Document:

EXHIBIT 10.39

 Exhibit 10.39 

 LOAN AGREEMENT 
  
 Dated as of August 19, 2004 
  
 Between 
  
 HH FP PORTFOLIO LLC,

 as Borrower 
  
 and 
  
 JPMORGAN CHASE BANK, 
 as Lender 
  

 TABLE OF CONTENTS 
  

							
	 	  	Page

			
	 I.
	  	DEFINITIONS; PRINCIPLES OF CONSTRUCTION	  	 
	 	  	     Section 1.1.
	  	     Definitions.
	  	1
	 	  	     Section 1.2.
	  	     Principles of Construction.
	  	23
			
	 II.
	  	GENERAL TERMS	  	 
	 	  	     Section 2.1.
	  	     Loan Commitment; Disbursement to Borrower.
	  	23
	 	  	     Section 2.2.
	  	     Interest Rate.
	  	23
	 	  	     Section 2.3.
	  	     Loan Payment.
	  	24
	 	  	     Section 2.4.
	  	     Prepayments.
	  	25
	 	  	     Section 2.5.
	  	     Defeasance.
	  	26
	 	  	     Section 2.6.
	  	     Release of Property.
	  	28
	 	  	     Section 2.7.
	  	     Cash Management.
	  	33
			
	 III.
	  	CONDITIONS PRECEDENT	  	 
	 	  	     Section 3.1.
	  	     Conditions Precedent to Closing.
	  	35
			
	 IV.
	  	REPRESENTATIONS AND WARRANTIES	  	 
	 	  	     Section 4.1.
	  	     Borrower Representations.
	  	38
	 	  	     Section 4.2.
	  	     Survival of Representations.
	  	47
			
	 V.
	  	BORROWER COVENANTS	  	 
	 	  	     Section 5.1.
	  	     Affirmative Covenants.
	  	48
	 	  	     Section 5.2.
	  	     Negative Covenants.
	  	59
			
	 VI.
	  	INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS	  	 
	 	  	     Section 6.1.
	  	     Insurance.
	  	65
	 	  	     Section 6.2.
	  	     Casualty.
	  	69
	 	  	     Section 6.3.
	  	     Condemnation.
	  	70
	 	  	     Section 6.4.
	  	     Restoration.
	  	70
			
	 VII.
	  	RESERVE FUNDS	  	 
	 	  	     Section 7.1.
	  	     Required Repair Funds.
	  	74
	 	  	     Section 7.2.
	  	     Tax and Insurance Escrow Fund.
	  	76
	 	  	     Section 7.3.
	  	     Replacements and Replacement Reserve.
	  	77
	 	  	     Section 7.4.
	  	     Excess Cash Flow Escrow Fund.
	  	77
	 	  	     Section 7.5.
	  	     Reserve Funds, Generally.
	  	78
			
	 VIII.
	  	DEFAULTS	  	 
	 	  	     Section 8.1.
	  	     Event of Default.
	  	79

  

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	 	  	     Section 8.2.
	  	     Remedies.
	  	81
			
	 IX.
	  	SPECIAL PROVISIONS	  	 
	 	  	    Section 9.1.	  	    Sale of Notes and Securitization.	  	83
	 	  	    Section 9.2.	  	    Securitization Indemnification.	  	85
	 	  	    Section 9.3.	  	    Intentionally Omitted.	  	88
	 	  	    Section 9.4.	  	    Exculpation.	  	88
	 	  	    Section 9.5.	  	    Matters Concerning Manager.	  	89
	 	  	    Section 9.6.	  	    Matters Concerning Franchisor.	  	90
	 	  	    Section 9.7.	  	    Servicer.	  	90
			
	 X.
	  	MISCELLANEOUS	  	 
	 	  	    Section 10.1.	  	    Survival.	  	90
	 	  	    Section 10.2.	  	    Lender’s Discretion.	  	90
	 	  	    Section 10.3.	  	    Governing Law.	  	90
	 	  	    Section 10.4.	  	    Modification, Waiver in Writing.	  	92
	 	  	    Section 10.5.	  	    Delay Not a Waiver.	  	92
	 	  	    Section 10.6.	  	    Notices.	  	92
	 	  	    Section 10.7.	  	    Trial by Jury.	  	93
	 	  	    Section 10.8.	  	    Headings.	  	93
	 	  	    Section 10.9.	  	    Severability.	  	93
	 	  	    Section 10.10.	  	    Preferences.	  	94
	 	  	    Section 10.11.	  	    Waiver of Notice.	  	94
	 	  	    Section 10.12.	  	    Remedies of Borrower.	  	94
	 	  	    Section 10.13.	  	    Expenses; Indemnity.	  	94
	 	  	    Section 10.14.	  	    Schedules Incorporated.	  	95
	 	  	    Section 10.15.	  	    Offsets, Counterclaims and Defenses.	  	96
	 	  	    Section 10.16.	  	    No Joint Venture or Partnership; No Third Party Beneficiaries.	  	96
	 	  	    Section 10.17.	  	    Publicity.	  	96
	 	  	    Section 10.18.	  	    Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets.	  	96
	 	  	    Section 10.19.	  	    Waiver of Counterclaim.	  	97
	 	  	    Section 10.20.	  	    Conflict; Construction of Documents; Reliance.	  	97
	 	  	    Section 10.21.	  	    Brokers and Financial Advisors.	  	97
	 	  	    Section 10.22.	  	    Prior Agreements.	  	98
	 	  	    Section 10.23.	  	    Counterparts.	  	98

  

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 SCHEDULES 
  

					
	 Schedule I
	  	-	  	Properties – Release Amounts
	 Schedule II
	  	-	  	Rent Roll
	 Schedule III
	  	-	  	Required Repairs – Deadlines for Completion
	 Schedule IV
	  	-	  	Organizational Structure
	 Schedule V
	  	-	  	Environmental Reports
	 Schedule VI
	  	-	  	Franchise Agreements
	 Schedule VII
	  	-	  	Management Agreements
	 Schedule VIII
	  	-	  	Out Parcel
	 Schedule IX
	  	-	  	Liquor Licenses
	 Schedule X
	  	-	  	Assignments of Management Agreement
	 Schedule XI
	  	-	  	Lockbox Agreements
	 Schedule XII
	  	-	  	Physical Conditions Reports

	

  

 -iii- 

 LOAN AGREEMENT 
  
 THIS LOAN AGREEMENT, dated as of August 19, 2004 (as amended, restated, replaced, supplemented or otherwise modified
from time to time, this “Agreement”), between JPMORGAN CHASE BANK, a New York banking corporation, having an address at 270 Park Avenue, New York, New York 10017 (“Lender”) HH FP PORTFOLIO LLC, a
Delaware limited liability company, having its principal place of business at 8405 Greensboro Drive, Suite 500, McLean, Virginia 22102 (“Borrower”). 
  
 W I T N E S S E T H: 
  

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and 
  
 WHEREAS, Lender is willing to make the Loan to Borrower, subject to
and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter defined). 
  
 NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as follows: 
  
 I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION 
  
 Section 1.1. Definitions. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent: 
  
 “Acquired Property” shall have the meaning set forth in
Section 5.1.11(f)(i) hereof. 
  
 “Acquired
Property Statements” shall have the meaning set forth in Section 5.1.11(f)(i) hereof. 
  
 “Additional Insolvency Opinion” shall have the meaning set forth in Section 4.1.30(c) hereof. 
  
 “Adjusted Release Amount” shall mean, for each Individual
Property, one hundred twenty-five percent (125%) of the applicable Release Amount for such Individual Property. 
  
 “Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person or of an Affiliate of such Person. 
  
 “Affiliated Loans” shall mean a loan made by Lender to an Affiliate of Borrower, Operating Lessee or any Guarantor. 

 “Affiliated Manager” shall mean any Manager in which Borrower, Principal, Operating
Lessee or any Guarantor has, directly or indirectly, any legal, beneficial or economic interest. 
  
 “ALTA” shall mean American Land Title Association, or any successor thereto. 
  
 “Annual Budget” shall mean the operating budget, including
all planned Capital Expenditures, for each of the Properties prepared by or on behalf of Borrower for the applicable Fiscal Year or other period. 
  
 “Applicable Interest Rate” shall mean a rate of six and seven ten-thousandths percent (6.0007%) per annum. 
  
 “Approved Annual Budget” shall have the meaning set forth in
Section 5.1.11(d) hereof. 
  
 “Assignment of
Leases” shall mean, with respect to each Individual Property, that certain first priority Assignment of Leases and Rents, dated as of the date hereof, from Borrower and Operating Lessee, collectively, as assignor, to Lender, as assignee,
assigning to Lender all of Borrower’s interest in and to the Leases and Rents of such Individual Property as security for the Loan, as the same may be amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time
to time. 
  
 “Assignment of Management Agreement”
shall mean, with respect to each Management Agreement, that certain assignment of management agreement more specifically identified on Schedule X attached hereto, each dated as of the date hereof, as the same may be amended, restated,
replaced, supplemented, renewed, extended or otherwise modified from time to time. 
  
 “Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation with respect to all or any part of any Individual Property. 
  
 “Bankruptcy Action” shall mean with respect to any Person
(a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (c) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition from any Person; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for such Person or any portion of any Individual Property; or (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability
generally to pay its debts as they become due. 
  
 “Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §101, et seq., as the same may be amended from time to time, and any successor statute or statutes and all rules and regulations from
time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state bankruptcy or insolvency law. 
  

 -2- 

 “Basic Carrying Costs” shall mean, for any period, with respect to each Individual
Property, the sum of the following costs associated with such Individual Property for such period: (a) Taxes, (b) Other Charges and (c) Insurance Premiums. 
  
 “Borrower” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.

  
 “Business Day” shall mean any day other than
a Saturday, Sunday or any other day on which national banks in New York, New York are not open for business. 
  
 “Capital Expenditures” shall mean, for any period, the amount expended for items capitalized under GAAP and the Uniform System of
Accounts (including expenditures for building improvements or major repairs, leasing commissions and tenant improvements). 
  
 “Cash Flow Threshold” shall mean $14,876,448.00. 
  

“Cash Flow Trigger Cure” shall mean Net Cash Flow for the Properties has been in excess of the Cash Flow Threshold for the Properties
for three (3) consecutive months. 
  
 “Cash Flow Trigger
Event” shall mean that the Net Cash Flow of the Properties for the preceding twelve (12) month period is less than the Cash Flow Threshold. 
  
 “Cash Flow Trigger Period” shall mean the period commencing on the occurrence of a Cash Flow Trigger Event and continuing until the
occurrence of a Cash Flow Trigger Cure. 
  
 “Cash
Management Account” shall have the meaning set forth in Section 2.7.2(a) hereof. 
  
 “Cash Management Agreement” shall mean that certain Cash Management Agreement, dated as of the date hereof, by and among Borrower,
Operating Lessee, Mezzanine Borrower, Mezzanine Lender and Lender, and acknowledged by the Crestline Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 
  
 “Casualty” shall have the meaning set forth in Section
6.2 hereof. 
  
 “Casualty Consultant” shall
have the meaning set forth in Section 6.4(b)(iii) hereof. 
  
 “Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv) hereof. 
  
 “Closing Date” shall mean the date of the funding of the Loan. 
  

 -3- 

 “Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be further
amended from time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form. 
  
 “Condemnation” shall mean a temporary or permanent taking by any Governmental Authority as the result or in
lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of any Individual Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade
affecting such Individual Property or any part thereof. 
  
 “Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b) hereof. 
  
 “Covered Disclosure Information” shall have the meaning set forth in Section 9.2 (b) hereof. 
  
 “Crestline Manager” shall mean Crestline Hotels &
Resorts, Inc., a Delaware corporation. 
  
 “Debt”
shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums (including the Yield Maintenance Premium) due to Lender in respect of
the Loan under the Note, this Agreement, the Mortgages and the other Loan Documents. 
  
 “Debt Service” shall mean, with respect to any particular period of time, scheduled principal and/or interest payments due under this Agreement and the Note. 
  
 “Debt Service Coverage Ratio” shall mean a ratio for the
applicable period in which: 
  
 (a) the numerator
is the Net Operating Income (excluding interest on credit accounts) for such period as set forth in the financial statements required hereunder; and 
  
 (b) the denominator is the aggregate amount of principal and interest due and payable for such period on (i) the Note or, in the event a
Defeasance Event has occurred, the Undefeased Note, and (ii) the Mezzanine Note. 
  
 “Decorative Changes” shall mean any alterations or change to the Improvements that are made primarily for decorative or cosmetic purposes (e.g., painting, wallpapering, carpeting, FF&E etc.) that:
(a) will not have a Material Adverse Effect, and (b) do not affect or involve any structural component of any Improvements, any utility or HVAC system contained in any Improvements or the exterior of any building constituting a part of any
Improvements. 
  
 “Default” shall mean the
occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default. 
  

 -4- 

 “Default Rate” shall mean a rate per annum equal to the lesser of (a) the Maximum Legal
Rate and (b) five percent (5%) above the Applicable Interest Rate. 
  
 “Defeasance Date” shall have the meaning set forth in Section 2.5.1(a)(i) hereof. 
  
 “Defeasance Deposit” shall mean an amount equal to the remaining principal amount of the Note or the Defeased Note, as applicable, the
Yield Maintenance Premium and any costs and expenses incurred or to be incurred in the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance Payments. 
  
 “Defeasance Event” shall have the meaning set forth in Section 2.5.1(a) hereof. 
  
 “Defeasance Lockout Date” shall mean the earlier to occur of
(a) the date that is two (2) years from the “startup day” within the meaning of Section 860G(a)(9) of the Code for the REMIC Trust or (b) August 19, 2008. 
  
 “Defeased Note” shall have the meaning set forth in Section 2.5.1(a)(v) hereof. 
  
 “Disclosure Document” shall mean a prospectus, prospectus
supplement, private placement memorandum, offering memorandum, offering circular, term sheet, road show presentation materials or other offering documents or marketing materials prepared by or on behalf of Lender, in each case in preliminary or
final form, used to offer Securities in connection with a Securitization. 
  
