) any right relating to the timing, manner or conduct of Administrative Agent's enforcement of rights against Borrower's assets or the collateral pledged by Borrower to secure the Guaranteed Obligations; (iv) if Guarantor and/or Borrower (or any other person) have each pledged assets to secure the Guaranteed Obligations, any right to require Lender or Administrative Agent to proceed first against collateral pledged by Borrower (or any other person) before proceeding against the collateral pledged by Guarantor; (v) promptness, diligence, notice of any default, notice of nonpayment or nonperformance, notice of acceleration or intent to accelerate, demand for payment or performance, acceptance or notice of acceptance of this Guaranty, presentment, notice of protest, notice of dishonor, notice of the incurring by Borrower of additional indebtedness, notice of any suit or other action by Administrative Agent against Borrower or any other person, any notice to any person liable for the obligation which is the subject of the suit or action, and all other notices and demands with respect to the Guaranteed Obligations and this Guaranty; and (vi) any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating the Guarantor to the rights of Lender or Administrative Agent), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by Guarantor under or in connection with this Guaranty or otherwise prior to satisfaction in full of Guarantor's obligations hereunder (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Payment of Expenses</u>. In the event that Guarantor should fail to timely perform any provisions of this Guaranty, Guarantor shall, within ten (10) days of written demand by Administrative Agent, pay Administrative Agent all out-of-pocket costs and expenses (including

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court costs and reasonable attorneys' fees) actually incurred by Lender or Administrative Agent in the enforcement hereof or the preservation of Lender or Administrative Agent's rights hereunder, together with interest thereon at the Default Rate from the date of demand by Administrative Agent until the date of payment to Administrative Agent. Any amounts payable to Administrative Agent hereunder shall be due and payable on written demand and, if not paid within ten (10) days of such demand therefor, shall bear interest at the Default Rate from the date payment was due. This <u>Section 4</u> shall survive the payment and performance of the Guaranteed Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Effect of Bankruptcy</u>. In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, Lender or Administrative Agent must rescind or restore any payment, or any part thereof, received by Lender or Administrative Agent in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to Guarantor by Lender or Administrative Agent shall be without effect, Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment has been due but not made at such time, and this Guaranty shall remain in full force and effect. It is the intention of Borrower and Guarantor that Guarantor's obligations hereunder shall not be discharged except by Guarantor's performance of such obligations and then only to the extent of such performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>No Discharge</u>. Guarantor agrees that its obligations under this Guaranty shall not be released, diminished, or adversely affected by any of the following, and waives any common law, equitable, statutory or other rights (including without limitation rights to notice) which Guarantor might otherwise have as a result of or in connection with any of the following: (a) any modification, extension, or increase of all or any part of the Guaranteed Obligations or the Loan Documents; (b) any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender or Administrative Agent to Borrower or Guarantor; (c) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower, Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations, or any dissolution of Borrower or Guarantor, or any payment by Borrower to Lender or Administrative Agent being held to constitute a preference under bankruptcy laws or for any reason Lender or Administrative Agent is required to refund such payment or pay such amount to Borrower or someone else pursuant to any applicable Federal or State bankruptcy or insolvency law relating to the bankruptcy or insolvency of Borrower or Guarantor; (d) any sale, lease or transfer of any or all of the assets of Borrower or Guarantor, or any changes in the shareholders, partners or members of Borrower or Guarantor; or any reorganization of Borrower or Guarantor, or the reorganization, merger or consolidation of Borrower into or with any other corporation or entity; (e) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with or evidencing the Guaranteed Obligations, for any reason whatsoever, including without limitation the fact that (i) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (ii) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the officers or representatives executing the Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v) the Borrower (or any other Person) has valid defenses (except the defense of payment or performance of the applicable Guaranteed Obligation), claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially reduced or uncollectible from Borrower (whether such right of offset, claim or defense arises in connection with the Guaranteed Obligations, the transactions creating the Guaranteed Obligations or otherwise), (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the

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Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (vii) the Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that Guarantor shall remain liable hereon regardless of whether Borrower or any other Person be found not liable on the Guaranteed Obligations or any part thereof for any reason; (f) any full or partial release of the liability of Borrower for any part of the Guaranteed Obligations, or of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by Guarantor that Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations, or that Lender or Administrative Agent will look to other Persons to pay or perform the Guaranteed Obligations; (g) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations; (h) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations; (i) the failure of Lender or Administrative Agent or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not limited to any neglect, delay, omission, failure; or (j) any other action taken or omitted to be taken with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed Obligations (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Representations and Warranties</u>. To induce Administrative Agent and Lender to enter into the Loan Documents, Guarantor represents and warrants to Administrative Agent and Lender as follows: (a) Guarantor has received, or will receive, direct or indirect benefit from the making of the Loan to Borrower; (b) Guarantor is familiar with the financial condition of the Borrower and is familiar with the value of any and all collateral intended to be created as security for the payment of the Guaranteed Obligations (however, Guarantor is not relying on such financial condition or the collateral as an inducement to enter into this Guaranty); (c) neither Administrative Agent nor any Lender or other party has made any representation, warranty or statement to Guarantor in order to induce the Guarantor to execute this Guaranty; (d) as of the date hereof, giving effect to this Guaranty and the contingent obligation evidenced hereby, Guarantor is solvent, and has assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and has property and assets sufficient to satisfy and repay its obligations and liabilities; and (e) this Guaranty is a legal and binding obligation of Guarantor and is enforceable in accordance with its terms, except as limited by general principles of equity and bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors' rights. All representations and warranties made by Guarantor herein shall survive the execution hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Financial Covenants; Reporting</u>. Guarantor (together with all Persons that constitute Guarantor) shall at all times (a) maintain a Guarantor Net Worth (as defined in that certain Guaranty of Recourse Obligations dated of even date herewith (the "<u>Recourse</u> 

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<u>Guaranty</u>")) of at least ONE HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000.00), and (b) own Liquid Assets (as defined in the Recourse Guaranty), in its own name, of at least FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00). Guarantor shall deliver to Administrative Agent: (i) within ninety (90) days after the end of each calendar year, a complete copy of Guarantor's annual financial statements prepared by an Independent Accountant in accordance with the Approved Accounting Method (<u>provided</u>, <u>however</u>, audited statements shall be delivered to Administrative Agent within sixty (60) days of Administrative Agent's request therefor during the existence of an Event of Default or at any other time up to two (2) times during the term of the Loan in the event that Administrative Agent reasonably determines that the financial statements delivered by Guarantor are incomplete, inconsistent, or inaccurate, and Guarantor has not corrected any such deficiencies within fifteen (15) days of written notice thereof from Administrative Agent); (ii) not later than June 30 and December 31 of each calendar year, a Guarantor Certificate (as defined below), with the "Financial Covenants Certification" section completed in full; (iii) within ten (10) Business Days after Administrative Agent's request (but not sooner than the date on which the same is actually filed), a copy of Guarantor's filed federal income tax return for the preceding year; (iv) within five (5) Business Days after the filing of Guarantor's federal tax return, a certificate from an Independent Accountant confirming that such income tax return was properly filed and attaching evidence that all tax obligations stated therein to be due have been paid; and (v) within thirty (30) days after request by Administrative Agent, such other financial information with respect to Guarantor as Administrative Agent may reasonably request. Guarantor shall deliver to Administrative Agent a Guarantor Certificate with each items delivered pursuant to the foregoing clauses. As used herein, "<u>Guarantor Certificate</u>" means a certificate in the form attached to the Recourse Guaranty as <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Subordination of All Guarantor Claims</u>. In the event of receivership, bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency proceedings involving Guarantor as debtor, Administrative Agent and Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims (as defined below). Guarantor hereby assigns such dividends and payments to Administrative Agent. Should Administrative Agent receive, for application upon the Guaranteed Obligations, any such dividend or payment which is otherwise payable to Guarantor, and which, as between Borrower and Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment to Administrative Agent in full of the Guaranteed Obligations, Guarantor shall become subrogated to the rights of Administrative Agent to the extent that such payments to Administrative Agent on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with respect to that proportion of the Guaranteed Obligations which would have been unpaid if Administrative Agent had not received dividends or payments upon the Guarantor Claims. As used herein, the term "<u>Guarantor Claims</u>" shall mean all debts and liabilities of Borrower to Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise (including, without limitation, all rights and claims of Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of Guarantor's payment of all or a portion of the Guaranteed Obligations). In the event that Guarantor should receive any payment which is prohibited by this Guaranty, Guarantor agrees to hold such payment in trust for Administrative Agent and promptly pay the same to Administrative Agent to the extent of any unpaid Guaranteed Obligations. Guarantor agrees that until the Project has been Completed and Guarantor's obligations hereunder have been paid and performed in full, any liens, security interests, judgment liens, charges or other encumbrances upon Borrower's assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower's assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of Guarantor or Administrative Agent presently exist or are hereafter created or attached. Without the prior

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written consent of Administrative Agent, until the Project has been Completed and Guarantor's obligations hereunder have been indefeasibly paid and performed in full (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt), Guarantor shall not (a) exercise or enforce any creditor's right it may have against Borrower or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of Borrower held by Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>GOVERNING LAW; VENUE</u>. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN §§ 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT THAT THE APPLICABILITY OF ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT, LENDER OR GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT ADMINISTRATIVE AGENT'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GUARANTOR 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 GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. GUARANTOR DOES HEREBY DESIGNATE AND APPOINT:**

**TUAN OLONA, LLP<br>ONE ROCKEFELLER PLAZA, ELEVENTH FLOOR<br>NEW YORK, NEW YORK 10020<br>ATTENTION: HAN-HSIEN TUAN**

**AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT 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 OR ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST** 

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**GUARANTOR IN ANY OTHER JURISDICTION. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS GUARANTY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>WAIVER OF RIGHT TO TRIAL BY JURY</u>. GUARANTOR, ADMINISTRATIVE AGENT, AND LENDER (BY THEIR ACCEPTANCE OF THIS GUARANTY) HEREBY AGREE 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 THIS GUARANTY, THE NOTE, THE LOAN AGREEMENT, THE SECURITY INSTRUMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, ADMINISTRATIVE AGENT, AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. THE PARTIES HERETO ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Miscellaneous</u>. All notices, consents, approvals and requests required or permitted hereunder shall be given (and shall be deemed effective) in the manner described in Section 8.6 of the Loan Agreement, and Guarantor's address for such purposes shall be the address of Guarantor set forth on the signature page hereof. No failure to exercise, and no delay in exercising, on the part of Lender or Administrative Agent, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. This Guaranty shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; <u>provided</u>, <u>however</u>, Guarantor may not assign any of its rights, powers, duties or obligations hereunder. This Guaranty embodies the entire agreement of Guarantor, Lender and Administrative Agent with respect to Guarantor's guaranty of the Guaranteed Obligations and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof. There are no oral agreements between Guarantor, Lender and Administrative Agent. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable and all other provisions of this Guaranty shall remain in full force and effect. This Guaranty may be amended only by an instrument in writing executed by the party or an authorized representative of the party against whom such amendment is sought to be enforced. If Guarantor consists of more than one Person, the obligations and liabilities of each such Person shall be joint and several. This Guaranty may be executed in counterparts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Intercreditor Agreement</u>. Guarantor hereby acknowledges and agrees that any intercreditor agreement entered into between Administrative Agent and Mezzanine Loan Administrative Agent will be solely for the benefit of Administrative Agent and Mezzanine Loan Administrative Agent, and that none of Guarantor, Borrower, or Mezzanine Borrower shall be third-party beneficiaries (intended or otherwise) of any of the provisions therein, have any rights thereunder, or be entitled to rely on any of the provisions contained therein. Administrative Agent and Mezzanine Loan Administrative Agent have no obligation to disclose to Guarantor the contents of any such intercreditor agreement. Guarantor's obligations hereunder are and will be independent of any such intercreditor agreement and shall remain unmodified by the terms and provisions thereof.

[The Remainder of This Page is Intentionally Blank]

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EXECUTED as of the day and year first above written.

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| |
|:---|
| **<u>GUARANTOR</u>:** |
| **NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executed Officer |

---

 Address for purposes of notice:<br>NexPoint Strategic Opportunities Fund<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>

 With a copy to:<br>Wick Phillips <br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D. C. Sauter, Esq.<br>Email: d.c.sauter@wickphillips.com

[Signatures continued on next page]<br>

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---

| |
|:---|
| **<u>GUARANTOR</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**HCRE PARTNERS, LLC**,<br>a Delaware limited liability company<br>By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Matt McGraner<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

---

 Address for purposes of notice:<br>HCRE Partners, LLC<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>

 With a copy to:<br>Wick Phillips <br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D. C. Sauter, Esq.<br>Email: d.c.sauter@wickphillips.com

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## Exhibit 10.17

**Exhibit 10.17**

**<u>GUARANTY OF REQUIRED EQUITY, REQUIRED PAY DOWN <br>AND MASTER LEASE</u>**

THIS GUARANTY OF REQUIRED EQUITY, REQUIRED PAY DOWN AND MASTER LEASE (this "<u>Guaranty</u>") is executed as of August 15, 2018, by **NEXPOINT STRATEGIC OPPORTUNITIES FUND**, a Delaware statutory trust, and **HCRE PARTNERS, LLC**, a Delaware limited liability company (individually and collectively, "<u>Guarantor</u>"), for the benefit of **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as Administrative Agent for and on behalf of the Lenders from time to time party to the Loan Agreement defined below (together with its successors and/or assigns, "<u>Administrative Agent</u>").

<u>RECITALS</u>:

WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith among **CP TOWER OWNER, LLC**, a Delaware limited liability company, and **CP LAND OWNER, LLC**, a Delaware limited liability company (collectively, "<u>Borrower</u>"), the Lenders from time to time party thereto, and Administrative Agent (as the same may be amended, the "<u>Loan Agreement</u>"), Lender has agreed to make a Loan to Borrower on the terms and conditions described therein; capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement; and

WHEREAS, Lender is not willing to make the Loan to Borrower unless Guarantor executes and delivers this Guaranty.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Guaranty of Obligation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Guarantor hereby irrevocably and unconditionally guarantees to Administrative Agent (for the benefit of the Lenders) the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is fully and personally liable for the Guaranteed Obligations as a primary obligor as set forth herein. As used herein, the term "<u>Guaranteed Obligations</u>" means the payment of (i) the Required Equity (as defined in the Loan Agreement) pursuant to <u>Section 5.1.14</u> of the Loan Agreement; (ii) all Leasing Expenditures in excess of the aggregate Additional Advances allocated for Leasing Expenditures pursuant to the Loan Agreement (the "<u>Leasing Expenditures Guaranty</u>"); <u>provided</u>, <u>however</u>, the maximum sum of such Leasing Expenditures Guaranty shall not exceed the sum of $9,600,000.00; (iii) the sum of the Required Pay Down, plus all other amounts due pursuant to <u>Section 5.1.19</u> of the Loan Agreement, when required pursuant to <u>Section 5.1.19</u> of the Loan Agreement; and (iv) all amounts that are due and payable under the Master Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Guarantor acknowledges and agrees that the unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u>, if not paid when due pursuant to this Guaranty and the other Loan Documents, shall, at Administrative Agent's election in its sole and absolute discretion, be deemed to be added to and form a part of the Debt for all purposes under the Loan Documents (it being agreed that neither Administrative Agent nor Lender shall be required to demonstrate that it has suffered a Loss in such amount in order to recover such amounts from Guarantor). For the avoidance of doubt, Guarantor's obligation to pay the unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u> shall survive any foreclosure

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or the giving of any deed-in-lieu of foreclosure with respect to the Property, and shall not be reduced or limited by any repayment of the Loan or by any amount bid by Administrative Agent in connection with any foreclosure under the Loan Documents. Guarantor acknowledges and agrees that its obligations under this Guaranty to pay to Administrative Agent the unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u> are separate and distinct from any obligation of Borrower to repay the Debt, and that such obligation does not constitute a guaranty of the Loan or of any of Borrower's obligations with respect to the Loan except to the extent that such unpaid amount of the Guaranteed Obligations as described in this <u>Section 1</u> are actually added to and form a part of the Debt as provided above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Nature of Guaranty</u>. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by Guarantor and if Guarantor is a natural person, shall continue to be effective after Guarantor's death (in which event this Guaranty shall be binding upon Guarantor's estate and heirs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Waivers</u>. Guarantor agrees and acknowledges that it has received copies of the Loan Documents, and hereby waives notice of (a) any loans or advances made by Lender to Borrower, (b) acceptance of this Guaranty, (c) any amendment or extension of the Loan Documents, (d) the execution and delivery by Borrower and Administrative Agent and/or Lender of any other loan or credit agreement or of Borrower's execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property, (e) the occurrence of any Default or Event of Default, (f) Administrative Agent's transfer or disposition of the Guaranteed Obligations, or any part thereof, to any Person acquiring all or any portion of (or any interest in) the Loan, (g) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (h) protest, proof of non-payment or default by Borrower, and (i) any other action at any time taken or omitted by Lender or Administrative Agent, and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations, except such notices and demands expressly required in the Loan Documents. In addition Guarantor hereby expressly waives: (i) any right to revoke this Guaranty; (ii) any right to require Lender or Administrative Agent to do any of the following before Guarantor is obligated to pay or perform the Guaranteed Obligations or before Administrative Agent may proceed against Guarantor: (A) sue or exhaust remedies against Borrower or any other person liable for the Guaranteed Obligations or any portion thereof; (B) sue on an accrued right of action in respect of any of the Guaranteed Obligations or bring any other action, exercise any other right, or exhaust any other remedy; (C) enforce rights against Borrower's assets or the collateral pledged by Borrower to secure the Guaranteed Obligations; (D) join Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty; or (E) mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations; (iii) any right relating to the timing, manner or conduct of Administrative Agent's enforcement of rights against Borrower's assets or the collateral pledged by Borrower to secure the Guaranteed Obligations; (iv) if Guarantor and/or Borrower (or any other person) have each pledged assets to secure the Guaranteed Obligations, any right to require Lender or Administrative Agent to proceed first against collateral pledged by Borrower (or any other person) before proceeding against the collateral pledged by Guarantor; (v) promptness, diligence, notice of any default, notice of nonpayment or nonperformance, notice of acceleration or intent to accelerate, demand for payment or performance, acceptance or notice of acceptance of this Guaranty, presentment, notice of protest, notice of dishonor, notice of the incurring by Borrower of additional indebtedness, notice of any suit or other action by Administrative Agent against Borrower or any other person, any notice to any person liable for the obligation which is the subject of the suit or action, and all other notices and demands with respect to the Guaranteed Obligations and this Guaranty; and (vi) any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating the Guarantor

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to the rights of Lender or Administrative Agent), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by Guarantor under or in connection with this Guaranty or otherwise prior to satisfaction in full of Guarantor's obligations hereunder (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Payment of Expenses</u>. In the event that Guarantor should fail to timely perform any provisions of this Guaranty, Guarantor shall, within ten (10) days of written demand by Administrative Agent, pay Administrative Agent all out-of-pocket costs and expenses (including court costs and reasonable attorneys' fees) actually incurred by Lender or Administrative Agent in the enforcement hereof or the preservation of Lender or Administrative Agent's rights hereunder, together with interest thereon at the Default Rate from the date of demand by Administrative Agent until the date of payment to Administrative Agent. Any amounts payable to Administrative Agent hereunder shall be due and payable on written demand and, if not paid within ten (10) days of such demand therefor, shall bear interest at the Default Rate from the date payment was due. This <u>Section 4</u> shall survive the payment and performance of the Guaranteed Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Effect of Bankruptcy</u>. In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, Lender or Administrative Agent must rescind or restore any payment, or any part thereof, received by Lender or Administrative Agent in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to Guarantor by Lender or Administrative Agent shall be without effect, Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment has been due but not made at such time, and this Guaranty shall remain in full force and effect. It is the intention of Borrower and Guarantor that Guarantor's obligations hereunder shall not be discharged except by Guarantor's performance of such obligations and then only to the extent of such performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>No Discharge</u>. Except as otherwise expressly provided in this Guaranty, Guarantor agrees that its obligations under this Guaranty shall not be released, diminished, or adversely affected by any of the following, and waives any common law, equitable, statutory or other rights (including without limitation rights to notice) which Guarantor might otherwise have as a result of or in connection with any of the following: (a) any modification, extension, or increase of all or any part of the Guaranteed Obligations or the Loan Documents; (b) any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender or Administrative Agent to Borrower or Guarantor; (c) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower, Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations, or any dissolution of Borrower or Guarantor, or any payment by Borrower to Lender or Administrative Agent being held to constitute a preference under bankruptcy laws or for any reason Lender or Administrative Agent is required to refund such payment or pay such amount to Borrower or someone else pursuant to any applicable Federal or State bankruptcy or insolvency law relating to the bankruptcy or insolvency of Borrower or Guarantor; (d) any sale, lease or transfer of any or all of the assets of Borrower or Guarantor, or any changes in the shareholders, partners or members of Borrower or Guarantor; or any reorganization of Borrower or Guarantor, or the reorganization, merger or consolidation of Borrower into or with any other corporation or entity; (e) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with or evidencing the Guaranteed Obligations, for any reason whatsoever, including without limitation the fact that (i) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (ii) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the

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officers or representatives executing the Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v) the Borrower (or any other Person) has valid defenses (except the defense of payment or performance of the applicable Guaranteed Obligation), claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially reduced or uncollectible from Borrower (whether such right of offset, claim or defense arises in connection with the Guaranteed Obligations, the transactions creating the Guaranteed Obligations or otherwise), (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (vii) the Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that Guarantor shall remain liable hereon regardless of whether Borrower or any other Person be found not liable on the Guaranteed Obligations or any part thereof for any reason; (f) any full or partial release of the liability of Borrower for any part of the Guaranteed Obligations, or of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by Guarantor that Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons will be liable to pay or perform the Guaranteed Obligations, or that Lender or Administrative Agent will look to other Persons to pay or perform the Guaranteed Obligations; (g) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations; (h) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations; (i) the failure of Lender or Administrative Agent or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not limited to any neglect, delay, omission, failure; or (j) any other action taken or omitted to be taken with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed Obligations (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Representations and Warranties</u>. To induce Administrative Agent and Lender to enter into the Loan Documents, Guarantor represents and warrants to Administrative Agent and Lender as follows: (a) Guarantor has received, or will receive, direct or indirect benefit from the making of the Loan to Borrower; (b) Guarantor is familiar with the financial condition of the Borrower and is familiar with the value of any and all collateral intended to be created as security for the payment of the Guaranteed Obligations (however, Guarantor is not relying on such financial condition or the collateral as an inducement to enter into this Guaranty); (c) neither Administrative Agent nor any Lender or other party has made any representation, warranty or statement to Guarantor in order to induce the Guarantor to execute this Guaranty; (d) as of the date hereof, giving effect to this Guaranty and the contingent obligation evidenced hereby, Guarantor is solvent, and has assets which, fairly valued, exceed its obligations, liabilities

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(including contingent liabilities) and debts, and has property and assets sufficient to satisfy and repay its obligations and liabilities; and (e) this Guaranty is a legal and binding obligation of Guarantor and is enforceable in accordance with its terms, except as limited by general principles of equity and bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors' rights. All representations and warranties made by Guarantor herein shall survive the execution hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Financial Covenants; Reporting</u>. Guarantor (together with all Persons that constitute Guarantor) shall at all times (a) maintain a Guarantor Net Worth (as defined in that certain Guaranty of Recourse Obligations dated of even date herewith (the "<u>Recourse Guaranty</u>")) of at least ONE HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000.00), and (b) own Liquid Assets (as defined in the Recourse Guaranty), in its own name, of at least FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00). Guarantor shall deliver to Administrative Agent: (i) within ninety (90) days after the end of each calendar year, a complete copy of Guarantor's annual financial statements prepared by an Independent Accountant in accordance with the Approved Accounting Method (<u>provided</u>, <u>however</u>, audited statements shall be delivered to Administrative Agent within sixty (60) days of Administrative Agent's request therefor during the existence of an Event of Default or at any other time up to two (2) times during the term of the Loan in the event that Administrative Agent reasonably determines that the financial statements delivered by Guarantor are incomplete, inconsistent, or inaccurate, and Guarantor has not corrected any such deficiencies within fifteen (15) days of written notice thereof from Administrative Agent); (ii) not later than June 30 and December 31 of each calendar year, a Guarantor Certificate (as defined below), with the "Financial Covenants Certification" section completed in full; (iii) within ten (10) Business Days after Administrative Agent's request (but not sooner than the date on which the same is actually filed), a copy of Guarantor's filed federal income tax return for the preceding year; (iv) within five (5) Business Days after the filing of Guarantor's federal tax return, a certificate from an Independent Accountant confirming that such income tax return was properly filed and attaching evidence that all tax obligations stated therein to be due have been paid; and (v) within thirty (30) days after request by Administrative Agent, such other financial information with respect to Guarantor as Administrative Agent may reasonably request. Guarantor shall deliver to Administrative Agent a Guarantor Certificate with each items delivered pursuant to the foregoing clauses. As used herein, "<u>Guarantor Certificate</u>" means a certificate in the form attached to the Recourse Guaranty as <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Subordination of All Guarantor Claims.</u> In the event of receivership, bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency proceedings involving Guarantor as debtor, Administrative Agent and Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims (as defined below). Guarantor hereby assigns such dividends and payments to Administrative Agent. Should Administrative Agent receive, for application upon the Guaranteed Obligations, any such dividend or payment which is otherwise payable to Guarantor, and which, as between Borrower and Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment to Administrative Agent in full of the Guaranteed Obligations, Guarantor shall become subrogated to the rights of Administrative Agent to the extent that such payments to Administrative Agent on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with respect to that proportion of the Guaranteed Obligations which would have been unpaid if Administrative Agent had not received dividends or payments upon the Guarantor Claims. As used herein, the term "<u>Guarantor Claims</u>" shall mean all debts and liabilities of Borrower to Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise (including, without limitation, all rights and claims of Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of Guarantor's payment of all or a portion of the Guaranteed

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Obligations). In the event that Guarantor should receive any payment which is prohibited by this Guaranty, Guarantor agrees to hold such payment in trust for Administrative Agent and promptly pay the same to Administrative Agent to the extent of any unpaid Guaranteed Obligations. Guarantor agrees that until the Debt is repaid in full and Guarantor's obligations hereunder have been paid and performed in full, any liens, security interests, judgment liens, charges or other encumbrances upon Borrower's assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower's assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of Guarantor or Administrative Agent presently exist or are hereafter created or attached. Without the prior written consent of Administrative Agent, until the Debt is indefeasibly repaid in full and Guarantor's obligations hereunder have been indefeasibly paid and performed in full (except for only those obligations which, by their express terms, survive indefeasible repayment of the Debt), Guarantor shall not (a) exercise or enforce any creditor's right it may have against Borrower or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of Borrower held by Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>GOVERNING LAW; VENUE</u>. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN §§ 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT THAT THE APPLICABILITY OF ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT, LENDER OR GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT ADMINISTRATIVE AGENT'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GUARANTOR 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 GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. GUARANTOR DOES HEREBY DESIGNATE AND APPOINT:**

**TUAN OLONA, LLP<br>ONE ROCKEFELLER PLAZA, ELEVENTH FLOOR<br>NEW YORK, NEW YORK 10020<br>ATTENTION: HAN-HSIEN TUAN**

**AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED** 

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**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 OR ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST GUARANTOR IN ANY OTHER JURISDICTION. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS GUARANTY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>WAIVER OF RIGHT TO TRIAL BY JURY</u>. GUARANTOR, ADMINISTRATIVE AGENT, AND LENDER (BY THEIR ACCEPTANCE OF THIS GUARANTY) HEREBY AGREE 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 THIS GUARANTY, THE NOTE, THE LOAN AGREEMENT, THE SECURITY INSTRUMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, ADMINISTRATIVE AGENT, AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. THE PARTIES HERETO ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Miscellaneous</u>. All notices, consents, approvals and requests required or permitted hereunder shall be given (and shall be deemed effective) in the manner described in Section 8.6 of the Loan Agreement, and Guarantor's address for such purposes shall be the address of Guarantor set forth on the signature page hereof. No failure to exercise, and no delay in exercising, on the part of Lender or Administrative Agent, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. This Guaranty shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; <u>provided</u>, <u>however</u>, Guarantor may not assign any of its rights, powers, duties or obligations hereunder. This Guaranty embodies the entire agreement of Guarantor, Lender and Administrative Agent with respect to Guarantor's guaranty of the Guaranteed Obligations and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof. There are no oral agreements between Guarantor, Lender and Administrative Agent. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable and all other provisions of this Guaranty shall remain in full force and effect. This Guaranty may be amended only by an instrument in writing executed by the party or an authorized representative of the party against whom such amendment is sought to be enforced. If Guarantor consists of more than one Person, the obligations and liabilities of each such Person shall be joint and several. This Guaranty may be executed in counterparts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Intercreditor Agreement</u>. Guarantor hereby acknowledges and agrees that any intercreditor agreement entered into between Administrative Agent and Mezzanine Loan Administrative Agent will be solely for the benefit of Administrative Agent and Mezzanine Loan Administrative Agent, and that none of Guarantor, Borrower, or Mezzanine Borrower shall be

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third-party beneficiaries (intended or otherwise) of any of the provisions therein, have any rights thereunder, or be entitled to rely on any of the provisions contained therein. Administrative Agent and Mezzanine Loan Administrative Agent have no obligation to disclose to Guarantor the contents of any such intercreditor agreement. Guarantor's obligations hereunder are and will be independent of any such intercreditor agreement and shall remain unmodified by the terms and provisions thereof.

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EXECUTED as of the day and year first above written.

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| |
|:---|
| **<u>GUARANTOR</u>:** |
| **NEXPOINT STRATEGIC OPPORTUNITIES FUND**,<br>a Delaware statutory trust<br>By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u><br> &nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp;&nbsp;&nbsp;James Dondero<br>**&nbsp;&nbsp;&nbsp;&nbsp;**Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executed Officer |

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 Address for purposes of notice:<br>NexPoint Strategic Opportunities Fund<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>Email: mmcgraner@highlandcapital.com

 With a copy to:<br>Wick Phillips <br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D. C. Sauter, Esq.<br>Email: d.c.sauter@wickphillips.com

[Signatures continued on next page]

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| |
|:---|
| **<u>GUARANTOR</u>:** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**HCRE PARTNERS, LLC**,<br>a Delaware limited liability company<br>By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Name:&nbsp;&nbsp;&nbsp;&nbsp;Matt McGraner<br>Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory |

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 Address for purposes of notice:<br>HCRE Partners, LLC<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201<br>Attention: Matt McGraner<br>Email: mmcgraner@highlandcapital.com

 With a copy to:<br>Wick Phillips<br>3131 McKinney Avenue<br>Suite 100<br>Dallas, Texas 75204<br>Attention: D. C. Sauter, Esq.<br>Email: d.c.sauter@wickphillips.com

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## Exhibit 10.18

***Exhibit 10.18***

**<u>JOINDER AGREEMENT OF NEW INDEMNITOR</u>**

**THIS JOINDER AGREEMENT OF NEW INDEMNITOR** (this "**Joinder Agreement**"), is dated as of March 8, 2022, and is made by **NEXPOINT DIVERSIFIED REAL ESTATE TRUST**, a Delaware statutory trust (the **"New Indemnitor**"), **NEXPOINT HOSPITALITY TRUST,** a real estate investment trust formed under the laws of the Province of Ontario ("**NexPoint Hospitality Trust**") and **NEXPOINT REAL ESTATE ADVISORS, L.P.**, a Delaware limited partnership ("**NexPoint Advisors**" and together with NexPoint Hospitality Trust, the "**Existing Indemnitor**") in favor of and delivered to **ACORE CAPITAL MORTGAGE, LP**, a Delaware limited partnership, in its capacity as Administrative Agent for and on behalf of the Lenders from time to time party to the Loan Agreement defined below (together with its successors and/or assigns, "**Administrative Agent**") under that certain Loan Agreement dated as of February 28, 2019, by and among 2325 STEMMONS TRS, INC., a Delaware corporation, 2325 STEMMONS HOTEL PARTNERS, LLC, HCRE ADDISON, LLC, HCRE ADDISON TRS, LLC, HCRE PLANO, LLC, HCRE PLANO TRS, LLC, HCRE LAS COLINAS, LLC, HCRE LAS COLINAS TRS, LLC, NHT SP, LLC, and NHT SP TRS, LLC, each a Delaware limited liability company (collectively, "**Borrower**"), the Lenders from time to time party thereto, and Administrative Agent (as the same may be amended, revised, modified, supplemented or amended and restated from time to time, the "**Loan Agreement**"). All capitalized terms not otherwise defined in this Joinder Agreement shall have the meanings given to such terms in the Loan Agreement.

**<u>RECITALS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Lenders agreed to make a Loan to Borrower pursuant to the terms and conditions of the Loan Agreement. The Loan is secured by, among other things, the Security Instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.In connection with the Loan, (i) NexPoint Advisors and NHT Holdco LLC, a Delaware limited liability company ("**Holdco**"), executed and delivered that certain Guaranty of Recourse Obligations (the **"Guaranty of Recourse Obligations**") in favor of the Administrative Agent dated as of February 28, 2019; (ii) Holdco executed and delivered that certain Completion Guaranty (the "**Completion Guaranty**") in favor of the Administrative Agent dated as of February 28, 2019; and (iii) the Borrower, Holdco, and Existing Indemnitor executed and delivered that certain Environmental Indemnity Agreement (the "**Environmental Indemnity**") in favor of the Administrative Agent dated February 28, 2019. The Guaranty of Recourse Obligations together with the Completion Guaranty and the Environmental Indemnity are collectively referred to in this Joinder Agreement as the "**Guaranty**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.Pursuant to that certain Joinder Agreement of New Indemnitor and Release of Prior Indemnitor dated May 1, 2019, among Holdco, NexPoint Advisors and NexPoint Hospitality Trust, Holdco was released from its obligations under the Guaranty and NexPoint Hospitality Trust assumed the obligations of Holdco under the Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.Pursuant to Section 8 of the Guaranty of Recourse Obligations, Existing Indemnitor is required to (i) maintain a Guarantor Net Worth (as defined therein) of at least

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$90,000,000.00, and (ii) own Liquid Assets (as defined therein), in its own name, of at least $10,000,000.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.The Existing Indemnitor acknowledges and agrees that it fails to satisfy both the net worth and liquidity requirements under Section 8 of the Guaranty of Recourse Obligations as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.Pursuant to Section 6.1(j) of the Loan Agreement, it is an Event of Default if the Existing Indemnitor breaches any of its net worth or liquidity requirements under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.In order to cure the Event of Default identified in Recital F, New Indemnitor agrees to execute this Joinder Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Benefit to New Indemnitor</u>.** New Indemnitor represents and warrants that (i) it has received, or will receive, direct and/or indirect benefit from the Loan to Borrower, and (ii) has received, or will receive, direct and/or indirect benefit from executing this Joinder Agreement and becoming a "Guarantor" under the Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Assumption by New Indemnitor of Guaranty of Recourse Obligations</u>.** From and after the date hereof, New Indemnitor hereby, jointly and severally together with Existing Indemnitor, assumes and agrees to be liable and responsible for and bound by all of the obligations, agreements and liabilities under the Guaranty of Recourse Obligations, as fully and completely as if the New Indemnitor had originally executed and delivered such Guaranty of Recourse Obligations as the guarantor/indemnitor thereunder. New Indemnitor further agrees to pay, perform and discharge each and every obligation of payment and performance of any guarantor/indemnitor under, pursuant to and as set forth in the Guaranty of Recourse Obligations at the time, in the manner and otherwise in all respects as therein provided. From and after the date hereof, the Guaranty of Recourse Obligations is amended to provide that all references to the term "Guarantor" used in the Guaranty of Recourse Obligations shall mean and refer to New Indemnitor and Existing Indemnitor collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Assumption by New Indemnitor of Completion Guaranty</u>.** From and after the date hereof, New Indemnitor hereby, jointly and severally together with NexPoint Hospitality Trust, assumes and agrees to be liable and responsible for and bound by all of the obligations, agreements and liabilities under the Completion Guaranty, as fully and completely as if the New Indemnitor had originally executed and delivered such Completion Guaranty as the guarantor/indemnitor thereunder. New Indemnitor further agrees to pay, perform and discharge each and every obligation of payment and performance of any guarantor/indemnitor under, pursuant to and as set forth in the Completion Guaranty at the time, in the manner and otherwise in all respects as therein provided. From and after the date hereof, the Completion Guaranty is amended to provide that all references to the term "Guarantor" used in the Completion Guaranty shall mean and refer to New Indemnitor and NexPoint Hospitality Trust collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Assumption by New lndemnitor of Environmental Indemnity</u>.** New Indemnitor, jointly and severally together with Existing Indemnitor, assumes and agrees to be liable and responsible for and bound by all of the obligations, agreements and liabilities under the Environmental Indemnity as fully and completely as if New Indemnitor had signed such Environmental Indemnity as the indemnitor/guarantor thereunder. New Indemnitor further

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agrees to pay, perform, and discharge each and every obligation of payment and performance of any guarantor/indemnitor under, pursuant to and as set forth in the Environmental Indemnity at the time, in the manner and otherwise in all respects as therein provided. The liability of New Indemnitor under this Section 4 shall be joint and several with that of Borrower and Existing Indemnitor. From and after the date hereof, the Environmental Indemnity is amended to provide that (a) all references to the term "Guarantor" used in the Environmental Indemnity shall mean and refer to the New Indemnitor and the Existing Indemnitor collectively and (b) all references to the term "Indemnitor" used in the Environmental Indemnity shall mean and refer to the New Indemnitor, the Existing Indemnitor, and the Borrower collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Conditions to Release of New Indemnitor</u>**<sup>1</sup>*.*** Administrative Agent for and on behalf of the Lenders acknowledges and agrees that the New Indemnitor shall be released as a "Guarantor" under the Guaranty at such time all of the following conditions have been satisfied in Lenders' sole and absolute discretion: (a) no Event of Default exists, (b) the Existing Indemnitor concurrently delivers to the Administrative Agent all of the following documents: (i) a complete set of its audited financial statements prepared by an Independent Accountant in accordance with an Approved Accounting Method which indicate that the Existing Indemnitor independently complies with the requirements of Section 8 of the Guaranty of Recourse Obligations, (ii) a Guarantor Certificate (as defined in the Guaranty of Recourse Obligations), with the "Financial Covenants Certification" section completed in full certifying that the Existing Indemnitor complies with the requirements of Section 8 of the Guaranty of Recourse Obligations, (iii) a written confirmation certifying the New Indemnitor's and Existing Indemnitor's compliance with all terms and conditions of the Guaranty, and (iii) any and all other documents, items, and/or information that the Administrative Agent, in its sole and absolute discretion, may require to ensure that the conditions under subsections (a) and (b) above have been satisfied. Nothing contained in this Section 5 shall be deemed to amended or modify any of the reporting obligations of the "Guarantor" under Section 8 of the Guaranty of Recourse Obligations. Furthermore, in the event New Indemnitor is released upon the Lenders' determining that all of the conditions in this Section 5 have been satisfied, the Security Instrument and all other Loan Documents (other than the Guaranty) and all liens and security interests granted therein by any party (other than the New Indemnitor) shall remain unmodified and in full force and effect. The Administrative Agent is signing this Joinder Agreement for and on behalf of the Lenders solely for the purpose of acknowledging and agreeing to the conditions that must occur in order for the New Indemnitor to be released as a "Guarantor" under the Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Confirmation of Continuing Liability by Existing lndemnitor</u>.** Existing Indemnitor hereby acknowledges and agrees that (a) Existing Indemnitor has reviewed, and consents to, the terms of this Joinder Agreement, (b) Existing Indemnitor unconditionally ratifies and confirms, renews and reaffirms all of its obligations and liabilities under the Guaranty of Recourse Obligations and the Environmental Indemnity, and (c) such obligations and liabilities remain in full force and effect, binding on and enforceable against it in accordance with their respective terms, covenants and conditions, without impairment. In addition to acknowledging and agreeing to those matters set forth under subsections (a), (b), and (c) above as a part of the Existing Indemnitor, NexPoint Hospitality Trust hereby acknowledges and agrees that (i) NexPoint Hospitality Trust unconditionally ratifies and confirms, renews and reaffirms all of its obligations and liabilities under the Completion Guaranty, and (ii) such obligations and liabilities remain in full force and effect, binding on and enforceable against it in accordance with their respective terms, covenants and conditions, without impairment.

<sup>1</sup> NTD: Subject to Lender's review.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Confirmation of Representations</u>.** New Indemnitor confirms the truth and accuracy of all representations and warranties set forth in the Guaranty of Recourse Obligations, the Completion Guaranty, and the Environmental Indemnity, as applicable. In addition, New Indemnitor and Existing Indemnitor each represents and warrants, as of the date of this Joinder Agreement, that no Event of Default has occurred and is continuing except for the Event of Default cured by this Joinder Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Authority Representations by New Indemnitor</u>.** The execution and delivery of this Joinder Agreement, and performance by New Indemnitor under this Joinder Agreement, the Guaranty of Recourse Obligations, and the Environmental Indemnity will not (a) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to New Indemnitor or (b) result in a breach of or constitute or cause a default under any indenture, agreement, lease or instrument to which New Indemnitor is a party or by which the Property may be bound or affected. New Indemnitor has the power and requisite authority to execute, deliver and perform their respective obligations under this Joinder Agreement and any other document executed in connection herewith and, upon execution and delivery of the necessary resolution as required by the terms of that certain Omnibus Amendment Agreement dated on or about the date hereof by and among the Borrower, New Indemnitor, NexPoint Hospitality Trust, NexPoint Advisors, NexPoint Real Estate Trust and the Administrative Agent, New Indemnitor shall be duly authorized to, and shall have taken all actions necessary to authorize such party to, execute, deliver and perform its obligations under this Joinder Agreement. This Joinder Agreement, , upon execution and delivery of the necessary resolution as required by the terms of that certain Omnibus Amendment Agreement dated on or about the date hereof by and among the Borrower, New Indemnitor, NexPoint Hospitality Trust, NexPoint Advisors, NexPoint Real Estate Trust and the Administrative Agent, New Indemnitor, shall constitute legal, valid and binding obligations of New Indemnitor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditors generally, and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). No consent, approval, authorization or order of any court or Governmental Authority or any third party is required in connection with the execution and delivery by New Indemnitor of this Joinder Agreement or to consummate the transactions contemplated hereby, which consent has not been obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Acknowledgement by the Existing Indemnitor</u>.** The Existing Indemnitor acknowledges that this Joinder Agreement, as executed by the New Indemnitor, shall be conclusively taken to have been executed by, or by an officer of the New Indemnitor on behalf of, the trustees of the New Indemnitor only in their capacity as trustees. The Existing Indemnitor hereby disavow any liability upon and waive any claims against holders of trust units of the New Indemnitor **(**"**REIT Units**"**)** and any annuitants or beneficiaries of a trust governed by a registered retirement savings plan, registered retirement income fund, registered education savings plan or deferred profit sharing plan or similar plan or under plans of which holders of REIT Units act as trustee or carrier, and the obligations created hereunder are not personally binding upon, nor shall resort be had to, nor shall recourse or satisfaction be sought from, the private property of any trustee or officers, employees or agents of the New Indemnitor or any holder of REIT Units or such annuitant or beneficiary, but only the property of the New Indemnitor from time to time owned thereby shall be bound. It is agreed that the benefit of this provision is restricted to the trustees of the New Indemnitor, each holder of REIT Units, such annuitants or beneficiaries and officers, employees or agents of the New Indemnitor and, solely for that purpose, the undersigned signing officer(s) of the New Indemnitor have entered into this provision as agent(s) and trustee(s) for and on behalf of the trustees of the New Indemnitor, each holder of REIT Units, each such annuitant or beneficiary and officers, employees or agents of the New Indemnitor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Notices to New lndemnitor</u>.** Administrative Agent shall deliver any notices to New Indemnitor which are required to be delivered pursuant to the Guaranty to the same address and the same manner as that set forth for the Existing Indemnitor in the Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>Counterparts.</u>** This Joinder Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Governing Law</u>.** This Joinder Agreement shall be interpreted, construed, and enforced in accordance with the governing law provisions of the Guaranty of Recourse Obligations, the Completion Guaranty, and the Environmental Indemnity, as applicable.

**(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)**

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The undersigned New Indemnitor and Existing Indemnitor have executed and delivered this Joinder Agreement to be effective as of the date hereof.

