Document:

Exhibit 10.16

 

PMI GREENSBORO, LLC AND MDR GREENSBORO,
LLC, as grantor

(Borrower)

 

to

 

BRIAN CARR, as trustee

(Trustee)

 

for the benefit of

 

BENEFIT STREET PARTNERS REALTY OPERATING
PARTNERSHIP, L.P., as beneficiary

(Lender)

 

 

 

DEED OF TRUST, SECURITY AGREEMENT, 

ASSIGNMENT OF LEASES AND FIXTURE FILING

 

 

 

	Dated:	 	As of November 3, 2017
	 	 	 
	Address:	 	7803 National Service Road,
	 	 	Greensboro, NC 27409
	 	 	 
	County:	 	Guilford County

 

PREPARED BY AND UPON

RECORDATION RETURN TO:

 

Seyfarth Shaw LLP

Two Seaport Lane, Suite 300

Boston, MA 02210-2028

Attn: Sean M. O’Brien, Esq.

 

THIS SECURITY INSTRUMENT SECURES PRESENT
AND FUTURE ADVANCES AND READVANCES.  THIS SECURITY INSTRUMENT COVERS GOODS WHICH ARE OR ARE TO BECOME FIXTURES, IS EFFECTIVE
AS A FINANCING STATEMENT FILED AS A FIXTURE FILING AND IS TO BE FILED IN THE REAL ESTATE RECORDS.

 

    			 

     

    

  

DEED OF TRUST, SECURITY
AGREEMENT,

ASSIGNMENT OF LEASES
AND FIXTURE FILING

 

THIS
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND FIXTURE FILING (this “Security Instrument”)
is made as of this 3rd day of November, 2017, by PMI GREENSBORO, LLC, a Delaware limited liability company having
its principal place of business at 406 Page Road, Nashville, Tennessee 37205 (“TIC Borrower 1”), and MDR
GREENSBORO, LLC, a Delaware limited liability company having its principal place of business at 11 S. 12th Street, Suite 401,
Richmond, Virginia 23219 (“TIC Borrower 2”, and, collectively with TIC Borrower 1, hereinafter, individually
or collectively as the context may imply, “Borrower”), together with its permitted
successors and assigns, as grantor, to BRIAN CARR, an individual having an address at c/o GRS/Title, 901 East Byrd Street,
Suite 1510, Richmond, Virginia 23219, as trustee (together with its successors and assigns, “Trustee”) for the
benefit of BENEFIT STREET PARTNERS REALTY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership,
having an address at 9 West 57th Street, Suite 4920, New York, New York 10019 (together with its successors and assigns,
“Lender”), as beneficiary. All capitalized terms not defined herein shall have the respective meanings set forth
in the Loan Agreement (defined below).

 

RECITALS:

 

A.           This
Security Instrument is given to Lender to secure a certain loan in the original principal amount of Ten Million Six Hundred Thousand
and No/100 Dollars ($10,600,000.00) (the “Loan”) advanced pursuant to a certain loan agreement between Borrower
and Lender (as the same may have been or may be amended, restated, replaced, supplemented or otherwise modified from time to time,
the “Loan Agreement”), which such Loan is evidenced by, among other things, a certain Promissory Note executed
in connection with the Loan Agreement (together with all extensions, renewals, replacements, restatements or other modifications
thereof, whether one or more being hereinafter collectively referred to as the “Note”). The stated maturity
date of the Note (exclusive of any acceleration thereof as provided in the Loan Documents) is November 9, 2020, subject to extension
in accordance with the terms of the Loan Agreement to November 9, 2022;

 

B.           Borrower
desires to secure the payment of the outstanding principal amount set forth in, and evidenced by, the Loan Agreement and the Note
together with all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, the
Loan Agreement, this Security Instrument or any of the other Loan Documents (defined below) (collectively, the “Debt”)
and the performance of all of the obligations due under the Note, the Loan Agreement and all other documents, agreements and certificates
executed and/or delivered in connection with the Loan (as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time, collectively, the “Loan Documents”); and

 

C.           This
Security Instrument is given pursuant to the Loan Agreement, and payment, fulfillment, and performance of the obligations due thereunder
and under the other Loan Documents are secured hereby in accordance with the terms hereof.

 

NOW THEREFORE,
in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in
this Security Instrument:

 

    			 

     

    

  

Article
1 - Grants of Security

 

Section 1.1           Property
Mortgaged. Borrower does hereby irrevocably mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer, convey to Trustee, its successors and assigns, for the benefit of Lender and its successors and assigns in and
to the following property, rights, interests and estates now owned, or hereafter acquired by Borrower (collectively, the “Property”):

 

(a)          Land.
The real property described in Exhibit A attached hereto and made a part hereof (collectively, the “Land”);

 

(b)          Additional
Land. All additional lands, estates and development rights hereafter acquired by Borrower for use in connection with the Land
and the development of the Land and all additional lands and estates therein which may, from time to time, by supplemental mortgage
or otherwise be expressly made subject to the lien of this Security Instrument;

 

(c)          Improvements.
The buildings, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter
erected or located on the Land (collectively, the “Improvements”);

 

(d)          Easements.
All easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties,
servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating
or pertaining to the Land and the Improvements, and the reversions and remainders, and all land lying in the bed of any street,
road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights,
titles, interests, rights of dower, rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity,
of Borrower of, in and to the Land and the Improvements, and every part and parcel thereof, with the appurtenances thereto;

 

(e)          Equipment,
Fixtures and Personal Property. All machinery, equipment, fixtures (including, but not limited to, all heating, air conditioning,
plumbing, lighting, communications, elevator fixtures, inventory and goods), furniture, software used in or to operate any of the
foregoing, inventory and articles of personal property and accessions thereof and renewals, replacements thereof and substitutions
therefor (including, but not limited to, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables,
rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures, divans, couches,
luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows, blankets, glassware, silverware, foodcarts, cookware,
dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and other drink dispensers,
icemakers, radios, television sets, intercom and paging equipment, electric and electronic equipment, dictating equipment, private
telephone systems, medical equipment, potted plants, heating, lighting and plumbing fixtures, fire prevention and extinguishing
apparatus, cooling and air-conditioning systems, elevators, escalators, fittings, plants, apparatus, stoves, ranges, refrigerators,
laundry machines, tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards, conduits, compressors, vacuum
cleaning systems, floor cleaning, waxing and polishing equipment, call systems, brackets, electrical signs, bulbs, bells, ash and
fuel, conveyors, cabinets, lockers, shelving, spotlighting equipment, dishwashers, garbage disposals, washers and dryers), other
customary hotel equipment and other property of every kind and nature whatsoever owned by Borrower, or in which Borrower has or
shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, and usable in connection
with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies
of any nature whatsoever owned by Borrower, or in which Borrower has or shall have an interest, now or hereafter located upon the
Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of
the Land and the Improvements (those portions of the foregoing constituting equipment under applicable Legal Requirements, the
“Equipment”, those portions of the foregoing constituting personal property under applicable Legal Requirements,
the “Personal Property”, those portions of the foregoing constituting fixtures under applicable Legal Requirements,
the “Fixtures” and all of the foregoing, collectively, the “Equipment, Fixtures and Personal Property”),
and the right, title and interest of Borrower in and to any of the foregoing which may be subject to any security interests, as
defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the
“Uniform Commercial Code”), and all proceeds and products of the above;

 

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(f)          Leases
and Rents. All leases, subleases, subsubleases, lettings, licenses, rental agreements, registration cards and agreements, concessions
or other agreements (whether written or oral) pursuant to which any Person is granted a possessory interest in, or right to use
or occupy all or any portion of the Land and the Improvements, and every modification, amendment or other agreement relating to
such leases, subleases, subsubleases, or other agreements entered into in connection with such leases, subleases, subsubleases,
or other agreements and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed
and observed by the other party thereto, heretofore or hereafter entered into, whether before or after the filing by or against
Borrower of any petition for relief under any Creditors Rights Laws (collectively, the “Leases”) and all right,
title and interest of Borrower, its successors and assigns therein and thereunder, including, without limitation, cash or securities
deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents,
rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation,
security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, registration fees, and other
consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or its agents or employees
from any and all sources arising from or attributable to the Property (or any portion thereof), including, all receivables, customer
obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale,
lease, sublease, license, concession or other grant of the right of the use and/or occupancy of the Property (or any portion thereof)
or rendering of services by Borrower, TRS Lessee or Manager and proceeds, if any, from business interruption or other loss of income
insurance whether paid or accruing before or after the filing by or against Borrower of any petition for relief under any Creditors
Rights Laws, including, without limitation, all hotel receipts, revenues and credit card receipts collected from guest rooms, restaurants,
bars, mini-bars, meeting rooms, banquet rooms and recreational facilities and otherwise, all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease,
license, concession or other grant of the right of possession, use and/or occupancy of the Property (or any portion thereof) and/or
rendering of services by Borrower, TRS Lessee or any operator or manager of the hotel or the commercial space located in the Improvements
or acquired from others (including, without limitation, from the rental of any office space, retail space, guest rooms or other
space, halls, stores, and offices, and deposits securing reservations of such space), license, lease, sublease and concession fees
and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales
(collectively, the “Rents”) and all proceeds from the sale or other disposition of the Leases and the right
to receive and apply the Rents to the payment of the Debt;

 

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(g)          Insurance
Proceeds. All insurance proceeds in respect of the Property under any insurance policies covering the Property, including,
without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof,
for damage to the Property (collectively, the “Insurance Proceeds”);

 

(h)          Condemnation
Awards. All condemnation awards, including interest thereon, which may heretofore and hereafter be made with respect to the
Property by reason of any taking or condemnation, whether from the exercise of the right of eminent domain (including, but not
limited to, any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any
other injury to or decrease in the value of the Property (collectively, the “Awards”);

 

(i)          Tax
Certiorari. All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against
the Property as a result of tax certiorari or any applications or proceedings for reduction;

 

(j)          Rights.
The right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the
Property and to commence any action or proceeding to protect the interest of Lender in the Property;

 