 “Discount Rate” shall mean the rate which, when compounded monthly, is equivalent to the Prepayment Treasury Rate when compounded semi-annually. 
  
 “Eligible Account” shall mean a separate and identifiable
account from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or
(b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company, is
subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will
not be evidenced by a certificate of deposit, passbook or other instrument. 
  
 “Eligible Institution” shall mean a depository institution or trust company, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P,
“P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held for more than thirty (30) days, the long term unsecured
debt obligations of which are rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s). 
  
 “Eligibility Requirements” means, with respect to any Person, that such Person (i) has total assets (in name or under management) in
excess of $600,000,000 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity of $250,000,000 and (ii) is engaged in the business of making or owning commercial real estate
loans or operating commercial properties. 
  

 -5- 

 “Embargoed Person” shall have the meaning set forth in Section 4.1.35 hereof.

  
 “Environmental Indemnity” shall mean that
certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time. 
  
 “Environmental Report” shall
mean, with respect to each Individual Property, that certain environmental report more particularly described on Schedule V hereto. 
  
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. 
  
 “Event of Default” shall have the meaning set forth in
Section 8.1(a) hereof. 
  
 “Excess Cash
Flow” shall mean all remaining amounts on deposit in the Cash Management Account (regardless of whether such amounts are more or less than the operating rent due under the Operating Lease) after the payment of all escrows, reserves, Debt
Service, expenses and other amounts required to be made in accordance with the Loan Documents. 
  
 “Excess Cash Flow Escrow Account” shall have the meaning set forth in Section 7.4 hereof. 
  
 “Excess Cash Flow Escrow Fund” shall have the meaning set forth in Section 7.4 hereof. 
  
 “Exchange Act” shall have the meaning set forth in
Section 9.2(a) hereof. 
  
 “Exchange Act
Filing” shall have the meaning set forth in Section 5.1.11(i) hereof. 
  
 “Extraordinary Expense” shall have the meaning set forth in Section 5.1.11(e) hereof. 
  
 “Fiscal Year” shall mean the period from the Closing Date through December 31, 2004 and each twelve (12) month period thereafter
commencing on January 1 and ending on December 31 during each year of the term of the Loan. 
  
 “Fitch” shall mean Fitch, Inc. 
  
 “Franchise Agreement” shall mean, with respect to each Individual Property, that certain franchise agreement more specifically identified on Schedule VI hereto, as the same may be amended or
modified from time to time in accordance with the terms and provisions of this Agreement, or, if the context requires, any Replacement Franchise Agreement executed in accordance with the terms and provisions of this Agreement. 
  

 -6- 

 “Franchisor” shall mean, with respect to each Individual Property, the franchisor with
respect thereto, as the same is identified on Schedule VI hereto, or, if the context requires, a Qualified Franchisor. 
  
 “GAAP” shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial
report. 
  
 “Governmental Authority” shall mean
any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence having jurisdiction over
Borrower, Operating Lessee, Principal, Guarantor, Lender or any Individual Property. 
  
 “Gross Income from Operations” shall mean, for any period, all income, computed in accordance with GAAP, derived from the ownership and operation of the Properties from whatever source during such
period, but excluding Rents from month-to-month tenants or tenants that are included in any Bankruptcy Action, sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower or Operating Lessee to any Governmental
Authority, refunds and uncollectible accounts, sales of furniture, fixtures and equipment, Insurance Proceeds and Condemnation Proceeds (other than business interruption or other loss of income insurance), and any disbursements to Borrower or
Operating Lessee from the Reserve Funds. 
  
 “Guarantor” shall mean Highland Hospitality L.P., a Delaware limited partnership. 
  
 “Guaranty” shall mean that certain Guaranty Agreement, dated as of the date hereof, from Guarantor to Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time. 
  
 “Improvements” shall have the meaning set forth in the granting clause of the related Mortgage with respect to each Individual Property. 
  
 “Indebtedness” of a Person, at a particular date, means the sum (without duplication) at such date of (a)
all indebtedness or liability of such Person (including, without limitation, amounts for borrowed money and indebtedness in the form of mezzanine debt and preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than
for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss; and (g)
obligations secured by any Liens, whether or not the obligations have been assumed. 
  
 “Indemnified Person” shall have the meaning set forth in Section 9.2(b) hereof. 
  
 “Indemnifying Person” shall mean Borrower. 
  

 -7- 

 “Independent Director” or “Independent Manager” shall mean a Person who is not
at the time of initial appointment, or at any time while serving as a director or manager, as applicable, and has not been at any time during the preceding five (5) years: (a) a stockholder, director (with the exception of serving as the Independent
Director or Independent Manager), officer, employee, partner, member, attorney or counsel of the Principal, the Borrower or any Affiliate of either of them; (b) a creditor, customer, supplier or other Person who derives any of its purchases or
revenues from its activities with Principal, Borrower or any Affiliate of either of them; (c) a Person controlling or under common control with any such stockholder, director, officer, employee, partner, member, creditor, customer, supplier or other
Person; or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, creditor, customer, supplier or other person. As used in this definition, the term “control” means the
possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. 
  
 “Individual Property” shall mean each parcel of real
property, the Improvements thereon and all personal property owned by Borrower and/or Operating Lessee and encumbered by a Mortgage, together with all rights pertaining to such property and Improvements, as more particularly described in the
Granting Clauses of each Mortgage and referred to therein as the “Property”. 
  
 “Insolvency Opinion” shall mean that certain non-consolidation opinion letter dated the date hereof delivered by Hogan & Hartson L.L.P. in connection with the Loan. 
  
 “Insurance Premiums” shall have the meaning set forth in
Section 6.1(b) hereof. 
  
 “Insurance
Proceeds” shall have the meaning set forth in Section 6.4(b) hereof. 
  
 “JPMorgan” shall mean JPMorgan Chase Bank and its successors in interest. 
  
 “Lease” shall mean any lease, sublease or subsublease, letting, license, concession or other agreement (whether now or hereafter in
effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any Individual Property, and (a) every modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto. 
  
 “Legal
Requirements” shall mean, including with respect to each Individual Property, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting Borrower, Operating Lessee, such Individual Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all
permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting Borrower,
Operating 
  

 -8- 

 Lessee, such Individual Property or any part thereof, including, without limitation, any which may (a) require repairs,
modifications or alterations in or to such Individual Property or any part thereof, or (b) in any way limit the use and enjoyment thereof. 
  
 “Lender” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns. 
  
 “Liabilities” shall have the meaning set forth in Section
9.2(b) hereof. 
  
 “Licenses” shall have the
meaning set forth in Section 4.1.22 hereof. 
  