**<u>NEW INDEMNITOR</u>**:

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**, a statutory trust organized under the Delaware Statutory Trust Statute

By: <u>/s/ James Dondero</u>_________________<br>Name: James Dondero<br>Title: President and Principal Executive Officer

**<u>EXISTING INDEMNITOR</u>**:

**NEXPOINT REAL ESTATE ADVISORS, L.P.**, a Delaware limited partnership

By: <u>/s/ Matt McGraner</u>________________<br>Name: Matt McGraner<br>Title: Executive Vice President

**NEXPOINT HOSPITALITY TRUST**, a real estate investment trust formed under the laws of the Province of Ontario

By: <u>/s/ Brian Mitts</u>____________________<br>Name: Brian Mitts<br>Title: Corporate Secretary

[Signatures Continued on Next Page]

(*Joinder Agreement of New Indemnitor – Signature Page*)

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**ACKLOWLEDGED AND AGREED** (solely as to the conditions <br>of New Indemnitor's release set forth in Section 5 of this Joinder <br>Agreement)

**<u>ADMINSTRATIVE AGENT</u>**:

**ACORE CAPITAL MORTGAGE, LP**, a Delaware limited<br>partnership, in its capacity as Administrative Agent for and on <br>behalf of the Lenders

By:&nbsp;&nbsp;&nbsp;&nbsp;ACORE Capital Mortgage GP, LLC, a Delaware<br>&nbsp;&nbsp;&nbsp;&nbsp;limited liability company, its General Partner

By: <u>/s/ David Dancer_</u>_____________________<br>&nbsp;&nbsp;&nbsp;&nbsp;Name: David Dancer<br>&nbsp;&nbsp;&nbsp;&nbsp;Title: Authorized Signatory ![image_0a.jpg](image_0a.jpg)

(*Joinder Agreement of New Indemnitor – 2*<sup>nd</sup> *Signature Page*)

## Exhibit 10.19

***Exhibit 10.19***

**<u>OMNIBUS AMENDMENT AGREEMENT</u>**

This OMNIBUS AMENDMENT AGREEMENT (this "**Agreement**"), dated as of March 8, 2022 (the "**Effective Date**"), is made and entered into by and among NHT SP TRS, LLC, a Delaware limited liability company, NHT SP, LLC, a Delaware limited liability company, 2325 STEMMONS TRS, INC., a Delaware corporation, 2325 STEMMONS HOTEL PARTNERS, LLC, a Delaware limited liability company, HCRE ADDISON, LLC, a Delaware limited liability company, HCRE ADDISON TRS, LLC, a Delaware limited liability company, HCRE PLANO, LLC, a Delaware limited liability company, HCRE PLANO TRS, LLC, a Delaware limited liability company, HCRE LAS COLINAS, LLC, a Delaware limited liability company, and HCRE LAS COLINAS TRS, LLC, a Delaware limited liability company (collectively, the "**Borrower**"), NEXPOINT HOSPITALITY TRUST, a real estate investment trust formed under the laws of the Province of Ontario ("**NexPoint Hospitality Trust**"), NEXPOINT REAL ESTATE ADVISORS, L.P., a Delaware limited partnership ("**NexPoint Advisors**"), and NEXPOINT DIVERSIFIED REAL ESTATE TRUST, a Delaware statutory trust ("**NexPoint Real Estate Trust**" together with NexPoint Advisors and NexPoint Hospitality Trust, the "**Guarantor**," and together with the Borrower, the "**Obligors**"), and ACORE CAPITAL MORTGAGE, LP, a Delaware limited partnership, as administrative agent for and on behalf of the Lenders (as defined in the Loan Agreement (as such term is defined below)) (in such capacity, together with its successors and assigns, the "**Administrative Agent**").

**<u>BACKGROUND</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.The Borrower, the Administrative Agent and the Lenders are parties to that certain Loan Agreement, dated as of February 28, 2019 (as the same may have been amended, restated, replaced, supplemented or otherwise modified from time to time, the "**Loan Agreement**"), pursuant to which the Lenders made a loan (the "**Loan**") to the Borrower, which Loan is evidenced by the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement). All capitalized terms that are used without being defined herein shall have the meanings given to such terms in the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.In connection with the Loan, (i) NexPoint Advisors and NHT Holdco LLC, a Delaware limited liability company ("**Holdco**"), executed and delivered to the Administrative Agent that certain Guaranty of Recourse Obligations dated February 28, 2019 (the "**Recourse Guaranty**"), (ii) Holdco executed and delivered to the Administrative Agent that certain Completion Guaranty dated February 28, 2019 (the "**Completion Guaranty"**), and (iii) the Borrower, Holdco, and NexPoint Advisors executed and delivered to the Administrative Agent that certain Environmental Indemnity Agreement dated February 28, 2019 (the "**Environmental Indemnity**). The Guaranty of Recourse Obligations together with the Completion Guaranty and the Environmental Indemnity are collectively referred to in this Agreement as the "**Guaranty**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.Pursuant to that certain Joinder Agreement of New Indemnitor and Release of Prior Indemnitor dated May 1, 2019, among Holdco, NexPoint Advisors and NexPoint Hospitality Trust, Holdco was released from its obligations under the Guaranty and NexPoint Hospitality Trust assumed the obligations of Holdco under the Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.The Loan Agreement and other Loan Documents (as defined in the Loan Agreement) were previously amended pursuant to that certain Limited Consent and Omnibus Amendment Agreement, executed by the Borrower, NexPoint Advisors, NexPoint Hospitality Trust, and Administrative Agent, dated as of May 13, 2020 ("**First Amendment**"), and further amended pursuant to that Second Limited Consent and Omnibus Amendment

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Agreement executed by Borrower, NexPoint Advisors, NexPoint Hospitality Trust, and Administrative Agent, dated as of October 6, 2021, but effective as of June 9, 2021 (the "**Second Amendment**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.Pursuant to that certain Joinder Agreement of New Indemnitor (the "**Joinder Agreement**") to be executed by the Guarantor simultaneously herewith, NexPoint Real Estate Trust will become a "Guarantor" under the Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.Pursuant to the Loan Agreement, the Borrower intends to exercise the remaining options to extend the Maturity Date to the Payment Date in March, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.In connection with the NexPoint Real Estate Trust becoming a "Guarantor" under the Guaranty and the extension of the Maturity Date, the parties hereto desire to amend the Loan Agreement as set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.Capitalized terms used but not defined in this Agreement have the meaning given to them in the Loan Agreement.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained and incorporating the above Background by reference herein, the Obligors and the Administrative Agent, for and on behalf of the Lenders, intending to be legally bound hereby, agree as follows:

**<u>ARTICLE I</u>**

**<u>AMENDMENTS TO LOAN AGREEMENT</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;<u>Defined Terms</u>. The following definitions contained in Section 1.1 of the Loan Agreement are amended to read in the respective entireties as follows:

"<u>Cash Management Event</u>" means the existence of any of the following: (a) the existence of an Event of Default; or (b) the occurrence of a Mezzanine Loan Event of Default (until the receipt by Administrative Agent of a Mezzanine Loan Event of Default Revocation Notice).

"<u>Environmental Indemnity</u>" means that certain Environmental Indemnity Agreement dated as of February 28, 2019, executed by Borrower, NHT Holdco, LLC, a Delaware limited liability company ("<u>Holdco</u>"), and NexPoint Real Estate Advisors, L.P., a Delaware limited partnership ("<u>NexPoint</u>"), in connection with the Loan for the benefit of the Administrative Agent, as amended by that certain Joinder Agreement of New Indemnitor and Release of Prior Indemnitor dated May 1, 2019, among Holdco, NexPoint Hospitality Trust, a real estate investment trust formed under the laws of the Province of Ontario ("<u>NexPoint Hospitality Trust</u>"), and NexPoint (the "<u>First Joinder</u>"), and further amended by that certain Joinder Agreement of New Indemnitor dated March 8, 2022, among NexPoint Diversified Real Estate Trust, a Delaware statutory trust ("<u>NexPoint Real Estate Trust</u>"), NexPoint Hospitality Trust, and NexPoint (the "<u>Second Joinder</u>"), as the same may be amended, restated, replaced, supplemented otherwise modified from time to time.

"<u>Guarantor</u>" means, collectively, NexPoint, NexPoint Hospitality Trust, and NexPoint Diversified Real Estate Trust, together with their successors and permitted assigns; provided, however, NexPoint Real Estate Trust shall automatically be removed from this definition of Guarantor at such time (if ever) NexPoint Real Estate Trust is released under the Recourse Guaranty, the Completion Guaranty, and the Environmental Indemnity by satisfying the conditions to its release under Section 5 of the Second Joinder.

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"<u>Guaranty</u>" means individually and collectively as the context may require: (i) that certain Guaranty of Recourse Obligations dated February 28, 2019, originally from Holdco and NexPoint to and for the benefit of the Administrative Agent, as amended by the First Joinder, and further amended by the Second Joinder, as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time (the "<u>Recourse Guaranty</u>"); and (ii) that certain Completion Guaranty dated as of February 28, 2019, originally from Holdco to and for the benefit of the Administrative Agent, as amended by the First Joinder, and further amended by the Second Joinder, as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time (the "<u>Completion Guaranty</u>").

"<u>Maturity Date</u>" means (a) the Payment Date in March, 2024, or (b) the date on which the Debt has been accelerated as herein provided.

"<u>Monthly Payment Amount</u>" means, as of any Payment Date, all accrued and unpaid interest that has accrued on the Outstanding Principal Balance at the Interest Rate for the Interest Period in effect as of the day immediately preceding such Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;The sixth (6<sup>th</sup>) sentence of <u>Section 3.2(c)</u> of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

In addition to the quarterly deposits required above, on or before the Payment Date in March, 2022, and continuing for a period of 12 successive Payment Dates, Borrower shall also make monthly deposits to the Project Expenditure Reserve in an amount equal to $200,000.00, which represents one twelfth (1/12th) of the amount estimated by Administrative Agent as necessary to improve the Hilton Garden Inn for future anticipated property improvement plans that will be required by the Franchisor atter such Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Required Principal Prepayment</u>**. On or before the earlier to occur of (i) the closing of the sale by NexPoint Hospitality Trust of the following properties: DoubleTree Vancouver, WA; DoubleTree Tigard, WA; DoubleTree Olympia, WA; DoubleTree Beaverton, OR; and DoubleTree Bend, OR (each as more particularly described on Exhibit A to the Mezzanine Loan Agreement) and (ii) July 31, 2022, the Borrower shall make a principal payment to the Administrative Agent in an amount equal to $6,400,000.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4&nbsp;&nbsp;&nbsp;&nbsp;**<u>Restrictions on Distributions</u>**. During any period where the Debt Yield is below 9.00%, Borrower shall not make, nor shall permit to be made, any distributions or other disbursements (including without limitation, any distributions of any kind, returns of capital or repayments of any loans (in each case, whether in cash, assets, equity interests or proceeds of any kind)), other than disbursements made for payment of any interest and principal payments due and payable under the current PPP Loan Documents (as defined in the Consent Agreement) (but excluding the principal balance due upon any acceleration of the maturity date under the current PPP Loan Documents).

**<u>ARTICLE II <br>CONDITIONS PRECEDENT</u>**

This Agreement and the amendments contained herein are conditioned upon the fulfillment by the Obligors of all of the following conditions precedent, in addition to Obligors' compliance with all other obligations set forth in this Agreement:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Documents to be Delivered to Administrative Agent</u>**<u>.</u> The Obligors shall deliver, or cause to be delivered to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, all of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)this Agreement, duly executed by all of the Obligors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the Joinder Agreement in the form attached hereto as <u>Exhibit A</u>, duly executed by the Guarantor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)such other Obligor-related or Property-related information and/or documentation as may be required by the Administrative Agent, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1**<u>Liability for Payment of Fees and Expenses</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Borrower must pay the Administrative Agent by the Effective Date all out-of-pocket costs and expenses, including, without limitation, all costs and expenses of outside legal counsel, incurred by the Administrative Agent in conjunction with the preparation, negotiation, and closing of this Agreement and the Joinder Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)On the Effective Date, the Borrower shall pay the Administrative Agent an extension fee equal in the amount of 0.50% of the Outstanding Principal Balance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Additionally, the Obligors shall pay to the Administrative Agent by the Effective Date a processing fee in the amount of $5,000.00 in connection with the negotiation and execution of this Agreement.

**<u>ARTICLE III <br>REPRESENTATIONS AND WARRANTIES</u>**

To induce the Administrative Agent, for and on behalf of the Lenders, to enter into this Agreement and as consideration for the terms and conditions contained herein, the Obligors make the following representations and warranties, each and all of which shall survive the execution and delivery of this Agreement and all of the other documents executed in connection herewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1**<u>Approvals and Authority from Third Parties.</u>** The Obligors have, or will have upon execution and delivery of the necessary resolution required by the terms of this Agreement, obtained the necessary approvals and authorizations from all applicable third-parties to execute this Agreement, including, without limitation, any and all franchisors, management companies, governmental authorities, ground lessors, and labor unions, as and to the extent applicable to the Obligors and the Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2**<u>Exclusive and First Priority Perfected Lien.</u>** The Administrative Agent has, as of the Effective Date, and shall continue to have, until all of the Obligations are paid and satisfied in full, first priority, valid perfected liens upon and security interests in all of the collateral under the Loan Documents to secure the payment and performance of all of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3**<u>No Untrue or Misleading Statements.</u>** Neither this Agreement nor any other document executed in connection herewith contains any untrue statement of a material fact or omits any material fact necessary in order to make the statement made, in light of the circumstances under which it was made, accurate in all material respects.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4**<u>Due Authorization</u>**. Borrower and Guarantor each have the power and requisite authority to execute, deliver and perform their respective obligations under this Agreement and any other document executed in connection herewith and are duly authorized to, and have taken all actions necessary to authorize such party to, execute, deliver and perform their respective obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5**<u>Enforceability</u>**. This Agreement constitutes legal, valid and binding obligations of Borrower and is enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditors generally, and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law. Upon execution and delivery of the necessary resolution required by the terms of this Agreement, this Agreement shall constitute legal, valid and binding obligations of Guarantor and be enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting the rights of creditors generally, and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6**<u>No Consent, Approval, Authorization or Order Required</u>**. No consent, approval, authorization or order of any court or Governmental Authority or any third party is required in connection with the execution and delivery by Borrower or Guarantor of this Agreement or to consummate the transactions contemplated hereby, which consent has not been obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7**<u>No Violation</u>**. The execution and delivery of this Agreement, and performance by the Obligors under this Agreement will not (a) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Obligors or (b) result in a breach of or constitute or cause a default under any indenture, agreement, lease or instrument to which any Obligor is a party or by which the Property may be bound or affected.

**<u>ARTICLE IV <br>MISCELLANEOUS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1&nbsp;&nbsp;&nbsp;&nbsp;**<u>Reservation of Rights</u>**. Pursuant to Section 5.1.11 of the Loan Agreement, Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Property providing at least the coverages described on Schedule VI attached thereto; however, Borrower prior to executing the Second Amendment notified Administrative Agent of a change in the Required Policies that may cause them to no longer meet such minimum coverages (the "**New Policies**"). In response to the New Policies, Administrative Agent wishes to continue to reserve its rights under the Loan Agreement and the Loan Documents to further review and provide or withhold its consent to the same. Notwithstanding the New Policies, Administrative Agent hereby reserves all rights and remedies which may arise because of the New Policies, and nothing herein shall constitute a waiver or a commitment to waive by Administrative Agent, its rights and remedies due to the New Policies, or any existing or future Defaults or Events of Default. Any past or future negotiation between any Obligor or any of Obligors' representatives or agents on the one hand and Administrative Agent and its representatives or agents on the other do not and shall not constitute a waiver of Administrative Agent's right to exercise its rights and remedies under the Loan Documents or at law or in equity. Any alleged waiver of any of Administrative Agent's rights shall not be effective unless in writing duly executed by an authorized representative of Administrative Agent. Neither Borrower nor any other Obligor for the indebtedness owed under the Loan Documents shall be entitled to rely upon any oral

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statements made or purported to be made by or on behalf of Administrative Agent or its agents in connection with any alleged agreement by or on behalf of Administrative Agent to refrain from exercising any of Administrative Agent's rights under the Loan Documents or otherwise at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2&nbsp;&nbsp;&nbsp;&nbsp;**<u>Integration</u>**. This Agreement supersedes all oral negotiations and prior and other writings with respect to the subject matter hereof, and is intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in this Agreement, except that the Loan Agreement and the other Loan Documents remain valid and enforceable. Except as expressly modified pursuant hereto, no other changes or modifications to the Loan Agreement or any other Loan Document are intended or implied by this Agreement, and in all other respects the Loan Agreement and the other Loan Documents hereby are ratified, reaffirmed and confirmed by all parties hereto as of the Effective Date. To the extent of any conflict between the terms of this Agreement, the Loan Agreement, and other Loan Documents, the terms of this Agreement shall govern and control. This Agreement shall constitute a Loan Document for purposes of the Loan Agreement. NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER HAS MADE ANY COMMITMENT, EXPRESS OR IMPLIED, AND HAS NO OBLIGATION TO PROVIDE ANY OTHER CONSENT, WAIVER OR ACCOMMODATION IN FAVOR OF THE OBLIGORS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3&nbsp;&nbsp;&nbsp;&nbsp;**<u>Cooperation; Other Documents</u>**. At all times following the execution of this Agreement, the Obligors shall execute and deliver to the Administrative Agent, or shall cause to be executed and delivered to the Administrative Agent and shall do or cause to be done all such other acts and things as the Administrative Agent deems to be necessary or desirable to assure the Administrative Agent of the benefit of this Agreement and the documents comprising or relating to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4.&nbsp;&nbsp;&nbsp;&nbsp;**<u>Amendment and Waiver</u>**. No amendment of this Agreement, and no waiver, discharge or termination of any one or more of the provisions thereof, shall be effective unless set forth in writing and signed by all of the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5&nbsp;&nbsp;&nbsp;&nbsp;**<u>Severability</u>**. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without such invalid provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6&nbsp;&nbsp;&nbsp;&nbsp;**<u>Successors and Assigns</u>**. This Agreement (a) shall be binding upon the parties hereto, and upon their respective successors or assigns, and (b) shall inure to the benefit of the parties hereto, and their respective successors or assigns; provided, however, that the Obligors may not assign or delegate any rights hereunder or any interest herein without obtaining the prior written consent of the Administrative Agent, as applicable, and any such assignment or attempted assignment shall be void and of no effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7&nbsp;&nbsp;&nbsp;&nbsp;**<u>Counterparts; Effectiveness</u>**. This Agreement may be executed by electronic signatures and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. This Agreement shall be deemed to have been executed and delivered when the Administrative Agent has received electronic counterparts hereof executed by all parties listed on the signature pages hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8&nbsp;&nbsp;&nbsp;&nbsp;**<u>Notices</u>**. Any notices or other communications sent or transmitted pursuant to this Agreement by any of the Obligors to the Administrative Agent shall be by electronic email sent to notices@acorecapital.com.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9&nbsp;&nbsp;&nbsp;&nbsp;**<u>Singular/Plural</u>**. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10&nbsp;&nbsp;&nbsp;&nbsp;**<u>Joint and Several</u>**. If Borrower consists of more than one (1) Person, the obligations and liabilities of each such Person hereunder shall be joint and several.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11&nbsp;&nbsp;&nbsp;&nbsp;**<u>Delivery of Officer's Certificate</u>**. As soon as possible, but in no event later than thirty (30) days after the Effective Date, the Obligors shall deliver to the Administrative Agent the fully-compiled Officer's Certificate of NexPoint Diversified Real Estate Trust in a form substantially similar to the form attached hereto as <u>Exhibit B</u>, duly executed by an authorized officer thereof. The failure by the Obligors to comply with the terms and provisions of this paragraph shall, at the Administrative Agent's option, constitute an Event of Default and Lender shall be entitled to exercise any and all rights and remedies it may have under the Note, the Loan Agreement, the Security Instrument and the other Loan Documents. Nothing in this paragraph shall be deemed to (i) be a waiver by the Administrative Agent of any of its rights or remedies under the Note, the Loan Agreement, the Security Instrument and the other Loan Documents, or this letter upon a default by Borrower thereunder, or (ii) affect in any other way the terms and provisions of the Note, the Loan Agreement, the Security Instrument or the other Loan Documents.

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

**<u>BORROWER</u>:**

**2325 STEMMONS TRS, INC.**, a Delaware

corporation

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**2325 STEMMONS HOTEL PARTNERS, LLC**,

a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**HCRE ADDISON, LLC**, a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**HCRE ADDISON TRS, LLC**, a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**HCRE PLANO, LLC**, a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

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**HCRE PLANO TRS, LLC**, a Delaware limited liability company

&nbsp;&nbsp;&nbsp;&nbsp;

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**HCRE LAS COLINAS, LLC**, a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**HCRE LAS COLINAS TRS, LLC**, a Delaware

limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**NHT SP, LLC**, a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

**NHT SP TRS, LLC**, a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Authorized Signatory

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**<u>GUARANTOR</u>:**

**NEXPOINT HOSPITALITY TRUST**, a real

estate investment trust formed under the laws of the Province of Ontario

By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts

Title:&nbsp;&nbsp;&nbsp;&nbsp;Corporate Secretary

**NEXPOINT REAL ESTATE ADVISORS, L.P.**,

a Delaware limited partnership

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Matt McGraner

Title:&nbsp;&nbsp;&nbsp;&nbsp;Executive Vice President

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**, a statutory trust organized under the Delaware Statutory Trust Statute

By: <u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: James Dondero

Title:&nbsp;&nbsp;&nbsp;&nbsp;President and Principal Executive Officer

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**<u>ADMINISTRATIVE AGENT</u>:**

**ACORE CAPITAL MORTGAGE, LP**,

a Delaware limited partnership, in its capacity as administrative agent for and on behalf of the Lenders

By: ACORE CAPITALMORTGAGE GP, LLC, a

Delaware limited liability company, its

General Partner

By:<u>/s/ David Dancer</u>__________________<br>Name: David Dancer<br>Title: Authorized Signatory

![image_3a.jpg](image_3a.jpg)

Omnibus Amendment Agreement – Highland 5 Pack Portfolio

## Exhibit 10.20

*Execution Version*

**AMENDED AND RESTATED<br>SPONSOR GUARANTY AGREEMENT**

This AMENDED AND RESTATED SPONSOR GUARANTY AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise modified and in effect from time to time, this "**Guaranty**") is made as of December 8, 2022, by the entities named on Schedule A (the "**Guarantors**" and each, a "**Guarantor**"), and NexPoint Storage Partners, Inc., a Maryland corporation ("**Issuer**"), in favor of Extra Space Storage LP, a Delaware limited partnership ("**Preferred Holder**").

W I T N E S S E T H:

WHEREAS, Issuer and Preferred Holder entered into that certain Sponsor Guaranty Agreement, dated as of November 6, 2020 (the "**Original Guaranty**");

WHEREAS, Issuer and Preferred Holder will contemporaneously herewith enter into that certain Recapitalization Agreement, dated as of December 8, 2022 (the "**Recapitalization Agreement**"; capitalized terms used herein which are not otherwise defined herein are used with the meanings ascribed to such terms in the Recapitalization Agreement), pursuant to which Preferred Holder has agreed to exchange all of its Series A Preferred Stock of the Issuer, par value $0.01 per share, and Series B Preferred Stock of the Issuer, par value $0.01 per share (collectively, the "**Original Preferred Shares**"), for (i) an aggregate of 300,000 newly designated and issued shares of Series D Preferred Stock of the Issuer, par value $0.01 per share (the "**Series D Preferred Stock**"), and (ii) two promissory notes issued by the Issuer (the "**Promissory Notes**"), in each case, on the terms and conditions set forth in the Recapitalization Agreement;

WHEREAS, in connection with the entry into the Recapitalization Agreement, the Guarantors, Issuer and Preferred Holder desire to amend and restate the Original Guaranty in its entirety on the terms and conditions set forth herein;

WHEREAS, no modification or amendment of any provision of the Original Guaranty is effective unless in writing and signed by a duly authorized officer of Preferred Holder and by the Guarantors;

WHEREAS, it is a condition precedent to the Closing under the Recapitalization Agreement that Guarantors enter into this Guaranty; and

WHEREAS, each Guarantor, as an owner of Issuer, agrees that it will derive substantial benefit and advantage from the Recapitalization Agreement, and it will be to such Guarantor's direct interest and economic benefit to assist the Issuer in inducing Preferred Holder to enter into the Recapitalization Agreement.

NOW, THEREFORE, for and in consideration of the premises and in order to induce Preferred Holder to enter into the Recapitalization Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Definitions</u>. For purposes of this Guaranty, the following terms shall have the following meanings:

"**Cap Amount**" means, on any date of determination, $97.6 million, reduced by the sum of the aggregate amount of all payments made by Guarantors hereunder; <u>provided</u> that, for the avoidance of doubt, the Cap Amount shall never be less than $0.

"**Guaranteed Obligations**" means, on any date of determination, the payment obligations of the Issuer with respect to (i) Accrued Dividends of the Series D Preferred Stock as defined in the Articles Supplementary and (ii) the Promissory Notes.

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"**Guarantor Material Adverse Effect**" means a material adverse effect on (i) the business, operations, long-term operating results, assets or financial condition of any Guarantor, (ii) the rights or remedies of Preferred Holder hereunder or (iii) the ability of any Guarantor to perform its obligations to Preferred Holder hereunder.

"**Guarantor Percentage**" has the meaning set forth in Section 2(a).

"**Guaranty Termination Date**" means the date that the Guaranteed Obligations have been satisfied in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Guaranty of Payment</u>. 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Each Guarantor hereby unconditionally and irrevocably guaranties, subject to Section 2(d), severally and not jointly, the full and prompt payment to Preferred Holder when due, and at all times thereafter, of such Guarantor's Guarantor Percentage set forth on Schedule A of any and all of the Guaranteed Obligations at any time outstanding; <u>provided</u> that, other than upon any insolvency, bankruptcy, dissolution, liquidation or winding up of the Issuer, Preferred Holder shall first seek payment from the Issuer for a period of three Business Days beyond any applicable grace period set forth in the Articles Supplementary or Promissory Notes, as applicable, prior to seeking payment under this Guaranty. Subject to Section 2(d), each Guarantor's guaranty is limited to such Guarantor's Guarantor Percentage of the Cap Amount. This Guaranty by Guarantors hereunder constitutes a guaranty of payment and not of collection. Preferred Holder's books and records showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and absent manifest error shall be binding upon Guarantors, and conclusive for the purpose of establishing the amount of the Guaranteed Obligations (not to exceed the Cap Amount). Each Guarantor acknowledges that the Guaranteed Obligations may increase or decrease from time to time and may be reduced to zero from time to time and each Guarantor agrees that, notwithstanding the foregoing, no reduction in the amount of the Guaranteed Obligations (even if such amount is reduced to zero at any time) shall limit such Guarantor's unconditional obligation to pay in full its Guarantor Percentage of the aggregate amount of the Guaranteed Obligations outstanding on any date demand for payment is made hereunder on such Guarantor by Preferred Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Each Guarantor acknowledges that valuable consideration supports this Guaranty, including, without limitation, the consideration set forth in the recitals above as well as any other financial accommodation, whether heretofore or hereafter made by Preferred Holder to Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Each Guarantor agrees that all payments under this Guaranty shall be made in U.S. Dollars and in the same manner as provided for the Guaranteed Obligations pursuant to the terms of the Articles Supplementary or Promissory Notes, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Notwithstanding anything to the contrary herein, NREF OP IV REIT Sub, LLC ("<u>NREF OP IV</u>") and NexPoint Diversified Real Estate Trust ("<u>NXDT</u>") agree that their obligations hereunder shall be joint and several and NREF OP IV's and NXDT's respective guaranties are limited to the aggregate Guarantor Percentage of both NREF OP IV and NXDT of the Cap Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Nature of Guaranty: Continuing, Absolute and Unconditional</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)This Guaranty is and is intended to be a continuing guaranty of payment of the Guaranteed Obligations in accordance with the terms hereof, and not of collectability, and is intended to be independent of and in addition to any other agreement held by Preferred Holder therefor or with respect thereto, whether or not furnished by the Guarantors. Preferred Holder shall not be required to prosecute collection, enforcement or other remedies against Issuer, any guarantor of the Guaranteed Obligations or any other Person, or to enforce other rights or remedies pertaining thereto, before calling on the Guarantors for payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Guaranty is absolute and unconditional and shall not be changed or affected by any representation, oral agreement, act or thing whatsoever, except as herein provided and in the Recapitalization Agreement, the Promissory Notes and the Articles Supplementary. This Guaranty is intended by the Guarantors to be the final, complete and exclusive expression of the guaranty agreement

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among the Guarantors and Preferred Holder. No modification or amendment of any provision of this Guaranty shall be effective against Preferred Holder or Guarantors unless in writing and signed by a duly authorized officer of Preferred Holder and by the Guarantors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Certain Rights and Obligations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Subject to the terms and conditions set forth herein, each Guarantor acknowledges and agrees that Preferred Holder may, without notice, demand or make any reservation of rights against such Guarantor and without affecting such Guarantor's obligations hereunder, from time to time, to do or refrain from doing any act or thing which might otherwise, at law or in equity, release the liability of each Guarantor as a guarantor or surety in whole or in part, and in no case shall Preferred Holder be responsible or shall any Guarantor be released either in whole or in part for any act or omission in connection with having sold any security at less than its value. Each Guarantor waives diligence, presentment, protest, marshaling, demand for payment, notice of dishonor, notice of default and notice of nonpayment to or upon the Issuer or any of the other Guarantors with respect to the Guaranteed Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Without limiting the generality of the foregoing, each Guarantor agrees that its obligations under and in respect of the guarantee contained in this Section 4 shall not be affected by, and shall remain in full force and effect without regard to, and hereby waives all rights, claims or defenses that it might otherwise have (now or in the future) with respect to each of the following (whether or not such Guarantor has knowledge thereof):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the validity or enforceability of the Recapitalization Agreement, any Transaction Agreement, any of the Guaranteed Obligations or any guarantee or right of offset with respect thereto at any time or from time to time held by Preferred Holder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)any renewal, extension or acceleration of, or any increase in the amount of the Guaranteed Obligations, or any amendment, supplement, modification or waiver of, or any consent to departure from, the Transaction Agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)any failure, omission or delay in enforcement (by agreement or otherwise), or the stay or enjoining (by court order, operation of law or otherwise) of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under any Transaction Agreement, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any guaranty, agreement, collateral or other security relating thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)any change, reorganization or termination of the corporate structure or existence of the Issuer or any other Guarantor or any of their Subsidiaries and any corresponding restructuring of the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)any settlement, compromise, release, subordination or discharge of, or acceptance or refusal of any offer of payment or performance with respect to, or any substitution for, the Guaranteed Obligations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)any other circumstance whatsoever which may or might in any manner or to any extent vary the risk of any Guarantor as an obligor in respect of the Guaranteed Obligations or which constitutes, or might be construed to constitute, an equitable or legal discharge of the Issuer or any other Guarantor for the Guaranteed Obligations, or of such Guarantor under the guarantee contained in this Section 4 or of any security interest granted by any Guarantor, whether in an insolvency or liquidation, dissolution or winding up or in any other instance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Except in accordance with the terms and conditions hereof, each Guarantor hereby agrees its Guaranty hereunder shall be satisfied:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)without deduction by reason of any setoff, defense (other than the occurrence of the Guaranty Termination Date) or counterclaim of Issuer or any other guarantor of the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)without demand for payment or proof of such demand or filing of claims with a court in the event of receivership, bankruptcy or reorganization of Issuer or guarantor of the Guaranteed Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)without requiring Preferred Holder to resort first to Issuer (this being a guaranty of payment and not of collection), to any other guarantor of the Guaranteed Obligations, or to any other guaranty which Preferred Holder may hold; <u>provided</u>, that, other than upon any insolvency, bankruptcy, dissolution, liquidation or winding up of the Issuer, Preferred Holder shall first seek payment from the Issuer for a period of three Business Days beyond any applicable grace period set forth in the Articles Supplementary or Promissory Notes, as applicable, prior to seeking payment under this Guaranty; all of which such Guarantor hereby waives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Representations and Warranties</u>. Each Guarantor represents and warrants to Preferred Holder as of the date hereof that: (a) such Guarantor is duly organized, validly existing and in good standing under the laws of it jurisdiction of formation, and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged; (b) such Guarantor has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty, and has taken all necessary action to authorize the guarantee hereunder on the terms and conditions of this Guaranty and to authorize the execution, delivery and performance of this Guaranty; (c) this Guaranty has been duly executed and delivered by such Guarantor and constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or other similar laws of affecting the enforcement of creditors' rights generally or by general principles of equity; (d) neither the execution and delivery of this Guaranty, nor the consummation of the transactions contemplated herein, nor performance of and compliance with the terms and provisions hereof will (i) violate or conflict with any provision of such Guarantor's organizational documents, (ii) violate any requirement of law, or any order, writ, judgment, injunction, decree or permit applicable to such Guarantor, (iii) violate or conflict with any or cause an event of default under, any contractual obligation to which such Guarantor is a party or by which it may be bound or (iv) result in or require the creation of any lien, security interest or other charge or encumbrance (other than those contemplated in or in connection with this Guaranty) upon or with respect to any of the assets of such Guarantor, except as would not, in the case of clauses (ii)-(iv), reasonably be expected to have a Guarantor Material Adverse Effect; (e) no consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or other Person is required in connection with the execution, delivery or performance of this Guaranty by such Guarantor; and (f) giving effect to this Guaranty, such Guarantor is solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Termination</u>. This Guaranty shall remain in full force and effect until the Guaranty Termination Date; <u>provided</u> that any provisions that expressly survive termination hereof shall survive notwithstanding the occurrence of the Guaranty Termination Date. Payment of all of the Guaranteed Obligations from time to time (other than by Guarantors in accordance with the terms hereof) shall not operate as a discontinuance of this Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The terms "Issuer" and "Guarantor" as used in this Guaranty shall include: (i) any successor individual or individuals, association, partnership, limited liability company or corporation to which all or substantially all of the business or assets of an Issuer or each Guarantor shall have been transferred and (ii) any other association, partnership, limited liability company, corporation or entity into or with which an Issuer or Guarantor shall have been merged, consolidated, or reorganized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Each Guarantor's obligation hereunder is to pay its Guarantor Percentage of the Guaranteed Obligations in full in cash when demanded hereunder to the extent provided herein, and shall

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not be affected by any stay or extension of time for payment by Issuer or any other guarantor of the Guaranteed Obligations resulting from any proceeding under bankruptcy or any similar law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Captions of the sections of this Guaranty are solely for the convenience of Preferred Holder, the Issuer and the Guarantors, and are not an aid in the interpretation of this Guaranty and do not constitute part of the agreement of the parties set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)If any provision of this Guaranty is unenforceable in whole or in part for any reason, the remaining provisions shall continue to be effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Except as otherwise provided in this Guaranty, any notice or other communication required or permitted to be delivered to any party under this Guaranty will be in writing and delivered by (i) email or (ii) registered mail via a national courier service to the following email address or physical address, as applicable:

if to Guarantors to: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Advisors, L.P.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;300 Crescent Court, Ste. 700

Dallas, TX 75201

Attention: Dustin Norris

Email: dnorris@nexpoint.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with a copy to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Advisors, L.P.

300 Crescent Court, Ste. 700

Dallas, TX 75201

Attention: Legal Department

Email: legalnotices@nexpoint.com

if to the Issuer to:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Storage Partners, Inc.

300 Crescent Ct., Ste. 700

Dallas, TX 75201

Attention: Matt McGraner; John Good

Email: mmcgraner@nexpoint.com; jgood@nexpoint.com

with a copy (which will not constitute notice) to:<br>Winston & Strawn LLP

2121 N. Pearl Street

Suite 900

Dallas, Texas 75201

Attention: Charles T. Haag

Email: chaag@winston.com

If to Preferred Holder to:&nbsp;&nbsp;&nbsp;&nbsp;Extra Space Storage LP

2795 East Cottonwood Parkway, Suite 300

Salt Lake City, Utah 84121

Attention: Gwyn G. McNeal

Email: gmcneal@extraspace.com

with a copy (which will not constitute notice) to:

Latham & Watkins LLP

12670 High Bluff Drive

San Diego, California 92130

Attention: Craig M. Garner

Email: craig.garner@lw.com

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Notice or other communication pursuant to Section 7(e) will be deemed given or received when delivered, except that any notice or communication received by email transmission on a non-Business Day or on any Business Day after 5:00 p.m. addressee's local time or by overnight delivery on a non-Business Day will be deemed to have been given and received at 9:00 a.m. addressee's local time on the next Business Day. Any party may specify a different address, by written notice to the other parties. The change of address will be effective upon the other parties' receipt of the notice of the change of address.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which shall be deemed to be an original, and all of which taken together shall constitute one and the same Guaranty, fully effective only upon the execution of at least one counterpart by each party, regardless of whether the execution by all parties shall appear on any single counterpart. Delivery of an executed signature page to this Guaranty by facsimile transmission or otherwise transmitted or communicated by email shall be as effective as delivery of a manually executed counterpart of this Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)This Guaranty and all questions relating to the interpretation or enforcement of this Guaranty will be governed by and construed in accordance with the Laws of the State of Maryland without regard to the Laws of the State of Maryland or any other jurisdiction that would call for the application of the substantive Laws of any jurisdiction other than Maryland.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Each party hereby, for itself and its property, submits to the jurisdiction of the Circuit Court of Baltimore City, Maryland and/or the U.S. District Court for the District of Maryland, Northern Division (such courts in such jurisdictional priority, the "Forum"), in any Proceeding arising out of or relating to this Guaranty or any transaction contemplated hereby, and agrees that all claims in respect of such Proceeding may be heard and determined in the Forum, and each of the parties hereby (a) agrees not to commence any such Proceeding except in the Forum, (b) agrees that any claim in respect of any such Proceeding may be heard and determined in the Forum, (c) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in the Forum, and (d) waives, to the fullest extent it may legally and effectively do so, the defense of an inconvenient forum to the maintenance of such Proceeding in the Forum. Each party hereby agrees that service of summons, complaint or other process in connection with any Proceedings contemplated hereby may be made by registered or certified mail addressed to such party at the address specified pursuant to Section 7(e), and that service so made will be effective as if personally made in the State of Maryland. EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BETWEEN OR AMONG THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[signature page follows]

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IN WITNESS WHEREOF, each Guarantor has executed this Guaranty as of the date first written above.

**NREF OP IV REIT SUB, LLC**, as a Guarantor

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Title:&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer, Treasurer and Assistant Secretary &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**HIGHLAND INCOME FUND**, as a Guarantor

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Dustin Norris&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Dustin Norris&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Title:&nbsp;&nbsp;&nbsp;&nbsp; Executive Vice President&nbsp;&nbsp;&nbsp;&nbsp;

**NEXPOINT REAL ESTATE STRATEGIES FUND**, as a Guarantor

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: James Dondero &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Title:&nbsp;&nbsp;&nbsp;&nbsp; President and Principal Executive Officer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**, as a Guarantor

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ James Dondero&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: James Dondero&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Title:&nbsp;&nbsp;&nbsp;&nbsp; President and Principal Executive Officer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**[Signature page to Sponsor Guaranty Agreement]**

------

**NEXPOINT STORAGE PARTNERS, INC.**, as Issuer

By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts

Title: Chief Financial Officer, Secretary and Treasurer

**[Signature page to Sponsor Guaranty Agreement]**

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Acknowledged and Agreed by:

**EXTRA SPACE STORAGE LP**, as Preferred Holder

By: ESS Holdings Business Trust I

Its: General Partner

By: <u>/s/ P. Scott Stubbs&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;P. Scott Stubbs

Title: Trustee

**[Signature page to Sponsor Guaranty Agreement]**

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**<u>SCHEDULE A&nbsp;&nbsp;&nbsp;&nbsp;</u>**

---

| | |
|:---|:---|
| NREF OP IV REIT SUB, LLC\* | 29.49% |
| HIGHLAND INCOME FUND | 12.69% |
| NEXPOINT REAL ESTATE STRATEGIES FUND | 1.41% |
| NEXPOINT DIVERSIFIED REAL ESTATE TRUST\* | 56.41% |

---

\* Jointly and severally liable for aggregate Guarantor Percentage of both Guarantors (i.e., 85.90%) of the Cap Amount.

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## Exhibit 10.21

***&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Exhibit 10.21**

*Execution Version*

**CONTRIBUTION AGREEMENT**

&nbsp;&nbsp;&nbsp;&nbsp;This Contribution Agreement (this **"Agreement"**) is dated effective as of December 8, 2022 (the "**Effective Date**"), by and among NexPoint Storage Partners Operating Company, LLC, a Delaware limited liability company ("**NSP OC**"), NFRO REIT Sub II, LLC, a Delaware limited liability company ("**NFRO**"), GAF REIT, LLC, a Delaware limited liability company ("**GAF I**"), GAF REIT SUB II, LLC, a Delaware limited liability company ("**GAF II**"), and NexPoint Real Estate Opportunities, LLC, a Delaware limited liability company ("**NREO**").

&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the parties hereto desire to engage in the transactions set forth in this Agreement.&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the parties do hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Contribution.</u> The parties hereto acknowledge and agree that the following contributions shall take place simultaneously (collectively, the "**Contribution**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.NREO shall contribute, transfer and deliver to NSP OC, and NSP OC shall accept from NREO, (i) a 60% membership interest in SAFStor NREA JV – I, LLC, a Delaware limited liability company and (ii) a 60% membership interest in NREA JV – III, LLC, a Delaware limited liability company, in exchange for 47,064.35 Class B Units in NSP OC (as defined in the Second Amended and Restated Limited Liability Company Agreement of NSP OC, dated as of the date hereof (the "**NSP OC LLCA**")) in NSP OC, representing 14.84% of the outstanding Common Units (as defined in the NSP OP LLCA) in NSP OC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.NFRO shall contribute, transfer and deliver to NSP OC, and NSP OC shall accept from NFRO, (i) a 60% membership interest in SAFStor NREA JV – IV, LLC, a Delaware limited liability company, (ii) a 60% membership interest in SAFStor NREA JV – V, LLC, a Delaware limited liability company, (iii) a 65% membership interest in SAFStor NREA JV – VI, LLC, a Delaware limited liability company, (iv) a 65% membership interest in SAFStor NREA JV – VII, LLC, a Delaware limited liability company and (v) a 60% membership interest in SAFStor NREA JV – VIII, LLC, a Delaware limited liability company, in exchange for 101,553.79 Class B Units in NSP OC, representing 32.02% of the outstanding Common Units in NSP OC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.GAF I shall contribute, transfer and deliver to NSP OC, and NSP OC shall accept from GAF I, a 65% membership interest in SAFStor NREA JV – IX, LLC, a Delaware limited liability company, in exchange for 3,924.92 Class B Units in NSP OC, representing 1.24% of the outstanding Common Units in NSP OC; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.GAF II shall contribute, transfer and deliver to NSP OC, and NSP OC shall accept from GAF II a 65% membership interest in SAFStor NREA JV – X, LLC, a Delaware limited liability company, in exchange for 1,888.38 Class B Units in NSP OC, representing 0.60% of the outstanding Common Units in NSP OC.

