Document:

Exhibit 10.10

 

EXECUTION COPY

 

PURCHASE AND SALE AGREEMENT

(Courtyard Kaua’i at Coconut Beach)

 

THIS PURCHASE
AND SALE AGREEMENT (this “Agreement”) is made and entered into as of June 19, 2017 (the “Effective
Date”), by and between (i) KAUAI COCONUT BEACH, LLC, a Delaware limited liability company (“Owner”),
and KAUAI COCONUT BEACH OPERATOR, LLC, a Delaware limited liability company (“Lessee” and collectively with
Owner, “Seller”), and (ii) KHS, LLC, a Delaware limited liability company (“Purchaser”).
Seller and Purchaser are sometimes referred to herein individually as a “Party,” and collectively as the “Parties.”

 

Recitals:

 

WHEREAS,
Owner is the owner of the hotel commonly known as Courtyard Kaua’i at Coconut Beach located at 650 Aleka Loop, Kapaa, Hawaii
(the “Hotel”), as more specifically described in this Agreement;

 

WHEREAS,
Owner leases the Hotel to Lessee, pursuant to that certain Lease Agreement dated as of May 8, 2017 (as amended or replaced from
time to time, the “Lease Agreement”); and

 

WHEREAS,
Seller desires to sell substantially all of assets and property (as described herein) of Seller to Purchaser, and Purchaser desires
to purchase such assets and property from Seller, on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE,
in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1         Definitions.
In addition to the terms defined above in the introduction and recitals to this Agreement, the following terms when used in this
Agreement shall have the meanings set forth in this Section 1.1:

 

“Accounts
Receivable” means all amounts that Lessee is entitled to receive from the Business which are not paid as of the Closing,
including charges for the use or occupancy of any guest, conference or banquet rooms or other facilities at the Hotel, any restaurant,
bar or banquet services, or any other goods or services provided by or on behalf of Seller at the Hotel.

 

“Affiliate”
means, with respect to the Person in question, any other Person that, directly or indirectly, (i) owns or controls fifty percent
(50%) or more of the outstanding voting and/or equity interests of such Person, or (ii) controls, is controlled by or is under
common control with, the Person in question. For the purposes of this definition, the term “control” and its derivations
means having the power, directly or indirectly, to direct the management, policies or general conduct of business of the Person
in question, whether by the ownership of voting securities, contract or otherwise.

 

     

     

    

 

“Anti-Terrorism
Laws” means Executive Order 13224 issued by the President of the United States, the USA PATRIOT Act, and all other Applicable
Law addressing or in any way relating to terrorist acts and acts of war.

 

“Applicable
Law” means (i) all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any
Governmental Authority, stock exchange, board of fire underwriters and similar quasi-governmental authority, and (ii) any judgment,
injunction, order or other similar requirement of any court or other adjudicatory authority, in effect at the time in question
and in each case to the extent the Person or property in question is subject to the same.

 

“Assumed
Contracts” means the Equipment Leases, Loan Documents, IRC Agreement, Operating Agreements, Tenant Leases, Bookings,
and all other Contracts that are assumed by Purchaser at Closing pursuant to this Agreement.

 

“Assumed
Liabilities” means the liabilities and obligations existing following the Closing Date under (i) the Loan Documents assumed
pursuant to the Loan Assumption Documents, (ii) the other Assumed Contracts, but excluding any liabilities related to any breach
or default under the Assumed Contracts which occurred prior to the Closing Date, and (iii) any Liability for which Purchaser receives
a credit pursuant to Section 10.2 (but only to the extent of such credit).

 

“Bookings” has the meaning set forth
in Section 2.1.16.

 

“Books and Records” has the meaning
set forth in Section 2.1.12.

 

“Business”
means the lodging business and all activities related thereto conducted at the Hotel, including (i) the rental of any guest, conference
or banquet rooms or other facilities at the Hotel, (ii) the operation of any restaurant, bar or banquet services, together with
all other goods and services provided at the Hotel, (iii) the rental of any commercial or retail space to tenants at the Hotel,
(iv) the maintenance and repair of the Real Property and tangible Personal Property, (v) the employment of the Employees, and (vi)
the payment of Taxes.

“Business Day” means any day other
than a Saturday, Sunday or federal legal holiday. “Cap” has the meaning set forth in Section 14.4.3.

 

“Casualty” has the meaning set forth
in Section 13.1.

 

“Closing” has the meaning set forth
in Section 9.1.

 

“Closing Date” has the meaning set
forth in Section 9.1.

 

“Closing Date Loan Balance” has
the meaning set forth in Section 7.9.1.

 

“Closing Date Payment” has the meaning
set forth in Section 3.3.1.

 

    	 	2	 

     

    

 

“Closing Date Reserve Balance” has
the meaning set forth in Section 7.9.1.

 

“Closing Statement” has the meaning
set forth in Section 10.1.

 

“Code” means
the Internal Revenue Code of 1986, as amended from time to time, and any regulations, rulings and guidance issued by the Internal
Revenue Service.

 

“Competing Transaction” has the
meaning set forth in Section 7.10.

 

“Condemnation” has the meaning set
forth in Section 13.2.

 

“Confidential Information” has the
meaning set forth in Section 7.1.1.

 

“Contemplated
Transactions” means all of the transactions contemplated by this Agreement, including (i) the sale by Seller of the Property
to Purchaser hereunder, (ii) the execution of this Agreement and the other Transaction Documents, and (iii) the performance by
Seller and Purchaser of the covenants and obligations under this Agreement and the other Transaction Documents.

 

“Contracts”
means, collectively, the Equipment Leases, the Operating Agreements and any other contract, agreement, deed, warranty, power of
attorney, lease, license, instrument, or other agreement or binding commitment, whether or not in written form, relating to the
Property, excluding the Tenant Leases and the Lease Agreement.

 

“Cut-Off Time” has the meaning set
forth in Section 10.2.

 

“Debt
Payoff Amount” means the amount of outstanding principal and accrued but unpaid interest, fees and other amounts payable
(including any prepayment penalties, if any) as of the close of business on the Closing Date of all Indebtedness of Seller, and
any other Indebtedness secured with an Encumbrance, other than a Permitted Exception on the Property, in each case, other than
the Indebtedness assumed by Purchaser under the Loan Assumption Documents.

 

“Deed” has the meaning set forth
in Section 9.3.1(b).

 

“Deposit Escrow Agent”
means Fidelity National Title & Escrow of Hawaii, Inc. located at City Financial Tower, 201 Merchant Street, Suite 2100, Honolulu,
Hawaii 96813.

 

“Deposit Escrow Agent Party” has
the meaning set forth in Section 14.6.

 

“Due Diligence Period” has the meaning
set forth in Section 4.1.1.

 

“Earnest Money” has the meaning
set forth in Section 3.2.1.

 

“Employees” means,
at the time in question, all persons employed full time or part time at the Hotel by Seller, Manager or their respective Affiliates.

 

“Encumbrance”
means any lien, charge, claim, security interest, mortgage, pledge or other encumbrance of any nature whatsoever.

 

    	 	3	 

     

    

 

“Environmental
Laws” means any United States federal, state, local or municipal law, environmental permit, approval, common law and
any judicial or administrative interpretation thereof, including any judicial or administrative order, consent or judgment, relating
to the environment, public health, occupational health and safety, or to any Hazardous Substance, including, without limitation,
(a) the presence, use, production, generation, handling, transportation, treatment, storage, disposal, release, control or cleanup
of any Hazardous Substance, or (b) to any chemical, material or substance, human exposure to which is regulated by any Governmental
Authority.

 

“Equipment Leases” has the meaning
set forth in Section 2.1.9.

 

“Exchange” has the meaning set forth
in Section 16.16.

 

“Excluded Liabilities” means all
Liabilities of Seller which are not Assumed Liabilities.

 

“Excluded Property” has the meaning
set forth in Section 2.2.

 

“Existing Survey”
means that certain ALTA/ACSM Survey prepared by Walter P. Thompson, Inc. last revised on May 4, 2017.

 

“F&B” has the meaning set forth
in Section 2.1.6.

 

“FF&E” has the meaning set forth
in Section 2.1.3.

 

“Final Accounting” has the meaning
set forth in Section 10.4.1.

 

“Final Adjustment Certificate” has
the meaning set forth in Section 10.4.1.

 

“Final Prorations” has the meaning
set forth in Section 10.4.1.

 

“Franchise
Agreement” means that certain Franchise Agreement dated as of October 21, 2010 between Franchisor and Lessee, as
amended from time to time.

 

“Franchise Approval” has the meaning
set forth in Section 7.8.1.

 

“Franchisor” means Marriott International,
Inc. or its Affiliate.

 

“Fundamental Representations” has
the meaning set forth in Section 8.2.1(b).

 

“GAAP” means generally accepted
accounting principles, consistently applied.

 

“Gift Certificates”
means, collectively, all gift certificates, gift cards and vouchers for use at the Property.

 

“Governmental
Authority” means any federal, state or local government or other political subdivision thereof, including any Person
exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the
extent the same has jurisdiction over the Person or property in question.

 

    	 	4	 

     

    

 

“Group Contracts”
means Contracts for group Bookings, weddings, banquets and other group events at the Hotel.

 

“Guest
Ledger” means all charges accrued to the open accounts of any guests or customers at the Hotel as of the Cut-Off Time
for the use or occupancy of any guest, conference or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet
services, or any other goods or services provided by or on behalf of Seller at the Hotel, including without limitation any and
all taxes and credit card fees.

 

“Hazardous
Substances” means (i) any chemical, material or substance defined as, or included in the definition of, “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “toxic substances or toxic pollutants,”
“contaminants,” “toxic or hazardous chemicals” or “pesticides” in any applicable Environmental
Law, or (ii) any petroleum or petroleum product, asbestos-containing materials, or lead-based paint, but excluding substances of
kinds and in amounts ordinarily and customarily used or stored in such properties similar to the Property for purposes of cleaning
or other maintenance or operations in compliance with Environmental Laws.

 

“Historical
Financials” means the unaudited balance sheets and statements of income of Seller as of and for the fiscal years ended
December 31, 2015 and December 31, 2016 (in each case, including the footnotes thereto, if any), and the unaudited balance sheet
and statement of income of Seller for the four (4) month period ended April 30, 2017.

 

“Holdback Amount” means an amount
equal to the Cap.

 

“Holdback
Escrow Agent” means Fidelity National Title & Escrow of Hawaii, Inc. located at City Financial Tower, 201 Merchant
Street, Suite 2100, Honolulu, Hawaii 96813.

 

“Holdback Escrow Agreement” has
the meaning set forth in Section 9.3.1(e).

 

“Hotel” has the meaning set forth
in the Recitals.

 

“Hotel
Guest Data and Information” means all guest or customer profiles, contact information (e.g., addresses, phone numbers,
facsimile numbers and email addresses), histories, preferences and any other guest or customer information in any database of Seller,
Manager or their respective Affiliates, whether obtained or derived by Seller, Manager or their respective Affiliates from guests
or customers of the Hotel or any facility associated with the Hotel.

 

“Improvements” has the meaning set
forth in Section 2.1.2.

 

“Indebtedness”
means (i) any liability, contingent or otherwise, of Seller (A) for borrowed money (whether or not the recourse of the lender is
to Property or only to a portion thereof and including all obligations in respect of principal, accrued interest, penalties (including
prepayment penalties), overdraft charges, fees, expenses and premiums), (B) evidenced by a bond, note, debenture or similar instrument
or letter of credit (including a purchase money obligation or other obligation relating to the deferred purchase price of property),
or (C) for reimbursement obligations under letters of credit, bank guarantees, surety bonds, performance bonds, and other similar
contractual obligations entered into by or on behalf of Seller (but solely to the extent drawn and not paid); (ii) any monetary
obligation secured by an Encumbrance to which any of the Property is subject; (iii) any lease of any property that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet of Seller; (iv) obligations under interest rate,
currency or commodity derivatives or hedging transactions (valued at the termination value thereof); and (v) any guarantees of
any of the foregoing.

 

    	 	5	 

     

    

 

“Indemnification Claim” has the
meaning set forth in Section 14.5.1.

 

“Indemnification Deductible” has
the meaning set forth in Section 14.4.3.

 

“Indemnification
Loss” means, with respect to any Indemnitee, any actual (and not contingent) liability, damage, loss, cost or expense,
including reasonable attorneys’ fees and expenses and court costs, incurred by such Indemnitee as a result of the act, omission
or occurrence in question.

 

“Indemnitee” has the meaning set
forth in Section 14.5.1.

 

“Indemnitor” has the meaning set
forth in Section 14.5.1.

 

“Inspections” has the meaning set
forth in Section 4.1.2.

 

“Intangible
Personal Property” means all intangible personal property owned by Seller with respect to the Business, including, without
limitation, goodwill, claims, approvals, warranties (expresses or implied), contract rights associated with the Assumed Contracts,
know- how, trade secrets, customer lists, membership lists, proprietary information, confidential information, proprietary processes
and formulae, databases and data collections; all source and object code, computer programs, software, algorithms, architecture,
structure, display screens, photography, layouts, inventions, development tools; rights of publicity and privacy and rights to
personal information; the content and information contained in any website, and all e-mail addresses and other internet addresses,
domain names and other similar proprietary rights used in connection with the Business, all documentation, marketing materials
and media constituting, describing or relating to the above, including, manuals, memoranda, records, pictures, photographs, digital
images, video recordings, audiotapes, film and the like.

 

“Inventoried Baggage” has the meaning
set forth in Section 11.2.

 

“Inventoried Safe Deposit Boxes”
has the meaning set forth in Section 11.1.

 

“IRC Agreement” means that certain
Interest Rate Cap Agreement dated as of May 8, 2017 between Seller and SMBC.

 

“IT Systems” has the meaning set
forth in Section 2.1.5.

 

“Land” has the meaning set forth
in Section 2.1.1.

 

“Lease Agreement” has the meaning
set forth in the Recitals.

 

“Lender” has the meaning set forth
in Section 7.9.1.

 

    	 	6	 

     

    

 

“Lender’s Liens”
means all mortgages, security interests, liens and encumbrances in favor of Lender pursuant to the Loan Documents.

 

“Lessee” has the meaning set forth
in the Recitals.

 

“Liability”
means any liability, obligation, damage, loss, diminution in value, cost or expense of any kind or nature whatsoever, whether accrued
or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen.

 

“Licenses and Permits” has the meaning
set forth in Section 2.1.11.

 

“Liquor License”
means the licenses and approvals required under Applicable Law for the sale of alcoholic beverages at the Hotel.

 

“Liquor License Holder” means
DHC Food & Beverage Corporation, an Affiliate of Manager.

 

“Loan” has the meaning set forth
in Section 7.9.1.

 

“Loan Assumption Costs” has the
meaning set forth in Section 7.9.3.

 

“Loan Assumption Documents” has
the meaning set forth in Section 7.9.1.

 

“Loan Cost Reimbursement Amount”
has the meaning set forth in Section 7.9.3.

 

“Loan Documents” has the meaning
set forth in Section 7.9.1.

 

“Management
Agreement” means, collectively, that certain Management Agreement dated as of September 15, 2010 between Lessee and Manager,
and that certain Amended and Restated Food & Beverage Management Agreement dated as of October 20, 2010 between Lessee and
Liquor License Holder, each as amended from time to time.

 

“Manager” means Davidson Hotel Company,
LLC.

 

“Material Casualty” has the meaning
set forth in Section 13.1.1.

 

“Material Condemnation” has the
meaning set forth in Section 13.2.1.

 

“Material Contract” has the meaning
set forth in Section 6.1.13(b).

 

“Mutual Closing Conditions” has
the meaning set forth in Section 8.1.1.

 

“New Exception” has the meaning
set forth in Section 5.3.3(a).

 

“Notice” has the meaning set forth
in Section 16.1.1.

 

“Operating Agreements” has the meaning
set forth in Section 2.1.10.

 

    	 	7	 

     

    

 

“Ordinary Course of Business”
means the ordinary course of business consistent with Seller’s past custom and practice for the Business.

 

“Paid Time Off Credit” has the meaning
set forth in Section 7.4.5.

 

“Parking
License” means that certain License Agreement dated November 6, 2015 by and between Coconut Plantation Beach Investor,
LLC and Lessee.

 

“Payoff
Letters” means letters, in form and substance reasonably satisfactory to Purchaser, setting forth the amounts and actions
required to satisfy all Indebtedness of Seller (other than the Indebtedness assumed by Purchaser under the Loan Assumption Documents)
and any broker’s fees related to the Contemplated Transactions (to the extent Seller is responsible therefor, if any), and
in each case, to obtain a release therefrom.

 

“Permitted Exceptions” has the meaning
set forth in Section 5.3.2.

 

“Person”
means any natural person, corporation, general or limited partnership, limited liability company, association, joint venture, trust,
estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity.

 

“Personal Property” means the Property
other than the Real Property.

 

“Phase
I Report” means the Phase I Environmental Site Assessment of the Courtyard Marriott Kauai at Coconut Beach dated
May 8, 2017 prepared by EMG.

 

“Plans and Specifications” has the
meaning set forth in Section 2.1.13.

 

“Prepaid
Amounts” means all prepaid expenses, reserves and deposits, associated with the Assumed Contracts or held by or for the
benefit of or granted to Seller, including all event, security and escrow deposits.

 

“Property” has the meaning set forth
in Section 2.1.

 

“Prorations” has the meaning set
forth in Section 10.2.

 

“Purchase Price” has the meaning
set forth in Section 3.1.

 

“Purchaser Closing Conditions” has
the meaning set forth in Section 8.2.

 

“Purchaser Closing Deliveries” has
the meaning set forth in Section 9.3.2.

 

“Purchaser Default” has the meaning
set forth in Section 12.1.

 

“Purchaser Documents” has the meaning
set forth in Section 6.2.2.

 

“Purchaser
Due Diligence Reports” means all studies, reports and assessments prepared by any Person for or on behalf of Purchaser
(other than any internal studies, reports and assessments prepared by any of Purchaser’s employees, attorneys or accountants)
in connection with the Inspections.

 

    	 	8	 

     

    

 

“Purchaser
Indemnitees” means Purchaser and its Affiliates, and each of their respective shareholders, members, partners, trustees,
beneficiaries, directors, officers and employees, and the successors, permitted assigns, legal representatives, heirs and devisees
of each of the foregoing.

 

“Purchaser’s Inspectors” has
the meaning set forth in Section 4.1.2.

 

“Purchaser’s New Objections”
has the meaning set forth in Section 5.3.3(a).

 

“Replacement
Franchise Documents” means (i) an interim Franchise Agreement between Purchaser, as owner of the Hotel, Franchisor, as
licensor, to become effective concurrently with Closing, pursuant to which Franchisor will license the “Courtyard by Marriott”
name to Purchaser (or its designated Affiliate) for use at the Hotel after the Closing, (ii) any guaranties required in connection
with such Franchise Agreement, and (iii) a term sheet between Purchaser, as owner of the Hotel, and Franchisor, as licensor, to
become effective subject to the implementation of a property improvement plan set forth therein, pursuant to which Franchisor will
license the “Sheraton” name to Purchaser (or its designated Affiliate) for use at the Hotel, in each case on terms
reasonably acceptable to Purchaser.

 

“QI” has the meaning set forth in
Section 16.16.

 

“Real Property” has the meaning
set forth in Section 2.1.2.

 

“Remove” has the meaning set forth
in Section 5.3.3(c).

 

“Reserves” has the meaning set forth
in Section 7.9.1.

 

“Retail Merchandise” has the meaning
set forth in Section 2.1.7.

 

“Seller Closing Conditions” has
the meaning set forth in Section 8.3.1.

 

“Seller Closing Deliveries” has
the meaning set forth in Section 9.3.1.

 

“Seller Default” has the meaning
set forth in Section 12.1.

 

“Seller Documents” has the meaning
set forth in Section 6.1.2.

 

“Seller Due Diligence Materials”
has the meaning set forth in Section 4.1.3(a).

 

“Seller
Indemnitees” means Seller, Manager, Liquor License Holder and their respective Affiliates, and each of their respective
shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, assigns, legal
representatives, heirs and devisees of each of the foregoing.

 

“Seller’s
Knowledge” (and any similar phrases as they relate to Seller) means the current actual knowledge of Greg Clay and Marc
Dober.

 

“Seller’s Response” has the
meaning set forth in Section 5.3.3(b).

 

    	 	9	 

     

    

 

“SMBC” means SMBC Capital Markets,
Inc.

 

“Supplies” has the meaning set forth
in Section 2.1.4.

 

“Survival Period” has the meaning
set forth in Section 6.3.

 

“Taxes”
means any federal, state, local or foreign, real property, personal property, sales, use, gross receipts taxes (including, without
limitation, general excise taxes), room, occupancy, ad valorem or similar taxes, assessments, levies, charges or fees imposed by
any Governmental Authority on Seller with respect to the Property or the Business, including any interest, penalty or fine with
respect thereto, but excluding any federal, state, local or foreign income, capital gain, gross receipts, capital stock, franchise,
profits, estate, gift or generation skipping tax, transfer, documentary stamp, recording or similar tax, levy, charge or fee, in
each case, incurred with respect to the transaction described in this Agreement.

 

“Tax
Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment thereof.

 

“Tenant Leases” has the meaning
set forth in Section 2.1.8.

 

“Third-Party
Claim” means, (i) with respect to any Seller Indemnitee, any claim, demand, lawsuit, arbitration or other legal or administrative
action or proceeding against such Seller Indemnitee by any Person which is not Purchaser or an Affiliate of Purchaser, and (ii)
with respect to any Purchaser Indemnitee, any claim, demand, lawsuit, arbitration or other legal or administrative action or proceeding
against such Purchaser Indemnitee by any Person which is not Seller or an Affiliate of Seller.

 

“Title Commitment” has the meaning
set forth in Section 5.1.

 

“Title Company”
means Chicago Title Insurance Company located at 2828 Routh Street, Suite 800, Dallas, Texas 75201.

 

“Title Policy” has the meaning set
forth in Section 5.4.

 

“Trademarks” has the meaning set
forth in Section 2.1.14.

 

“Trade Payables” has the meaning
set forth in Section 10.2.9.

 

“Transaction Documents”
means, collectively, this Agreement, the Seller Closing Deliveries and the Purchaser Closing Deliveries.

 

“Unpermitted Exceptions” has the
meaning set forth in Section 5.3.2.

 

“Updated
Survey” means an updated Existing Survey (or a new survey of the Real Property) ordered and paid for solely by Purchaser
and completed and obtained by Purchaser during the Due Diligence Period.

 

    	 	10	 

     

    

 

“WARN Act” means the
Worker’s Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq., as well as the rules and
regulations thereto, set forth in 20 CFR 639, et seq., and any similar state and local laws, as amended from time to time,
and any regulations, rules and guidance issued pursuant thereto.

 

“Warranties” has the meaning set
forth in Section 2.1.15.