(k)          Agreements.
All agreements (including, without limitation, the Franchise Agreement, to the extent assignable), contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein
and thereto, respecting or pertaining to the use, occupation, construction, management or operation of the Land and any part thereof
and any Improvements or any business or activity conducted on the Land and any part thereof and all right, title and interest of
Borrower therein and thereunder, including, without limitation, the right, upon the happening of any default hereunder, to receive
and collect any sums payable to Borrower thereunder;

 

(l)          Intangibles.
All tradenames, trademarks, servicemarks, logos, copyrights, goodwill, books and records and all other general intangibles relating
to or used in connection with the operation of the Property;

 

(m)          Accounts.
All (I) reserves, escrows and deposit accounts maintained by or on behalf of Borrower with respect to the Property, including,
without limitation, any and all reserve accounts maintained in connection with the Franchise Agreement and/or the Equipment, Fixtures
and Personal Property; together with all deposits or wire transfers made to such accounts and all cash, checks, drafts, certificates,
securities, investment property, financial assets, instruments and other property held therein from time to time and all proceeds,
products, distributions or dividends or substitutions thereon and thereof and (II) right, title and interest of Borrower arising
from the operation of the Land and the Improvements in and to all payments for goods or property sold or leased or for services
rendered, whether or not yet earned by performance, and not evidenced by an instrument or chattel paper, (hereinafter referred
to as “Accounts Receivable”) including, without limiting the generality of the foregoing, (A) all accounts,
contract rights, book debts, and notes arising from the operation of a hotel on the Land and the Improvements or arising from the
sale, lease or exchange of goods or other property and/or the performance of services, (B) Borrower’s rights to payment from
any consumer credit/charge card organization or entities which sponsor and administer such cards as the American Express Card,
the Visa Card and the Mastercard, (C) Borrower’s rights in, to and under all purchase orders for goods, services or other
property, (D) Borrower’s rights to any goods, services or other property represented by any of the foregoing, (E) monies
due to or to become due to Borrower under all contracts for the sale, lease or exchange of goods or other property and/or the performance
of services including the right to payment of any interest or finance charges in respect thereto (whether or not yet earned by
performance on the part of Borrower) and (F) all collateral security and guaranties of any kind given by any person or entity with
respect to any of the foregoing. Accounts Receivable shall include those now existing or hereafter created, substitutions therefor,
proceeds (whether cash or non-cash, movable or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection
or other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom (collectively, the “Accounts”);

 

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(n)          Proceeds.
All proceeds of any of the foregoing items set forth in subsections (a) through (m) including, without limitation, Insurance Proceeds
and Awards, whether cash, liquidation claims (or other claims) or otherwise; 

 

(o)          TIC
Agreement. Any and all rights of Borrower under the TIC Agreement, including, without limitation, any options to purchase and
rights of first refusal, including any rights of first refusal under Section 363(i) of the Bankruptcy Code; and

 

(p)          Other
Rights. Any and all other rights of Borrower in and to the items set forth in subsections (a) through (o) above.

 

Section 1.2           Assignment
of Rents. Borrower hereby absolutely and unconditionally assigns to Lender and Trustee
all of Borrower’s right, title and interest in and to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless,
subject to the terms of the Loan Agreement and Section 8.1(h) of this Security Instrument, Lender grants to Borrower a revocable
license to (i) collect, receive, use and enjoy the Rents and Borrower shall hold the Rents, or a portion thereof sufficient to
discharge all current sums due on the Debt, for use in the payment of such sums, and (ii) enforce the terms of the Leases.

 

Section 1.3           Security
Agreement. This Security Instrument is both a real property mortgage and a “security
agreement” within the meaning of the Uniform Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of Borrower in the Property. By executing and delivering
this Security Instrument, Borrower hereby grants to Lender and Trustee, as security for the Obligations (hereinafter defined),
a security interest in the Personal Property to the full extent that the Personal Property may be subject to the Uniform Commercial
Code.

 

Section 1.4           Fixture
Filing. Certain of the Property is or will become “fixtures” (as that term
is defined in the Uniform Commercial Code) on the Land, and this Security Instrument, upon being filed for record in the real estate
records of the city or county wherein such fixtures are situated, shall operate also as a financing statement filed as a fixture
filing in accordance with the applicable provisions of said Uniform Commercial Code upon such of the Property that is or may become
fixtures.

 

Section 1.5           Pledge
of Monies Held. Borrower hereby pledges to Lender any and all monies now or hereafter
held by Lender or on behalf of Lender in connection with the Loan, including, without limitation, any sums deposited in the Accounts
and Net Proceeds, as additional security for the Obligations until expended or applied as provided in the Loan Documents.

 

Section 1.6           Conditions
to Grant. TO HAVE AND TO HOLD the above granted and described Property unto Trustee for
and on behalf of Lender and to the use and benefit of Lender and Trustee and their successors and assigns, forever; PROVIDED,
HOWEVER, these presents are upon the express condition that, if Lender shall be well and truly paid the Debt at the time
and in the manner provided in the Note, the Loan Agreement and this Security Instrument, if Borrower shall well and truly perform
the Other Obligations as set forth in this Security Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, the Loan Agreement and the other Loan Documents, these presents and the
estate hereby granted shall cease, terminate and be void.

 

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Article
2 - Debt and Obligations Secured

 

Section 2.1           Debt.
This Security Instrument and the grants, assignments and transfers made in Article 1 are given for the purpose of securing the
Debt.

 

Section 2.2           Other
Obligations. This Security Instrument and the grants, assignments and transfers made in
Article 1 are also given for the purpose of securing the performance of the following (the “Other Obligations”):
(a) all other obligations of Borrower contained herein; (b) each obligation of Borrower and/or TRS Lessee, as applicable, contained
in the Loan Agreement and any other Loan Document; and (c) each obligation of Borrower and/or TRS Lessee, as applicable, contained
in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part
of the Note, the Loan Agreement or any other Loan Document.

 

Section 2.3           Debt
and Other Obligations. Borrower’s obligations for the payment of the Debt and the
performance of the Other Obligations shall be referred to collectively herein as the “Obligations.”

 

Section 2.4           Payment
of Debt. Borrower will pay the Debt at the time and in the manner provided in the Loan
Agreement, the Note and this Security Instrument.

 

Section 2.5           Incorporation
by Reference. All the covenants, conditions and agreements contained in (a) the Loan Agreement,
(b) the Note and (c) all and any of the other Loan Documents, are hereby made a part of this Security Instrument to the same extent
and with the same force as if fully set forth herein.

 

Article
3 - Property Covenants

 

Borrower covenants
and agrees that:

 

Section 3.1           Insurance.
Borrower shall obtain and maintain, or cause to be obtained and maintained, in full force and effect at all times insurance with
respect to Borrower and the Property as required pursuant to the Loan Agreement.

 

Section 3.2           Taxes
and Other Charges. Borrower shall pay all real estate and personal property taxes, assessments,
water rates or sewer rents (collectively “Taxes”), ground rents, maintenance charges, impositions (other than
Taxes), and any other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property (collectively, “Other Charges”), now or hereafter levied or assessed or
imposed against the Property or any part thereof in accordance with the Loan Agreement.

 

Section 3.3           Leases.
Borrower shall not (and shall not permit any other applicable Person to) enter in any Leases for all or any portion of the Property
unless in accordance with the provisions of the Loan Agreement.

 

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Section 3.4           Warranty
of Title. Borrower has good, indefeasible, marketable and insurable title to the Property
and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same. Borrower possesses
an unencumbered fee simple absolute estate in the Land and the Improvements except for the Permitted Encumbrances, such other liens
as are permitted pursuant to the Loan Documents and the liens created by the Loan Documents. This Security Instrument, when properly
recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first priority lien on the Property, subject only to Permitted Encumbrances and the
liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all
personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted
Encumbrances, such other liens as are permitted pursuant to the Loan Documents and the liens created by the Loan Documents. Borrower
shall forever warrant, defend and preserve the title and the validity and priority of the lien of this Security Instrument and
shall forever warrant and defend the same to Lender against the claims of all Persons whomsoever.

 

Article
4 - Further Assurances

 

Section 4.1           Compliance
With Loan Agreement. Borrower shall comply with all covenants set forth in the Loan Agreement
relating to acts or other further assurances to be made on the part of Borrower in order to protect and perfect the lien or security
interest hereof upon, and in the interest of Lender in, the Property.

 

Section 4.2           Authorization
to File Financing Statements; Power of Attorney. Borrower hereby authorizes Lender at
any time and from time to time to file any initial financing statements, amendments thereto and continuation statements as authorized
by applicable law, as applicable to all or part of the Personal Property and as necessary or required in connection herewith. For
purposes of such filings, Borrower agrees to furnish any information reasonably requested by Lender in accordance with the Loan
Documents promptly upon request by Lender. Borrower also ratifies its authorization for Lender to have filed any like initial financing
statements, amendments thereto or continuation statements, if filed prior to the date of this Security Instrument. Borrower hereby
irrevocably constitutes and appoints Lender and any officer or agent of Lender, with full power of substitution, as its true and
lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Borrower or in Borrower’s own
name to execute in Borrower’s name any such documents and otherwise to carry out the purposes of this Section 4.2, to the
extent that Borrower’s authorization above is not sufficient and Borrower fails or refuses to promptly execute such documents.
To the extent permitted by law, Borrower hereby ratifies all acts said attorneys-in-fact have lawfully done in the past or shall
lawfully do or cause to be done in the future by virtue hereof. This power of attorney is a power coupled with an interest and
shall be irrevocable.

 

Article
5 - Due On Sale/Encumbrance

 

Section 5.1           No
Sale/Encumbrance. Except in accordance with the express terms and conditions contained
in the Loan Agreement, Borrower shall not cause or permit a sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
or grant of any options with respect to, or any other transfer or disposition (directly or indirectly, voluntarily or involuntarily,
by operation of law or otherwise, and whether or not for consideration or of record) of a direct or indirect legal or beneficial
interest in the Property or any part thereof, Borrower, any constituent owner or other holder of a direct or indirect equity interest
in Borrower, any indemnitor or other guarantor of the Loan, any constituent owner or other holder of a direct or indirect equity
interest in such indemnitor or guarantor, any manager or operating lessee of the Property that is affiliated with Borrower or any
constituent owner or other holder of a direct or indirect equity interest in such manager or such operating lessee.

