Document:

PROMISSORY NOTE

 

	$1,775,000.00	New York, New York
	 	March 21, 2014

 

This Promissory Note
(this “Note”) is made and executed as of the date set forth above by AMERICAN REALITY CAPITAL HOSPITALITY OPERATING
PARTNERSHIP L.P., a Delaware limited partnership (the “Borrower”) for the benefit of CRESTLINE HOTELS &
RESORTS, LLC., a Delaware limited liability company (“Lender”). For value received, Borrower promises and agrees
to pay to the order of Lender, at 3950 University Drive, Suite 301, Fairfax, Virginia 22030, or at such other place as Lender may
designate in writing, the principal sum of One Million Seven Hundred and Seventy-Five Thousand Dollars ($1,775,000), together with
interest thereon from the date hereof, until paid in full, at the rate of Four and One Half percent (4.5%) per annum.

 

Borrower shall pay
accrued interest on the outstanding principal balance of this Note on a quarterly basis commencing on the first calendar quarter
after the date hereof (i.e., July 1, 2014), and continuing on the first day of each calendar quarter thereafter. The entire unpaid
principal balance of this Note, together with any and all accrued interest accrued thereon, shall be due and payable on March 21,
2019 (the “Maturity Date”).

 

Prepayment of this
Note in whole or part may occur at any time after the date hereof without penalty, provided that Borrower shall give Lender not
less than three (3) days’ of prior written notice of the date on which Borrower intents to prepay all or any portion of this
Note. Any partial prepayment of this Note in accordance with the terms hereof shall not operate to postpone or suspend the obligation
to make, and shall not have the effect of altering the time for, payment of the remaining balance of this Note as provided herein,
unless and until this Note is paid in full. All payments received hereunder shall be applied, first, to any costs or expenses incurred
by Lender in connection with collecting any payment due hereunder after an Event of Default (hereinafter defined); second, to the
interest accrued hereunder; and third, to the reduction of the principal amount of this Note.

 

In order to induce
Lender to enter into this Note, Borrower represents and warrants to Lender that (a) Borrower (i) is duly organized and subsisting
under the laws of the State of Delaware, (ii) has the power and authority and the legal right to own and operate its property,
and to conduct the business in which it is currently engaged, and (iii) except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a material adverse effect, is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership or operation of property or the conduct of its business require
such qualification, (b) Borrower has the authority and power to execute and deliver any document required hereunder and to perform
any condition or obligation imposed under the terms of such documents, (c) the execution, delivery and performance of this Note
and each document incident hereto will not violate any provision of any applicable law, regulation, order, judgment, decree, article
of incorporation, bylaw, indenture, contract, agreement, or other undertaking to which Borrower is a party, or which purports to
be binding on Borrower or its assets and will not result in the creation or imposition of a lien on any of its assets, and (d)
there is no action, suit, investigation, or proceeding pending or, to the knowledge of Borrower, threatened, against or affecting
Borrower or any of its assets which, if adversely determined, would have a material adverse effect on the financial condition of
Borrower or the operation of its business.

 

    	A-1

    	 

    

 

An event of default
will occur if any of the following events occurs (each such event is referred to herein as an “Event of Default”):
(a) Failure to pay any principal or interest hereunder within ten (10) days after the Maturity Date, (b) Any representation or
warranty made by Borrower in this Note, or in any certificate, financial statement, or other statement furnished by Borrower to
Lender is untrue in any material respect at the time when made, (c) Default by Borrower in the observance or performance of any
other covenant or agreement contained in this Note, other than a default constituting a separate and distinct Event of Default
under this paragraph, (d) Filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment
of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal,
now or hereafter existing, or (e) Filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement
or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state
or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.

 

Upon the occurrence
and during the continuance of an Event of Default, Lender may declare the entire unpaid principal balance of this Note, together
with accrued interest thereon, to be immediately due and payable without presentment, demand, protest, or other notice of any kind.
To the extent permitted by law, Borrower waives any rights to presentment, demand, protest, or notice of any kind in connection
with this Note. No failure or delay on the part of Lender in exercising any right, power, or privilege hereunder will preclude
any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided
herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity. Borrower agrees to pay all
costs of collection incurred by reason of an Event of Default, including court costs and reasonable attorney's fees.