 

ARTICLE II

THE PROPERTY AND LIABILITIES

 

2.1         Description of the Property.
Subject to the terms set forth in this Agreement, at the Closing, Seller shall sell, convey, transfer, assign and deliver to Purchaser,
and Purchaser shall purchase and accept from Seller, free and clear of all Encumbrances, other than Permitted Exceptions, all property
and assets of Seller, including, without limitation, the property and assets set forth in this Section 2.1, but expressly
excluding the Excluded Property (collectively, the “Property”):

 

2.1.1.     Land. The land described
in Schedule 2.1.1, together with all appurtenant easements and any other rights and interests appurtenant thereto (the “Land”);

 

2.1.2.     Improvements.
All buildings, structures and other improvements located on or affixed to the Land and all fixtures on the Land which constitute
real property under Applicable Law (the “Improvements”; the Land and the Improvements are referred to collectively
herein as the “Real Property”);

 

2.1.3.     FF&E.
All fixtures (other than those which constitute Improvements), furniture, furnishings, equipment, machinery, tools, vehicles, appliances,
art work and other items of tangible personal property which are located at the Hotel and used exclusively in the Business, or
ordered for future use at the Hotel as of the Closing, other than the Supplies, IT Systems, F&B, Retail Merchandise, Books
and Records and Plans and Specifications (the “FF&E”);

 

2.1.4.     Supplies.
All china, glassware and silverware, linens, uniforms, engineering, maintenance, cleaning and housekeeping supplies, matches and
ashtrays, soap and other toiletries, stationery, menus, directories and other printed materials, and all other similar supplies
and materials, which are located at the Hotel or ordered for future use at the Hotel as of the Closing (the “Supplies”);

 

2.1.5.     IT
Systems. All computer hardware, telecommunications and information technology systems located at the Hotel, and all computer
software used at the Hotel (subject to the terms of the applicable license agreement), to the extent the same are transferable
or the Parties obtain any consent necessary to effectuate such a transfer (the “IT Systems”);

 

2.1.6.     Food
and Beverage. All food and beverages (alcoholic and non-alcoholic) which are located at the Hotel (whether opened or unopened),
or ordered and paid for by Seller for future use at the Hotel as of the Closing, including all food and beverages located in the
guest rooms (the “F&B”);

 

    	 	11	 

     

    

 

2.1.7.     Retail
Merchandise. All merchandise located at the Hotel and held for sale to guests and customers of the Hotel, or ordered for future
sale and paid for by Seller at the Hotel as of the Closing, including the inventory held for sale in any gift shop or newsstand
operated by Seller or Manager at the Hotel, but expressly excluding the F&B (the “Retail Merchandise”);

 

2.1.8.     Tenant
Leases. All leases, subleases, licenses, concessions and similar agreements granting to any other Person the right to use or
occupy any portion of the Real Property described in Schedule 2.1.8, other than the Lease Agreement, the Management Agreement
and Bookings, together with all security deposits held by Seller thereunder (the “Tenant Leases”);

 

2.1.9.     Equipment
Leases. All leases and purchase money security agreements for any equipment, machinery, vehicles, furniture or other personal
property located at the Hotel which are held by Seller and used exclusively in the Business described in Schedule 2.1.9,
together with all deposits made by Seller thereunder (the “Equipment Leases”);

 

2.1.10.   Operating
Agreements; Parking License. All maintenance, repair, improvement, service and supply contracts, credit card service agreements,
and all other agreements for goods or services, described in Schedule 2.1.10, including, without limitation, the Parking
License, which are held by Seller in connection with the Business, other than Equipment Leases, Tenant Leases, Bookings, and Licenses
and Permits (the “Operating Agreements”);

 

2.1.11.   Licenses
and Permits. All licenses, permits, consents, authorizations, approvals, registrations and certificates issued by any Governmental
Authority which are held by Seller with respect to the Hotel, including the construction, use or occupancy of the Hotel or the
Business, together with any deposits made by Seller thereunder, to the extent the same and such deposits are transferable or the
Parties obtain any consent necessary to effectuate such a transfer, but expressly excluding any Liquor License to the extent it
cannot be transferred under Applicable Law (the “Licenses and Permits”);

 

2.1.12.   Books
and Records. All books and records located at the Hotel which relate exclusively to the Hotel or the Business, including all
Hotel Guest Data and Information, to the extent transferable to Purchaser, but expressly excluding (i) all documents and other
materials that are legally privileged or constitute attorney work product, or are subject to an Applicable Law or a confidentiality
agreement prohibiting their disclosure by Seller, (ii) corporate or other entity governance records, (iii) Employee personnel files
(if any), and (iv) memoranda, analysis, correspondence and similar documents and materials prepared by or for Seller or any of
its Affiliates in connection with the transaction described in this Agreement (the “Books and Records”);

 

2.1.13.   Plans
and Specifications. All plans and specifications, blue prints, architectural plans, engineering diagrams and similar items
located at the Hotel which relate exclusively to the Hotel, to the extent the same are transferable (the “Plans and Specifications”);

 

2.1.14.   Trademarks;
Intellectual Property. Excluding any such rights granted to Seller pursuant to Franchise Agreement, all trademarks, tradenames
and servicemarks used by Seller or Manager in the operation of the Business (the “Trademarks”), including, if
applicable, causing Manager to transfer such Trademarks to Purchaser, and all other intellectual property of Seller;

 

    	 	12	 

     

    

 

2.1.15.   Warranties.
All warranties and guaranties held by Seller with respect to any Improvements or Personal Property, to the extent the same are
transferable or the Parties obtain any consent necessary to effectuate such a transfer (the “Warranties”);

 

2.1.16.   Bookings.
All bookings and reservations for guest, conference and banquet rooms or other facilities at the Hotel as of the Closing, together
with all deposits held by Seller with respect thereto (the “Bookings”);

 

2.1.17.   Cash on Hand. All cash on hand or on
deposit in any house bank;

 

2.1.18.   Prepaid Amounts. Any Prepaid Amounts
not otherwise included above;

 

2.1.19.   Entitlements
and Development Approvals. All licenses, certificates, permits, entitlements, development rights, consents, authorizations,
registrations, certificates, notices, permits and rights required or requested by any Governmental Authority in connection with
the any previous redevelopment of the Hotel and any future redevelopment rights thereunder, to the extent transferable under Applicable
Law;

 

2.1.20.   Accounts Receivable. The Accounts Receivable
and Guest Ledger; and

 

2.1.21.   Other Intangible
Personal Property. All other Intangible Personal Property of Seller and goodwill associated therewith to the extent
transferable.

 

2.2         Excluded Property.
Notwithstanding anything to the contrary in Section 2.1, the property, assets, rights and interests set forth in this Section
2.2 (the “Excluded Property”) shall not be transferred, assigned or conveyed to Purchaser, and shall be
excluded from the Property:

 

2.2.1.     Account
Cash. Except for deposits and cash on hand expressly included in Section 2.1 all operating account or other account
or reserve maintained in connection with the Business, together with any and all credit card charges, checks and other instruments
which Seller has submitted for payment as of the Closing;

 

2.2.2.     Third-Party
Property. Any fixtures, personal property or intellectual property owned by (i) the lessor under any Equipment Leases, (ii)
the supplier, vendor, licensor or other party under any Operating Agreements or Licenses and Permits, (iii) the tenant under any
Tenant Leases, (iv) Manager or Liquor License Holder, (v) any Employees, (vi) any guests or customers of the Hotel, or (vii) Franchisor;

 

2.2.3.     Management
Agreement. The Management Agreement, which shall be terminated by Seller at Closing at Seller’s cost and expense;

 

2.2.4.     Franchise
Agreement. The Franchise Agreement, which shall be terminated by Seller at Closing at Seller’s cost and expense so long
as Purchaser satisfies its obligations set forth in Section 7.8;

 

2.2.5.     Lease Agreement.
The Lease Agreement, which shall be terminated by Seller at Closing at Seller’s cost and expense;

 

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2.2.6.     Liquor License. To the extent not transferrable,
the Liquor License; and

 

2.2.7.     Equity
Interests and Seller Rights. The rights of Seller under this Agreement, Owner’s membership interests in Lessee, and Seller’s
seal, minute book and member records book.

 

2.3         Assumed
Liabilities. At the Closing, Purchaser will assume and agree to pay or perform, as the case may be, the Assumed
Liabilities.

 

2.4         Excluded Liabilities.
Notwithstanding anything to the contrary, Purchaser shall assume no Liabilities of Seller of any nature other than the Assumed
Liabilities. Seller shall retain all Liabilities of Seller other than the Assumed Liabilities.

 

2.5         Non-Assignment of Certain
Assigned Agreements. To the extent that Seller’s rights under any Assumed Contract may not be assigned to Purchaser
without the consent of another Person that has not been obtained, this Agreement shall not constitute an agreement to assign the
same if an attempted assignment would constitute a breach thereof or be unlawful. If any such consent shall not be obtained or
if any attempted assignment would be ineffective or would impair Purchaser’s rights under the Assumed Contract in question
so that Purchaser would not in effect acquire the benefit of all such rights, Seller, to the extent permitted by law and the Assumed
Contract, shall act (for up to thirty (30) days after the Closing and at no cost or liability to Seller) as Purchaser’s agent
in order to obtain for it the benefits thereunder.

 

ARTICLE III 

PURCHASE PRICE

 

3.1         Purchase Price.
The purchase price for the Property is $62,000,000 (the “Purchase Price”), which shall be adjusted at
Closing for the Prorations pursuant to Section 10.2, the Guest Ledger pursuant to Section 10.3, and as otherwise
expressly provided in this Agreement, and shall be paid in accordance with Section 9.3.2(a).

 

3.2         Earnest Money.

 

3.2.1.     Deposit
of Earnest Money. Purchaser shall deposit with Deposit Escrow Agent $4,000,000 (together with any interest earned
thereon, the “Earnest Money”) within two (2) Business Days after the Effective Date. If, in accordance
with Section 4.1.1, Purchaser elects to terminate this Agreement during the Due Diligence Period, the Earnest Money shall be
refunded to Purchaser. If Purchaser elects to proceed to Closing by failing to deliver a Termination Notice prior to the
expiration of the Due Diligence Period, then, the Earnest Money shall be non- refundable to Purchaser, except as otherwise
expressly provided in this Agreement.

 

3.2.2.     Investment
of Earnest Money. Upon receipt by Deposit Escrow Agent of the Earnest Money, Deposit Escrow Agent shall cause the same to be
deposited into an interest bearing account at an institution selected by Deposit Escrow Agent.

 

3.2.3.     Disbursement
of Earnest Money at Closing. At Closing, Purchaser shall cause Deposit Escrow Agent to disburse the Earnest Money to
Seller, and Purchaser shall receive a credit against the Purchase Price in the amount of the Earnest Money disbursed to
Seller. This Section 3.2.3 shall survive the termination of this Agreement.

 

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3.2.4.     Disbursement
of Earnest Money Following Termination. In the event this Agreement is terminated by Purchaser or by Seller in accordance with
this Agreement, all or a portion of the Earnest Money Deposit shall be refunded or disbursed by the Deposit Escrow Agent based
upon the applicable events giving rise to such termination as set forth in this Agreement. Upon any termination of this Agreement,
Purchaser or Seller, as applicable, may provide written notice to the Deposit Escrow Agent to disperse the Earnest Money in accordance
with the terms hereof. Upon receipt of such notice, the Deposit Escrow Agent shall provide written notice in accordance with the
terms hereof to the other Party, and so long as the other Party does not object to such disbursement within three (3) Business
Days of receipt of such notice, the Deposit Escrow Agent may proceed to disperse the Earnest Money as requested by Purchaser or
Seller, as applicable.

 

3.3         Payment of Purchase Price.

 

3.3.1.     Payment at Closing. At Closing:

 

(a) Purchaser
shall pay to Seller an amount equal to the Purchase Price (as adjusted pursuant to Section 3.1), plus the Loan Cost
Reimbursement Amount, plus the Closing Date Reserve Balance, less the Closing Date Loan Balance, less the
Holdback Amount paid to the Holdback Escrow Agent, less any Debt Payoff Amount, less the Earnest Money disbursed
to Seller (the “Closing Date Payment”);

 

(b) Purchaser
shall pay the Holdback Amount to the Holdback Escrow Agent solely for purposes of securing Seller’s obligations under Article
X and Article XIV, to be held during the Survival Period in accordance with the terms of the Holdback Escrow Agreement;
and

 

(c) Purchaser shall pay any Debt Payoff
Amount in cash by wire transfer of immediately available funds to the appropriate lenders in accordance with the Payoff Letters.

 

3.3.2.     Method of Payment.
All amounts to be paid by Purchaser to Seller pursuant to this Agreement shall be paid by wire transfer of immediately available
U.S. dollars.

 

3.4         Allocation of Purchase
Price. The Parties shall use reasonable efforts to agree, prior to Closing, upon an allocation of the Purchase Price among
the Land, the Improvements and the Personal Property for federal, state and local tax purposes. If the Parties cannot agree upon
such allocation of the Purchase Price, (a) each Party shall file federal, state and local tax returns based on each Party’s
own determination of the proper allocation of the Purchase Price, each bearing its own consequences with respect to any discrepancies,
and (b) Seller’s proposed allocation to Real Property shall be used for purposes of determining any transfer tax payable
at Closing.

 

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ARTICLE IV 

CONTINGENCIES

 

4.1         Due Diligence.

 

4.1.1.     Due
Diligence Contingency. Purchaser shall have a period from May 2, 2017 until 5:00 p.m. (Hawaii Time) on June 19, 2017 (the
“Due Diligence Period”) to perform its due diligence review of the Property and all matters related
thereto which Purchaser deems advisable, including any engineering, environmental, title, survey, financial, operational and
legal compliance matters relating to the Property. At any time during the Due Diligence Period, Purchaser may, in its sole
discretion, elect to terminate this Agreement by providing written notice thereof to Seller and Deposit Escrow Agent (a
“Termination Notice”), in which event the Earnest Money shall be refunded to Purchaser in accordance with Section
3.2.4 and Purchaser and Seller shall have no further obligation to or recourse against each other except for those
expressly stated to survive the termination of this Agreement. If, at the end of the Due Diligence Period, Seller has not
received a Termination Notice (with a copy to Deposit Escrow Agent), then Purchaser shall have no further right to terminate
this Agreement except as expressly provided otherwise elsewhere in this Agreement.

 

4.1.2.     Due
Diligence Inspections. Purchaser shall have the right to perform such examinations, tests, investigations and studies of the
Property (the “Inspections”) as Purchaser reasonably deems advisable, in accordance with this Section 4.1.2.
Purchaser may conduct the Inspections with its officers, employees, contractors, consultants, agents or representatives (“Purchaser’s
Inspectors”); provided, however, that Purchaser shall cause the Purchaser’s Inspectors to comply with the provisions
regarding Confidential Information set forth in Section 7.1. Seller shall provide reasonable access to the Property for
Purchaser’s Inspectors to perform the Inspections; provided, however, that (i) Purchaser shall provide Seller with at least
twenty-four (24) hours prior notice of each of the Inspections; (ii) Purchaser’s Inspectors shall be accompanied by an employee,
agent or representative of Seller, which Seller shall make available; (iii) the Inspections shall be conducted by Purchaser’s
Inspectors during business hours; (iv) Purchaser’s Inspectors shall not perform any drilling, coring or other invasive testing,
without Seller’s prior written consent, which may be withheld it its sole discretion; (v) Purchaser’s right to perform
the Inspections shall be subject to the rights of tenants, guests and customers at the Hotel; and (vi) the Inspections shall not
unreasonably interfere with the Business.

 

4.1.3.     Seller’s Due Diligence Materials.

 

(a) To the extent
in Seller’s possession, Seller shall provide to Purchaser promptly upon request by Purchaser, or make available to Purchaser
at the Hotel for review and copying by Purchaser, due diligence materials relating to the Property that are reasonably requested
by Purchaser. All documents and materials provided by Seller to Purchaser pursuant to this Agreement, together with any copies
or reproductions of such documents or materials, are referred to collectively herein as the “Seller Due Diligence Materials.”
This provision shall survive the Closing.

 

    	 	16	 

     

    

 

(b) If this Agreement
is terminated, Purchaser shall, upon written request from Seller, (i) return all original Seller Due Diligence Materials provided
to Purchaser by or on behalf of Seller, and destroy all other Seller Due Diligence Materials, and (ii) cause all Persons to whom
Purchaser has provided any Seller Due Diligence Materials to return any original Seller Due Diligence Materials to Purchaser, and
destroy all other Seller Due Diligence Materials.

 

4.1.4.     Inspections
Indemnification. Purchaser shall defend, indemnify and hold harmless the Seller Indemnitees in accordance with Article XIV
from and against any Indemnification Loss (excluding discovery of any pre-existing condition of the Property) incurred by any Seller
Indemnitee resulting from the Inspections. At Seller’s request, Purchaser, at its cost and expense, shall repair any damage
to the Property or any other property owned by a Person other than Purchaser (including any Excluded Property) resulting from the
Inspections, and restore the Property or such other third party property (including any Excluded Property) to the same condition
as existed prior to such Inspections, except to the extent caused by Seller, or replace the Property or such third party property
with property (including any Excluded Property) of the same quantity and quality. This Section 4.1.4 shall survive the termination
of this Agreement.

 

ARTICLE V

TITLE TO THE PROPERTY

 

5.1         Title Commitment.
Purchaser has received a current title insurance commitment dated June 8, 2017 from the Title Company for an ALTA owner’s
title insurance policy covering the Real Property, together with copies of all documents referenced therein (the “Title
Commitment”).

 

5.2         Survey. Purchaser
has received Seller’s existing ALTA survey for the Property (the “Existing Survey”). Purchaser shall have
the right during the Due Diligence Period to obtain an updated survey (the “Updated Survey”). Any Updated Survey
obtained by Purchaser shall be prepared by a duly licensed surveyor, in accordance with the ALTA/ACSM Minimum Standard Detail Requirements
for Land Title Surveys, certified to Seller, Purchaser and the Title Company, and shall otherwise be in accordance with such standards
as are required by the Title Company in order to issue the Title Policy. In the event Purchaser does not obtain an Updated Survey
prior to the expiration of the Due Diligence Period and the Title Company determines that the Existing Survey is insufficient to
permit the Title Company to remove or insure over any survey exception in the Title Commitment, then Seller shall have no obligation
to cause the Title Company to remove or insure over any such survey exception, and such exception shall constitute a Permitted
Exception.

 

5.3         Exceptions to Title.

 

5.3.1.     Permitted
Exceptions. As used herein, “Permitted Exceptions” shall mean (i) current non-delinquent real property taxes,
(ii) all Lender’s Liens, (iii) the rights and interests of customers and guests at the Hotel to occupy rooms on a transient
license basis, (iv) the rights of tenants under the Tenant Leases, as tenants only, pursuant to the Tenant Leases, (v) all Encumbrances
caused or created by any Purchaser Indemnitee, (vi) any other exceptions set forth in the Title Commitment other than Unpermitted
Exceptions.

 

    	 	17	 

     

    

 

5.3.2.     Unpermitted
Exceptions. Seller agrees that the following shall constitute unpermitted exceptions: (i) any mortgages, deeds of trust, monetary
encumbrance or other security interests for any financing or other Encumbrances requiring the payment of money, other than Lender’s
Liens and any other Encumbrances which are expressly assumed by Purchaser under this Agreement, (ii) mechanics’ liens for
work performed by, through or under Seller or Manager prior to Closing, (iii) any mortgages, deeds of trust, monetary encumbrances
or other security interests for any financing or other Encumbrances on the Real Property incurred by any third party which Seller
agrees in writing to satisfy at or prior to Closing and (iv) Taxes which constitute an Encumbrance on the Real Property which would
be delinquent if unpaid at Closing; provided, however, that if any such Taxes are payable in installments, such obligation shall
apply only to the extent such installments would be delinquent if unpaid at Closing (collectively, the “Unpermitted Exceptions”).

 

5.3.3.     New Exceptions to Title.

 

(a)      Purchaser’s New Objections. To the extent the Real Property is encumbered after the Effective Date and prior to the
Closing without the approval of Purchaser, and such encumbrance is not a Permitted Exception, (a “New Exception”),
upon receipt of written notice of any such New Exception, Purchaser shall have five (5) Business Days to review such New Exception
and provide written notice to Seller with any objections to such New Exception (the “Purchaser’s New Objections”);
provided, however, Purchaser agrees that it shall not have the right to object to any of the matters described in Section 5.3.1
that constitute Permitted Exceptions. To the extent Purchaser receives written notice of any New Exception less than five (5) Business
Days prior to Closing, Purchaser shall be entitled to a reasonable adjournment of the Closing in order to review such New Exception
and evaluate Seller’s Response in accordance with and within the times frames set forth in Section 5.3.3(a) and Section
5.3.3(b). Unless Purchaser notifies Seller in writing that it objects to a New Exception within the foregoing time period,
each such New Exception shall automatically constitute a Permitted Exception.

 

(b)      Seller’s Response. Not later than five (5) Business Days after receipt of a Purchaser’s New Objection, but in
any event prior to the Closing Date (unless Closing is extended pursuant to Section 5.3.3(a)), Seller shall, in its sole
discretion, either: (i) notify Purchaser of its intention (the “Seller’s Response”) to attempt to Remove,
as defined herein, the New Exception(s) listed in the Purchaser’s New Objections, or (ii) notify Purchaser that Seller does
not intend to attempt to Remove any such matter. If Seller does not provide Seller’s Response to Purchaser within such time
period, Seller shall be deemed to have elected not to attempt to Remove Purchaser’s New Objections. If Seller elects (or
is deemed to have elected) not to Remove one or more of the New Exceptions, then not more than five (5) Business Days after receipt
of Seller’s Response (but in any event not later than the Closing Date), Purchaser shall by written notice to Seller either:
(x) terminate this Agreement, or (y) waive the existence of such New Exception, in which case, any such New Exception shall automatically
constitute a Permitted Exception. Purchaser’s failure to respond within said five (5) Business Day period shall constitute
Purchaser’s election to proceed under clause (y). If Seller elects to attempt to Remove any New Exception, then Seller shall
use commercially reasonable efforts to attempt to cure any such New Exception on or before the Closing Date. If at any time Seller
notifies Purchaser that Seller will be unable or is unwilling to cure any such New Exception, then Purchaser shall, within five
(5) Business Days after receipt of such notification, either terminate this Agreement or waive any such New Exception, in which
case, any such New Exception shall automatically constitute a Permitted Exception. Purchaser’s failure to respond to Seller’s
notice within such five (5) Business Day period shall constitute Purchaser’s decision to waive the existence of such New
Exception, in which case, any such New Exception shall automatically constitute a Permitted Exception, and proceed to Closing in
accordance with this Agreement. In no event shall Purchaser be entitled to a reduction of the Purchase Price on account of any
uncured New Exception unless Seller has agreed to cure such New Exception and fails to do so at or prior to Closing. In any case
where this Agreement is terminated as permitted in this paragraph, then the Earnest Money shall be returned to Purchaser, and all
rights, obligations and liabilities of the Parties hereunder shall be released and discharged except for those obligations and
rights which by their terms survive termination of this Agreement.

 

    	 	18	 

     

    

 

(c)      Removal of New Exceptions. As used in this Agreement, “Remove” shall mean that Seller in its discretion
will either (i) take such actions as are necessary to eliminate (of record or otherwise, as appropriate) the New Exception, (ii)
cause the Title Company to remove the New Exception as an exception to the Title Policy and affirmatively insure against the same,
whether such insurance is made available in consideration of payment, bonding, indemnity of Seller or otherwise, which in each
case must be in a manner reasonably acceptable to Purchaser, or (iii) deliver its own funds to the Title Company with instructions
for the Title Company to apply such funds to discharge fully the New Exception, together with such instruments, in recordable form,
as are necessary to enable the Title Company to discharge the New Exception of record and funds necessary to cover the fees and
expenses of the Title Company for discharging the claim and recording or filing such instruments.

 

5.3.4.     Removal
of Unpermitted Exceptions. Seller shall have no obligation to cure (a) any Permitted Exceptions or (b) any encroachments by
improvements on adjoining properties onto or over the Land, any encroachments of the Improvements onto or over adjoining properties,
setback lines or easements (to the extent in violation thereof) or any other survey matters disclosed in the Existing Survey or
Updated Survey, other than the Unpermitted Exceptions and all New Exceptions that are not Permitted Exceptions. Seller may cure
any Unpermitted Exception by removing such Unpermitted Exception from title or causing the Title Company to commit to remove or,
with Purchaser’s consent in Purchaser’s reasonable discretion, insure over such Unpermitted Exception in the Title
Policy at any time prior to or at Closing.

 

5.4         Title Policy.
At Closing, Seller shall cause the Title Company to issue an owner’s title insurance policy to Purchaser (which may be in
the form of a mark-up of the Title Commitment or pro forma owner’s title insurance policy) in accordance with the Title Commitment,
insuring Purchaser’s title to the Real Property as of the Closing Date, subject only to the Permitted Exceptions (the “Title
Policy”).

 

5.5         Conveyance of the Property.
At Closing, Seller shall convey the Real Property subject to all (i) Permitted Exceptions, and (ii) all Unpermitted Exceptions
that are cured by causing the Title Company to remove or insure over such Unpermitted Exceptions in the Title Policy as herein
provided, but which otherwise are not removed from title.

 

    	 	19	 

     

    

 

ARTICLE VI 

REPRESENTATIONS AND WARRANTIES

 

6.1         Seller’s Representations
and Warranties. To induce Purchaser to enter into this Agreement and to consummate the transaction described in this Agreement,
Seller hereby makes the representations and warranties in this Section 6.1, upon which Seller acknowledges and agrees that
Purchaser is entitled to rely:

 

6.1.1.     Organization
and Power. Seller is duly formed, validly existing, in good standing in the State of Delaware, and is qualified to do business
in the State of Hawaii, and has all requisite power and authority to own the Property and conduct the Business as currently owned
and conducted.