 

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Article
6 - Prepayment; Release of Property

 

Section 6.1           Prepayment.
The Debt may not be prepaid in whole or in part except in strict accordance with the express terms and conditions of the Note and
the Loan Agreement.

 

Section 6.2           Release
of Property. Borrower shall not be entitled to a release of any portion of the Property
from the lien of this Security Instrument except in accordance with terms and conditions of the Loan Agreement.

 

Article
7 - Default

 

Section 7.1           Event
of Default. The term “Event of Default” as used in this Security Instrument
shall have the meaning assigned to such term in the Loan Agreement.

 

Article
8 - Rights and Remedies Upon Default

 

Section 8.1           Remedies.
Upon the occurrence and during the continuance of any Event of Default continuing beyond the expiration of any applicable cure
period, Borrower agrees that Lender may or acting by or through Trustee may take such action, without notice or demand, as it deems
advisable to protect and enforce its rights against Borrower and in and to the Property, including, but not limited to, the following
actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Lender or Trustee may determine,
in their sole discretion, without impairing or otherwise affecting the other rights and remedies of Lender or Trustee:

 

(a)          declare
the entire unpaid Debt to be immediately due and payable;

 

(b)          institute
proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of
law, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;

 

(c)          with
or without entry, to the extent permitted and pursuant to the procedures provided by applicable law, institute proceedings for
the partial foreclosure of this Security Instrument for the portion of the Debt then due and payable, subject to the continuing
lien and security interest of this Security Instrument for the balance of the Debt not then due, unimpaired and without loss of
priority;

 

(d)          sell
for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Borrower therein
and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entirety or in parcels, at
such time and place, upon such terms and after such notice thereof as may be required or permitted by law;

 

(e)          institute
an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained herein,
in the Note, the Loan Agreement or in the other Loan Documents;

 

(f)          recover
judgment on the Note either before, during or after any proceedings for the enforcement of this Security Instrument or the other
Loan Documents;

 

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(g)          seek
and obtain the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard
for the adequacy of the security for the Debt and without regard for the solvency of Borrower, any guarantor or indemnitor under
the Loan or any other Person liable for the payment of the Debt;

 

(h)          the
license granted to Borrower under Section 1.2 hereof shall automatically be revoked and Lender may enter into or upon the Property,
either personally or by its agents, nominees or attorneys and dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly therefrom, and take possession
of all books, records and accounts relating thereto and Borrower agrees to surrender possession of the Property and of such books,
records and accounts to Lender upon demand, and thereupon Lender may (i) use, operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part of the Property and conduct the business thereat; (ii) complete any construction
on the Property in such manner and form as Lender deems advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Property; (iv) exercise all rights and powers of Borrower with respect to the Property, whether in the
name of Borrower or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict
tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require Borrower to
pay monthly in advance to Lender, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the
use and occupation of such part of the Property as may be occupied by Borrower; (vi) require Borrower to vacate and surrender possession
of the Property to Lender or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings or otherwise;
and (vii) apply the receipts from the Property to the payment of the Debt, in such order, priority and proportions as Lender shall
deem appropriate in its sole discretion after deducting therefrom all expenses (including reasonable attorneys’ fees) incurred
in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses
in connection with the Property, as well as just and reasonable compensation for the services of Lender, its counsel, agents and
employees;

 

(i)          apply
any sums then deposited or held in escrow or otherwise by or on behalf of Lender in accordance with the terms of the Loan Agreement,
this Security Instrument or any other Loan Document and/or the Accounts to the payment of the following items in any order in its
sole discretion: (i) Taxes and Other Charges; (ii) insurance premiums; (iii) interest on the unpaid principal balance of the
Debt; (iv) amortization of the unpaid principal balance of the Debt; (v) all other sums payable pursuant to the Note, the
Loan Agreement, this Security Instrument and the other Loan Documents, including without limitation advances made by Lender pursuant
to the terms of this Security Instrument;

 

(j)          surrender
the insurance policies maintained pursuant to the Loan Agreement, collect the unearned insurance premiums for such insurance policies
and apply such sums as a credit on the Debt in such priority and proportion as Lender in its discretion shall deem proper, and
in connection therewith, Borrower hereby appoints Lender as agent and attorney-in-fact (which is coupled with an interest and is
therefore irrevocable) for Borrower to collect such insurance premiums;

 

(k)          apply
the undisbursed balance of any deposit made by Borrower with Lender in connection with the restoration of the Property after a
casualty thereto or condemnation thereof, together with interest thereon, to the payment of the Debt in such order, priority and
proportions as Lender shall deem to be appropriate in its discretion; 

 

    	 	9	 

     

    

  

(l)          if
the entire unpaid Debt is declared to be immediately due and payable, require TIC Borrower 1 and TIC Borrower 2, at their sole
cost and expense, to (i) convey the Property subject to this Security Instrument to a newly-formed limited liability company which
satisfies the requirements of Section 3.24 of the Loan Agreement (which entity shall be owned and Controlled by TIC Borrower 1
and TIC Borrower 2 in proportion to their tenant in common interest) pursuant to a duly recorded deed and a general assignment
that are each in form and substance acceptable to Lender, and pay any transfer, stamp or recording tax, costs and expenses, (ii)
deliver a date down endorsement to the Title Insurance Policy, which reflects the new ownership of the Property and that the Security
Instrument remains a first priority lien against such Property, and (iii) cause such new entity to assume all of the obligations
and liabilities of Borrower under the Loan Documents; provided, however, that if the requirements in the foregoing (i), (ii) and
(iii) are not satisfied within five (5) days after Lender’s written request, then Lender shall have an irrevocable power
of attorney coupled with an interest (which is hereby granted by Borrower) for the purpose of effectuating the requirements described
in the foregoing (i), (ii) and (iii) at Borrower’s sole cost and expense; and/or

 

(m)          pursue
such other remedies as Lender may have under applicable law.

 

In the event of a sale, by foreclosure,
power of sale or otherwise, of less than all of the Property, this Security Instrument shall continue as a lien and security interest
on the remaining portion of the Property unimpaired and without loss of priority. Notwithstanding the provisions of this Section
to the contrary, if any Event of Default as described in Section 10.1(f) of the Loan Agreement shall occur with respect to Borrower
or any SPE Component Entity, the entire unpaid Debt shall be automatically due and payable, without any further notice, demand
or other action by Lender.

 

Section 8.2           Application
of Proceeds. Upon the occurrence and during the continuance of any Event of Default beyond
the expiration of any applicable notice and/or cure periods, the purchase money, proceeds and avails of any disposition of the
Property (or any part thereof) and any other sums collected by Lender pursuant to the Note, this Security Instrument or the other
Loan Documents may, in each case, be applied by Lender to the payment of the Debt in such order, priority and proportions as Lender
in its sole discretion shall determine.

 

Section 8.3           Right
to Cure Defaults. Upon the occurrence and during the continuance of any Event of Default
beyond the expiration of any applicable notice and/or cure periods, Lender may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any obligation hereunder, make any payment or do any act required
of Borrower hereunder in such manner and to such extent as Lender may deem necessary to protect the security hereof. Lender or
Trustee is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Security Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys’ fees to the extent permitted by law), with interest as provided in this Section 8.3, shall
constitute a portion of the Debt and shall be due and payable to Lender upon demand. All such costs and expenses incurred by Lender
in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any such action or
proceeding shall bear interest at any default rate specified in the Loan Agreement, if any (the “Default Rate”),
for the period after notice from Lender that such cost or expense was incurred to the date of payment to Lender. All such costs
and expenses incurred by Lender or Trustee together with interest thereon calculated at the Default Rate shall be deemed to constitute
a portion of the Debt and be secured by this Security Instrument and the other Loan Documents and shall be immediately due and
payable upon demand by Lender therefor.

 

Section 8.4           Actions
and Proceedings. Lender or Trustee has the right to appear in and defend any action or
proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect its interest in the Property.

 

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Section 8.5           Recovery
of Sums Required To Be Paid. Lender shall have the right from time to time to take action
to recover any sum or sums which constitute a part of the Debt as the same become due, without regard to whether or not the balance
of the Debt shall be due, and without prejudice to the right of Lender thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Borrower existing at the time such earlier action was commenced.

 

Section 8.6           Other
Rights, etc. (a) The failure of Lender or Trustee to insist upon strict performance of
any term hereof shall not be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be relieved of Borrower’s
obligations hereunder by reason of (i) the failure of Lender or Trustee to comply with any request of Borrower or any guarantor
or indemnitor with respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce any of the
provisions hereof or of the Note or the other Loan Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any Person liable for the Debt or any portion thereof, or (iii) any agreement or stipulation by Lender
extending the time of payment or otherwise modifying or supplementing the terms of the Note, this Security Instrument or the other
Loan Documents.

 

(b)          It
is agreed that the risk of loss or damage to the Property is on Borrower, and Lender shall have no liability whatsoever for decline
in the value of the Property, for failure to maintain the insurance policies required to be maintained pursuant to the Loan Agreement,
or for failure to determine whether insurance in force is adequate as to the amount of risks insured. Possession by Lender shall
not be deemed an election of judicial relief if any such possession is requested or obtained with respect to any Property or collateral
not in Lender’s possession.

 

(c)          Lender
may resort for the payment of the Debt to any other security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender or Trustee may take action to recover the Debt, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Lender or Trustee thereafter to foreclose this Security Instrument. The rights of Lender or Trustee under
this Security Instrument shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others.
No act of Lender or Trustee shall be construed as an election to proceed under any one provision herein to the exclusion of any
other provision. Neither Lender or Trustee shall be limited exclusively to the rights and remedies herein stated but shall be entitled
to every right and remedy now or hereafter afforded at law or in equity.

 

Section 8.7           Right
to Release Any Portion of the Property. Lender may release any portion of the Property
for such consideration as Lender may require without, as to the remainder of the Property, in any way impairing or affecting the
lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except
to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by
Lender for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Lender may require
without being accountable for so doing to any other lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.