 “Lien” shall mean, with respect to each Individual Property, any mortgage, deed of trust, deed to secure debt, lien, pledge, hypothecation, easement, restrictive covenant, preference, assignment, security interest, or any
other encumbrance, lis pendens, charge or transfer of, or any agreement to enter into or create, any of the foregoing, on or affecting Borrower, Operating Lessee, the related Individual Property, any portion thereof or any interest therein,
including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s,
materialmen’s and other similar liens and encumbrances. Notwithstanding the foregoing, any purchase and sale agreement or similar agreement or option to sell entered into or otherwise granted by Borrower with respect to all or any portion of
any Individual Property shall not constitute a “Lien” hereunder provided, that the consummation of the transactions contemplated under and such agreement or option is in accordance with the terms and conditions of this Agreement and the
other Loan Documents. 
  
 “Liquor License
Agreement” shall mean, with respect to each Individual Property listed on Schedule IX, that certain Beverage Services Management Agreement, dated as of the date hereof, between Operating Lessee, as owner, and the holder of the
applicable liquor license, as licensee. 
  
 “Loan” shall mean the loan made by Lender to Borrower pursuant to this Agreement. 
  
 “Loan Documents” shall mean, collectively, this Agreement, the Note, the Mortgages, the Assignments of Leases, the Environmental
Indemnity, the O&M Agreements, the Assignments of Management Agreement, the Guaranty, the Cash Management Agreement and all other documents executed and/or delivered by or on behalf of Borrower, Operating Lessee or Guarantor in connection with
the Loan. 
  
 “Loan-to-Value Ratio” shall mean
the ratio, as of a particular date, in which the numerator is equal to the outstanding principal balance of the Loan and the Mezzanine Loan and the denominator is equal to the appraised value of the Properties as determined by Lender in its
reasonable discretion. 
  
 “Lockbox Account”
shall have the meaning set forth in Section 2.7.1(a) hereof. 
  

 -9- 

 “Lockbox Agreement” shall mean, with respect to each Individual Property, that certain
lockbox agreement, dated as of the Closing Date more specifically identified on Schedule XI attached hereto. 
  
 “Lockbox Bank” shall mean, collectively, those certain lockbox banks, which each establish, maintain and hold a Lockbox Account or any
successor or permitted assigns thereof. 
  
 “Lockbox
Event” shall mean (a) the occurrence and continuance of an Event of Default or a Mezzanine Loan Default, or (b) a Cash Flow Trigger Period. 
  
 “Management Agreement” shall mean, with respect to each Individual Property, the management agreement entered into by and between
Operating Lessee and the applicable Manager, pursuant to which Manager is to provide management and other services with respect to the related Individual Property, as more particularly described on Schedule VII hereto, or, if the context
requires, any Replacement Management Agreement. 
  
 “Manager” shall mean, with respect to each Individual Property, the manager under the applicable Management Agreement or, if the context requires, any Qualified Manager who is managing any Individual Property in accordance
with the terms and provisions of this Agreement. 
  
 “Material Adverse Effect” shall mean any action or occurrence which materially and adversely affects, or could reasonably be expected to materially and adversely affect (a) the use, operation or value of an Individual
Property, (b) the business operations and/or the financial condition of Borrower, Principal, Operating Lessee or Guarantor, (c) the ability of Borrower, Operating Lessee and/or Guarantor to perform its obligations under the Loan Documents, or (d)
the validity or enforceability of any Loan Documents. 
  
 “Maturity Date” shall mean September 1, 2011, or such other date on which the final payment of principal of the Note becomes due and payable as therein or herein provided, whether at such stated maturity date, by
declaration of acceleration, or otherwise. 
  
 “Maximum
Legal Rate” shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or
the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan. 
  
 “Mezzanine Borrower” shall mean HH FP Portfolio Holding LLC, a Delaware limited liability company, together
with its successors and permitted assigns. 
  
 “Mezzanine
Lender” shall mean JPMorgan Chase Bank, a New York banking corporation, together with its successors and assigns. 
  
 “Mezzanine Loan” shall mean that certain loan in the original principal amount of Twenty-Five Million and No/100 Dollars ($25,000,000) of
even date herewith made by Mezzanine Lender to Mezzanine Borrower. 
  

 -10- 

 “Mezzanine Loan Default” shall mean an “Event of Default” as defined under the
Mezzanine Loan Documents. 
  
 “Mezzanine Loan
Documents” shall mean all documents evidencing the Mezzanine Loan and all documents executed and/or delivered in connection therewith. 
  
 “Mezzanine Note” shall mean that certain Promissory Note of even date herewith in the principal amount of Twenty-Five Million and No/100
Dollars ($25,000,000), made by Mezzanine Borrower in favor of Mezzanine Lender, as the same may be amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time. 
  
 “Monthly Debt Service Payment Amount” shall mean a constant
monthly payment of $870,384.64. 
  
 “Moody’s” shall mean Moody’s Investors Service, Inc. 
  
 “Mortgage” shall mean, with respect to each Individual Property, that certain first priority Mortgage (or Deed to Secure Debt) and Security Agreement, dated the date hereof, executed and delivered by
Borrower and Operating Lessee as security for the Loan and encumbering such Individual Property, as the same may be amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time. 
  
 “Net Cash Flow” shall mean, with respect to the Properties
for any period, the amount obtained by subtracting Operating Expenses and deposits made to the Replacement Reserve Fund and deposits made with any Manager for Replacements for such period from Gross Income from Operations for such period.

  
 “Net Operating Income” shall mean, for any
period, the amount obtained by subtracting Operating Expenses for such period from Gross Income from Operations for such period. 
  
 “Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof. 
  
 “Net Proceeds Deficiency” shall have the meaning set forth
in Section 6.4(b)(vi) hereof. 
  
 “New York
Mortgage” shall have the meaning set forth in Section 2.6.3 hereof. 
  
 “Note” shall mean that certain Promissory Note of even date herewith in the principal amount of One Hundred Thirty-Five Million and No/100 Dollars ($135,000,000), made by Borrower in favor of Lender,
as the same may be amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time, including any Defeased Note and Undefeased Note, if any, that may exist from time to time. 
  
 “O&M Agreement” shall mean, with respect to each of the
Individual Properties located in Parsippany, New Jersey and Boston, Massachusetts, that certain Operations and Maintenance Agreement, dated as of the date hereof, between Borrower, Operating Lessee and Lender given in connection with the Loan, as
the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 
  

 -11- 

 “Offering Document Date” shall have the meaning set forth in Section
5.1.11(f)(iv) hereof. 
  
 “Officer’s
Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by the president, any vice president or the treasurer of Borrower. 
  
 “Open Repayment Date” shall mean the Payment Date one month prior to the Maturity Date. 
  
 Operating Expenses” shall mean, for any period, the total of all
expenditures, computed in accordance with GAAP, of whatever kind during such period relating to the operation, maintenance and management of the Properties or any Individual Property, as applicable, that are incurred on a regular monthly or other
periodic basis, including without limitation, utilities, ordinary repairs and insurance, license fees, property taxes and assessments, advertising expenses, management fees, payroll and related taxes, computer processing charges, operational
equipment or other lease payments as approved by Lender, and other similar costs, but excluding depreciation, Debt Service, Capital Expenditures, and contributions to the Reserve Funds. 
  
 “Operating Lease” shall mean, with respect to each Individual Property, that certain Lease Agreement, dated
as of the Closing Date, between Borrower, as lessor, and Operating Lessee, as lessee. 
  