 

6.1.2.     Authority
and Binding Obligation. Seller has full power and authority to execute and deliver this Agreement and all other documents to
be executed and delivered by Seller pursuant to this Agreement (the “Seller Documents”), and to perform all
obligations of Seller under each of the Seller Documents. The execution and delivery by the signer on behalf of Seller of each
of the Seller Documents, and the performance by Seller of its obligations under each of the Seller Documents, have been duly and
validly authorized by all necessary action by Seller. Each of the Seller Documents, when executed and delivered, will constitute
the legal, valid and binding obligations of Seller enforceable against Seller in accordance with its terms, except to the extent
Purchaser itself is in default thereunder.

 

6.1.3.     Consents
and Approvals; No Conflicts. Subject to the approval of the appropriate Governmental Authorities in connection with the transfer
of the Licenses and Permits, and the recordation of any Seller Documents as appropriate, and except as disclosed in Schedule
6.1.3, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority or other Person is
necessary for execution or delivery by Seller of any of the Seller Documents, or the performance by Seller of any of its obligations
under any of the Seller Documents or the consummation by Seller of the transaction described in this Agreement, except to the extent
the failure to obtain such permit, authorization, consent or approval would not have a material adverse effect on the Business
or on Seller’s ability to consummate the Contemplated Transactions. Neither the execution and delivery by Seller of any of
the Seller Documents, nor the performance by Seller of any of its obligations under any of the Seller Documents, nor the consummation
by Seller of the transaction described in this Agreement, will: (i) violate any provision of Seller’s organizational or governing
documents; (ii) violate any Applicable Law to which Seller is subject; (iii) result in the creation or imposition of any lien or
encumbrance on the Property or any portion thereof, or (iv) violate, breach or require any consent under any Material Contract
(except as expressly contemplated herein) or trigger any rights of first refusal, rights of first offer, option agreements or similar
transfer agreements which are binding on Seller with respect to the Property.

 

6.1.4.     Condemnation; Real Property.

 

(a)         Seller
has not received any written notice of any threatened or pending condemnation proceeding or other proceeding in eminent domain.

 

    	 	20	 

     

    

 

(b)         The Real Property constitutes all of the real property that (i) Seller leases, owns or occupies with respect to the Business, (ii)
Seller uses in connection with the Business or (iii) is necessary to operate the Business as it is currently operated.

 

(c)         To Seller’s Knowledge, all construction with respect to the Improvements used in the operation of the Business has been completed
and all expenses related thereto have been paid in full.

 

(d)         Seller has not received written notice of any dispute from any contiguous property owners concerning contiguous boundary lines,
or any claims of others to rights over, under, across or through any of the Real Property by virtue of use or prescription.

 

(e)         Seller
has not received any written notice of any claim, nor to Seller's Knowledge, has any such claim been threatened, relating to the
Land from any Person, including any Native Hawaiian cultural practitioner or other Native Hawaiian resident, asserting any Native
Hawaiians claims of ownership or other rights based upon the cultural history or ancestral land ownership of the Property. Seller
has not received any written notice of any claim, nor to Seller's Knowledge, has any such claim been threatened, that there are
any burial sites or other archeological findings that are culturally significant to Native Hawaiians on the Land.

 

6.1.5.     Compliance
with Applicable Law. Except as set forth in Schedule 6.1.5, Seller has not received any written notice and, to Seller’s
Knowledge, no fact, event or condition exists which would give rise to, a material violation of any Applicable Law with respect
to the Property or the Business that has not been cured or dismissed. To Seller’s Knowledge, no investigation or review by
any Governmental Authority with respect to Seller is pending or threatened.

 

6.1.6.     Claims
and Litigation. Except as set forth in Schedule 6.1.6, Seller has not received any written notice of any order, decree,
litigation, claim, charge or complaint with respect to the Property or the Business, except litigation that is not reasonably likely
to have an adverse effect on the Property or the Business which is covered by insurance policies (subject to customary deductibles).

 

6.1.7.     Union
Contract. Neither Seller nor, to Seller’s Knowledge, Manager is a party to any collective bargaining agreement with any
labor union with respect to the Employees, and Seller has not received any written notice of any organization activities, labor
strike, work stoppage, unfair labor practice charge, grievance or other material labor dispute at the Property.

 

6.1.8.     Employment
Agreements; Labor Matters. No Seller has any employees or has engaged any independent contractors. To Seller’s Knowledge,
all Employees are employed by Manager on an “at will” basis.

 

6.1.9.     Management
and Franchise Agreements. Except for the Management Agreement and the Franchise Agreement, Seller is not a party to any management,
franchise, license or similar agreements with respect to the Hotel.

 

6.1.10.     Finders
and Brokers. Seller has not dealt with any Person who has acted, directly or indirectly, as a broker, finder, financial adviser
or in such other capacity for or on behalf of Seller in connection with the transaction described by this Agreement in a manner
which would entitle such Person to any fee or commission in connection with this Agreement or the transaction described in this
Agreement.

 

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6.1.11.     Foreign
Person. Seller is a “United States person” (as defined in Section 7701(a)(30)(B) or (C) of the Code) for the purposes
of the provisions of Section 1445(a) of the Code.

 

6.1.12.     No
violation of Anti-Terrorism Laws. None of Seller’s property or interests is subject to being “blocked” under
any Anti-Terrorism Laws, and neither Seller nor any Person holding any direct or indirect interest in Seller is in violation of
any Anti-Terrorism Laws.

 

6.1.13.     Material Contracts.

 

(a)         Except
as set forth on Schedule 6.1.13, Seller is not a party to, and neither the Property, nor the Business, is bound by, any
Contracts which:

 

(A)      involve
expenditures, investments, consideration, loans or other commitments with a value of more than $25,000, individually, or
$100,000, in the aggregate, over its term, which are not otherwise terminable by Seller or Manager on no more than thirty (30)
days’ notice without penalty or fee;

 

(B)       evidence,
impose or provide for any Encumbrance on the Property or which relate to any Indebtedness, whether incurred, assumed, guaranteed,
or secured, or which restrict the incurrence of Indebtedness or any Encumbrance, other than Permitted Exceptions;

 

(C)       guarantee
or secure the performance, Liabilities or obligations of any other Person;

 

(D)       limit
or restrict, or purport to limit or restrict, the ability, right or freedom of to enter into or engage in any market or type or
line of business, solicit or hire any Person, solicit customers or to conduct its business in any geographical area;

 

(E)       provide
for, establish or grant “most favored” nation or similar preferential pricing provisions (other than Bookings made
in the Ordinary Course of Business), a right of first refusal or right of first offer for any line of business, equity interests
or material portion of assets or properties terms or an exclusive sale or purchase obligation with respect to any obligation or
geographical area;

 

(F)       involve any
Affiliate of Seller;

 

(G)       evidence,
involve or relate to capital expenditures or relating to the development or construction of, or additions or expansions to, the
Property;

 

(H)       evidence,
involve or relate to (i) the sale or exchange of, or option to sell or exchange, the Property or any right of first offer or right
of first refusal related thereto, (ii) the acquisition, purchase or exchange of, or option to acquire, purchase or exchange, any
real estate, or any term sheets or letters of intent in effect and not expired as of the date hereof, whether or not binding, relating
to any of the foregoing;

 

    	 	22	 

     

    

 

(I)        evidence
or relate to the resolution, settlement or compromise of any action or litigation (i) requiring non-monetary relief or (ii) in
excess of $50,000; or

 

(J)        provide
for management, franchise or brand licensing services with respect to the Property.

 

(b)         Each of
the Contracts set forth or required to be set forth on Schedule 6.1.13, together with each of the Tenant Leases, is
referred to herein as a “Material Contract” and collectively, the “Material
Contracts.”

 

(c)        To Seller’s
Knowledge, neither Seller nor any other Person is in violation, breach or default under any Material Contract and each Material
Contract is valid, binding, in full force and effect and enforceable with respect to Seller, except as such may be limited by bankruptcy,
insolvency, reorganization or other similar Laws affecting creditors’ rights generally, and by general equitable principles
or agreements. Seller has not received written notice from any counterparty thereto that any Material Contract is not enforceable.

 

6.1.14.   Bankruptcy.
There are no attachments, executions, assignments for the benefit of creditors, or voluntary or involuntary proceedings in bankruptcy
or under other debtor relief law as contemplated by, pending or threatened against Seller.

 

6.1.15.   Tenant
Leases.     Schedule 2.1.8 lists all Tenant Leases, including any amendments thereto and the amount of any security or other
refundable deposit made in respect of such leases. Seller is not, and to Seller’s Knowledge no other Person is, in violation,
breach or default under any Tenant Lease. The Tenant Leases constitute the only the leases and other Contracts pursuant to which
any Person has the right to use, occupy, acquire and/or possess all or any portion of the Real Property, other than the Lease Agreement
and Bookings for transient hotel guests.

 

6.1.16.   Personal
Property. Seller has good and marketable title to the Personal Property, free and clear of all Encumbrances, other than (i)
Permitted Exceptions and (ii) Personal Property which is leased or licensed pursuant to the Equipment Leases.

 

6.1.17.   Group
Bookings; Gift Certificates.     Schedule 6.1.17(a) lists all of the Bookings for Group Contracts as of a date which is
not more than two (2) Business Days prior to the Effective Date, including any deposits received with respect to such Group Contracts.
Schedule 6.1.17(b) lists all issued and outstanding Gift Certificates and outstanding liabilities related thereto as of
the Effective Date.

 

6.1.18.   Financial
Statements. To Seller’s Knowledge, the Historical Financials have been accurately derived from the books and records
of Seller and Manager and fairly present the financial position of Seller as of the dates specified and the results of operations
of Seller in all material respects for the periods covered thereby. Seller has no material liabilities, Indebtedness or other obligations,
whether accrued, absolute, contingent or otherwise, of a kind required to be disclosed in the Historical Financials in accordance
with GAAP, except: (a) to the extent reflected in the Historical Financials and, (b) liabilities incurred in the Ordinary Course
of Business since April 30, 2017.

 

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6.1.19.   Environmental
Compliance. Seller has delivered or made available to Purchaser true, complete and correct copies of all material environmental
reports, analyses, tests or monitoring in its possession pertaining to the Property, including the Phase I Report. Except as set
forth in the Phase I Report, Seller has not received any written notice of violation of any Environmental Laws. To Seller’s
Knowledge, except as set forth in the Phase I Report, (i) Seller has conducted the Business in material compliance with all Environmental
Laws, (ii) no underground storage tanks, including active, temporarily closed, closed, abandoned, registered or unregistered tanks,
are located on the Property, and (iii) Seller has not assumed, undertaken or otherwise become subject to any material liability
or corrective, investigatory or remedial obligations of any other Person related to Hazardous Substances or Environmental Laws.

 

6.1.20.   Licenses
and Permits.     Schedule 6.1.20 lists all material Licenses and Permits. Each of the Licenses and Permits is in full force
and effect in accordance with its terms, and, to Seller’s Knowledge, no defaults exist under or with respect to any of them.
The Licenses and Permits constitute all of the material licenses, permits and authorizations necessary for Seller to operate the
Hotel and the Business in the Ordinary Course of Business.

 

6.1.21.   Tax
Matters. Seller has paid or caused to be paid all applicable sales and use taxes due with respect to the Property and the Business,
and neither the Property nor the Business has been the subject of a sales tax audit or gross receipts tax audit (including, without
limitation, Hawaii general excise tax) within the last three (3) years, nor to Seller’s Knowledge has the Property or the
Business has been the subject of a sales tax audit or gross receipts tax audit (including, without limitation, Hawaii general excise
tax) prior to the last three (3) year period during the period Seller has owned the Property. Seller has duly and timely filed
(or filed extensions therefor) all Tax Returns required to be filed by Seller on or before the Closing Date with respect to all
applicable Taxes, and, to Seller’s Knowledge, no penalties or other charges are or will become due with respect to any of
the Tax Returns as the result of the late filing thereof. There is no material dispute or claim concerning any Tax liability of
Seller either (a) claimed or raised by any Governmental Authority in writing or (b) as to which Seller has Knowledge.

 

6.1.22.   Insurance.
Seller maintains insurance coverage for its operations, the Property and the Business in compliance with the Loan Documents and
the Management Agreement. Except as set forth in Schedule 6.1.22, there is no material claim by Seller pending, or to Seller’s
Knowledge, threatened, under any such policies with respect to the Property or the Hotel which (i) has been denied or disputed
by the insurer, or (ii) if not paid, could reasonably be expected to be material to Seller. None of Seller or, to Seller’s
Knowledge, Manager has received any written notice of cancellation, termination or a material increase in premiums or that any
such policies with respect to the Hotel or the Property will not be available in the future on substantially the same terms as
currently in effect.

 

6.1.23.   Loan
Documents. Seller is not in material breach of any representation, warranty or covenant under the Loan Documents and to Seller’s
Knowledge, no event, occurrence or condition which is, or upon notice, lapse of time or both would constitute, a default or “Event
of Default” thereunder has occurred.

 

    	 	24	 

     

    

 

6.2         Purchaser’s
Representations and Warranties. To induce Seller to enter into this Agreement and to consummate the transaction
described in this Agreement, Purchaser hereby makes the representations and warranties in this Section 6.2, upon which
Purchaser acknowledges and agrees that Seller is entitled to rely:

 

6.2.1.     Organization
and Power. Purchaser is duly formed, validly existing and in good standing in the jurisdiction of its formation and has all
requisite power and authority to own, lease and operate its properties and to carry on its business as currently being conducted.

 

6.2.2.     Authority
and Binding Obligation. Purchaser has full power and authority to execute and deliver this Agreement and all other documents
to be executed and delivered by Purchaser pursuant to this Agreement (the “Purchaser Documents”), and to perform
all obligations of Purchaser arising under each of the Purchaser Documents. The execution and delivery by the signer on behalf
of Purchaser of each of the Purchaser Documents, and the performance by Purchaser of its obligations under each of the Purchaser
Documents, have been duly and validly authorized by all necessary action by Purchaser. Each of the Purchaser Documents, when executed
and delivered, will constitute the legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance
with its terms, except to the extent Seller itself is in default thereunder.

 

6.2.3.     Consents
and Approvals; No Conflicts. Except as contemplated hereby, no filing with, and no permit, authorization, consent or approval
of, any Governmental Authority or other Person is necessary for the execution or delivery by Purchaser of any of the Purchaser
Documents, the performance by Purchaser of any of its obligations under any of the Purchaser Documents, or the consummation by
Purchaser of the transaction described in this Agreement. Neither the execution and delivery by Purchaser of any of the Purchaser
Documents, nor the performance by Purchaser of any of its obligations under any of the Purchaser Documents, nor the consummation
by Purchaser of the transaction described in this Agreement, will: (i) violate any provision of the organizational or governing
documents of Purchaser; (ii) violate any Applicable Law to which Purchaser is subject; or (iii) result in a violation or breach
of or constitute a default under any contract, agreement or other instrument or obligation to which Purchaser is a party or by
which any of Purchaser’s properties are subject.

 

6.2.4.     Finders
and Brokers. Purchaser has not dealt with any Person who has acted, directly or indirectly, as a broker, finder, financial
adviser or in such other capacity for or on behalf of Purchaser in connection with the transaction described by this Agreement
in any manner which would entitle such Person to any fee or commission in connection with this Agreement or the transaction described
in this Agreement.

 

6.2.5.     No
Violation of Anti-Terrorism Laws. None of Purchaser’s property or interests is subject to being “blocked”
under any Anti-Terrorism Laws, and neither Purchaser nor any Person holding any direct or indirect interest in Purchaser is in
violation of any Anti-Terrorism Laws.

 

6.2.6.     Sophisticated
Investor. Purchaser is a sophisticated investor, is represented by competent counsel, understands the assumption of risk and
liability set forth in this Agreement, and is experienced in, and knowledgeable about, the ownership, management, leasing and purchase
of commercial real estate and hotel properties, and has relied and will rely exclusively on the representations expressly made
by Seller in this Agreement and the other Transaction Documents and on its own consultants, advisors, counsel, employees, agents,
principals and/or studies, investigations and/or inspections with respect to the Property, its tax or legal status, condition,
value and potential. Purchaser agrees that, notwithstanding the fact that it has received certain information from Seller or its
agents or consultants, Purchaser has relied solely upon and will continue to rely solely upon its own analysis and will not rely
on any information provided by Seller or its agents or consultants, except solely for the representations expressly made by Seller
in this Agreement or the other Transaction Documents.

 

    	 	25	 

     

    

 

6.3         Survival. The
representations and warranties in Section 6.1 and Section 6.2 shall survive for nine (9) months after the Closing
(the “Survival Period”).

 

ARTICLE VII

COVENANTS

 

7.1         Confidentiality.

 

7.1.1.     Disclosure
of Confidential Information. Seller and Purchaser shall keep confidential and not make any public announcement or disclose
to any Person the existence or any terms of this Agreement or any information disclosed by the Inspections or in the Seller Due
Diligence Materials, the Purchaser Due Diligence Reports or any other documents, materials, data or other information with respect
to the Property or the Business which is not generally known to the public (the “Confidential Information”).
Notwithstanding the foregoing, Seller and Purchaser shall be permitted to (i) disclose any Confidential Information to the extent
required under Applicable Law including applicable security regulations, and (ii) disclose any Confidential Information to any
Person on a “need to know” basis, such as their respective shareholders, partners, members, trustees, beneficiaries,
directors, officers, employees, attorneys, consultants, engineers, surveyors, lenders, investors, managers, franchisors and such
other Persons whose assistance is required to consummate the transactions described in this Agreement; provided, however, that
Seller or Purchaser (as the case may be) shall (A) advise such Person of the confidential nature of such Confidential Information,
and (B) use commercially reasonable efforts to cause such Person to maintain the confidentiality of such Confidential Information.
The obligations under this Section 7.1.1 shall survive termination of this Agreement, and Seller’s obligations under
this Section 7.1.1 shall survive the Closing.

 

7.1.2.     Public
Announcements. For the avoidance of doubt and notwithstanding anything to the contrary in Section 7.1.1, neither Party
shall have the right prior to the Closing to make a public announcement regarding the transaction described in this Agreement,
except as may be required by Applicable Law; provided however that the Parties shall be permitted to make disclosures in accordance
with Section 7.1.1.

 

7.1.3.     Communication
with Employees. Without limiting the generality of the provisions in Section 7.1.1, Purchaser shall not, through its
officers, employees, managers, contractors, consultants, agents, representatives or any other Person (including Purchaser’s
Inspectors), directly or indirectly, communicate with any Employees which are not management level employees or any Person representing
such Employees involving any matter with respect to the Property or the Business, the Employees or this Agreement, unless such
communication is approved by Seller or is otherwise expressly permitted hereunder. Seller acknowledges that reasonably in advance
of the Closing, Purchaser and/or the hotel manager retained by Purchaser will need to interview, meet with and in many cases offer
employment to be effective as of the Closing to Employees and Seller shall (or shall cause Manager to) reasonably cooperate with
Purchaser and/or the hotel manager retained by Purchaser to arrange such communications.

 

    	 	26	 

     

    

 

7.2         Conduct of the Business.

 

7.2.1.     Operation
in Ordinary Course of Business. From the Effective Date until the Closing or earlier termination of this Agreement, except
as otherwise provided in this Agreement, Seller shall, and shall instruct the Manager (provided that so long as Seller provides
such instruction to the Manager, Seller shall not be liable to Purchaser with respect to Manager’s failure to comply):

 

(a)         conduct the
Business in the Ordinary Course of Business;

 

(b)         keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried with respect to the
Business and the Property;

 

(c)         not take any action or omit to take any action for the purpose of directly or indirectly preventing, materially delaying or materially
impeding the consummation of Contemplated Transactions;

 

(d)        not acquire or agree to acquire any material assets, in each case, except in the Ordinary Course of Business;

 

(e)         not transfer, sell, lease or otherwise dispose of or agree to transfer, sell, lease or dispose of or remove or cause or permit
to be removed any part or portion of the Property (including any FF&E) unless such removed property is being removed in the
Ordinary Course of Business and is replaced prior to the Closing Date with similar items of at least equal suitability, quality
and value; and

 

(f)          not authorize
or enter into any written commitment with respect to any of the matters described above.

 

7.2.2.     Contracts.
From the expiration of the Due Diligence Period until the Closing or earlier termination of this Agreement, Seller shall not, and,
subject to Manager’s right under the Management Agreement, shall instruct Manager not to (provided that so long as Seller
provides such instructions to the Manager, Seller shall not be liable to Purchaser with respect to Manager’s failure to comply),
without Purchaser’s prior written consent which shall not be unreasonably withheld, conditioned or delayed, enter into, obtain,
amend, extend, renew or terminate any new or existing Tenant Leases, Contracts or Licenses and Permits. Any such Tenant Leases,
Contracts or Licenses and Permits or amendments, extensions, renewals or terminations thereof approved by Purchaser pursuant to
this Section 7.2.2 shall be deemed incorporated into Seller’s representations and warranties.

 

7.2.3.     This Section 7.2 shall survive the Closing
for the Survival Period.

 

    	 	27	 

     

    

 

7.3         Licenses and Permits.

 

7.3.1.     Generally.
Purchaser (with the cooperation of Seller) shall be responsible for obtaining the transfer of all Licenses and Permits (to the
extent transferable) or the issuance of new licenses and permits. Purchaser, at its cost and expense, shall submit all necessary
applications and other materials to the appropriate Governmental Authority and take such other actions to effect the transfer of
Licenses and Permits or issuance of new licenses and permits as of the Closing, and Seller shall use commercially reasonable efforts
(at no cost or expense to Seller other than any de minimis cost or expense or any cost or expense which Purchaser agrees in writing
to reimburse) to cooperate with Purchaser to cause the Licenses and Permits to be transferred or new licenses and permits to be
issued to Purchaser. Notwithstanding anything to the contrary in Section 7.3, Purchaser shall not communicate, file any
application or otherwise commence any procedure or proceeding with any Governmental Authority for the transfer of any Licenses
or Permits or issuance or new licenses and permits, or post any notices at the Hotel or publish any notices required for the transfer
of the Licenses or Permits or issuance of new licenses and permits prior to the expiration of the Due Diligence Period. If this
Agreement is terminated and Purchaser has filed an application or otherwise commenced the processing of obtaining new licenses
and permits, Purchaser shall withdraw all such applications and cease all other activities with respect to such new licenses and
permits.

 

7.3.2.     Liquor License.

 

(a)         Generally.
Purchaser and Seller recognize that the Liquor License is statutorily regulated pursuant to Applicable Law. If the Liquor License
is subject to transfer under Applicable Law, Seller shall cause Liquor License Holder to transfer the Liquor License to Purchaser
(and/or the manager it has retained, if applicable) in accordance with Applicable Law and at Purchaser’s expense. The Parties
recognize that the transfer of the Liquor License may occur subsequent to the Closing Date, and after the Closing Date, Purchaser
and Seller shall each continue to use commercially reasonable efforts and cooperate in the prompt transfer of the Liquor License.

 

(b)         New License.
If the Liquor License is not subject to transfer under Applicable Law, then Purchaser may, promptly following the end of the Due
Diligence Period, make all necessary applications for, and diligently pursue, issuance of, a new Liquor License. At the sole cost
and expense of Purchaser, Seller shall (and shall cause Liquor License Holder to) reasonably cooperate with and assist Purchaser
in seeking the issuance of such new Liquor License.

 

7.4         Employees.

 

7.4.1.     If the
WARN Act is applicable, Purchaser, or Purchaser’s manager, or their Affiliates, shall offer employment, or continue to employ
a sufficient number of the Employees on such terms and conditions so that Manager is not required to provide notice of a “plant
closing” or “mass layoff” to any Person under the WARN Act as a result of the termination of employment of the
Employees as of the Closing. If the WARN Act is applicable, on or following the Closing, Purchaser shall comply with all provisions
of the WARN Act with respect to all Employees, including without limitation, employing a sufficient number of Employees during
the ninety (90) day period following the Closing so as to not trigger the applicability of the WARN Act. If Purchaser fails to
comply with the provisions of this Section 7.4.1, then in addition to any remedies Seller may have, Purchaser alone shall
be responsible for giving such notices as may be required by the WARN Act and shall be solely liable for the payment of any amounts
that may become due under the WARN Act. If the WARN Act is applicable, as part of its obligations under this Section 7.4.1,
Purchaser shall indemnify, defend and hold Seller and Manager harmless from and against any liability, loss, damage, fines, penalty,
back pay, back benefits, costs or expenses (including, without limitation, attorneys’ fees and expenses) that may result
to Seller or Manager based on Purchaser’s failure to comply with this Section 7.4.1. This Section 7.4 shall
survive the Closing.