To the extent permitted under applicable law, each contribution that constitutes the Contribution is intended, for U.S. federal income tax purposes, to be a tax-deferred contribution of property to a partnership under Section 721 of the Internal Revenue Code of 1986, as amended (the "**Code**"). Each of the Contributions shall be treated by

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the parties to this Agreement in accordance with the foregoing intentions, except to the extent required by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Delivery of Contribution</u>. The closing of the transactions contemplated by this Agreement shall be deemed to occur as of the Effective Date (the "**Contribution Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Representations and Warranties of Each Party</u>. Each party hereto represents and warrants: (i) that it is duly formed, validly existing and in good standing under the laws of its jurisdiction of formation; (ii) that it has all requisite power and authority to enter into and deliver this Agreement, to carry out the transactions contemplated hereby and to perform its obligations hereunder; (iii) that this Agreement has been duly and validly executed and delivered and, assuming due and valid authorization, execution and delivery hereof by the other parties, constitutes the valid and legally binding obligation of such party and is enforceable against such party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and (iv) that neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby by such party will violate its organizational documents or conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice or consent under, any contract, or any franchise or permit to which such party is a party or by which such party is bound, other than those that have been previously obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Representations and Warranties of the Contributors.</u> 

The Contributors (as defined below) hereby represent and warrant that the following statements, as applicable to each Contributor, are true and correct as of the date hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Consents and Approvals</u>. Other than those that have been previously obtained, no consent, waiver, approval, authorization, notice, order, license, permit or registration of, qualification, designation, declaration, or filing with, any person or any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign ("**Governmental Authority**") or under any applicable laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority, including, without limitation, zoning, land use or other similar rules or ordinances ("**Laws**") is required to be obtained by the Contributors in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>No Violation</u>. The execution, delivery or performance by each of the Contributors of this Agreement, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does not or will not, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under any term or provision of any judgment, order, writ, injunction, or decree binding on each of the Contributors or any of their subsidiaries or any of their respective assets or properties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Licenses and Permits</u>. All notices, licenses, permits, certificates and authorizations, required for the continued management and operation of the business of each of the Contributors, as applicable, have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and are assignable, except in each case for items that, if not so obtained, obtainable and/or transferred, would not, individually or in the aggregate, reasonably be expected to have any material adverse change in any of the assets, business, condition (financial or otherwise), results of operation or prospects of the Contributors, taken as a whole (a "**Material Adverse Effect**"). There are no licenses, permits, certificates and authorizations held by the Contributors other than those copies of which have been made available to NSP OC. No third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, nor has any of them received any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of such notice, license, permit, certificate or authorization, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.<u>Litigation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)To the knowledge of the undersigned (the "**Contributors' Knowledge**"), there is no action, suit or proceeding pending or threatened against any one of the Contributors affecting all or any portion of the Contributors' ability to consummate the transactions contemplated hereby which, if adversely determined, would adversely affect the Contributors' ability to so consummate the transactions contemplated hereby. To the Contributors' Knowledge, there is no outstanding order, writ, injunction or decree of any Governmental Authority against or affecting the Contributors, which in any such case would impair the Contributors' ability to enter into and perform all of their obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)There is no action, suit or proceeding pending (for which the Contributors have been properly served or otherwise have knowledge) or, to the Contributors' Knowledge, threatened against the Contributors or any officer, director, principal or managing member of any of the foregoing or any of its assets which, if adversely determined, would have a Material Adverse Effect. There is no material judgment, decree, injunction, or order of a Governmental Authority outstanding against the Contributors or any officer, director, principal or managing member of any of the foregoing in their capacity as such which affects the ability of the Contributors to consummate the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.<u>Compliance with Laws/Restrictions</u>. Each of the Contributors have conducted their respective businesses in compliance with all applicable Laws, except for such failures that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Contributors' Knowledge, no third party has been informed in writing of any continuing violation of any such Laws or that any investigation has been commenced and is continuing or is contemplated respecting any such possible violation or violations of any of such covenants, conditions or other obligations, except in each case for violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.<u>Insolvency</u>. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings

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are pending or, to Contributors' Knowledge, threatened against the Contributors or any of the Contributed Assets (as defined below), nor are any such proceedings contemplated by the Contributors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.<u>Investment</u>. The Contributors acknowledge that the offering and issuance of the securities to be acquired by the Contributors pursuant to this Agreement are intended to be exempt from registration under the Securities Act and that the issuing entities' reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Contributors contained herein. In furtherance thereof, each of the Contributors represents and warrants to NSP OC as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Each of the Contributors is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Each of the Contributors acknowledges that the securities have not been registered under the Securities Act and, therefore, unless registered under the Securities Act or an exemption from registration is available, must be held (and each of the Contributors must continue to bear the economic risk of the investment in the securities) indefinitely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.<u>Other Agreements</u>. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) to the Contributors' Knowledge, no party to any material agreement affecting any of the assets being contributed in the Contributions (the "**Contributed Assets**"), is in breach of or default under any material agreement affecting any Contributed Assets, (ii) no event has occurred or, to the Contributors' Knowledge, has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of the Contributors or any their subsidiaries, and (iii) to the Contributors' Knowledge, all agreements required for the ownership and continued management and servicing of such Contributed Assets are valid and binding and in full force and effect, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors' rights and general principles of equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.<u>No Other Representations or Warranties</u>. Other than the representations and warranties expressly set forth in this Section 4, the Contributors shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.<u>Survival of Representations and Warranties</u>. All representations and warranties of the Contributors contained in this Agreement shall survive until the first anniversary of the Effective Date (the "**Expiration Date**"). If written notice of a claim in accordance with indemnification has been given prior to the Expiration Date, then the relevant representation or warranty shall survive, but only with respect to such specific claim, until such claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Indemnification</u>:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Indemnification of NSP OC</u>. NSP OC and its directors, officers, employees, agents and representatives (each of which is an "**Indemnified Party**"), shall be indemnified and held harmless by the Contributors, under the terms and conditions of this Agreement, from and against any and all Losses arising out of or relating to, asserted against, imposed upon or incurred by the Indemnified Parties in connection with or as a result of any breach of a representation or warranty contained in Section 4 of this Agreement; <u>provided</u>, <u>however</u>, that the liability of each Contributor hereunder shall be limited to an amount equal to the value of the Class B Units contributed by such Contributor pursuant to Section 1 as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Claims</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)At the time when any Indemnified Party learns of any potential claim under this Agreement (a "**Claim**") against an indemnifying party, it will promptly give written notice (a "**Claim Notice**") to the indemnifying party; <u>provided</u> that the failure to so notify the indemnifying party shall not prevent recovery under this Agreement, except to the extent that the indemnifying party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim and the amount or good faith estimate of the amount of Losses arising therefrom. The Indemnified Party shall deliver to the indemnifying party, promptly after the Indemnified Party's receipt thereof, copies of all notices and documents (including court papers) received by such Indemnified Party relating to a Third-Party Claim (as defined below); <u>provided</u> that failure to do so shall not prevent recovery under this Agreement, except to the extent that the indemnifying party shall have been materially prejudiced by such failure. Any Indemnified Party may at its option demand indemnity under this Agreement as soon as a Claim has been threatened by a third party, regardless of whether an actual Loss has been suffered, so long as the Indemnified Party shall in good faith determine that such claim is not frivolous and that the Indemnified Party may be liable for, or otherwise incur, a Loss as a result thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The indemnifying party shall be entitled, at its own expense, to elect, to assume and control the defense of any Claim based on claims asserted by third parties ("**Third-Party Claims**"), through counsel chosen by the indemnifying party and reasonably acceptable to the Indemnified Party, if it gives written notice of its intention to do so to the Indemnified Party within thirty (30) days of the receipt of the applicable Claim Notice; <u>provided</u>, <u>however</u>, that the Indemnified Parties may at all times participate in such defense at their own expense. Without limiting the foregoing, in the event that the indemnifying party exercises the right to undertake any such defense against a Third-Party Claim, the Indemnified Party shall cooperate with the indemnifying party in such defense and make available to the indemnifying party, at the indemnifying party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under such Indemnified Party's control relating thereto as is reasonably required by the indemnifying party. No compromise or settlement of such Third-Party Claim may be effected by either the Indemnified Party, on the one hand, or the indemnifying party, on the other hand, without the other party's consent (which shall not be unreasonably withheld or delayed) unless (i) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party, (ii) each Indemnified Party that is party to such claim is released from all liability with respect to such claim, and (iii) there is no equitable order, judgment or term that in any manner affects, restrains or interferes with the business of the Indemnified Party that is party to such claim or any of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Authorization</u>. For purposes of this Section 5:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)a decision, act, consent, election or instruction of any of the Contributors shall be deemed to be authorized if approved in writing by the applicable Contributor and NSP OC may rely upon such decision, act, consent, election or instruction as provided in this Section 5(d)(i) as being the decision, act, consent, election or instruction of the applicable Contributor. NSP OC, including its directors, officers, employees, agents and representatives, are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent, election or instruction. The Contributors may from time to time by written notice to NSP OC appoint a representative or representatives to exercise such powers with respect to one or more claims as may be delegated by the Contributors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)a decision, act, consent, election or instruction by NSP OC shall be deemed to be authorized if approved in writing by its managing partner and the Contributors may rely upon such decision, act, consent, election or instruction as provided in this Section 5(d)(ii) as being the decision, act, consent, election or instruction of NSP OC. The Contributors, including their respective directors, officers, employees, agents and representatives, are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent, election or instruction. NSP OC may from time to time by written notice to the Contributors appoint a representative or representatives to exercise such powers with respect to one or more claims as may be delegated by NSP OC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Governing Law</u>. This Agreement shall be governed by, and shall be construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the laws of the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Binding Effect</u>. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Severability</u>. If any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Further Assurances</u>. At any time or from time to time after the date hereof, at the request of a party hereto and without further consideration, the other parties hereto and its successors or assigns, shall execute and deliver, or shall cause to be executed and delivered, such other instruments or documents and take such other actions as such party may reasonably request to further the purposes of this Agreement and the transactions contemplated by this Agreement. The parties hereto further agree that in all instances they will take all actions, and to do, or cause to be done, all things necessary to give effect to the transactions contemplated hereby in all manners including, without limitation, economically as of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Entire Agreement</u>. This Agreement delivered in connection herewith constitutes the sole and entire agreement of the parties to this Agreement with respect

&nbsp;&nbsp;&nbsp;&nbsp;6

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to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, representations and warranties and agreements, both written and oral, with respect to such subject matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Successors and Assigns; No Third-Party Beneficiaries</u>. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Headings</u>. The headings in this Agreement are for reference only and shall not affect the interpretations of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;7

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&nbsp;&nbsp;&nbsp;&nbsp;**IN WITNESS WHEREOF,** this Agreement has been duly executed by each of the parties hereto as of the date and year first above written.

**NexPoint Real Estate Opportunities, LLC**

By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts

Title: Authorized Signatory

**NexPoint Storage Partners Operating Company, LLC**

By: NexPoint Storage Partners, Inc., its Managing Member

By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts

Title: Chief Financial Officer, Secretary and Treasurer

**NFRO REIT Sub II, LLC**

By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts

Title: Executive Vice President, Chief Financial Officer and Principal Financial and Accounting Officer

**GAF REIT, LLC**

By: <u>/s/ Dustin Norris&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Dustin Norris

Title: Executive Vice President

[Signature Page to Contribution Agreement]

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**GAF REIT SUB II, LLC**

By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Brian Mitts

Title: Authorized Signatory

[Signature Page to Contribution Agreement]

## Exhibit 10.22

**Exhibit 10.22**

*Execution Version*

---

| |
|:---|
| **SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT** |
| **OF** |
| **NEXPOINT STORAGE PARTNERS OPERATING COMPANY, LLC** |

---

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.

Dated as of December 8, 2022

AmericasActive:17820717.17

------

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| <u>[ARTICLE I DEFINED TERMS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [1](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE II ORGANIZATIONAL MATTERS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [19](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 2.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Organization](#i1162202c059540189b7bd8809bedaad7_7)</u> | [19](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 2.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Name](#i1162202c059540189b7bd8809bedaad7_7)</u> | [20](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 2.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Registered Office and Agent; Principal Office](#i1162202c059540189b7bd8809bedaad7_7)</u> | [20](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 2.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Term](#i1162202c059540189b7bd8809bedaad7_7)</u> | [20](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 2.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Interests as Securities](#i1162202c059540189b7bd8809bedaad7_7)</u> | [20](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 2.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Certificates Describing Units](#i1162202c059540189b7bd8809bedaad7_7)</u> | [20](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE III PURPOSE](#i1162202c059540189b7bd8809bedaad7_7)</u> | [21](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 3.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Purpose and Business](#i1162202c059540189b7bd8809bedaad7_7)</u> | [21](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 3.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Powers](#i1162202c059540189b7bd8809bedaad7_7)</u> | [21](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF INTERESTS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [22](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Capital Contributions of the Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [22](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Issuances of Interests](#i1162202c059540189b7bd8809bedaad7_7)</u> | [22](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[No Preemptive Rights](#i1162202c059540189b7bd8809bedaad7_7)</u> | [23](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Other Contribution Provisions](#i1162202c059540189b7bd8809bedaad7_7)</u> | [23](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[No Interest on Capital](#i1162202c059540189b7bd8809bedaad7_7)</u> | [24](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[LTIP Units](#i1162202c059540189b7bd8809bedaad7_7)</u> | [24](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.7](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Conversion of LTIP Units.](#i1162202c059540189b7bd8809bedaad7_7)</u> | [27](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.8](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Series D Preferred Units](#i1162202c059540189b7bd8809bedaad7_7)</u> | [28](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.9](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Series C Preferred Units](#i1162202c059540189b7bd8809bedaad7_7)</u> | [34](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 4.10](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Series C Units.](#i1162202c059540189b7bd8809bedaad7_7)</u> | [39](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE V DISTRIBUTIONS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [40](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 5.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Requirement and Characterization of Distributions](#i1162202c059540189b7bd8809bedaad7_7)</u> | [40](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 5.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Amounts Withheld](#i1162202c059540189b7bd8809bedaad7_7)</u> | [41](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 5.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Distributions Upon Liquidation](#i1162202c059540189b7bd8809bedaad7_7)</u> | [42](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 5.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Revisions to Reflect Issuance of Interests](#i1162202c059540189b7bd8809bedaad7_7)</u> | [42](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE VI ALLOCATIONS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [42](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 6.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Allocations for Capital Account Purposes](#i1162202c059540189b7bd8809bedaad7_7)</u> | [42](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 6.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Revisions to Allocations to Reflect Issuance of Interests](#i1162202c059540189b7bd8809bedaad7_7)</u> | [45](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [45](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Management](#i1162202c059540189b7bd8809bedaad7_7)</u> | [45](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Certificate of Formation](#i1162202c059540189b7bd8809bedaad7_7)</u> | [49](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Title to Company Assets](#i1162202c059540189b7bd8809bedaad7_7)</u> | [50](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Reimbursement of the Managing Member](#i1162202c059540189b7bd8809bedaad7_7)</u> | [50](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Outside Activities of the Managing Member; Relationship of Shares to Units; Funding Debt](#i1162202c059540189b7bd8809bedaad7_7)</u> | [53](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Transactions with Affiliates](#i1162202c059540189b7bd8809bedaad7_7)</u> | [55](#i1162202c059540189b7bd8809bedaad7_7) |

---

i

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---

| | |
|:---|:---|
| <u>[Section 7.7](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Indemnification](#i1162202c059540189b7bd8809bedaad7_7)</u> | [56](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.8](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Liability of the Managing Member](#i1162202c059540189b7bd8809bedaad7_7)</u> | [57](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.9](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Other Matters Concerning the Managing Member](#i1162202c059540189b7bd8809bedaad7_7)</u> | [59](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.10](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Reliance by Third Parties](#i1162202c059540189b7bd8809bedaad7_7)</u> | [59](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.11](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Restrictions on Managing Member's Authority](#i1162202c059540189b7bd8809bedaad7_7)</u> | [60](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.12](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Loans by Third Parties](#i1162202c059540189b7bd8809bedaad7_7)</u> | [60](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.13](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Separateness of the SAFStor Assets](#i1162202c059540189b7bd8809bedaad7_7)</u> | [60](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 7.14](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[SAFStor Valuation](#i1162202c059540189b7bd8809bedaad7_7)</u> | [61](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE VIII RIGHTS AND OBLIGATIONS OF MEMBERS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [62](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 8.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Limitation of Liability](#i1162202c059540189b7bd8809bedaad7_7)</u> | [62](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 8.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Management of Business](#i1162202c059540189b7bd8809bedaad7_7)</u> | [62](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 8.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Outside Activities of Non-Managing Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [62](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 8.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Return of Capital](#i1162202c059540189b7bd8809bedaad7_7)</u> | [62](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 8.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Rights of Non-Managing Members Relating to the Company](#i1162202c059540189b7bd8809bedaad7_7)</u> | [63](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 8.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Redemption Right](#i1162202c059540189b7bd8809bedaad7_7)</u> | [63](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [67](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 9.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Records and Accounting](#i1162202c059540189b7bd8809bedaad7_7)</u> | [67](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 9.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Fiscal Year](#i1162202c059540189b7bd8809bedaad7_7)</u> | [67](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 9.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Reports](#i1162202c059540189b7bd8809bedaad7_7)</u> | [67](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE X TAX MATTERS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [68](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 10.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Tax Classification; Preparation of Tax Returns](#i1162202c059540189b7bd8809bedaad7_7)</u> | [68](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 10.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Tax Elections](#i1162202c059540189b7bd8809bedaad7_7)</u> | [68](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 10.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Tax Matters Partner; Partnership Representative](#i1162202c059540189b7bd8809bedaad7_7)</u> | [69](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 10.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Organizational Expenses](#i1162202c059540189b7bd8809bedaad7_7)</u> | [71](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 10.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Withholding](#i1162202c059540189b7bd8809bedaad7_7)</u> | [71](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE XI TRANSFERS AND WITHDRAWALS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [72](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 11.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Transfer](#i1162202c059540189b7bd8809bedaad7_7)</u> | [72](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 11.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Transfers of Interests of Managing Member](#i1162202c059540189b7bd8809bedaad7_7)</u> | [72](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 11.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Non-Managing Members' Rights to Transfer](#i1162202c059540189b7bd8809bedaad7_7)</u> | [73](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 11.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Substituted Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [75](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 11.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Assignees](#i1162202c059540189b7bd8809bedaad7_7)</u> | [75](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 11.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[General Provisions](#i1162202c059540189b7bd8809bedaad7_7)</u> | [76](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE XII ADMISSION OF MEMBERS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [78](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 12.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Admission of a Successor Managing Member](#i1162202c059540189b7bd8809bedaad7_7)</u> | [78](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 12.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Admission of Additional Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [78](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 12.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Amendment of Agreement and Certificate of Formation](#i1162202c059540189b7bd8809bedaad7_7)</u> | [79](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 12.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Limit on Number of Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [79](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE XIII DISSOLUTION AND LIQUIDATION](#i1162202c059540189b7bd8809bedaad7_7)</u> | [79](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Dissolution](#i1162202c059540189b7bd8809bedaad7_7)</u> | [79](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Winding Up](#i1162202c059540189b7bd8809bedaad7_7)</u> | [80](#i1162202c059540189b7bd8809bedaad7_7) |

---

ii

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------

---

| | |
|:---|:---|
| <u>[Section 13.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Compliance with Timing Requirements of Regulations; Restoration of Deficit Capital Accounts](#i1162202c059540189b7bd8809bedaad7_7)</u> | [81](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Rights of Non-Managing Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [83](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Notice of Dissolution](#i1162202c059540189b7bd8809bedaad7_7)</u> | [83](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Cancellation of Certificate of Limited Liability Company](#i1162202c059540189b7bd8809bedaad7_7)</u> | [83](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.7](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Reasonable Time for Winding Up](#i1162202c059540189b7bd8809bedaad7_7)</u> | [83](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.8](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Waiver of Partition](#i1162202c059540189b7bd8809bedaad7_7)</u> | [84](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 13.9](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Liability of Liquidator](#i1162202c059540189b7bd8809bedaad7_7)</u> | [84](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE XIV AMENDMENT OF COMPANY AGREEMENT; MEETINGS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [84](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 14.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Amendments](#i1162202c059540189b7bd8809bedaad7_7)</u> | [84](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 14.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Meetings of the Members](#i1162202c059540189b7bd8809bedaad7_7)</u> | [86](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[ARTICLE XV GENERAL PROVISIONS](#i1162202c059540189b7bd8809bedaad7_7)</u> | [87](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.1](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Addresses and Notice](#i1162202c059540189b7bd8809bedaad7_7)</u> | [87](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.2](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Titles and Captions](#i1162202c059540189b7bd8809bedaad7_7)</u> | [87](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.3](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Pronouns and Plurals](#i1162202c059540189b7bd8809bedaad7_7)</u> | [87](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.4](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Further Action](#i1162202c059540189b7bd8809bedaad7_7)</u> | [87](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.5](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Binding Effect](#i1162202c059540189b7bd8809bedaad7_7)</u> | [87](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.6](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Creditors](#i1162202c059540189b7bd8809bedaad7_7)</u> | [88](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.7](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Waiver](#i1162202c059540189b7bd8809bedaad7_7)</u> | [88](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.8](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Counterparts](#i1162202c059540189b7bd8809bedaad7_7)</u> | [88](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.9](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Applicable Law](#i1162202c059540189b7bd8809bedaad7_7)</u> | [88](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.10](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Invalidity of Provisions](#i1162202c059540189b7bd8809bedaad7_7)</u> | [88](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.11](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Power of Attorney](#i1162202c059540189b7bd8809bedaad7_7)</u> | [88](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.12](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Entire Agreement](#i1162202c059540189b7bd8809bedaad7_7)</u> | [89](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.13](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[No Rights as Stockholders](#i1162202c059540189b7bd8809bedaad7_7)</u> | [90](#i1162202c059540189b7bd8809bedaad7_7) |
| <u>[Section 15.14](#i1162202c059540189b7bd8809bedaad7_7)</u>[&nbsp;&nbsp;&nbsp;&nbsp;](#i1162202c059540189b7bd8809bedaad7_7)<u>[Limitation to Preserve REIT Status](#i1162202c059540189b7bd8809bedaad7_7)</u> | [90](#i1162202c059540189b7bd8809bedaad7_7) |

---

List of Exhibits:

Exhibit A —&nbsp;&nbsp;&nbsp;&nbsp;Form of Member Registry

&nbsp;&nbsp;&nbsp;&nbsp;

Exhibit B —&nbsp;&nbsp;&nbsp;&nbsp;Capital Account Maintenance

&nbsp;&nbsp;&nbsp;&nbsp;

Exhibit C —&nbsp;&nbsp;&nbsp;&nbsp;Special Allocation Rules

&nbsp;&nbsp;&nbsp;&nbsp;

Exhibit D —&nbsp;&nbsp;&nbsp;&nbsp;Notice of Redemption

&nbsp;&nbsp;&nbsp;&nbsp;

Exhibit E —&nbsp;&nbsp;&nbsp;&nbsp;Form of DRO Registry

&nbsp;&nbsp;&nbsp;&nbsp;

Exhibit F —&nbsp;&nbsp;&nbsp;&nbsp;Notice of Election by Member to Convert LTIP Units into Class A Units

&nbsp;&nbsp;&nbsp;&nbsp;

Exhibit G —&nbsp;&nbsp;&nbsp;&nbsp;Notice of Election by Company to Force Conversion of LTIP Units into Class A Units

iii

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------

List of Schedules

Schedule 1.1 —&nbsp;&nbsp;&nbsp;&nbsp;SAFStor Assets

iv

AmericasActive:17820717.17

------

**SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT<br>OF<br>NEXPOINT STORAGE PARTNERS OPERATING COMPANY, LLC**

THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of NexPoint Storage Partners Operating Company, LLC (the "**<u>Company</u>**"), dated as of December 8, 2022 (the "**<u>Agreement</u>**"), is entered into by and among NexPoint Storage Partners, Inc., a Maryland corporation, as the "**<u>Managing Member</u>**" of the Company, together with any other Persons who become Members of the Company as provided herein.

WHEREAS, on March 5, 2015, the Managing Member formed the Company, as a limited partnership pursuant to Delaware law by the filing of the Certificate of Limited Partnership with the Delaware Secretary of State;

WHEREAS on December 30, 2015, the Company converted to a limited liability company pursuant to section 18-214 of the Delaware Limited Liability Company Act, as amended from time to time, and any successor to such statute (the "**<u>Act</u>**"), and section 17-219 of the Delaware Revised Uniform Limited Partnership Act, as amended, by the simultaneous filing of the Certificate of Formation and the Certificate of Conversion;

WHEREAS, the Company was previously governed by that certain Amended and Restated Limited Liability Company Agreement of the Company (as amended through the Effective Date, the "**<u>Prior Agreement</u>**") dated as of November 6, 2020, which was ratified, confirmed and approved by the Managing Member and the other Members of the Company; and

WHEREAS, the Managing Member and the other Members now wish to enter into this Agreement, which, for the avoidance of doubt, replaces the Prior Agreement in its entirety.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree to enter into the Agreement and agree to continue the Company as a limited liability company under the Delaware Act, as follows:

**ARTICLE I<br>DEFINED TERMS**

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

"**<u>Act</u>**" has the meaning set forth in the Recitals.

"**<u>Additional Member</u>**" means a Person admitted to the Company as a Member pursuant to <u>Section 12.2</u> and who is shown as a Member in the Member Registry.

"**<u>Adjusted Capital Account</u>**" means the Capital Account maintained for each Member as of the end of each Fiscal Year (i) increased by any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

------

"**<u>Adjusted Capital Account Deficit</u>**" means, with respect to any Member, the deficit balance, if any, in such Member's Adjusted Capital Account as of the end of the relevant Fiscal Year.

"**<u>Adjusted Property</u>**" means any property the Carrying Value of which has been adjusted pursuant to **<u>Exhibit B</u>**.

"**<u>Adjustment Event</u>**" has the meaning set forth in <u>Section 4.6.A(i)</u>.

"**<u>Affiliate</u>**" means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting interests of such Person, (iii) any Person of which such Person owns or controls ten percent (10%) or more of the voting interests or (iv) any officer, director, general partner or trustee of such Person or any Person referred to in clauses (i), (ii), and (iii) above. For purposes of this definition, "control," when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

"**<u>Aggregate DRO Amount</u>**" means the aggregate balances of the DRO Amounts, if any, of all DRO Members, if any, as determined on the date in question.

"**<u>Agreed Value</u>**" means (i) in the case of any Contributed Property, the Section 704(c) Value of such property as of the time of its contribution to the Company, reduced by any liabilities either assumed by the Company upon such contribution or to which such property is subject when contributed as determined under Section 752 of the Code and the Regulations thereunder; and (ii) in the case of any property distributed to a Member by the Company, the Company's Carrying Value of such property at the time such property is distributed, reduced by any indebtedness either assumed by such Member upon such distribution or to which such property is subject at the time of distribution as determined under Section 752 of the Code and the Regulations thereunder.

"**<u>Agreement</u>**" means this Second Amended and Restated Limited Liability Company Agreement, as it may be amended, supplemented or restated from time to time.

"**<u>Assignee</u>**" means a Person to whom one or more Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Member, and who has the rights set forth in <u>Section 11.5</u>.

"**<u>Available Cash</u>**" means, with respect to any period for which such calculation is being made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all cash revenues and other funds received by the Company from whatever source (including proceeds from any sale or financing or refinancing of assets but excluding the proceeds of any Capital Contribution, unless otherwise determined by the Managing Member in its reasonable discretion) plus the amount of any reduction (including, without limitation, a reduction resulting because the Managing Member determines such amounts are no longer necessary) in reserves of the Company, which reserves are referred to in clause (b)(iv) below;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) less the sum of the following (except to the extent made with the proceeds of any Capital Contribution):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all interest, principal and other debt-related payments made during such period by the Company,

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all cash expenditures (including capital expenditures) made by the Company during such period,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) investments in any entity (including loans made thereto) to the extent that such investments are permitted under this Agreement and are not otherwise described in clauses (b)(i) or (ii), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the amount of any increase in reserves established during such period which the Managing Member determines is necessary or appropriate in its reasonable discretion (including any reserves that may be necessary or appropriate to account for distributions required with respect to Units having a preference over other classes, series or sub-series of Units); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) with any other adjustments as determined by the Managing Member, in its reasonable discretion.

Notwithstanding the foregoing, after commencement of the dissolution and liquidation of the Company, Available Cash shall not include any cash received from or reductions in reserves and shall not take into account any disbursements made or reserves established.

"**<u>Book-Tax Disparities</u>**" means, with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for U.S. federal income tax purposes as of such date. A Member's share of the Company's Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Member's Capital Account balance as maintained pursuant to **<u>Exhibit B</u>** and the hypothetical balance of such Member's Capital Account computed as if it had been maintained strictly in accordance with U.S. federal income tax accounting principles.

"**<u>Budget Act</u>**" has the meaning set forth in Section 10.3.A(i).

"**<u>Business Day</u>**" means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

"**<u>Capital Account</u>**" means the Capital Account maintained for a Member pursuant to **<u>Exhibit B</u>**.

"**<u>Capital Account Limitation</u>**" has the meaning set forth in <u>Section 4.7.B</u>.

"**<u>Capital Contribution</u>**" means, with respect to any Member, any cash and the Agreed Value of Contributed Property which such Member contributes or is deemed to contribute to the Company.

"**<u>Carrying Value</u>**" means (i) with respect to a Contributed Property or Adjusted Property, the Section 704(c) Value of such property reduced (but not below zero) by all Depreciation with respect to such Contributed Property or Adjusted Property, as the case may be, charged to the Members' Capital Accounts and (ii) with respect to any other Company property, the adjusted basis of such property for U.S. federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with **<u>Exhibit B</u>**, and to reflect changes, additions (including capital improvements thereto) or other adjustments to the Carrying Value for dispositions and acquisitions of Company properties, as deemed appropriate by the Managing Member.

"**<u>Cash Amount</u>**" means an amount of cash equal to the Value on the Valuation Date of the Shares Amount.

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"**<u>Certificate of Conversion</u>**" means the Certificate of Conversion relating to the Company filed in the office of the Delaware Secretary of State, as amended from time to time in accordance with the terms hereof and the Act.

"**<u>Certificate of Formation</u>**" means the Certificate of Formation relating to the Company filed in the office of the Delaware Secretary of State, as amended from time to time in accordance with the terms hereof and the Act.

"**<u>Change of Control</u>**" has the meaning set forth in the Series D Articles Supplementary.

"**<u>Charter</u>**" means the charter of the Managing Member, within the meaning of Section 1-101(f) of the Maryland General Corporation Law.

"**<u>Class A Unit</u>**" means any Common Unit designated as a Class A Unit or any other Common Unit that is not specifically designated by the Managing Member as being a Class B Unit or another specified class of Units.

"**<u>Class A Unit Distribution</u>**" has the meaning set forth in <u>Section 4.6.A(ii)</u>.

"**<u>Class A Unit Economic Balance</u>**" has the meaning set forth in <u>Section 6.1.E</u>.

"**<u>Class A Unit Transaction</u>**" means any financing, reorganization, acquisition, merger, consolidation, unit exchange, self-tender offer for all or substantially all Class A Units or other business combination or reorganization, or sale of all or substantially all of the Company's assets.

"**<u>Class B Available Cash</u>**" means Available Cash primarily attributable to, directly or indirectly, the SAFStor Assets.

"**<u>Class B Unit</u>**" means any Common Unit designated as a Class B Unit.

"**<u>Class B Unit Transaction</u>**" means any financing, reorganization, acquisition, merger, consolidation, unit exchange, self-tender offer for all or substantially all Class B Units or other business combination or reorganization, or sale of all or substantially all of the Company's assets.

"**<u>Code</u>**" means the Internal Revenue Code of 1986, as amended and in effect from time to time, as interpreted by the applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.

"**<u>Common Unit</u>**" means a Unit of Interest without any preference with respect to the amount and timing of any distribution from the Company as set forth in this Agreement and attachments hereto, and generally designated or referred to as such by the Managing Member in this Agreement, including all Class A Units, Class B Units and LTIP Units. The Company may have one or more classes of Common Units. As used in this Agreement, unless specifically mentioned otherwise, Common Units of the various classes then outstanding will be referred to as "Common Units" in the aggregate.

"**<u>Common Unit Transaction</u>**" means any Class A Unit Transaction, Class B Unit Transaction or any other financing, reorganization, acquisition, merger, consolidation, unit exchange, self-tender offer for all or substantially all Common Units or other business combination or reorganization, or sale of all or substantially all of the Company's assets.

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"**<u>Company</u>**" means NexPoint Storage Partners Operating Company, LLC, the limited liability company formed under the Act pursuant to the terms and conditions set forth in this Agreement.

"**<u>Company Record Date</u>**" means the record date established by the Managing Member either (i) for the distribution of Available Cash pursuant to <u>Section 5.1</u>, which record date shall be the same as the record date established by the Managing Member Entity for a distribution to its stockholders of some or all of its portion of such distribution, or (ii) if applicable, for determining the Members entitled to vote on or Consent to any proposed action for which the Consent or approval of the Members is sought pursuant to <u>Section 14.2</u>.

"**<u>Consent</u>**" means the consent or approval of a proposed action by a Member given in accordance with this Agreement.

"**<u>Consent of the Non-Managing Members</u>**" means the Consent of the Non-Managing Members (excluding for this purpose (i) any Interests held by the Managing Member, (ii) any Person of which the Managing Member directly or indirectly owns or controls more than fifty percent (50%) of the voting interests and (iii) any Person directly or indirectly owning or controlling more than fifty percent (50%) of the outstanding voting interests of the Managing Member or the Managing Member Entity) holding Interests representing more than fifty percent (50%) of the Percentage Interest of the Common Units of all Non-Managing Members who are not excluded pursuant to (i), (ii) and (iii) above.

"**<u>Constituent Person</u>**" has the meaning set forth in <u>Section 4.7.F</u>.

"**<u>Contributed Property</u>**" means each property or other asset contributed to the Company, in such form as may be permitted by the Act, but excluding cash contributed or deemed contributed to the Company. Once the Carrying Value of a Contributed Property is adjusted pursuant to **<u>Exhibit B</u>**, such property shall no longer constitute a Contributed Property for purposes of **<u>Exhibit B</u>**, but shall be deemed an Adjusted Property for such purposes.

"**<u>Conversion Date</u>**" has the meaning set forth in <u>Section 4.7.B</u>.

"**<u>Conversion Factor</u>**" means 1.0; provided, however, that, if the Managing Member Entity (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares and does not make a corresponding distribution on Common Units in Common Units corresponding to such class thereof, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination; and provided further that if an entity other than an Affiliate of the Managing Member or the Managing Member Entity shall become the Managing Member pursuant to any merger, consolidation or combination of the Managing Member or the Managing Member Entity with or into another entity (the "**<u>Successor Entity</u>**"), the Conversion Factor shall be adjusted by multiplying the Conversion Factor by the number of shares of the Successor Entity into which one Share is converted pursuant to such merger, consolidation or combination, determined as of the date of such merger, consolidation or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of the event retroactive to the record date, if any, for the event giving rise thereto, it being intended that (x) adjustments to the Conversion Factor are to be made to avoid unintended dilution or anti-dilution

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as a result of transactions in which Shares are issued, redeemed or exchanged without a corresponding issuance, redemption or exchange of Units and (y) if a Specified Redemption Date shall fall between the record date and the effective date of any event of the type described above, that the Conversion Factor applicable to such redemption shall be adjusted to take into account such event.

"**<u>Conversion Notice</u>**" has the meaning set forth in <u>Section 4.7.B</u>.

"**<u>Conversion Right</u>**" has the meaning set forth in <u>Section 4.7.A</u>.

"**<u>Convertible Funding Debt</u>**" has the meaning set forth in <u>Section 7.5.F</u>.

"**<u>Debt</u>**" means, as to any Person, as of any date of determination, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person, (iii) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person's interest in such property, even though such Person has not assumed or become liable for the payment thereof, and (iv) obligations of such Person incurred in connection with entering into a lease which, in accordance with generally accepted accounting principles, should be capitalized.

"**<u>Depreciation</u>**" means, for each Fiscal Year, an amount equal to the U.S. federal income tax depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such year, except that if the Carrying Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Carrying Value as the U.S. federal income tax depreciation, amortization, or other cost recovery deduction for such year bears to such beginning adjusted tax basis; provided, however, that if the U.S. federal income tax depreciation, amortization, or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Carrying Value using any reasonable method selected by the Managing Member.

"**<u>DRO Amount</u>**" means the amount specified in the DRO Registry with respect to any DRO Member, as such DRO Registry may be amended from time to time.

"**<u>DRO Member</u>**" means a Member who has agreed in writing to be a DRO Member and has agreed and is obligated to make certain contributions, not in excess of such DRO Member's DRO Amount, to the Company with respect to any deficit balance in such Member's Capital Account upon the occurrence of certain events. A DRO Member who is obligated to make any such contribution only upon liquidation of the Company shall be designated in the DRO Registry as a Part I DRO Member and a DRO Member who is obligated to make any such contribution to the Company either upon liquidation of the Company or upon liquidation of such DRO Member's Interest shall be designated in the DRO Registry as a Part II DRO Member.

"**<u>DRO Registry</u>**" means the DRO Registry maintained by the Managing Member in the books and records of the Company containing substantially the same information as would be necessary to complete the Form of DRO Registry attached hereto as **<u>Exhibit E</u>**.

"**<u>Economic Capital Account Balances</u>**" has the meaning set forth in <u>Section 6.1.E</u>.

"**<u>Effective Date</u>**" shall mean the date of this Agreement.

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"**<u>Equity Incentive Plan</u>**" means any equity incentive plan of the Managing Member, the Managing Member Entity, the Company and/or any Affiliate of the Company.

"**<u>ERISA</u>**" means the Employee Retirement Income Security Act of 1974, as amended.

"**<u>Exchange Act</u>**" means the Securities Exchange Act of 1934, as amended.

"**<u>Fiscal Year</u>**" means the fiscal year of the Company, which shall be the calendar year as provided in Section 9.2.

"**<u>Forced Conversion</u>**" has the meaning set forth in <u>Section 4.7.C</u>.

"**<u>Forced Conversion Notice</u>**" has the meaning set forth in <u>Section 4.7.C</u>.

"**<u>Funding Debt</u>**" means any Debt incurred for the purpose of providing funds to the Company by or on behalf of the Managing Member or the Managing Member Entity or any wholly owned subsidiary of either the Managing Member or the Managing Member Entity.

"**<u>Immediate Family</u>**" means, with respect to any natural Person, such natural Person's spouse, parents, descendants, nephews, nieces, brothers, and sisters.

"**<u>Incapacity</u>**" or "**<u>Incapacitated</u>**" means, (i) as to any individual who is a Member, death, total physical disability or entry by a court of competent jurisdiction adjudicating such Member incompetent to manage his or her Member or estate, (ii) as to any corporation which is a Member, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter, (iii) as to any partnership or limited liability company which is a Member, the dissolution and commencement of winding up of the Company or limited liability company, (iv) as to any estate which is a Member, the distribution by the fiduciary of the estate's entire interest in the Company, (v) as to any trustee of a trust which is a Member, the termination of the trust (but not the substitution of a new trustee) or (vi) as to any Member, the bankruptcy of such Member. For purposes of this definition, bankruptcy of a Member shall be deemed to have occurred when (a) the Member commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Member is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Member, (c) the Member executes and delivers a general assignment for the benefit of the Member's creditors, (d) the Member files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Member in any proceeding of the nature described in clause (b) above, (e) the Member seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Member or for all or any substantial part of the Member's properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof, (g) the appointment without the Member's consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment or (h) an appointment referred to in clause (g) is not vacated within ninety (90) days after the expiration of any such stay.

"**<u>Indemnitee</u>**" means (i) any Person made a party to a proceeding by reason of its status as (A) a Managing Member, (B) the Managing Member Entity, (C) a Non-Managing Member or (D) a trustee, director, shareholder, partner, member, employee, representative, agent or officer of the Company, the Managing Member or the Managing Member Entity and (ii) such other Persons (including Affiliates of either a Member or the Company) as the Managing Member may

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designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.

"**<u>Interest</u>**" means an Interest of a Member in the Company representing a fractional part of the ownership interest in the Company and includes any and all benefits to which the holder of such an Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. An Interest may be expressed as a number of Units.

"**<u>Invested Capital</u>**" means an initial value for the Class A Units of $172,856,846.80, which, for the avoidance of doubt, is equal to the aggregate initial Capital Contribution of the Managing Member attributable to the common stock (or other comparable equity interest) of the Managing Member, minus the total amount of all dividends and other distributions paid on the Class A Units and/or Shares from time to time.

"**<u>IRS</u>**" means the Internal Revenue Service, which administers the internal revenue laws of the United States.

"**<u>Junior Securities</u>**" has the meaning set forth in <u>Section 4.8.B.</u>

"**<u>Liquidating Event</u>**" has the meaning set forth in <u>Section 13.1</u>.

"**<u>Liquidating Gains</u>**" has the meaning set forth in <u>Section 6.1.E</u>.

"**<u>Liquidation</u>**" has the meaning set forth in the Series D Articles Supplementary.

"**<u>Liquidator</u>**" has the meaning set forth in <u>Section 13.2.A</u>.

"**<u>LTIP Unitholder</u>**" means a Member that holds LTIP Units.

"**<u>LTIP Units</u>**" means a Unit which is designated as an LTIP Unit and which has the rights, preferences and other privileges designated in <u>Section 4.6</u> and elsewhere in this Agreement in respect of holders of LTIP Units. The allocation of LTIP Units among the Members shall be set forth in the Member Registry, as it may be amended or restated from time to time.

"**<u>LV Safe Harbor</u>**" "**<u>LV Safe Harbor Election</u>**" and "**<u>LV Safe Harbor Interest</u>**" each has the meaning set forth in <u>Section 10.3.B</u>.

"**<u>Managing Member</u>**" means NexPoint Storage Partners, Inc., a Maryland corporation, or its successor, as managing member of the Company.

"**<u>Managing Member Entity</u>**" means the Managing Member, or its successor, as managing member of the Company.

"**<u>Material Event Redemption</u>**" has the meaning set forth in Series D Articles Supplementary.

"**<u>Member</u>**" means any Person named as a Member, including the Managing Member or a Non-Managing Member, in the Member Registry or any Substituted Member or Additional Member, in such Person's capacity as a Member of the Company.

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"**<u>Member Registry</u>**" means the Member Registry maintained by the Managing Member in the books and records of the Company containing substantially the same information as would be necessary to complete the form of Member Registry attached hereto as **<u>Exhibit A</u>**.

"**<u>Net Income</u>**" means, for any taxable period, the excess, if any, of the Company's items of income and gain for such taxable period over the Company's items of loss and deduction for such taxable period. The items included in the calculation of Net Income shall be determined in accordance with **<u>Exhibit B</u>**. If an item of income, gain, loss or deduction that has been included in the initial computation of Net Income is subjected to the special allocation rules in **<u>Exhibit C</u>**, Net Income or the resulting Net Loss, whichever the case may be, shall be recomputed without regard to such item.

"**<u>Net Loss</u>**" means, for any taxable period, the excess, if any, of the Company's items of loss and deduction for such taxable period over the Company's items of income and gain for such taxable period. The items included in the calculation of Net Loss shall be determined in accordance with **<u>Exhibit B</u>**. If an item of income, gain, loss or deduction that has been included in the initial computation of Net Loss is subjected to the special allocation rules in **<u>Exhibit C</u>**, Net Loss or the resulting Net Income, whichever the case may be, shall be recomputed without regard to such item.

"**<u>New Securities</u>**" means (i) any rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase Shares, excluding grants under any Equity Incentive Plan, or (ii) any Debt issued by the Managing Member Entity that provides any of the rights described in clause (i).

"**<u>Non-Managing Member</u>**" means any Person named in the Member Registry other than the Managing Member.

"**<u>Nonrecourse Built-in Gain</u>**" means, with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or negative pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Members pursuant to <u>Section 2.B</u> of **<u>Exhibit C</u>** if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.

"**<u>Nonrecourse Deductions</u>**" has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

"**<u>Nonrecourse Liability</u>**" has the meaning set forth in Regulations Section 1.752-1(a)(2).

"**<u>Notice of Redemption</u>**" means a Notice of Redemption substantially in the form of **<u>Exhibit D</u>**.

"**<u>Operating Entity</u>**" has the meaning set forth in <u>Section 7.4.F</u>.

"**<u>Parent Entity</u>**" has the meaning set forth in <u>Section 7.4.F</u>.

"**<u>Partner Minimum Gain</u>**" means an amount, with respect to each Partner Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

"**<u>Partner Nonrecourse Debt</u>**" has the meaning set forth in Regulations Section 1.704-2(b)(4).

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"**<u>Partner Nonrecourse Deductions</u>**" has the meaning set forth in Regulations Section 1.704-2(i), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).

"**<u>Partnership Minimum Gain</u>**" has the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Fiscal Year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).

"**<u>Percentage Interest</u>**" means, as to a Member holding a class or series of Units, its interest in such class, determined by dividing the Units of such class or series owned by such Member by the total number of Units of such class or series then outstanding.

"**<u>Permitted DST Transaction</u>**" has the meaning set forth in the Series D Articles Supplementary.

"**<u>Permitted Intercompany Loans</u>**" means, as of any particular time, one or more loans from the Company, or any Subsidiary of the Company that does not own, directly or indirectly, any SAFStor Assets, on the one hand, to any Subsidiary of the Company that owns, directly or indirectly, any SAFStor Assets, on the other hand, in exchange for cash on customary arm's length terms; provided, that the aggregate principal amount of all such loans does not exceed, individually or in the aggregate, $15,000,000.

"**<u>Person</u>**" means a natural person, partnership (whether general or limited), trust, estate, association, corporation, limited liability company, unincorporated organization, custodian, nominee or any other individual or entity in its own or any representative capacity.

"**<u>Predecessor Entity</u>**" has the meaning set forth in the definition of "**<u>Conversion Factor</u>**" herein.

"**<u>Prior Agreement</u>**" has the meaning set forth in the Recitals.

"**<u>Publicly Traded</u>**" means listed or admitted to trading on the New York Stock Exchange, the NYSE American, the NASDAQ Stock Market or any successor to any of the foregoing.