 “Operating Lessee” shall mean HHC TRS FP Portfolio LLC, a Delaware limited liability company, together with its successors and permitted assigns. 
  
 “Other Charges” shall mean all 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 any Individual Property, now or hereafter levied or assessed or
imposed against such Individual Property or any part thereof. 
  
 “Out Parcel” shall mean that certain portion of the Individual Property located in Hauppauge, New York specified as “Release Parcel” on Schedule VIII attached hereto. 
  
 “Payment Date” shall mean the first (1st) day of each calendar month during the term of the Loan or, if such day is not a Business Day, the immediately succeeding
Business Day. 
  
 “Permitted Encumbrances” shall
mean, with respect to an Individual Property, collectively (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policies relating to such Individual
Property or any part thereof, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, (d) any Lien and security interest expressly permitted within the definition hereunder of “Special Purpose
Entity”, (e) easements created in the ordinary course of business that do not have a Material Adverse Effect, and (f) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion.

  

 -12- 

 “Permitted Investments” shall have the meaning set forth in the Cash Management
Agreement. 
  
 “Person” shall mean any
individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in
such capacity on behalf of any of the foregoing. 
  
 “Personal Property” shall have the meaning set forth in the granting clauses of the Mortgage with respect to each Individual Property. 
  

“Physical Conditions Report” shall mean, with respect to each Individual Property, that certain, report regarding the physical
condition of such Individual Property, as more particularly described on Schedule XII attached hereto. 
  
 “PIP Requirements” shall mean, collectively, with respect to any Individual Property, the obligation of Borrower and/or Operating Lessee
to comply with any property improvement program that is mandated or otherwise required under any Management Agreement, Franchise Agreement or other applicable licensing agreement. 
  
 “Policies” shall have the meaning specified in Section 6.1(b) hereof. 
  
 “Prepayment Treasury Rate” shall mean the Treasury Rate for
the week ending prior to the applicable Payment Date for U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the Open Repayment Date. 
  
 “Principal” shall mean the Special Purpose Entity that is
the (a) managing member or sole member of Borrower in the event that Borrower is a limited liability company, or (b) a general partner of Borrower in the event that Borrower is a limited partnership. 
  
 “Properties” shall mean, collectively, each and every
Individual Property which is subject to the terms of this Agreement. 
  
 “Provided Information” shall mean any and all financial and other information provided at any time by, or on behalf of, any Indemnifying Person with respect to the Properties, Borrower, Principal, Guarantor and/or Manager.

  
 “Qualified Franchisor” shall mean either (a)
Franchisor; (b) Hyatt Corporation, Hilton Inns, Inc., Marriott International, Inc. (including Courtyard by Marriott, Residence Inn by Marriott and Renaissance), Westin Hotel Company, Sheraton Operating Corporation, Inter Continental, Ritz Carlton or
Meridien, provided that there shall have been no material adverse change in such Person since the Closing Date; or (c) in the reasonable judgment of Lender, a reputable and experienced franchisor (which may be an Affiliate of Borrower) possessing,
directly or through its Affiliates, experience in flagging hotel properties similar in size, scope, use and value as the Properties, provided, that Borrower shall have (i) obtained prior written 
  

 -13- 

 confirmation from the applicable Rating Agencies that licensing of the Properties by such Person will not cause a
downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof, and (ii) if such Person is an Affiliate of Borrower, delivered to Lender an Additional Insolvency Opinion. 
  
 “Qualified Manager” shall mean either (a) Manager; (b)
Westin Hotel Company, Sheraton Operating Corporation, Marriott International, Inc. (including Courtyard by Marriott, Residence Inn by Marriott and Renaissance), Hilton Inns, Inc., Starwood Worldwide Resorts Inc., Inter Continental, Ritz Carlton, or
Meridien, provided that there shall have been no material adverse change in such Person since the Closing Date; or (c) in the reasonable judgment of Lender, a reputable management organization (which may be an Affiliate of Borrower) having at least
five (5) years’ experience in the management of hotels with similar uses as the Properties, and in the jurisdictions in which the Properties are located, which (x) at the time of its engagement and has, for at least five (5) years prior to its
engagement as property manager, managed at least five (5) properties of the same property type as the Properties, and (y) is not the subject of a bankruptcy or similar insolvency proceeding, provided, that Borrower shall have (i) obtained
prior written confirmation from the applicable Rating Agencies that management of the Properties by such Person will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof, and (ii) is
such Person is an Affiliate of Borrower, delivered to Lender an Additional Insolvency Opinion. 
  
 “Qualified Transferee” shall mean any one of the following Persons: 
  
 (c) a real estate investment trust, bank, saving and loan association, investment bank, insurance company, trust company, commercial
credit corporation, pension plan, pension fund or pension advisory firm, mutual fund, government entity or plan, provided that any such Person referred to in this clause (a) satisfies the Eligibility Requirements; 
  
 (d) an investment company, money management firm or
“qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as
amended, provided that any such Person referred to in this clause (b) satisfies the Eligibility Requirements; 
  
 (e) an institution substantially similar to any of the foregoing entities described in clauses (a) or (b) that satisfies the
Eligibility Requirements; 
  
 (f) any entity
Controlled by any of the entities described in clauses (a), (b) or (c) above; or 
  
 (g) an investment fund, limited liability company, limited partnership or general partnership where a fund manager or an entity that is
otherwise a Qualified Transferee under clauses (a), (b), (c) or (d) of this definition acts as the general partner, managing member or fund manager and at least fifty percent (50%) of the equity interests in such
investment vehicle are owned, directly or indirectly, by one or more entities that are otherwise Qualified Transferees under clauses (a), (b), (c) or (c) of this definition. 
  

 -14- 

 “Rating Agencies” shall mean each of S&P, Moody’s and Fitch, or any other
nationally recognized statistical rating agency which has been approved by Lender. 
  
 “Release Amount” shall mean for an Individual Property the amount set forth on Schedule I hereto, as the same may be reduced pursuant to Section 2.4.2 hereof. 
  
 “REMIC Trust” shall mean a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code that holds the Note. 
  
 “Rents” shall mean, with respect to each Individual Property, all rents (including, without limitation, percentage 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, accounts, cash, issues, profits, charges for services rendered, 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 Individual Property, and proceeds, if any, from business interruption
or other loss of income or insurance, including, without limitation, all hotel receipts, revenues and credit card receipts collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and recreational facilities, all receivables,
installment payments and other payments made under arrangements now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of property or rendering of
services by Borrower 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 and proceeds, if any, from business interruption or other loss of income insurance. 
  
 “Replacement Franchise Agreement” shall mean either (a) a franchise agreement with a Qualified Franchisor substantially in the same form and substance as the Franchise Agreement or such Qualified
Franchisor’s then existing form, provided that such existing form is reasonably acceptable to Lender, or (b) a franchise, trademark and license agreement with a Qualified Franchisor, which franchise, trademark and license agreement shall be
reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (b), Lender, at its option, may require that Borrower shall have obtained prior written confirmation from the applicable Rating Agencies that such
franchise, trademark and license agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any class thereof, and provided, further, that Lender shall not unreasonably delay its
response to any such requests. 
  