 

    	 	28	 

     

    

 

7.4.2.     Seller
shall cooperate, and authorize Manager to cooperate, with Purchaser to provide information to Purchaser regarding Employees’
names, positions, dates of hire and current compensation, as reasonably requested by Purchaser and to the extent permitted by Applicable
Law, and allow Purchaser, or its designee, the opportunity to interview the Employees in accordance with this Agreement.

 

7.4.3.     Seller
and Purchaser shall cooperate in good faith to prepare and disseminate to the Employees mutually-agreeable communications regarding
the Contemplated Transactions in an effort to minimize business disruption prior to the Closing Date.

 

7.4.4.     No provision
of this Section 7.4 shall create any third party beneficiary or other rights in any Employee or former employee (including
any beneficiary or dependent thereof) of Seller or Manager in respect of continued employment (or resumed employment) with Purchaser,
or any of its Affiliates, and no provision of this Section 7.4 shall create any such rights in any such persons in respect
of any benefit that may be provided, directly or indirectly, under any employee plan of Seller or any Purchaser employee plan.

 

7.4.5.     In accordance
with the term of the Management Agreement, Seller shall be responsible for all compensation, fringe benefits, vacations and vacation
payments, and other amounts owed to Employees, and taxes thereon, through the Cut-Off Time, except that, at Closing, Purchaser
shall receive a credit (the “Paid Time Off Credit”) in the amount of accrued and unpaid bonuses, vacation time,
personal time and sick time, and taxes thereon, as of the Cut- Off Time for the Employees. Purchaser shall be responsible for the
wages, salaries and benefits and taxes thereon for the Employees retained by Purchaser or its manager following Closing and for
accrued and unpaid vacation time, personal time and sick time and taxes thereon that are the subject of the Paid Time Off Credit.

 

7.4.6.     This Section 7.4 shall survive the
Closing.

 

7.5         Bookings. Purchaser
shall honor all Bookings made in the Ordinary Course of Business prior to the Closing Date for any period on or after the Closing
Date. This Section 7.5 shall survive the Closing.

 

7.6         Tax Contests.

 

7.6.1.     Taxable Period Terminating
Prior to Closing Date. Seller shall retain the right to commence, continue and settle any proceeding to contest any Taxes for
any taxable period which terminates prior to the Closing Date, and shall be entitled to any refunds or abatements of Taxes awarded
in such proceedings. This Section 7.6.1 shall survive the Closing.

 

    	 	29	 

     

    

 

7.6.2.     Taxable
Period Including the Closing Date. Prior to the Closing, Seller shall have the right to commence, continue and settle any proceeding
to contest any Taxes for any taxable period that includes the Closing Date. Notwithstanding the foregoing, if Purchaser desires
to contest any Taxes for such taxable period and Seller has not commenced any proceeding to contest any such Taxes for such taxable
period, Purchaser shall provide written notice requesting that Seller contest such Taxes. If Seller desires to contest such Taxes,
Seller shall provide written notice to Purchaser within thirty (30) days after receipt of Purchaser’s request confirming
that Seller will contest such Taxes, in which case Seller shall proceed to contest such Taxes, and Purchaser shall not have the
right to contest such Taxes. If Seller fails to provide such written notice confirming that Seller will contest such Taxes within
such thirty (30) day period, Purchaser shall have the right to contest such Taxes. Any refunds or abatements awarded in such proceedings
shall be used first to reimburse the Party contesting such Taxes for the reasonable costs and expenses incurred by such Party in
contesting such Taxes, and the remainder of such refunds or abatements shall be prorated between Seller and Purchaser as of the
Cut-Off Time, and the Party receiving such refunds or abatements promptly shall pay such prorated amount due to the other Party.
This Section 7.6.2 shall survive the Closing.

 

7.6.3.     Taxable
Period Commencing After Closing Date. Purchaser shall have the right to commence, continue and settle any proceedings to contest
Taxes for any taxable period which commences after the Closing Date, and shall be entitled to any refunds or abatements of Taxes
awarded in such proceedings. This Section 7.6.3 shall survive the Closing.

 

7.6.4.     Cooperation.
Seller and Purchaser shall use commercially reasonable efforts to cooperate with the Party contesting the Taxes (at no cost or
expense to the Party not contesting the Taxes other than any de minimis cost or expense or any cost or expense which the requesting
Party agrees in writing to reimburse) and to execute and deliver any documents and instruments reasonably requested by the Party
contesting the Taxes in furtherance of the contest of such Taxes. This Section 7.6.4 shall survive the Closing.

 

7.7         Notices and Filings.
Seller and Purchaser shall use commercially reasonable efforts to cooperate with each other (at no cost or expense to the Party
whose cooperation is requested, other than any de minimis cost or expense or any cost or expense which the requesting Party agrees
in writing to reimburse) to provide written notice to any Person under any Contracts, Tenant Leases, Licenses and Permits, and
to effect any registrations or filings with any Governmental Authority or other Person, regarding the change in ownership of the
Property or the Business. This Section 7.7 shall survive the Closing.

 

7.8         Franchise Approval/Replacement
Franchise Documents.

 

7.8.1.     Franchise
Approval. Purchaser has submitted its application and application fee to Franchisor for the approval of Purchaser as its new
franchisee at the Hotel as contemplated by the Replacement Franchise Documents (“Franchise Approval”). Purchaser
shall diligently pursue obtaining Franchise Approval, shall be responsible for any application and other fees incurred in connection
with pursuing Franchise Approval, and shall keep Seller apprised of the status of Franchise Approval.

 

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7.8.2.     Replacement
Franchise Documents. As necessary, Seller shall reasonably cooperate with Purchaser (at no cost or expense to Seller) in connection
with Purchaser or its designated Affiliate entering into the Replacement Franchise Documents with Franchisor in forms reasonably
acceptable to Purchaser. In addition, Purchaser shall diligently, promptly and in good faith (a) provide Franchisor with such information,
and execute and deliver such documents and instruments to Franchisor, and (b) take such actions, in each case as are customarily
required by Franchisor in providing Franchise Approval.

 

7.9         Loan Assumption.

 

7.9.1.     Loan
Assumption Documents. At the Closing, Purchaser shall assume the obligations of Seller under and with respect to that certain
mortgage loan with an original principal balance of up to $44,000,000 (the “Loan”) by TH Commercial Mortgage
LLC (together with its successors and assigns, “Lender”) and created, evidenced, governed and/or secured by
the documents, including all amendments thereto, if any, evidencing the Loan as more particularly described on Schedule 7.9
hereto, true, correct and complete copies of all of which have been delivered to Purchaser (collectively, the “Loan Documents”),
in accordance with this Section 7.9. All accrued and unpaid interest (including default interest), unpaid late fees and
charges, unreimbursed costs and expenses due and owing to Lender (other than Loan Assumption Costs) and the outstanding principal
balance of the Loan on the Closing Date (collectively, the “Closing Date Loan Balance”) shall be credited against
the Purchase Price at Closing. Seller shall assign to Purchaser all of their right, title and interest in and to any reserves existing
and on deposit in connection with the Loan as of the Closing Date (collectively, the “Reserves”), and Purchaser
shall pay Seller an amount equal to the aggregate balance of the Reserves on the Closing Date (collectively, the “Closing
Date Reserve Balance”). Purchaser agrees that it shall, at its own expense, cooperate with Seller in order to supply
any information required, and take any actions reasonably required of Purchaser and its Affiliates to comply with Lender’s
application requirements. Purchaser understands and agrees that it shall cause an Affiliate of Purchaser, of like credit quality
to the current guarantors of the Loan or otherwise acceptable to Lender, to guaranty these obligations to the same extent as currently
provided in the applicable Loan Documents, in accordance with this Section 7.9. Seller and Purchaser shall use commercially
reasonable efforts to cause the assumption of the Loan to occur on the Closing Date, including without limitation giving required
notices to Lender, executing assumption documents reasonably required by Lender, and providing Lender with any financial, organizational
and other information regarding Purchaser and its Affiliates as necessary to satisfy the requirements of Lender applicable to the
assumption of the Loan. Purchaser and its Affiliates shall execute such loan assumption agreements, guaranties and/or indemnity
agreements, and shall provide such legal opinions, franchisor comfort letters and other deliverables, as may reasonably be deemed
necessary by Lender and Purchaser to consummate Purchaser’s assumption of the Loan (collectively, the “Loan Assumption
Documents”); provided that it shall be a condition of Purchaser’s obligation to close hereunder that the Loan Documents
be amended in accordance with Schedule 7.9 and except for such amendment, all other terms shall be consistent in all material
respects with the terms of the Loan Documents in effect as of the date hereof. Purchaser shall pay all fees and expenses incurred
in connection with the Loan Assumption Documents and process (in accordance with Section 7.9.3); provided, however, that
(i) Seller shall pay its own legal fees and expenses and (ii) no loan assumption fee shall be due to Lender in connection with
the Loan Assumption Documents. It shall be a condition to the Parties’ obligations to close the transaction under this Agreement
that Lender consents in writing to the assumption of the Loan by Purchaser. It shall also be a condition to Seller’s (but
not Purchaser’s) obligation to close the transaction under this Agreement that Lender releases Seller and all current guarantors
of all liabilities under the Loan Documents arising from and after the date of the assumption by Purchaser.

 

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7.9.2      IRC
Agreement. At the Closing, to the extent such assignment is approved by SMBC, Purchaser shall assume the obligations of Seller
under the IRC Agreement, and Purchaser shall execute and deliver such assignment and assumption documents as SMBC may reasonably
request in connection therewith, to the extent in a form reasonably acceptable to Purchaser.

 

7.9.3      Costs.
At the Closing, Purchaser shall pay (i) to Seller $800,000, as reimbursement for costs Seller incurred in connection with Seller
entering into the Loan Documents (the “Loan Cost Reimbursement Amount”), and (ii) to Lender (or to such Persons
as Lender may direct) the out-of-pocket costs and expenses incurred by Lender in connection with the Loan Assumption Documents,
including without limitation the fees of Lender’s outside legal counsel and any third party search costs (“Loan
Assumption Costs”). Notwithstanding anything to the contrary herein, in the event this Agreement is terminated for any
reason other than due to a Seller Default, Purchaser shall pay all Loan Assumption Costs within five (5) days of delivery of an
invoice therefor.

 

7.10       Exclusivity.
From May 2, 2017 to the Closing or earlier termination of this Agreement, Seller shall not directly or indirectly (including through
any officer, director, employee, stockholder, agent, partner, affiliate or otherwise) (i) enter into any agreement, agreement in
principle or other commitment (whether or not legally binding) relating to any business combination with, recapitalization of,
or acquisition or purchase of all or a portion of the Property or its assets (a “Competing Transaction”); (ii)
solicit, initiate or encourage the submission of any proposal or offer from any Person (including any of its officers, directors,
employees and agents) relating to any Competing Transaction, or (iii) participate in any discussions or negotiations regarding,
furnish to any other Person any information with respect to, or otherwise cooperate with, assist, participate in, facilitate or
encourage, any effort or attempt by any Person to effect a Competing Transaction. Seller shall immediately terminate all pending
discussions regarding a Competing Transaction and shall notify Purchaser promptly if any proposal regarding a Competing Transaction
(or any inquiry or contact with any Person with respect thereto) is made.

 

7.11       Estoppels. Seller shall use commercially
reasonable efforts to obtain estoppels, in a form reasonably acceptable to Purchaser, with respect to the two declarations set
forth on Schedule 7.11 hereto.

 

    	 	32	 

     

    

 

7.12       Further Assurances.
From the Effective Date until the Closing or earlier termination of this Agreement, Seller and Purchaser shall use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable
to consummate the transaction described in this Agreement, including (i) obtaining all necessary consents, approvals and authorizations
required to be obtained from any Governmental Authority or other Person under this Agreement or Applicable Law, and (ii) effecting
all registrations and filings required under this Agreement or Applicable Law. After the Closing, Seller and Purchaser shall use
commercially reasonable efforts (at no cost or expense to such Party, other than any de minimis cost or expense or any cost or
expense which the requesting Party agrees in writing to reimburse) to further effect the transaction contemplated in this Agreement.
The immediately preceding sentence of this Section 7.12 shall survive the Closing.

 

7.13       Tax Forms. Seller
shall use commercially reasonable efforts to submit promptly following the Effective Date the following completed forms to the
State of Hawaii Department of Taxation: (i) Report of Bulk Sale or Transfer [http://files.hawaii.gov/tax/forms/2016/g8a.pdf], and
(ii) Tax Clearance Application [http://files.hawaii.gov/tax/forms/2016/a6.pdf] (collectively, the “Tax Forms”). In
the event that certifications requested pursuant to the Tax Forms from the Hawaii Department of Taxation reflecting that all Taxes
have been paid and that Seller is compliant (collectively, the “Tax Clearance Certificates”) have not been received
prior to the Closing Date, Seller agrees to cooperate with Purchaser in obtaining the Tax Clearance Certificates and to reimburse
Purchaser for any Taxes, costs and fees associated with obtaining the Tax Clearance Certificates. In addition, Seller and Purchaser
shall use commercially reasonable efforts to submit promptly at the Closing (x) a Notice of Mortgage, Pledge or Purchase, [http://files.hawaii.gov/tax/forms/2010/d37.pdf],
and (y) the Conveyance Tax Certificate and pay their applicable portion of the Taxes due thereunder as provided for in this Agreement.

 

ARTICLE
VIII

CLOSING CONDITIONS

 

8.1         Mutual Closing Conditions.

 

8.1.1.     Satisfaction
of Mutual Closing Conditions. The respective obligations of Seller and Purchaser to close the transaction contemplated in this
Agreement are subject to the satisfaction at or prior to Closing of the following conditions precedent (the “Mutual Closing
Conditions”):

 

(a)         Adverse Proceedings. No litigation or other court action shall have been commenced by a third party seeking to obtain an
injunction or other relief from such court to enjoin the consummation of the transaction described in this Agreement, and no preliminary
or permanent injunction or other order, decree or ruling shall have been issued by a court of competent jurisdiction or by any
Governmental Authority, that would make illegal or invalid or otherwise prevent the consummation of the transaction described in
this Agreement.

 

(b)        Adverse Law. No Applicable Law shall have been enacted that would make illegal or invalid or otherwise prevent the consummation
of the transaction described in this Agreement.

 

    	 	33	 

     

    

 

(c)         Franchise Approval. Franchisor shall have provided Franchise Approval by (i) agreeing to enter into the Replacement Franchise
Documents, in a form reasonably acceptable to Purchaser, and (ii) terminating Seller’s and all applicable Affiliates’
obligations under the Franchise Agreement and any ancillary documents with respect thereto arising and/or accruing from and after
the Closing, and the Replacement Franchise Documents shall become effective concurrently with the Closing. Notwithstanding the
foregoing and as required by Franchisor, any guaranty executed in connection with the Franchise Agreement will remain in effect
as to any surviving obligations under the Franchise Agreement.

 

(d)         Loan Assumption. Lender shall have approved the assumption of the Loan by Purchaser, and SMBC shall have consented to the
assignment and assumption of the IRC Agreement by Purchaser, and Seller and its Affiliates shall have been released from liability
thereunder, all as more fully described in Section 7.9.

 

8.1.2.     Failure
of Mutual Closing Condition. If any of the Mutual Closing Conditions is not satisfied at Closing, then each Party shall have
the right to terminate this Agreement by providing written notice to the other Party, in which case the Earnest Money shall be
refunded to Purchaser in accordance with Section 3.2.4, and the Parties shall have no further rights or obligations under
this Agreement, except for those which expressly survive such termination; provided, however, if the Mutual Closing Conditions
set forth in Section 8.1.1(c) and/or 8.1.1(d) are not satisfied by the scheduled Closing Date, either Party may,
upon written notice to the other Party prior to the scheduled Closing Date, postpone the Closing for up to thirty (30) days to
allow additional time for the applicable Mutual Closing Condition to be satisfied.

 

8.2         Purchaser Closing Conditions.

 

8.2.1.     Satisfaction
of Purchaser Closing Conditions. In addition to the Mutual Closing Conditions, Purchaser’s obligations to close the transactions
described in this Agreement are subject to the satisfaction at or prior to Closing of the following conditions precedent (the “Purchaser
Closing Conditions”):

 

(a)         Seller’s Deliveries. All of the Seller Closing Deliveries shall have been delivered to Purchaser or deposited with
Deposit Escrow Agent to be delivered to Purchaser at Closing.

 

(b)         Representations
and Warranties. The representations and warranties of Seller contained in this Agreement (other than representations and warranties
of Seller contained in Sections 6.1.1 (Organization and Power), 6.1.2 (Authority and Binding Obligation) and 6.1.16(a)
(Title to Personal Property) (collectively, the “Fundamental Representations”), which shall be true and correct
in all respects) shall be true and correct in all material respects (other than representations and warranties qualified by materiality,
which shall be true and correct in all respects) on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date (or as of such other date to which such representation or warranty expressly is made).

 

(c)         Covenants
and Obligations. The covenants and obligations of Seller in this Agreement shall have been performed in all material respects
(other than covenants and obligations qualified by materiality, which Seller shall have performed in all respects).

 

    	 	34	 

     

    

 

(d)         Encumbrances. At or prior to Closing, Seller shall have obtained the release of all Unpermitted Exceptions. In the event
that any Unpermitted Exceptions shall exist at the Closing on the Property that (i) is not a Permitted Exception, and (ii) can
be removed immediately by the payment of a liquidated and discernible sum of money, then Purchaser and Seller shall be obligated
to consummate the Closing, notwithstanding the existence of such Unpermitted Exception, so long as Purchaser receives a credit,
equal to such liquidated or discernable amount of money, against the Purchase Price as may be necessary to discharge such Permitted
Exception.

 

(e)         Title
Policy. The Title Company shall be irrevocably committed to issue the Title Policy in favor of Purchaser in the form required
pursuant to Section 5.4.

 

8.2.2.     Failure
of Purchaser Closing Condition. If any of the Purchaser Closing Conditions is not satisfied at Closing because of a Seller
Default, then Purchaser shall have the rights set forth in Section 12.1. If any of the Purchaser Closing Conditions is not
satisfied at Closing (other than as a result of Seller Closing Condition not being satisfied or waived or as a result of a Purchaser
Default), then Purchaser shall have the right (i) to terminate this Agreement by providing written notice to Seller, in which case
the Earnest Money shall be refunded to Purchaser in accordance with Section 3.2.4, and the Parties shall have no further
rights or obligations under this Agreement, except those which expressly survive such termination, (ii) to waive any of the Purchaser
Closing Conditions at or prior to Closing or (iii) upon written notice to Seller, postpone the Closing for up to five (5) Business
Days to allow additional time for applicable Purchaser Closing Condition to be satisfied.

 

8.3         Seller Closing Conditions.

 

8.3.1.     Satisfaction
of Seller Closing Conditions. In addition to the Mutual Closing Conditions, Seller’s obligations to close the transactions
contemplated in this Agreement are subject to the satisfaction at or prior to Closing of the following conditions precedent (the
“Seller Closing Conditions”):

 

(a)         Receipt of the Purchase Price. Purchaser shall have (i) paid to Seller, or deposited with Deposit Escrow Agent with written
direction to disburse the same to Seller, the Purchase Price (as adjusted pursuant to Section 3.1), and (ii) delivered written
direction to Deposit Escrow Agent to disburse the Earnest Money to Seller.

 

(b)         Purchaser’s Deliveries. All of the Purchaser Closing Deliveries shall have been delivered to Seller or deposited with
Deposit Escrow Agent to be delivered to Seller at Closing.

 

(c)         Representations
and Warranties. The representations and warranties of Purchaser in this Agreement (other than representations and warranties
of Purchaser contained in Sections 6.2.1 (Organization and Power) and 6.2.2 (Authority and Binding Obligation), which
shall be true and correct in all respects) shall be true and correct in all material respects (other than representations and warranties
qualified by materiality, which shall be true and correct in all respects) on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date (or as of such other date to which such representation or warranty expressly
is made).

 

    	 	35	 

     

    

 

(d)         Covenants and Obligations. The covenants and obligations of Purchaser in this Agreement shall have been performed in all
material respects (other than covenants and obligations qualified by materiality, which Purchaser shall have performed in all respects).

 

8.3.2.     Failure
of Seller Closing Condition. If any of the Seller Closing Conditions is not satisfied at Closing (other than as a result of
a Purchaser Closing Condition not being satisfied or waived or as a result of a Seller Default), then Seller shall have the right
to (i) terminate this Agreement by providing written notice to Purchaser, in which case the Earnest Money shall be disbursed to
Seller in accordance with Section 3.2.4, and the Parties shall have no further rights or obligations under this Agreement,
except those which expressly survive such termination, (ii) waive any of the Seller Closing Conditions at or prior to Closing or
(iii) upon written notice to Purchaser, postpone the Closing for up to five (5) Business Days to allow additional time for applicable
Seller Closing Condition to be satisfied.

 

ARTICLE IX

CLOSING

 

9.1         Closing
Date. Subject to the satisfaction or waiver of the conditions set forth in Article VIII, the closing
of the transaction described in this Agreement (the “Closing”) shall occur on June 30, 2017 (as such date
may be postponed pursuant to Section 5.3.3, 8.1.2, 8.2.2, 8.3.2, 13.1.1, 13.2.1 or 16.16),
or such other date as agreed to in writing by Purchaser and Seller (the date on which the Closing occurs is referred to
herein as the “Closing Date”). The Closing shall be effected as provided in Section 9.2.

 

9.2         Closing Escrow.
The Parties acknowledge (i) the Purchase Price to be paid by Purchaser pursuant to Section 3.3 shall be deposited with Deposit
Escrow Agent, (ii) all of the documents required to be delivered by Seller and Purchaser at the Closing pursuant to this Agreement
shall be deposited with Deposit Escrow Agent, and (iii) at Closing, the Purchase Price (as adjusted pursuant to Section 3.1)
and the Earnest Money shall be disbursed to Seller and the documents deposited into the Closing Escrow shall be delivered to Seller
and Purchaser (as the case may be).

 

9.3         Closing Deliveries.

 

9.3.1.     Seller’s
Deliveries. At the Closing, Seller shall deliver or cause to be delivered to Purchaser or deposited with Deposit Escrow Agent
to be delivered to Purchaser at the Closing, all of the (i) documents set forth in this Section 9.3.1, each of which shall
have been duly executed by Seller and acknowledged (if required), and (ii) other items set forth in this Section

9.3.1 (the “Seller
Closing Deliveries”), as follows:

 

(a)      A closing certificate
in the form of Exhibit A;

 

(b)      A
warranty deed for the Real Property (the “Deed”) in the form of Exhibit B, conveying the Real Property
to Purchaser, subject to the Permitted Exceptions;

 

    	 	36	 

     

    

 

(c)         A Bill of Sale for the Hotel in the form of Exhibit C, transferring the Personal Property assets including the FF&E,
Supplies, IT Systems, F&B, Retail Merchandise, Books and Records, Plans and Specifications, Warranties, Bookings, and Trademarks
to Purchaser on the terms set forth therein;

 

(d)         An
Assignment and Assumption of Leases, Contracts and Licenses and Permits for the Hotel in the form of Exhibit D, assigning
the Assumed Contracts (other than the Loan Documents) on the terms set forth therein;

 

(e)         A Holdback
Escrow Agreement in the form of Exhibit F (the “Holdback Escrow Agreement”);

 

(f)          A certificate or registration of title for any owned vehicle or other Personal Property included in the Property which requires
such certification or registration, duly executed, conveying such vehicle or such other Personal Property to Purchaser;

 

(g)         Such agreements, affidavits or other documents as may be reasonably required by the Title Company from Seller to issue the Title
Policy, including, without limitation, an owner’s affidavit, a gap indemnity, and such copies of Seller’s organizational
documents, authorizing resolutions and good standing certificates;

 

(h)         Any real estate transfer tax declaration or similar documents required under Applicable Law in connection with the conveyance of
the Real Property;

 

(i)          A
FIRPTA affidavit in the form set forth in the regulations under Section 1445 of the Code;

 

(j)          To the extent not previously delivered to Purchaser, all originals (or copies if originals are not available) of the Tenant Leases,
Contracts, Licenses and Permits, Books and Records, keys and lock combinations in Seller’s possession, which shall be located
at the Hotel on the Closing Date and deemed to be delivered to Purchaser upon delivery of possession of the Hotel; provided, however,
that Seller shall have the right to (i) redact and reformat any Books and Records which include data or other information pertaining
to any other hotels owned, managed or franchised by Seller, Franchisor, Manager or their Affiliates, and (ii) subject to Section
7.1.1, retain copies of any Books and Records delivered to Purchaser;

 

(k)         The Closing
Statement prepared pursuant to Section 10.1;

 

(l)          Evidence of
the termination of the Management Agreement;

 

(m)        Evidence of
termination of the Lease Agreement;

 

(n)         All
Loan Assumption Documents which are required to be executed by Seller or its Affiliates, duly executed by such Persons;

 

(o)         To
the extent obtained, a tenant estoppel for the spa Tenant Lease, in substantially the form such tenant recently delivered to Lender
(provided that Seller shall use commercially reasonable efforts to obtain such estoppel);

 

    	 	37	 

     

    

 

(p)         Payoff
Letters and lien releases with respect to the payment of the Debt Payoff Amount, if any;

 

(q)         A Settlement
Statement duly executed by Seller and the Title Company; and

 

(r)          Such other documents and instruments as may be reasonably requested by Purchaser or the Title Company in order to consummate the
transaction described in this Agreement, including such documents and instruments reasonably required by Franchisor to enter into
the Replacement Franchise Documents.