 

Any notice, demand,
request or other communication required to be given hereunder shall be deemed effectively given if (a) delivered by hand (against
a signed receipt), (b) sent by registered or certified mail (return receipt requested), or (c) sent by a nationally-recognized
overnight courier (with verification of delivery), and addressed in each case as follows:

 

	Lender:	Crestline Hotels & Resorts, LLC.
	 	3950 University Drive, Suite 301
	 	Fairfax, Virginia 22030
	 	Attn:  General Counsel
	 	 
	Borrower:	American Realty Capital Hospitality Operating Partnership, L.P.
	 	405 Park Avenue, 12th Floor
	 	New York, NY 10022
	 	Attn:  Jesse C. Galloway

 

    	A-2

    	 

    

 

Borrower hereof waives
presentment for payment, protest, demand, notice of protest, notice of dishonor, and notice of nonpayment, and expressly agrees
that this Note, or any payment hereunder, may be extended from time to time by Lender without in any way affecting its liability
hereunder.

 

In the event any payment
under this Note is not made at the time and in the manner required, Borrower agrees to pay any and all costs and expenses which
may be incurred by Lender hereof in connection with the enforcement of any of its rights under this Note or under any such other
instrument, including court costs and reasonable attorneys' fees.

 

This Note shall be
governed by and construed and enforced in accordance with the laws of the State of New York.

 

	 	BORROWER:
	 	 
	 	AMERICAN REALTY CAPITAL HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
	 	 	 
	 	By:	American Realty Capital Hospitality Trust, Inc.,
	 	 	its general partner

 

 

	 	By:	/s/ Jesse C. Galloway
	 		Name: Jesse C. Galloway
	 	 	Title: Authorized Signatory

 

    	A-3PROMISSORY NOTE

(Purchase Price)

 

	$5,000,000.00	March 21, 2014

 

FOR VALUE RECEIVED,
American Realty Capital Hospitality Operating Partnership, L.P., a Delaware limited partnership (“Maker”), whose
principal office is located at 405 Park Avenue, 15th floor, New York, NY 10022, promises to pay to the order of Barceló
Crestline Corporation, a Maryland corporation (together with any and all of its successors and assigns and/or any other holder
of this Note, “Seller”), whose principal office is located at 3950 University Drive, Suite 301, Fairfax, VA,
22030, in lawful money of the United States of America, at its office indicated above or wherever else Seller may specify, the
sum of Five Million and 00/100 Dollars ($5,000,000.00), on the terms provided in this Promissory Note (including all renewals,
extensions or modifications hereof, this “Note”).

 

1.          USE
OF PROCEEDS. Indebtedness evidenced by this Note constitutes the purchase price (the “Purchase Price”)
required to be paid in accordance with that certain Agreement of Purchase and Sale dated as of January 30, 2014 between ARC
Hospitality TRS Holding, LLC, a Delaware limited liability company (“TRS Holding”), and Seller, as amended
by that certain First Amendment to Agreement for Purchase and Sale, dated as of March 11, 2014, between TRS Holding and
Seller (as amended or assigned, the “Purchase Agreement”). Maker is the direct owner of TRS Holding and
will derive a direct benefit from TRS Holding’s closing under the Purchase Agreement. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Purchase Agreement.

 

2.          MATURITY
DATE. The entire principal balance of this Note, together with all accrued and unpaid interest thereon, if any, and any
and all other amounts payable by Maker under this Note, shall be fully and immediately due and payable by the Maker within
ten (10) business days after the date that Maker or its parent corporation, American Realty Capital Hospitality Trust, Inc.,
has raised common equity in an aggregate amount equal to or greater than One Hundred Fifty Million and 00/100 Dollars
($150,000,000.00) (such date, the “Trigger Date”). From and after the date hereof, Maker shall provide
written updates at least monthly to BCC of the aggregate amount of common equity raised by Maker or parent corporation. Maker
shall fully and immediately pay to BCC (without prior request from BCC being required) the entire principal balance of this
Note, together with all accrued and unpaid interest thereon, and any and all other amounts payable by Maker under this Note
on the earlier of (i) within (10) days after the occurrence of the Trigger Date (and shall provide written notice to BCC
within two (2) days after the occurrence of the Trigger Date) and (ii) the tenth (10th) anniversary of the date of
this Note (the earlier of such two dates, the “Maturity Date”).

 

3.          INTEREST
RATE. Commencing on the date hereof and continuing until the Maturity Date, interest shall accrue on the unpaid principal
balance of this Note at a rate of interest equal to 6.8% (the “Interest Rate”), compounded annually.

 

    	 

    	 

    

 

4.          INTEREST
AND FEE(S) COMPUTATION (ACTUAL/365). Interest and fees, if any, shall be computed, payable and allocated on the basis of
a 360-day year consisting of twelve 30-day months.

 

5.          MONTHLY
PAYMENTS. Subject to the remainder of this Section 5, interest shall be paid by Maker to Seller monthly, in
arrears, beginning on April 1, 2014 and continuing on the first day of each following month (each, a “Monthly
Payment Date”). The outstanding principal balance of this Note, together with all accrued and unpaid interest
thereon, if any, and any and all other amounts payable by Maker under this Note shall be due and payable on the Maturity
Date. Notwithstanding the foregoing, Maker may defer any amounts due to Seller on a Monthly Payment Date that occurs prior to
July 7, 2014 (the “Defer Period”); provided however, that on the first Monthly Payment Date to occur after
the Defer Period, Maker shall pay to Seller all accrued, but unpaid interest then outstanding.