 “Replacement Management
Agreement” shall mean, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same form and substance as the Management Agreement, or (ii) a management agreement with a Qualified Manager, which
management agreement shall be reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (ii), Lender, at its option, may require that Borrower obtain confirmation from the applicable Rating Agencies that
such management 
  

 -15- 

 agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any
class thereof, and provided, further, that Lender shall not unreasonably delay its response to any such requests; and (b) an assignment of management agreement and subordination of management fees substantially in the form then used by
Lender (or of such other form and substance reasonably acceptable to Lender), executed and delivered to Lender by Borrower and such Qualified Manager at Borrower’s expense. 
  
 “Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1 hereof. 

 
 “Replacement Reserve Fund” shall have the meaning set
forth in Section 7.3.1 hereof. 
  
 “Replacement
Reserve Monthly Deposit” shall mean an amount equal to Gross Income from Operations for each Individual Property for the immediately preceding calendar year multiplied by four percent (4.0%) and divided by twelve (12) less the amounts
required to be deposited with the applicable Manager for Replacements under the related Management Agreements, which Replacement Reserve Monthly Deposit shall be an aggregate amount for all Properties equal to $225,056.00 on each Payment Date
occurring during the calendar year 2004 less the amounts required to be deposited with the applicable Manager for Replacements under the related Management Agreements. 
  
 “Replacements” shall have the meaning set forth in Section 7.3.1 hereof. 
  
 “Required Repair Account” shall have the meaning set forth
in Section 7.1.1 hereof. 
  
 “Required Repair
Fund” shall have the meaning set forth in Section 7.1.1 hereof. 
  
 “Required Repairs” shall have the meaning set forth in Section 7.1.1 hereof. 
  
 “Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow Fund, the Replacement Reserve Fund, the Required Repair Fund, the
Excess Cash Flow Escrow Fund, and any other escrow fund established pursuant to the Loan Documents. 
  
 “Restoration” shall mean the repair and restoration of an Individual Property after a Casualty or Condemnation as nearly as possible to
the condition the Individual Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender. 
  

“Restricted Party” shall mean, collectively (a) Borrower, Principal, Operating Lessee, any Guarantor and any Affiliated Manager and
(b) any shareholder, partner, member, non-member manager (other than a natural person), direct or indirect legal or beneficial owner of, Borrower, Principal, Operating Lessee, any Guarantor, any Affiliated Manager or any non-member manager.
Restricted Parties shall not include (i) Highland Hospitality Corporation or any of its shareholders, (ii) the Independent Directors or Independent Members or (iii) the limited partners of Guarantor that are not Affiliates of Guarantor. 

 

 -16- 

 “S&P” shall mean Standard & Poor’s Ratings Group, a division of The
McGraw-Hill Companies. 
  
 “Sale or Pledge” shall
mean a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance or pledge of a legal or beneficial interest. 
  
 “Scheduled Defeasance Payments” shall have the meaning set forth in Section 2.5.1(b) hereof. 
  
 “Securities” shall have the meaning set forth in Section
9.1 hereof. 
  
 “Securities Act” shall have
the meaning set forth in Section 9.2(a) hereof. 
  
 “Securitization” shall have the meaning set forth in Section 9.1 hereof. 
  
 “Security Agreement” shall have the meaning set forth in Section 2.5.1(a)(vi) hereof. 
  
 “Servicer” shall have the meaning set forth in Section
9.7 hereof. 
  
 “Servicing Agreement” shall
have the meaning set forth in Section 9.7 hereof. 
  
 “Severed Loan Documents” shall have the meaning set forth in Section 8.2(c) hereof. 
  
 “Special Purpose Entity” shall mean a corporation, limited partnership or limited liability company which at all times since its
formation and after the date hereof: 
  
 (a) is
organized solely for the purpose of (i) acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Properties, entering into this Agreement with the Lender, refinancing the Properties in connection
with a permitted repayment of the Loan, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing; or (ii) acting as a general partner of the limited partnership that owns the Properties or member of the
limited liability company that owns the Properties; 
  
 (b) is not engaged and will not engage in any business unrelated to (i) the acquisition, development, ownership, management or operation of the Properties, (ii) acting as general partner of the limited partnership that owns the Properties
or (iii) acting as a member of the limited liability company that owns the Properties, as applicable; 
  
 (c) does not have and will not have any assets other than those related to the Properties or its partnership interest in the limited
partnership or the member interest in the limited liability company that owns the Properties or acts as the general partner or managing member thereof, as applicable; 
  

 -17- 

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

  
 (e) if such entity is a limited partnership,
has, as its only general partners, Special Purpose Entities that are corporations, limited partnerships or limited liability companies; 
  
 (f) if such entity is a corporation, has at least two (2) Independent Directors, and has not caused or allowed and will not cause or allow
the board of directors of such entity to take any action requiring the unanimous affirmative vote of one hundred percent (100%) of the members of its board of directors unless two (2) Independent Directors shall have participated in such vote;

  
 (g) if such entity is a limited liability
company with more than one (1) equity member, has at least one (1) member that is a Special Purpose Entity that is a corporation that has at least two (2) Independent Directors and that owns at least one percent (1.0%) of the equity of the limited
liability company; 
  
 (h) if such entity is a
limited liability company with only one (1) equity member, is a limited liability company organized in the State of Delaware that has (i) as its only member a non-managing member, and (ii) at least two (2) Independent Managers and has not caused or
allowed and will not cause or allow the board of managers of such entity to take any action requiring the unanimous affirmative vote of one hundred percent (100%) of the managers unless two (2) Independent Managers shall have voted in favor of such
action; 
  
 (i) if such entity is (i) a limited
liability company, has articles of organization, a certificate of formation and/or an operating agreement, as applicable, (ii) a limited partnership, has a limited partnership agreement, or (iii) a corporation, has a certificate of incorporation or
articles that, in each case, provide that such entity will not: (A) dissolve, merge, liquidate, consolidate; (B) sell all or substantially all of its assets or the assets of Borrower (as applicable) in violation of the Loan Documents; (C) engage in
any other business activity, or amend its organizational documents with respect to the matters set forth in this definition without the consent of the Lender; or (D) without the affirmative vote of two Independent Directors and of all other
directors of the corporation (that is such entity or the general partner or managing or co-managing member of such entity), file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other
entity in which it has a direct or indirect legal or beneficial ownership interest; 
  
 (j) is and will remain solvent and pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from
its assets as the same shall 
  

 -18- 

 become due, and is maintaining and will maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated business operations; 
  
 (k) has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity; 
  
 (l) has maintained and will maintain its accounts, books and
records separate from any other Person and will file its own tax returns, except to the extent that it is a tax-disregarded entity; 
  
 (m) has maintained and will maintain its own records, books, resolutions and agreements as official records; 
  
 (n) other than as provided in the Cash Management Agreement
(i) has not commingled and will not commingle its funds or assets with those of any other Person and (ii) has not participated and will not participate in any cash management system with any other Person; 
  