 

9.3.2.     Purchaser’s
Deliveries. At the Closing, Purchaser shall deliver or cause to be delivered to Seller or deposited with Deposit Escrow Agent
to be delivered to Seller all of the (i) documents set forth in this Section 9.3.2, each of which shall have been duly executed
by Purchaser and acknowledged (if required), and (ii) other items set forth in this Section 9.3.2 (the “Purchaser
Closing Deliveries”), as follows:

 

(a)         The Closing
Date Payment;

 

(b)         A closing certificate
in the form of Exhibit E;

 

(c)         A counterpart
of each of the documents and instruments to be delivered by Seller under Section 9.3.1 which require execution by Purchaser;

 

(d)         All Loan Assumption
Documents which are required to be executed by Purchaser or its Affiliates, duly executed by such Persons; and

 

(e)         Such other documents
and instruments as may be reasonably requested by Seller or the Title Company in order to consummate the transaction described
in this Agreement.

 

9.4         Possession. Seller shall deliver
possession of the Real Property, subject to the Permitted Exceptions, and tangible Personal Property to Purchaser upon completion
of the Closing.

 

ARTICLE X 

PRORATIONS AND EXPENSES

 

10.1      Closing Statement.
No later than one day prior to Closing, the Parties, through their respective employees, agents or representatives, jointly shall
make such examinations, audits and inventories of the Hotel as may be necessary to make the adjustments and prorations to the Purchase
Price as set forth in Sections 10.2 and 10.3 or any other provisions of this Agreement. Based upon such examinations,
audits and inventories, the Parties jointly shall prepare prior to Closing a closing statement with respect to the Hotel (the “Closing
Statement”), which shall set forth their best estimate of the amounts of the items to be adjusted and prorated under
this Agreement. The Closing Statement shall be approved and executed by the Parties at Closing, and such adjustments and prorations
shall be final with respect to the items set forth in the Closing Statement, except to the extent any such items shall be re-prorated
after the Closing as expressly set forth in Section 10.2.

 

    	 	38	 

     

    

 

10.2      Prorations.
The items of revenue and expense set forth in this Section 10.2 shall be prorated between the Parties (the “Prorations”)
as of 11:59 p.m. on the day preceding the Closing Date (the “Cut-Off Time”), or such other time expressly provided
in this Section 10.2, so that the Closing Date is a day of income and expense for Purchaser.

 

10.2.1.   Taxes.
All real property, personal property, and similar Taxes shall be prorated as of the Cut-Off Time between Seller and Purchaser.
If the amount of any such Taxes is not ascertainable on the Closing Date, the proration for such Taxes shall be based on the most
recent available bill; provided, however, that after the Closing, Seller and Purchaser shall re-prorate the Taxes and pay any deficiency
in the original proration to the other Party promptly upon receipt of the actual bill for the relevant taxable period. This Section
10.2.1 shall survive the Closing.

 

10.2.2.   Tenant
Leases. Any rents and other amounts prepaid under the Tenant Leases shall be prorated as of the Cut-Off Time between Seller
and Purchaser. Purchaser shall receive a credit for all assignable security deposits held by Seller under the Tenant Leases which
are not transferred to Purchaser, and Purchaser thereafter shall be obligated to refund or apply such deposits in accordance with
the terms of such Tenant Leases. Purchaser shall not receive a credit for any non-assignable security deposits held by Seller which
Seller shall return to the tenant under such Tenant Lease, and Purchaser shall obtain any replacement security deposit from such
tenant.

 

10.2.3.   Contracts.
Any Prepaid Amounts or amounts accrued or due and payable under the Assumed Contracts (other than for utilities which
proration is addressed separately in Section 10.2.5) shall be prorated as of the Cut-Off Time between Seller and
Purchaser, with Seller being credited for Prepaid Amounts, and Purchaser being credited for amounts accrued and unpaid.
Without duplication with the foregoing, Purchaser shall receive a credit for all deposits held by Seller under the Assumed
Contracts (together with any interest thereon) which are not transferred to Purchaser, and Purchaser thereafter shall be
obligated to refund or apply such deposits in accordance with the terms of such Assumed Contracts. Seller shall receive a
credit for all deposits made by Seller under the Assumed Contracts (together with any interest thereon) which are transferred
to Purchaser or remain on deposit for the benefit of Purchaser.

 

10.2.4.   Licenses
and Permits. All amounts prepaid, accrued or due and payable under any Licenses and Permits transferred to Purchaser shall
be prorated as of the Cut-Off Time between Seller and Purchaser. Seller shall receive a credit for all deposits made by Seller
under the Licenses and Permits (together with any interest thereon) which are transferred to Purchaser or which remain on deposit
for the benefit of Purchaser.

 

10.2.5.   Utilities.
All utility services shall be prorated as of the Cut-Off Time between Seller and Purchaser. The Parties shall use commercially
reasonable efforts to obtain readings for all utilities as of the Cut-Off Time. If readings cannot be obtained as of the Closing
Date, the cost of such utilities shall be prorated between Seller and Purchaser by estimating such cost on the basis of the most
recent bill for such service; provided, however, that after the Closing, the Parties shall re-prorate the amount for such utilities
and pay any deficiency in the original proration to the other Party promptly upon receipt of the actual bill for the relevant billing
period, which obligation shall survive the Closing. Seller shall receive a credit for all fuel stored at the Hotel based on Seller’s
cost for such fuel. Seller shall receive a credit for all deposits transferred to Purchaser or which remain on deposit for the
benefit of Purchaser with respect to such utility contracts.

 

    	 	39	 

     

    

 

10.2.6.   Bookings.
Purchaser shall receive a credit for all prepaid deposits for Bookings scheduled to occur on or after the Closing Date, except
to the extent such deposits are transferred to Purchaser.

 

10.2.7.   Restaurants
and Bars. Seller shall close out the transactions in the restaurants and bars in the Hotel (if any) as of the regular closing
time for such restaurants and bars during the night in which the Cut-Off Time occurs and retain all monies collected as of such
closing, and Purchaser shall be entitled to any monies collected from the restaurants and bars thereafter.

 

10.2.8.   Vending
Machines. Seller shall remove all monies from all vending machines, laundry machines, pay telephones and other coin operated
equipment as of the Cut-Off Time and shall retain all monies collected therefrom as of the Cut-Off Time, and Purchaser shall be
entitled to any monies collected therefrom after the Cut-Off Time.

 

10.2.9.   Trade
Payables. Except to the extent an adjustment or proration is made under another subsection of this Section 10.2, (i)
Seller shall pay in full prior to or promptly following the Closing all amounts payable to vendors or other suppliers of goods
or services for the Business (the “Trade Payables”) that are due and payable as of the Closing Date for which
goods or services have been delivered to the Hotel prior to Closing, and (ii) Purchaser shall receive a credit for the amount of
such Trade Payables which have accrued, but are not yet due and payable as of the Closing Date, and Purchaser shall pay all such
Trade Payables accrued as of the Closing Date when such Trade Payables become due and payable; provided, however, Seller and Purchaser
shall re-prorate the amount of credit for any Trade Payables and pay any deficiency in the original proration to the other Party
promptly upon receipt of the actual bill for such goods or services.

 

10.2.10.  Cash.
Seller shall receive a credit for all cash on hand or on deposit in any house bank at the Hotel which shall remain on deposit for
the benefit of Purchaser.

 

10.2.11.  Unopened
Containers and Retail Merchandise. All unopened F&B and Retail Merchandise, excluding any expired, obsolete or slow moving
items or any items placed in guest rooms, with respect to the Hotel on hand as of the Closing Date, for which Seller shall receive
a credit at Closing in the amount of the total of the actual cost to Seller of such items transferred to Purchaser at Closing.

 

10.2.12.  Gift
Certificates. Following the Closing, notwithstanding that Purchaser is not assuming any liability for Seller’s Gift Certificates,
Purchaser shall honor when presented Seller’s outstanding Gift Certificates to the extent listed on an updated Schedule
6.1.17(b) (which Seller shall deliver at Closing), and Purchaser shall receive a credit at Closing for 100% of the aggregate
face amount (or value based upon an average daily rate to the extent not for a specified amount) of the outstanding Gift Certificates
listed on Schedule 6.1.17(b)(1). Purchaser shall not receive any credit at Closing for the Gift Certificates set forth on
Schedule 6.1.17(b)(2).

 

10.2.13.  Paid Time Off Credit.
Purchaser shall receive a credit in an amount equal to the Paid Time Off Credit.

 

    	 	40	 

     

    

 

10.2.14.  Accounts Receivable.
Seller shall receive a credit for all Accounts Receivable other than Accounts Receivable that are more than ninety (90) days past
due.

 

10.3       Guest Ledger.
At Closing, Seller shall receive a credit in an amount equal to: (i) all amounts charged to the Guest Ledger for all room nights
up to (but not including) the night during which the Cut-Off Time occurs, and (ii) 50% of all amounts charged to the Guest Ledger
for the room night which includes the Cut-Off Time (other than any restaurant or bar charges on the Guest Ledger which shall be
prorated in accordance with Section 10.2.7), and Purchaser shall be entitled to retain all deposits made and amounts collected
with respect to such Guest Ledger.

 

10.4       Final Accounting.

 

10.4.1.   Within
one hundred twenty (120) days following the Closing, Purchaser shall conduct a final accounting of all matters and items subject
to proration pursuant to this Article X, which shall include a determination as to whether there were any errors or omissions
on the Closing Statement (“Final Accounting”), and Purchaser shall deliver to Seller a certificate (the “Final
Adjustment Certificate”) reflecting the final proration calculations (the “Final Prorations”).
In addition to the standard prorations, Purchaser shall be entitled to include in any proration calculation any amounts of Seller’s
transaction costs set forth in Section 10.5 not paid at Closing as an amount owed to Purchaser pursuant to such prorations.

 

10.4.2.   Purchaser
and Seller shall cooperate in good faith to reconcile all items included on the Final Accounting. The Final Accounting shall be
binding and conclusive on all Parties hereto, unless within ten (10) Business Days after receipt by Seller of the Final Adjustment
Certificate Seller notifies Purchaser in writing that it seeks an adjustment in the Final Accounting, and specifies in reasonable
detail the items that it seeks to adjust and the reasons therefor (which may include items not reflected in the Final Adjustment
Certificate, but which Seller believes should have been reflected therein). The Parties shall attempt to resolve such dispute;
however, if Purchaser and Seller have not resolved the request for adjustment within fifteen (15) Business Days after delivery
of the original notice by Seller to Purchaser, then the Parties shall submit such dispute to KPMG, LLC, certified public accountants.
The determination of such accountants, which shall be made within thirty (30) days after submission, shall be conclusive, provided
that such accountant shall only decide the specific items under dispute by the Parties and the decision for each disputed amount
must be within the range of values assigned to each such item by Purchaser and Seller. The fees and expenses of such accountant
shall be paid by Seller, on the one hand, and by Purchaser, on the other hand, based upon the percentage that the amount actually
contested but not awarded to Seller or Purchaser, respectively, bears to the aggregate amount actually contested by Seller and
Purchaser. Any retainer charged by such accountant will be advanced 50% by Seller, on the one hand, and 50% by Purchaser, on the
other hand.

 

10.4.3.   In
the event it is determined pursuant to the Final Accounting, if any, that any amounts are due and owing by Seller to Purchaser,
then Seller shall cause such amounts to be paid to Purchaser on or before thirty (30) days from the date the Final Accounting is
completed. In the event it is determined pursuant to the Final Accounting that any amounts are due and owing by Purchaser to Seller,
then Purchaser shall cause such amounts to be paid to Seller on or before thirty (30) days from the date the Final Accounting is
completed.

 

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10.5       Transaction Costs.

 

10.5.1.   Seller’s
Transaction Costs. In addition to the other costs and expenses to be paid by Seller set forth elsewhere in this Agreement,
Seller shall pay for the following items in connection with this transaction: (i) the fees and expenses of removing or curing any
Unpermitted Exceptions as required under Section 5.3; (ii) 50% of the fees and expenses for the Deposit Escrow Agent; (iii)
the fees and expenses of its own attorneys, accountants and consultants; (iv) 60% of the customary fees and expenses for the Title
Commitment and Title Policy (excluding endorsements); and (v) 50% of any transfer, sales or similar tax and recording charges payable
in connection with the conveyance of the Property or the other assets of the Business.

 

10.5.2.   Purchaser’s
Transaction Costs. In addition to the other costs and expenses to be paid by Purchaser as set forth elsewhere in this Agreement,
Purchaser shall pay for the following items in connection with this transaction: (i) the fees and expenses incurred by Purchaser
for Purchaser’s Inspectors or otherwise in connection with the Inspections; (ii) any fees or expenses payable for the assignment,
transfer or conveyance of any Tenant Leases, Contracts, Licenses and Permits, IT Systems, Plans and Specifications and Warranties;
(iii) the fees and expenses for the Updated Survey; (iv) 50% of the fees and expenses for the Deposit Escrow Agent; (v) 40% of
the customary fees and expenses for the Title Commitment and Title Policy (excluding endorsements); (vi) the cost for any title
endorsements to the Title Policy requested by Purchaser; (vii) any mortgage tax, title insurance fees and expenses for any loan
title insurance policies, recording charges or other amounts payable in connection with any financing obtained by Purchaser; (viii)
recording fees for the Deed; (ix) the fees and expenses of its own attorneys, accountants and consultants; and (x) 50% of any transfer,
sales or similar tax and recording charges payable in connection with the conveyance of the Property or the other assets of the
Business.

 

10.5.3.   Other
Transaction Costs. All other fees, costs and expenses not expressly addressed in this Section 10.5 or elsewhere in this
Agreement shall be allocated between Seller and Purchaser in accordance with applicable local custom for similar transactions.

 

10.5.4.   This Article X shall survive the Closing.

 

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ARTICLE XI

TRANSITION PROCEDURES

 

11.1       Safe Deposit Boxes.
Prior to the Closing, Seller shall notify all guests or customers who are then using a safe deposit box at the Hotel advising them
of the pending change in management of the Hotel and requesting them to conduct an inventory and verify the contents of such safe
deposit box. All inventories by such guests or customers shall be conducted under the joint supervision of employees, agents or
representatives of the Parties. Upon such inventory and verification, Seller shall deliver to Purchaser all keys, receipts and
agreements for such safe deposit box (and thereafter such safe deposit box shall be deemed an “Inventoried Safe Deposit
Box”). If this Agreement is terminated after such inventory, Purchaser shall return all keys, receipts and agreements
to Seller for such Inventoried Safe Deposit Boxes immediately upon such termination. Upon Closing, Seller shall deliver to Purchaser
all keys in Seller’s possession for all safe deposit boxes not then in use, and a list of all safe deposit boxes which are
then in use, but not yet inventoried by the depositor, with the name and room number of such depositor. After the Closing, the
Parties shall make appropriate arrangements for guests and customers at the Hotel to inventory and verify the contents of the non-Inventoried
Safe Deposit Boxes, and upon such inventory and verification, Seller shall deliver to Purchaser all keys, receipt and agreements
for such safe deposit box (and such safe deposit box thereafter shall constitute an Inventoried Safe Deposit Box). Purchaser shall
be responsible for, and shall indemnify and hold harmless the Seller Indemnitees in accordance with Article XIV from and
against any Indemnification Loss incurred by any Seller Indemnitees with respect to, any theft, loss or damage to the contents
of any safe deposit box from and after the time such safe deposit box is deemed an Inventoried Safe Deposit Box pursuant to this
Section 11.1. Seller shall be responsible for, and shall indemnify and hold harmless the Purchaser Indemnitees in accordance
with Article XIV from and against any Indemnification Loss incurred by any Purchaser Indemnitees with respect to, any theft,
loss or damage to the contents of any safe deposit box prior to the time such safe deposit box is deemed an Inventoried Safe Deposit
Box. This Section 11.1 shall survive the Closing.

 

11.2       Baggage. On
the Closing Date, employees, agents or representatives of the Parties jointly shall make a written inventory of all baggage, boxes
and similar items checked in or left in the care of Seller at the Hotel, and Seller shall deliver to Purchaser the keys to any
secured area which such baggage and other items are stored (and thereafter such baggage, boxes and other items inventoried shall
be deemed the “Inventoried Baggage”). Purchaser shall be responsible for, and shall indemnify and hold harmless
the Seller Indemnitees in accordance with Article XIV from and against any Indemnification Loss incurred by any Seller
Indemnitees with respect to any theft, loss or damage to any Inventoried Baggage from and after the time of such inventory, and
any other baggage, boxes or similar items left in the care of Purchaser which was not inventoried by the Parties. Seller shall
be responsible for, and shall indemnify and hold harmless the Purchaser Indemnitees in accordance with Article XIV from
and against any Indemnification Loss incurred by any Purchaser Indemnitees with respect to any theft, loss or damage to any Inventoried
Baggage prior to the time of such inventory, and any other baggage, boxes or similar items left in the care of Seller which was
not inventoried by the Parties. This Section 11.2 shall survive the Closing.

 

11.3       IT Systems.
With respect to the IT Systems, Seller shall provide Purchaser with a contact name and telephone number of the applicable licensor,
vendor or supplier, and Purchaser shall (i) be responsible for obtaining any consents or approvals necessary for the assignment
or transfer of such IT Systems from Seller to Purchaser, or a new license for such IT Systems (as the case may be), and (ii) pay
any fees or expenses charged by the licensor, vendor or supplier of such IT Systems in respect of such assignment or transfer or
new license (as the case may be).

 

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ARTICLE XII 

DEFAULT AND REMEDIES

 

12.1       Seller’s Default.
If (i) Purchaser has not delivered a Termination Notice pursuant to Section 4.1.1 and (ii) any of Seller’s representations
or warranties hereunder is not true and correct in any material respect or Seller fails to perform its covenants or obligations
hereunder in any material respect other than due to a Purchaser’s Default (a “Seller Default”) and Seller’s
Default is not cured by Seller within ten (10) days of receipt of written notice thereof of Purchaser, then Purchaser, as its sole
and exclusive remedies, may elect to: (a) terminate this Agreement, in which case the Earnest Money shall be refunded to Purchaser
in accordance with Section 3.2.4, and Seller shall reimburse Purchaser for all third party out-of-pocket costs and expenses
actually incurred by Purchaser and its Affiliates in connection with Purchaser’s due diligence investigations and the negotiation
of this Agreement and Purchaser’s efforts to consummate the Contemplated Transactions (which reimbursement shall be capped
at $300,000), and Seller shall promptly pay such amounts to Purchaser upon receipt of documentation showing the amount of such
costs and expenses, after which the Parties shall have no further rights or obligations under this Agreement, except those which
expressly survive such termination; (b) proceed to Closing in which case Purchaser shall be deemed to have waived such Seller Default
and, if applicable, any Purchaser Closing Condition that is not satisfied as a result of such Seller Default; or (c) seek specific
performance, by commencing legal action within forty- five (45) days following the expiration of any applicable cure period, with
Seller responsible for costs and attorneys’ fees incurred by Purchaser in connection with obtaining such relief and with
a reduction in or setoff against the Purchase Price as the court may deem appropriate. The preceding clause (a) shall survive the
termination of this Agreement. Seller acknowledges and agrees that irreparable damage would occur in the event that Seller fails
to take such actions as are required of it hereunder to consummate the Contemplated Transactions. Accordingly, Seller acknowledges
and agrees that Purchaser shall be entitled to specific performance as provided in this Section 12.1. Seller agrees that
it will not oppose the granting of specific performance as provided in this Section 12.1 on the basis that Purchaser has
an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.

 

12.2       Purchaser’s Default.
If (i) Purchaser has not deposited the Earnest Money within the time period provided in, and otherwise in accordance with, Section
3.2.1, or (ii) at any time prior to Closing, any of Purchaser’s representations or warranties hereunder is not true and
correct in any material respect or Purchaser fails to perform any of its other covenants or obligations under this Agreement in
any material respect other than due to a Seller Default (a “Purchaser Default”) and Purchaser’s Default
is not cured by Purchaser within ten (10) days of receipt of written notice thereof of Seller, then Seller, as its sole and exclusive
remedy, may elect to (A) terminate this Agreement by providing written notice to Purchaser, in which case the Earnest Money shall
be disbursed to Seller in accordance with Section 3.2.4, and the Parties shall have no further rights or obligations under
this Agreement, except those which expressly survive such termination, or (B) proceed to Closing pursuant to this Agreement, in
which case Seller shall be deemed to have waived such Purchaser Default. Notwithstanding the foregoing, Seller shall have the right
to bring an action for damages against Purchaser for Purchaser’s failure to deposit the Earnest Money. The preceding sentence
shall survive the termination of this Agreement.

 

12.3       LIQUIDATED DAMAGES.
THE PARTIES ACKNOWLEDGE AND AGREE THAT IF THIS AGREEMENT IS TERMINATED PURSUANT TO SECTION 12.2, THE DAMAGES THAT SELLER
WOULD SUSTAIN AS A RESULT OF SUCH TERMINATION WOULD BE DIFFICULT IF NOT IMPOSSIBLE TO ASCERTAIN. ACCORDINGLY, THE PARTIES AGREE
THAT SELLER SHALL RETAIN THE EARNEST MONEY AS FULL AND COMPLETE LIQUIDATED DAMAGES (AND NOT AS A PENALTY) AS SELLER’S SOLE
AND EXCLUSIVE REMEDY FOR SUCH TERMINATION; PROVIDED, HOWEVER, THAT IN ADDITION TO THE EARNEST MONEY, SELLER SHALL RETAIN ALL RIGHTS
AND REMEDIES UNDER THIS AGREEMENT WITH RESPECT TO THOSE OBLIGATIONS OF PURCHASER WHICH EXPRESSLY SURVIVE SUCH TERMINATION.

 

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12.4       Effect of Termination.
If this Agreement is terminated all rights and obligations of the Parties hereunder shall terminate and no Party shall have any
liability to the other Party hereto, except for obligations of the Parties in this Agreement which expressly survive the termination
of this Agreement, and except that nothing herein will relieve any Party from liability arising out of any willful breach of its
representations, warranties, covenants or agreements contained in this Agreement.

 

ARTICLE XIII 

RISK OF LOSS

 

13.1      Casualty. If,
at any time after the Effective Date and prior to Closing or earlier termination of this Agreement, the Property or any portion
thereof is damaged or destroyed by fire or any other casualty (a “Casualty”), Seller shall give written notice
of such Casualty to Purchaser promptly after the occurrence of such Casualty.