"**<u>Qualified Assets</u>**" means any of the following assets: (i) interests, rights, options, warrants or convertible or exchangeable securities of the Company; (ii) Debt issued by the Company or any Subsidiary thereof in connection with the incurrence of Funding Debt; (iii) equity interests in Qualified REIT Subsidiaries and limited liability companies (or other entities disregarded from their sole owner for U.S. federal income tax purposes, including wholly owned grantor trusts) whose assets consist solely of Qualified Assets; (iv) up to a one percent (1%) equity interest in any partnership or limited liability company at least ninety-nine percent (99%) of the equity of which is owned, directly or indirectly, by the Company; (v) cash held for payment of administrative expenses or pending distribution to security holders of the Managing Member Entity or any wholly owned Subsidiary thereof or pending contribution to the Company; and (vi) other tangible and intangible assets that, taken as a whole, are de minimis in relation to the net assets of the Company and its Subsidiaries.

"**<u>Qualified REIT Subsidiary</u>**" means any Subsidiary of the Managing Member Entity that is a "qualified REIT subsidiary" within the meaning of Section 856(i) of the Code.

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"**<u>Recapture Income</u>**" means any gain recognized by the Company (computed without regard to any adjustment pursuant to Section 754 of the Code) upon the disposition of any property or asset of the Company, which gain is characterized either as ordinary income or as "unrecaptured Section 1250 gain" (as defined in Section 1(h)(6) of the Code) because it represents the recapture of depreciation deductions previously taken with respect to such property or asset.

"**<u>Recourse Liabilities</u>**" means the amount of liabilities owed by the Company (other than Nonrecourse Liabilities and liabilities to which Partner Nonrecourse Deductions are attributable in accordance with Section 1.704-(2)(i) of the Regulations).

"**<u>Redeeming Member</u>**" has the meaning set forth in <u>Section 8.6.A</u>.

"**<u>Redemption Amount</u>**" means either the Cash Amount or the Shares Amount, as determined by the Managing Member, in its sole and absolute discretion; provided, however, that if the Shares are not Publicly Traded at the time a Redeeming Member exercises its Redemption Right, the Redemption Amount shall be paid only in the form of the Cash Amount unless the Redeeming Member, in its sole and absolute discretion, consents to payment of the Redemption Amount in the form of the Shares Amount. A Redeeming Member shall have no right, without the Managing Member's consent, in its sole and absolute discretion, to receive the Redemption Amount in the form of the Shares Amount.

"**<u>Redemption Right</u>**" has the meaning set forth in <u>Section 8.6.A</u>.

"**<u>Regulations</u>**" means the Treasury Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

"**<u>REIT</u>**" means an entity that qualifies as a real estate investment trust under the Code.

"**<u>REIT Non-Compliance</u>**" has the meaning set forth in <u>Section 4.8.E(ii)</u>.

"**<u>REIT Non-Compliance Determination</u>**" has the meaning set forth in <u>Section 4.8.E(ii)</u>.

"**<u>REIT Preferred Units</u>**" means the Series C Preferred Units and any other series of Units that is authorized and approved by the Managing Member and issued solely in connection with the Managing Member's issuance(s) of Shares in accordance with the Charter to the extent required in order for the Managing Member to comply with the requirements of Sections 856(a)(5) and 856(b) of the Code.

"**<u>REIT Requirements</u>**" has the meaning set forth in <u>Section 5.1.A</u>.

"**<u>Remaining Liquidation Cash</u>**" means all cash available for distribution, after (i) payment in full of all obligations under Section 13.2.A(1)-(6) and (ii) payment in full of the Invested Capital to the holders of Common Units and/or Shares.

"**<u>Residual Gain</u>**" or "**<u>Residual Loss</u>**" means any item of gain or loss, as the case may be, of the Company recognized for U.S. federal income tax purposes resulting from a sale, exchange or other disposition of Contributed Property or Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to <u>Section 2.B.1(a)</u> or <u>2.B.2(a)</u> of **<u>Exhibit C</u>** to eliminate Book-Tax Disparities.

"**<u>Safe Harbor</u>**" has the meaning set forth in <u>Section 11.6.F</u>.

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"**<u>SAFStor Assets</u>**" means, initially, the SAFStor Entities, together with their direct and indirect subsidiaries and all properties owned, directly or indirectly, by such entities at the closing of the SAFStor Transaction, as set forth on **<u>Schedule 1.1</u>**, and all other assets owned by such SAFStor Entities at such time, together with any proceeds, properties, assets or other interests primarily relating thereto, including, without limitation, in connection with any sale, assignment, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise, whether pursuant to a financing, reorganization, merger, consolidation, exchange, tender offer, redemption or other business combination or reorganization, or sale, of all or any portion of the assets, properties or equity interests owned by, directly or indirectly, such SAFStor Entities, together with any proceeds, properties, assets or other interests received therefrom, in each case, as reasonably determined by the Managing Member.

"**<u>SAFStor Entities</u>**" means those certain entities set forth on **<u>Schedule 1.1</u>**.

"**<u>SAFStor Transaction</u>**" means the acquisition by the Company, directly or indirectly of all of the issued and outstanding equity interests of the SAFStor Entities pursuant to (a) those certain Membership Interest Purchase Agreements, each dated on or about the date hereof, by and among the Company and the respective managing member of each SAFStor Entity and (b) that certain Contribution Agreement, dated on or about the date hereof, by and among the Company and the respective non-managing member of each SAFStor Entity.

**"<u>SAFStor Valuation</u>"** has the meaning set forth in <u>Section 7.14</u>.

"**<u>SDAT</u>**" means the State Department of Assessments and Taxation of the State of Maryland.

"**<u>Section 704(c) Value</u>**" of any Contributed Property or Adjusted Property means the fair market value of such property at the time of contribution or adjustment, as the case may be, as determined by the Managing Member using such reasonable method of valuation as it may adopt; provided, however, subject to **<u>Exhibit B</u>**, the Managing Member shall, in its sole and absolute discretion, use such method as it deems reasonable and appropriate to allocate the aggregate of the Section 704(c) Value of Contributed Properties or Adjusted Properties in a single or integrated transaction among each separate property on a basis proportional to its fair market values.

"**<u>Securities Act</u>**" means the Securities Act of 1933, as amended.

"**<u>Series C Preferred Articles Supplementary</u>**" means the Articles Supplementary of NexPoint Storage Partners, Inc., filed with the SDAT on December 1, 2020, designating the terms, rights and preferences of the Series C Preferred Stock.

"**<u>Series C Preferred Distribution Payment Date</u>**" has the meaning set forth in <u>Section 4.9.C(i)</u>.

"**<u>Series C Preferred Distribution Record Date</u>**" has the meaning set forth in <u>Section 4.9.C(i)</u>.

"**<u>Series C Preferred Liquidation Event</u>**" has the meaning set forth in <u>Section 4.9.D(i)</u>.

"**<u>Series C Preferred Liquidation Preference</u>**" has the meaning set forth in <u>Section 4.9.D(i)</u>.

"**<u>Series C Preferred Original Issue Date</u>**" has the meaning set forth in <u>Section 4.9.C(i)</u>.

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"**<u>Series C Preferred Redemption Premium</u>**" has the meaning set forth in <u>Section 4.9.E(i)</u>.

"**<u>Series C Preferred Stock</u>**" means the 12.0% Series C Cumulative Non-Voting Preferred Stock, par value $0.01 per share, of the Managing Member.

"**<u>Series C Preferred Units</u>**" has the meaning set forth in <u>Section 4.9.A</u>.

"**<u>Series C Units</u>**" has the meaning set forth in <u>Section 4.10.C</u>.

"**<u>Series C Units Distribution Amount</u>**" means (a) 10% of the fair market value (as determined by the Managing Member in its reasonable discretion) of the total of the kind and amount of consideration payable in connection with any distribution on Common Units (other than Class B Units) pursuant to <u>Article V</u>, paid pro rata based on the number of Series C Units then outstanding (for the avoidance of doubt, without reference to the number of Common Units then outstanding) and (b) to the extent applicable, the Series C Units Participation Amount; <u>provided</u>, however, if shares of Series D Preferred Stock are outstanding and the holder or holders thereof receive payment of the Participating Dividend Amount (as defined in the Series D Articles Supplementary) on the same payment date as any distribution on Common Units, the Series C Units Distribution Amount shall be reduced on a dollar-for-dollar basis by the amount of such Participating Dividend Amount paid by the Managing Member. For the avoidance of doubt, except to the extent attributable to the Series C Units Participation Amount, the Series C Units Distribution Amount expressly excludes Class B Available Cash.

"**<u>Series C Units Participation Amount</u>**" means all amounts distributable to the Series C Units pursuant to Section 13.2.A(5), up to an aggregate maximum amount in respect of such distributions equal to the Series C Units Participation Cap.

"**<u>Series C Units Participation Cap</u>**" means $8,421,021.90.

"**<u>Series D Accrued Distributions</u>**" has the meaning set forth in <u>Section 4.8.C(iii)</u>.

"**<u>Series D Accrued Minimum Cash Distribution</u>**" has the meaning set forth in <u>Section 4.8.C(iii)</u>.

"**<u>Series D Accrued Regular Distributions</u>**" has the meaning set forth in <u>Section 4.8.C(i)</u>.

"**<u>Series D Articles Supplementary</u>**" means the Articles Supplementary of NexPoint Storage Partners, Inc., filed with the SDAT on December 8, 2022, designating the terms, rights and preferences of the Series D Preferred Stock.

"**<u>Series D Cash Distribution</u>**" has the meaning set forth in <u>Section 4.8.C(i)</u>.

"**<u>Series D Distribution Payment Date</u>**" has the meaning set forth in <u>Section 4.8.C(iv)</u>.

"**<u>Series D Distribution Rate</u>**" means a rate expressed as a percentage per annum of the Series D Liquidation Amount payable in Series D Cash Distributions or Series D Non-Cash Distributions as set forth below.

<u>Anniversary of Series D&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;<u>Series D Cash</u> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Series D Non-Cash</u>

<u>First Issuance Date</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Distributions</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Distributions</u>

First Issuance Date – 1<sup>st</sup> Anniversary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.0%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5%

1<sup>st</sup> Anniversary – 2<sup>nd</sup> Anniversary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.0%

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2<sup>nd</sup> Anniversary – 6<sup>th</sup> Anniversary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.0%

6<sup>th</sup> Anniversary – 7<sup>th</sup> Anniversary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.0%

7<sup>th</sup> Anniversary – Thereafter&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.0%

"**<u>Series D First Issuance Date</u>**" means the date that the first Series D Preferred Unit is issued.

"**<u>Series D First Repurchase Date</u>**" has the meaning set forth in the definition of "**<u>Series D Make-Whole Amount</u>**" herein.

"**<u>Series D Liquidation Amount</u>**" means $1,000.00 per Series D Preferred Unit, subject to adjustment in the event of a Unit Event, distribution (other than Series D Accrued Distributions), or other proportionate reduction or increase to the Series D Preferred Unit.

"**<u>Series D Liquidation Preference</u>**" has the meaning set forth in <u>Section 4.8.D(i)</u>.

"**<u>Series D Make-Whole Amount</u>**" means, with respect to any redemption of any Series D Preferred Unit as of any Series D Redemption Date prior to the third anniversary of the Series D First Issuance Date (the "**Series D First Repurchase Date**"), an amount equal to (a) the present value (calculated as provided below) as of such Series D Redemption Date of the sum of (i) the remaining distributions that would accrue on such Series D Preferred Unit being redeemed from such Series D Redemption Date to the applicable Series D First Repurchase Date (including, for the avoidance of doubt, any distributions that would accrue from the Series D Distribution Payment Date immediately prior to the applicable Series D First Repurchase Date through the applicable Series D First Repurchase Date), plus (ii) the Series D Redemption Price as of the applicable Series D First Repurchase Date of such Series D Preferred Unit being redeemed (i.e., 105% of the applicable Series D Liquidation Preference), assuming that, for purposes of calculating clauses (i) and (ii), such Series D Preferred Unit were to remain outstanding through the Series D First Repurchase Date, and then be redeemed on the Series D First Repurchase Date at such Series D Redemption Price described above, and with the present value of such sum being computed using an annual discount rate (applied quarterly) equal to the interest rate on U.S. Treasury notes with a maturity closest to the Series D First Repurchase Date at such Series D Redemption Date plus 50 basis points, less (b) the applicable Series D Liquidation Preference of such Series D Preferred Unit being redeemed as of such Series D Redemption Date.

"**<u>Series D Mandatory Redemption</u>**" has the meaning set forth in <u>Section 4.8.E(iii)</u>.

"**<u>Series D Maturity Date</u>**" means the Series D Sixth Anniversary, subject to two one-year extension options at the election of the Managing Member.

"**<u>Series D Minimum Cash Distribution</u>**" has the meaning set forth in <u>Section 4.8.C(iii)</u>.

"**<u>Series D Minimum Cash Distribution Payment Date</u>**" has the meaning set forth in <u>Section 4.8.C(iv)</u>.

"**<u>Series D Minimum Cash Distribution Rate</u>**" means a rate expressed as a percentage per annum of the Series D Liquidation Amount payable in Series D Minimum Cash Distributions as set forth below: &nbsp;&nbsp;&nbsp;&nbsp;

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| | | |
|:---|:---|:---|
| <u>Anniversary of Series D</u><br><u>First Issuance Date</u> | <u>Cash Portion of the Series D Minimum Cash Distribution Rate</u> | <u>Non-Cash Portion of the Series D Minimum Cash Distribution Rate</u> |
| First Issuance Date – 18-month Anniversary | 0.0% | 1.1% |
| 18-month Anniversary – Thereafter | 1.1% | 0.0% |

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"**<u>Series D Optional Redemption</u>**" has the meaning set forth in <u>Section 4.8.E(iv)</u>.

"**<u>Series D Participating Dividend</u>**" has the meaning set forth in the definition of "Participating Dividend" in the Series D Articles Supplementary.

"**<u>Series D Preferred Stock</u>**" means the Series D Preferred Stock, par value $0.01 per share, of the Managing Member.

"**<u>Series D Preferred Units</u>**" has the meaning set forth in <u>Section 4.8.A</u>. 

"**<u>Series D Redemption Date</u>**" means the date set for redemption by the Managing Member of shares of Series D Preferred Stock, as provided for in the definition of "Redemption Date" in the Series D Articles Supplementary.

"**<u>Series D Redemption Price</u>**" means:

&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;in respect of any redemption pursuant to <u>Section 4.8.E(i)</u>, <u>Section 4.8.E(ii)</u> or any Series D Mandatory Redemption, for a Series D Redemption Date (i) prior to the third anniversary of the Series D First Issuance Date, the applicable Series D Liquidation Preference of the Series D Preferred Units to be redeemed plus the applicable Series D Make-Whole Amount, (ii) on or after the third anniversary of the Series D First Issuance Date and prior to the fourth anniversary of the Series D First Issuance Date, 105% of the applicable Series D Liquidation Preference, (iii) on or after the fourth anniversary of the Series D First Issuance Date and prior to the Series D Sixth Anniversary Date, 103% of the applicable Series D Liquidation Preference and (iv) on or after the Series D Sixth Anniversary Date, 100% of the applicable Series D Liquidation Preference; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;in respect of any Series D Optional Redemption, for a Series D Redemption Date (i) prior to the third anniversary of the Series D First Issuance Date, the sum of the applicable Series D Liquidation Amount of, plus any Series D Accrued Distributions on, the Series D Preferred Units to be redeemed, plus the applicable Series D Make-Whole Amount, (ii) on or after the third anniversary of the Series D First Issuance Date and prior to the fourth anniversary of the Series D First Issuance Date, 105% of the sum of the applicable Series D Liquidation Amount of, plus any Series D Accrued Distributions on, the Series D Preferred Units to be redeemed, (iii) on or after the fourth anniversary of the Series D First Issuance Date and prior to the Series D Sixth Anniversary Date, 103% of the sum of the applicable Series D Liquidation Amount of, plus any Series D Accrued Distributions on, the shares of Series D Preferred Stock to be redeemed, and (iv) on or after the Series D Sixth Anniversary Date, 100% of the sum of the applicable Series D Liquidation Amount of, plus any Series D Accrued Distributions on, the Series D Preferred Units to be redeemed.

"**<u>Series D Regular Distribution Date</u>**" has the meaning set forth in <u>Section 4.8.C(ii)</u>.

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"**<u>Series D Sixth Anniversary</u>**" means the sixth anniversary of the Series D First Issuance Date.

"**<u>Share</u>**" means a share of common stock (or other comparable equity interest) of the Managing Member Entity (or the Successor Entity, as the case may be). Shares may be issued in one or more classes or series in accordance with the terms of the Charter (or, if the Managing Member Entity is not the Managing Member, the organizational documents of the Managing Member Entity). Shares issued in lieu of the Cash Amount by the Company or the Managing Member may be either registered or unregistered Shares at the option of the Managing Member or Company. If there is more than one class or series of Shares, the term "Shares" shall, as the context requires, be deemed to refer to the class or series of Shares that corresponds to the class or series of interests for which the reference to Shares is made. When used with reference to Class A Units or Class B Units, the term "Shares" refers to shares of common stock (or other comparable equity interest) of the Managing Member.

"**<u>Shares Amount</u>**" means a number of Shares equal to the product of the number of Units offered for redemption by a Redeeming Member times the Conversion Factor; provided, however, that, if the Managing Member Entity issues to holders of Shares securities, rights, options, warrants or convertible or exchangeable securities entitling such holders to subscribe for or purchase Shares or any other securities or property (collectively, the "rights"), then the Shares Amount shall also include such rights that a holder of that number of Shares would be entitled to receive unless the Company issues corresponding rights to holders of Units.

"**<u>Specified Redemption Date</u>**" means the tenth Business Day after the Valuation Date or such shorter period as the Managing Member, in its sole and absolute discretion, may determine; provided, however, that, if the Shares are not Publicly Traded, the Specified Redemption Date means the thirtieth Business Day after receipt by the Managing Member of a Notice of Redemption.

"**<u>Subsidiary</u>**" means, with respect to any Person, any corporation, limited liability company, trust, partnership or joint venture, or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.

"**<u>Substituted Member</u>**" means a Person who is admitted as a Member to the Company pursuant to <u>Section 11.4</u> and who is shown as a Member in the Member Registry.

"**<u>Successor Entity</u>**" has the meaning set forth in the definition of "Conversion Factor" herein.

"**<u>Termination Transaction</u>**" has the meaning set forth in <u>Section 11.2.B</u>.

"**<u>Unit</u>**" means a fractional, undivided share of the Interests of all Members issued pursuant to <u>Section 4.1</u> and <u>Section 4.2</u>, and includes Class A Units, Class B Units, LTIP Units and any other classes of Common Units or other Units established after the date hereof. For purposes of determining the Percentage Interest of the Common Units, all classes of Common Units then outstanding shall be treated as one class. The number of Units outstanding and the Percentage Interests of the class of the Interests represented by such Units are as set forth in the Member Registry. Fractional Units may be issued by the Company.

"**<u>Unit Event</u>**" means a unit split, unit combination, reclassification, recapitalization or other similar transaction of such character that the shares of Common Units shall be changed into or become exchangeable for a larger or smaller number of units.

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"**<u>Unrealized Gain</u>**" attributable to any item of Company property means, as of any date of determination, the excess, if any, of (i) the fair market value of such property (as determined under **<u>Exhibit B</u>**) as of such date, over (ii) the Carrying Value of such property (prior to any adjustment to be made pursuant to **<u>Exhibit B</u>**) as of such date.

"**<u>Unrealized Loss</u>**" attributable to any item of Company property means, as of any date of determination, the excess, if any, of (i) the Carrying Value of such property (prior to any adjustment to be made pursuant to **<u>Exhibit B</u>**) as of such date, over (ii) the fair market value of such property (as determined under **<u>Exhibit B</u>**) as of such date.

"**<u>Unvested LTIP Units</u>**" has the meaning set forth in <u>Section 4.6.C</u>.

"**<u>Valuation Date</u>**" means the date of receipt by the Managing Member of a Notice of Redemption or, if such date is not a Business Day, the first Business Day thereafter.

"**<u>Value</u>**" means, with respect to one Share of a class of outstanding Shares of the Managing Member Entity that are Publicly Traded, the average of the daily market price for the ten consecutive trading days immediately preceding the date with respect to which value must be determined. The market price for each such trading day shall be the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day. If the outstanding Shares of the Managing Member Entity are Publicly Traded and the Shares Amount includes, in addition to the Shares, rights or interests that a holder of Shares has received or would be entitled to receive, then the Value of such rights shall be determined by the Managing Member acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. If the Shares of the Managing Member Entity are not Publicly Traded, the Value of the Shares Amount per Unit tendered for redemption (which will be the Cash Amount per Unit offered for redemption payable pursuant to <u>Section 8.6.A</u>) means the amount that a holder of one Unit would receive if each of the assets of the Company were to be sold for its fair market value on the Specified Redemption Date, the Company were to pay all of its outstanding liabilities, and the remaining proceeds were to be distributed to the Members in accordance with the terms of this Agreement. Such Value shall be determined by the Managing Member, acting in good faith and based upon a commercially reasonable estimate of the amount that would be realized by the Company if each asset of the Company (and each asset of each partnership, limited liability company, trust, joint venture or other entity in which the Company owns a direct or indirect interest) were sold to an unrelated purchaser in an arm's-length transaction where neither the purchaser nor the seller were under economic compulsion to enter into the transaction (without regard to any discount in value as a result of the Company's minority interest in any property or any illiquidity of the Company's interest in any property).

"**<u>Vested LTIP Units</u>**" has the meaning set forth in <u>Section 4.6.C</u>.

"**<u>Vesting Agreement</u>**" means each or any, as the context implies, agreement or instrument entered into by a holder of LTIP Units upon acceptance of an award of LTIP Units under an Equity Incentive Plan.

**ARTICLE II<br>ORGANIZATIONAL MATTERS**

**Section 2.1&nbsp;&nbsp;&nbsp;&nbsp;Organization**

ARTICLE I<u>Organization, Status and Rights</u>. The Company is a limited liability company organized pursuant to the provisions of the Act and upon the terms and conditions set

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forth in this Agreement. The Members hereby confirm and agree to their status as members of the Company and to continue the business of the Company on the terms set forth in this Agreement. Except as expressly provided herein, the rights and obligations of the Members and the administration and termination of the Company shall be governed by the Act. The Interest of each Member shall be personal property for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Qualification of Company</u>. The Members (i) agree that if the laws of any jurisdiction in which the Company transacts business so require, the Managing Member, the appropriate officers or other authorized representatives of the Company shall file, or shall cause to be filed, with the appropriate office in that jurisdiction, any documents necessary for the Company to qualify to transact business under such laws; and (ii) agree and obligate themselves to execute, acknowledge and cause to be filed for record, in the place or places and manner prescribed by law, any amendments to the Certificate of Formation as may be required, either by the Act, by the laws of any jurisdiction in which the Company transacts business, or by this Agreement, to reflect changes in the information contained therein or otherwise to comply with the requirements of law for the continuation, preservation and operation of the Company as a limited liability company under the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Representations</u>. Each Member represents and warrants that such Member is duly authorized to execute, deliver and perform its obligations under this Agreement and that the Person, if any, executing this Agreement on behalf of such Member is duly authorized to do so and that this Agreement is binding on and enforceable against such Member in accordance with its terms.

**Section 2.2&nbsp;&nbsp;&nbsp;&nbsp;Name**

The name of the Company is NexPoint Storage Partners Operating Company, LLC. The Company's business may be conducted under any other name or names deemed advisable by the Managing Member, including the name of any of the Managing Member or any Affiliate thereof. The words "Limited Liability Company," L.L.C.," "LLC" or similar words or letters shall be included in the Company's name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The Managing Member in its sole and absolute discretion may change the name of the Company at any time and from time to time and shall notify the Non-Managing Members of such change in the next regular communication to the Non-Managing Members.

**Section 2.3&nbsp;&nbsp;&nbsp;&nbsp;Registered Office and Agent; Principal Office**

The address of the registered office of the Company in the State of Delaware is located at 251 Little Falls Drive, Wilmington, County of New Castle, Delaware 19808 and the registered agent for service of process on the Company in the State of Delaware at such registered office is Corporation Service Company. The principal office of the Company is 300 Crescent Court, Suite 700, Dallas, TX 75201, or shall be such other place as the Managing Member may from time to time designate by notice to the Non-Managing Members. The Company may maintain offices at such other place or places within or outside the State of Delaware as the Managing Member deems advisable.

**Section 2.4&nbsp;&nbsp;&nbsp;&nbsp;Term**

The term of the Company commenced on March 5, 2015 and shall continue until dissolved pursuant to the provisions of <u>Article XIII</u> or as otherwise provided by law.

**Section 2.5&nbsp;&nbsp;&nbsp;&nbsp;Interests as Securities**

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All Interests shall be securities within the meaning of, and governed by, (i) Article 8 of the Delaware Uniform Commercial Code and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction.

**Section 2.6&nbsp;&nbsp;&nbsp;&nbsp;Certificates Describing Units**

The Managing Member shall have the authority to issue certificates evidencing the Interests in accordance with Section 18-702(c) of the Act. Any such certificate (i) shall be in form and substance as approved by the Managing Member, (ii) shall not be negotiable and (iii) shall bear a legend to the following effect:

THIS CERTIFICATE IS NOT NEGOTIABLE. THE UNITS REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH (A) THE PROVISIONS OF THE SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF NEXPOINT STORAGE PARTNERS OPERATING COMPANY, LLC, AS AMENDED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME AND (B) ANY APPLICABLE FEDERAL OR STATE SECURITIES OR BLUE SKY LAWS.

**ARTICLE III<br>PURPOSE**

**Section 3.1&nbsp;&nbsp;&nbsp;&nbsp;Purpose and Business**

The purpose and nature of the business to be conducted by the Company is (i) to conduct any business that may be lawfully conducted by a limited liability company organized pursuant to the Act; (ii) to enter into any corporation, partnership, joint venture, trust, limited liability company or other similar arrangement to engage in any of the foregoing or the ownership of interests in any entity engaged, directly or indirectly, in any of the foregoing; and (iii) to do anything necessary or incidental to the foregoing; provided, however, that any business shall be limited to and conducted in such a manner as to permit the Managing Member and, if different, the Managing Member Entity, at all times to be classified as a REIT, unless the Managing Member or Managing Member Entity, as applicable, in its sole and absolute discretion has chosen to cease to qualify as a REIT or has chosen not to attempt to qualify as a REIT for any reason or reasons whether or not related to the business conducted by the Company. In connection with the foregoing, and without limiting the Managing Member's or the Managing Member Entity's right, in its sole and absolute discretion, to cease qualifying as a REIT, the Members acknowledge that the status of the Managing Member as a REIT inures to the benefit of all the Members and not solely to the Managing Member, the Managing Member Entity or their Affiliates.

**Section 3.2&nbsp;&nbsp;&nbsp;&nbsp;Powers**

The Company is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Company, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and develop real property, and lease, sell, transfer and dispose of real property; provided, however, that the Company shall not take, or shall refrain from taking, any action which, in the judgment of the Managing Member, in its sole and absolute

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discretion, (i) could adversely affect the ability of the Managing Member Entity to qualify or continue to qualify as a REIT (unless the Managing Member has decided to terminate or revoke its election to be taxed as a REIT), (ii) could subject the Managing Member Entity to any taxes under Sections 857 or 4981 of the Code, or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over the Managing Member or the Managing Member Entity, or their securities, unless such action (or inaction) shall have been specifically consented to by the Managing Member in writing.

**SECTION IV<br>CAPITAL CONTRIBUTIONS AND ISSUANCES OF INTERESTS**

**Section 4.1&nbsp;&nbsp;&nbsp;&nbsp;Capital Contributions of the Members**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Capital Contributions</u>. Prior to or concurrently with the execution of this Agreement, the Members have made the Capital Contributions as set forth in the Member Registry. On the date hereof, the Members own Units in the amounts set forth in the Member Registry and have Percentage Interests in the Company as set forth in the Member Registry. The number of Units and Percentage Interest shall be adjusted in the Member Registry from time to time by the Managing Member to the extent necessary to reflect accurately exchanges, redemptions, Capital Contributions, the issuance of additional Units or similar events having an effect on a Member's Percentage Interest occurring after the Effective Date and in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.Except as provided in <u>Sections 7.5</u>, <u>10.5</u>, and <u>13.3</u>, the Members shall have no obligation to make any additional Capital Contributions or provide any additional funding to the Company (whether in the form of loans, repayments of loans or otherwise). Except as otherwise set forth in <u>Section 13.3</u>, no Member shall have any obligation to restore any deficit that may exist in its Capital Account, either upon a liquidation of the Company or otherwise.

**Section 4.2&nbsp;&nbsp;&nbsp;&nbsp;Issuances of Interests**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. The Managing Member is hereby authorized to cause the Company from time to time to issue to Members (including the Managing Member and its Affiliates) or other Persons (including, without limitation, in connection with the contribution of property to the Company or any of its Subsidiaries) Units or other Interests in one or more classes, or in one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to one or more other classes of Interests, all as shall be determined, subject to applicable Delaware law, by the Managing Member in its sole and absolute discretion, including, without limitation, (i) the allocations of items of Company income, gain, loss, deduction and credit to each such class or series of Interests, (ii) the right of each such class or series of Interests to share in Company distributions, (iii) the rights of each such class or series of Interests upon dissolution and liquidation of the Company, (iv) the rights, if any, of each such class to vote on matters that require the vote or Consent of the Members, and (v) the consideration, if any, to be received by the Company; provided that no such Units or other Interests shall be issued to the Managing Member unless either (a) the Interests are issued in connection with the grant, award or issuance of Shares or other equity interests in the Managing Member Entity (including a transaction described in Section 7.4.F) having designations, preferences and other rights such that the economic interests attributable to such Shares or other equity interests are substantially similar to the designations, preferences and other rights (except voting rights) of the Interests issued to the Managing Member in accordance with this Section 4.2.A, and the Managing Member contributes to the Company the proceeds (if any) from the issuance of Shares or equity received by the Managing Member as required pursuant to Section 7.5.D, (b) the Managing Member makes an

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additional Capital Contribution to the Company, (c) the additional Interests are issued to all Members holding Interests in the same class in proportion to their respective Percentage Interests in such class or (d) the additional Interests are 154,431.44 Class B Units issued on or following the Effective Date in connection with the SAFStor Transaction. If the Company issues Interests pursuant to this Section 4.2.A, the Managing Member shall make such revisions to this Agreement (including but not limited to the revisions described in Section 5.4, Section 6.2 and Section 8.6) as it deems necessary to reflect the issuance of such Interests. The designation of any newly issued class or series of Interests may provide a formula for treating such Interests solely for purposes of voting on or consenting to any matter that requires the vote or Consent of the Members as set forth in one or more of <u>Sections 7.1</u>, <u>7.5.A</u>, <u>7.11</u>, <u>13.1(i)</u>, <u>13.1(v)</u>, <u>14.1.A</u>, <u>14.1.C</u>, <u>14.2.A</u>, and <u>14.2.B</u> of this Agreement as the equivalent of a specified number (including any fraction thereof) of Class A Units, Class B Units or other Common Units. Nothing in this Agreement shall prohibit the Managing Member from issuing Units for less than fair market value if the Managing Member concludes in good faith that such issuance is in the best interests of the Company.

**Section 4.3&nbsp;&nbsp;&nbsp;&nbsp;No Preemptive Rights**

Except to the extent expressly granted by the Company pursuant to another agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) additional Capital Contributions or loans to the Company or (ii) issuance or sale of any Units or other Interests.

**Section 4.4&nbsp;&nbsp;&nbsp;&nbsp;Other Contribution Provisions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. If any Member is admitted to the Company and is given a Capital Account in exchange for services rendered to the Company, such transaction shall be treated by the Company and the affected Member (and set forth in the Member Registry) as if the Company had compensated such Member in cash, and the Company had made a Capital Contribution of such cash to the capital of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Mergers</u>. To the extent the Company acquires any property (or an indirect interest therein) by the merger of any other Person into the Company or with or into a Subsidiary of the Company, Persons who receive Interests in exchange for their interest in the Person merging into the Company or with or into a Subsidiary of the Company shall be deemed to have been admitted as Additional Members pursuant to <u>Section 12.2</u> and shall be deemed to have made Capital Contributions as provided in the applicable merger agreement (or if not so provided, as determined by the Managing Member in its sole and absolute discretion) and as set forth in the Member Registry.

**Section 4.5&nbsp;&nbsp;&nbsp;&nbsp;No Interest on Capital**

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No Member shall be entitled to interest on its Capital Contributions or its Capital Account.

**Section 4.6&nbsp;&nbsp;&nbsp;&nbsp;LTIP Units**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Issuance of LTIP Units</u>. The Managing Member may from time to time, for such consideration as the Managing Member may determine to be appropriate, issue LTIP Units to Persons who provide services to the Company or the Managing Member and admit such Persons as Members. Subject to the following provisions of this <u>Section 4.6</u> and the special provisions of <u>Sections 4.7</u> and <u>6.1.E</u>, LTIP Units shall, at the discretion of the Managing Member, be treated as Class A Units, with all of the rights, privileges and obligations attendant thereto. For purposes of computing the Members' Percentage Interests, holders of LTIP Units shall be treated as Class A Unit holders and LTIP Units shall be treated as Class A Units, in each case, as determined by the Managing Member in its sole discretion. In particular, the Company shall maintain at all times a one-to-one correspondence between LTIP Units and Common Units for conversion, distribution and other purposes, including, without limitation, complying with the following procedures:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)If an Adjustment Event (as defined below) occurs, then the Managing Member shall make a corresponding adjustment to the LTIP Units to maintain a one-for-one conversion and economic equivalence ratio between Common Units and LTIP Units. The following shall be "**<u>Adjustment Events</u>**": (A) the Company makes a distribution on all outstanding Common Units in Units, (B) the Company subdivides the outstanding Common Units into a greater number of units or combines the outstanding Common Units into a smaller number of units, or (C) the Company issues any Units in exchange for its outstanding Common Units by way of a reclassification or recapitalization of its Common Units. If more than one Adjustment Event occurs, the adjustment to the LTIP Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously. For the avoidance of doubt, the following shall not be Adjustment Events: (x) the issuance of Units in a financing, reorganization, acquisition or other similar business Common Unit Transaction, (y) the issuance of Units pursuant to any employee benefit or compensation plan or distribution reinvestment plan or (z) the issuance of any Units to the Managing Member in respect of a capital contribution to the Company. If the Company takes an action affecting the Common Units other than actions specifically described above as "**<u>Adjustment Events</u>**" and in the opinion of the Managing Member such action would require an adjustment to the LTIP Units to maintain the one-to-one correspondence described above, the Managing Member shall have the right to make such adjustment to the LTIP Units, to the extent permitted by law and by any Equity Incentive Plan, in such manner and at such time as the Managing Member, in its sole discretion, may determine to be appropriate under the circumstances. If an adjustment is made to the LTIP Units, as herein provided, the Company shall promptly file in the books statement and records of the Company an officer's certificate setting forth such adjustment and a brief of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error. Promptly after filing of such certificate, the Company shall mail a notice to each LTIP Unitholder setting forth the adjustment to his or her LTIP Units and the effective date of such adjustment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The LTIP Unitholders that hold LTIP Units designated as Class A Units shall, when, as and if authorized and declared by the Managing Member out of assets legally available for that purpose, be entitled to receive distributions in an amount per LTIP Unit equal to the distributions per Class A Unit (excluding, for the avoidance of doubt, any Series C Units Distribution Amount) (the "**<u>Class A Unit Distribution</u>**"), paid to holders of Class A Units on such Company Record Date established by the Managing Member with respect to such distribution.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Priority</u>. Subject to the provisions of this <u>Section 4.6</u> and the special provisions of <u>Sections 4.7</u> and <u>5.1.C</u>, the LTIP Units shall rank pari passu with the Class A Units as to the payment of regular and special periodic or other distributions and distribution of assets upon liquidation, dissolution or winding up. As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Units which by its terms specifies that it shall rank junior to, on a parity with, or senior to the Class A Units shall also rank junior to, or pari passu with, or senior to, as the case may be, the LTIP Units. Subject to the terms of any Vesting Agreement, an LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the same extent, and subject to the same restrictions as holders of Class A Units, are entitled to transfer their Class A Units pursuant to <u>Article XI</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Special Provisions</u>. LTIP Units shall be subject to the following special provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Vesting Agreements</u>. LTIP Units may, in the sole discretion of the Managing Member, be issued subject to vesting, forfeiture and additional restrictions on transfer pursuant to the terms of a Vesting Agreement. The terms of any Vesting Agreement may be modified by the Managing Member from time to time in its sole discretion, subject to any restrictions on amendment imposed by the relevant Vesting Agreement or by the Equity Incentive Plan, if applicable. LTIP Units that have vested under the terms of a Vesting Agreement are referred to as "**<u>Vested LTIP Units</u>**;" all other LTIP Units shall be treated as "**<u>Unvested LTIP Units</u>**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Forfeiture</u>. Unless otherwise specified in the Vesting Agreement, upon the occurrence of any event specified in a Vesting Agreement as resulting in either the right of the Company or the Managing Member to repurchase LTIP Units at a specified purchase price or some other forfeiture of any LTIP Units, then if the Company or the Managing Member exercises such right to repurchase or forfeiture in accordance with the applicable Vesting Agreement, the relevant LTIP Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose. Unless otherwise specified in the Vesting Agreement, no consideration or other payment shall be due with respect to any LTIP Units that have been forfeited, other than any distributions declared with respect to a Company Record Date prior to the effective date of the forfeiture. In connection with any repurchase or forfeiture of LTIP Units, the balance of the portion of the Capital Account of the LTIP Unitholder that is attributable to all of his or her LTIP Units shall be reduced by the amount, if any, by which it exceeds the target balance contemplated by <u>Section 6.1.E</u>, calculated with respect to the LTIP Unitholder's remaining LTIP Units, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Allocations</u>. LTIP Unitholders shall be entitled to certain special allocations of gain under <u>Section 6.1.E</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)<u>Redemption</u>. The Redemption Right provided to the holders of Common Units under <u>Section 8.6</u> shall not apply with respect to LTIP Units unless and until they are converted to Class A Units as provided in clause (v) below and <u>Section 4.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>Conversion to Common Units</u>. Vested LTIP Units that are designated as Class A Units are eligible to be converted into Class A Units in accordance with <u>Section 4.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Voting</u>. LTIP Unitholders shall (a) have the same voting rights as the Class A Unitholders based on the designation of such LTIP Unit, with the LTIP Units voting as a single class with the Class A Units and having one vote per LTIP Unit; and (b) have the additional voting rights that are expressly set forth below. So long as any LTIP Units remain outstanding,

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the Company shall not, without the affirmative vote of the holders of a majority of the LTIP Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of this Agreement applicable to LTIP Units so as to materially and adversely affect any right, privilege or voting power of the LTIP Units or the LTIP Unitholders as such, unless such amendment, alteration, or repeal affects equally, ratably and proportionately the rights, privileges and voting powers of all of Class A Units (including the Class A Units held by the Managing Member) with respect to such LTIP Unit; but subject, in any event, to the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)With respect to any Common Unit Transaction, so long as the LTIP Units are treated in accordance with <u>Section 4.7</u>, the consummation of such Common Unit Transaction shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders as such; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Any creation or issuance of any Units or of any class or series of Interest in accordance with the terms of this Agreement, including, without limitation, additional Class A Units, Class B Units or LTIP Units, whether ranking senior to, junior to, or on a parity with the LTIP Units with respect to distributions and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders as such.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, all outstanding LTIP Units shall have been converted into Common Units.

**Section 4.7&nbsp;&nbsp;&nbsp;&nbsp;Conversion of LTIP Units.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Conversion Right</u>. An LTIP Unitholder shall have the right (the "**<u>Conversion Right</u>**"), at his or her option, at any time to convert all or a portion of his or her Vested LTIP Units into Class A Units. LTIP Unitholders shall not have the right to convert Unvested LTIP Units into Class A Units until they become Vested LTIP Units; provided, however, that when an LTIP Unitholder is notified of the expected occurrence of an event that will cause his or her Unvested LTIP Units to become Vested LTIP Units, such LTIP Unitholder may give the Company a Conversion Notice conditioned upon and effective as of the time of vesting and such Conversion Notice, unless subsequently revoked by the LTIP Unitholder, shall be accepted by the Company subject to such condition. The Managing Member shall have the right at any time to cause a conversion of Vested LTIP Units into Class A Units. In all cases, the conversion of any LTIP Units into Class A Units shall be subject to the conditions and procedures set forth in this <u>Section 4.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Exercise by an LTIP Unitholder</u>. A holder of Vested LTIP Units may convert such LTIP Units into an equal number of fully paid and non-assessable Class A Units, if such Vested LTIP Unit was designated as a Class A Unit, giving effect to all adjustments (if any) made pursuant to <u>Section 4.6</u>. Notwithstanding the foregoing, in no event may a holder of Vested LTIP Units convert a number of Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such Non-Managing Member, to the extent attributable to its ownership of LTIP Units, divided by the Class A Unit Economic Balance as determined as of the effective date of conversion (the "**<u>Capital Account Limitation</u>**"). In order to exercise his or her Conversion Right, an LTIP Unitholder shall deliver a notice (a "**<u>Conversion Notice</u>**") in the form attached as **<u>Exhibit F</u>** to this Agreement to the Company (with a copy to the Managing Member) not less than ten nor more than 60 days prior to a date (the "**<u>Conversion Date</u>**")

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specified in such Conversion Notice; provided, however, that if the Managing Member has not given to the LTIP Unitholders notice of a proposed or upcoming Common Unit Transaction at least 30 days prior to the effective date of such Common Unit Transaction, then LTIP Unitholders shall have the right to deliver a Conversion Notice until the earlier of (x) the tenth day after such notice from the Managing Member of a Common Unit Transaction or (y) the third business day immediately preceding the effective date of such Common Unit Transaction. A Conversion Notice shall be provided in the manner provided in <u>Section 15.1</u>. Each LTIP Unitholder covenants and agrees with the Company that all Vested LTIP Units to be converted pursuant to this <u>Section 4.7.B</u> shall be free and clear of all liens and encumbrances. Notwithstanding anything herein to the contrary, a holder of LTIP Units may deliver a Notice of Redemption pursuant to <u>Section 8.6</u> relating to those Class A Units that will be issued to such holder upon conversion of such LTIP Units into Class A Units in advance of the Conversion Date; provided, however, that the redemption of such Class A Units by the Company shall in no event take place until after the Conversion Date. For clarity, it is noted that the objective of this paragraph is to put an LTIP Unitholder in a position where, if he or she so wishes, the Class A Units into which his or her Vested LTIP Units will be converted can be redeemed by the Company simultaneously with such conversion, with the further consequence that, if the Managing Member elects to cause the Managing Member Entity to assume and perform the Company's redemption obligation with respect to such Class A Units under Section 8.6 by delivering to such holder Shares rather than cash, then such holder can have such Shares issued to him or her simultaneously with the conversion of his or her Vested LTIP Units into Class A Units. The Managing Member and LTIP Unitholder shall reasonably cooperate with each other to coordinate the timing of the events described in the foregoing sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Forced Conversion</u>. The Company, at any time at the election of the Managing Member, may cause any number of Vested LTIP Units held by an LTIP Unitholder to be converted (a "**<u>Forced Conversion</u>**") into an equal number of Class A Units, giving effect to all adjustments (if any) made pursuant to <u>Section 4.6</u>; provided, however, that the Company may not cause a Forced Conversion of any LTIP Units that would not at the time be eligible for conversion at the option of such LTIP Unitholder pursuant to <u>Section 4.7.B</u>. In order to exercise its right of Forced Conversion, the Company shall deliver a notice (a "**<u>Forced Conversion Notice</u>**") in the form attached as Exhibit G to this Agreement to the applicable LTIP Unitholder not less than ten nor more than 60 days prior to the Conversion Date specified in such Forced Conversion Notice. A Forced Conversion Notice shall be provided in the manner provided in <u>Section 15.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Completion of Conversion</u>. A conversion of Vested LTIP Units for which the holder thereof has given a Conversion Notice or the Company has given a Forced Conversion Notice shall occur automatically after the close of business on the applicable Conversion Date without any action on the part of such LTIP Unitholder, as of which time such LTIP Unitholder shall be credited on the books and records of the Company with the issuance as of the opening of business on the next day of the number of Class A Units issuable upon such conversion. After the conversion of LTIP Units as aforesaid, the Company shall deliver to such LTIP Unitholder, upon his or her written request, a certificate of the Managing Member certifying the number of Class A Units and remaining LTIP Units, if any, held by such person immediately after such conversion. The Assignee of any Non-Managing Member pursuant to <u>Article XI</u> may exercise the rights of such Non-Managing Member pursuant to this <u>Section 4.7</u> and such Non-Managing Member shall be bound by the exercise of such rights by the Assignee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Impact of Conversions for Purposes of Section 6.1.E</u>. For purposes of making future allocations under <u>Section 6.1.E</u> and applying the Capital Account Limitation, the portion of the Economic Capital Account Balance of the applicable LTIP Unitholder that is treated as attributable to his or her LTIP Units shall be reduced, as of the date of conversion, by the product

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of the number of such LTIP Units designated as Class A Units converted and the Class A Unit Economic Balance.