 

6.          PREPAYMENT
TERMS. Maker may pay the principal amount outstanding under this Note, in whole or in part, together with any accrued and
unpaid interest thereon, at any time or from time to time, without penalty or premium.

 

7.          METHOD
AND APPLICATION OF PAYMENTS. All payments made hereunder shall be made in lawful money of the United States of America. Monies
received by Seller from any source for application toward payment of the Obligations shall be applied first, to cost of enforcement
(as set forth in Section 11 of this Note), second, to accrued interest, and third, to principal. If any payment received
by Seller under this Note is rescinded, avoided, invalidated, declared to be fraudulent or preferential, set aside, or for any
reason returned by Seller (or repaid by Seller) because of any adverse claim or threatened action, the returned or repaid payment
shall remain payable as an Obligation under this Note as though such payment had not been made. Remittances shall be made without
offset, demand, counterclaim, deduction, or recoupment (each of which is hereby waived) and shall be accepted subject to the condition
that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance
by Seller of any payment in an amount less than the amount then due pursuant to this Note shall be deemed an acceptance on account
only, notwithstanding any notation on or accompanying such partial payment to the contrary, and shall not in any way (a) waive,
impair or extinguish any right or remedy available to Seller hereunder or under the Purchase Agreement, or (b) waive the requirement
of punctual payment and performance or constitute a novation in any respect. Payments received after 2:00 p.m. EDT shall be deemed
to be received on, and shall be posted as of, the following business day. Whenever any payment under this Note falls due on a day
which is not a business day, such payment may be made on the next succeeding business day.

 

8.          EVENTS
OF DEFAULT. Each of the following shall constitute an event of default by Maker under this Note (each, an “Event
of Default”)

 

a. Failure
to make any Monthly Payment or other payment due hereunder within two (2) days after written notice from Seller that such failure
has occurred; and

 

    	 

    	 

    

 

b. Failure
to comply with any covenant or obligation set forth in this Note, not otherwise provided for in Section 8(a) within ten
(10) days after written notice from Seller that such failure has occurred.

 

9.          REMEDIES;
DEFAULT INTEREST RATE. Upon the occurrence of an Event of Default, Seller may take such action at law or equity, without notice
or demand, as it deems advisable to protect and enforce its rights hereunder, including, but not limited to, declaring the entire
principal then outstanding, together with any accrued interest thereon, immediately due and payable. Without limiting the foregoing,
if, and for so long as, any Monthly Payment or other payment due under this Note (subject to Maker’s right to defer Monthly
Payments during the Defer Period) remains past due for five (5) days or more, interest under this Note shall accrue on the unpaid
principal balance at the rate of twenty percent (20%) per annum (the “Default Interest Rate”), compounded monthly,
beginning on the date such payment was due until such time as Maker pays to Seller such past due amounts together with any amounts
that become due during such time.

 

10.         DEFINITIONS.
Obligations. The term “Obligations”, as used in this Note refers to any and all indebtedness and other obligations
under this Note of Maker to Seller.

 

11.         COST
OF ENFORCEMENT; ATTORNEYS’ FEES AND OTHER COSTS. Maker shall pay all of Seller’s reasonable expenses incurred to
(1) enforce its right under this Note, and (2) to enforce or collect any of the Obligations, including, without limitation, as
a result of an Event of Default by Maker, in each case, including, without limitation, reasonable arbitration, paralegals’,
attorneys’ and experts’ fees and expenses, whether incurred without the commencement of a suit, in any trial, arbitration,
or administrative proceeding, or in any appellate or bankruptcy proceeding.

 

12.         USURY.
If at any time the effective interest rate under this Note (including the Default Interest Rate) would, but for this paragraph,
exceed the maximum lawful rate, the effective interest rate under this Note shall be the maximum lawful rate, and any amount received
by Seller in excess of such rate shall be applied to principal and then to fees and expenses, or, if no such amounts are owing,
returned to Maker.

 

13.         WAIVERS
AND AMENDMENTS. No waivers, amendments or modifications of this Note shall be valid unless in writing and signed by an officer
of Seller. No waiver by Seller of any default shall operate as a waiver of any other default or the same default on a future occasion.
Neither the failure nor any delay on the part of Seller in exercising any right, power, or remedy under this Note or the Purchase
Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Except to the extent otherwise provided by the Purchase Agreement
or prohibited by law, Maker waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate
maturity, notice of acceleration of maturity, notice of sale and all other notices of any kind.