 

13.1.1.   Material
Casualty. If (a) the amount of the repair restoration of the Property required by a Casualty equals or exceeds five percent
(5%) of the Purchase Price, or (b) the damage (i) materially limits the ingress or egress to the Hotel for a period of more than
thirty (30) days, or (ii) would render the lobby, reception area, front desk, parking area or other portions of the Property that
are material to the operation of the Business unavailable for use for a period longer than forty-five (45) days following Closing
(each a “Material Casualty”) and such Material Casualty was not caused by Purchaser or Purchaser’s Inspectors,
or their respective employees or agents, then Purchaser shall have the right to elect, by providing written notice to Seller within
ten (10) days after Purchaser’s receipt of Seller’s written notice of such Material Casualty, to (a) terminate this
Agreement, in which case the Earnest Money shall be refunded to Purchaser in accordance with Section 3.2.4, and the Parties
shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (b)
proceed to Closing, without terminating this Agreement, in which case Seller shall (i) provide Purchaser with a credit against
the Purchase Price in an amount equal to the lesser of: (A) the applicable insurance deductible, and (B) and the reasonable estimated
costs for the repair or restoration of the Property required by such Material Casualty, and (ii) transfer and assign to Purchaser
all of Seller’s right, title and interest in and to all proceeds from all casualty and lost profits insurance policies maintained
by Seller with respect to the Property or the Business, except those proceeds allocable to lost profits and costs incurred by Seller
for the period prior to the Closing. If Purchaser fails to provide written notice of its election to Seller within such time period,
then Purchaser shall be deemed to have elected to terminate this Agreement pursuant to clause (a) of the preceding sentence. If
the Closing is scheduled to occur within Purchaser’s ten (10) day election period, the Closing Date shall be postponed until
the date which is five (5) Business Days after the expiration of such ten (10) day election period.

 

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13.1.2.   Non-Material
Casualty. In the event of any (i) Casualty which is not a Material Casualty, or (ii) Material Casualty which is caused by Purchaser
or Purchaser’s Inspectors, or their respective employees or agents, then Purchaser shall not have the right to terminate
this Agreement, but shall proceed to Closing, in which case Seller shall (A) provide Purchaser with a credit against the Purchase
Price (except if such Casualty is caused by Purchaser or Purchaser’s Inspectors) in an amount equal to the reasonable estimated
costs for the repair or restoration required by such Casualty, and (B) transfer and assign to Purchaser all of Seller’s right,
title and interest in and to all proceeds from all lost profits/costs insurance policies maintained by Seller with respect to the
Hotel, except those proceeds allocable to any lost profits incurred by Seller for the period prior to the Closing.

 

13.2      Condemnation.
If, at any time after the Effective Date and prior to Closing or the earlier termination of this Agreement, any Governmental Authority
threatens or commences any condemnation proceeding or other proceeding in eminent domain with respect to all or any portion of
the Real Property (a “Condemnation”), Seller shall give written notice of such Condemnation to Purchaser promptly
after Seller receives notice of such Condemnation.

 

13.2.1.   Material
Condemnation. If the Condemnation would (i) result in the permanent loss of more than five percent (5%) of the Purchase Price,
(ii) result in any material reduction or restriction in access to the Land or Improvements, or (iii) have a materially adverse
effect on the Business as conducted prior to such Condemnation, including, without limitation rendering the lobby, reception area,
front desk, parking area or other portions of the Property that are material to the operation of the Business unavailable for use
following Closing (a “Material Condemnation”), then Purchaser shall have the right to elect, by providing
written notice to Seller within ten (10) days after Purchaser’s receipt of Seller’s written notice of such Material
Condemnation, to (A) terminate this Agreement, in which case the Earnest Money shall be refunded to Purchaser in accordance with
Section 3.2.4, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly
survive such termination, or (B) proceed to Closing, without terminating this Agreement, in which case Seller shall assign to Purchaser
all of Seller’s right, title and interest in all proceeds and awards from such Material Condemnation. If Purchaser fails
to provide written notice of its election to Seller within such time period, then Purchaser shall be deemed shall be deemed to
have elected to terminate this Agreement pursuant to clause (A) of the preceding sentence. If the Closing is scheduled to occur
within Purchaser’s ten (10) day election period, the Closing shall be postponed until the date which is five (5) Business
Days after the expiration of such ten (10) day election period.

 

13.2.2.   Non-Material
Condemnation. In the event of any Condemnation other than a Material Condemnation, Purchaser shall not have the right to terminate
this Agreement, but shall proceed to Closing, in which case Seller shall assign to Purchaser all of Seller’s right, title
and interest in all proceeds and awards from such Condemnation.

 

ARTICLE XIV

SURVIVAL AND INDEMNIFICATION

 

14.1       Survival. If
this Agreement is terminated, those representations, warranties, covenants, liabilities, indemnities and obligations of the Parties
under this Agreement that expressly survive the termination of this Agreement shall survive such termination, and all others shall
not survive such termination. If the Closing occurs, those representations, warranties, covenants, liabilities, indemnities and
obligations of the Parties under this Agreement that expressly survive the Closing shall survive the Closing as provided in Section
6.3 or elsewhere herein and all others shall merge in the Deed and not survive the Closing. This Article XIV and all
rights and obligations of defense and indemnification as expressly set forth in this Agreement shall survive the Closing or termination
of this Agreement.

 

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14.2       Indemnification
by Seller. Subject to the limitations set forth in Sections 14.1, 14.4 and 14.5 and any other express
provision in this Agreement, Seller shall defend, indemnify and hold harmless the Purchaser Indemnitees from and against any
Indemnification Loss incurred by any Purchaser Indemnitee to the extent resulting from (a) any breach by Seller of any of its
representations and warranties made by Seller under this Agreement or any other Transaction Document, (b) any breach by
Seller of any covenants or obligations under this Agreement or any other Transaction Document, and (c) the Excluded
Liabilities.

 

14.3       Indemnification by Purchaser.
Subject to the limitations set forth in Sections 14.1, 14.4 and 14.5, Purchaser shall defend, indemnify and hold
harmless the Seller Indemnitees from and against any Indemnification Loss incurred by any Seller Indemnitee to the extent resulting
from (a) any breach by Purchaser of any of its representations, warranties, covenants or obligations under this Agreement or any
other Transaction Document and (b) the Assumed Liabilities.

 

14.4       Limitations on Indemnification
Obligations.

 

14.4.1.   Failure
to Provide Timely Notice of Indemnification Claim. Notwithstanding anything to the contrary in this Agreement, an Indemnitee
shall not be entitled to defense or indemnification to the extent the Indemnitee’s failure to promptly notify the Indemnitor
in accordance with Section 14.5.1, (i) prejudices the Indemnitor’s ability to defend against any Third-Party Claim
on which such Indemnification Claim is based, or (ii) increases the amount of Indemnification Loss incurred in respect of such
indemnification obligation of the Indemnitor.

 

14.4.2.   Fault
of Indemnitee. Notwithstanding anything to the contrary in this Agreement, (i) a Purchaser Indemnitee shall not be entitled
to defense or indemnification to the extent the applicable Indemnification Loss results from the gross negligence or willful misconduct
of, or breach of this Agreement by, any Purchaser Indemnitee, and (ii) a Seller Indemnitee shall not be entitled to defense or
indemnification to the extent the applicable Indemnification Loss results from the gross negligence or willful misconduct of, or
breach of this Agreement by, any Seller Indemnitee.

 

14.4.3.   Indemnification
Deductible and Cap. Notwithstanding anything to the contrary in this Agreement, Seller shall not be required to provide indemnification
to the Purchaser Indemnitees pursuant to Section 14.2(a) to the extent that the aggregate amount of all Indemnification
Losses incurred by the Purchaser Indemnitees for which Purchaser otherwise would be entitled to indemnification under Section
14.2(a) (A) does not exceed $100,000 (the “Indemnification Deductible”); or if such Indemnification Losses
exceed the Indemnification Deductible, such Indemnification Losses shall not exceed $1,000,000 (the “Cap”);
provided further that (i) neither the Cap nor the Indemnification Deductible shall be applicable with respect to any breach of
any of the Fundamental Representations and (ii) neither the Indemnification Deductible nor the Cap shall be applicable with respect
to fraud. Notwithstanding anything in this Agreement to the contrary, for the purposes of the Parties’ indemnification under
this Article XIV, all of the representations and warranties set forth in this Agreement that are qualified as to materiality
or other similar qualification shall be deemed to have been made without any such qualification for purposes of determining (i)
whether a breach of the any such representation or warranty has occurred, and (ii) the amount of Indemnification Loss resulting
from or arising out of or in connection with any such breach of the representation or warranty.

 

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14.4.4.   WAIVER
OF CERTAIN DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR UNDER APPLICABLE LAW, SELLER (FOR ITSELF
AND ALL SELLER INDEMNITEES) AND PURCHASER (FOR ITSELF AND ALL PURCHASER INDEMNITEES) HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE
AND DISCLAIM ALL RIGHTS TO CLAIM OR SEEK ANY CONSEQUENTIAL, PUNITIVE, EXEMPLARY, STATUTORY OR TREBLE DAMAGES AND ACKNOWLEDGE AND
AGREE THAT THE RIGHTS AND REMEDIES IN THIS AGREEMENT WILL BE ADEQUATE IN ALL CIRCUMSTANCES FOR ANY CLAIMS THE PARTIES (OR ANY INDEMNITEE)
MIGHT HAVE WITH RESPECT THERETO; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT LIMIT THE INDEMNIFICATION OBLIGATIONS OF SELLER
OR PURCHASER WITH RESPECT TO ANY THIRD-PARTY CLAIM FOR CONSEQUENTIAL, PUNITIVE, EXEMPLARY, STATUTORY OR TREBLE DAMAGES.

 

14.5       Indemnification Procedure

 

14.5.1.   Notice
of Indemnification Claim. If any of the Seller Indemnitees or Purchaser Indemnitees (as the case may be) (each, an “Indemnitee”)
is entitled to defense or indemnification under Section 4.1.4, 7.8, 11.1, 11.2, 14.2 or 14.3 or any other express
provision in this Agreement (each, an “Indemnification Claim”), the Party required to provide defense or indemnification
to such Indemnitee (the “Indemnitor”) shall not be obligated to defend, indemnify and hold harmless such Indemnitee
unless and until such Indemnitee provides written notice to such Indemnitor promptly after such Indemnitee has actual knowledge
of any facts or circumstances on which such Indemnification Claim is based or a Third-Party Claim is made on which such Indemnification
Claim is based, describing in reasonable detail such facts and circumstances or Third-Party Claim with respect to such Indemnification
Claim.

 

14.5.2.   Resolution
of Indemnification Claim Not Involving Third-Party Claim. If the Indemnification Claim does not involve a Third-Party Claim
and is disputed by the Indemnitor, the dispute shall be resolved by litigation or other means of alternative dispute resolution
as the Parties may agree in writing.

 

14.5.3.   Resolution
of Indemnification Claim Involving Third-Party Claim. If the Indemnification Claim involves a Third-Party Claim, the Indemnitor
shall have the right (but not the obligation) to assume the defense of such Third-Party Claim, at its cost and expense, and shall
use good faith efforts consistent with prudent business judgment to defend such Third-Party Claim, provided that (i) the counsel
for the Indemnitor who shall conduct the defense of the Third-Party Claim shall be reasonably satisfactory to the Indemnitee (unless
selected by Indemnitor’s insurance company), (ii) the Indemnitee, at its cost and expense, may participate in, but shall
not control, the defense of such Third-Party Claim, and (iii) the Indemnitor shall not enter into any settlement or other agreement
which requires any performance by the Indemnitee, other than the payment of money which shall be paid by the Indemnitor. The Indemnitee
shall not enter into any settlement or other agreement with respect to the Indemnification Claim, without the Indemnitor’s
prior written consent, which consent may be withheld in Indemnitor’s sole discretion. If the Indemnitor elects not to assume
the defense of such Third-Party Claim, the Indemnitee shall have the right to retain the defense of such Third-Party Claim and
shall use good faith efforts consistent with prudent business judgment to defend such Third-Party Claim in an effective and cost
efficient manner.

 

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14.6       Release and Indemnification.
Seller and Purchaser hereby release Deposit Escrow Agent and its officers, managers, employees and agents (each, a “Deposit
Escrow Agent Party”), for any liability, damage, loss, cost or expense incurred by Seller or Purchaser to the extent
resulting from (i) any action taken or not taken in good faith upon advice of Deposit Escrow Agent’s counsel given with respect
to any questions relating to its obligations under this Agreement, or (ii) any action taken or not taken in reliance upon any document,
including any written notice provided to Deposit Escrow Agent pursuant to this Agreement, as to the due execution and the validity
and effectiveness of such document, and the truth and accuracy of any information contained therein, which such Deposit Escrow
Agent Party in good faith believes to be genuine, to have been signed or presented by a duly authorized person or persons and to
comply with the terms of this Agreement, except to the extent resulting from the gross negligence, willful default, intentional
misconduct or breach of trust by such Deposit Escrow Agent Party. Seller and Purchaser, jointly and severally, shall indemnify
and hold harmless any Deposit Escrow Agent Party against any liability, damage, loss, cost or expense, including reasonable attorneys’
fees and court costs, incurred by such Deposit Escrow Agent Party to the extent resulting from the performance by any Deposit Escrow
Agent Party of Deposit Escrow Agent’s obligations under this Agreement, except to the extent resulting from the gross negligence,
willful default, intentional misconduct or breach of trust by such Deposit Escrow Agent Party.

 

14.7       Exclusive Remedy for
Indemnification Loss. Following the Closing, the indemnification provisions in this Article XIV shall be the sole
and exclusive remedy of any Indemnitee with respect to any claim for Indemnification Loss arising from or in connection with this
Agreement, other than with respect to any Purchase Price adjustments made pursuant to Article X and any fraud claims and
as provided in Article XII or any other express provision in this Agreement.

 

14.8       Treatment of Indemnity
Payment. Any indemnity payment made to an Indemnitee pursuant to this Agreement shall be treated as an adjustment to the
Purchase Price for the Property, for all tax, financial reporting and other purposes.

 

14.9       SURVIVAL. This
Article XIV shall survive the Closing.

 

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ARTICLE XV 

CONDITION OF THE PROPERTY

 

15.1      PROPERTY SOLD “AS
IS”. PURCHASER ACKNOWLEDGES AND AGREES THAT (A) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT THE PURCHASE OF THE PROPERTY SHALL BE ON AN “AS IS”, “WHERE IS”, “WITH ALL FAULTS”
BASIS, SUBJECT TO WEAR AND TEAR FROM THE EFFECTIVE DATE UNTIL CLOSING, AND (B) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT, SELLER HAS NO OBLIGATION TO REPAIR ANY DAMAGE TO OR DEFECT IN THE PROPERTY, REPLACE ANY OF THE
PROPERTY OR OTHERWISE REMEDY ANY MATTER AFFECTING THE CONDITION OF THE PROPERTY.

 

15.2       LIMITATION ON REPRESENTATIONS
AND WARRANTIES. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT, NEITHER SELLER, MANAGER OR ANY OF THEIR AFFILIATES, NOR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS,
PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS,
AGENTS OR REPRESENTATIVES, NOR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING, HAVE MADE ANY REPRESENTATION, WARRANTY,
GUARANTY, PROMISE, PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO THE PROPERTY OR THE BUSINESS, WRITTEN OR ORAL, EXPRESS OR
IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, OR ANY REPRESENTATION OR WARRANTY AS TO (A) THE CONDITION, SAFETY, QUANTITY, QUALITY, USE, OCCUPANCY OR OPERATION
OF THE PROPERTY, (B) THE PAST, PRESENT OR FUTURE REVENUES OR EXPENSES WITH RESPECT TO THE PROPERTY OR THE BUSINESS, (C) THE COMPLIANCE
OF THE PROPERTY OR THE BUSINESS WITH ANY ZONING REQUIREMENTS, BUILDING CODES OR OTHER APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION,
THE AMERICANS WITH DISABILITIES ACT OF 1990, (D) THE ACCURACY OF ANY ENVIRONMENTAL REPORTS OR OTHER DATA OR INFORMATION SET FORTH
IN THE SELLER DUE DILIGENCE MATERIALS PROVIDED TO PURCHASER WHICH WERE PREPARED FOR OR ON BEHALF OF SELLER, OR (E) ANY OTHER MATTER
RELATING TO SELLER, THE PROPERTY OR THE BUSINESS.

 

15.3       RELIANCE ON DUE DILIGENCE.
PURCHASER ACKNOWLEDGES AND AGREES THAT:

 

(A)         PURCHASER
SHALL HAVE HAD THE OPPORTUNITY TO CONDUCT ALL DUE DILIGENCE INSPECTIONS OF THE PROPERTY AND THE BUSINESS AS OF THE EXPIRATION OF
THE DUE DILIGENCE PERIOD, INCLUDING REVIEWING ALL SELLER DUE DILIGENCE MATERIALS AND OBTAINING ALL INFORMATION WHICH IT DEEMS NECESSARY
TO MAKE AN INFORMED DECISION AS TO WHETHER IT SHOULD PROCEED WITH THE PURCHASE OF THE PROPERTY AND THE BUSINESS;

 

    	 	50	 

     

    

 

(B)         PURCHASER
SHALL BE DEEMED TO BE SATISFIED WITH THE RESULTS OF ITS DUE DILIGENCE REVIEW OF THE PROPERTY AND THE BUSINESS UPON THE EXPIRATION
OF THE DUE DILIGENCE PERIOD;

 

(C)         PURCHASER
WILL BE RELYING ONLY ON ITS DUE DILIGENCE INSPECTIONS OF THE PROPERTY, ITS REVIEW OF THE SELLER DUE DILIGENCE MATERIALS AND THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT IN PURCHASING THE
PROPERTY; AND

 

(D)         PURCHASER
WILL NOT BE RELYING ON ANY STATEMENT MADE OR INFORMATION PROVIDED TO PURCHASER BY SELLER (EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
EXPRESSLY MADE BY SELLER IN THIS AGREEMENT), MANAGER OR ANY OF THEIR AFFILIATES, OR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS,
PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS,
AGENTS OR REPRESENTATIVES, OR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING.

 

15.4       SURVIVAL. This Article XV
shall survive the Closing.

 

ARTICLE XVI

MISCELLANEOUS
PROVISIONS

 

16.1      Notices.

 

16.1.1.   Method
of Delivery. All notices, requests, demands and other communications required to be provided by any Party under this Agreement
(each, a “Notice”) shall be in writing and delivered, at the sending Party’s cost and expense, by (i)
personal delivery, (ii) express courier service, or (iii) facsimile transmission to the recipient Party at the following address
or facsimile number:

 

If to Seller:

 

c/o Behringer Harvard

The Lightstone Group

460 Park Avenue, 13th Floor

New York, NY 10022

Attn: Alan Liu and Tom Kennedy

Facsimile No.: (212) 751-2494

 

    	 	51	 

     

    

 

With copies to:

 

JMI Realty LLC

111 Congress Avenue, Suite 2600

Austin, TX 78701

Attn: Gregory W. Clay and Bryant Burke, Esq.

Facsimile
No.: (858) 350-1874

 

And

 

c/o The Lightstone Group

1985 Cedar Bridge Ave., Suite 1

Lakewood, NJ 08701

Attn: Joseph E. Teichman, Esq.

Facsimile No.: (732)
612-1444

 

And:

 

Eckert Seamans Cherin & Mellott, LLC

600 Grant Street, 44th Floor

Pittsburgh, PA 15219

Attn: Timothy Q. Hudak, Esq.

Facsimile No.: (412) 566-6099

 

If to Purchaser:

 

c/o KSL Capital Partners

100 St. Paul Street, Suite 800

Denver, CO 80206

Attn: Kevin Rohnstock

Facsimile No.: (720) 284-6401

 

With a copy to:

 

Brownstein Hyatt Farber Schreck, LLP

410 Seventeenth Street, Suite 2200

Denver, CO 80202

Attn: Christopher D. Reiss and Kristin Macdonald

Facsimile No.: (303) 223-1111

 

    	 	52	 

     

    

 

If to Deposit Escrow Agent or Title Company:

 

Fidelity National Title & Escrow of Hawaii, Inc.
City Financial Tower

201 Merchant Street, Suite 2100

Honolulu, HI 96813

Attn: Anthony W.O. Ching

Facsimile No.: (    )     -    

 

16.1.2.   Receipt of Notices. All Notices sent
by a Party (or its counsel pursuant to Section 16.1.4) under this Agreement shall be deemed to have been received by the
Party to whom such Notice is sent upon (i) delivery to the address or facsimile number of the recipient Party, provided that such
delivery is made prior to 5:00 p.m. (local time for the recipient Party) on a Business Day, otherwise the following Business Day,
or (ii) the attempted delivery of such Notice if such recipient Party refuses delivery of such Notice.

 

16.1.3.   Change
of Address. The Parties and their respective counsel shall have the right to change their respective address, facsimile number
and/or email address for the purposes of this Section 16.1 by providing a Notice of such change in address, facsimile number
and/or email address as required under this Section 16.1.

 

16.1.4.   Delivery
by Party’s Counsel. The Parties agree that the attorney for such Party shall have the authority to deliver Notices on
such Party’s behalf to the other Party hereto.

 

16.2       Time is of the Essence.
Time is of the essence of this Agreement; provided, however, that notwithstanding anything to the contrary in this Agreement, if
the time period for the performance of any covenant or obligation, satisfaction of any condition or delivery of any Notice or item
required under this Agreement shall expire on a day other than a Business Day, such time period shall be extended automatically
to the next Business Day.

 

16.3       Assignment.
Purchaser may assign this Agreement to one or more of its Affiliates without the written consent of Seller; provided, however,
such assignment shall not relieve assignor from its obligations and duties under this Agreement. Purchaser shall provide a copy
of any such assignment to Seller at least five (5) days prior to the Closing Date. Seller may not assign this Agreement.

 

16.4       Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the Parties, and their respective successors and permitted assigns.

 

16.5       Third Party Beneficiaries.
This Agreement shall not confer any rights or remedies on any Person other than (i) the Parties and their respective successors
and assigns, and (ii) any Indemnitee to the extent such Indemnitee is expressly provided any right of defense or indemnification
in this Agreement.

 

16.6       GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF HAWAII, WITHOUT GIVING EFFECT TO ANY PRINCIPLES REGARDING CONFLICT
OF LAWS.

 

    	 	53	 

     

    

 

16.7       Rules of Construction. The following
rules shall apply to the construction and interpretation of this Agreement:

 

16.7.1.   Singular
words shall connote the plural as well as the singular, and plural words shall connote the singular as well as the plural, and
the masculine shall include the feminine and the neuter, as the context may require.

 

16.7.2.   All
references in this Agreement to particular articles, sections, subsections or clauses (whether in upper or lower case) are references
to articles, sections, subsections or clauses of this Agreement. All references in this Agreement to particular exhibits or schedules
(whether in upper or lower case) are references to the exhibits and schedules attached to this Agreement, unless otherwise expressly
stated or clearly apparent from the context of such reference.

 

16.7.3.   The
headings in this Agreement are solely for convenience of reference and shall not constitute a part of this Agreement nor shall
they affect its meaning, construction or effect.

 

16.7.4.   Each
Party and its counsel have reviewed and revised (or requested revisions of) this Agreement and have participated in the preparation
of this Agreement, and therefore any rules of construction requiring that ambiguities are to be resolved against the Party which
drafted the Agreement or any exhibits hereto shall not be applicable in the construction and interpretation of this Agreement or
any exhibits hereto.

 

16.7.5.   The
terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar
terms shall refer to this Agreement, and not solely to the provision in which such term is used.

 

16.7.6.   The
terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without
limitation.”

 

16.7.7.   The
term “sole discretion” with respect to any determination to be made a Party under this Agreement shall mean the sole
and absolute discretion of such Party, without regard to any standard of reasonableness or other standard by which the determination
of such Party might be challenged.

 

16.8       Severability.
If any term or provision of this Agreement is held to be or rendered invalid or unenforceable at any time in any jurisdiction,
such term or provision shall not affect the validity or enforceability of any other terms or provisions of this Agreement, or the
validity or enforceability of such affected term or provision at any other time or in any other jurisdiction.

 

16.9       JURISDICTION AND VENUE.
ANY LITIGATION OR OTHER COURT PROCEEDING WITH RESPECT TO ANY MATTER ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT SHALL BE
CONDUCTED IN STATE OR FEDERAL COURT IN THE JURISDICTION WHERE THE PROPERTY IS LOCATED, AND SELLER (FOR ITSELF AND ALL SELLER INDEMNITEES)
AND PURCHASER (FOR ITSELF AND ALL PURCHASER INDEMNITEES) HEREBY SUBMIT TO JURISDICTION AND CONSENT TO VENUE IN SUCH COURTS, AND
WAIVE ANY DEFENSE BASED ON FORUM NON CONVENIENS.