**Section 4.8&nbsp;&nbsp;&nbsp;&nbsp;Series D Preferred Units**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Designation and Number</u>. There shall be a series of Units designated as the "Series D Preferred Units" (the "**Series D Preferred Units**"). The number of authorized Series D Preferred Units is 300,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Rank</u>. The Series D Preferred Units will, with respect to distribution rights and rights upon liquidation, dissolution or winding up of the Company, rank (a) senior to the Common Units (including any LTIP Units), the Series C Units and to any other class or series of equity securities of the Company now or hereafter issued and outstanding (other than the REIT Preferred Units) (collectively, the "**<u>Junior Securities</u>**") and (b) junior to the REIT Preferred Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Distributions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Each holder of the then-outstanding Series D Preferred Units shall be entitled to receive, when, as and if authorized by the Managing Member and declared by the Company, out of funds legally available for the payment of distribution, cumulative preferential distributions per Series D Preferred Unit at the Series D Distribution Rate. Such distributions shall accrue at the Series D Distribution Rate on the then-applicable Series D Liquidation Amount of, plus the amount of previously accrued and unpaid distributions that have accumulated for all distribution periods ending prior to such date in accordance with this <u>Section 4.8.C(i)</u> on, such Series D Preferred Unit (the "**<u>Series D Accrued Regular Distributions</u>**") on a daily basis and be compounded quarterly on each Series D Regular Distribution Payment Date, whether or not declared, and be cumulative from the Series D First Issuance Date. Each distribution payment under this <u>Section 4.8.C(i)</u> shall be paid (A) in cash (a "**<u>Series D Cash Distribution</u>**") and (B) by adding the dollar amount of the non-cash distribution (the "**<u>Series D Non-Cash Distribution</u>**"), effective immediately before the close of business on the related Series D Regular Distribution Payment Date, to the amount of Series D Accrued Regular Distributions on such Series D Preferred Unit, in each case at the applicable rate set forth in the definition of "Series D Distribution Rate." If the Company fails to declare and pay pursuant to this <u>Section 4.8.C(i)</u> a full distribution on the Series D Preferred Units on any Series D Regular Distribution Payment Date, then the amount of such unpaid distribution shall automatically be added to the amount of Series D Accrued Regular Distributions on such unit on the applicable Series D Regular Distribution Payment Date without any action on the part of the Company or any other person. The Company shall be entitled to declare and pay all or any part of the Series D Accrued Regular Distributions relating to distribution that were accrued but not paid in full on subsequent Series D Regular Distribution Payment Dates, and, following such payment, such Series D Accrued Regular Distributions shall no longer be deemed Series D Accrued Regular Distributions hereunder solely to the extent of such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Distributions payable under <u>Section 4.8.C(i)</u> on each outstanding Series D Preferred Unit shall be payable in arrears for the prior calendar quarter on or before the 15<sup>th</sup> day of March, June, September and December of each year (each a "**<u>Series D</u> <u>Regular Distribution Payment Date</u>**"); provided, however, that if any Series D Regular Distribution Payment Date is not a Business Day, then the distribution which would otherwise have been payable on such Series D Regular Distribution Payment Date may be paid on the preceding Business Day or the following Business Day with the same force and effect as if paid on such Series D Regular Distribution Payment Date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)In addition to the distribution described in <u>Section 4.8.C(i)</u>, whether or not full cumulative preferential distributions are declared and paid on each Series D Preferred Unit, but only if full cumulative Series D Cash Distributions have been declared and paid on each Series D Preferred Unit, each holder of the then-outstanding Series D Preferred Units shall be entitled to receive, when, as and if authorized by the Managing Member and declared by the Company, out of funds legally available for the payment of distribution, cumulative preferential Series D Cash Distributions per Series D Preferred Unit at the Series D Minimum Cash Distribution Rate (such distribution, the "**<u>Series D Minimum Cash Distribution</u>**"). Such distributions shall accrue at the Series D Minimum Cash Distribution Rate on the then-applicable Series D Liquidation Amount of, plus the amount of previously accrued and unpaid Series D Minimum Cash Distributions that have accumulated for all distribution periods ending prior to such date in accordance with this <u>Section 4.8.C(iii)</u> on, such Series D Preferred Unit (the "**<u>Series D Accrued Minimum Cash Distribution</u>**" and, together with the Series D Accrued Regular Distributions, the "**<u>Series D</u> <u>Accrued Distributions</u>**") on a daily basis, whether or not declared, and be cumulative from the Series D First Issuance Date. If the Company fails to declare and pay pursuant to this <u>Section 4.8.C(iii)</u> the full Series D Minimum Cash Distributions on the Series D Preferred Units on any Series D Minimum Cash Distribution Payment Date, then the amount of such unpaid distributions shall automatically be added to the amount of Series D Accrued Minimum Cash Distributions on such unit on the applicable Series D Minimum Cash Distribution Payment Date without any action on the part of the Company or any other person. To the extent permitted by this <u>Section 4.8.C(iii)</u>, the Company shall be entitled to declare and pay all or any part of the Series D Accrued Minimum Cash Distribution relating to distributions that were accrued but not paid in full on subsequent Series D Minimum Cash Distribution Payment Dates, and, following such payment, such Series D Accrued Minimum Cash Distributions shall no longer be deemed Series D Accrued Minimum Cash Distributions hereunder solely to the extent of such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Distributions payable under <u>Section 4.8.C(iii)</u> on each outstanding Series D Preferred Unit shall be payable in arrears for the prior calendar month on or before the fifth day of the immediately following month (each a "**<u>Series D Minimum Cash Distribution Payment Date</u>**" and, together with each Series D Regular Distribution Payment Date, a "**<u>Series D Distribution Payment Date</u>**"); provided, however, that if any Series D Minimum Cash Distribution Payment Date is not a Business Day, then the distribution which would otherwise have been payable on such Series D Minimum Cash Distribution Payment Date may be paid on the preceding Business Day or the following Business Day with the same force and effect as if paid on such Series D Minimum Cash Distribution Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Any distribution payable on the Series D Preferred Units for any partial distribution period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. A "distribution period" shall mean, with respect to the first "distribution period," the period from and including the Series D First Issuance Date to and including the first Series D Regular Distribution Payment Date or Series D Minimum Cash Distribution Payment Date, as applicable, and with respect to each subsequent "distribution period," the period from but excluding a Series D Regular Distribution Payment Date or Series D Minimum Cash Distribution Payment Date, as applicable, to and including the next succeeding Series D Regular Distribution Payment Date or Series D Minimum Cash Distribution Payment Date, respectively, or other date as of which Series D Accrued Distributions are to be calculated. Distributions shall be payable to holders of record as they appear in the Member Registry at the close of business on the applicable record date, which record date shall be the date designated by the Managing

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Member for the payment of distributions that is not more than 30 nor less than 10 days prior to such Series D Distribution Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Distributions on the Series D Preferred Units shall accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized or declared.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)No distribution on any Junior Securities (whether in cash, securities or other property, or any combination of the foregoing) will be declared or paid on such Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Securities) by the Company, unless, at the time of such declaration and payment, (A) the holders of outstanding Series D Preferred Units shall first receive, or simultaneously receive, a cash distribution on each outstanding Series D Preferred Unit in an amount at least equal to the amount of the aggregate Series D Accrued Distributions then accrued on such Series D Preferred Unit and not previously paid, or such aggregate Series D Accrued Distributions are declared and a sum sufficient for the payment thereof is set apart for payment and paid on or before the next Series D Regular Distribution Payment Date, (B) all principal and interest due and owing with respect to the Promissory Notes has been paid in full and (C) the Company complies with the distribution obligations set forth in <u>Section 4.10.C(ii)</u>, to the extent applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)When distributions are not paid in full (or a sum sufficient for such full payment is not set apart) on the Series D Preferred Units, all distributions declared upon the Series D Preferred Units shall be declared and paid pro rata based on the number of Series D Preferred Units then outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)Any distribution payment made on the Series D Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series D Preferred Units which remains payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)Notwithstanding anything to the contrary herein, if the Managing Member pays any Series D Participating Dividend as provided in Section 3(j) of the Series D Articles Supplementary, the Company shall make an equivalent cash distribution with respect to the Series D Preferred Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)If the dividend rate at which the Managing Member is required to distribute payments or amounts to the holders of Series D Preferred Stock increases or decreases pursuant to the terms of the Series D Articles Supplementary, the distribution rate that is required to be paid on the Series D Preferred Units shall increase or decrease by the same amount and for the same periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Liquidation Preference</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Upon any Liquidation of the Managing Member or Liquidating Event of the Company, the holders of the Series D Preferred Units will be entitled to be paid out of the assets of the Company legally available for distribution to its members, in cash or property at its fair market value as determined by the Managing Member, in an amount, for each outstanding Series D Preferred Unit equal to the sum of (i) the Series D Liquidation Amount plus (ii) all Series D Accrued Distributions to and including the date of payment, in each case before any distribution or payment is made to holders of Common Units or any Junior Securities as to the distribution of assets upon a liquidation. In addition, upon any Liquidation of the Managing Member, the amount payable with

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respect to the Series D Preferred Stock pursuant to the second sentence of Section 4(a) of the Series D Articles Supplementary shall be distributed to the holders of the Series D Preferred Units. The amounts described in this <u>Section 4.8.D(i)</u> are collectively referred to as the "**<u>Series D Liquidation Preference</u>**." Such amounts shall be distributed in full redemption of the Series D Preferred Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)In the event that, upon any Liquidation of the Managing Member or Liquidating Event of the Company, the available assets of the Company are insufficient to pay the Series D Liquidation Preference on all outstanding Series D Preferred Units, then the holders of Series D Preferred Units shall share ratably in any such distribution of assets in proportion to the full Series D Liquidation Preference per unit to which they would otherwise be respectively entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Upon a Change of Control, if the outstanding Series D Preferred Units are not redeemed or repurchased as provided herein, then the Company will cause any acquirer of the Company to assume the obligations set forth herein and be subject to the terms and conditions set forth herein. Notwithstanding the foregoing, if such assumption is not permitted by law, the Company shall take any actions under its control necessary to cause the acquirer to issue securities of the acquirer with substantially similar contractual rights as those contained herein (including the inclusion of a provision in the relevant merger or consolidation agreement requiring the acquirer to issue securities of the acquirer with substantially similar contractual rights as those contained herein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Written notice of any Liquidation of the Managing Member or Liquidating Event of the Company, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage prepaid, not less than 30 nor more than 60 days prior to the payment date stated therein to each record holder of the Series D Preferred Units at the respective address of such holders as the same shall appear on the Member Registry in the books and records of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Redemption and Repurchase</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Material Event Redemption</u>. If the Managing Member is required to redeem any of the Series D Preferred Stock as provided in Section 5(a) of the Series D Articles Supplementary immediately upon or immediately prior to the occurrence of Material Event Redemption, the Company shall, on the Series D Redemption Date of such Series D Preferred Stock, redeem such number of outstanding Series D Preferred Units equal to the number of shares of Series D Preferred Stock for which the Managing Member has given notice of redemption pursuant to Section 5(e) of the Series D Articles Supplementary. The aggregate Series D Redemption Price will be due and payable, and paid in cash in immediately available funds, to the respective holders of the Series D Preferred Units on the applicable Series D Redemption Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>REIT Non-Compliance Redemption</u>. If, at any time while any Series D Preferred Units are outstanding, the Managing Member is required to redeem any of the Series D Preferred Stock as provided in Section 5(b) of the Series D Articles Supplementary following a determination by the Managing Member, upon advice of tax counsel (the "**<u>REIT Non-Compliance Determination</u>**"), that it no longer meets the requirements for qualification and taxation as a REIT under the Code ("**<u>REIT Non-Compliance</u>**"), the Company shall, on the Series D Redemption Date of such Series D Preferred Stock, redeem for cash such number of outstanding Series D Preferred Units equal to the number of shares of Series D Preferred Stock for which the applicable holder of the Series D Preferred Stock has given a REIT Redemption Notice (as defined in the

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Series D Articles Supplementary) pursuant to Section 5(f) of the Series D Articles Supplementary. The aggregate Series D Redemption Price will be due and payable, and paid in cash in immediately available funds, to the respective holders of the Series D Preferred Units on the applicable Series D Redemption Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Series D Mandatory Redemption</u>. If the Managing Member is required to redeem any of the Series D Preferred Stock as provided in Section 5(c) of the Series D Articles Supplementary immediately following the Series D Maturity Date (the "**<u>Series D Mandatory Redemption</u>**"), the Company shall, on the Series D Redemption Date of such Series D Preferred Stock, redeem for cash such number of outstanding Series D Preferred Units equal to the number of shares of Series D Preferred Stock for which the Managing Member has given notice of redemption pursuant to Section 5(e) of the Series D Articles Supplementary. The aggregate Series D Redemption Price will be due and payable, and paid in cash in immediately available funds, to the respective holders of the Series D Preferred Units on the applicable Series D Redemption Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Series D Optional Redemption</u>. If the Managing Member elects to redeem any of the Series D Preferred Stock at any time from and after the Series D First Issuance Date (a "**<u>Series D</u> <u>Optional Redemption</u>**"), in whole or in part, the Company shall, on the Series D Redemption Date of such Series D Preferred Stock, redeem for cash such number of outstanding Series D Preferred Units equal to the number of shares of Series D Preferred Stock for which the Managing Member has given notice of redemption pursuant to Section 5(e) of the Series D Articles Supplementary. The aggregate Series D Redemption Price will be due and payable, and paid in cash in immediately available funds, to the respective holders of the Series D Preferred Units on the applicable Series D Redemption Date. The minimum Series D Redemption Price for all Series D Preferred Units being redeemed in any Series D Optional Redemption pursuant to this <u>Section 4.8.E(iv)</u> shall be at least $50.0 million, unless such Series D Optional Redemption is pursuant to a Permitted DST Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)In addition to any redemption pursuant to this <u>Section 4.8.E</u>, the Company may at any time and from time-to-time purchase Series D Preferred Units in privately negotiated transactions, provided that in such privately negotiated transactions all holders of Series D Preferred Units are offered a ratable opportunity to participate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Notices</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Notice of redemption will be given by the Managing Member to the holders of Series D Preferred Units concurrently with the notice by the Managing Member to the holders of Series D Preferred Stock in connection with any Material Event Redemption, Series D Mandatory Redemption or Series D Optional Redemption, and shall be consistent with the notice procedures set forth in Section 5(e) of the Series D Articles Supplementary, including the content and information requirements of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Notice of redemption will be given by the Managing Member to the holders of Series D Preferred Units concurrently with the notice by the Managing Member to the holders of Series D Preferred Stock in connection with any REIT Non-Compliance Determination, and shall be consistent with the notice procedures set forth in Section 5(f) of the Series D Articles Supplementary, including the content and information requirements of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.<u>Voting</u>. The holders of the Series D Preferred Units shall not have any voting rights.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.<u>Construction</u>. The Series D Preferred Units have been created and are being issued in conjunction with the issuance and sale of Series D Preferred Stock by the Managing Member, and as such, the Series D Preferred Units are intended to have designations, preferences and other rights and terms that are substantially the same as those of the Series D Preferred Stock, all such that the economic interests of the Series D Preferred Units and the Series D Preferred Stock are substantially identical, and the provisions, terms and conditions of this Agreement, including this <u>Section 4.8</u>, shall be interpreted in a fashion consistent with this intent.

**Section 4.9&nbsp;&nbsp;&nbsp;&nbsp;Series C Preferred Units**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Designation and Number</u>. There shall be a series of Units designated as the "Series C Preferred Units" (the "**<u>Series C Preferred Units</u>**"). The number of authorized Series C Preferred Units is 125.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Rank</u>. The Series C Preferred Units shall, with respect to distribution and redemption rights and rights upon liquidation, dissolution, or winding up of the Company, rank senior to the Series D Preferred Units, any Junior Securities and to any other class or series of equity securities of the Company now or hereafter issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Distributions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Each holder of the then outstanding Series C Preferred Units shall be entitled to receive, when and as authorized by the Managing Member, out of funds legally available for the payment of distributions, cumulative preferential cash distributions at the rate of 12.0% per annum of the total of $1,000.00 per unit plus all accumulated and unpaid distributions thereon. Such distributions shall accrue on a daily basis and be cumulative from the first date on which any Series C Preferred Unit is issued, such issue date to be contemporaneous with the receipt by the Company of subscription funds for the Series C Preferred Units, except that funds transferred on the first business day of a calendar year shall be deemed received on January 1 of such year (the "**<u>Series C Preferred Original Issue Date</u>**"), and shall be payable semi-annually in arrears on or before June 30 and December 31 of each year (each a "**<u>Series C Preferred Distribution Payment Date</u>**"); provided, however, that if any Series C Preferred Distribution Payment Date is not a business day, then the distribution which would otherwise have been payable on such Series C Preferred Distribution Payment Date may be paid on the preceding business day or the following business day with the same force and effect as if paid on such Series C Preferred Distribution Payment Date. Any distribution payable on the Series C Preferred Units for any partial distribution period will be computed on the basis of a 360-day year consisting of twelve 30-day months. A "distribution period" shall mean, with respect to the first "distribution period," the period from and including the Series C Preferred Original Issue Date to and including the first Series C Preferred Distribution Payment Date, and with respect to each subsequent "distribution period," the period from but excluding a Series C Preferred Distribution Payment Date to and including the next succeeding Series C Preferred Distribution Payment Date or other date as of which accrued distributions are to be calculated. Distributions will be payable to holders of record as they appear in the unit records of the Company at the close of business on the applicable record date, which shall be the fifteenth day of the calendar month in which the applicable Series C Preferred Distribution Payment Date falls or on such other date designated by the Managing Member for the payment of distributions that is not more than 30 nor less than 10 days prior to such Series C Preferred Distribution Payment Date (each, a "**<u>Series C Preferred Distribution Record Date</u>**").

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)No distributions on Series C Preferred Units shall be declared by the Company or paid or set apart for payment by the Company at such time as the terms and provisions of any written agreement between the Company and any party that is not an Affiliate of the Company, including any agreement relating to its indebtedness, prohibit such declaration, payment or setting apart for payment or provide that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Notwithstanding the foregoing, distributions on the Series C Preferred Units shall accrue whether or not the terms and provisions set forth in Section 4.9.C(ii) hereof at any time prohibit the current payment of distributions, whether or not the Company has earnings, whether or not there are funds legally available for the payment of such distributions, and whether or not such distributions are authorized or declared. Furthermore, distributions will be declared and paid when due in all events to the fullest extent permitted by law and except as provided in Section 4.9.C(ii) above. Accrued but unpaid distributions on the Series C Preferred Units will accumulate as of the Series C Preferred Distribution Payment Date on which they first become payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Unless full cumulative distributions on all outstanding Series C Preferred Units have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past distribution periods, no distributions (other than in Junior Securities) shall be declared or paid or set aside for payment nor shall any other distribution be declared or made upon any Junior Securities or Series D Preferred Units, nor shall any Junior Securities or Series D Preferred Units be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Company (except by conversion into or exchange for other Junior Securities and except for transfers made pursuant to the provisions of Article VI of the Charter).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)When distributions are not paid in full (or a sum sufficient for such full payment is not set apart) on the Series C Preferred Units, all distributions declared upon the Series C Preferred Units shall be declared and paid pro rata based on the number of Series C Preferred Units then outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Any distribution payment made on the Series C Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such units which remains payable. Holders of the Series C Preferred Units shall not be entitled to any distribution, whether payable in cash, property, or units, in excess of full cumulative distributions on the Series C Preferred Units as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)Any distribution payment made on the Series C Preferred Units may be made via check or electronic payment. Permissible forms of electronic payment pursuant to this paragraph shall include, without limitation, Automated Clearing House transfers, direct deposits or wire transfers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Liquidation Preference</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (each a "**<u>Series C</u> <u>Preferred</u> <u>Liquidation Event</u>**"), the holders of Series C Preferred Units then outstanding are entitled to be paid, or have the Company declare and set aside for payment, out of the assets of the Company legally available for distribution to its unitholders, a liquidation preference equal to the sum of the following (collectively, the "**<u>Series C Preferred Liquidation Preference</u>**"): (i) $1,000.00 per Series C Preferred Unit, (ii) all accrued and unpaid distributions thereon

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through and including the date of payment, and (iii) if the Series C Preferred Liquidation Event occurs before the Redemption Premium (as defined below) right expires, the per unit Redemption Premium in effect on the date of payment of the Series C Preferred Liquidation Preference, before any distribution of assets is made to holders of any Junior Securities. In the event that the Company elects to set aside the Series C Preferred Liquidation Preference for payment, the Series C Preferred Units shall remain outstanding until the holders thereof are paid the full Series C Preferred Liquidation Preference, which payment shall be made no later than immediately prior to the Company making its final liquidating distribution on the Junior Securities. In the event that the Redemption Premium in effect on the payment date is less than the Redemption Premium on the date that the Series C Preferred Liquidation Preference was set apart for payment, the Company may make a corresponding reduction to the funds set apart for payment of the Series C Preferred Liquidation Preference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If, upon any such Series C Preferred Liquidation Event, the available assets of the Company are insufficient to pay the full amount of the Series C Preferred Liquidation Preference on all outstanding Series C Preferred Units, then the holders of the Series C Preferred Units shall share ratably in any such distribution of assets in proportion to the full Series C Preferred Liquidation Preference to which they would otherwise be respectively entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)After payment of the full amount of the Series C Preferred Liquidation Preference to which they are entitled, the holders of Series C Preferred Units will have no right or claim to any of the remaining assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Upon the Company's provision of written notice as to the effective date of any such Series C Preferred Liquidation Event, accompanied by a check or electronic payment in the amount of the full Series C Preferred Liquidation Preference to which each record holder of the Series C Preferred Units is entitled, the Series C Preferred Units shall no longer be deemed outstanding and all rights of the holders of such Series C Preferred Units will terminate. Such notice shall be given by first class mail, postage pre-paid, or via electronic mail to each record holder of the Series C Preferred Units at the respective addresses of such holders as the same shall appear on the unit transfer records of the Company. Permissible forms of electronic payment pursuant to this paragraph shall include, without limitation, ACH transfers, direct deposit or wire transfers, in each case to be initiated on or before the day on which the related notice is given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)The consolidation or merger of the Company with or into any other business enterprise or of any other business enterprise with or into the Company, or the sale, lease or conveyance of all or substantially all of the assets or business of the Company, shall not be deemed to constitute a Series C Preferred Liquidation Event; <u>provided, however</u> that any such transaction which results in an amendment, restatement or replacement of the Operating Agreement that has a material adverse effect on the rights and preferences of the Series C Preferred Units, or that increases the number of authorized or issued Series C Preferred Units, shall be deemed a Series C Preferred Liquidation Event for purposes of determining whether the Series C Preferred Liquidation Preference is payable unless the right to receive payment is waived by holders of a majority of the outstanding Series C Preferred Units voting as a separate class (excluding any Series C Preferred Units that were not issued in a private placement of the Series C Preferred Units conducted by H&L Equities, LLC).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Redemption and Repurchase</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Right of Optional Redemption</u>. The Company, at its option, may redeem the Series C Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price equal to $1,000.00 per Series C Preferred Unit plus all accrued and unpaid distributions thereon to and including the date fixed for redemption (except as provided in Section 4.9.E(iii) below), plus a redemption premium per Series C Preferred Unit (each, a "**<u>Series C</u> <u>Preferred</u> <u>Redemption Premium</u>**") calculated as follows based on the date fixed for redemption:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)until December 31, 2022, $100, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)thereafter, no Series C Preferred Redemption Premium.

If less than all of the outstanding Series C Preferred Units are to be redeemed, the Series C Preferred Units to be redeemed may be selected by any equitable method determined by the Company, provided that such method does not result in the creation of fractional units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Limitations on Redemption</u>. Unless full cumulative distributions on all Series C Preferred Units shall have been, or contemporaneously are, declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past distribution periods, no Series C Preferred Units shall be redeemed or otherwise acquired, directly or indirectly, by the Company unless all outstanding Series C Preferred Units are simultaneously redeemed or acquired, and the Company shall not purchase or otherwise acquire, directly or indirectly, any Junior Securities of the Company (except by exchange for Junior Securities); provided, however, that the foregoing shall not prevent the purchase by the Company of Series C Preferred Units corresponding to shares of Series C Preferred Stock transferred to a Charitable Beneficiary (as defined in the Charter) pursuant to Article VI of the Charter in order to ensure that the Managing Member remains qualified as a real estate investment trust for federal income tax purposes or the purchase or acquisition of Series C Preferred Units pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series C Preferred Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Rights to Distributions on Units Called for Redemption</u>. Immediately prior to or upon any redemption of Series C Preferred Units, the Company shall pay, in cash, any accumulated and unpaid distributions to and including the redemption date, unless a redemption date falls after a Series C Preferred Distribution Record Date and prior to the corresponding Series C Preferred Distribution Payment Date, in which case each holder of Series C Preferred Units at the close of business on such Series C Preferred Distribution Record Date shall be entitled to the distribution payable on such Series C Preferred Units on the corresponding Series C Preferred Distribution Payment Date notwithstanding the redemption of such Series C Preferred Units before such Series C Preferred Distribution Payment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)<u>Procedures for Redemption</u>. Notice of redemption will be given by the Managing Member to the holders of Series C Preferred Units concurrently with the notice by the Managing Member to the holders of Series C Preferred Stock in connection with any redemption of the Series C Preferred Stock pursuant to the Series C Articles Supplementary and shall be consistent with the notice procedures set forth in Section 5(d) of the Series C Articles Supplementary, including the content and information requirements of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)<u>Status of Redeemed Units</u>. Any Series C Preferred Units that shall at any time have been redeemed or otherwise acquired by the Company shall, after such redemption or acquisition, have the status of authorized but unissued Series C Preferred Units which may be issued by the Managing Member from time to time at its discretion.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Voting</u>. The holders of Series C Preferred Units shall not have any voting rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.<u>Construction</u>. The Series C Preferred Units were created and issued in conjunction with the issuance and sale of Series C Preferred Stock by the Managing Member, and as such, the Series C Preferred Units are intended to have designations, preferences and other rights and terms that are substantially the same as those of the Series C Preferred Stock, all such that the economic interests of the Series C Preferred Units and the Series C Preferred Stock are substantially identical, and the provisions, terms and conditions of this Agreement shall be interpreted in a fashion consistent with this intent.

**Sectino 4.10&nbsp;&nbsp;&nbsp;&nbsp;Series C Units.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Designation and Number</u>. There shall be a series of Units designated as the "Series C Units" (the "**<u>Series C Units</u>**"). The number of authorized Series C Units is 100.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Rank</u>. Subject to the provisions of this <u>Section 4.10</u>, the Series C Units shall rank pari passu with the Class A Units as to the payment of regular and special periodic or other distributions and distribution of assets upon liquidation, dissolution or winding up. The Series C Units shall rank (a) junior to the Class B Units, and shall not have any right to, nor claim against, the payment of regular and special periodic distributions of assets upon liquidation, dissolution or winding up to the extent such distributions are Class B Available Cash (other than the Series C Units Participation Amount) and (b) pari passu with the Class B Units as to the payment of the Series C Units Participation Amount. As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Units which by its terms specifies that it shall rank junior to, on a parity with, or senior to the Class A Units shall also rank junior to, or pari passu with, or senior to, as the case may be, the Series C Units. As to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, any class or series of Units which by its terms specifies that it shall rank junior to, on a parity with, or senior to the Class B Units shall also rank junior to, or pari passu with, or senior to, as the case may be, the Series C Units, as applicable, with respect to the Series C Units Participation Amount. So long as the Series C Units remain issued and outstanding, without the written consent of all of the holders of Series C Units, the Company shall not (i) authorize or issue any securities having any preference as to the dividend or redemption rights, liquidation preferences, voting rights or any other rights or privileges of the Series C Units, (ii) reclassify any Units into interests having any preference as to the dividend or redemption rights, liquidation preferences, voting rights or any other rights or privileges of the Series C Units, (iii) authorize or issue any debt convertible into or exchangeable for Units having any preference as to the dividend or redemption rights, liquidation preferences, voting rights or any other rights or privileges of the Series C Units, or (iv) amend or repeal any provision of, or add any provision to this Agreement if such actions would alter or change the preferences, rights, privileges or restrictions provided for the benefit of the Series C Units. Except for the Series C Units Participation Amount, the Series C Units shall not have any right to, nor claim against, any regular, periodic or other distributions or distributions of assets upon liquidation, dissolution or winding up attributable to, or due and owing in respect of, the Class B Units. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, the Company shall have the right to issue the Class B Units in conjunction with, and upon the closing of, the SAFStor Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Distributions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Series C Units shall, when, as and if authorized and declared by the Managing Member out of funds legally available for that purpose, be entitled to receive distributions (a "**<u>Series C Unit Distribution</u>**") equal to the Series C Units Distribution

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Amount on such Company Record Date established by the Managing Member with respect to such distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Notwithstanding anything to the contrary herein, following the receipt by each holder of Common Units of distributions in an aggregate amount equal to its pro rata share of the Invested Capital, no distribution on the Common Units (whether in cash, securities or other property, or any combination of the foregoing) will be declared or paid on the Common Units by the Company, unless, at the time of such declaration and payment, a distribution equal to the Series C Units Distribution Amount is declared and paid, respectively, on the Series C Units, such that the record date and payment date for such Series C Unit Distribution occur on the same dates as the record date and payment date, respectively, for such distribution with respect to the Common Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Liquidation</u>. Upon any Liquidation of the Managing Member or any Liquidating Event of the Company, (a) 10% of any Remaining Liquidation Cash available for distribution to the Common Units (and specifically excluding any amounts distributable to the Class B Units in connection therewith) by the Company and (b) the Series C Units Participation Amount shall, in each case, be paid to the holders of the Series C Units, pro rata based on the number of Series C Units held by each such holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Voting</u>. The holders of the Series C Units shall not have any voting rights.

**ARTICLE V<br>DISTRIBUTIONS**

**Section 5.1&nbsp;&nbsp;&nbsp;&nbsp;Requirement and Characterization of Distributions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. The Managing Member may cause the Company to distribute at least quarterly all, or such portion as the Managing Member may in its sole and absolute discretion determine, of the Available Cash of the Company with respect to such quarter or shorter period to the Members in accordance with the terms established for the class or classes of Units or other Interests held by such Members who are Members on the respective Company Record Date with respect to such quarter or shorter period as provided in <u>Sections 5.1.B</u> and in accordance with the respective terms established for each class of Interest. Notwithstanding anything to the contrary contained herein, in no event may a Member receive a distribution of Available Cash with respect to a Unit for a quarter or shorter period if such Member is entitled to receive a distribution with respect to a Share for which such Unit has been redeemed or exchanged. Unless otherwise expressly provided for herein, or in the terms established for a new class or series of Units or other Interests created in accordance with <u>Article IV</u> hereof, no Interest shall be entitled to a distribution in preference to any other Interest. The Managing Member shall make such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with the qualification of the Managing Member as a REIT, to distribute Available Cash (a) to Members so as to preclude any such distribution or portion thereof from being treated as part of a sale of property to the Company by a Member under Section 707 of the Code or the Regulations thereunder; provided that the Managing Member, the Managing Member Entity, and the Company shall not have liability to a Member under any circumstances as a result of any distribution to a Member being so treated, and (b) to the Managing Member in an amount sufficient to enable the Managing Member Entity to make distributions to its stockholders that will enable the Managing Member Entity to (1) satisfy the requirements for qualification as a REIT under the Code and the Regulations (the "**<u>REIT Requirements</u>**"), and (2) avoid any U.S. federal income or excise tax liability, except to the extent that a distribution pursuant to clause (2) would prevent the Company from making a distribution to the holders of Series D Preferred Units in accordance with <u>Section 4.8</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Distributions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Each holder of Units or other Interests of a class that is entitled to any preference in distribution (including, for the avoidance of doubt, the Series D Preferred Units) shall be entitled to a distribution in accordance with the rights of any such class of Interests (and, within such class, pro rata in proportion to the respective Percentage Interests on such Company Record Date); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)To the extent there is Available Cash remaining after the payment of any preference in distribution in accordance with the foregoing <u>clause (i</u>), (A) the portion of the Available Cash that is Class B Available Cash shall be distributed to the Class B Units (pro-rata among the Class B Units on a per Unit basis) and (B) the portion (if any) of the Available Cash that is not Class B Available Cash shall be distributed to Interests (other than the Class B Units) that are not entitled to any preference in distribution, including the Common Units (other than the Class B Units), to each such class and, if applicable, to each series within such class in accordance with the terms and conditions of such class and, if applicable, series (and, in the case of Common Units (other than Class B Units), all distributions shall be made pro-rata among the Common Units (other than the Class B Units) on a per Unit basis).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Distributions With Respect to LTIP Units</u>. In accordance with <u>Section 4.6.A</u>, LTIP Unitholders shall be entitled to receive distributions in an amount per LTIP Unit equal to the Class A Unit Distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Distributions With Respect to Series D Preferred Units</u>. Series D Preferred Units shall be entitled to receive distributions in accordance with <u>Section 4.8</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Distributions With Respect to Series C Preferred Units</u>. Series C Preferred Units shall be entitled to receive distributions in accordance with <u>Section 4.9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Distributions With Respect to Series C Units</u>. Series C Units shall be entitled to receive distributions in accordance with <u>Section 4.10</u>.

**Section 5.2&nbsp;&nbsp;&nbsp;&nbsp;Amounts Withheld**

All amounts withheld pursuant to the Code or any provisions of any state or local tax law and <u>Section 10.5</u> with respect to any allocation, payment or distribution to a Member or Assignee shall be treated as amounts distributed to the Member or Assignee, as the case may be, pursuant to <u>Section 5.1</u> for all purposes under this Agreement.

**Section 5.3&nbsp;&nbsp;&nbsp;&nbsp;Distributions Upon Liquidation**

Proceeds from a Liquidating Event shall be distributed to the Members in accordance with <u>Section 13.2</u>.

**Section 5.4&nbsp;&nbsp;&nbsp;&nbsp;Revisions to Reflect Issuance of Interests**

If the Company issues Interests to any Member or any Additional Member pursuant to <u>Article IV</u> hereof, or if there is any change in the ownership of the Units (for example, as a result of a conversion, redemption or splitting of units), the Managing Member shall make such revisions to this <u>Article V</u> and the Member Registry in the books and records of the Company as it deems necessary to reflect the issuance of such additional Interests without the consent or approval of any other Member.

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**ARTICLE VI<br>ALLOCATIONS**

**Section 6.1&nbsp;&nbsp;&nbsp;&nbsp;Allocations for Capital Account Purposes**

For purposes of maintaining the Capital Accounts and in determining the rights of the Members among themselves, the Member's items of income, gain, loss and deduction (computed in accordance with **<u>Exhibit B</u>**) shall be allocated among the Members in each taxable year (or portion thereof) as provided herein below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Net Income</u>. After giving effect to the special allocations set forth in <u>Section 1</u> of **<u>Exhibit C</u>** of this Agreement, Net Income shall be allocated:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)first, to the Managing Member until the cumulative Net Income allocated under this clause (1) equals the cumulative Net Losses allocated to the Managing Member under <u>Section 6.1.B(6)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)second, to each DRO Member until the cumulative Net Income allocated to such DRO Member under this clause (2) equals the cumulative Net Losses allocated to such DRO Member under <u>Section 6.1.B(5)</u> (and among the DRO Members, pro rata in proportion to their respective percentages of the cumulative Net Losses allocated to all DRO Members pursuant to <u>Section 6.1.B(5)</u> hereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)third, to the Managing Member until the cumulative Net Income allocated under this clause (3) equals the cumulative Net Losses allocated to the Managing Member under <u>Section 6.1.B(4)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)fourth, to the holders of any Interests that are entitled to any preference upon liquidation until the cumulative Net Income allocated under this clause (4) equals the cumulative Net Losses allocated to such Members under <u>Section 6.1.B(3)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)fifth, to the holders of any Interests that are entitled to any preference in distribution in accordance with the rights of any such class of Interests until each such Interest has been allocated, on a cumulative basis pursuant to this clause (5), Net Income equal to the amount of distributions payable that are attributable to the preference of such class of Interests whether or not paid (and, within such class, pro rata in proportion to the respective Percentage Interests as of the last day of the period for which such allocation is being made); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)finally, with respect to Interests that are not entitled to any preference in distribution or with respect to which distributions are not limited to any preference in distribution, including the Common Units, among the classes of such Interests in a manner that reflects the relative terms of such classes (as reasonably determined by the Managing Member) (and, within each such class, pro rata in proportion to the respective Percentage Interests of such class as of the last day of the period for which such allocation is being made).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Net Losses</u>. After giving effect to the special allocations set forth in <u>Section 1</u> of **<u>Exhibit C</u>**, Net Losses shall be allocated:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)first, to the holders of Interests, in proportion to, and to the extent that, their share of the Net Income previously allocated pursuant to <u>Section 6.1.A(6)</u> exceeds, on a cumulative basis, the sum of (a) distributions with respect to such Interests pursuant to clause (ii) of <u>Section 5.1.B</u> and (b) Net Losses allocated under this clause (1);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)second, with respect to classes of Interests that are not entitled to any preference in distribution upon liquidation of such class, pro rata to each such class in accordance with the terms of such class (and, within such class, pro rata in proportion to the respective Percentage Interests as of the last day of the period for which such allocation is being made); provided, however, that Net Losses shall not be allocated to any Member pursuant to this <u>Section 6.1.B(2)</u> to the extent that such allocation would cause such Member to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) (determined in each case (i) by not including in the Members' Adjusted Capital Accounts any amount that a Member is obligated to contribute to the Company with respect to any deficit in its Capital Account pursuant to <u>Section 13.3</u> and (ii) in the case of a Member who also holds classes of Interests that are entitled to any preferences in distribution upon liquidation, by subtracting from such Members' Adjusted Capital Account the amount of such preferred distribution to be made upon liquidation) at the end of such taxable year (or portion thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)third, with respect to classes of Interests that are entitled to any preference in distribution upon liquidation, in reverse order of the priorities of each such class (and within each such class, pro rata in proportion to their respective Percentage Interests as of the last day of the period for which such allocation is being made); provided, however, that Net Losses shall not be allocated to any Member pursuant to this <u>Section 6.1.B(3)</u> to the extent that such allocation would cause such Member to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) (determined in each case by not including in the Members' Adjusted Capital Accounts any amount that a Member is obligated to contribute to the Company with respect to any deficit in its Capital Account pursuant to <u>Section 13.3</u>) at the end of such taxable year (or portion thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)fourth, to the Managing Member, in an amount equal to the excess of (a) the amount of the Company's Recourse Liabilities over (b) the Aggregate DRO Amount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)fifth, to and among the DRO Members, in proportion to their respective DRO Amounts, until such time as the DRO Members as a group have been allocated cumulative Net Losses pursuant to this clause (4) equal to the Aggregate DRO Amount; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)thereafter, to the Managing Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Allocation of Nonrecourse Debt</u>. For purposes of Regulation Section 1.752-3(a), the Members agree that Nonrecourse Liabilities of the Company in excess of the sum of (i) the amount of Partnership Minimum Gain and (ii) the total amount of Nonrecourse Built-in Gain shall be allocated by the Managing Member by taking into account facts and circumstances relating to each Member's respective interest in the profits of the Company. For this purpose, the Managing Member shall have the sole and absolute discretion in any Fiscal Year to allocate such excess Nonrecourse Liabilities among the Members in any manner permitted under Code Section 752 and the Regulations thereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Recapture Income</u>. Any gain allocated to the Members upon the sale or other taxable disposition of any Company asset shall, to the extent possible after taking into account other required allocations of gain pursuant to **<u>Exhibit C</u>**, be characterized as Recapture Income in the same proportions and to the same extent as such Members have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Special Allocations Regarding LTIP Units</u>. Notwithstanding the provisions of <u>Section 6.1.A</u>, Liquidating Gains shall first be allocated to the LTIP Unitholders until their Economic Capital Account Balances to the extent attributable to their ownership of LTIP Units are equal to (i) the Class A Unit Economic Balance multiplied by (ii) the number of their LTIP Units. For this purpose, "**<u>Liquidating Gains</u>**" means net gains that are or would be realized in connection with the actual or hypothetical sale of all or substantially all of the assets of the Company, including but not limited to net capital gain realized in connection with an adjustment to the value of Company assets under Section 704(b) of the Code made pursuant to <u>Section 1.D</u> of **<u>Exhibit B</u>** of the Agreement. The "**<u>Economic Capital Account Balances</u>**" of the LTIP Unitholders will be equal to their Capital Account balances to the extent attributable to their ownership of LTIP Units. Similarly, the "**<u>Class A Unit Economic Balance</u>**" shall mean (i) the Capital Account balance of the Managing Member Entity, plus the amount of the Managing Member's share of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to the Managing Member Entity's ownership of Class A Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this <u>Section 6.1.E</u>, but prior to the realization of any Liquidating Gains, divided by (ii) the number of the Managing Member Entity's Class A Units. Any such allocations shall be made among the LTIP Unitholders whose LTIP Units are designated Class A Units in proportion to the amounts required to be allocated to each under this <u>Section 6.1.E</u>. The parties agree that the intent of this <u>Section 6.1.E</u> is to make the Capital Account balance associated with each LTIP Unit to be economically equivalent to the Capital Account balance associated with the Managing Member Entity's Class A Units (on a per-Unit basis), provided that Liquidating Gains are of a sufficient magnitude to do so upon a sale of all or substantially all of the assets of the Company, or upon an adjustment to the Members' Capital Accounts pursuant to <u>Section 1.D</u> of **<u>Exhibit B</u>**. To the extent the LTIP Unitholders receive a distribution in excess of their Capital Accounts, such distribution will be a guaranteed payment under Section 707(c) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Special Allocations in Connection with a Liquidity Event</u>. The Members intend that the allocation of Net Income, Net Losses and other items of income, gain, loss, deduction and credit required to be allocated to the Capital Accounts of the Members pursuant to this Agreement will result in final Capital Account balances that will permit the amount each Member is entitled to receive upon "liquidation" of the Company (within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations) to equal the amount such Member would have received if such amount was distributable solely pursuant to the priorities set forth in <u>Article IV</u>, <u>Article V</u> and <u>Section 13.2.A(1) – (7)</u> (assuming, for this purpose, that distributions under <u>Section 13.2.A(7)</u> are made to the Members (other than the Members holding Class B Units) in accordance with <u>Sections 5.1.B(ii)(B)</u>, <u>5.1.C</u> and <u>5.1.F</u>) (and, for the avoidance of doubt, taking into account any applicable DRO Amounts). Accordingly, notwithstanding the provisions of <u>Section 6.1.A</u>, in the taxable year of the event precipitating a Liquidity Event and thereafter, appropriate adjustments to allocations of Net Income and Net Losses to the Members shall be made to achieve such result.

**Section 6.2&nbsp;&nbsp;&nbsp;&nbsp;Revisions to Allocations to Reflect Issuance of Interests**

If the Company issues Units or other Interests to any Member or any Additional Member pursuant to <u>Article IV</u> hereof, the Managing Member shall make such revisions to this <u>Article VI</u> and the Member Registry in the books and records of the Company as it deems necessary to

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reflect the terms of the issuance of such Units or Interests, including making preferential allocations to classes of Units or Interests that are entitled thereto. Such revisions shall not require the consent or approval of any other Member.