 

Section 8.8           Right
of Entry. Upon reasonable notice to Borrower, Lender and its agents shall have the right
to enter and inspect the Property at all reasonable times, subject to the rights of tenants under Leases.

 

    	 	11	 

     

    

  

Section 8.9           Bankruptcy.
(a) Upon the occurrence and during the continuance of an Event of Default beyond the expiration of any applicable notice and/or
cure periods, Lender shall have the right to proceed in its own name or in the name of Borrower in respect of any claim, suit,
action or proceeding relating to the rejection of any Lease, including, without limitation, the right to file and prosecute, to
the exclusion of Borrower, any proofs of claim, complaints, motions, applications, notices and other documents, in any case in
respect of the lessee under such Lease under the Bankruptcy Code.

 

(b)          If
there shall be filed by or against Borrower a petition under the Bankruptcy Code and Borrower, as lessor under any Lease, shall
determine to reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then Borrower shall give Lender not less than
ten (10) days’ prior notice of the date on which Borrower shall apply to the bankruptcy court for authority to reject the
Lease. Lender shall have the right, but not the obligation, to serve upon Borrower within such ten-day period a notice stating
that (i) Lender demands that Borrower assume and assign the Lease to Lender pursuant to Section 365 of the Bankruptcy Code and
(ii) Lender covenants to cure or provide adequate assurance of future performance under the Lease. If Lender serves upon Borrower
the notice described in the preceding sentence, Borrower shall not seek to reject the Lease and shall comply with the demand provided
for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance
by Lender of the covenant provided for in clause (ii) of the preceding sentence.

 

Section 8.10         Subrogation.
If any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against
the Property, then, to the extent of the funds so used, Lender shall be subrogated to all of the rights, claims, liens, titles,
and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former
rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor
of Lender and are merged with the lien and security interest created herein as cumulative security for the repayment of the Debt,
the performance and discharge of the Other Obligations.

 

Article
9 - Environmental Hazards

 

Section 9.1           Environmental
Covenants. Borrower has provided representations, warranties and covenants regarding environmental
matters set forth in the Environmental Indemnity and Borrower shall comply with the aforesaid covenants regarding environmental
matters.

 

Article
10 - Waivers

 

Section 10.1         Marshalling
and Other Matters. Borrower hereby waives, to the extent permitted by law, the benefit
of all Legal Requirements now or hereafter in force regarding appraisement, valuation, stay, extension, reinstatement and redemption
and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein. Further,
Borrower hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security
Instrument on behalf of Borrower, and on behalf of each and every Person acquiring any interest in or title to the Property subsequent
to the date of this Security Instrument and on behalf of all Persons to the extent permitted by Legal Requirements.

 

Section 10.2         Waiver
of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from
Lender or Trustee except with respect to matters for which this Security Instrument or the Loan Agreement specifically and expressly
provides for the giving of notice by Lender or Trustee to Borrower and except with respect to matters for which Borrower is not
permitted by Legal Requirements to waive its right to receive notice, and Borrower hereby expressly waives the right to receive
any notice from Lender or Trustee with respect to any matter for which this Security Instrument does not specifically and expressly
provide for the giving of notice by Lender or Trustee to Borrower.

 

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Section 10.3         Waiver
of Statute of Limitations. To the fullest extent permitted by applicable law, Borrower
hereby expressly waives and releases its right to plead any statute of limitations as a defense to the payment of the Debt or performance
of its Other Obligations.

 

Section 10.4         Waiver
of Counterclaim. To the extent permitted by applicable law, Borrower hereby waives the
right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against
it by Lender arising out of or in any way connected with this Security Instrument, the Loan Agreement, the Note, any of the other
Loan Documents, or the Obligations.

 

Section 10.5         Waiver
of Trial by Jury. BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW
OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER AND BORROWER IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.

 

Section 10.6         Waiver
of Foreclosure Defense. Borrower hereby waives any defense Borrower might assert or have
by reason of Lender’s failure to make any tenant or lessee of the Property a party defendant in any foreclosure proceeding
or action instituted by Lender.

 

Article
11 - Exculpation

 

Section 11.1         Exculpation.
The provisions of Article 12 of the Loan Agreement are hereby incorporated by reference into this Security Instrument to the same
extent and with the same force as if fully set forth herein.

 

Article
12 - Notices

 

Section 12.1         Notices.
All notices or other written communications hereunder shall be delivered in accordance with the applicable terms and conditions
of the Loan Agreement.

 

Notices to the Trustee
shall be sent as follows:

 

Brian Carr
c/o GRS/Title

901 East Byrd
Street, Suite 1510

Richmond, Virginia
23219

E-Mail: bcarr@grs-global.com

 

Article
13 - Applicable Law

 

Section 13.1         Governing
Law. The governing law and related provisions contained in Section 15.4 of the Loan Agreement
are hereby incorporated by reference as if fully set forth herein.

 

Section 13.2         Provisions
Subject to Applicable Law. All rights, powers and remedies provided in this Security Instrument
may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended
to be limited to the extent necessary so that they will not render this Security Instrument invalid, unenforceable or not entitled
to be recorded, registered or filed under the provisions of any applicable law. If any term of this Security Instrument or any
application thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other application of the
term shall not be affected thereby.

 

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Article
14 - Definitions

 

Section 14.1         General
Definitions. Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and
the word “Borrower” shall mean “each Borrower and any subsequent owner or owners of the Property or any part
thereof or any interest therein,” the word “Lender” shall mean “Lender and any of Lender’s successors
and assigns,” the word “Note” shall mean “the Note and any other evidence of indebtedness secured by this
Security Instrument,” “Trustee” shall mean “Trustee and any substitute Trustee of the estates, properties,
powers, trusts and rights conferred upon Trustee pursuant to this Security Instrument, the word “Property” shall include
any portion of the Property and any interest therein, and the phrases “attorneys’ fees”, “legal fees”
and “counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including,
but not limited to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Lender in protecting
its interest in the Property, the Leases and the Rents and enforcing its rights hereunder.

 

Article
15 - Miscellaneous Provisions

 

Section 15.1         No
Verbal Change. This Security Instrument, and any provisions hereof, may not be modified,
amended, waived, extended, changed, discharged or terminated verbally or by any act or failure to act on the part of Borrower,
Lender or Trustee, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.

 

Section 15.2         Successors
and Assigns. This Security Instrument shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.

 

Section 15.3         Inapplicable
Provisions. If any term, covenant or condition of the Loan Agreement, the Note or this
Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Loan Agreement, the Note and this Security
Instrument shall be construed without such provision.

 

Section 15.4         Headings,
etc. The headings and captions of various Sections of this Security Instrument are for
convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions
hereof.

 

Section 15.5         Number
and Gender. Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice
versa.

 

Section 15.6         Entire
Agreement. This Security Instrument and the other Loan Documents contain the entire agreement
of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among
or between such parties, whether oral or written, are superseded by the terms of this Security Instrument and the other Loan Documents.

 

Section 15.7         Limitation
on Lender’s Responsibility. No provision of this Security Instrument shall operate
to place any obligation or liability for the control, care, management or repair of the Property upon Lender, nor shall it operate
to make Lender responsible or liable for any waste committed on the Property by the tenants or any other Person, or for any dangerous
or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting
in loss or injury or death to any tenant, licensee, employee or stranger. Nothing herein contained shall be construed as constituting
Lender a “mortgagee in possession.”

 

    	 	14	 

     

    

  

Section 15.8         Joint
and Several Liability. If Borrower consists of more than one Person, the obligations and
liabilities of each such Person hereunder shall be joint and several.

 

Section 15.9         Sole
Discretion of Lender. Whenever pursuant to this Security Instrument, Lender exercises
any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise
specifically herein provided) be in the sole (but reasonable) discretion of Lender and shall be final and conclusive.

 

Section 15.10        Subrogation.
If any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against
the Property, then, to the extent of the funds so used, Lender shall be subrogated to all of the rights, claims, liens, titles,
and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former
rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor
of Lender and are merged with the lien and security interest created herein as cumulative security for the payment, performance
and discharge of the Obligations (including, but not limited to, the payment of the Debt).

 

Section 15.11        Variable
Interest Rate. The Loan secured by this Security Instrument is a variable interest rate
loan, as more particularly set forth in the Loan Agreement.

 

Article
16 - Deed of Trust Provisions

 

Section 16.1         Concerning
the Trustee. Trustee shall be under no duty to take any action hereunder except as expressly
required hereunder or by law, or to perform any act which would involve Trustee in any expense or liability or to institute or
defend any suit in respect hereof, unless properly indemnified to Trustee’s reasonable satisfaction. Trustee, by acceptance
of this Security Instrument, covenants to perform and fulfill the trusts herein created, being liable, however, only for gross
negligence or willful misconduct, and hereby waives any statutory fee and agrees to accept reasonable compensation, in lieu thereof,
for any services rendered by Trustee in accordance with the terms hereof. Trustee may resign at any time upon giving thirty (30)
days’ notice to Borrower and to Lender. Lender may remove Trustee at any time or from time to time and select a successor
trustee. In the event of the death, removal, resignation, refusal to act, or inability to act of Trustee, or in its sole discretion
for any reason whatsoever Lender may, without notice and without specifying any reason therefor and without applying to any court,
select and appoint a successor trustee, by an instrument recorded wherever this Security Instrument is recorded and all powers,
rights, duties and authority of Trustee, as aforesaid, shall thereupon become vested in such successor. Such substitute trustee
shall not be required to give bond for the faithful performance of the duties of Trustee hereunder unless required by Lender. The
procedure provided for in this paragraph for substitution of Trustee shall be in addition to and not in exclusion of any other
provisions for substitution, by law or otherwise.

 

Section 16.2         Trustee’s
Fees. Borrower shall pay all reasonable costs, fees and expenses incurred by Trustee and
Trustee’s agents and counsel in connection with the performance by Trustee of Trustee’s duties hereunder and all such
costs, fees and expenses shall be secured by this Security Instrument. Notwithstanding anything to the contrary contained herein
or in any other Loan Documents, Trustee hereby acknowledges and agrees that no fees or other compensation shall be payable to Trustee
hereunder or otherwise in connection with the Loan or Loan Documents except in connection with (a) a sale of the Property in connection
with an exercise of remedies hereunder and/or under the other Loan Documents or (b) a release hereof in accordance with the applicable
terms and conditions hereof.