 

14.         NOTICES.
Any notice, request, demand, consent, approval or other communication under or in accordance with this Note shall be in writing
and delivered by hand against receipt or sent by recognized overnight delivery service or by facsimile. All notices shall be addressed
as follows:

 

    	 

    	 

    

 

	If to Seller: 	with a copy to:
	 	 
	
        Simon Pedro Barceló C/.

        José Rover Motta, 27

        07006 Palma de Mallorca

        Spain

        Phone: 011 34 (971) 771 700

        Fax: 011 34 (971) 466 720
	
        Holland & Knight LLP

        1600 Tysons Boulevard

        Suite 700

        Tysons Corner, Virginia 22102

        Attn: William J. Mutryn

        Phone: (703) 720-8069

        Fax: (703) 720-8610

        

 

	If to Maker:	with a copy to:
	 	 
	
        ARC Hospitality Trust 405

        Park Avenue, 15th Floor

        New York, NY 10022 Tel.

        No.: 212.415.6505 Fax No.:

        857.207.3397 Attention:

        Jonathan Mehlman Tel.

        No.: (646) 626-8857

        Fax No.: (646) 381-0539
	
        Jesse Galloway

        c/o AR Capital, LLC

        405 Park Avenue, 15th

        Floor New York, NY 10022

        Tel. No.: (212) 415-6516

        Fax No.: (646) 861-7751

         

 

 

or to such other addresses as may be designated
by a proper notice. Notices shall be deemed to be effective upon receipt (or refusal thereof) if personally delivered or sent by
recognized overnight delivery service, or upon electronically verified transmission, if such delivery is by facsimile. Notices
may be given on behalf of a party by such party’s legal counsel.

 

    	 

    	 

    

 

15. MISCELLANEOUS
PROVISIONS. Assignment. This Note shall inure to the benefit of and be binding upon the parties and their respective heirs,
legal representatives, successors and assigns. Seller’s interests in and rights under this Note are freely assignable, in
whole or in part, by Seller. Maker shall not assign its rights and interest hereunder without the prior written consent of Seller,
and any attempt by Maker to assign without Seller’s prior written consent is null and void. Any assignment shall not release
Maker from the Obligations. Applicable Law; Conflict Between Documents. This Note shall be governed by and construed under
the laws of the State of Delaware without regard to the conflict of laws principles thereof. Jurisdiction. Maker irrevocably
agrees to nonexclusive personal jurisdiction in the State of Delaware. Severability. If any provision of this Note shall
be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note. Interpretation; Captions.
Any reference in this Notice to the term “person” shall mean any individual, person or entity; as required by the
context, the singular shall include the plural, the plural the singular, the neuter gender shall include the male gender and female
gender and vice versa. The captions contained in this Note are inserted for convenience only and shall not affect the meaning or
interpretation of this Note. Posting of Payments. All payments received on business days after 2:00 p.m. EDT at the office
of Seller first shown above shall be deemed received at the opening of the next business day. Fees and Taxes. Maker shall
promptly pay all documentary, intangible recordation and/or similar taxes on this transaction assessed or arising from time to
time. LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING SELLER BY ACCEPTANCE HEREOF,
AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE
OUT OF OR BE IN ANY WAY CONNECTED WITH THIS NOTE OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY
HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES.
EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE
IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE. FINAL AGREEMENT. This Note and the Purchase Agreement represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.

 

16.         WAIVER
OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF MAKER BY EXECUTION HEREOF AND SELLER BY ACCEPTANCE HEREOF,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS
NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO SELLER TO ACCEPT THIS NOTE. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF
SHALL SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN THE PURCHASE
AGREEMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED,
EXTENDED OR MODIFIED BY, THIS NOTE.

 

17.         PROMISSORY
NOTE SUBORDINATION TO THE LOAN. In connection with the execution of this Note, Maker, Seller and the financing bank of the
Maker will enter into a “Subordination and Standstill Agreement” in the form attached hereto as Attachment 1.

 

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IN WITNESS WHEREOF, Maker,
on the day and year first above written, has caused this Note to be executed under seal.

 

	 	MAKER:
	 	AMERICAN REALTY CAPITAL
	 	HOSPITALITY OPERATING PARTNERSHIP, 
	 	L.P., a Delaware limited partnership
	 	 	 
	 	By:	American Realty Capital Hospitality Trust,
	 	 	Inc., a Maryland corporation, its general partner

 

	 	By:	/s/  Jesse C. Galloway
	 	 	Name: Jesse C. Galloway
	 	 	Title: Authorize d Signatory

 

    	 

    	 

    

 

ATTACHMENT 1:

Form of Subordination and Standstill Agreement

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