 

    	 	54	 

     

    

 

16.10    WAIVER OF TRIAL BY
JURY. EACH PARTY HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY LITIGATION OR OTHER COURT PROCEEDING WITH RESPECT TO
ANY MATTER ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT.

 

16.11    Prevailing Party.
If any litigation or other court action, arbitration or similar adjudicatory proceeding is commenced by any Party to enforce its
rights under this Agreement against any other Party, all fees, costs and expenses, including reasonable attorneys’ fees and
court costs, incurred by the prevailing Party in such litigation, action, arbitration or proceeding shall be reimbursed by the
losing Party; provided, that if a Party to such litigation, action, arbitration or proceeding prevails in part, and loses in part,
the court, arbitrator or other adjudicator presiding over such litigation, action, arbitration or proceeding shall award a reimbursement
of the fees, costs and expenses incurred by such Party on an equitable basis.

 

16.12    Incorporation of Recitals,
Exhibits and Schedules. The recitals to this Agreement, and all exhibits and schedules referred to in this Agreement are
incorporated herein by such reference and made a part of this Agreement. The information disclosed in any particular schedule to
this Agreement shall be deemed to relate to and to qualify only the particular matter set forth in the corresponding numbered section
in this Agreement; provided, however, to the extent that an item in a schedule is relevant and reasonably apparent on its face
to apply to the disclosure required by another schedule, such item shall be deemed to be disclosed in such schedule whether or
not an explicit cross-reference appears.

 

16.13    Entire Agreement.
This Agreement sets forth the entire understanding and agreement of the Parties hereto, and shall supersede any agreements and
understandings (written or oral), including any letter of intent, between the Parties on or prior to the Effective Date with respect
to the transaction described in this Agreement.

 

16.14    Amendments, Waivers
and Termination of Agreement. No amendment or modification to any terms or provisions of this Agreement, waiver of any
covenant, obligation, breach or default under this Agreement or termination of this Agreement (other than as expressly provided
in this Agreement), shall be valid unless in writing and executed and delivered by each of the Parties.

 

16.15    Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument. The submission of a signature page transmitted by facsimile (or similar electronic transmission
facility, including PDF via email) shall be considered as an “original” signature page for purposes of this Agreement
so long as the original signature page is thereafter transmitted by mail or by other delivery service and the original signature
page is substituted for the facsimile (or similar electronic transmission facility, including PDF via email) signature page in
the original and duplicate originals of this Agreement.

 

    	 	55	 

     

    

 

16.16    1031 Exchange.
If either Seller or Purchaser wishes to enter into a like-kind exchange (either simultaneous with the Closing or deferred) with
respect to the Property under Section 1031 of the Code (“Exchange”), the other Party shall cooperate in all
reasonable respects to effectuate the Exchange, including the execution of documents; provided (i) the cooperating Party shall incur
no liability or expense related to the Exchange and (ii) the Closing shall not be contingent upon, nor extended or delayed by,
such Exchange (other than as expressly provided in this Section 16.16). Purchaser’s or Seller’s cooperation
shall include, but not be limited to, permitting the assignment of rights under this Agreement to a qualified intermediary (as
defined in Treasury Regulation Section 1.1031 (k)-1(g)(4)(iii)) (the “QI”), or permitting an assignment of this
Agreement to a QI to effectuate the Exchange and/or entering into an agreement with a QI for the acquisition of the Property (or
interests in the Property) and permitting the assignment of rights under this Agreement to two or more assignees as tenants in
common in connection with the Exchange (which may involve the conveyance of a tenancy in common interest immediately prior to Closing
to facilitate a “drop and swap” transaction), provided that Purchaser or Seller, as the case may be, shall remain obligated
for all of the terms and conditions hereunder. Seller represents that Seller shall be the “Exchangor” under an Exchange
for the Property, as the “Relinquished Property”, and shall be the purchasing entity for the “Replacement Property”
in such Exchange, as all such terms are used and defined in similar Exchanges. Each Party acknowledges and agrees that in the event
the other Party requires additional time in order to effectuate its Exchange, the requesting Party shall have the one-time right,
in its sole discretion, to extend the Closing Date for up to thirty (30) days by delivering written notice to the other Party on
or before five (5) days prior to the originally scheduled Closing Date. The exchanging Party shall be responsible for all agreements,
documents and escrow instructions and no substitution of or assignment to another party to effectuate such exchange shall release
any other Party from its obligations, warranties or obligations under this Agreement or from liability from any prior or subsequent
default.

 

16.17    Remedies. Except
as otherwise provided herein, any and all remedies with respect to a Party’s willful or intentional breach hereunder expressly
conferred upon a Party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity
upon such Party, and the exercise by a Party of any one remedy shall not preclude the exercise of any other remedy.

 

16.18    Survival. This Article XVI
shall survive the Closing.

 

[Signatures appear on next page.]

 

    	 	56	 

     

    

 

IN
WITNESS WHEREOF, each Party has caused this Agreement to be executed and delivered in its name by a duly authorized officer
or representative.

 

	 	SELLER:
	 	 
	 	KAUAI COCONUT BEACH, LLC,
	 	a Delaware limited liability company
	 	 
	 	By:
	 	 
	 	Name:
	 	 
	 	Title:
	 	 
	 	KAUAI COCONUT BEACH OPERATOR, LLC, a Delaware limited liability company
	 	 
	 	By:
	 	 
	 	Name:
	 	 
	 	Title:
	 	 
	 	PURCHASER:
	 	 
	 	KHS, LLC,
	 	a Delaware limited liability company
	 	 
	 	By:
	 	 
	 	Name:
	 	 
	 	Title:

 

    	 	57EX-4.1

 Exhibit 4.1 
  

 
 DISCOVER CARD EXECUTION NOTE TRUST

 Issuer 
 and 

U.S. BANK NATIONAL ASSOCIATION 

Indenture Trustee 
 CLASS A(2017-6) TERMS DOCUMENT 
 Dated as of August 14, 2017 

to 
 SECOND AMENDED AND RESTATED
INDENTURE SUPPLEMENT 
 Dated as of December 22, 2015 

for the DiscoverSeries Notes 
 to

 AMENDED AND RESTATED INDENTURE 

Dated as of December 22, 2015 
  

 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	
	 ARTICLE I
	  

	 DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
	  

			
	 Section 1.01
	  	Definitions	  	 	1	 
	 Section 1.02
	  	Representations and Warranties of Issuer	  	 	6	 
	 Section 1.03
	  	Representations and Warranties of Indenture Trustee	  	 	7	 
	 Section 1.04
	  	Limitations on Liability	  	 	7	 
	 Section 1.05
	  	Governing Law	  	 	8	 
	 Section 1.06
	  	Counterparts	  	 	8	 
	 Section 1.07
	  	Ratification of Indenture and Indenture Supplement	  	 	8	 
	
	 ARTICLE II
	  

	 THE
CLASS A(2017-6) NOTES
	  

			
	 Section 2.01
	  	Creation and Designation	  	 	8	 
	 Section 2.02
	  	Adjustments to Required Subordinated Percentages and Amount	  	 	8	 
	 Section 2.03
	  	Interest Payment	  	 	9	 
	 Section 2.04
	  	[Reserved]	  	 	9	 
	 Section 2.05
	  	Payments of Interest and Principal	  	 	9	 
	 Section 2.06
	  	Form of Delivery of Class A(2017-6) Notes; Depository; Denominations	  	 	9	 
	 Section 2.07
	  	Delivery and Payment for the Class A(2017-6) Notes	  	 	10	 
	 Section 2.08
	  	Targeted Deposits to the Accumulation Reserve Account	  	 	10	 
	 Section 2.09
	  	Additional Issuances of Notes	  	 	10	 
	 Section 2.10
	  	Designation of Additional Amounts to Be Included in the Excess Spread Amount for the DiscoverSeries Notes	  	 	11	 
	 Section 2.11
	  	Variable Accumulation Period	  	 	11	 
	 Section 2.12
	  	Seller’s Interest to Be Included in the Monthly Statement	  	 	12	 
	 Section 2.13
	  	Duties of the Indenture Trustee	  	 	12	 
			
	 EXHIBIT A
	  	FORM OF CLASS A(2017-6) NOTE	  			

  

  
 -i- 

 THIS CLASS A(2017-6) TERMS DOCUMENT (this “Terms
Document”), by and between DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States of America, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of August 14, 2017. 

Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class A Notes of the DiscoverSeries and shall specify the
principal terms thereof. 
 ARTICLE I 

Definitions and Other Provisions of General Application 

Section 1.01    Definitions. For all purposes of this Terms Document, except as otherwise expressly provided
or unless the context otherwise requires: 
 (1)    the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular; 
 (2)    all other terms used herein which are defined
in the Indenture Supplement or the Indenture, either directly or by reference therein, have the meanings assigned to them therein; 

(3)    all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally
accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder means such accounting principles as are
generally accepted in the United States of America at the date of such computation; 
 (4)    all references in this
Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Terms Document; the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular Article, Section or other subdivision; 

(5)    in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture Supplement or the Indenture, the terms and provisions of this Terms Document shall be controlling, but solely with respect to the Class A(2017-6) Notes; 

(6)    each capitalized term defined herein shall relate only to the
Class A(2017-6) Notes and no other Tranche of Notes issued by the Issuer; 

(7)    “including” and words of similar import will be deemed to be followed by “without limitation”;
and 

 (8)    for purposes of determining any amount or making any calculation
hereunder, such amount or calculation, (x) if specified to be as of the first day of any Due Period, shall (a) include any Notes issued during such Due Period as if such Notes had been outstanding on the first day of such Due Period and
(b) give effect to any payments, deposits or other allocations made on the Distribution Date related to the prior Due Period and (y) if specified to be as of the close of business on the last day of any Due Period shall give effect to any
payments, deposits or other allocations made on the related Distribution Date. 
 “Accumulation Amount” means
$108,333,333.34; provided, however, if the commencement of the Accumulation Period is delayed in accordance with Section 2.11 hereof, the Accumulation Amount shall be determined in accordance with the definition of
“Accumulation Amount” in the Indenture Supplement. 
 “Accumulation Commencement Date” means August 1, 2019,
or such later date as the Calculation Agent on behalf of the Issuer determines in accordance with Section 2.11 hereof. 

“Accumulation Period” has the meaning set forth in the Indenture Supplement. 

“Accumulation Period Length” means 12 months; provided, however, if the commencement of the Accumulation Period
is delayed in accordance with Section 2.11 hereof, the Accumulation Period Length shall be determined in accordance with the definition of “Accumulation Period Length” in the Indenture Supplement. 

“Accumulation Reserve Funding Period” shall not apply if the Calculation Agent on behalf of the Issuer notifies the Indenture
Trustee that it expects the Accumulation Period Length to be adjusted to one (1) month, and otherwise shall mean a period commencing on the first Distribution Date on which a condition in the right column of the following table was in effect on
the immediately preceding Distribution Date, if such Distribution Date is a Distribution Date described in the corresponding left column of the following table, and ending on the Distribution Date immediately preceding the earlier to occur of: 

(x)    the Expected Maturity Date for the Class A(2017-6) Notes and 

(y)    the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class A(2017-6) Notes is paid in full. 
  

			
	 Distribution Date:
	  	 Condition:

		
	(a)     The Distribution Date occurring three (3) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any
following Distribution Date	  	No condition.
		
	(b)     The Distribution Date occurring four (4) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any
following Distribution Date	  	The three-month rolling average Excess Spread Percentage is less than 4%.

  
 2 

			
	 Distribution Date:
	  	 Condition:

		
	(c)     The Distribution Date occurring six (6) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any
following Distribution Date	  	The three-month rolling average Excess Spread Percentage is less than 3%.
		
	(d)     The Distribution Date occurring twelve (12) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 2.11 hereof) and any
following Distribution Date	  	The three-month rolling average Excess Spread Percentage is less than 2%.

 provided, however, if at any point the Accumulation Reserve Funding Period has not commenced because no
condition requiring funding has occurred or the Calculation Agent has determined that the Accumulation Period Length will be shortened to one (1) month, and subsequently a condition requiring funding occurs and the Calculation Agent determines
that the Accumulation Period Length will not be so shortened, the Accumulation Reserve Funding Period shall commence on the following Distribution Date. 

“Class A(2017-6) Adverse Event” means the occurrence of any of the
following: (a) an Early Redemption Event with respect to the Class A(2017-6) Notes or (b) an Event of Default and acceleration of the Class A(2017-6)
Notes; provided, however, that if the only such event to have occurred is an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption Cure has occurred, a
Class A(2017-6) Adverse Event shall not be treated as continuing from and after the date of such cure. 

“Class A(2017-6) Note” means any Note, in the form set forth in
Exhibit A hereto, designated therein as a Class A(2017-6) Note and duly executed and authenticated in accordance with the Indenture. 

“Class A(2017-6) Noteholder” means a Person in whose name a Class A(2017-6) Note is registered in the Note Register. 
 “Class A(2017-6) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class A(2017-6) Notes is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 

“Excess Spread Percentage” for any Distribution Date means a fraction, the numerator of which is the Excess Spread Amount for
such Distribution Date multiplied by 12 and the denominator of which is the sum of the Nominal Liquidation Amounts of all Tranches of DiscoverSeries Notes as of the first day of the related Due Period. 

  
 3 

 “Expected Maturity Date” means August 17, 2020. 

“Indenture” means the Amended and Restated Indenture, dated as of December 22, 2015, between the Issuer and Indenture
Trustee, as such agreement may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Indenture Supplement” means the Second Amended and Restated Indenture Supplement, dated as of December 22, 2015, for
the DiscoverSeries Notes, between the Issuer and the Indenture Trustee, as the same may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Initial Dollar Principal Amount” means $1,300,000,000, or such higher amount as is specified in any Notice of Additional
Issuance under Section 2.09 hereof. 
 “Interest Accrual Period” means, with respect to any Interest Payment Date, the
period from and including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2017-6) Note, from and including the applicable Issuance Date) to but
excluding such Interest Payment Date. 
 “Interest Payment Date” means the fifteenth day of each month commencing in
September 2017, or if such fifteenth day is not a Business Day, the next succeeding Business Day. 
 “Issuance Date” means
August 14, 2017, with respect to all Class A(2017-6) Notes issued on the date hereof and, with respect to any additional Class A(2017-6) Notes issued
pursuant to Section 2.09 hereof, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder. 

“Legal Maturity Date” means February 15, 2023. 

“Note Interest Rate” means 1.88% per annum, calculated on the basis of twelve 30-day months and a 360-day year. 

“Notice of Additional Issuance” has the meaning set forth in Section 2.09 hereof. 

“Regulation RR” means Regulation RR (Credit Risk Retention) promulgated by the Securities and Exchange Commission to
implement the credit risk retention requirements of Section 15G of the Securities Exchange Act. 
 “Required Daily Deposit
Target Finance Charge Amount” means, for any day in a Due Period, an amount equal to the Class A Tranche Interest Allocation for the related Distribution Date. 

“Required Daily Deposit Target Principal Amount” means, for any day in a Due Period, (i) if such Due Period is in
the Accumulation Period for the Class A(2017-6) Notes, the Accumulation Amount, (ii) if such day is on or after the occurrence and during the continuance of a
Class A(2017-6) Adverse Event, the Nominal Liquidation Amount of the Class A(2017-6) Notes and (iii) in all other circumstances, zero. 

  
 4 

 “Required Subordinated Amount of Class B Notes” means, for
the Class A(2017-6) Notes for any date of determination, an amount equal to the product of 

(a)    the Required Subordinated Percentage of Class B Notes for such
Class A(2017-6) Notes on such date of determination; and 
 (b)    the
Nominal Liquidation Amount of such Class A(2017-6) Notes on such date of determination; 
 provided,
however, that for any date of determination on or after the occurrence and during the continuation of a Class A(2017-6) Adverse Event, the Required Subordinated Amount of Class B Notes for the
Class A(2017-6) Notes will be the greater of 
 (x)    the amount
determined above for such date of determination; and 
 (y)    the amount determined above for the date immediately
prior to the date on which such Class A(2017-6) Adverse Event shall have occurred. 

“Required Subordinated Amount of Class C Notes” means, for the
Class A(2017-6) Notes for any date of determination, an amount equal to the product of 

(a)    the Required Subordinated Percentage of Class C Notes for such
Class A(2017-6) Notes on such date of determination; and 
 (b)    the
Nominal Liquidation Amount of such Class A(2017-6) Notes on such date of determination; 
 provided,
however, that for any date of determination on or after the occurrence and during the continuation of a Class A(2017-6) Adverse Event, the Required Subordinated Amount of Class C Notes for the
Class A(2017-6) Notes will be the greater of 
 (x)    the amount
determined above for such date of determination; and 
 (y)    the amount determined above for the date immediately
prior to the date on which such Class A(2017-6) Adverse Event shall have occurred. 

“Required Subordinated Amount of Class D Notes” means, for the
Class A(2017-6) Notes for any date of determination, an amount equal to the product of 

(a)    the Required Subordinated Percentage of Class D Notes for such
Class A(2017-6) Notes on such date of determination; and 
 (b)    the
Nominal Liquidation Amount of such Class A(2017-6) Notes on such date of determination; 
 provided,
however, that for any date of determination on or after the occurrence and during the continuation of a Class A(2017-6) Adverse Event, the Required Subordinated Amount of Class D Notes for
the Class A(2017-6) Notes will be the greater of 

  
 5 

 (x)    the amount determined above for such date of determination; and 

(y)    the amount determined above for the date immediately prior to the date on which the
Class A(2017-6) Adverse Event shall have occurred. 
 “Required Subordinated Percentage
of Class B Notes” means, for the Class A(2017-6) Notes, 6.96202532%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class C Notes” means, for the
Class A(2017-6) Notes, 8.86075950%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class D Notes” means, for the
Class A(2017-6) Notes, 10.75949368%, subject to adjustment in accordance with Section 2.02. 

“Seller’s Interest” means, at any time, a “seller’s interest” as defined in, and calculated in accordance
with, Regulation RR. 
 “Seller’s Interest Measurement Date” means the last day of each calendar month. 

“Specified Rating” means, for the Class A(2017-6) Notes, Aaa(sf) with respect to
Moody’s, AAA(sf) with respect to Standard & Poor’s and AAAsf with respect to Fitch. 
 “Stated Principal
Amount” means $1,300,000,000 or such higher amount as is specified in any Notice of Additional Issuance under Section 2.09. 

“Targeted Accumulation Reserve Subaccount Deposit” means, with respect to any Distribution Date during the Accumulation
Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class A(2017-6) Notes as of the close of business on the last day of the related Due Period or
(ii) any other amount designated by the Calculation Agent on behalf of the Issuer. 

Section 1.02    Representations and Warranties of Issuer. The Issuer represents and warrants that: 

(a)    the Issuer has been duly formed and is validly existing as a statutory trust in good standing under the laws of the
State of Delaware, and has full power and authority to execute and deliver this Terms Document and to perform the terms and provisions hereof; 

(b)    the execution, delivery and performance of this Terms Document by the Issuer have been duly authorized by all
necessary limited liability company and statutory trust proceedings of the Beneficiary and the Owner Trustee, do not require any approval or consent of any governmental agency or authority and do not and will not conflict with any material provision
of the Certificate of Trust or the Trust Agreement of the Issuer; 
 (c)    this Terms Document is the valid, binding
and enforceable obligation of the Issuer, except as the same may be limited by receivership, insolvency, reorganization, moratorium or other laws relating to the enforcement of creditors’ rights generally or by general equity principles; 

  
 6 

 (d)    to the best of the Issuer’s knowledge, this Terms Document will
not conflict with any law or governmental regulation or court decree applicable to it; 
 (e)    the Issuer is not
required to be registered under the Investment Company Act; 
 (f)    all information heretofore furnished by the Issuer
in writing to the Indenture Trustee for purposes of or in connection with this Terms Document or any transaction contemplated hereby is, and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will be, true and
accurate in every material respect or based on reasonable estimates on the date as of which such information is stated or certified; and 

(g)    to the best knowledge of the Issuer, there are no proceedings or investigations pending against the Issuer before
any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Issuer (i) asserting the invalidity of this Terms Document, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Terms Document or (iii) seeking any determination or ruling which in the Issuer’s judgment would materially and adversely affect the performance by the Issuer of its obligations under this Terms
Document or the validity or enforceability of this Terms Document. 
 Section 1.03    Representations and
Warranties of Indenture Trustee. The Indenture Trustee represents and warrants and any successor trustee shall represent and warrant that: 

(a)    the Indenture Trustee is organized, existing and in good standing under the laws of the United States of America;

 (b)    the Indenture Trustee has full power, authority and right to execute, deliver and perform this Terms Document,
and has taken all necessary action to authorize the execution, delivery and performance by it of this Terms Document; and 

(c)    this Terms Document has been duly executed and delivered by the Indenture Trustee. 

Section 1.04    Limitations on Liability. 

(a)    It is expressly understood and agreed by the parties hereto that (i) this Terms Document is executed and
delivered by the Owner Trustee not individually or personally but solely as Owner Trustee under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking or agreement by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein
contained will be construed as creating any liability on the Owner Trustee individually or personally, to perform any covenant of the Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to
this Terms Document and by any Person claiming by, through or under them and (iv) under no circumstances will the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Terms Document or any related documents. 

  
 7 

 (b)    None of the Indenture Trustee, the Owner Trustee, the Calculation
Agent, the Beneficiary, the Depositor, any Master Servicer or any Servicer or any of their respective officers, directors, employees, incorporators or agents will have any liability with respect to this Terms Document, and recourse may be had solely
to the Collateral pledged to secure these Class A(2017-6) Notes under the Indenture, the Indenture Supplement and this Terms Document. 

Section 1.05    Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE.

 Section 1.06    Counterparts. This Terms Document may be executed in any number of counterparts, each of
which when so executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 

Section 1.07    Ratification of Indenture and Indenture Supplement. As supplemented by this Terms Document,
each of the Indenture and the Indenture Supplement is in all respects ratified and confirmed and the Indenture as supplemented by the Indenture Supplement and this Terms Document shall be read, taken and construed as one and the same instrument.

 ARTICLE II 
 The Class A(2017-6) Notes 
 Section 2.01    Creation and Designation.
There is hereby created a Tranche of Class A Notes to be issued pursuant to this Terms Document, the Indenture and the Indenture Supplement to be known as the “DiscoverSeries Class A(2017-6)
Notes.” 
 Section 2.02    Adjustments to Required Subordinated Percentages and Amount. 

(a)    On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of
Class B Notes, the Required Subordinated Percentage of Class C Notes or the Required Subordinated Percentage of Class D Notes, in each case for the Class A(2017-6) Notes, without the
consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a Ratings Effect for any Tranche of Outstanding
DiscoverSeries Notes. 
 (b)    On any date, the Issuer may, at the direction of the Beneficiary, replace all or a
portion of the Required Subordinated Amount of Class B Notes, the Required Subordinated Amount of Class C Notes or the Required Subordinated Amount of Class D Notes, in each case for the
Class A(2017-6) Notes with a different form of credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond, an insurance policy or a
collateral interest, or any combination thereof) and may add such 

  
 8 

 
definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the consent of any Noteholders, provided that the
Issuer has received written confirmation from each applicable Note Rating Agency that such replacement and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 

Section 2.03    Interest Payment. For the first Interest Payment Date, September 15, 2017, the amount of
interest due with respect to the Class A(2017-6) Notes is $2,104,555.56. For each Interest Payment Date following the first Interest Payment Date for any
Class A(2017-6) Note, the amount of interest due with respect to the Class A(2017-6) Notes shall be an amount equal to 

 

	 	(i)    (A)	a fraction, the numerator of which is 30 and the denominator of which is 360, times 

  

	 	        (B)	the Note Interest Rate in effect with respect to such related Interest Accrual Period, times 

  

	 	(ii)	the Outstanding Dollar Principal Amount of the Class A(2017-6) Notes determined as of the first date of such related Interest Accrual Period, 

plus any Class A Tranche Interest Allocation Shortfall for such Class A(2017-6) Notes for the
immediately preceding Distribution Date, together with interest thereon at the Note Interest Rate in effect with respect to such related Interest Accrual Period, calculated on the basis of twelve 30-day months and a
360-day year. 
 Section 2.04    [Reserved]. 

Section 2.05    Payments of Interest and Principal. 