 

    	 	15	 

     

    

  

Section 16.3         Certain
Rights. With the approval of Lender, Trustee shall have the right to take any and all
of the following actions: (i) to select, employ, and advise with counsel (who may be, but need not be, counsel for Lender) upon
any matters arising hereunder, including the preparation, execution, and interpretation of the Note, this Security Instrument or
the Other Security Documents, and shall be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute
any of the trusts and powers hereof and to perform any duty hereunder either directly or through his/her agents or attorneys, (iii)
to select and employ, in and about the execution of his/her duties hereunder, suitable accountants, engineers and other experts,
agents and attorneys-in-fact, either corporate or individual, not regularly in the employ of Trustee, and Trustee shall not be
answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney-in-fact,
if selected with reasonable care, or for any error of judgment or act done by Trustee in good faith, or be otherwise responsible
or accountable under any circumstances whatsoever, except for Trustee’s gross negligence or bad faith, and (iv) any and all
other lawful action as Lender may instruct Trustee to take to protect or enforce Lender’s rights hereunder. Trustee shall
not be personally liable in case of entry by Trustee, or anyone entering by virtue of the powers herein granted to Trustee, upon
the Property for debts contracted for or liability or damages incurred in the management or operation of the Property. Trustee
shall have the right to rely on any instrument, document, or signature authorizing or supporting an action taken or proposed to
be taken by Trustee hereunder, believed by Trustee in good faith to be genuine. Trustee shall be entitled to reimbursement for
actual expenses incurred by Trustee in the performance of Trustee’s duties hereunder and to reasonable compensation for such
of Trustee’s services hereunder as shall be rendered.

 

Section 16.4         Retention
of Money. All moneys received by Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys
(except to the extent required by applicable law) and Trustee shall be under no liability for interest on any moneys received by
Trustee hereunder.

 

Section 16.5         Perfection
of Appointment. Should any deed, conveyance, or instrument of any nature be required from
Borrower by any Trustee or substitute trustee to more fully and certainly vest in and confirm to Trustee or substitute trustee
such estates rights, powers, and duties, then, upon request by Trustee or substitute trustee, any and all such deeds, conveyances
and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Borrower.

 

Section 16.6         Succession
Instruments. Any substitute trustee appointed pursuant to any of the provisions hereof
shall, without any further act, deed, or conveyance, become vested with all the estates, properties, rights, powers, and trusts
of its or his/her predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless,
upon the written request of Lender or of the substitute trustee, Trustee ceasing to act shall execute and deliver any instrument
transferring to such substitute trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts
of Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and moneys held by such Trustee to
the substitute trustee so appointed in Trustee’s place.

 

Article
17 - State-Specific Provisions

 

Section 17.1         Principles
of Construction. In the event of any inconsistencies between the terms and conditions
of this Article 17 and the terms and conditions of this Security Instrument, the terms and conditions of this Article 17 shall
control and be binding.

 

    	 	16	 

     

    

  

Section 17.2         Future
Advances. This Security Instrument is given to secure all present and future obligations of the Borrower to Lender.
The period in which future obligations may be incurred and secured by this Security Instrument is the period between the date hereof
and that date which is the earlier of (i) the stated maturity date of the Note, as the same may be extended in accordance with
the terms of the Loan Agreement or (ii) thirty (30) years from the date hereof. Subject to the remaining provisions of this Section
17.2, the maximum principal amount, including present and future obligations, which may be secured by this Security Instrument
at any one-time is Twenty-One Million Two Hundred Thousand and 00/100 Dollars ($21,200,000.00). Any additional amounts advanced
by Lender pursuant to the provisions of this Security Instrument shall be deemed necessary expenditures for the protection of the
security. The Borrower (and the maker of the Note, if the maker is a different party) does not need to sign any instrument or notation
evidencing or stipulating that future advances are secured by this Security Instrument.

 

Section 17.3         Power
of Sale. Trustee is hereby granted a power of sale, and Trustee, after having recorded and given all notices and conducted
such hearings a required by law, upon the expiration of such time as is required by law, may sell the Property and all estate,
right, title, interest, claim, and demand of Borrower therein, at one or more sales, as an entity or in parcels or lots (regardless
of the manner in which the Property may be classified), with such elements of real and/or personal property (and, to the extent
permitted by applicable law, may elect to deem all of the Property to be real property for purposes thereof), and at such time
or place and upon such terms as Trustee may deem expedient or as may be required by applicable law. In the event of a sale, by
foreclosure or otherwise, of less than all of the Property, this Security Instrument shall continue as a lien and security interest
on the remaining portion of the Property. Notwithstanding anything in this Security Instrument to the contrary, no sale of any
portion of the Property under the power of sale contained in this Security Instrument shall occur until Lender and Trustee shall
have complied with the provisions of Chapter 45 of the North Carolina General Statutes relating to the power of sale foreclosures,
including, without limitation, the requirement for notice and a hearing and the distribution of proceeds from any sale.

 

Section 17.4         Maturity
Date. The maturity date hereof shall be defined and determined in accordance with the Loan Agreement, but in no event
shall be later than November 9, 2022.

 

Section 17.5         Attorney
Fees. Notwithstanding anything herein or in any other Loan Document to the contrary, whenever the term “reasonable
attorneys’ fees” is used with respect to, or otherwise applicable regarding, solely the Property subject to this Security
Instrument, it shall mean reasonable attorney fees actually incurred (based on the actual number of hours worked by outside legal
counsel and paralegals multiplied by the usual and customary hourly rate then in effect) and actual out-of-pocket legal expenses,
notwithstanding any statutory presumption set forth in NCGS § 6-21.2 or otherwise to the contrary.

 

Section 17.6         
Substitute Trustee. Lender may, at any time and from time
to time, without notice, at the Lender’s discretion, remove Trustee and appoint a substitute trustee (the “Substitute
Trustee”) by filing in the records where this Security Instrument is recorded an instrument affecting such removal and
appointment. A Substitute Trustee shall be vested with title to the Property and with all rights, powers, and duties of the original
Trustee herein and all provisions hereof pertaining to the Trustee shall similarly affect any Substitute Trustee. The necessity
of Trustee, or any Substitute Trustee, making oath or giving bond is expressly waived.

 

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Section 17.7         Trustee
Commission. If a foreclosure proceeding is commenced by the Trustee, Trustee shall be entitled to receive a reasonable
and customary commission, but in no event shall such commission exceed an amount that is reasonable in light of the complexity
of the matter and the hours expended by the Trustee, and shall become earned in accordance with the following schedule: one-fourth
(1/4) thereof as of the date Trustee requests a notice of hearing on the right to foreclosure; one-half (1/2) thereof after the
issuance of said notice; three-fourths (3/4) thereof after such hearing; and the full commission after the initial sale. If a foreclosure
proceeding is terminated prior to its completion, Trustor shall pay all expenses incurred by the Trustee, including reasonable
attorney fees, plus a partial commission computed in accordance with this paragraph.

 

Section 17.8         Fixture
Filing. This Security Instrument shall constitute a financing statement filed as a fixture filing in accordance with
NCGS § 25-9-502 (or any amendment thereto). For purposes of complying with the requirements of NCGS § 25-9-502, the name
of Borrower and Lender and the respective addresses of Borrower and Lender are set forth on the first page of this Security Instrument;
the types or items of collateral are described in the definition of Property; and the Property is owned by the Borrower. The collateral
is or includes fixtures.

 

Article
18 - Tenancy in Common

 

TENANCY IN COMMON

 

Section 18.1         Joint
and Several Liability. All of the representations, warranties, covenants, agreements,
liabilities and obligations of Borrower hereunder are joint and several. Furthermore, all representations, warranties, covenants,
agreements, grants and pledges made by Borrower hereunder shall be deemed made by each of TIC Borrower 1 and TIC Borrower 2 individually
and both of TIC Borrower 1 and TIC Borrower 2 together, unless the context requires otherwise.

 

Section 18.2         Waivers.
Until the Debt is indefeasibly paid in full and the Other Obligations are satisfied in full, each Borrower expressly waives (i)
any right to file an action for partition of the Property or to compel any sale thereof and covenants that it will not exercise
any such right, (ii) any right to assert a lien against the interest of the other Borrower in the Property and covenants that it
shall not assert such a lien, including any liens or charges which a Borrower may be entitled to assert under TIC Agreement, (iii)
any and all rights to encumber the other Borrower’s tenant-in-common interest in the Property, and (iv) any and all rights
of subrogation, reimbursement, contribution, indemnity or otherwise arising by contract or operation of law (including, without
limitation, any lien rights) from or against the other Borrower. 

 

Section 18.3         Subordination.
Each Borrower hereby agrees that (i) any purchase rights or rights of first refusal with respect to any interest in the Property
in favor of either Borrower shall be subject and subordinate to the Debt, this Security Instrument and the other Loan Documents
(and any purchase must be in accordance with the terms of the Loan Agreement and subject to the liens of the Security Instrument
and the other Loan Documents), (ii) any lien rights between each Borrower shall be subject and subordinate to the Debt, this Security
Instrument and the other Loan Documents, and (iii) all indemnities and other rights and remedies of each Borrower pursuant to or
in connection with the TIC, including any rights of payment (including the payment of any interest thereon, costs of collection,
deficiency payments and attorneys’ fees) shall be subject and subordinate to the Debt, this Security Instrument and the other
Loan Documents.

 

    	 	18	 

     

    

  

Section 18.4         Negative
Covenants. Until the Debt is indefeasibly paid in full and the Other Obligations are satisfied
in full:

 

(a)          Borrower
shall not, without Lender’s prior written consent: (i) modify, change, supplement, alter or amend any of the terms of the
TIC Agreement; (ii) waive or discharge any rights or obligations under the TIC Agreement; or (iii) terminate the TIC Agreement.
Lender, at its option, may require that Borrower obtain a Rating Agency Confirmation from each of the Rating Agencies with respect
to any requested or proposed modification, amendment or termination of the TIC Agreement.