 (o) has held and will hold its assets in its own name;

  
 (p) has conducted and will conduct its
business in its name or in a name franchised or licensed to it by an entity other than an Affiliate of Borrower, except for services rendered under a business management services agreement with an Affiliate that complies with the terms contained in
Subsection (dd) below, so long as Borrower requires that the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of the Borrower; 
  
 (q) has maintained and will maintain its financial
statements, accounting records and other entity documents separate from any other Person and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except as required by GAAP;
provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of
the consolidated entity; 
  
 (r) has paid and
will pay its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets except as contemplated under the Management Agreements, and has maintained and will maintain a sufficient number of employees in
light of its contemplated business operations; 
  
 (s) has observed and will observe all partnership, corporate or limited liability company formalities, as applicable; 
  
 (t) has and will have no Indebtedness other than (i) the Loan, (ii) trade payables incurred in the ordinary course of business relating to
the ownership and operation of the Properties and the routine administration of Borrower and Operating Lessee, in amounts not to exceed two percent (2%) of the principal balance of the Loan 
  

 -19- 

 (and with respect to each Individual Property, four percent (4%) of the Release Amount for such
Individual Property), which trade payables are not more than sixty (60) days past the date incurred (unless being contested in good faith in accordance with the terms of the Loan Documents), are not evidenced by a note and are paid when due, (iii)
debt incurred in the ordinary course of business for the purpose of financing fixtures and equipment at the Properties (including obligations pursuant to equipment leases) in amounts that are normal and reasonable under the circumstances,
provided, however, that (A) such debt (which, with respect to an equipment lease shall be the annual rents payable thereunder for the then current calendar year) shall not in the aggregate outstanding at any one time exceed an amount
equal to $500,000.00 and (B) such debt shall be secured only by a pledge of such fixtures or equipment or an assignment of equipment lease, and (iv) such other liabilities that are permitted pursuant to this Agreement or expressly required
pursuant to the Loan Documents; 
  
 (u) has not
and will not assume or guarantee or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except as permitted pursuant to this Agreement, except for obligations
under the Franchise Agreements; 
  
 (v) has not
and will not acquire obligations or securities of its partners, members or shareholders or any other Affiliate; 
  
 (w) has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including, but not
limited to, paying for shared office space and services performed by any employee of an Affiliate; 
  
 (x) maintains and uses and will maintain and use separate stationery, invoices and checks bearing its name. The stationery, invoices, and
checks utilized by the Special Purpose Entity or utilized to collect its funds or pay its expenses shall bear its own name and shall not bear the name of any other entity unless such entity is clearly designated as being the Special Purpose
Entity’s agent; 
  
 (y) has not pledged and
will not pledge its assets to secure the obligations of any other Person other than as expressly required under the Loan Documents; 
  
 (z) has held itself out and identified itself and will hold itself out and identify itself as a separate and distinct entity under its own
name or in a name franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part of any other Person, except for services rendered under a business management services agreement with an Affiliate that
complies with the terms contained in Subsection (dd) below, so long as Borrower requires that the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of the Borrower; 
  
 (aa) has maintained and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person; 
  

 -20- 

 (bb) has not made and will not make loans to any Person or hold evidence of indebtedness
issued by any other Person or entity (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity); 
  
 (cc) has not identified and will not identify its partners, members or shareholders, or any Affiliate of any
of them, as a division or part of it, and has not identified itself and shall not identify itself as a division of any other Person; 
  
 (dd) has not entered into or been a party to, and will not enter into or be a party to, any transaction with its partners, members,
shareholders or Affiliates except (A) in the ordinary course of its business and on terms which are intrinsically fair, commercially reasonable and are no less favorable to it than would be obtained in a comparable arm’s-length transaction with
an unrelated third party and (B) in connection with this Agreement; 
  
 (ee) has not and will not have any obligation to, and will not, indemnify its partners, officers, directors or members, as the case may be, except as provided in its organizational documents; 
  
 (ff) if such entity is a corporation, it shall consider the
interests of its creditors in connection with all corporate actions; 
  
 (gg) does not and will not have any of its obligations guaranteed by any Affiliate (except its obligations under any Franchise Agreement); and 
  
 (hh) has complied and will comply with all of the terms and provisions contained in its organizational
documents. The statement of facts contained in its organizational documents are true and correct and will remain true and correct. 
  
 “Standard Statements” shall have the meaning set forth in Section 5.1.11(f)(i) hereof. 
  
 “State” shall mean, with respect to an Individual Property,
the State or Commonwealth in which such Individual Property or any part thereof is located. 
  
 “Static Cash Deposit” shall have the meaning set forth in Section 7.2 hereof. 
  
 “Successor Borrower” shall have the meaning set forth in Section 2.5.3 hereof. 
  
 “Survey” shall mean a survey of the Individual Property in
question prepared pursuant to the requirements contained in Section 4.1.27 hereof. 
  
 “Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 7.2 hereof. 
  

 -21- 

 “Taxes” shall mean all real estate and personal property taxes, assessments, water rates
or sewer rents, now or hereafter levied or assessed or imposed against any Individual Property or part thereof. 
  
 “Terrorism Losses” shall have the meaning set forth in Section 6.1(a)(x) hereof. 
  
 “Terrorism Premium Limit” shall mean $875,000.00.

  
 “Threshold Amount” shall have the meaning set
forth in Section 5.1.21 hereof. 
  
 “Title
Insurance Policies” shall mean, with respect to each Individual Property, an ALTA mortgagee Title Insurance policy in a form acceptable to Lender (or, if an Individual Property is in a State which does not permit the issuance of such ALTA
policy, such form as shall be permitted in such State and acceptable to Lender) issued with respect to such Individual Property and insuring the lien of the Mortgage encumbering such Individual Property. 
  
 “Transfer” shall have the meaning set forth in Section
5.2.10(b) hereof. 
  
 “Transferee” shall have
the meaning set forth in Section 5.2.10(f) hereof. 
  
 “Treasury Rate” shall mean, as of the Open Repayment Date, the yield, calculated by linear interpolation (rounded to the nearest one-thousandth of one percent (i.e., 0.001%) of the yields of noncallable United
State Treasury obligations with terms (one longer and one shorter) most nearly approximately the period from such date of determination to the Maturity Date, as determined by Lender on the basis of Federal Reserve Statistical Release H.15-Selected
Interest Rates under the heading U.S. Governmental Security/Treasury Constant Maturities, or, in the absence thereof, other recognized source of financial market information selected by Lender. 
  
 “UCC” or “Uniform Commercial Code” shall
mean the Uniform Commercial Code as in effect in the applicable State in which an Individual Property is located. 
  
 “Undefeased Note” shall have the meaning set forth in Section 2.5.1(a)(v) hereof. 
  
 “Uniform System of Accounts” shall mean the most recent
edition of the Uniform System of Accounts for Hotels, as adopted by the American Hotel and Motel Association. 
  
 “U.S. Obligations” shall mean non-redeemable securities evidencing an obligation to timely pay principal and/or interest in a full and
timely manner that are direct obligations of the United States of America for the payment of which its full faith and credit is pledged. 
  