(a)    The Issuer will cause interest to be paid on each Interest Payment Date and principal to be paid on the Expected
Maturity Date; provided, however, that it shall not be an Event of Default if principal is not paid in full on such Expected Maturity Date unless funds for such payment have been allocated in accordance with Section 3.01 of the
Indenture Supplement; and provided, further, that if a Class A(2017-6) Adverse Event has occurred and is continuing, principal will instead be payable in monthly installments on each
Principal Payment Date for the Class A(2017-6) Notes in accordance with Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and principal on the
Class A(2017-6) Notes shall be made as set forth in Section 1102 of the Indenture. 

(b)    The right of the Class A(2017-6) Noteholders to receive payments from
the Issuer will terminate on the Class A(2017-6) Termination Date. 

(c)    All payments of principal, interest or other amounts to the
Class A(2017-6) Noteholders will be made pro rata based on the Stated Principal Amount of their Class A(2017-6) Notes. 

Section 2.06    Form of Delivery of Class A(2017-6)
Notes; Depository; Denominations. 

  
 9 

 (a)    The Class A(2017-6) Notes
shall be delivered in the form of a Global Note which shall be a Registered Note as provided in Section 204 of the Indenture. The form of the Class A(2017-6) Notes is attached hereto as Exhibit A.

 (b)    The Depository for the Class A(2017-6) Notes shall be The
Depository Trust Company, and the Class A(2017-6) Notes shall initially be registered in the name of Cede & Co., its nominee. 

(c)    The Class A(2017-6) Notes will be issued in minimum denominations of
$100,000 and integral multiples of $1,000 in excess of that amount. 
 Section 2.07    Delivery and Payment for
the Class A(2017-6) Notes. The Issuer shall execute and deliver the Class A(2017-6) Notes to the Indenture Trustee for authentication, and
the Indenture Trustee shall deliver the Class A(2017-6) Notes when authenticated, each in accordance with Sections 203 and 303 of the Indenture. 

Section 2.08    Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to be made to the
Accumulation Reserve Subaccount for the Class A(2017-6) Notes for any Due Period during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation Reserve Subaccount
Deposit minus any amount on deposit in the Accumulation Reserve Subaccount for the Class A(2017-6) Notes. 

Section 2.09    Additional Issuances of Notes. Subject to clauses (ii), (iii), (iv) and (v) of
Section 2.02 and Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class A(2017-6) Notes, so long as the following conditions precedent are satisfied: 

(a)    the Issuer shall have given the Indenture Trustee written notice of such issuance of additional Class A(2017-6) Notes (the “Notice of Additional Issuance”) at least one (1) Business Day in advance of the Issuance Date thereof, which notice shall include: 

 

	 	(i)	the Issuance Date of such additional Class A(2017-6) Notes; 

  

	 	(ii)	the amount of such additional Class A(2017-6) Notes being offered and the resulting Initial Dollar Principal Amount and Stated Principal Amount of Class A(2017-6) Notes; 

  

	 	(iii)	the date from which interest on such additional Class A(2017-6) Notes will accrue (which may be a date prior to the date of issuance thereof); 

 

	 	(iv)	the first Interest Payment Date on which interest will be paid on such additional Class A(2017-6) Notes; and 

 

	 	(v)	any other terms that the Issuer set forth in such notice of issuance of additional Class A(2017-6) Notes to clarify the rights of Holders of such additional Class A(2017-6) Notes or the effect of such issuance of additional Class A(2017-6) Notes on any calculations to be made with respect to the Class A(2017-6) Notes, the Class A Notes or the Issuer. 

  
 10 

 All such terms shall be incorporated into and form a part of this Terms Document on and after the effective date
of such Class A(2017-6) Notes; 
 (b)    no
Class A(2017-6) Adverse Event has occurred and is continuing; and 

(c)    either (i) the issuance of such additional Class A(2017-6) Notes
would be treated as part of the same issue as the outstanding Class A(2017-6) Notes under Treasury Regulation Sections 1.1275-1(f)(1) or 1.1275-2(k) or (ii) such additional Class A(2017-6) Notes are not issued with “original issue discount” for purposes of Section 1273 of the Code. 

The Issuer shall not have to satisfy the conditions set forth in Section 310 of the Indenture in connection with an issuance of
additional Class A(2017-6) Notes so long as such conditions were satisfied or waived in connection with the initial issuance of Class A(2017-6) Notes;
provided, however, that the Issuer shall have to deliver to the Indenture Trustee a Master Trust Tax Opinion and an Issuer Tax Opinion with respect to such issuance. 

Section 2.10    Designation of Additional Amounts to Be Included in the Excess Spread Amount for the
DiscoverSeries Notes. At any time that any outstanding Series of certificates issued by the Master Trust provides that the Series Principal Collections allocated to such Series will be deposited into the Group Finance Charge Collections
Reallocation Account for the Master Trust to the extent necessary for application to cover shortfalls for other Series issued by the Master Trust, an amount equal to (x) all Series Principal Collections allocated to such Series, multiplied
by (y) a fraction, the numerator of which is the sum of the Nominal Liquidation Amounts for each outstanding Tranche of the DiscoverSeries Notes (including the Class A(2017-6) Notes) and the
denominator of which is (i) the Aggregate Investor Interest for the Master Trust minus (ii) the sum of the Series Investor Interests for all such Series that provide that the Series Principal Collections allocated to such Series
will be so deposited, is hereby designated to be included in the Excess Spread Amount and shall be treated as Series Finance Charge Amounts for the DiscoverSeries. 

Section 2.11    Variable Accumulation Period. Notwithstanding anything to the contrary in Section 4.02 of
the Indenture Supplement, the Calculation Agent on behalf of the Issuer shall, by written notice to the Indenture Trustee, delay the commencement of the Accumulation Period for the Class A(2017-6) Notes
and determine a new Accumulation Commencement Date, subject to the conditions set forth in this Section 2.11; provided, however, that the Accumulation Period shall commence no later than the first day of the Due Period related to
the Expected Maturity Date for the Class A(2017-6) Notes. Any such delay by the Calculation Agent on behalf of the Issuer shall be made no later than the first day of the scheduled Due Period immediately
preceding the first Due Period in the Accumulation Period (after giving effect to any prior delay in the commencement of the Accumulation Period pursuant to this Section 2.11). 

The Calculation Agent on behalf of the Issuer shall cause such delay if the Calculation Agent determines in good faith that each of the
following conditions will be satisfied: (i) the Calculation Agent on behalf of the Issuer delivers to the Indenture Trustee a certificate to the effect that the Calculation Agent on behalf of the Issuer reasonably believes that, based on the
payment rate and the anticipated availability of Series Principal Amounts and Reallocated Principal Amounts, the delay in the commencement of the Accumulation Period for the Class 

  
 11 

 
A(2017-6) Notes will not result in any Tranche of Notes not being paid in full on the relevant Expected Maturity Date (as defined in the applicable Terms
Document); (ii) such delay is permitted under the Series 2007-CC Supplement or any other applicable agreement relating to any Additional Collateral Certificate; and (iii) the Accumulation Amount, the
Accumulation Commencement Date and the Accumulation Period Length shall have been adjusted. The Calculation Agent on behalf of the Issuer shall not be required to obtain confirmation from the applicable Note Rating Agencies that such delay in the
commencement of the Accumulation Period will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. The Calculation Agent on behalf of the Issuer shall provide written notice to each applicable Note Rating Agency in the
event that the commencement of the Accumulation Period for the Class A(2017-6) Notes is delayed pursuant to this Section 2.11. 

Section 2.12    Seller’s Interest to Be Included in the Monthly Statement. The Issuer shall
cause the Master Servicer to include the amount of the Seller’s Interest as of the Seller’s Interest Measurement Date on each investor certificateholder’s monthly statement delivered pursuant to the Series 2007-CC Supplement. 
 Section 2.13    Duties of the Indenture Trustee.
For the avoidance of doubt, the Indenture Trustee undertakes to perform only such duties as are specifically set forth in the Indenture, the Indenture Supplement, the Pooling and Servicing Agreement, any Series Supplement and this
Agreement and as such shall have no obligation or responsibility to monitor or enforce compliance with Regulation RR, nor shall be liable to any Person for any violation of Regulation RR; provided that nothing in this Section 2.13 shall alter
the Indenture Trustee’s duties, obligations or standard of care as set forth in the Indenture or any Indenture Supplement. It is understood and acknowledged that the Indenture Trustee has not provided any advice with respect to the acquisition
of the Class A(2017-6) Notes, and has no financial interest in the acquisition of such Class A(2017-6) Notes. 

[Remainder of page intentionally blank; signature page follows] 

  
 12 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all
as of the day and year first above written. 
  

					
		 	DISCOVER CARD EXECUTION NOTE TRUST,
  as Issuer
			
		 	By:	 	Wilmington Trust Company,
		 		 	not in its individual capacity but solely as
Owner Trustee
			
		 	By:	 	 /s/ Rachel Simpson

		 		 	Name: Rachel Simpson
		 		 	Title:   Vice President
		
		 	U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
			
		 	By:	 	 /s/ Julia Linian

		 		 	Name: Julia Linian
		 		 	Title:   Vice President

 [Signature Page to Class A(2017-6) Terms Document] 

 EXHIBIT A 

FORM OF CLASS A(2017-6) NOTE 

 DISCOVERSERIES CLASS A(2017-6) NOTE 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
 THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT AT ANY TIME
INSTITUTE AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, OR JOIN IN ANY INSTITUTION AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT
ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, ANY RECEIVERSHIP, INSOLVENCY, BANKRUPTCY OR SIMILAR PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY
OBLIGATIONS RELATING TO THE NOTES, THE INDENTURE, ANY DERIVATIVE AGREEMENT, ANY SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENT AND ANY SUPPLEMENTAL LIQUIDITY AGREEMENT. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL
INTEREST THEREIN, AGREE TO TREAT THE NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON OR MEASURED BY INCOME. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE ACQUISITION OF A BENEFICIAL
INTEREST THEREIN, WILL BE DEEMED TO REPRESENT AND WARRANT THAT EITHER (i) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A BENEFIT PLAN INVESTOR (AS DEFINED BELOW) OR PLAN SUBJECT TO SIMILAR LAW (AS DEFINED BELOW) OR (ii) (A) THE
ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”) OR A VIOLATION OF SIMILAR LAW AND (B) IF IT IS A BENEFIT PLAN INVESTOR, THE DECISION TO ACQUIRE THIS NOTE WAS MADE BY AN AUTHORIZED FIDUCIARY THAT IS AN “INDEPENDENT FIDUCIARY WITH FINANCIAL
EXPERTISE,” AS DESCRIBED IN 29 C.F.R. SECTION 2510.3-21(c)(1). FOR THESE PURPOSES, A “BENEFIT PLAN 

 
INVESTOR” INCLUDES AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF ERISA THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (B) A “PLAN” DESCRIBED IN
SECTION 4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE AND (C) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” OF THE FOREGOING. ”SIMILAR LAW” MEANS ANY LAW SUBSTANTIALLY SIMILAR TO THE FIDUCIARY
RESPONSIBILITY OR PROHIBITED TRANSACTION SECTIONS OF ERISA OR SECTION 4975 OF THE CODE 

			
	 REGISTERED
 No. [●]
	  	 $[●]*

CUSIP NO. 254683 CB9

 DISCOVER CARD EXECUTION NOTE TRUST 

1.88% 
 DISCOVERSERIES
CLASS A(2017-6) NOTE 
 DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the
laws of the State of Delaware (herein referred to as the “Issuer” or the “Note Issuance Trust”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, subject to the following
provisions, a principal sum of $[●] ([●] dollars) payable on the August 2020 Payment Date (the “Expected Maturity Date”), except as otherwise provided below or in the Indenture or the Indenture Supplement (as defined on
the reverse hereof); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the February 2023 Payment Date (the “Legal Maturity Date”). Interest will accrue on this Note at
the rate of 1.88% per annum, as more specifically set forth in the Class A(2017-6) Terms Document dated as of August 14, 2017 (the “Terms Document”), between the Issuer and U.S. Bank
National Association, as Indenture Trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), and shall be due and payable on each Interest Payment Date for the period from and
including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2017-6) Notes, from and including the applicable Issuance Date) to but excluding such
Interest Payment Date. Interest will be computed on the basis of twelve 30-day months and a 360-day year (or, in the case of the first Interest Payment Date, based on a 31-day period and a 360-day year). Such
principal of and interest on this Note shall be paid in the manner specified on the reverse hereof. 
 The principal and interest may be
payable monthly, and may be payable earlier or later than the Expected Maturity Date, following an Event of Default or while an Early Redemption Event has occurred and is continuing. No principal or interest will be distributed on the Note following
the distribution of proceeds of a Receivables Sale. 
 The principal of and interest on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for payment of public and private debts. 
 The Initial Dollar
Principal Amount of the Class A(2017-6) Notes is $1,300,000,000. 
 Reference is made to the
further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note. 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this
Note shall not be entitled to any benefit under the Indenture, Indenture Supplement or the Terms Document referred to on the reverse hereof, or be valid or obligatory for any purpose. 

 

	* 	Denominations of $100,000 and in integral multiples of $1,000 in excess thereof. 

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile,
by its Authorized Officer. 
  

					
		 	DISCOVER CARD EXECUTION NOTE TRUST,
  as Issuer
			
		 	By:	 	    WILMINGTON TRUST COMPANY, not
    in its individual capacity, but solely as
    Owner Trustee
			
		 	By:	 	  

		 		 	  Name:
		 		 	  Title:
			
		 		 	Date:                    , 20    

 INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Notes designated above and referred to in the within-mentioned Indenture. 

 

					
		 		 	US BANK NATIONAL ASSOCIATION, not in its
  individual capacity, but solely as Indenture
  Trustee
			
		 	By:	 	  

		 		 	  Name:
		 		 	  Title:
			
		 		 	  Date:                    , 20    

 REVERSE OF NOTE 

This Note is one of the Notes of a duly authorized issue of Notes of the Issuer, designated as its 1.88%
Class A(2017-6) DiscoverSeries Notes (herein called the “Class A(2017-6) Notes”), all issued under an Amended and Restated
Indenture dated as of December 22, 2015 (such Indenture, as may be further amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture”), as
supplemented by a Second Amended and Restated Indenture Supplement for the DiscoverSeries Notes, dated as of December 22, 2015 (such Indenture Supplement, as may be further amended, restated, amended and restated, supplemented, replaced or
otherwise modified from time to time, is herein called the “Indenture Supplement”), between the Issuer and Indenture Trustee, to which Indenture and Indenture Supplement reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A(2017-6) Notes are subject to all terms of the Indenture, the Indenture Supplement and the
Terms Document. All terms used in this Class A(2017-6) Note that are defined in the Indenture, the Indenture Supplement and the Terms Document shall have the meanings assigned to them in or pursuant to
the Indenture, the Indenture Supplement and the Terms Document. 
 The Class B Notes, the Class C Notes and the Class D Notes
of the DiscoverSeries and other tranches of Class A Notes of the DiscoverSeries will also be issued under the Indenture and the Indenture Supplement. 

The Class A(2017-6) Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture and the Indenture Supplement. 
 Principal of the
Class A(2017-6) Notes will be payable on the Expected Maturity Date in an amount described on the face hereof except as otherwise provided in the Indenture or the Indenture Supplement. 

As described above, the entire unpaid principal amount of this Class A(2017-6) Note shall be due
and payable on the Legal Maturity Date. Notwithstanding the foregoing, the entire unpaid principal amount of the Class A(2017-6) Notes shall be due and payable on the date on which an Event of Default
relating to the Class A(2017-6) Notes shall have occurred and be continuing and, except in the event of an insolvency related default, the Indenture Trustee or the Majority Holders of the applicable
Series, Class or Tranche of Outstanding Dollar Principal Amount of the Outstanding Notes have declared the Class A(2017-6) Notes to be immediately due and payable in the manner provided in
Section 702 of the Indenture; provided, however, that such acceleration of the entire unpaid principal amount of the Notes may be rescinded by the Majority Holders of such applicable Series, Class or
Tranche of Notes. 
 On any day occurring on or after the date on which the aggregate Nominal Liquidation Amount of any Tranche of Notes is
reduced to less than 5% of its highest Outstanding Dollar Principal Amount, the Depositor or any Affiliate thereof has the right, but not the obligation, to redeem such Tranche of Notes in whole but not in part, pursuant to
Section 1202 of the Indenture. The redemption price will be an amount equal to the Outstanding Dollar Principal Amount of such Tranche, plus accrued, unpaid and additional interest or principal accreted and unpaid on such
Tranche to but excluding the date of redemption. 

 Subject to the terms and conditions of the Indenture, the Beneficiary, on behalf of the Note
Issuance Trust, may from time to time issue, or direct the Owner Trustee, on behalf of the Note Issuance Trust, to issue, one or more Series, Classes or Tranches of Notes. 

On each Payment Date, the Paying Agent shall distribute to each Holder of Class A(2017-6) Notes
of record on the related Record Date (except for the final distribution with respect to this Class A(2017-6) Note) such Holder’s pro rata share of the amounts held by the Paying Agent that are
allocated and available on such Payment Date to pay interest and principal on the Class A Notes. 
 Payments of interest on this Class A(2017-6) Note due and payable on each Payment Date, together with any installment of principal, if any, to the extent not in full payment of this
Class A(2017-6) Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Class A(2017-6) Note on the Note Register
as of the close of business on each Record Date, except that with respect to Class A(2017-6) Notes registered on the Record Date in the name of the nominee of the clearing agency (initially, such nominee
to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on
the Note Register as of the applicable Record Date without requiring that this Class A(2017-6) Note be submitted for notation of payment. Any reduction in the principal amount of this Class A(2017-6) Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this
Class A(2017-6) Note and of any Class A(2017-6) Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not
noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Class A(2017-6) Note on a Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed within five days of such Payment Date and the amount
then due and payable shall be payable only upon presentation and surrender of this Class A(2017-6) Note at the Indenture Trustee’s principal Corporate Trust Office or at the office of the Indenture
Trustee’s agent appointed for such purposes located in the City of New York. 
 As provided in the Indenture and subject to certain
limitations set forth therein and as set forth in the first legend on the face hereof, the transfer of this Class A(2017-6) Note may be registered on the Note Register upon surrender of this Class A(2017-6) Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member firm of a national securities exchange, and such other documents as the Indenture Trustee may require, and thereupon one or more new
Class A(2017-6) Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class A(2017-6) Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange. 

 To the fullest extent permitted by applicable law, each Noteholder or Note Owner, by acceptance
of a Class A(2017-6) Note or, in the case of a Note Owner, a beneficial interest in a Class A(2017-6) Note, covenants and agrees that by accepting the benefits
of the Indenture it will not at any time institute against the Issuer, any Master Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer, or join in any institution against the Issuer, any Master
Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer of, any receivership, insolvency, bankruptcy or other similar proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, any Derivative Agreement, any Supplemental Credit Enhancement Agreement and any Supplemental Liquidity Agreement. 

By acquiring a Class A(2017-6) Note (or interest therein), each Noteholder or Note Owner (and if
each Noteholder or Note Owner is a Plan, its fiduciary) shall be deemed to represent and warrant that either: (a) it is not acquiring the Class A(2017-6) Note (or interest therein) with the assets of
(i) an “employee benefit plan” as defined in Section 3(3) of Employee Retirement Income Security Act of 1974 (“ERISA”) that is subject to Title I of ERISA, (ii) a “plan” as defined in and subject
to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (iii) an entity deemed to hold plan assets of the foregoing (each of (i), (ii) and (iii), a “Benefit Plan Investor”) or (iv) a
plan that is subject to federal, state, local or other law that is similar to the fiduciary or prohibited transaction provisions of ERISA or Section 4975 of the Code (“Similar Law”); or (b) the acquisition and holding of
the Class A(2017-6) Note (or interest therein) will not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of any Similar Law.

 In addition, each Noteholder or Note Owner that is a Benefit Plan Investor, and the fiduciary purchasing the Class A(2017-6) Notes on behalf of a Benefit Plan Investor (the “Plan Fiduciary”), is deemed to represent and warrant by its acquisition of a
Class A(2017-6) Note (or interest therein) that the decision to acquire the Class A(2017-6) Note has been made by the Plan Fiduciary and the Plan Fiduciary is
an “independent fiduciary with financial expertise” as described in 29 C.F.R. Sec. 2510.3-21(c)(1). Specifically, this requires the Benefit Plan Investor and Plan Fiduciary to represent and warrant
that: (a) the Plan Fiduciary is independent of the Issuer, the Underwriters, the Depositor, the Owner Trustee, any Master Servicer, any Servicer and each of their affiliates (the “Transaction Parties”) and the Plan Fiduciary
either: (i) is a bank as defined in Section 202 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), or similar institution that is regulated and supervised and subject to periodic examination by a U.S.
state or U.S. federal agency, (ii) is an insurance carrier which is qualified under the laws of more than one U.S. state to perform the services of managing, acquiring or disposing of assets of an employee benefit plan described in
Section 3(3) of ERISA or any plan described in Section 4975(e)(1)(A) of the Code, (iii) is an investment adviser registered under the Advisers Act, or, if not registered as an investment adviser under the Advisers Act by reason of
paragraph (1) of Section 203A of the Advisers Act, is registered as an investment adviser under the laws of the U.S. state in which it maintains its principal office and place of business, (iv) is a broker-dealer registered under the
U.S. Securities Exchange Act of 1934, as amended or (v) holds, or 

 
has under its management or control, total assets of at least U.S. $50 million (provided that this clause (v) shall not be satisfied if the Plan Fiduciary is an individual directing his
or her own individual retirement account or plan account or relative of such individual); (b) the Plan Fiduciary is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment
strategies, including the acquisition by the Benefit Plan Investor of the Class A(2017-6) Notes; (c) the Plan Fiduciary is a “fiduciary” with respect to the Benefit Plan Investor within the
meaning of Section 3(21) of ERISA, Section 4975 of the Code, or both, and is responsible for exercising independent judgment in evaluating the Benefit Plan Investor’s acquisition of the
Class A(2017-6) Notes, (d) none of the Transaction Parties has exercised any authority to cause the Benefit Plan Investor to invest in the Class A(2017-6)
Notes or to negotiate the terms of the Benefit Plan Investor’s investment in the Class A(2017-6) Notes; and (e) the Plan Fiduciary has been informed by the Transaction Parties: (i) that
none of the Transaction Parties are undertaking to provide impartial investment advice or to give advice in a fiduciary capacity, and that no such entity has given investment advice or otherwise made a recommendation, in connection with the Benefit
Plan Investor’s acquisition of the Class A(2017-6) Notes and (ii) of the existence and nature of the Transaction Parties’ financial interests in the Benefit Plan Investor’s acquisition
of the Class A(2017-6) Notes. 
 Prior to the due presentment for registration of transfer of
this Class A(2017-6) Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this
Class A(2017-6) Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class A(2017-6) Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary. 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing not less than 66 2/3% of the Outstanding Dollar Principal Amount of each adversely affected
Series, Class or Tranche of Notes. The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Dollar Principal Amount of the Notes, on behalf of the Holders of all the Notes, to
waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this
Class A(2017-6) Note shall be conclusive and binding upon such Holder and upon all future Holders of this Class A(2017-6) Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Class A(2017-6) Note. The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. 

The term “Issuer” as used in this Class A(2017-6) Note includes any successor to
the Issuer under the Indenture. 
 The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject
to the rights of the Indenture Trustee and the Holders of Notes under the Indenture. 

 The Class A(2017-6) Notes are issuable only in
registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. 
 THIS CLASS A(2017-6) NOTE AND THE INDENTURE WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION
LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 
 No
reference herein to the Indenture and no provision of this Class A(2017-6) Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and interest on this Class A(2017-6) Note at the times, place, and rate, and in the coin or currency herein prescribed. 

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer or any successor or assign of the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Owner Trustee has no such obligations in its individual capacity). The Holder of this Class A(2017-6) Note by the acceptance hereof agrees that, except as expressly provided
in the Indenture and the Indenture Supplement in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this
Class A(2017-6) Note. 

 ASSIGNMENT 

Social Security or taxpayer I.D. or other identifying number of assignee 
  

 
 FOR VALUE RECEIVED, the undersigned
hereby sells, assigns and transfers unto 
 (name and address of assignee) 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises. 
  

							
	Dated:	 	  
	  	  
	 	*
		 		  	Signature Guaranteed:	 	

  

	*	NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.

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