 

(b)          No
payments, including payments of an indemnity obligation under the TIC Agreement, due by one Borrower to the other Borrower under
the TIC Agreement shall be made or accepted.

 

(c)          There
shall never be more than two tenants in common owning the Property or any interest therein and, without limiting the foregoing,
each Person owning a tenant in common interest in the Property must have agreed to and assumed the obligations and liabilities
under the TIC Agreement.

 

(d)          No
Borrower shall bring any action, proceeding, claim or litigation of any kind, or pursue arbitration, against any other Borrower,
any Sponsor or any Restricted Party, unless Lender’s prior written consent is obtained in each instance, and each Borrower
agrees that any such action, proceeding, claim or litigation is and shall be shall be subordinate to the prior indefeasible payment
in full of the Debt.

 

Section 18.5         Conflict/Inconsistency.
In the event of any conflict or inconsistency between Article 18 of this Security Instrument and the TIC Agreement, the provisions
of Article 18 shall govern and control.

 

    	 	19	 

     

    

  

[NO FURTHER TEXT ON THIS PAGE]

 

    	 	20	 

     

    

  

IN WITNESS WHEREOF,
this Security Instrument has been executed by the undersigned as of the day and year first above written.

 

	 	BORROWER
	 	 
	 	BORROWER:
	 	 
	 	PMI GREENSBORO, LLC
	 	A Delaware limited liability company
	 	 
	 	By: Peter Mueller, Inc.,
	 	A Virginia corporation
	 	Its: Manager (and sole member)
	 	 
	 	By: 	/s/ Kurt A.
    Schirm
	 	Name: Kurt A. Schirm
	 	Title: President

 

STATE OF TENNESSEE

COUNTY OF BLOUNT

 

I, Rachel Wiers, a Notary Public of Blount
County, North Carolina, do hereby certify that Kurt A. Schirm, President of PETER MUELLER, INC., a Virginia corporation, Manager
and sole member of PMI GREENSBORO, LLC, a Delaware limited liability company, personally came before me this day and acknowledged
that he, as President, being authorized to do so, executed the foregoing on behalf of PETER MUELLER, INC., Manager and sole member
of PMI GREENSBORO, LLC.

 

Witness my hand and official seal this
the 27 day of October, 2017

 

	/s/ Rachel Wiers	 
	Notary Public	 
	Name: 	Rachel Wiers	 

 

My Commission expires: 05/27/2020

 

[SEAL]

 

[signature page to Hampton Inn Greensboro
Deed of Trust, security Agreement, Assignment of Leases and Fixture Filing]

 

    	 	21	 

     

    

  

	 	BORROWER:
	 	 
	 	MDR GREENSBORO, LLC
	 	A Delaware limited liability company
	 	 
	 	By: MEDALIST DIVERSIFIED HOLDINGS, L.P.
	 	       A Delaware limited partnership
	 	       Its: Sole owner

 

	 	By: MEDALIST DIVERSIFIED REIT, INC.
	 	       A Maryland corporation
	 	       Its: General Partner

 

	 	By: 	/s/ William R. Elliott
	 	       Name: William R. Elliott
	 	       Its: Co-President

 

STATE OF VIRGINIA

CITY OF RICHMOND

 

I, Laura C. Burton, a Notary Public of
Richmond City, Virginia, do hereby certify that William R. Elliott, Co-President of MEDALIST DIVERSIFIED REIT, INC., a Maryland
corporation, General Partner of of MEDALIST DIVERSIFIED HOLDINGS, L.P., a Delaware limited partnership, the Sole Owner ofMDR GREENSBORO,
LLC, a Delaware limited liability company, personally came before me this day and acknowledged that he, as President, being authorized
to do so, executed the foregoing on behalf of MEDALIST DIVERSIFIED REIT, INC., General Partner of MEDALIST DIVERSIFIED HOLDINGS,
L.P., Sole Owner of MDR GREENSBORO, LLC.

 

Witness my hand and official seal this
27 day of Oct., 2017.

 

	/s/ Laura C. Burton	      [SEAL]
	Notary Public	 
	Print Name: 	Laura C. Burton	 

 

My Commission expires: 11-30-20

 

[signature page to Hampton Inn Greensboro
Deed of Trust, security Agreement, Assignment of Leases and Fixture Filing]

 

    	 	22	 

     

    

  

EXHIBIT
A

 

LEGAL DESCRIPTION

 

BEING all of Lot 2, Idlewild/Deep River
Property according to a plat duly recorded in Book of Maps 115, Page 140, Guilford County Registry.

 

TOGETHER WITH all right, title and interest
to that certain storm water detention easement as through and across the easement estate created by Declaration of Covenants, Conditions
and Restrictions, dated March 28, 1995, recorded in Book 4297, Page 1361, Guilford County Registry.

 

TOGETHER WITH all right, title and interest
in and to the appurtenant rights and easements set out in the Declaration of Protective Covenants dated November 18, 1987 of record
in Book 3628, Page 24; as amended by First Amendment to Declaration of Protective Covenants dated as of January 3, 1989 and recorded
in Book 3721, Page 1467, by Second Amendment to Declaration of Protective Covenants dated as of April 25, 1989 and recorded in
Book 3741, Page 871, by Third Amendment to Declaration of Protective Covenants dated as of Apri1 25, 1989 and recorded in Book
3741, Page 879, by Supplementary Declaration of Protective Covenants dated as of January 21, 1994 and recorded in Book 4262, Page
1986, and by Fifth Amendment to Declaration of Protective Covenants dated as of April 4, 1995 and recorded in Book 4297, Page 1309;
as affected by Agreement with respect to Declaration of Restrictions Covenants dated as of April 13, 1995 and recorded in Book
4297; Page 1325, all in Guilford County Registry.Exhibit 10.17

 

SECURITY
AGREEMENT

 

This
SECURITY AGREEMENT (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time,
this "Agreement") is entered into as of [                , 2017],
by and between MDR GREENSBORO HI TRS, LLC, a Delaware limited liability company, having an address at [                                                                                        ] (together with its
respective permitted successors and assigns, collectively "Debtor" and/or "Tenant'), and BENEFIT
STREET PARTNERS REALTY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an address at 9 West 57th Street,
Suite 4920, New York, New York 10019, Attention:
Micah Goodman, General Counsel (together with its successors and/or assigns and any servicer, "Secured
Party").

 

WITNESSETH:

 

A.
Pursuant to the Loan Agreement dated as of the date hereof (as amended, modified, supplemented, restated or replaced from time
to time, the "Loan Agreement"), among Secured
Party, PMI Greensboro, LLC, a Delaware limited liability
company ("TIC Borrower 1"), and MDR Greensboro, LLC, a Delaware limited liability company ("TIC Borrower 2"
and, together with TIC Borrower 1 and their respective permitted successors and assigns, "Borrower"), Secured Party has
agreed to provide financing to Borrower secured by a Deed of Trust, Security Agreement, Assignment of Leases and Fixture Filing
dated as of the date hereof (as amended, modified, supplemented, restated or replaced from time to time,
the "Security Instrument"),
on certain real property owned by Borrower and commonly known as the Hilton Inn Greensboro and more
particularly described on Exhibit A attached to the Security Instrument (the "Property") (capitalized terms used herein
and not herein defined shall have the meanings assigned to such terms in the Loan Agreement);

 

B.
Borrower leased the Property to Tenant pursuant to that certain Lease Agreement between Borrower and Tenant dated of even date
herewith (as the same may be amended, supplemented or modified from time to time, the "Lease");

 

C. Tenant
operates a hotel on the Property (the "Hotel”) and Marshall Hotels and Resorts, Inc., a Maryland corporation
("Manager"), manages the Hotel pursuant to that certain Management Agreement by ad between Tenant and Manager
dated as of the date hereof (the "Management Agreement ");

 

D. Pursuant
to certain of the Loan Documents, Borrower, Tenant and Manager have agreed to deposit all Rents in the Clearing Account as and
when required by the terms of the Loan Documents;

 

E. Debtor
hereby acknowledges and agrees that Secured Party is unwilling to make the Loan to Borrower unless Debtor grants Secured Party
the security interests described herein and Debtor will benefit from Secured Party making the Loan to Borrower.

 

NOW
THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration the sufficiency
of which is hereby acknowledged, the parties hereto agree
as follows:

 

1.          Grant.

 

To
secure the payment, performance and observance of the Obligations, Debtor hereby grants to Secured Party a continuing security
interest in all of the Collateral (as defined and described below) (the ("Security
Interest").  The Security Interest attaches immediately upon the execution hereof, or, as to any after-acquired Collateral,
as soon as Debtor acquires rights therein.

 

     

     

    

  

2.          Description
of Collateral

 

All
fixtures and personal property of any kind whatsoever now owned or hereafter acquired by Debtor, whether tangible or intangible,
which are or will be placed upon, derived from, or used in any connection with the Property and the improvements thereon (the "Improvements").
The foregoing property shall include all Accounts, Chattel Paper, Cash Proceeds, Commercial Tort Claims, Deposit Accounts, Documents,
Electronic Chattel Paper, Equipment, Fixtures, Goods, General
Intangibles, Instruments, Inventory, Investment Property, Letter of Credit Rights, Noncash Proceeds, Software, Supporting
Obligations and Tangible Chattel
Paper (as those terms are defined in the UCC (as defined below)),
including specifically and without
limitation all furniture, furnishings, goods, supplies, office equipment, office machines, office furnishings, fixtures, machines,
plans and specifications, books and records, contracts and contract
rights, licenses (including,
without limitation,
any alcoholic beverage license) causes of
action, claims, condemnation proceeds,
profits, concessions, fees, leases and lease guaranties,
rents, security deposits, utility deposits, utility contracts,
maintenance contracts and agreements, management contracts, service contracts, negotiable instruments, instruments, letters of
credit, policies and proceeds of insurance, cash bank accounts,
and refunds for taxes or premiums of any insurance, equipment, fixtures, furnishings, inventory and supplies, landscaping equipment,
tools and supplies, mowers,
sprinkler and irrigation systems,
facilities and equipment, accounts receivable and any Rents, including, without
limitation any payments
from users of the Hotel and
all other revenue arising from the operation of the Hotel
including, without limitation, income
and revenues from guest rooms, food
and beverages, banquets, telephone services laundry,
vending, television, movies, meetings,
and such other activities
related to the ownership, operation or management of the
Hotel all of which shall, to the extent provided in the
Loan Agreement, be deposited
in the Clearing Account. All of the foregoing property is collectively referred to herein as the
"Collateral."