**ARTICLE VII<br>MANAGEMENT AND OPERATIONS OF BUSINESS**

**Section 7.1&nbsp;&nbsp;&nbsp;&nbsp;Management**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Powers of Managing Member</u>. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Company are and shall be exclusively vested in the Managing Member, and no Non-Managing Member shall have any right to participate in or exercise control or management power over the business and affairs of the Company. The Managing Member may not be removed by the Non-Managing Members with or without cause. In addition to the powers now or hereafter granted a managing member of a limited liability company under applicable law or which are granted to the Managing Member under any other provision of this Agreement, the Managing Member, subject to <u>Section 7.11</u>, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Company, to exercise all powers set forth in <u>Section 3.2</u> and to effectuate the purposes set forth in <u>Section 3.1</u>, including, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Company to make distributions to its Members in such amounts as are required under <u>Section 5.1.A</u> or will permit the Managing Member and the Managing Member Entity (so long as such entity qualifies as a REIT) to avoid the payment of any U.S. federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its stockholders sufficient to permit the Managing Member to maintain its REIT status), the assumption or guarantee of, or other contracting for, indebtedness and other liabilities including, without limitation, the assumption or guarantee of the debt of the Managing Member, its Subsidiaries or the Company's Subsidiaries, the issuance of evidences of indebtedness (including the securing of same by mortgage, deed of trust or other lien or encumbrance on the Company's assets) and the incurring of any obligations the Managing Member deems necessary for the conduct of the activities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Company (including acquisition of any new assets, the exercise or grant of any conversion, option, privilege or subscription right or other right available in connection with any assets at any time held by the Company) or the merger or other combination of the Company or any Subsidiary of the Company with or into another entity on such terms as the Managing Member deems proper;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)the use of the assets of the Company (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including, without limitation, the financing of the conduct of the operations of the Managing Member, the Company or any of the Company's

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Subsidiaries, the lending of funds to other Persons (including, without limitation, the Managing Member, its Subsidiaries, and the Company's Subsidiaries) and the repayment of obligations of the Company and its Subsidiaries and any other Person in which the Company has an equity investment and the making of capital contributions to its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)the origination, acquisition, ownership, financing, including through securitizations, servicing and disposition of mortgage loans and other interests in real property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Company or any Subsidiary of the Company or any Person in which the Company has made a direct or indirect equity investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)the negotiation, execution, and performance of any contracts, conveyances or other instruments that the Managing Member considers useful or necessary to the conduct of the Company's operations or the implementation of the Managing Member's powers under this Agreement, including contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Company's assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)the mortgage, pledge, encumbrance or hypothecation of any assets of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)the distribution of Company cash or other Company assets in accordance with this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)the holding, managing, investing and reinvesting of cash and other assets of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)the hedging of liabilities of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)the collection and receipt of revenues and income of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13)the selection, designation of powers, authority and duties and the dismissal of employees of the Company (including, without limitation, employees having titles such as "president," "vice president," "secretary" and "treasurer") and agents, outside attorneys, accountants, consultants and contractors of the Company and the determination of their compensation and other terms of employment or hiring;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)the maintenance of such insurance for the benefit of the Company and the Members (including, without limitation, the Managing Member Entity and the Managing Member) as it deems necessary or appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15)the formation of, or acquisition of an interest (including non-voting interests in entities controlled by Affiliates of the Company or third parties) in, and the contribution of property to, any further limited or general partnerships, joint ventures, limited liability companies or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of funds or property to, or making of loans to, its Subsidiaries and any other Person in which it has an equity investment from time to time, or the

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incurrence of indebtedness on behalf of such Persons or the guarantee of the obligations of such Persons); provided that as long as the Managing Member has determined to continue to qualify as a REIT, the Company may not engage in any such formation, acquisition or contribution that would cause the Managing Member to fail to qualify as a REIT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16)the control of any matters affecting the rights and obligations of the Company, including the settlement, compromise, submission to arbitration or any other form of dispute resolution or abandonment of any claim, cause of action, liability, debt or damages due or owing to or from the Company, the commencement or defense of suits, legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the representation of the Company in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expense and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17)the determination of the fair market value of any Company property distributed in kind, using such reasonable method of valuation as the Managing Member may adopt;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18)the exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any assets or investment held by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19)the exercise of any of the powers of the Managing Member enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Company or any other Person in which the Company has a direct or indirect interest, individually or jointly with any such Subsidiary or other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20)the exercise of any of the powers of the Managing Member enumerated in this Agreement on behalf of any Person in which the Company does not have any interest pursuant to contractual or other arrangements with such Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21)the making, executing and delivering of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or other legal instruments or agreements in writing necessary or appropriate in the judgment of the Managing Member for the accomplishment of any of the powers of the Managing Member enumerated in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22)the distribution of cash to acquire Units held by a Member in connection with a Member's exercise of its Redemption Right under <u>Section 8.6</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23)the determination regarding whether a payment to a Member who exercises its Redemption Right under <u>Section 8.6</u> that is assumed by the Managing Member will be paid in the form of the Cash Amount or the Shares Amount, except as such determination may be limited by <u>Section 8.6</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24)the acquisition of Interests in exchange for cash, debt instruments and other property;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(25)the maintenance of the Member Registry in the books and records of the Company to reflect the Capital Contributions and Percentage Interests of the Members as the same are adjusted from time to time to the extent necessary to reflect redemptions, Capital Contributions, the issuance of Units, the admission of any Additional Member or any Substituted Member or otherwise; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(26)the registration of any class of securities of the Company under the Securities Act or the Exchange Act and the listing of any debt securities of the Company on any exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>No Approval by Non-Managing Members</u>. Except as provided in <u>Section 7.11</u>, each of the Non-Managing Members agrees that the Managing Member is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Company without any further act, approval or vote of the Members, notwithstanding any other provision of this Agreement, the Act or any applicable law, rule or regulation, to the full extent permitted under the Act or other applicable law. The execution, delivery or performance by the Managing Member or the Company of any agreement authorized or permitted under this Agreement shall be in the sole and absolute discretion of the Managing Member without consideration of any other obligation or duty, fiduciary or otherwise, of the Company or the Members and shall not constitute a breach by the Managing Member of any duty that the Managing Member may owe the Company or the Non-Managing Members or any other Persons under this Agreement or of any duty stated or implied by law or equity. The Non-Managing Members acknowledge that the Managing Member is acting for the benefit of the Company, the Members and the stockholders of the Managing Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Insurance</u>. At all times from and after the date hereof, the Managing Member may cause the Company to obtain and maintain (i) casualty, liability and other insurance on the properties of the Company and its Subsidiaries, (ii) liability insurance for the Indemnitees hereunder, and (iii) such other insurance as the Managing Member, in its sole and absolute discretion, determines to be necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Working Capital and Other Reserves</u>. At all times from and after the date hereof, the Managing Member may cause the Company to establish and maintain working capital reserves in such amounts as the Managing Member, in its sole and absolute discretion, deems appropriate and reasonable from time to time, including upon liquidation of the Company under <u>Article XIII</u>.

**Section 7.2&nbsp;&nbsp;&nbsp;&nbsp;Certificate of Formation**

To the extent that such action is determined by the Managing Member to be reasonable and necessary or appropriate, the Managing Member shall file amendments to and restatements of the Certificate of Formation and do all the things to maintain the Company as a limited liability company under the laws of the State of Delaware and each other state, the District of Columbia or other jurisdiction in which the Company may elect to do business or own property. Subject to the terms of <u>Section 8.5.A(4)</u>, the Managing Member shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Formation or any amendment thereto to any Member. The Managing Member shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited liability company in the State of Delaware and any other state, the District of Columbia or other jurisdiction in which the Company may elect to do business or own property.

**Section 7.3&nbsp;&nbsp;&nbsp;&nbsp;Title to Company Assets**

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Title to Company assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Members, individually or collectively, shall have any ownership interest in such Company assets or any portion thereof. Title to any or all of the Company assets may be held in the name of the Company, the Managing Member or one or more nominees, as the Managing Member may determine, in its sole and absolute discretion, including Affiliates of the Managing Member. The Managing Member hereby declares and warrants that any Company assets for which legal title is held in the name of the Managing Member or any nominee or Affiliate of the Managing Member shall be held by the Managing Member for the use and benefit of the Company in accordance with the provisions of this Agreement. All Company assets shall be recorded as the property of the Company in its books and records, irrespective of the name in which legal title to such Company assets is held.

**Section 7.4&nbsp;&nbsp;&nbsp;&nbsp;Reimbursement of the Managing Member**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>No Compensation</u>. Except as provided in this <u>Section 7.4</u> and elsewhere in this Agreement (including the provisions of <u>Articles V</u> and <u>VI</u> regarding distributions, payments and allocations to which it may be entitled), the Managing Member shall not receive payments from the Company or otherwise be compensated for its services as the Managing Member of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Responsibility for Company, Managing Member and Managing Member Entity Expenses</u>. The Company shall be responsible for and shall pay all expenses relating to the Company's organization, the ownership of its assets and its operations. The Company shall also be responsible for the administrative and operating costs and expenses incurred by the Managing Member, including, but not limited to, all expenses relating to the Managing Member's and the Managing Member Entity's (i) continued existence and subsidiary operations, (ii) offerings and registration of securities, (iii) preparation and filing of any periodic or other reports and communications required under federal, state or local laws and regulations, (iv) compliance with laws, rules and regulations promulgated by any regulatory body, (v) operating or administrative costs incurred in the ordinary course of business on behalf of the Company, (vi) director fees and expenses of the Company, (vii) any expenses (other than the purchase price) incurred by the Managing Member in connection with the redemption or other repurchase of its Shares, and (viii) all costs and expenses of the Managing Member in connection with its operation as a REIT; provided, however, that such costs and expenses shall not include any administrative or operating costs of the Managing Member attributable to assets owned by the Managing Member directly and not through the Company or its subsidiaries; and provided, further, such costs shall not include any costs that are the responsibility of the Manager under the Management Agreement. The Managing Member, at the Managing Member's sole and absolute discretion, shall be reimbursed on a monthly basis, or such other basis as the Managing Member may determine in its sole and absolute discretion, for all expenses the Managing Member incurs relating to or resulting from the ownership and operation of, or for the benefit of, the Company (including, without limitation, expenses related to the operations of the Managing Member Entity and to the management and administration of any Subsidiaries of the Managing Member, the Managing Member Entity or the Company or Affiliates of the Company, such as auditing expenses and filing fees); provided, however, that (i) the amount of any such reimbursement shall be reduced by (x) any interest earned by the Managing Member with respect to bank accounts or other instruments or accounts held by it on behalf of the Company as permitted in <u>Section 7.5.A</u> (which interest is considered to belong to the Company and shall be paid over to the Company to the extent not applied to reimburse the Managing Member for expenses hereunder); and (y) any amount derived by the Managing Member from any investments permitted in <u>Section 7.5.A</u>; (ii) the Company shall not be responsible for any taxes that the Managing Member Entity would not have been required to pay if the Managing Member Entity qualified as a REIT for U.S. federal income tax purposes or any taxes imposed on the Managing Member Entity by reason of the

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Managing Member Entity's failure to distribute to its stockholders an amount equal to its taxable income; (iii) the Company shall not be responsible for expenses or liabilities incurred by the Managing Member in connection with any business or assets of the Managing Member other than its ownership of Interests or operation of the business of the Company or ownership of interests in Qualified Assets to the extent permitted in <u>Section 7.5.A</u>; and (iv) the Company shall not be responsible for any expenses or liabilities of the Managing Member that are excluded from the scope of the indemnification provisions of <u>Section 7.7.A</u> by reason of the provisions of clause (i), (ii) or (iii) thereof. The Managing Member shall determine in good faith the amount of expenses incurred by it or the Managing Member Entity related to the ownership of Units or Interests or operation of, or for the benefit of, the Company. If certain expenses are incurred that are related both to the ownership of Interests or operation of, or for the benefit of, the Company and to the ownership of other assets (other than Qualified Assets and such other assets as permitted under <u>Section 7.5.A</u>) or the operation of other businesses, such expenses will be allocated to the Company and such other entities (including the Managing Member and the Managing Member Entity) owning such other assets or businesses in such a manner as the Managing Member in its sole and absolute discretion deems fair and reasonable. Such reimbursements shall be in addition to any reimbursement to the Managing Member pursuant to <u>Section 10.3.C</u> and as a result of indemnification pursuant to <u>Section 7.7</u>. All payments and reimbursements hereunder shall be characterized for U.S. federal income tax purposes as expenses of the Company incurred on its behalf, and not as expenses of the Managing Member or the Managing Member Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Interest Issuance Expenses</u>. The Managing Member shall also be reimbursed for all expenses it incurs relating to any issuance of Interests, Shares, Debt of the Company, Funding Debt of the Managing Member, or rights, options, warrants or convertible or exchangeable securities pursuant to <u>Article IV</u> (including, without limitation, all costs, expenses, damages and other payments resulting from or arising in connection with litigation related to any of the foregoing), all of which expenses are considered by the Members to constitute expenses of, and for the benefit of, the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Purchases of Shares by the Managing Member Entity</u>. If the Managing Member Entity exercises its rights under the Charter (or, if the Managing Member is not the Managing Member Entity, the organizational documents of the Managing Member Entity) to purchase Shares or otherwise elects or is required to purchase from its stockholders Shares in connection with a Share repurchase or similar program or otherwise, or for the purpose of delivering such Shares to satisfy an obligation under any dividend reinvestment or equity purchase program adopted by the Managing Member Entity, any employee equity purchase plan adopted by the Managing Member Entity or any similar obligation or arrangement undertaken by the Managing Member Entity in the future, the purchase price paid by the Managing Member Entity for those Shares and any other expenses incurred by the Managing Member Entity in connection with such purchase shall be considered expenses of the Company and shall be reimbursable to the Managing Member Entity, subject to the conditions that: (i) if those Shares subsequently are to be sold by the Managing Member Entity, the Managing Member Entity shall pay to the Company any proceeds received by the Managing Member Entity for those Shares (provided that a transfer of Shares for Units pursuant to <u>Section 8.6</u> would not be considered a sale for such purposes); and (ii) if such Shares are required to be cancelled pursuant to applicable law or are not retransferred by the Managing Member Entity within thirty (30) days after the purchase thereof, the Managing Member shall cause the Company to cancel a number of Units (rounded to the nearest whole Unit) held by the Managing Member equal to the product attained by multiplying the number of those Shares by a fraction, the numerator of which is one and the denominator of which is the Conversion Factor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Reimbursement not a Distribution</u>. Except as set forth in the succeeding sentence, if and to the extent any reimbursement made pursuant to this <u>Section 7.4</u> is determined for U.S.

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federal income tax purposes not to constitute a payment of expenses of the Company, the amount so determined shall constitute a guaranteed payment with respect to capital within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Company and all Members and shall not be treated as a distribution for purposes of computing the Members' Capital Accounts. Amounts deemed paid by the Company to the Managing Member in connection with redemption of Units pursuant to clause (ii) of subparagraph (D) above shall be treated as a distribution for purposes of computing the Member's Capital Accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Funding for Certain Capital Transactions</u>. In the event that the Managing Member shall undertake to acquire (whether by merger, consolidation, purchase or otherwise) the assets or equity interests of another Person and such acquisition shall require the payment of cash by the Managing Member (whether to such Person or to any other selling party or parties in such transaction or to one or more creditors, if any, of such Person or such selling party or parties), (i) the Company shall advance to the Managing Member the cash required to consummate such acquisition if, and to the extent that, such cash is not to be obtained by the Managing Member through an issuance of Shares described in <u>Section 4.2</u> or pursuant to a transaction described in <u>Section 7.5.B</u>, (ii) the Managing Member shall immediately, upon consummation of such acquisition, transfer to the Company (or cause to be transferred to the Company), in full and complete satisfaction of such advance and as required by <u>Section 7.5</u>, the assets or equity interests of such Person acquired by the Managing Member in such acquisition (or equity interests in Persons owning all of such assets or equity interests), and (iii) pursuant to and in accordance with <u>Section 4.2</u> and <u>Section 7.5.B</u>, the Company shall issue to the Managing Member, Interests and/or rights, options, warrants or convertible or exchangeable securities of the Company having designations, preferences and other rights that are substantially the same as those of any additional Shares, other equity securities, New Securities and/or Convertible Funding Debt, as the case may be, issued by the Managing Member in connection with such acquisition (whether issued directly to participants in the acquisition transaction or to third parties in order to obtain cash to complete the acquisition). In addition to, and without limiting, the foregoing, in the event that the Managing Member engages in a transaction in which (x) the Managing Member (or a wholly owned direct or indirect Subsidiary of the Managing Member) merges with another entity (referred to as the "**<u>Parent Entity</u>**") that is organized in the "UPREIT format" (i.e., where the Parent Entity holds substantially all of its assets and conducts substantially all of its operations through a partnership, limited liability company or other entity (referred to as an "**<u>Operating Entity</u>**")) and the Managing Member survives such merger, (y) such Operating Entity merges with or is otherwise acquired by the Company in exchange in whole or in part for Interests, and (z) the Managing Member is required or elects to pay part of the consideration in connection with such merger involving the Parent Entity in the form of cash and part of the consideration in the form of Shares, the Company shall distribute to the Managing Member with respect to its existing Interests an amount of cash sufficient to complete such transaction and the Managing Member shall cause the Company to cancel a number of Units (rounded to the nearest whole number) held by the Managing Member equal to the product attained by multiplying the number of additional Shares of the Managing Member that the Managing Member would have issued to the Parent Entity or the owners of the Parent Entity in such transaction if the entire consideration therefor were to have been paid in Shares by a fraction, the numerator of which is one and the denominator of which is the Conversion Factor.

**Section 7.5&nbsp;&nbsp;&nbsp;&nbsp;Outside Activities of the Managing Member; Relationship of Shares to Units; Funding Debt**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Without the Consent of the Non-Managing Members (excluding any Managing Member Entity or other Non-Managing Member that is an Affiliate of the Managing Member), the Managing Member shall not, directly or indirectly, enter into or conduct any business other than in connection with the ownership, acquisition and disposition of Units or other Interests as a Member and the management of the business of the Company and such

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activities as are incidental thereto. Without the Consent of the Non-Managing Members (excluding any Managing Member Entity or other Non-Managing Member that is an Affiliate of the Managing Member), the assets of the Managing Member shall be limited to Interests and permitted debt obligations of the Company (as contemplated by <u>Section 7.5.F</u>) so that Shares and Units are completely fungible except as otherwise specifically provided herein; provided that (i) the Managing Member shall be permitted to hold such bank accounts or similar instruments or accounts in its name as it deems necessary to carry out its responsibilities and purposes as contemplated under this Agreement and its organizational documents (provided that accounts held on behalf of the Company to permit the Managing Member to carry out its responsibilities under this Agreement shall be considered to belong to the Company and the interest earned thereon shall, subject to <u>Section 7.4.B</u>, be applied for the benefit of the Company); and, provided further that, the Managing Member shall be permitted to acquire Qualified Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Repurchase of Shares and Other Securities</u>. If the Managing Member exercises its rights under the Charter (or, if the Managing Member is not the Managing Member Entity, the organizational documents of the Managing Member Entity) to purchase Shares or otherwise elects to purchase from the holders thereof Shares, other equity securities of the Managing Member, New Securities or Convertible Funding Debt, then the Managing Member shall cause the Company to purchase from the Managing Member (i) in the case of a purchase of Shares, that number of Units of the appropriate class equal to the product obtained by multiplying the number of Shares purchased by the Managing Member times a fraction, the numerator of which is one and the denominator of which is the Conversion Factor, or (ii) in the case of the purchase of any other securities on the same terms and for the same aggregate price that the Managing Member purchased such securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Forfeiture of Shares</u>. If the Company or the Managing Member Entity acquires Shares as a result of the forfeiture of such Shares under a restricted or similar share, share bonus or similar share plan, then the Managing Member shall cause the Company to cancel, without payment of any consideration to the Managing Member, that number of Units of the appropriate class equal to the number of Shares so acquired, and, if the Company acquired such Shares, it shall transfer such Shares to the Managing Member for cancellation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Issuances of Shares and Other Securities</u>. The Managing Member shall not grant, award or issue any additional Shares (other than Shares issued pursuant to <u>Section 8.6</u> or pursuant to a dividend or distribution (including any Share split) of Shares to all of its stockholders that results in an adjustment to the Conversion Factor pursuant to clause (i), (ii) or (iii) of the definition thereof), other equity securities of the Managing Member, New Securities or Convertible Funding Debt unless (i) the Managing Member shall cause, pursuant to <u>Section 4.2.A</u>, the Company to issue to the Managing Member, Interests or rights, options, warrants or convertible or exchangeable securities of the Company having designations, preferences and other rights, all such that the economic interests are substantially the same as those of such additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be, and (ii) in exchange therefor, the Managing Member transfers or otherwise causes to be transferred to the Company, as an additional Capital Contribution, the proceeds (if any) from the grant, award, or issuance of such additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be, or from the exercise of rights contained in such additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be (or, in the case of an acquisition described in <u>Section 7.4.F</u> in which all or a portion of the cash required to consummate such acquisition is to be obtained by the Managing Member through an issuance of Shares described in <u>Section 4.2</u>, the Managing Member complies with such <u>Section 7.4.F</u>). Without limiting the foregoing, the Managing Member is expressly authorized to issue additional Shares, other equity securities, New Securities or Convertible Funding Debt, as the case may be, for less than fair market value, and the Managing Member is expressly authorized, pursuant to <u>Section 4.2.A</u>, to cause the Company

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to issue to the Managing Member corresponding Interests, (for example, and not by way of limitation, the issuance of Shares and corresponding Units pursuant to a stock purchase plan providing for purchases of Shares, either by employees or stockholders, at a discount from fair market value or pursuant to employee stock options that have an exercise price that is less than the fair market value of the Shares, either at the time of issuance or at the time of exercise) as long as (a) the Managing Member concludes in good faith that such issuance is in the interests of the Managing Member and the Company and (b) the Managing Member transfers all proceeds from any such issuance or exercise to the Company as an additional Capital Contribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Equity Incentive Plan</u>. If at any time or from time to time, the Managing Member sells or otherwise issues Shares pursuant to any Equity Incentive Plan, the Managing Member shall transfer or cause to be transferred the net proceeds of the sale of such Shares, if any, to the Company as an additional Capital Contribution in exchange for an amount of additional Units equal to the number of Shares so sold divided by the Conversion Factor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Funding Debt</u>. The Managing Member or the Managing Member Entity or any wholly owned Subsidiary of either of them may incur a Funding Debt from a financial institution or other lender, including, without limitation, a Funding Debt that is convertible into Shares or otherwise constitutes a class of New Securities ("**<u>Convertible Funding Debt</u>**"), subject to the condition that the Managing Member, the Managing Member Entity or such Subsidiary, as the case may be, lend to the Company the net proceeds of such Funding Debt; provided that Convertible Funding Debt shall be issued in accordance with the provisions of <u>Section 7.5.D</u> above; and, provided further that the Managing Member, the Managing Member Entity or such Subsidiary shall not be obligated to lend the net proceeds of any Funding Debt to the Company in a manner that would be inconsistent with the Managing Member's or the Managing Member Entity's ability to qualify or remain qualified as a REIT. If the Managing Member, the Managing Member Entity or such Subsidiary enters into any Funding Debt, the loan to the Company shall be on comparable terms and conditions, including interest rate, repayment schedule, costs and expenses and other financial terms, as are applicable with respect to or incurred in connection with such Funding Debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.<u>Capital Contributions of the Managing Member</u>. The Capital Contributions by the Managing Member pursuant to <u>Sections 7.5.D</u> and <u>7.5.E</u> will be deemed to equal the cash contributed by the Managing Member plus (a) in the case of cash contributions funded by an offering of any equity interests in or other securities of the Managing Member, the offering costs attributable to the cash contributed to the Company to the extent not reimbursed pursuant to <u>Section 7.4.C</u> and (b) in the case of Units issued pursuant to <u>Section 7.5.E</u>, an amount equal to the difference between the Value of the Shares sold pursuant to any Equity Incentive Plan and the net proceeds of such sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.<u>Tax Loans</u>. The Managing Member or the Managing Member Entity may in its sole and absolute discretion, cause the Company to make an interest free loan to the Managing Member or the Managing Member Entity, as applicable, provided that the proceeds of such loans are used to satisfy any tax liabilities of the Managing Member or Managing Member Entity, as applicable.

**Section 7.6&nbsp;&nbsp;&nbsp;&nbsp;Transactions with Affiliates**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Transactions with Certain Affiliates</u>. The Company shall not, directly or indirectly, sell, transfer or convey any property to, or purchase any property from, or borrow funds from, or lend funds to, any Member or any Affiliate of the Company or the Managing Member that is not also a Subsidiary of the Company, if such transaction is prohibited by the Charter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Joint Ventures</u>. The Company may transfer assets to joint ventures, limited liability companies, partnerships, corporations, business trusts or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law as the Managing Member, in its sole and absolute discretion, believes to be advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Conflict Avoidance</u>. The Managing Member is expressly authorized to enter into, in the name and on behalf of the Company, a non-competition arrangement and other conflict avoidance agreements with various Affiliates of the Company and the Managing Member on such terms as the Managing Member, in its sole and absolute discretion, believes are advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Benefit Plans Sponsored by the Company</u>. The Managing Member in its sole and absolute discretion and without the approval of the Non-Managing Members may propose and adopt on behalf of the Company employee benefit plans funded by the Company for the benefit of employees of the Managing Member, the Company, Subsidiaries of the Company, or any Affiliate of any of them.

**Section 7.7&nbsp;&nbsp;&nbsp;&nbsp;Indemnification**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. The Company shall indemnify each Indemnitee to the fullest extent provided by the Act from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including, without limitation, attorneys fees and other legal fees and expenses), judgments, fines, settlements and other amounts, arising from or in connection with any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, incurred by the Indemnitee and relating to the Company, the Managing Member or the Managing Member Entity or the operation of, or the ownership of property by, the Indemnitee, Company, the Managing Member or the Managing Member Entity as set forth in this Agreement in which any such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established by a final determination of a court of competent jurisdiction that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty, (ii) the Indemnitee actually received an improper personal benefit in money, property or services or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guarantee, contractual obligation for any indebtedness or other obligation or otherwise, for any indebtedness of the Company or any Subsidiary of the Company (including, without limitation, any indebtedness which the Company or any Subsidiary of the Company has assumed or taken subject to), and the Managing Member is hereby authorized and empowered, on behalf of the Company, to enter into one or more indemnity agreements consistent with the provisions of this <u>Section 7.7</u> in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this <u>Section 7.7.A</u>. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this <u>Section 7.7.A</u> with respect to the subject matter of such proceeding. Any indemnification pursuant to this <u>Section 7.7</u> shall be made only out of the assets of the Company, and any insurance proceeds from the liability policy covering the Managing Member and any Indemnitee, and no Member shall have any obligation to contribute to the capital of the Company or otherwise provide funds to enable the Company to fund its obligations under this <u>Section 7.7</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Reimbursement of Expenses</u>. Reasonable expenses expected to be incurred by an Indemnitee shall be paid or reimbursed by the Company in advance of the final disposition of

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any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative made or threatened against an Indemnitee upon receipt by the Company of (i) a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized in <u>Section 7.7.A</u> has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>No Limitation of Rights</u>. The indemnification provided by this <u>Section 7.7</u> shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Members, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Insurance</u>. The Company may purchase and maintain insurance on behalf of the Indemnitees and such other Persons as the Managing Member shall determine against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Company's activities, regardless of whether the Company would have the power to indemnify such Indemnitee or Person against such liability under the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>No Personal Liability for Members</u>. In no event may an Indemnitee subject any of the Members to personal liability by reason of the indemnification provisions set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Interested Transactions</u>. An Indemnitee shall not be denied indemnification in whole or in part under this <u>Section 7.7</u> because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.<u>Benefit</u>. The provisions of this <u>Section 7.7</u> are for the benefit of the Indemnitees, their employees, officers, directors, trustees, heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this <u>Section 7.7</u>, or any provision hereof, shall be prospective only and shall not in any way affect the limitation on the Company's liability to any Indemnitee under this <u>Section 7.7</u> as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or related to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.<u>Indemnification Payments Not Distributions</u>. If and to the extent any payments to the Managing Member pursuant to this <u>Section 7.7</u> constitute gross income to the Managing Member (as opposed to the repayment of advances made on behalf of the Company), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Company and all Members, and shall not be treated as distributions for purposes of computing the Members' Capital Accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I.<u>Exception to Indemnification</u>. Notwithstanding anything to the contrary in this Agreement, the Managing Member shall not be entitled to indemnification hereunder for any loss, claim, damage, liability or expense for which the Managing Member is obligated to indemnify the Company under any other agreement between the Managing Member and the Company.

**Section 7.8&nbsp;&nbsp;&nbsp;&nbsp;Liability of the Managing Member**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Notwithstanding anything to the contrary set forth in this Agreement, the Managing Member (which, for the purposes of this <u>Section 7.8</u>, shall include the directors and officers of the Managing Member) shall not be liable for monetary or other damages to the Company, any Members or any Assignees for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or of any act or omission unless the Managing Member acted in bad faith and the act or omission was material to the matter giving rise to the loss, liability or benefit not derived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Obligation to Consider Interests of Managing Member</u>. The Non-Managing Members expressly acknowledge that the Managing Member, in considering whether to dispose of any of the Company assets, shall take into account the tax consequences to the Managing Member Entity of any such disposition and shall have no liability whatsoever to the Company or any Non-Managing Member for decisions that are based upon or influenced by such tax consequences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>No Obligation to Consider Separate Interests of Non-Managing Members and Their Owners</u>. The Non-Managing Members expressly acknowledge that the Managing Member is acting on behalf of the Company and the Members of the Company, that the Managing Member is under no obligation to consider the separate interests of the Non-Managing Members (including, without limitation, the tax consequences to the Non-Managing Members or Assignees) or their owners in deciding whether to cause the Company to take (or decline to take) any actions, and that the Managing Member shall not be liable for monetary or other damages for losses sustained, liabilities incurred or benefits not derived by Non-Managing Members in connection with any decisions or actions made or taken or declined to be made or taken, provided that the Managing Member has acted pursuant to its authority under this Agreement. Any decisions or actions not taken by the Managing Member in accordance with the terms of this Agreement shall not constitute a breach of any duty owed to the Company or the Non-Managing Members by law or equity, fiduciary or otherwise. In the event of a conflict between the interests of the Non-Managing Members and the stockholders of the Managing Member, the Managing Member and its Affiliates may endeavor in good faith to resolve any conflicts in a manner that is not adverse to either the stockholders of the Managing Member or the Non-Managing Members; provided the Non-Managing Members acknowledge and agree that the Managing Member and its Affiliates may fulfill their duties to the Non-Managing Members by acting in the best interests of the stockholders of the Managing Member; and the Managing Member shall not be liable for monetary or other losses sustained, liabilities incurred or benefits not derived by the Non-Managing Members in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Actions of Agents</u>. Subject to its obligations and duties as Managing Member set forth in <u>Section 7.1.A</u>, the Managing Member may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The Managing Member shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Managing Member in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Effect of Amendment</u>. Notwithstanding any other provision contained herein, any amendment, modification or repeal of this <u>Section 7.8</u> or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Managing Member's liability to the Company and the Non-Managing Members under this <u>Section 7.8</u> as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Limitations of Fiduciary Duty</u>. <u>Sections 7.1.B</u>, <u>Section 7.7.E</u> and this <u>Section 7.8</u> and any other Section of this Agreement limiting the liability of the Managing Member and/or the directors and officers of the Managing Member shall constitute an express limitation of any

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duties, fiduciary or otherwise, that they would owe the Company or the Non-Managing Members if such duty would be imposed by any law, in equity or otherwise.

**Section 7.9&nbsp;&nbsp;&nbsp;&nbsp;Other Matters Concerning the Managing Member**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Reliance on Documents</u>. The Managing Member may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Reliance on Advisors</u>. The Managing Member may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which the Managing Member reasonably believes to be within such Person's professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Action Through Agents</u>. The Managing Member shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the Managing Member in the power of attorney, have full power and authority to do and perform all and every act and duty that is permitted or required to be done by the Managing Member hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Actions to Maintain REIT Status or Avoid Taxation of the Managing Member Entity</u>. Notwithstanding any other provisions of this Agreement or the Act, any action of the Managing Member on behalf of the Company or any decision of the Managing Member to refrain from acting on behalf of the Company undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of the Managing Member Entity to qualify as a REIT or (ii) to allow the Managing Member Entity to avoid incurring any liability for taxes under Sections 857 or 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Non-Managing Members.

**Section 7.10 Reliance by Third Parties**

Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Company shall be entitled to assume that the Managing Member has full power and authority, without consent or approval of any other Member or Person, to encumber, sell or otherwise use in any manner any and all assets of the Company, to enter into any contracts on behalf of the Company and to take any and all actions on behalf of the Company, and such Person shall be entitled to deal with the Managing Member as if the Managing Member were the Company's sole party in interest, both legally and beneficially. Each Non-Managing Member hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the Managing Member in connection with any such dealing, in each case except to the extent that such action imposes, or purports to impose, liability on the Non-Managing Member. In no event shall any Person dealing with the Managing Member or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the Managing Member or its representatives. Each and every certificate, document or other instrument executed on behalf of the Company by the Managing Member or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or

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instrument was duly authorized and empowered to do so for and on behalf of the Company, and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Company.

**Section 7.11&nbsp;&nbsp;&nbsp;&nbsp;Restrictions on Managing Member's Authority**

The Managing Member may not take any action in contravention of an express prohibition or limitation of this Agreement without the written Consent of (i) all Members adversely affected or (ii) such lower percentage of the Interests held by Non-Managing Members as may be specifically provided for under a provision of this Agreement or the Act. The preceding sentence shall not apply to any limitation or prohibition in this Agreement that expressly authorizes the Managing Member to take action (either in its discretion or in specified circumstances) so long as the Managing Member acts within the scope of such authority.

**Section 7.12&nbsp;&nbsp;&nbsp;&nbsp;Loans by Third Parties**

The Company may incur Debt, or enter into similar credit, guarantee, financing or refinancing arrangements for any purpose (including, without limitation, in connection with any acquisition of property and any borrowings from, or guarantees of Debt of the Managing Member or any of its Affiliates) with any Person upon such terms as the Managing Member determines appropriate.

**Section 7.13&nbsp;&nbsp;&nbsp;&nbsp;Separateness of the SAFStor Assets**

From and after the date of this Agreement the Managing Member shall cause the Company and each Subsidiary of the Company that owns, directly or indirectly, any SAFStor Assets, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.maintain its own records, books, resolutions, and agreements and satisfy customary corporate and other formalities, as applicable, in each case, in a manner sufficient to allow the Company to reasonably determine, from time to time, the fair market value of the SAFStor Assets, and provide such records, books, resolutions, and agreements to holders of Series C Units, along with any material updates thereto and other related materials, as reasonably requested by the holders of Series C Units;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.not permit any transaction between a Subsidiary of the Company that owns, directly or indirectly, any SAFStor Assets, on the one hand, and the Company or a Subsidiary of the Company that does not own, directly or indirectly, any SAFStor Assets, on the other hand, for the purpose of increasing the fair market value of the SAFStor Assets and decreasing the fair market value of the Company's other properties and assets (other than the SAFStor Assets); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.provide prompt written notice to the holders of Series C Units of any sale, assignment, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise of any of the SAFStor Assets.

In addition, from and after the date of this Agreement, the Managing Member shall not, and shall cause the Company and each of its Subsidiaries not to, without the written consent of the holders of a majority of the Series C Units, (i) make any further investment into the SAFStor Entities or the SAFStor Assets, (ii) merge any SAFStor Entity with or into the Managing Member or any of its other Subsidiaries or (iii) transfer or comingle any SAFStor Assets to or with the Managing Member or any of its other Subsidiaries, or properties or assets of the Managing Member or any of its other Subsidiaries, other than in each case in a manner which keeps such assets separately identifiable; <u>provided</u>, that the Managing Member shall be permitted to cause the Company and any of its Subsidiaries to enter into one or more Permitted Intercompany Loans.

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**Section 7.14&nbsp;&nbsp;&nbsp;&nbsp;SAFStor Valuation** 

No later than (a) thirty (30) days prior to any Liquidating Event of the Company under <u>Article XIII</u> involving a distribution to holders of Class B Units or (b) fifteen (15) days prior to any other event involving a distribution to holders of Class B Units, the Managing Member shall prepare and deliver to the holders of the Series C Units (i) a written notice setting forth the Managing Member's reasonable good faith calculation of the fair market value of the SAFStor Assets, together with reasonable supporting documentation therefor, and the expected amounts attributable to the proceeds received from or allocable to the SAFStor Assets (collectively, the "**<u>SAFStor Valuation</u>**") and (ii) a certificate, duly executed by an officer of the Managing Member, whereby such officer affirms that the SAFStor Valuation was calculated in good faith and that the Company and the Managing Member are, and have been, in compliance with their respective obligations under Section 7.13. For the avoidance of doubt, the SAFStor Valuation will account for the outstanding amount of any Permitted Intercompany Loans, as applicable. Following receipt of such SAFStor Valuation, (A) the holders of the Series C Units shall have access to such books and records relating to the SAFStor Valuation as such holders may reasonably request for the purpose of reviewing the SAFStor Valuation and (B) the holders of a majority of the Series C Units may elect, in lieu of accepting the Managing Member's determination of the SAFStor Valuation, to cause the Company to engage an impartial nationally recognized and qualified third-party valuation firm reasonably acceptable to the holders of a majority of the Series C Units to make a determination as to such SAFStor Valuation. The Company shall pay the costs and expenses of such valuation firm. The SAFStor Valuation, as provided by the Managing Member and agreed upon by the holders of a majority of the Series C Units or as finally determined by such qualified third-party valuation firm shall be deemed, for all purposes of this Agreement, including <u>Article XIII</u>, notwithstanding anything to the contrary herein, the value attributable to the SAFStor Assets from such Liquidation Event or otherwise, subject to, with respect to any such Liquidation Event, customary purchase price adjustments, escrows or indemnities in connection therewith, as applicable.

**ARTICLE VIII<br>RIGHTS AND OBLIGATIONS OF MEMBERS**

**Section 8.1Limitation of Liability**

The Members shall have no liability under this Agreement except as expressly provided in this Agreement, including <u>Section 10.5</u>, or under the Act.

**Section 8.2Management of Business**

No Member or Assignee (other than the Managing Member or any of its Affiliates, or any officer, director, employee, partner, agent or trustee of the Managing Member, the Company or any of their Affiliates, in their capacity as such) shall take part in the operation, management or control (within the meaning of the Act) of the Company's business, transact any business in the Company's name or have the power to sign documents for or otherwise bind the Company. The transaction of any such business by the Managing Member, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the Managing Member, the Company or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Non-Managing Members or Assignees under this Agreement.

**Section 8.3Outside Activities of Non-Managing Members**

Subject to <u>Section 7.5</u> hereof, and subject to any agreements entered into pursuant to <u>Section 7.6.B</u> hereof and to any other agreements entered into by a Non-Managing Member or its

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Affiliates with the Company or a Subsidiary, any Non-Managing Member and any officer, director, employee, agent, trustee, Affiliate or owner of any Non-Managing Member shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Company, including business interests and activities in direct or indirect competition with the Company. Neither the Company nor any Members shall have any rights by virtue of this Agreement in any business ventures of any Non-Managing Member or Assignee. None of the Non-Managing Members or any other Person shall have any rights by virtue of this Agreement or the limited liability company relationship established hereby in any business ventures of any other Person (other than the Managing Member to the extent expressly provided herein), and no Person (other than the Managing Member) shall have any obligation pursuant to this Agreement to offer any interest in any such business venture to the Company, any Non-Managing Member or any such other Person, even if such opportunity is of a character which, if presented to the Company, any Non-Managing Member or such other Person, could be taken by such Person.

**Section 8.4Return of Capital**

Except pursuant to the right of redemption set forth in <u>Section 8.6</u>, no Member shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Company as provided herein. No Member or Assignee shall have priority over any other Member or Assignee either as to the return of Capital Contributions (except as permitted by <u>Section 4.2.A</u>) or, except to the extent provided by **<u>Exhibit C</u>** or as permitted by <u>Sections 4.2.A</u>, <u>5.1.B</u>, <u>6.1.A</u> and <u>6.1.B</u>, or otherwise expressly provided in this Agreement, as to profits, losses, distributions or credits.

**Section 8.5Rights of Non-Managing Members Relating to the Company**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. In addition to other rights provided by this Agreement or by the Act, and except as limited by <u>Section 8.5.D</u>, each Non-Managing Member shall have the right, for a purpose reasonably related to such Non-Managing Member's interest as a member in the Company, upon written demand with a statement of the purpose of such demand and at such Non-Managing Member's own expense:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)to obtain a copy of the Company's U.S. federal, state and local income tax returns for each Fiscal Year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)to obtain a current list of the name and last known business, residence or mailing address of each Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)to obtain a copy of this Agreement and the Certificate of Formation and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Formation and all amendments thereto have been executed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)to obtain true and full information regarding the amount of cash and a description and statement of the Agreed Value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future, and the date on which each Member became a Member; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)other information regarding the affairs of the Company as is just and reasonable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Notice of Conversion Factor</u>. The Company shall notify each Non-Managing Member upon request (i) of the then current Conversion Factor and (ii) of any changes to the Conversion Factor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Confidentiality</u>. Notwithstanding any other provision of this <u>Section 8.5</u>, the Managing Member may keep confidential from the Non-Managing Members, for such period of time as the Managing Member determines in its sole and absolute discretion, any information that (i) the Managing Member reasonably believes to be in the nature of trade secrets or other information the disclosure of which the Managing Member in good faith believes is not in the best interests of the Company or could damage the Company or its business or (ii) the Company is required by law or by agreements with unaffiliated third parties to keep confidential.