 

With
respect to the defined terms in this Section 2, "UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of Delaware.

 

For
the balance of this Agreement, "UCC" shall mean the Uniform Commercial Code as in effect on the date hereof in the State
of Delaware; provided that if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection
of the Security Interests in any
of the Collateral or the availability of
any remedy hereunder is governed
by the Uniform Commercial Code as in effect on
or after the date hereof in any other jurisdiction, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such
remedy.

 

3.          Security
for Obligations

 

This Agreement
secures the payment and performance of the Obligations.

 

4.          Debtor
Remains Liable

 

Anything
herein to the contrary notwithstanding: (a) Debtor shall remain liable under the contracts and agreements included in the Collateral
to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement
had not been executed; (b) the exercise by Secured Party of any of the rights hereunder
shall not release Debtor from any of its duties or obligations under the contracts and agreements included in the Collateral; (c)
Secured Party shall have no obligation or liability under the contracts and agreements included in the Collateral by reason of
this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of Debtor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder; and (d) Secured Party shall not have any liability in
contract or tort for Debtor's acts or omissions.

 

    	 	2	 

     

    

 

5.          Representations
and Warranties

 

Debtor represents and warrants as follows:

 

a.           Location
of Equipment. Inventory
and Fixtures. All
of the Equipment, Inventory and Fixtures are located at the Property. All hereafter acquired or arising Equipment, Inventory or
Fixtures will be located at the Property.

 

b.           State
of Organization. Debtor was organized and remains organized solely under the laws of the state identified in the first paragraph
of this Agreement.

 

c.           Ownership
of Collateral; Bailees.
Debtor owns the Collateral, and will own all after-acquired Collateral, free and clear of any lien other than Permitted Encumbrances.
No effective financing statement or other form of lien notice covering all or any part of the Collateral is on file in any recording
office and none of the Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor. No other Person
has Control (as defined below) of any of the Collateral. As used herein "Control' shall mean the manner in which
"control" is achieved under the UCC with respect to that particular item of Collateral.

 

d.           Office
Locations; Fictitious Names. The mailing address,
chief place of business, chief executive office and office where Debtor keeps its books and records relating to the Accounts, Documents,
General Intangibles, Instruments and Investment Property is located at the place specified on Schedule I. Debtor has no
place of business except those separately set forth on Schedule I.
Debtor does not do business and has not done business during the past five years under any trade name
or fictitious business name.

 

e.           Perfection.
This Agreement and all necessary UCC filings (provided Secured Party properly records such UCC filings) together create a valid,
perfected, first priority (except as provided in the UCC) security interest in the Collateral (other than Deposit Accounts for
which there is no control agreement), securing the payment of the Obligations, and all filings (other than continuation statements),
registrations, recordings and other actions necessary or desirable to create, perfect and protect such security interests have
been duly taken (other than Deposit Accounts for which there is no control agreement), and such security interests are entitled
to all of the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction
which relates to perfected security interests.

 

f.            Governmental
Authorizations; Consents. No authorization, approval or other action by, and no notice to or filing with, any domestic or foreign
governmental authority or regulatory body or consent of any other person is required either (a) for the grant by Debtor of the
Security Interests granted hereby or for the execution, delivery or performance of this Agreement by Debtor or (b) the perfection
of the Security Interests granted hereby and pursuant to any other Loan Documents, (except for the filing UCC financing statements
with the appropriate jurisdiction); or (c) the exercise by Secured Party of its rights and remedies hereunder.

 

g.           Accounts.
Each existing Account constitutes, and each hereafter arising Account will constitute, the legally valid and binding obligation
of the Account Debtor (as defined in the UCC) obligated to pay the same. No Account Debtor has any defense, set-off, claim or counterclaim
against Debtor that can be
asserted against Secured Party, whether in any proceeding
to enforce Secured Party's rights in the Collateral or otherwise except defenses, setoffs, claims or counterclaims that are not,
in the aggregate, material to the value of the Accounts. No Account is, nor will any hereafter arising Account be, evidenced by
a promissory note or other Instrument.

 

    	 	3	 

     

    

 

h.           Chattel
Paper. As of the date hereof, Debtor does not hold Chattel Paper in the
ordinary course of its business conducted at the Property.

 

i.            Commercial
Tort Claims.  As of the date hereof, Debtor does not own any Commercial
Tort Claims with respect to
the Property.

 

j.            Inventory.
Except for the rights of Franchisor, no Inventory is subject to any licensing, patent, trademark,
trade name or copyright agreement with any Person that restricts Debtor's ability
to sell the Inventory.

 

6.          Further
Assurance; Covenants.

 

a.           Other
Documents and Actions. Debtor will, from time to time, at its expense,
promptly execute and deliver
all further instruments and documents and take
all further action that may be necessary or desirable, or that Secured Party may reasonably request, in order to create, perfect
and protect the Security Interests or to enable Secured
Party to exercise and enforce its rights and
remedies hereunder or under any other Loan Document with respect
to any Collateral. Without limiting the generality of the foregoing, Debtor will: (a) authorize the filing of financing or continuation
statements, or amendments thereto, and execute and/or authorize the filing of such other instruments, documents or notices, as
Secured Party may reasonably request, in order to create, perfect and protect the Security Interests; (b) at any reasonable time,
upon demand by Secured Party, allow inspection of the Collateral by Secured Party or Persons designated by Secured Party
and allow Secured Party to examine
and make copies of the records of Debtor related thereto, and to discuss the Collateral and
the records of Debtor with respect thereto with, and to be advised as to the same
by, Debtor's officers and employees and, after
the occurrence and during the continuance of an Event of Default, with any other Person which is or may be obligated with
respect to any Collateral;
and (c) upon Secured Party's reasonable request, appear in and defend any action or proceeding that may affect Debtor's title to
or Secured Party's security interest in the Collateral.

 

b.           Secured
Party Authorized. Debtor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto (or similar documents required by any laws of any applicable
jurisdiction), relating to all or any part of the Collateral without
the signature of Debtor.

 

c.           Corporate
or Name Change.  Debtor will give Secured Party at least thirty (30) days
prior written notice of any change in Debtor's
jurisdiction of organization, name, identity, mailing address, jurisdiction of organization
or corporate structure. With respect to any such change, Debtor will
execute such instruments, documents and notices and take such actions as Secured
Party reasonably deems necessary or desirable to create, perfect and protect the Security Interests.

 

d.           Business
Locations. Subject to the next sentence, Debtor will keep the Collateral
(other than Collateral in the possession
of Secured Party and cash on
deposit in the Clearing Account) at the Property. Debtor will give Secured Party at least thirty (30) days prior written
notice of any change in Debtor's principal place of business or of any new location
of business or any new location for any of the Collateral. With respect to any new location (which in any event shall be within
the continental United States), Debtor will execute such instruments, documents
and notices and take such actions as Secured Party deems necessary to create, perfect and protect the Security Interests.

 

    	 	4	 

     

    

 

e.           Bailees.
No Collateral shall at any time be in the possession or control of any warehouseman, bailee or any of Debtor's agents or processors
without Secured Party's prior written consent. Debtor shall, upon the request of Secured Party, notify any such warehouseman, bailee,
agent or processor of the Security Interests created hereby and shall instruct such Person to hold all such Collateral for Secured
Party's account subject to Secured Party's instructions and shall obtain an acknowledgement from such Person that such Person holds
the Collateral for Secured Party's benefit. To the extent a Document is issued with respect to any Collateral in the possession
or control of any warehouseman, bailee or any of Debtor's agents or processors, such Document shall be delivered to Secured Party.

 

f.            Accounts. Collection of Accounts and distribution of such proceeds shall, at all times, be conducted
in accordance with Article 8 of the Loan Agreement.

 

g.           General
Intangibles. Debtor shall
use all commercially reasonable efforts to obtain any consents, waivers or agreements necessary to enable Secured Party to exercise
remedies hereunder and under the other Loan Documents during the continuance of an Event of Default with respect to any of Debtor's
rights under any General Intangibles, including Debtor's rights as a licensee of computer software.

 

h.           Protection
of Collateral. Debtor
will do nothing to impair the rights of Secured Party .in
the Collateral. Debtor will
at all times keep the Collateral insured in favor of the Secured Party in compliance with
the requirements of the Loan Documents. Debtor assumes all liability and responsibility
in connection with the Collateral acquired by it, and the liability of Debtor to pay the Obligations shall in no way be affected
or diminished by reason of the fact that such Collateral may be lost, stolen, damaged, or for any reason whatsoever unavailable
to Debtor.

 

i.            Taxes
and Claims.  Debtor will pay when due all property and other taxes, assessments
and governmental charges imposed upon, and all claims against, the Collateral; provided that no such tax, assessment or charge
need be paid if Debtor is contesting same in good faith by appropriate proceedings promptly instituted and diligently conducted
and if Debtor has established such reserve or other appropriate provision if any as shall be required in conformity with GAAP;
and provided further that the same can be
contested without risk of loss
or forfeiture or material impairment of any of the Collateral or the use thereof.

 

j.           Collateral
Description. Debtor will furnish to Secured Party, from time to time upon request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with the Collateral as Secured Party may reasonably request,
all in reasonable detail. Debtor will, promptly upon request, provide to Secured Party all information and evidence it may reasonably
request concerning the Collateral, and in particular the Accounts, to enable Secured Party to enforce the provisions of this Agreement.

 

k.          Records
of Collateral. Debtor shall keep full and accurate
books and records relating to the Collateral.

 

l.          
Federal Claims. Debtor shall notify Secured Party
of any Collateral which, to its best knowledge, constitutes a claim against the United States government or any instrumentality
or agency thereof, the assignment of which claim is restricted by federal law. Upon the request of Secured Party, Debtor shall
take such steps as may be necessary to comply with any applicable federal assignment of claims laws.

 

    	 	5	 

     

    

 

7.          Remedies

 

If
any event of Default shall have occurred and be continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein, under the Loan Documents or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected Collateral) and also may:
(i) require Debtor to, and Debtor hereby agrees that it will, at its expense and upon request of Secured Party forthwith, assemble
all or part of the Collateral as directed by Secured Party and make it available to Secured Party at any place or places designated
by Secured Party, in which event Debtor shall at its own expense (A) forthwith cause the same to be moved to the place or places
so designated by Secured Party and there delivered to Secured Party, (B) store and keep any Collateral so delivered to Secured
Party at such place or places pending further action by Secured Party, and (C) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain the Collateral
in good condition; (ii) withdraw all cash in the Clearing Account, Cash Management Account and/or Reserve Accounts and apply such
monies in accordance with the Loan Agreement; and (iii) without notice, except as specified below, sell, lease, license or otherwise
dispose of the Collateral or any part thereof by one or more contracts, in one or more parcels at public or private sale, and without
the necessity of gathering at the place of sale of the property to be sold, at any of Secured Party's offices or elsewhere, at
such time or times, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as Secured
Party may deem commercially reasonable.

 

Debtor
agrees that, to the extent notice of sale shall be required by law, a reasonable authenticated notification of disposition shall
be a notification given at least ten (10) days prior to any such sale and such notice shall (i) describe Secured Party and Debtor,
(ii) describe the Collateral that is the subject of the intended disposition, (iii) state the method of intended disposition, (iv)
state that the Debtor is entitled to an accounting of the Obligations and stating the charge, if any, for an accounting, and (v)
state the time and place of any public disposition or the time after which any private sale is to be made. At any sale of the Collateral,
if permitted by law, Secured Party may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness)
for the purchase, lease, license or other disposition of the Collateral or any portion thereof for the account of Secured Party.
Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may disclaim any warranties that might arise in connection with the sale, lease, license or other disposition
of the Collateral and shall have no obligation to provide any warranties at such time. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. To the extent permitted by law, Debtor hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter enacted.

 

Upon
the occurrence and during the continuance of an Event of Default, Secured Party or its agents or attorneys shall have the right
without notice or demand or legal process (unless the same shall be required by applicable law), personally, or by agents or attorneys,
(i) to enter upon, occupy and use the Property until the Obligations are paid in full without any obligation to pay rent, to render
the Collateral useable or saleable and to remove the Collateral or any part thereof therefrom to the premises of Secured Party
or any agent or bailee of Secured Party for such time as Secured Party may desire in order to effectively collect or liquidate
the Collateral and use in connection with such removal any and all services, supplies and other facilities of Debtor; (ii) to take
possession of Debtor's original books and records with respect to the operation of the Property, to obtain access to Debtor's data
processing equipment, computer hardware and software relating to the Collateral and to use all of the foregoing and the information
contained therein in any manner Secured Party deems appropriate.

 

    	 	6	 

     

    

 

Debtor
acknowledges and agrees that a breach of any of the covenants contained herein will cause irreparable injury to Secured Party and
that Secured Party has no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of
Secured Party to seek and obtain specific performance of other obligations of Debtor contained in this Agreement, that the covenants
of Debtor contained herein shall be specifically enforceable against Debtor.

 

8.          Assigned
Contracts

 

If
an Event of Default shall have occurred and be continuing, Debtor hereby irrevocably authorizes and empowers Secured Party, without
limiting any other authorizations or empowerments contained in any of the other Loan Documents, to assert, either directly or on
behalf of Debtor, any claims Debtor may have, from time to time, against any other party to any contract relating to the Hotel
or the operation thereof or to otherwise exercise any right or remedy of Debtor under any such contract (including without limitation,
the right to enforce directly against any party to any such contract, all of Debtor's rights thereunder, to make all demands and
give all notices and to make all requests required or permitted to be made by Debtor thereunder).

 

9.          Limitation
on Duty of Secured Party with Respect to
Collateral

 

Beyond
the safe custody thereof, Secured Party shall have no duties concerning the custody and preservation of any Collateral in its possession
or control (or in the possession of any Secured Party or bailee) or with respect to any income thereon, other than to account for
the same, or the preservation of rights against prior parties or any other rights pertaining thereto. Secured Party shall be deemed
to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property. Secured Party shall not be liable or responsible for any
loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman,
carrier, forwarding agency, consignee or other Secured Party or bailee selected by Secured Party in good faith.

 

10.         Application
of Proceeds

 

Upon
the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or
any part of the Collateral and any cash held in the Clearing Account, Cash Management Account and/or Reserve Accounts shall be
applied to the Obligations subject to and in accordance with the Loan Agreement.

 

11.         Expenses

 

Debtor
shall pay all costs, fees and expenses of Secured Party (a) protecting, storing, warehousing, appraising, insuring, handling, maintaining
and shipping the Collateral, (b) perfecting, maintaining and enforcing the Security Interests, and (c) collecting, enforcing, retaking,
holding, preparing for disposition, processing and disposing of the Collateral. Debtor shall also pay any and all excise, property,
sales and use taxes imposed by any state, federal or local authority on any of the Collateral, or with respect to periodic appraisals
and inspections of the Collateral as may be required under the terms of the Loan Agreement, or with respect to the sale or other
disposition thereof.

 

12.         Termination
of Security Interests; Release of Collateral

 

Upon
satisfaction and performance of all Obligations under the Loan Agreement, the Security Interests shall terminate and all rights
to the Collateral shall revert to Debtor. Upon such termination of the Security Interests or release of any Collateral, Secured
Party will, at Debtor's expense, file termination statements (or authorize Debtor to do so) terminating all financing statements
filed naming Secured Party as secured party and covering the Collateral, and execute and deliver to Debtor such documents as Debtor
shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral, as the case may
be.

 

    	 	7	 

     

    

 

13.         Notices

 

Notices
to Tenant should be sent to the address first above and notices to Secured Party should be sent to the address first above written
or, in each case, to such other address as shall be designated in writing by the respective party to the other parties hereto.
Unless otherwise expressly provided herein, all such notices shall be given and deemed received in accordance with Section 15.5
of the Loan Agreement.

 

14.         Successors
and Assigns

 

This
Agreement is for the benefit of Secured Party and its successors and assigns, and in the event of an assignment of all or any of
the Obligations, the rights hereunder, to the extent applicable to the Obligations so assigned, may be transferred with such Obligations.
This Agreement shall be binding on Debtor and its successors and assigns; provided that
Debtor may not delegate its obligations under this Agreement without Secured Party's prior written consent.

 

15.         Changes
in Writing

 

No
amendment, modification, termination or waiver of any provision of this Agreement shall be effective unless the same shall be in
writing signed by Debtor and Secured Party.

 

16.         Applicable
Law

 

This
Agreement shall be governed by, and construed in accordance with, the laws of the State of North Carolina.

 

13.         Headings

 

Section
and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any substantive effect.

 

14.         Survival

 

All
representations and warranties of Debtor contained in this Agreement shall survive the execution and delivery of this Agreement.

 

[The remainder of
this page intentionally left blank.]

 

    	 	8	 

     

    

 

IN WITNESS WHEREOF, the undersigned
Debtor has executed this Security Agreement the day and year first written above.

 

	 	TENANT:
	 	 
	 	MDR GREENSBORO HI TRS, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:  	Medalist Diversified Holdings, L.P. 

a Delaware limited partnership
	 	 	Its: Manager and member

 

	 	By: 	Medalist Diversified REIT, Inc.
	 	Maryland corporation
	 	Its: General Partner

 

	 	By:	 /s/ William R. Elliot
	 	Name:	 William R. Elliot
	 	Its: 	Co-President

 

[signature page to Hampton Inn Greensboro
Tenant Security Agreement]

 

    	 		 

     

    

 

[OFFICIAL SEAL]

STATE OF VIRGINIA

CITY OF RICHMOND

. I       

I,
Laura C. Bunton,  a Notary Public of Richmond City, Virginia, do hereby certify that William R. Elliott, Co-President of
MEDALIST DIVERSIFIED REIT, INC., a Maryland corporation, general partner of MEDALIST DIVERSIFIED HOLDINGS, L.P., a Delaware limited
partnership, manager and member of MDR GREENSBORO HI TRS, LLC, a Delaware limited liability company, personally came before me
this day and acknowledged that he, as Co-President, being
authorized to do so, executed the foregoing on behalf of MEDALIST DIVERSIFIED REIT, INC., general partner of MEDALIST DIVERSIFIED
REIT, INC., manager and member of MDR GREENSBORO HI TRS, LLC.

 

Witness my hand and official seal
this the 27th day of October 2017.

 

	 	/s/Laura Bunton
	 	Notary Public
	 	Print Name: Laura C. Bunton
	 	 
	 	My Commission expires: 11/30/20
	 	 
	 	[OFFICIAL SEAL]
	 	 
	 	[Signatures continue on next page]

 

[signature page to Hampton Inn Greensboro
Tenant Security Agreement]

 

    	 		 

     

    

 

IN WITNESS WHEREOF,
the undersigned Debtor has executed this Security Agreement the day and year first written above.

 

	 	TENANT:
	 	 
	 	[SIGNATURE PAGES TO BE CIRCULATED FOR REVIEW SEPARATELY AND     ATTACHED AT CLOSING]

 

STATE SPECIFIC
NOTARY BLOCK TO BE
INSERTED

 

	 	SECURED PARTY:
	 	 
	 	[SIGNATURE PAGES TO BE CIRCULATED FOR REVIEW SEPARATELY AND ATTACHED AT CLOSING]

 

STATE SPECIFIC NOTARY
BLOCK TO BE INSERTED

 

    	 	9	 

     

    

 

SCHEDULE I

 

Chief Executive
Office, Locations of Books and 

Records, Equipment, Inventory and Fixtures

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