**Section 8.6Redemption Right**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Common Units</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Subject to <u>Section 8.6.C</u> and <u>Section 11.6.E</u>, at any time on or after one (1) year following the date of the initial issuance thereof (which, in the event of the transfer of a Common Unit, shall be deemed to be the date that the Common Unit was issued to the original recipient thereof for purposes of this <u>Section 8.6</u>), the holder of a Common Unit (if other than the Managing Member or any Subsidiary of the Managing Member), including any LTIP Units that are converted into Class A Units, shall have the right (the "**<u>Redemption Right</u>**") to require the Company to redeem such Common Unit, with such redemption to occur on the Specified Redemption Date and at a redemption price equal to and in the form of the Cash Amount to be paid by the Company. Any such Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Company (with a copy to the Managing Member) by the holder of the Units who is exercising the Redemption Right (the "**<u>Redeeming Member</u>**"). A Non-Managing Member may exercise the Redemption Right from time to time, without limitation as to frequency, with respect to part or all of the Common Units that it owns, as selected by the Non-Managing Member, provided, however, that a Non-Managing Member may not exercise the Redemption Right for fewer than one thousand (1,000) Common Units of a particular class unless such Redeeming Member then holds fewer than one thousand (1,000) Common Units of that class, in which event the Redeeming Member must exercise the Redemption Right for all of the Common Units held by such Redeeming Member in that class, and provided further that, with respect to a Non-Managing Member which is an entity, such Non-Managing Member may exercise the Redemption Right for fewer than one thousand (1,000) Common Units without regard to whether or not such Non-Managing Member is exercising the Redemption Right for all of the Common Units held by such Non-Managing Member as long as such Non-Managing Member is exercising the Redemption Right on behalf of one or more of its equity owners in respect of one hundred percent (100%) of such equity owners' interests in such Non-Managing Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The Redeeming Member shall have no right with respect to any Common Units so redeemed to receive any distributions paid in respect of a Company Record Date for distributions in respect of Common Units after the Specified Redemption Date with respect to such Common Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The Assignee of any Non-Managing Member may exercise the rights of such Non-Managing Member pursuant to this <u>Section 8.6</u>, and such Non-Managing Member shall be deemed to have assigned such rights to such Assignee and shall be

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bound by the exercise of such rights by such Non-Managing Member's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such Non-Managing Member, the Cash Amount shall be paid by the Company directly to such Assignee and not to such Non-Managing Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)If the Managing Member Entity provides notice to the Non-Managing Members, pursuant to <u>Section 8.5.C</u> hereof, the Redemption Right shall be exercisable, without regard to whether the Common Units have been outstanding for any specified period, during the period commencing on the date on which the Managing Member Entity provides such notice and ending on the record date to determine stockholders eligible to receive such distribution or to vote upon the approval of such merger, sale or other extraordinary transaction (or, if no such record date is applicable, at least twenty (20) Business Days before the consummation of such merger, sale or other extraordinary transaction). If this subparagraph (iv) applies, the Specified Redemption Date is the date on which the Company and the Managing Member receive notice of exercise of the Redemption Right, rather than ten (10) Business Days after receipt of the Notice of Redemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Managing Member Entity Assumption of Redemption Right</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)If a Non-Managing Member has delivered a Notice of Redemption, the Managing Member Entity may, in its sole and absolute discretion (subject to the limitations on ownership and transfer of Shares set forth in the Charter or, if the Managing Member is not the Managing Member Entity, the organizational documents of the Managing Member Entity), elect to assume directly and satisfy a Redemption Right. If such election is made by the Managing Member, the Company shall determine whether the Managing Member Entity shall pay the Redemption Amount in the form of the Cash Amount or the Shares Amount. The Company's decision regarding whether such payment shall be made in the form of the Cash Amount or the Shares Amount shall be made by the Managing Member, in its capacity as the managing member of the Company and in its sole and absolute discretion. Upon such payment by the Managing Member Entity, the Managing Member Entity shall acquire the Common Units offered for redemption by the Redeeming Member and shall be treated for all purposes of this Agreement as the owner of such Common Units. Unless the Managing Member Entity, in its sole and absolute discretion, shall exercise its right to assume directly and satisfy the Redemption Right, the Managing Member Entity shall not have any obligation to the Redeeming Member or to the Company with respect to the Redeeming Member's exercise of the Redemption Right. If the Managing Member Entity shall exercise its right to assume directly and satisfy the Redemption Right in the manner described in the first sentence of this <u>Section 8.6.B</u> and the Managing Member Entity shall fully perform its obligations in connection therewith, the Company shall have no right or obligation to pay any amount to the Redeeming Member with respect to such Redeeming Member's exercise of the Redemption Right, and each of the Redeeming Member, the Company and the Managing Member Entity shall, for U.S. federal income tax purposes, treat the transaction between the Managing Member Entity and the Redeeming Member as a sale of the Redeeming Member's Common Units to the Managing Member Entity. Nothing contained in this <u>Section 8.6.B</u> shall imply any right of the Managing Member Entity to require any Non-Managing Member to exercise the Redemption Right afforded to such Non-Managing Member pursuant to <u>Section 8.6.A</u>. Any Common Units acquired by the Managing Member pursuant to the Redeeming Member's exercise of the Redemption Right shall retain such classification or series designation attributable to such Common Units from and after the acquisition by the Managing Member thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If the Managing Member determines to pay the Redeeming Member the Redemption Amount in the form of Shares, the total number of Shares to be paid to the Redeeming Member in exchange for the Redeeming Member's Common Units shall be the applicable Shares Amount. If this amount is not a whole number of Shares, the Redeeming Member shall be paid (i) that number of Shares which equals the nearest whole number less than such amount plus (ii) an amount of cash which the Managing Member determines, in its reasonable discretion, to represent the fair value of the remaining fractional Share which would otherwise be payable to the Redeeming Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Each Redeeming Member agrees to execute such documents or provide such information or materials as the Managing Member Entity may reasonably require in connection with the issuance of Shares upon exercise of the Redemption Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Exceptions to Exercise of Redemption Right</u>. Notwithstanding the provisions of <u>Sections 8.6.A</u> and <u>8.6.B</u>, a Member shall not be entitled to exercise the Redemption Right pursuant to <u>Section 8.6.A</u> if (but only as long as) the delivery of Shares to such Member on the Specified Redemption Date would (i) be prohibited under the restrictions on the ownership or transfer of Shares in the Charter (or, if the Managing Member is not the Managing Member Entity, the organizational documents of the Managing Member Entity), (ii) be prohibited under applicable federal or state securities laws or regulations (in each case regardless of whether the Managing Member would in fact assume and satisfy the Redemption Right), (iii) without limiting the foregoing, result in the Managing Member's Shares being owned by fewer than 100 persons (determined without reference to rules of attribution), (iv) without limiting the foregoing, result in the Managing Member Entity being "closely held" within the meaning of Section 856(h) of the Code or cause the Managing Member to own, actually or constructively, ten percent (10%) or more of the ownership interests in a tenant of the Managing Member, the Company or a Subsidiary of the Company's real property within the meaning of Section 856(d)(2)(B) of the Code, and (v) without limiting the foregoing, cause the acquisition of the Shares by the Redeeming Member to be "integrated" with any other distribution of Shares for purposes of complying with the registration provision of the Securities Act. Notwithstanding the foregoing, the Managing Member may, in its sole and absolute discretion, waive such prohibition set forth in this <u>Section 8.6.C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>No Liens on Common Units Delivered for Redemption</u>. Each Non-Managing Member covenants and agrees that all Common Units delivered for redemption shall be delivered to the Company or the Managing Member Entity, as the case may be, free and clear of all liens; and, notwithstanding anything contained herein to the contrary, neither the Managing Member Entity nor the Company shall be under any obligation to acquire Common Units which are or may be subject to any liens. Each Non-Managing Member further agrees that, if any state or local property transfer tax is payable as a result of the transfer of its Common Units to the Company or the Managing Member Entity, such Non-Managing Member shall assume and pay such transfer tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Additional Interests; Modification of Holding Period</u>. If the Company issues Interests to any Additional Member pursuant to <u>Article IV</u>, the Managing Member shall make such revisions to this <u>Section 8.6</u> as it determines are necessary to reflect the issuance of such Interests (including setting forth any restrictions on the exercise of the Redemption Right with respect to such Interests which differ from those set forth in this Agreement), provided that no such revisions shall materially adversely affect the rights of any other Non-Managing Member to exercise its Redemption Right without that Non-Managing Member's prior written consent. In addition, the Managing Member may, with respect to any holder or holders of Common Units, at any time and from time to time, as it shall determine in its sole and absolute discretion, (i) reduce or waive the length of the period prior to which such holder or holders may not exercise the

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Redemption Right or (ii) reduce or waive the length of the period between the exercise of the Redemption Right and the Specified Redemption Date.

**ARTICLE IX<br>BOOKS, RECORDS, ACCOUNTING AND REPORTS**

**Section 9.1Records and Accounting**

The Managing Member shall keep or cause to be kept at the principal office of the Company appropriate books and records with respect to the Company's business, including, without limitation, all books and records necessary to provide to the Non-Managing Members any information, lists and copies of documents required to be provided pursuant to <u>Section 9.3</u>. Any records maintained by or on behalf of the Company in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device, provided, however, that the records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Company shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles.

**Section 9.2&nbsp;&nbsp;&nbsp;&nbsp;Fiscal Year**

The fiscal year of the Company shall be the calendar year.

**Section 9.3&nbsp;&nbsp;&nbsp;&nbsp;Reports**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Annual Reports</u>. As soon as practicable, but in no event later than the date on which the Managing Member Entity mails its annual report to its stockholders, the Managing Member Entity shall cause to be mailed to each Non-Managing Member an annual report, as of the close of the most recently ended Fiscal Year, containing financial statements of the Company, or of the Managing Member Entity (and, if different, the Managing Member) if such statements are prepared on a consolidated basis with the Company, for such Fiscal Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized firm of independent public accountants selected by the Managing Member Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Quarterly Reports</u>. If and to the extent that the Managing Member Entity mails quarterly reports to its stockholders, as soon as practicable, but in no event later than the date on which such reports are mailed, the Managing Member Entity shall cause to be mailed to each Non-Managing Member a report containing unaudited financial statements, as of the last day of such fiscal quarter, of the Company, or of the Managing Member Entity (and, if different, the Managing Member) if such statements are prepared on a consolidated basis with the Company, and such other information as may be required by applicable law or regulation, or as the Managing Member determines to be appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.The Managing Member shall have satisfied its obligations under <u>Section 9.3.A</u> and <u>Section 9.3.B</u> by posting or making available the reports required by this <u>Section 9.3</u> on the website maintained from time to time by the Company or the Managing Member Entity, provided that such reports are able to be printed or downloaded from such website.

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**ARTICLE X<br>TAX MATTERS**

**Section 10.1&nbsp;&nbsp;&nbsp;&nbsp; Tax Classification; Preparation of Tax Returns**

At all times that the Company has a single Member for federal income tax purposes, it is the intent of the Members that the Company shall be operated in a manner consistent with its treatment as a "disregarded entity" for federal, state and local income and franchise tax purposes. At all times that the Company has more than one Member for federal income tax purposes, it is the intent of the Members that the Company shall be operated in a manner consistent with its treatment as a "partnership" for federal, state and local income and franchise tax purposes. The Managing Member shall arrange for the preparation and timely filing of all returns of Company income, gains, deductions, losses and other items required of the Company for U.S. federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by Non-Managing Members for U.S. federal and state income tax reporting purposes.

**Section 10.2&nbsp;&nbsp;&nbsp;&nbsp;Tax Elections**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Except as otherwise provided herein, the Managing Member shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code (including the election under Section 754 of the Code). The Managing Member shall have the right to seek to revoke any such election upon the Managing Member's determination in its sole and absolute discretion that such revocation is in the best interests of the Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.Without limiting the foregoing, the Members, intending to be legally bound, hereby authorize the Managing Member, on behalf of the Company, to make an election (the "**<u>LV Safe Harbor Election</u>**") to have the "liquidation value" safe harbor provided in Proposed Treasury Regulation § 1.83-3(l) and the Proposed Revenue Procedure set forth in Internal Revenue Service Notice 2005-43, as such safe harbor may be modified when such proposed guidance is issued in final form or as amended by subsequently issued guidance (the "**<u>LV Safe Harbor</u>**"), apply to any interest in the Company transferred to a service provider while the LV Safe Harbor Election remains effective, to the extent such interest meets the LV Safe Harbor requirements (collectively, such interests are referred to as "**<u>LV Safe Harbor Interests</u>**"). The Managing Member is authorized and directed to execute and file the LV Safe Harbor Election on behalf of the Company and the Members. The Company and the Members (including any person to whom an interest in the Company is transferred in connection with the performance of services) hereby agree to comply with all requirements of the LV Safe Harbor (including forfeiture allocations) with respect to all LV Safe Harbor Interests and to prepare and file all U.S. federal income tax returns reporting the tax consequences of the issuance and vesting of LV Safe Harbor Interests consistent with such final LV Safe Harbor guidance. The Company is also authorized to take such actions as are necessary to achieve, under the LV Safe Harbor, the effect that the election and compliance with all requirements of the LV Safe Harbor referred to above would be intended to achieve under Proposed Treasury Regulation § 1.83-3, including amending this Agreement.

**Section 10.3&nbsp;&nbsp;&nbsp;&nbsp;Tax Matters Partner; Partnership Representative**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For taxable years of the Company beginning prior to January 1, 2018, the Managing Member shall be the "tax matters partner" of the Company under Section 6223(a) of the Code (as in effect prior to the effective date of the Bipartisan Budget Act

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of 2015 (the "**<u>Budget Act</u>**")) for U.S. federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code (as in effect prior to the effective date of the Budget Act), upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Company for any such taxable year, the tax matters partner shall furnish the IRS with the name, address, taxpayer identification number and profit interest of each of the Non-Managing Members and any Assignees; provided, however, that such information is provided to the Company by the Non-Managing Members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For taxable years of the Company beginning after December 31, 2017, the Managing Member shall be the "partnership representative" of the Company under Section 6231(a) of the Code for U.S. federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Powers</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)With respect to any audit or proceeding for a taxable year of the Company beginning prior to January 1, 2018, the tax matters partner is authorized, but not required:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Company items required to be taken into account by a Member for income tax purposes (such administrative proceedings being referred to as a "tax audit" and such judicial proceedings being referred to as "judicial review"), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Members, except that such settlement agreement shall not bind any Member (i) who (within the time prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Member or (ii) who is a "notice partner" (as defined in Section 6231(a)(8) of the Code (as in effect prior to the effective date of the Budget Act)) or a member of a "notice group" (as defined in Section 6223(b)(2) of the Code (as in effect prior to the effective date of the Budget Act));

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)if a notice of a final administrative adjustment at the Company level of any item required to be taken into account by a Member for tax purposes (a "**<u>final adjustment</u>**") is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the filing of a complaint for refund with the United States Claims Court or the District Court of the United States for the district in which the Company's principal place of business is located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)to intervene in any action brought by any other Member for judicial review of a final adjustment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Member for tax purposes, or an item affected by such item;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)to take any other action on behalf of the Members of the Company in connection with any tax audit or judicial review proceeding, to the extent permitted by applicable law or regulations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)to take any other action required by the Code and Regulations in connection with its role as tax matters partner.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)With respect to any audit or proceeding for a taxable year of the Company beginning after December 31, 2017, the partnership representative is authorized, but not required (except as required under the applicable provisions of the Code), to take any action contemplated by Sections 6221 through 6241 of the Code. All Members (and former Members) agree to cooperate with, and to take all reasonable actions requested by, the partnership representative to avoid or reduce any tax imposed under Code Section 6225, including cooperating with any election under Code Section 6226, or to otherwise allow the Company and the partnership representative to comply with the applicable provisions of the Code.

The taking of any action and the incurring of any expense by the tax matters partner or partnership representative, as applicable, in connection with any audit or proceeding referred to in this <u>Section 10.3.B</u>, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner or partnership representative, as applicable, and the provisions relating to indemnification of the Managing Member set forth in <u>Section 7.7</u> shall be fully applicable to the tax matters partner or partnership representative, as applicable, in its capacity as such.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Reimbursement</u>. The tax matters partner or partnership representative, as applicable, shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner or partnership representative, as applicable, in performing its duties as such (including legal and accounting fees and expenses) shall be borne by the Company. Nothing herein shall be construed to restrict the Company from engaging an accounting firm and/or law firm to assist the tax matters partner or partnership representative, as applicable, in discharging its duties hereunder, so long as the compensation paid by the Company for such services is reasonable. Each Member hereby agrees to reimburse the Company from and against any "imputed underpayment" liability of the Company under Section 6225 of the Code that is the result of adjustments to the Member's distributive share of Company items of income, gain, loss, deduction, or credit for a Company taxable year, including, but not limited to any interest, penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share. The obligations of a Member under this <u>Section 10.3.C</u> shall survive such Member's sale or other disposition of its Interests in the Company and the termination, dissolution, liquidation, or winding up of the Company.

**Section 10.4&nbsp;&nbsp;&nbsp;&nbsp;Organizational Expenses**

The Company shall elect to deduct expenses as provided in Section 709 of the Code.

**Section 10.5&nbsp;&nbsp;&nbsp;&nbsp;Withholding**

Each Non-Managing Member hereby authorizes the Company to withhold from or pay on behalf of or with respect to such Non-Managing Member any amount of U.S. federal, state, local, or foreign taxes that the Managing Member determines that the Company is required to withhold or pay with respect to any amount distributable, allocable or otherwise transferred to such Non-Managing Member pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Company pursuant to Sections 1441, 1442, 1445, 1446 or 1471-1474, inclusive, of the Code and the Regulations thereunder. Any amount paid on behalf of

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or with respect to a Non-Managing Member (other than amounts actually withheld from payments to a Non-Managing Member) shall constitute a loan by the Company to such Non-Managing Member, which loan shall be repaid by such Non-Managing Member within fifteen (15) days after notice from the Managing Member that such payment must be made unless (i) the Company withholds such payment from a distribution which would otherwise be made to the Non-Managing Member or (ii) the Managing Member determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Company which would, but for such payment, be distributed to the Non-Managing Member. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as having been distributed or otherwise paid to such Non-Managing Member. Each Non-Managing Member hereby unconditionally and irrevocably grants to the Company a security interest in such Non Managing Member's Interests to secure such Non-Managing Member's obligation to pay to the Company any amounts required to be paid pursuant to this <u>Section 10.5</u>. If a Non-Managing Member fails to pay any amounts owed to the Company pursuant to this <u>Section 10.5</u> when due, the Managing Member may, in its sole and absolute discretion, elect to make the payment to the Company on behalf of such defaulting Non-Managing Member, and in such event shall be deemed to have loaned such amount to such defaulting Non-Managing Member and shall succeed to all rights and remedies of the Company as against such defaulting Non-Managing Member (including, without limitation, the right to receive distributions). Any amounts payable by a Non-Managing Member hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in The Wall Street Journal, plus four (4) percentage points (but not higher than the maximum rate that may be charged under law) from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full. Each Non-Managing Member shall take such actions as the Company or the Managing Member shall request to perfect or enforce the security interest created hereunder.

**ARTICLE XI<br>TRANSFERS AND WITHDRAWALS**

**Section 11.1&nbsp;&nbsp;&nbsp;&nbsp;Transfer**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Definition</u>. The term "transfer," when used in this <u>Article XI</u> with respect to a Unit, shall be deemed to refer to a transaction by which the Member purports to assign all or any part of its Interest to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise. The term "transfer" when used in this <u>Article XI</u> does not include any redemption or repurchase of Units by the Company from a Member or acquisition of Units from a Non-Managing Member by the Managing Member Entity pursuant to <u>Section 8.6</u> or otherwise. No part of the Unit of a Member shall be subject to the claims of any creditor, any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>General</u>. No Unit shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this <u>Article XI</u>. Any transfer or purported transfer of a Unit not made in accordance with this <u>Article XI</u> shall be null and void.

**Section 11.2&nbsp;&nbsp;&nbsp;&nbsp;Transfers of Interests of Managing Member**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Other than to an Affiliate of the Managing Member Entity, the Managing Member may not transfer any of its Units or other Interests except in connection with (i) a transaction permitted under <u>Section 11.2.B</u>, (ii) a transfer to any wholly owned Subsidiary of the Managing Member or the owner of all of the ownership interests of the Managing Member Entity, or (iii) as otherwise expressly permitted under this Agreement, nor shall the Managing

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Member withdraw as Managing Member except in connection with a transaction permitted under <u>Section 11.2.B</u> or any transfer, merger, consolidation, or other combination permitted under clause (ii) of this <u>Section 11.2.A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Termination Transactions</u>. The Managing Member Entity shall not engage in any merger (including, without limitation, a triangular merger), consolidation or other combination with or into another Person (other than any transaction permitted by <u>Section 11.2.A</u>), any sale of all or substantially all of its assets or any reclassification, recapitalization or change of outstanding Shares (other than a change in par value, or from par value to no par value, or as a result of a subdivision or combination as described in the definition of "**<u>Conversion Factor</u>**") (a "**<u>Termination Transaction</u>**"), unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Consent of the Non-Managing Members is obtained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)following such Termination Transaction, substantially all of the assets directly or indirectly owned by the surviving entity are owned directly or indirectly by the Company or another limited partnership or limited liability company which is the survivor of a merger, consolidation or combination of assets with the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)in connection with such Termination Transaction all Members either will receive, or will have the right to receive, for each Unit an amount of cash, securities, or other property equal to the product of the Conversion Factor and the greatest amount of cash, securities or other property paid to a holder of Shares, if any, corresponding to such Unit in consideration of one such Share at any time during the period from and after the date on which the Termination Transaction is consummated; provided, however, that, if in connection with the Termination Transaction, a purchase, tender or exchange offer shall have been made to and accepted by the holders of the percentage required for the approval of mergers under the organizational documents of the Managing Member Entity, each holder of Units shall receive, or shall have the right to receive without any right of Consent set forth above in this <u>Section 11.2.B</u>, the greatest amount of cash, securities, or other property which such holder would have received had it exercised the Redemption Right and received Shares in exchange for its Units immediately prior to the expiration of such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange offer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Creation of New Managing Member</u>. The Managing Member shall not enter into an agreement or other arrangement providing for or facilitating the creation of a managing member other than the Managing Member, unless the successor managing member executes and delivers a counterpart to this Agreement in which such managing member agrees to be fully bound by all of the terms and conditions contained herein that are applicable to a Managing Member.

**Section 11.3&nbsp;&nbsp;&nbsp;&nbsp;Non-Managing Members' Rights to Transfer**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Except to the extent expressly permitted in <u>Sections 11.3.B</u> and <u>11.3.C</u> or in connection with the exercise of a Redemption Right pursuant to <u>Section 8.6</u>, a Non-Managing Member may not transfer all or portion of its Interest, or any of such Non-Managing Member's rights as a Non-Managing Member, without the prior written consent of the Managing Member, which consent may be withheld in the Managing Member's sole and absolute discretion. Any transfer otherwise permitted under <u>Sections 11.3.B</u> and <u>11.3.C</u> shall be subject to the conditions set forth in <u>Section 11.3.D</u> and <u>11.3.E</u>, and all permitted transfers shall be subject to <u>Section 11.5</u> and <u>Section 11.6</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Incapacitated Non-Managing Member</u>. If a Non-Managing Member is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator or receiver of such Non-Managing Member's estate shall have all the rights of a Non-Managing Member, but not more rights than those enjoyed by other Non-Managing Members, for the purpose of settling or managing the estate and such power as the Incapacitated Non-Managing Member possessed to transfer all or any part of its interest in the Company. The Incapacity of a Non-Managing Member, in and of itself, shall not dissolve or terminate the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Permitted Transfers</u>. A Non-Managing Member may transfer, with or without the consent of the Managing Member, all or a portion of its Interest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)in the case of a Non-Managing Member who is an individual, to a member of his or her Immediate Family, any trust formed for the benefit of himself or herself and/or members of his or her Immediate Family, or any Company, limited liability company, joint venture, corporation or other business entity comprised only of himself or herself and/or members of his or her Immediate Family and entities the ownership interests in which are owned by or for the benefit of himself or herself and/or members of his or her Immediate Family;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)in the case of a Non-Managing Member which is a trust, to the beneficiaries of such trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)in the case of a Non-Managing Member which is a partnership, limited liability company, joint venture, corporation or other business entity to which Units were transferred pursuant to clause (i) above, to its partners, owners or stockholders, as the case may be, who are members of the Immediate Family of or are actually the Person(s) who transferred Units to it pursuant to clause (i) above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)in the case of a Non-Managing Member which acquired Units as of the date hereof and which is a partnership, limited liability company, joint venture, corporation or other business entity, to its partners, owners, stockholders or Affiliates thereof, as the case may be, or the Persons owning the beneficial interests in any of its partners, owners or stockholders or Affiliates thereof (it being understood that this clause (iv) will apply to all of each Person's Interests whether the Units relating thereto were acquired on the date hereof or hereafter);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)in the case of a Non-Managing Member which is a partnership, limited liability company, joint venture, corporation or other business entity other than any of the foregoing described in clause (iii) or (iv), in accordance with the terms of any agreement between such Non-Managing Member and the Company pursuant to which such Interest was issued;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)pursuant to a gift or other transfer without consideration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)pursuant to applicable laws of descent or distribution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)to another Non-Managing Member; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)pursuant to a grant of security interest or other encumbrance effectuated in a bona fide transaction or as a result of the exercise of remedies related thereto, subject to the provisions of <u>Section 11.3.E</u> hereof.

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A trust or other entity will be considered formed "for the benefit" of a Member's Immediate Family even though some other Person has a remainder interest under or with respect to such trust or other entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>No Transfers Violating Securities Laws</u>. The Managing Member may prohibit any transfer of Units by a Non-Managing Member unless it receives a written opinion of legal counsel (which opinion and counsel shall be reasonably satisfactory to the Company) to such Non-Managing Member to the effect that such transfer would not require filing of a registration statement under the Securities Act or would not otherwise violate any federal or state securities laws or regulations applicable to the Company or the Unit or, at the option of the Company, an opinion of legal counsel to the Company to the same effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>No Transfers to Holders of Nonrecourse Liabilities</u>. No pledge or transfer of any Units may be made to a lender to the Company or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Company whose loan otherwise constitutes a Nonrecourse Liability unless (i) the Managing Member is provided prior written notice thereof and (ii) the lender enters into an arrangement with the Company and the Managing Member to exchange or redeem for the Redemption Amount any Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Company for purposes of allocating liabilities to such lender under Section 752 of the Code.

**Section 11.4&nbsp;&nbsp;&nbsp;&nbsp;Substituted Members**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Consent of Managing Member</u>. No Non-Managing Member shall have the right to substitute a transferee as a Non-Managing Member in its place. The Managing Member shall, however, have the right to consent to the admission of a transferee of the interest of a Non-Managing Member pursuant to this <u>Section 11.4</u> as a Substituted Member, which consent may be given or withheld by the Managing Member in its sole and absolute discretion. The Managing Member's failure or refusal to permit a transferee of any such interests to become a Substituted Member shall not give rise to any cause of action against the Company, the Managing Member or any Member. The Managing Member hereby grants its consent to the admission as a Substituted Member to any bona fide financial institution that loans money or otherwise extends credit to a holder of Units and thereafter becomes the owner of such Units pursuant to the exercise by such financial institution of its rights under a pledge of such Units granted in connection with such loan or extension of credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Rights of Substituted Member</u>. A transferee who has been admitted as a Substituted Member in accordance with this <u>Article XI</u> shall have all the rights and powers and be subject to all the restrictions and liabilities of a Non-Managing Member under this Agreement. The admission of any transferee as a Substituted Member shall be conditioned upon the transferee executing and delivering to the Company an acceptance of all the terms and conditions of this Agreement (including, without limitation, the provisions of <u>Section 15.11</u>) and such other documents or instruments as may be required to effect the admission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Member Registry</u>. Upon the admission of a Substituted Member, the Managing Member shall update the Member Registry in the books and records of the Company as it deems necessary to reflect such admission in the Member Registry.

**Section 11.5&nbsp;&nbsp;&nbsp;&nbsp;Assignees**

If the Managing Member, in its sole and absolute discretion, does not consent to the admission of any permitted transferee under <u>Section 11.3</u> as a Substituted Member, as described in <u>Section 11.4</u>, such transferee shall be considered an Assignee for purposes of this Agreement.

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An Assignee shall be entitled to all the rights of an assignee of a limited liability company interest under the Act, including the right to receive distributions from the Company and the allocable shares of Net Income, Net Losses and Recapture Income and all items of income, gain, loss, deduction and credit of the Company attributable to the Units assigned to such transferee, and shall have the rights granted to the Non-Managing Members under <u>Section 8.6</u>, but shall not be deemed to be a holder of Units for any other purpose under this Agreement, and shall not be entitled to vote such Units in any matter presented to the Non-Managing Members for a vote (such Units being deemed to have been voted on such matter in the same proportion as all other Units held by Non-Managing Members are voted). If any such transferee desires to make a further assignment of any such Units, such transferee shall be subject to all the provisions of this <u>Article XI</u> to the same extent and in the same manner as any Non-Managing Member desiring to make an assignment of Units.

**Section 11.6&nbsp;&nbsp;&nbsp;&nbsp;General Provisions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Withdrawal of Non-Managing Member</u>. No Non-Managing Member may withdraw from the Company other than as a result of a permitted transfer of all of such Non-Managing Member's Units in accordance with this <u>Article XI</u> or pursuant to redemption of all of its Units under <u>Section 8.6</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Termination of Status as Non-Managing Member</u>. Any Non-Managing Member who shall transfer all of its Units in a transfer permitted pursuant to this <u>Article XI</u> or pursuant to redemption of all of its Units under <u>Section 8.6</u> shall cease to be a Non-Managing Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Timing of Transfers</u>. Transfers pursuant to this <u>Article XI</u> may only be made upon three (3) Business Days prior notice to the Managing Member, unless the Managing Member otherwise agrees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Allocations</u>. If any Interest is transferred during any quarterly segment of the Company's Fiscal Year in compliance with the provisions of this <u>Article XI</u> or redeemed or transferred pursuant to <u>Section 8.6</u>, Net Income, Net Losses, each item thereof and all other items attributable to such interest for such fiscal year shall be divided and allocated between the transferor Member and the transferee Member by taking into account their varying interests during the fiscal year in accordance with Section 706(d) of the Code and corresponding Regulations, using the interim closing of the books method (unless the Managing Member, in its sole and absolute discretion, elects to adopt a daily, weekly, or a monthly proration period, in which event Net Income, Net Losses, each item thereof and all other items attributable to such interest for such fiscal year shall be prorated based upon the applicable method selected by the Managing Member). Solely for purposes of making such allocations, each of such items for the calendar month in which the transfer or redemption occurs shall be allocated to the Person who is a Member as of midnight on the last day of said month. All distributions of Available Cash attributable to any Unit with respect to which the Company Record Date is before the date of such transfer, assignment or redemption shall be made to the transferor Member or the Redeeming Member, as the case may be, and, in the case of a transfer or assignment other than a redemption, all distributions of Available Cash thereafter attributable to such Unit shall be made to the transferee Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Additional Restrictions</u>. Notwithstanding anything to the contrary herein, and in addition to any other restrictions on transfer herein contained, including, without limitation, the provisions of <u>Article VII</u> and this <u>Article XI</u>, in no event may any transfer or assignment of an Interest by any Member (including pursuant to <u>Section 8.6</u>) be made without the express consent of the Managing Member, in its sole and absolute discretion, (i) to any person or entity who lacks the legal right, power or capacity to own an Interest; (ii) in violation of applicable law; (iii) of any component portion of an Interest, such as the Capital Account, or rights to distributions,

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separate and apart from all other components of an Interest; (iv) if in the opinion of legal counsel to the Company there is a significant risk that such transfer would cause a termination of the Company for U.S. federal or state income tax purposes (except as a result of the redemption or exchange for Shares of all Units held by all Non-Managing Members other than the Managing Member, the Managing Member Entity, or any Subsidiary of either, or pursuant to a transaction expressly permitted under <u>Section 7.11B</u> or <u>Section 11.2</u>); (v) if in the opinion of counsel to the Company, there is a significant risk that such transfer would cause the Company to cease to be classified as a partnership for federal income tax purposes (except as a result of the redemption or exchange for Shares of all Units held by all Non-Managing Members other than the Managing Member, the Managing Member Entity or any Subsidiary of either, or pursuant to a transaction expressly permitted under <u>Section 7.11B</u> or <u>Section 11.2</u>); (vi) if such transfer requires the registration of such Interest pursuant to any applicable federal or state securities laws; (vii) if such transfer is effectuated through an "established securities market" or a "secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code and the Regulations thereunder or such transfer causes the Company to become a "publicly traded partnership," as such term is defined in Section 469(k)(2) or Section 7704(b) of the Code (provided, however, that, this clause (vii) shall not be the basis for limiting or restricting in any manner the exercise of the Redemption Right under <u>Section 8.6</u> unless, and only to the extent that, outside tax counsel provides to the Managing Member an opinion to the effect that, in the absence of such limitation or restriction, there is a significant risk that the Company will be treated as a "publicly traded partnership" and, by reason thereof, taxable as a corporation for U.S. federal income tax purposes); (viii) if such transfer subjects the Company or the activities of the Company to regulation under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended; (ix) if such transfer could adversely affect the ability of the Managing Member Entity to remain qualified as a REIT; or (x) if in the opinion of legal counsel for the transferring Member (which opinion and counsel shall be reasonable satisfactory to the Company) or legal counsel for the Company, there is a risk that such transfer would cause the Managing Member Entity to fail to remain qualified as a REIT or subject the Managing Member Entity to any additional taxes under Section 857 or Section 4981 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Avoidance of "Publicly Traded Partnership" Status</u>. The Managing Member shall monitor the transfers of interests in the Company to determine (i) if such interests are being traded on an "established securities market" or a "secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code and (ii) whether additional transfers of interests would result in the Company being unable to qualify for at least one of the "safe harbors" set forth in Regulations Section 1.7704-1 (or such other guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as "readily tradable on a secondary market (or the substantial equivalent thereof)" within the meaning of Section 7704 of the Code) (the "**<u>Safe Harbors</u>**"). The Managing Member shall take all steps reasonably necessary or appropriate to prevent any trading of interests or any recognition by the Company of transfers made on such markets and, except as otherwise provided herein, to insure that at least one of the Safe Harbors is met; provided, however, that the foregoing shall not authorize the Managing Member to limit or restrict in any manner the right of any holder of a Unit to exercise the Redemption Right in accordance with the terms of <u>Section 8.6</u> unless, and only to the extent that, outside tax counsel provides to the Managing Member an opinion to the effect that, in the absence of such limitation or restriction, there is a significant risk that the Company will be treated as a "publicly traded partnership" and, by reason thereof, taxable as a corporation.

**ARTICLE XII<br>ADMISSION OF MEMBERS**

**Section 12.1&nbsp;&nbsp;&nbsp;&nbsp;Admission of a Successor Managing Member**

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A successor to all of the Managing Member's Managing Member Interest pursuant to <u>Section 11.2</u> who is proposed to be admitted as a successor Managing Member shall be admitted to the Company as the Managing Member, effective upon such transfer. Any such successor shall carry on the business of the Company without dissolution. In such case, the admission shall be subject to such successor Managing Member executing and delivering to the Company an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission.

**Section 12.2&nbsp;&nbsp;&nbsp;&nbsp;Admission of Additional Members**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. No Person shall be admitted as an Additional Member without the consent of the Managing Member, which consent shall be given or withheld in the Managing Member's sole and absolute discretion. A Person who makes a Capital Contribution to the Company in accordance with this Agreement or who exercises an option to receive Units shall be admitted to the Company as an Additional Member only with the consent of the Managing Member and only upon furnishing to the Managing Member (i) evidence of acceptance in form satisfactory to the Managing Member of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in <u>Section 15.11</u> and (ii) such other documents or instruments as may be required in the discretion of the Managing Member to effect such Person's admission as an Additional Member. The admission of any Person as an Additional Member shall become effective on the date upon which the name of such Person is recorded on the books and records of the Company, following the consent of the Managing Member to such admission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Allocations to Additional Members</u>. If any Additional Member is admitted to the Company on any day other than the first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all other items allocable among Members and Assignees for such Fiscal Year shall be allocated among such Additional Member and all other Members and Assignees by taking into account their varying interests during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method (unless the Managing Member, in its sole and absolute discretion, elects to adopt a daily, weekly or monthly proration method, in which event Net Income, Net Losses, and each item thereof would be prorated based upon the applicable period selected by the Managing Member). Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of any Additional Members occurs shall be allocated among all the Members and Assignees including such Additional Member. All distributions of Available Cash with respect to which the Company Record Date is before the date of such admission shall be made solely to Members and Assignees other than the Additional Member, and all distributions of Available Cash thereafter shall be made to all the Members and Assignees including such Additional Member.

**Section 12.3&nbsp;&nbsp;&nbsp;&nbsp;Amendment of Agreement and Certificate of Formation**

For the admission to the Company of any Member, the Managing Member shall take all steps necessary and appropriate under the Act to amend the records of the Company and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment to the Member Registry) and, if required by law, shall prepare and file an amendment to the Certificate of Formation and may for this purpose exercise the power of attorney granted pursuant to <u>Section 15.11</u>.

**Section 12.4&nbsp;&nbsp;&nbsp;&nbsp;Limit on Number of Members**

Unless otherwise permitted by the Managing Member in its sole and absolute discretion, no Person shall be admitted to the Company as an Additional Member if the effect of such

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admission would be to cause the Company to have a number of Members that would cause the Company to become a reporting company under the Exchange Act.

**ARTICLE XIII<br>DISSOLUTION AND LIQUIDATION**

**Section 13.1&nbsp;&nbsp;&nbsp;&nbsp;Dissolution**

The Company shall not be dissolved by the admission of Substituted Members or Additional Members or by the admission of a successor Managing Member in accordance with the terms of this Agreement. Upon the withdrawal of the Managing Member, any successor Managing Member shall continue the business of the Company. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following ("**<u>Liquidating Events</u>**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)an event of withdrawal of the Managing Member (other than an event of bankruptcy) unless within ninety (90) days after the withdrawal, the written Consent of the Non-Managing Members to continue the business of the Company and to the appointment, effective as of the date of withdrawal, of a substitute Managing Member is obtained;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)an election to dissolve the Company made by the Managing Member, in its sole and absolute discretion;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)entry of a decree of judicial dissolution of the Company pursuant to the provisions of the Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)the sale of all or substantially all of the assets and properties of the Company for cash or for marketable securities; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)a final and non-appealable judgment is entered by a court of competent jurisdiction ruling that the Managing Member is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the Managing Member, in each case under any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to or at the time of the entry of such order or judgment, the written Consent of the Non-Managing Members is obtained to continue the business of the Company and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute Managing Member.

**Section 13.2&nbsp;&nbsp;&nbsp;&nbsp;Winding Up**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Upon the occurrence of a Liquidating Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members. No Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's business and affairs. The Managing Member (or, if there is no remaining Managing Member, any Person elected by a majority in interest of the Non-Managing Members (the "**<u>Liquidator</u>**")) shall be responsible for overseeing the winding up and dissolution of the Company and shall take full account of the Company's liabilities and property and the Company property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the Managing Member, include equity or other securities of the Managing Member or any other entity) shall be applied and distributed in the following order:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)First, to the payment and discharge of all of the Company's debts and liabilities to creditors other than the Members, including, for the avoidance of doubt, any Permitted Intercompany Loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Second, to the payment and discharge of all of the Company's debts and liabilities to the Managing Member;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Third, to the payment and discharge of all of the Company's debts and liabilities to the Non-Managing Members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Fourth, to the holders of Units that are entitled to any preference in distribution upon liquidation in accordance with the rights of any such class of Interests (and, within each such class to each holder thereof pro rata in accordance with the terms and conditions of such class);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Fifth, with respect to all amounts attributable to the proceeds received from or allocable to, the SAFStor Assets, (x) 90% to the Members holding Class B Units, pro rata based on the number of Class B Units then outstanding and (y) 10% to the Members holding Series C Units, pro rata based on the number of Series C Units then outstanding, until the Series C Units have received distributions pursuant to this Section 13.2.A(5) equal to the Series C Units Participation Cap;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Sixth, with respect to all remaining amounts attributable to the proceeds received from or allocable to, the SAFStor Assets, 100% to the Members holding Class B Units, pro rata based on the number of Class B Units then outstanding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)The balance, if any, to the Members (other than the Members holding Class B Units) in accordance with their positive Capital Accounts, after giving effect to all contributions, distributions, and allocations for all periods.

The Managing Member shall not receive any additional compensation for any services performed pursuant to this <u>Article XIII</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Deferred Liquidation</u>. Notwithstanding the provisions of <u>Section 13.2.A</u> which require liquidation of the assets of the Company, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Company the Liquidator determines that an immediate sale of part or all of the Company's assets would be impractical or would cause undue loss to the Members, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Company (including to those Members as creditors) or distribute to the Members, in lieu of cash, as tenants in common and in accordance with the provisions of <u>Section 13.2.A</u>, undivided interests in such Company assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Members, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt. 

**Section 13.3&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Timing Requirements of Regulations; Restoration of Deficit Capital Accounts**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Timing of Distributions</u>. If the Company is "liquidated" within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made under this <u>Article XIII</u> to the Managing Member and Non-Managing Members who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). In the discretion of the Managing Member, a pro rata portion of the distributions that would otherwise be made to the Managing Member and Non-Managing Members pursuant to this <u>Article XIII</u> may be: (A) distributed to a trust established for the benefit of the Managing Member and Non-Managing Members for the purposes of liquidating Company assets, collecting amounts owed to the Company and paying any contingent or unforeseen liabilities or obligations of the Company or of the Managing Member arising out of or in connection with the Company (in which case the assets of any such trust shall be distributed to the Managing Member and Non-Managing Members from time to time, in the reasonable discretion of the Managing Member, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Managing Member and Non-Managing Members pursuant to this Agreement); or (B) withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Company; provided, however, that such withheld amounts shall be distributed to the Managing Member and Non-Managing Members as soon as practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Restoration of Deficit Capital Accounts upon Liquidation of the Company</u>. If any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation occurs), such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever, except as otherwise set forth in this <u>Section 13.3.B</u>, or as otherwise expressly agreed in writing by the affected Member and the Company after the date hereof. Notwithstanding the foregoing, (i) if the Managing Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all Fiscal Years of the Company or portions thereof, including the year during which such liquidation occurs), the Managing Member shall contribute to the capital of the Company the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a DRO Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all Fiscal Years of the Company or portions thereof, including the year during which such liquidation occurs), such DRO Member shall be obligated to make a contribution to the Company with respect to any such deficit balance in such DRO Member's Capital Account upon a liquidation of the Company in an amount equal to the lesser of such deficit balance or such DRO Member's DRO Amount; and (iii) the first sentence of this <u>Section 13.3.B</u> shall not apply with respect to any other Member to the extent, but only to such extent, that such Member previously has agreed in writing, with the consent of the Managing Member, to undertake an express obligation to restore all or any portion of a deficit that may exist in its Capital Account upon a liquidation of the Company. No Non-Managing Member shall have any right to become a DRO Member, to increase its DRO Amount, or otherwise agree to restore any portion of any deficit that may exist in its Capital Account without the express written consent of the Managing Member, in its sole and absolute discretion. Any contribution required of a Member under this <u>Section 13.3.B</u> shall be made on or before the later of (i) the end of the Fiscal Year of the Company in which the interest is liquidated or (ii) the ninetieth (90th) day following the date of such liquidation. The proceeds of any contribution to the Company made by a DRO Member with respect to a deficit in such DRO Member's Capital Account balance shall be treated as a Capital Contribution by such DRO Member and the proceeds thereof shall be treated as assets of the Company to be applied as set forth in <u>Section 13.2.A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Restoration of Deficit Capital Accounts upon a Liquidation of a Member's Interest by Transfer</u>. If a DRO Member's interest in the Company is "liquidated" within the

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meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (other than in connection with a liquidation of the Company) which term shall include a redemption by the Company of such DRO Member's interest upon exercise of the Redemption Right, and such DRO Member is designated on **<u>Exhibit E</u>** as a Part II DRO Member, such DRO Member shall be required to contribute cash to the Company equal to the lesser of (i) the amount required to increase its Capital Account balance as of such date to zero, or (ii) such DRO Member's DRO Amount. For this purpose, (i) the DRO Member's deficit Capital Account balance shall be determined by taking into account all contributions, distributions, and allocations for the portion of the Fiscal Year of the Company ending on the date of the liquidation or redemption, and (ii) solely for purposes of determining such DRO Member's Capital Account balance, the Managing Member shall redetermine the Carrying Value of the Company's assets on such date based upon the principles set forth in <u>Sections 1.D.(3)</u> and <u>(4)</u> of **<u>Exhibit B</u>** hereto, and shall take into account the DRO Member's allocable share of any Unrealized Gain or Unrealized Loss resulting from such redetermination in determining the balance of its Capital Account. The amount of any payment required hereunder shall be due and payable within the time period specified in the second to last sentence of <u>Section 13.3.B</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Effect of the Death of a DRO Member</u>. After the death of a DRO Member who is an individual, the executor of the estate of such DRO Member may elect to reduce (or eliminate) the DRO Amount of such DRO Member. Such elections may be made by such executor by delivering to the Managing Member within two hundred and seventy (270) days of the death of such Non-Managing Member, a written notice setting forth the maximum deficit balance in its Capital Account that such executor agrees to restore under this <u>Section 13.3</u>, if any. If such executor does not make a timely election pursuant to this <u>Section 13.3</u> (whether or not the balance in the applicable Capital Account is negative at such time), then the DRO Member's estate (and the beneficiaries thereof who receive distributions of Interests therefrom) shall be deemed a DRO Member with a DRO Amount in the same amount as the deceased DRO Member. Any DRO Member which itself is a partnership for U.S. federal income tax purposes may likewise elect, after the date of its partner's death to reduce (or eliminate) its DRO Amount by delivering a similar notice to the Managing Member within the time period specified above, and in the absence of any such notice the DRO Amount of such DRO Member shall not be reduced to reflect the death of any of its partners.

**Section 13.4&nbsp;&nbsp;&nbsp;&nbsp;Rights of Non-Managing Members**

Except as otherwise provided in this Agreement, each Non-Managing Member shall look solely to the assets of the Company for the return of its Capital Contributions and shall have no right or power to demand or receive property other than cash from the Company. Except as otherwise expressly provided in this Agreement, no Non-Managing Member shall have priority over any other Non-Managing Member as to the return of its Capital Contributions, distributions, or allocations.

**Section 13.5&nbsp;&nbsp;&nbsp;&nbsp;Notice of Dissolution**

If a Liquidating Event occurs or an event occurs that would, but for provisions of an election or objection by one or more Members pursuant to <u>Section 13.1</u>, result in a dissolution of the Company, the Managing Member shall, within thirty (30) days thereafter, provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Managing Member).

**Section 13.6&nbsp;&nbsp;&nbsp;&nbsp;Cancellation of Certificate of Limited Liability Company**

Upon the completion of the liquidation of the Company cash and property as provided in <u>Section 13.2</u>, the Company shall be terminated and the Certificate of Formation and all

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qualifications of the Company as a foreign limited liability company in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Company shall be taken.

**Section 13.7&nbsp;&nbsp;&nbsp;&nbsp;Reasonable Time for Winding Up**

A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to <u>Section 13.2</u>, to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect among the Members during the period of liquidation.

**Section 13.8&nbsp;&nbsp;&nbsp;&nbsp;Waiver of Partition**

Each Member hereby waives any right to partition of the Company property.

**Section 13.9&nbsp;&nbsp;&nbsp;&nbsp;Liability of Liquidator**

The Liquidator shall be indemnified and held harmless by the Company in the same manner and to the same degree as an Indemnitee may be indemnified pursuant to <u>Section 7.7</u>.

**ARTICLE XIV<br>AMENDMENT OF COMPANY AGREEMENT; MEETINGS**

**Section 14.1&nbsp;&nbsp;&nbsp;&nbsp;Amendments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Amendments to this Agreement may be proposed by the Managing Member or by any Non-Managing Member holding Interests representing twenty-five percent (25%) or more of the Percentage Interest of the Common Units. Following such proposal (except an amendment governed by <u>Section 14.1.B</u>), the Managing Member shall submit any proposed amendment to the Non-Managing Members. The Managing Member shall seek the written Consent of the Non-Managing Members as set forth in this <u>Section 14.1</u> on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. For purposes of obtaining a written Consent, the Managing Member may require a response within a reasonable specified time, but not less than fifteen (15) days, any failure to respond in such time period shall constitute a vote in favor of the recommendation of the Managing Member. A proposed amendment shall be adopted and be effective as an amendment hereto if it is approved by the Managing Member and, except as provided in <u>Section 14.1.B</u>, <u>14.1.C</u> or <u>14.1.D</u>, it receives the Consent of the Members holding Interests representing more than fifty percent (50%) of the Percentage Interest of the Common Units (including Common Units held by the Managing Member Entity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Amendments Not Requiring Non-Managing Member Approval</u>. Notwithstanding <u>Section 14.1.A</u> but subject to <u>Section 14.1.C</u>, the Managing Member shall have the power, without the consent of the Non-Managing Members, to amend this Agreement as may be required to facilitate or implement any of the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)to add to the obligations of the Managing Member or surrender any right or power granted to the Managing Member or any Affiliate of the Managing Member for the benefit of the Non-Managing Members;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)to reflect the admission, substitution, termination, or withdrawal of Members in accordance with this Agreement (which may be effected through the replacement of the Member Registry with an amended Member Registry);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)to set forth the designations, rights, powers, duties, and preferences of the holders of any additional Interests issued pursuant to <u>Article IV</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)to reflect a change that does not adversely affect the Non-Managing Members in any material respect, or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with law or with other provisions of this Agreement, or make other changes with respect to matters arising under this Agreement that will not be inconsistent with law or with the provisions of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)to satisfy any requirements, conditions, or guidelines contained in any order, directive, opinion, ruling or regulation of a federal, state or local agency or contained in federal, state or local law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)to modify the method by which Members' Capital Accounts, or any debits or credits thereto, are computed, in each case in accordance with <u>Section 1.E</u> of **<u>Exhibit B</u>** to this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)to include provisions in the Agreement that may be referenced in any rulings, regulations, notices, announcements, or other guidance regarding the U.S. federal income tax treatment of compensatory Interests issued and made effective after the date hereof or in connection with any elections that the Managing Member determines to be necessary or advisable in respect of any such guidance. Any such amendment may include, without limitation, (a) a provision authorizing or directing the Managing Member to make any election under such guidance, (b) a covenant by the Company that all of the Members must (I) comply with the such guidance and (II) take all actions (or, as the case may be, not take any action) necessary, including providing the Company with any required information, to permit the Company to comply with the requirements set forth or referred to in the Regulations for such election or other related guidance from the IRS, and (c) an amendment to the capital account maintenance provisions and the allocation provisions contained in **<u>Exhibit B</u>** or **<u>Exhibit C</u>** of this Agreement so that such provisions comply with (I) the provisions of the Code and the Regulations as they apply to the issuance of compensatory Interests and (II) the requirements of such guidance and any election made by the Managing Member with respect thereto, including, a provision requiring "forfeiture allocations" as appropriate.

The Managing Member shall notify the Non-Managing Members in writing when any action under this <u>Section 14.1.B</u> is taken in the next regular communication to the Non-Managing Members or within ninety (90) days of the date thereof, whichever is earlier.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Amendments Requiring Member Approval (Excluding the Managing Member Entity)</u>. Notwithstanding <u>Sections 14.1.A</u> and <u>14.1.B</u>, without the Consent of the Non-Managing Members, the Managing Member shall not amend <u>Section 4.2.A</u>, <u>Section 7.1.A</u> (second sentence only), <u>Section 7.5</u>, <u>Section 7.6</u>, <u>Section 7.8</u>, <u>Section 7.11</u>, <u>Section 11.2</u>, the last sentence of <u>Section 11.4.A</u> (provided that no such amendment shall in any event adversely affect the rights of any lender who made a loan or who extended credit and received in connection therewith a pledge of Units prior to the date such amendment is adopted unless, and only to the extent such lender consents thereto), <u>Section 13.1</u>, this <u>Section 14.1.C</u> or <u>Section 14.2</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Other Amendments Requiring Certain Non-Managing Member Approval</u>. Notwithstanding anything in this <u>Section 14.1</u> to the contrary, this Agreement shall not be amended with respect to any Member adversely affected without the Consent of such Member

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adversely affected or to any Assignee who is a bona fide financial institution that loans money or otherwise extends credit to a holder of Units that is adversely affected, but in either case only if such amendment would (i) modify the limited liability of such Non-Managing Member, (ii) amend <u>Section 7.11</u>, (iii) amend <u>Article IV</u>, <u>Article V</u> or <u>Article VI</u> (except as permitted pursuant to <u>Sections 4.2</u>, <u>5.4</u>, <u>6.2</u> and <u>14.1.B(3)</u>), (iv) amend <u>Section 8.6</u> or any defined terms set forth in <u>Article I</u> that relate to the Redemption Right (except as permitted in <u>Section 8.6.E</u>), or (v) amend <u>Sections 11.3</u> or <u>11.5</u>, or add any additional restrictions to <u>Section 11.6.E</u> or amend <u>Section 14.1.B(4)</u> or this <u>Section 14.1.D</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Amendment and Restatement of Member Registry Not an Amendment</u>. Notwithstanding anything in this <u>Article XIV</u> or elsewhere in this Agreement to the contrary, any amendment and restatement of the Member Registry by the Managing Member to reflect events or changes otherwise authorized or permitted by this Agreement shall not be deemed an amendment of this Agreement and may be done at any time and from time to time, as determined by the Managing Member without the Consent of the Non-Managing Members and without any notice requirement.

**Section 14.2&nbsp;&nbsp;&nbsp;&nbsp;Meetings of the Members**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Meetings of the Members may be called by the Managing Member and shall be called upon the receipt by the Managing Member of a written request by Non-Managing Members holding Interests representing twenty-five percent (25%) or more of the Percentage Interest of the Common Units (including Common Units held by the Managing Member Entity). The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Members not less than seven (7) days nor more than thirty (30) days prior to the date of such meeting. Members entitled to vote may vote in person or by proxy at such meeting. Whenever the vote or Consent of Members is permitted or required under this Agreement, such vote or Consent may be given at a meeting of Members or may be given in accordance with the procedure prescribed in <u>Section 14.1.A</u>. Except as otherwise expressly provided in this Agreement, the Consent of holders of Interests representing a majority of the Percentage Interests of the Common Units shall control (including Common Units held by the Managing Member Entity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Actions Without a Meeting</u>. Except as otherwise expressly provided by this Agreement, any action required or permitted to be taken at a meeting of the Members may be taken without a meeting if a written consent setting forth the action so taken is signed by Members holding Interests representing more than fifty percent (50%) (or such other percentage as is expressly required by this Agreement) of the Percentage Interest of the Common Units (including Common Units held by the Managing Member Entity). Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of Members. Such consent shall be filed with the Managing Member. An action so taken shall be deemed to have been taken at a meeting held on the date on which written consents from the Members holding the required Percentage Interest of the Common Units have been filed with the Managing Member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.<u>Proxy</u>. Each Non-Managing Member may authorize any Person or Persons to act for him by proxy on all matters in which a Non-Managing Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Non-Managing Member or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Non-Managing Member executing it, such revocation to be effective upon the Company's receipt of written notice thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Conduct of Meeting</u>. Each meeting of Members shall be conducted by the Managing Member or such other Person as the Managing Member may appoint pursuant to such rules for the conduct of the meeting as the Managing Member or such other Person deem appropriate.

**ARTICLE XV<br>GENERAL PROVISIONS**

**Section 15.1&nbsp;&nbsp;&nbsp;&nbsp;Addresses and Notice**

Any notice, demand, request or report required or permitted to be given or made to a Member or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person, when sent by first class United States mail or by other means of written communication (including, but not limited to, via e-mail) to the Member or Assignee at the address set forth in the Member Registry or such other address as the Members shall notify the Managing Member in writing.

**Section 15.2&nbsp;&nbsp;&nbsp;&nbsp;Titles and Captions**

All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to "Articles" "Sections" and "Exhibits" are to Articles, Sections and Exhibits of this Agreement.

**Section 15.3&nbsp;&nbsp;&nbsp;&nbsp;Pronouns and Plurals**

Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

**Section 15.4&nbsp;&nbsp;&nbsp;&nbsp;Further Action**

The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

**Section 15.5&nbsp;&nbsp;&nbsp;&nbsp;Binding Effect**

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

**Section 15.6&nbsp;&nbsp;&nbsp;&nbsp;Creditors**

Other than as expressly set forth herein with regard to any Indemnitee, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Company.

**Section 15.7&nbsp;&nbsp;&nbsp;&nbsp;Waiver**

No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

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**Section 15.8&nbsp;&nbsp;&nbsp;&nbsp;Counterparts**

This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

**Section 15.9&nbsp;&nbsp;&nbsp;&nbsp;Applicable Law**

This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

**Section 15.10&nbsp;&nbsp;&nbsp;&nbsp;Invalidity of Provisions**

If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

**Sectino 15.11&nbsp;&nbsp;&nbsp;&nbsp;Power of Attorney**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>General</u>. Each Non-Managing Member and each Assignee who accepts Units (or any rights, benefits or privileges associated therewith) is deemed to irrevocably constitute and appoint the Managing Member, any Liquidator and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate of Formation and all amendments or restatements thereof) that the Managing Member or any Liquidator deem appropriate or necessary to form, qualify or continue the existence or qualification of the Company as a limited liability company in the State of Delaware and in all other jurisdictions in which the Company may conduct business or own property, (b) all instruments that the Managing Member or any Liquidator deem appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms, (c) all conveyances and other instruments or documents that the Managing Member or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Company pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation, (d) all instruments relating to the admission, withdrawal, removal or substitution of any Member pursuant to, or other events described in, <u>Article XI</u>, <u>XII</u> or <u>XIII</u> or the Capital Contribution of any Member and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Interests; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the Managing Member or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Members hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole and absolute discretion of the Managing Member or any Liquidator, to effectuate the terms or intent of this Agreement.

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Nothing contained in this <u>Section 15.11</u> shall be construed as authorizing the Managing Member or any Liquidator to amend this Agreement except in accordance with <u>Article XIV</u> or as may be otherwise expressly provided for in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Irrevocable Nature</u>. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Members will be relying upon the power of the Managing Member or any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Company, and it shall survive and not be affected by the subsequent Incapacity of any Non-Managing Member or Assignee and the transfer of all or any portion of such Non-Managing Member's or Assignee's Units and shall extend to such Non-Managing Member's or Assignee's heirs, successors, assigns and personal representatives. Each such Non-Managing Member or Assignee hereby agrees to be bound by any representation made by the Managing Member or any Liquidator, acting in good faith pursuant to such power of attorney; and each such Non-Managing Member or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the Managing Member or any Liquidator, taken in good faith under such power of attorney. Each Non-Managing Member or Assignee shall execute and deliver to the Managing Member or the Liquidator, within fifteen (15) days after receipt of the Managing Member's or Liquidator's request therefor, such further designation, powers of attorney and other instruments as the Managing Member or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Company.

**Section 15.12&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement**

This Agreement contains the entire understanding and agreement among the Member with respect to the subject matter hereof and supersedes any prior written oral understandings or agreements among them with respect thereto.

**Section 15.13&nbsp;&nbsp;&nbsp;&nbsp;No Rights as Stockholders**

Nothing contained in this Agreement shall be construed as conferring upon the holders of the Units any rights whatsoever as stockholders of the Managing Member Entity, including, without limitation, any right to receive dividends or other distributions made to stockholders of the Managing Member Entity, or to vote or to consent or receive notice as stockholders in respect to any meeting of stockholders for the election of directors of the Managing Member Entity or any other matter.

**Section 15.14&nbsp;&nbsp;&nbsp;&nbsp;Limitation to Preserve REIT Status**

To the extent that any amount paid or credited to the Managing Member Entity or any of their officers, directors, employees or agents pursuant to <u>Sections 7.4</u> or <u>7.7</u> would constitute gross income to the Managing Member Entity for purposes of Sections 856(c)(2) or 856(c)(3) of the Code (a "**<u>Managing Member Payment</u>**") then, notwithstanding any other provision of this Agreement, the amount of such Managing Member Payment for any Fiscal Year shall not exceed the lesser of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)an amount equal to the excess, if any, of (a) 4% of the Managing Member Entity's total gross income (within the meaning of Section 856(c)(3) of the Code but not including the amount of any Managing Member Payments) for the Fiscal Year which is described in subsections (A) though (H) of Section 856(c)(2) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(2) of the Code) derived by the Managing Member Entity from sources other than those described in subsections (A) through (H) of Section 856(c)(2) of the Code (but not including the amount of any Managing Member Payments); or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)an amount equal to the excess, if any of (a) 24% of the Managing Member Entity's total gross income (but not including the amount of any Managing Member Payments) for the Fiscal Year which is described in subsections (A) through (I) of Section 856(c)(3) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(3) of the Code but not including the amount of any Managing Member Payments) derived by the Managing Member Entity from sources other than those described in subsections (A) through (I) of Section 856(c)(3) of the Code;

provided, however, that Managing Member Payments in excess of the amounts set forth in subparagraphs (i) and (ii) above may be made if the Managing Member Entity, as a condition precedent, obtains an opinion of tax counsel that the receipt of such excess amounts would not adversely affect the Managing Member Entity's ability to qualify as a REIT. To the extent Managing Member Payments may not be made in a given Fiscal Year due to the foregoing limitations, such Managing Member Payments shall carry over and be treated as arising in the following year; provided, however, that such amounts shall not carry over for more than five (5) Fiscal Years, and if not paid within such five (5) Fiscal Year period, shall expire; and provided further that (i) as Managing Member Payments are made, such payments shall be applied first to carry over amounts outstanding, if any, and (ii) with respect to carry over amounts for more than one Fiscal Year, such payments shall be applied to the earliest Fiscal Year first.

[Remainder of page intentionally left blank, signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

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| |
|:---|
| **MANAGING MEMBER:** |
| **NexPoint Storage Partners, Inc.** |
| By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u> |
| Name: Brian Mitts<br>Title: Chief Financial Officer,<br>Secretary and Treasurer |

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*[Signature Page to Second A&R LLCA of* 

*NexPoint Storage Partners Operating Company, LLC]*

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**NON-MANAGING MEMBERS:**

**NexPoint Real Estate Opportunities, LLC**

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| |
|:---|
| By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u> |
| Name: Brian Mitts<br>Title: Authorized Signatory |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**NFRO REIT Sub II, LLC**

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| |
|:---|
| By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u> |
| Name: Brian Mitts <br>Title: Executive Vice President, Chief Financial Officer and Principal Financial and Accounting Officer |

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**GAF REIT, LLC**

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| |
|:---|
| By: <u>/s/ Dustin Norris&nbsp;&nbsp;&nbsp;&nbsp;</u> |
| Name: Dustin Norris<br>Title: Executive Vice President |

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**GAF REIT Sub II, LLC**

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| |
|:---|
| By: <u>/s/ Brian Mitts&nbsp;&nbsp;&nbsp;&nbsp;</u> |
| Name: Brian Mitts<br>Title: Authorized Signatory |

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*[Signature Page to Second A&R LLCA of* 

*NexPoint Storage Partners Operating Company, LLC]*

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| |
|:---|
| **Extra Space Storage LP** |
| <br>By: ESS Holdings Business Trust I<br>Its: General Partner |
| By: <u>/s/ P. Scott Stubbs&nbsp;&nbsp;&nbsp;&nbsp;</u> |
| Name: P. Scott Stubbs<br>Title: Trustee |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

*[Signature Page to Second A&R LLCA of* 

*NexPoint Storage Partners Operating Company, LLC]*

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**EXHIBIT A<br>FORM OF MEMBER REGISTRY**

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| | | | |
|:---|:---|:---|:---|
| <u>CLASS A UNITS</u> | <u>CLASS A UNITS</u> | <u>CLASS A UNITS</u> | <u>CLASS A UNITS</u> |
| Name And Address Of Member | Class A Units | Percentage <br>Interest (Class A Units) | Percentage <br>Interest (Common Units) |
| NexPoint Storage Partners, Inc. | 162751.00 | 100.00000% | 51.31148% |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: Matt McGraner<br>Email: mmcgraner@nexpoint.com |  |  |  |
| TOTAL CLASS A UNITS | 162751.00 | 100.00000% | 51.31148% |

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| | | | |
|:---|:---|:---|:---|
| <u>CLASS B UNITS</u> | <u>CLASS B UNITS</u> | <u>CLASS B UNITS</u> | <u>CLASS B UNITS</u> |
| Name And Address Of Member | Class B Units | Percentage <br>Interest (Class B Units) | Percentage <br>Interest (Common Units) |
| NexPoint Real Estate Opportunities, LLC | 47064.35 | 30.47589% | 14.83826% |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: <br>Email:  |  |  |  |
| NFRO REIT Sub II, LLC | 101553.79 | 65.75979% | 32.01747% |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: <br>Email:  |  |  |  |
| GAF REIT, LLC | 3924.92 | 2.54153% | 1.23743% |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: <br>Email:  |  |  |  |
| GAF REIT Sub II, LLC | 1888.38 | 0.59536% | 1.22280% |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: <br>Email:  |  |  |  |
| TOTAL CLASS B UNITS | **154431.44** | $100.00000% | 48.68852% |

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| | | | |
|:---|:---|:---|:---|
| | SERIES C UNITS | SERIES C UNITS | |
| Name And Address Of Member | Series C Units | Percentage <br>Interest |  |
| Extra Space Storage LP | 100 |  | 100.00000 |
| 2795 East Cottonwood Parkway, Suite 300<br>Salt Lake City, Utah 84121<br>Attn: Gwyn G. McNeal<br>Email: gmcneal@extraspace.com |  |  |  |
| TOTAL SERIES C UNITS | 100 |  | 100.00000 |

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| | | |
|:---|:---|:---|
| | SERIES C PREFERRED UNITS | SERIES C PREFERRED UNITS |
| Name And Address Of Member | Series C Preferred Units | Percentage <br>Interest |
| NexPoint Storage Partners, Inc. | 125 | 100.00000 |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: Matt McGraner<br>Email: mmcgraner@nexpoint.com |  |  |
| TOTAL SERIES C PREFERRED UNITS | 125 | 100.00000 |

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| | | |
|:---|:---|:---|
| | SERIES D PREFERRED UNITS | SERIES D PREFERRED UNITS |
| Name And Address Of Member | Series D Preferred Units | Percentage <br>Interest |
| NexPoint Storage Partners, Inc. | 300000 | 100.00000 |
| 300 Crescent Court, <br>Suite 700<br>Dallas, TX 75201<br>Attn: Matt McGraner<br>Email: mmcgraner@nexpoint.com |  |  |
| TOTAL SERIES D PREFERRED UNITS | 300000 | 100.00000 |

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**EXHIBIT B<br>CAPITAL ACCOUNT MAINTENANCE**

**1.&nbsp;&nbsp;&nbsp;&nbsp;Capital Accounts of the Members**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.The Company shall maintain for each Member a separate Capital Account in accordance with the rules of Regulations Section l.704-l(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions and any other deemed contributions made by such Member to the Company pursuant to this Agreement and (ii) all items of Company income and gain (including income and gain exempt from tax) computed in accordance with <u>Section 1.B</u> and allocated to such Member pursuant to <u>Section 6.1</u> of the Agreement and **<u>Exhibit C</u>** thereof, and decreased by (x) the amount of cash or Agreed Value of property actually distributed or deemed to be distributed to such Member pursuant to this Agreement and (y) all items of Company deduction and loss computed in accordance with <u>Section 1.B</u> and allocated to such Member pursuant to <u>Section 6.1</u> of the Agreement and Exhibit C thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Members' Capital Accounts, unless otherwise specified in this Agreement, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for U.S. federal income tax purposes determined in accordance with Section 703(a) of the Code (for this purpose all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Except as otherwise provided in Regulations Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and deduction shall be made without regard to any adjustments to the adjusted bases of the assets of the Company pursuant to Sections 734(b) and 743(b) of the Code, provided, however, that the amounts of any adjustments to the adjusted bases of the assets of the Company made pursuant to Section 734 of the Code as a result of the distribution of property by the Company to a Member (to the extent that such adjustments have not previously been reflected in the Members' Capital Accounts) shall be reflected in the Capital Accounts of the Members in the manner and subject to the limitations prescribed in Regulations Section l.704-1(b)(2)(iv)(m)(4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The computation of all items of income, gain, and deduction shall be made without regard to the fact that items described in Sections 705(a)(l)(B) or 705(a)(2)(B) of the Code are not includible in gross income or are neither currently deductible nor capitalized for U.S. federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Any income, gain or loss attributable to the taxable disposition of any Company property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Company's Carrying Value with respect to such property as of such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)In the event the Carrying Value of any Company asset is adjusted pursuant to <u>Section 1.D</u>, the amount of any such adjustment shall be taken into account as gain or loss from the disposition of such asset.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)Any items specially allocated under <u>Section 2</u> of **<u>Exhibit C</u>** to the Agreement hereof shall not be taken into account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.A transferee (including any Assignee) of a Unit shall succeed to a pro rata portion of the Capital Account of the transferor in accordance with Regulations Section 1.704-1(b)(2)(iv)(l).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.(1) Consistent with the provisions of Regulations Section 1.704-1(b)(2)(iv)(f), and as provided in Section 1.D(2), the Carrying Values of all Company assets shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company property, as of the times of the adjustments provided in Section 1.D(2), as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property and allocated pursuant to Section 6.1 of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Such adjustments shall be made as of the following times: (a) immediately prior to the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (b) immediately prior to the distribution by the Company to a Member of more than a de minimis amount of property as consideration for an interest in the Company; (c) immediately prior to the liquidation of the Company within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g); (d) immediately prior to the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company; (e) immediately prior to the issuance by the Company of a noncompensatory option to acquire an interest in the Company (other than an option for a de minimis interest); and (f) at such other times as are permitted by applicable Regulations and as determined in the discretion of the Managing Member; provided, however, that adjustments pursuant to clauses (a), (b), (d), (e) and (f) above shall be made only if the Managing Member determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company or to comply with applicable Regulations; provided further, however, that the issuance of any LTIP Unit shall be deemed to require a revaluation pursuant to this Section 1.D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) In accordance with Regulations Section 1.704- l(b)(2)(iv)(e), the Carrying Value of Company assets distributed in kind shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company property, as of the time any such asset is distributed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) In determining Unrealized Gain or Unrealized Loss for purposes of this **<u>Exhibit B</u>**, the aggregate cash amount and fair market value of all Company assets (including cash or cash equivalents) shall be determined by the Managing Member using such reasonable method of valuation as it may adopt, or in the case of a liquidating distribution pursuant to <u>Article XIII</u> of the Agreement, shall be determined and allocated by the Liquidator using such reasonable methods of valuation as it may adopt. The Managing Member, or the Liquidator, as the case may be, shall allocate such aggregate fair market value among the assets of the Company in such manner as it determines in its sole and absolute discretion to arrive at a fair market value for individual properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.The provisions of the Agreement (including this **<u>Exhibit B</u>** and the other Exhibits to the Agreement) relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the Managing Member shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company, the Managing Member, or the Non-Managing Members) are computed in order to comply with such Regulations, the Managing Member may

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make such modification without regard to <u>Article XIV</u> of the Agreement, provided that it is not likely to have a material effect on the amounts distributable to any Person pursuant to <u>Article XIII</u> of the Agreement upon the dissolution of the Company. The Managing Member also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of Company capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Regulations Section l.704-l(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section l.704-1(b).

**2.&nbsp;&nbsp;&nbsp;&nbsp;No Interest**

No interest shall be paid by the Company on Capital Contributions or on balances in Members' Capital Accounts.

**3.&nbsp;&nbsp;&nbsp;&nbsp;No Withdrawal**

No Member shall be entitled to withdraw any part of its Capital Contribution or Capital Account or to receive any distribution from the Company, except as provided in <u>Articles IV</u>, <u>V</u>, <u>VII</u> and <u>XIII</u> of the Agreement.

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**EXHIBIT C<br>SPECIAL ALLOCATION RULES**

**1.&nbsp;&nbsp;&nbsp;&nbsp;Special Allocation Rules.**

Notwithstanding any other provision of the Agreement or this Exhibit C, the following special allocations shall be made in the following order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.<u>Minimum Gain Chargeback</u>. Notwithstanding the provisions of Section 6.1 of the Agreement or any other provisions of this Exhibit C, if there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member's share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(f)(6). This Section 1.A is intended to comply with the minimum gain chargeback requirements in Regulations Section 1.704-2(f) and for purposes of this Section 1.A only, each Member's Adjusted Capital Account Deficit shall be determined prior to any other allocations pursuant to Section 6.1 of the Agreement or this Exhibit C with respect to such Fiscal Year and without regard to any decrease in Partner Minimum Gain during such Fiscal Year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.<u>Partner Minimum Gain Chargeback</u>. Notwithstanding any other provision of Section 6.1 of this Agreement or any other provisions of this Exhibit C (except Section 1.A), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Member who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member's share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Managing Member and Non-Managing Member pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(i)(4). This Section 1.B is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith. Solely for purposes of this Section 1.B, each Member's Adjusted Capital Account Deficit shall be determined prior to any other allocations pursuant to Section 6.1 of the Agreement or this Exhibit C with respect to such Fiscal Year, other than allocations pursuant to Section 1.A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.<u>Gross Income Allocation</u>. In the event that any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year (after taking into account allocations to be made

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under the preceding paragraphs hereof with respect to such Fiscal Year), each such Member shall be specially allocated items of Company income and gain (consisting of a pro rata portion of each item of Company income, including gross income and gain for the Fiscal Year) in an amount and manner sufficient to eliminate, to the extent required by the Regulations, its Adjusted Capital Account Deficit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.<u>Nonrecourse Deductions</u>. Except as may otherwise be expressly provided by the Managing Member pursuant to Section 4.2 of the Agreement with respect to other classes of Units, Nonrecourse Deductions for any Fiscal Year shall be allocated only to the Members holding Class A Units in accordance with their respective Percentage Interests. If the Managing Member determines in its good faith discretion that the Company's Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of the Regulations promulgated under Section 704(b) of the Code, the Managing Member is authorized, upon notice to the Non-Managing Members, to revise the prescribed ratio for such Fiscal Year to the numerically closest ratio which would satisfy such requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.<u>Partner Nonrecourse Deductions</u>. Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.<u>Adjustments Pursuant to Code Section 734 and Section 743</u>. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Regulations Section 1.704-l(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations.

**2.&nbsp;&nbsp;&nbsp;&nbsp;Allocations for Tax Purposes**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Except as otherwise provided in this Section 2, for U.S. federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Members in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, and deduction shall be allocated for U.S. federal income tax purposes among the Members as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) (a) In the case of a Contributed Property, such items attributable thereto shall be allocated among the Members consistent with the principles of Section 704(c) of the Code to take into account the variation between the Section 704(c) Value of such property and its adjusted basis at the time of contribution (taking into account Section 2.C of this Exhibit C); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any item of Residual Gain or Residual Loss attributable to a Contributed Property shall be allocated among the Members in the same manner as its correlative item of "book" gain or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) (a) In the case of an Adjusted Property, such items shall

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) first, be allocated among the Members in a manner consistent with the principles of Section 704(c) of the Code to take into account the Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof pursuant to Exhibit B;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) second, in the event such property was originally a Contributed Property, be allocated among the Members in a manner consistent with Section 2.B(1) of this Exhibit C; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Members in the same manner its correlative item of "book" gain or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) all other items of income, gain, loss and deduction shall be allocated among the Members in the same manner as their correlative item of "book" gain or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.To the extent Regulations promulgated pursuant to Section 704(c) of the Code permit a Company to utilize alternative methods to eliminate the disparities between the Carrying Value of property and its adjusted basis, the Managing Member shall have the authority to elect the method to be used by the Company and such election shall be binding on all Members.

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**EXHIBIT D<br>NOTICE OF REDEMPTION**

The undersigned hereby irrevocably (i) redeems Units in NexPoint Storage Partners Operating Company, LLC (the "Company") in accordance with the terms of the Second Amended and Restated Limited Liability Company Agreement of the Company, as amended, and the Redemption Right referred to therein, (ii) surrenders such Units and all right, title and interest therein and (iii) directs that the Cash Amount or Shares Amount (as determined by the Managing Member) deliverable upon exercise of the Redemption Right be delivered to the address specified below, and if Shares are to be delivered, such Shares be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, and certifies that the undersigned (a) has marketable and unencumbered title to such Units, free and clear of the rights of or interests of any other person or entity, (b) has the full right, power and authority to redeem and surrender such Units as provided herein and (c) has obtained the consent or approval of all persons or entities, if any, having the right to consult or approve such redemption and surrender. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Second Amended and Restated Limited Liability Company Agreement of the Company.

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| | |
|:---|:---|
| Dated: | Name of Member: |
| | (Signature of Member) |
| | (Street Address) |
| | (City) (State) (Zip Code) |
| | Signature Guaranteed by: |

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IF SHARES ARE TO BE ISSUED, ISSUE TO:

Name: _________________________________

Social Security or tax identifying number: _________________________

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**EXHIBIT E<br>FORM OF DRO REGISTRY**

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| | |
|:---|:---|
| | DRO AMOUNT |
| PART I DRO MEMBERS | |
| PART II DRO MEMBERS | |

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------

**EXHIBIT F<br>NOTICE OF ELECTION BY MEMBER TO CONVERT<br>LTIP UNITS INTO CLASS A UNITS**

The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert LTIP Units in NexPoint Storage Partners Operating Company, LLC (the "Company") into Class A Units in accordance with the terms of the Second Amended and Restated Limited Liability Company Agreement of the Company, as amended; and (ii) directs that any cash in lieu of Class A Units that may be deliverable upon such conversion be delivered to the address specified below. The undersigned hereby represents, warrants, and certifies that the undersigned (a) has title to such LTIP Units, free and clear of the rights or interests of any other person or entity other than the Company; (b) has the full right, power, and authority to cause the conversion of such LTIP Units as provided herein; and (c) has obtained the consent to or approval of all persons or entities, if any, having the right to consent or approve such conversion. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Second Amended and Restated Limited Liability Company Agreement of the Company.

---

| | |
|:---|:---|
| Dated: | Name of Member: |
| | (Signature of Member) |
| | (Street Address) |
| | (City) (State) (Zip Code) |
| | Signature Guaranteed by: |

---

AmericasActive:17820717.13

AmericasActive:17820717.17

------

**EXHIBIT G<br>NOTICE OF ELECTION BY COMPANY TO FORCE CONVERSION OF<br>LTIP UNITS INTO CLASS A UNITS**

NexPoint Storage Partners Operating Company, LLC (the "Company") hereby irrevocably elects to cause the number of LTIP Units held by the holder of LTIP Units set forth below to be converted into Class A Units in accordance with the terms of the Limited Liability Agreement of the Company, as amended (the "Agreement"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Agreement.

Name of Holder:

Date of this Notice:

Number of LTIP Units to be Converted:

Please Print: Exact Name as Registered with Company

AmericasActive:17820717.13

AmericasActive:17820717.17

------

**<u>Schedule 1.1</u>**

**<u>SAFStor Assets</u>**

Schedule 1.1-1

AmericasActive:17820717.13

AmericasActive:17820717.17

## Exhibit 10.23

**Exhibit 10.23**

THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS.

**<u>CONVERTIBLE PROMISSORY NOTE</u>**

U.S. $[•]&nbsp;&nbsp;&nbsp;&nbsp;[•], 20[•]

FOR VALUE RECEIVED, NHT OPERATING PARTNERSHIP, LLC, having an address at [•] (the "<u>Maker</u>"), hereby promises to pay to the order of [•] ("<u>Holder</u>"), at its address at [•] or such other address as it may designate, the principal sum of [•] DOLLARS ($[•]), and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Interest</u>**. The principal amount hereof outstanding from time to time shall bear interest until paid in full at the Note Rate. Interest at the Note Rate shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Maximum Lawful Rate</u>**. It is the intent of Maker and Holder to conform to and contract in strict compliance with applicable usury law from time to time in effect. In no way, nor in any event or contingency (including but not limited to prepayment, default, demand for payment, or acceleration of the maturity of any obligation), shall the rate of interest taken, reserved, contracted for, charged or received under this Note and the other Loan Documents exceed the highest lawful interest rate permitted under applicable law. If Holder shall ever receive anything of value which is characterized as interest under applicable law and which would apart from this provision be in excess of the highest lawful interest rate permitted under applicable law, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loan in the inverse order of its maturity and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal. All interest paid or agreed to be paid to the holder hereof shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of the Loan so that the amount of interest on account of such obligation does not exceed the maximum permitted by applicable law. As used in this Section, the term "<u>applicable law</u>" shall mean the laws of the State of Texas or the federal laws of the United States, whichever laws allow the greater interest, as such laws now exist or may be changed or amended or come into effect in the future. of the month during which the Loan was made or most recently continued and (b) the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Note Rate.</u>** "*Note Rate*" means a rate per annum equal to [•] percent ([•])%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Interest Period.</u>** "*Interest Period*" shall mean the period beginning on the date first set forth above (the "*Note Date*") and ending on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Payments</u>**. Borrower shall make a payment in full of principal and accrued interest on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Maturity Date</u>**. The indebtedness evidenced hereby shall mature on the [•] [•], 20[•]. On the Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Conversion</u>**.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Prior to the payment in full of this Note, the Holder may convert all or any part of the outstanding principal and accrued but unpaid interest due hereunder, and all other amounts due and payable to the Holder hereunder or in connection herewith, into Membership Interests (as defined in the Limited Liability Company Agreement of the Maker dated of even date herewith (the "***Company Agreement***")) in the Maker (the "***Conversion Interest***") as a capital contribution into the Holder's Capital Account (as defined in the Company Agreement), in an amount equal to the amount so converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The issuance of certificates, if any, for the Conversion Interests upon conversion of this Note shall be made without charge to the Holder hereof for any issuance tax in respect thereof or other cost incurred by the Maker in connection with such conversion and the related issuance of the Conversion Interests. Upon conversion of this Note, the Maker shall take all such actions as are necessary in order to insure that the Conversion Interests issuable with respect to such conversion shall be validly issued, fully paid and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Maker shall not close its books against the transfer of the Conversion Interests issued or issuable upon conversion of this Note in any manner which interferes with the timely conversion of this Note. The Maker shall assist and cooperate with any Holder required to make any governmental filings or obtain any governmental approval prior to or in connection with the conversion of this Note (including, without limitation, making any filings required to be made by the Maker).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>General Provisions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Holder, together with its successors and assigns, including each owner and holder from time to time of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Time is of the essence as to all dates set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)To the fullest extent permitted by applicable law, Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Holder; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Holder with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)To the fullest extent permitted by applicable Law, Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys' fees and disbursements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)To the fullest extent permitted by applicable law, all parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise

------

hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due amounts following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Holder thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by the laws of the State. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Irrespective of the place of execution and/or delivery, this Note shall be governed by, and shall be construed in accordance with, the laws of the State of Texas.

[Signature page follows.]

------

Maker has delivered this Note as of the day and year first set forth above.

MAKER:

NHT OPERATING PARTNERSHIP, LLC

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title:&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

[Promissory Note]

------

With respect to Notes held by NexPoint Diversified Real Estate Trust

or its subsidiaries as of December 31, 2022:

Principal outstanding: Approximately $19.2 million

Interest rates: Ranging from 1.82% to 6.00%

Maturity dates: Ranging from May 6, 2039 to July 8, 2042

## Exhibit 10.24

**Exhibit 10.24**

**CDOR Option Sub, LLC Convertible Promissory Note**

[•], 20[•]&nbsp;&nbsp;&nbsp;&nbsp;$[•]

CDOR Option Sub, LLC, a Delaware limited liability company (the "**Company**"), hereby promises to pay to the order of [•] (the "Holder"), the principal amount of [•] ($[•]) together with interest thereon calculated in accordance with the provisions of this Convertible Promissory Note (this "**Note**"). All capitalized terms not defined in this Note shall have the meanings ascribed to them in that certain Indemnification Agreement, dated as of [•] [•], 20[•], by and among NHT Operating Partnership, LLC, a Delaware limited liability company, NHT REIT Merger Sub, LLC, a Delaware limited liability company, NHT Operating Partnership II, LLC, a Virginia limited liability company, NexPoint Hospitality Trust, an unincorporated open-ended real estate investment trust organized under the laws of the Province of Ontario, Canada ("**NHT**"), the Company, and NexPoint Advisors, L.P., a Delaware limited partnership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Payment of Principal</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Maturity Date</u>. Unless this Note has been previously converted in accordance with Section 3, the entire outstanding principal balance of this Note and accrued and unpaid interest thereon shall be due and payable on [•] [•], 20[•] (the "**Maturity Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Prepayment</u>. The Company has the option to pre-pay the outstanding principal balance of this Note and accrued and unpaid interest thereon at any time (the date of such payment, the "**Repayment Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Consideration</u>. The Company may elect to pay the amounts due and owing to the Holder pursuant to Section 1(a) or (b) in either (x) cash in immediately available funds or (y) a number of trust units of NHT having a fair market value equal to such amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Interest</u>. Until the earlier the Maturity Date or the Repayment Date, interest shall accrue at the rate of TWO HUNDRED TWENTY FIVE basis point (2.25%) per annum on the then-outstanding principal balance of this Note, compounded annually and computed on the basis of a 365-day year and shall be payable in kind, with such interest amount added to, and made part of, the outstanding principal amount of the Note on such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)At the election of the Holder prior to the Maturity Date or the Repayment Date, effective upon the date of such election, the outstanding principal balance and any unpaid accrued interest under this Note shall be converted into Membership Interests of the Company ("**Membership Interests**") with such amounts treated as a capital contribution into the Holder's capital account as set forth in the Limited Liability Agreement of the Company, dated as of [•] [•], 20[•], as amended from time to time, in an amount equal to the amount so converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any conversion pursuant to Section 3(a) shall be subject to any required approval of the TSX Venture Exchange.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Transfer Restrictions</u>. This Note may not be sold, transferred, assigned, pledged or otherwise disposed of at any time to any Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Amendment and Waiver</u>. Except as otherwise expressly provided herein, the provisions of this Note may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Cancellation</u>. After all principal and accrued interest at any time owed on this Note has been paid in full, this Note shall be surrendered to the Company for cancellation and shall not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Payments</u>. All payments to be made to the Holder of the Note shall be made in the lawful money of the United States of America in immediately available funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Place of Payment</u>. Payments of principal and interest shall be delivered to Holder at such address specified by Holder. If such address is changed, payments of principal and interest shall be delivered to the address specified by prior written notice by Holder to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Governing Law; Exclusive Venue</u>. All questions concerning the construction, validity and interpretation of this Note will be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. The Company and Holder agree that any litigation arising hereunder shall be filed in and resolved exclusively in the federal or state courts located in Delaware. The Company and Holder hereby irrevocably consents to the personal jurisdiction of such courts and agree that venue shall be exclusive with such courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Waiver of Presentment; Demand and Dishonor</u>. The Company hereby waives presentment for payment, protest, demand, notice of protest, notice of nonpayment and diligence with respect to this Note, and waives and renounces all rights to the benefits of any statute of limitations or any moratorium, appraisement, exemption, or homestead now provided or that hereafter may be provided by any federal or applicable state statute, including but not limited to exemptions provided by or allowed under the Federal Bankruptcy Code, both as to itself and as to all of its property, whether real or personal, against the enforcement and collection of the obligations evidenced by this Note and any and all extensions, renewals, and modifications hereof.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Business Days</u>. If any payment is due, or any time period for giving notice or taking action expires, on a day which is a Saturday, Sunday or legal holiday in the State of Delaware, the payment shall be due and payable on, and the time period shall automatically be extended to, the next business day immediately following such Saturday, Sunday or legal holiday, and interest shall continue to accrue at the required rate hereunder until any such payment is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Replacement</u>. Upon receipt of evidence reasonably satisfactory to the Company of the mutilation, destruction, loss or theft of the Note and the ownership thereof; and, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company shall, upon the written request of Holder, execute and deliver in replacement thereof a new Note in the same form, in the same original principal amount and dated the same date as the Note so mutilated, destroyed, lost or stolen, and such Note so mutilated, destroyed, lost or stolen shall then be deemed no longer outstanding hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Usury Laws</u>. It is the intention of the Company and the Holder of this Note to conform strictly to all applicable usury laws now or hereafter in force, and any interest payable under this Note shall be subject to reduction to the amount not in excess of the maximum legal amount allowed under the applicable usury laws as now or hereafter construed by the courts having jurisdiction over such matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Partial Invalidity</u>. If at any time any provision of this Note is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Assignment</u>. This Note may not be sold, offered for sale, pledged, hypothecated or otherwise encumbered, transferred or disposed of by the Holder without the prior written consent of the Company.

[Signature page follows.]

------

IN WITNESS WHEREOF, the Company has executed and delivered this Note on the date first above written.

CDOR OPTION SUB, LLC

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

*[Signature Page to Convertible Promissory Note]*

------

With respect to Notes held by NexPoint Diversified Real Estate Trust

or its subsidiaries as of December 31, 2022:

Principal outstanding: Approximately $5.6 million

Maturity dates: Ranging from November 25, 2040 to January 25, 2041

## Exhibit 21.1

**Exhibit 21.1**

**List of Subsidiaries of the Registrant**

---

| | |
|:---|:---|
| Subsidiary | Jurisdiction of Organization |
| Entegra-NHF Holdco, LLC | Delaware |
| NexPoint Diversified Real Estate Trust OP GP, LLC | Delaware |
| NexPoint Diversified Real Estate Trust Operating Partnership, L.P. | Delaware |
| NexPoint Dominion Land, LLC | Delaware |
| NexPoint Real Estate Capital, LLC | Delaware |
| NexPoint Real Estate Opportunities, LLC | Delaware |
| NHF TRS, LLC | Delaware |
| CP Equity Owner, LLC | Delaware |
| CP Tower Owner, LLC | Delaware |
| CP Equity Hotel Owner, LLC | Delaware |
| CP Hotel TRS, LLC | Delaware |

---

## Exhibit 23.1

---

| | |
|:---|:---|
| ![image_1.jpg](image_1.jpg) | |
| | KPMG LLP<br>Suite 1400<br>2323 Ross Avenue<br>Dallas, TX 75201-2721 |

---

**Consent of Independent Registered Public Accounting Firm**

We consent to the incorporation by reference in the registration statement (No. 333-269602) on Form S-8 of our report dated March 31, 2023, with respect to the consolidated financial statements of NexPoint Diversified Real Estate Trust.

/s/ KPMG LLP

Dallas, Texas<br>March 31, 2023

KPMG LLP, a Delaware limited liability partnership and a member firm of<br>the KPMG global organization of independent member firms affiliated with

KPMG International Limited, a private English company limited by guarantee.

## Exhibit 23.2

**Exhibit 23.2**

![image_1.jpg](image_1.jpg)![image_2b.jpg](image_2b.jpg)![image_0b.jpg](image_0b.jpg)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the incorporation in the exhibits to Form 10-K of our report dated March 10, 2022, relating to the financial statements of NexPoint Diversified Real Estate Trust, for the years ended December 31, 2020 and 2021.

![image_3b.jpg](image_3b.jpg)

COHEN & COMPANY, LTD.

Cleveland, Ohio March 24, 2022

C O H E N & C O M P A N Y , L T D .

800.229.1099 \| 866.818.4538 fax \| cohencpa.com

Registered with the Public Company Accounting Oversight Board

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO** 

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Jim Dondero, certify that:

1. I have reviewed this Annual Report on Form 10-K of NexPoint Diversified Real Estate Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

------

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 31, 2023

---

| |
|:---|
| /s/ Jim Dondero |
| Jim Dondero |
| President |
| (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO** 

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Brian Mitts, certify that:

1. I have reviewed this Annual Report on Form 10-K of NexPoint Diversified Real Estate Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

------

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 31, 2023

---

| |
|:---|
| /s/ Brian Mitts |
| Brian Mitts |
| Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary |
| (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO SECTION 906 OF** 

**THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report on Form 10-K of NexPoint Diversified Real Estate Trust (the "Company") for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Jim Dondero, President of the Company, and Brian Mitts, Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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|:---|:---|
| Dated: March 31, 2023 | /s/ Jim Dondero |
| | Jim Dondero<br>President<br>(Principal Executive Officer) |

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| | |
|:---|:---|
| Dated: March 31, 2023 | /s/ Brian Mitts |
| | Brian Mitts<br>Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary (Principal Financial Officer) |

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