 “Yield Maintenance Premium” shall mean the amount (if any) which, when added to the remaining principal amount of the Note or the
principal amount of a Defeased Note, as applicable, will be sufficient to purchase U.S. Obligations providing the required Scheduled Defeasance Payments. 
  

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 Section 1.2. Principles of Construction. All references to sections and schedules are to
sections and schedules in or to this Agreement unless otherwise specified. All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise. Unless otherwise specified, the
words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined. 
  
 II. GENERAL TERMS 
  
 Section 2.1. Loan Commitment; Disbursement to Borrower. 
  
 2.1.1 Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender
hereby agrees to make and Borrower hereby agrees to accept the Loan on the Closing Date. 
  
 2.1.2 Single Disbursement to Borrower. Borrower may request and receive only one borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of the Loan may not be
reborrowed. 
  
 2.1.3 The Note, Mortgages and Loan
Documents. The Loan shall be evidenced by the Note and secured by the Mortgages, the Assignments of Leases and the other Loan Documents. 
  
 2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) acquire the Properties and/or repay and discharge any existing
loans relating to the Properties, (b) pay all past-due Basic Carrying Costs, if any, with respect to the Properties, (c) make deposits into the Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses incurred in
connection with the closing of the Loan, as approved by Lender, (e) fund any working capital requirements of the Properties and (f) distribute the balance, if any, to Borrower. 
  
 Section 2.2. Interest Rate. 
  
 2.2.1 Interest Rate. Interest on the outstanding principal balance of the Loan shall accrue from the Closing
Date to but excluding the Maturity Date at the Applicable Interest Rate. 
  
 2.2.2 Interest Calculation. Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is
being made by (b) a daily rate based on a three hundred sixty (360) day year by (c) the outstanding principal balance. 
  
 2.2.3 Default Rate. In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the outstanding
principal balance of the Loan and, to the extent permitted by law, all accrued and unpaid interest in respect of the Loan and any other amounts due pursuant to the Loan Documents, shall accrue interest at the Default Rate, calculated from the date
such payment was due without regard to any grace or cure periods contained herein. 
  

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 2.2.4 Usury Savings. This Agreement, the Note and the other Loan Documents are subject to
the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the
Maximum Legal Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Applicable
Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal
and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to
the Loan for so long as the Loan is outstanding. 
  
 Section
2.3. Loan Payment. 
  
 2.3.1 Scheduled
Payments. Borrower shall pay to Lender (a) on the Closing Date, an amount equal to interest only on the outstanding principal balance of the Loan from the Closing Date up to but not including the first Payment Date following the Closing Date
(unless such Closing Date is the first (1st) day of the month, in which case no such interest only payment shall be due), and (b) on each Payment Date thereafter up to and including the Maturity Date, Borrower shall make a payment to Lender of
principal and interest in an amount equal to the Monthly Debt Service Payment Amount, which payments shall be applied first to accrued and unpaid interest and the balance to principal. The principal portion of the Monthly Debt Service Payment Amount
required hereunder is based upon a twenty-five (25) year amortization schedule. 
  
 2.3.2 Payments Generally. The first interest accrual period hereunder shall commence on and include the Closing Date and end on August 31, 2004. Each interest accrual period thereafter shall commence on
the first (1st) day of each calendar month during the term of the Loan and shall end on and include the last day of such calendar month. For purposes of making payments hereunder, but not for purposes of calculating interest accrual periods, if the
day on which such payment is due is not a Business Day, then amounts due on such date shall be due on the immediately succeeding Business Day and with respect to payments of principal due on the Maturity Date, interest shall be payable at the
Applicable Interest Rate or the Default Rate, as the case may be, through and including the day immediately preceding such Maturity Date. All amounts due pursuant to this Agreement and the other Loan Documents shall be payable without setoff,
counterclaim, defense or any other deduction whatsoever. 
  
 2.3.3 Payment on Maturity Date. Borrower shall pay to Lender on the Maturity Date the outstanding principal balance of the Loan, all accrued and unpaid interest and all other amounts due hereunder and under the Note, the
Mortgages and the other Loan Documents. 
  

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 2.3.4 Late Payment Charge. If any principal, interest or any other sums due under the Loan
Documents is not paid by Borrower by the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by applicable law in order to defray the
expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall be secured by the Mortgages and the other Loan Documents to the extent
permitted by applicable law. 
  
 2.3.5 Method and Place of
Payment. Except as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender not later than 1:00 P.M., New York City time, on the date when due and shall be made in lawful
money of the United States of America in immediately available funds at Lender’s office or as otherwise directed by Lender, and any funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day. 
  
 Section 2.4.
Prepayments. 
  
 2.4.1 Voluntary
Prepayments. Except as otherwise provided herein, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Maturity Date. On the Open Repayment Date, or on any Payment Date thereafter, Borrower may, at its option
and upon thirty (30) days prior notice to Lender, prepay the Debt in whole but not in part without payment of the Yield Maintenance Premium. 
  
 2.4.2 Mandatory Prepayments. On the next occurring Payment Date following the date on which Lender actually receives any Net Proceeds, if
Lender is not obligated to make such Net Proceeds available to Borrower for the Restoration of any Individual Property or otherwise opted to return such Net Proceeds to Borrower pursuant to Section 6.4(c), Borrower shall prepay, or authorize
Lender to apply Net Proceeds as a prepayment of, the outstanding principal balance of the Note in an amount equal to one hundred percent (100%) of such Net Proceeds. Provided that no Event of Default has occurred and is continuing, no Yield
Maintenance Premium shall be due in connection with any prepayment made pursuant to this Section 2.4.2 or Section 5.3 of the Mortgages. The Release Amount with respect to such Individual Property shall be reduced in an amount equal to such
prepayment. Any partial prepayment under this Section 2.4.2 shall be applied to the last payments of principal due under the Loan. 
  
 2.4.3 Prepayments After Default. If following the occurrence and during the continuance of an Event of Default, payment of all or any part
of the Debt is tendered by Borrower or otherwise recovered by Lender (including through application of any Reserve Funds), such tender or recovery shall be (a) made on the next occurring Payment Date together with the Monthly Debt Service Payment
Amount and (b) deemed a voluntary prepayment by Borrower in violation of the prohibition against prepayment set forth in Section 2.4.1 and Borrower shall pay, in addition to the Debt, an amount equal to the greater of (i) five percent (5%) of
the outstanding principal balance of the Loan to be prepaid or satisfied, and (ii) the Yield 
  

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 Maintenance Premium that would be required if a Defeasance Event had occurred in an amount equal to the outstanding
principal amount of the Loan to be prepaid or satisfied. During the continuance of an Event of Default, any prepayment shall be applied to payments of principal of the Loan and other amounts due under the Loan Documents in such order and priority as
Lender may determine in its sole discretion. 
  
 Section 2.5.
Defeasance. 
  
 2.5.1 Voluntary
Defeasance. (a) Provided no Event of Default shall then exist and so long as the Defeasance Lockout Date has occurred, Borrower shall have the right at any time prior to the date voluntary prepayments are permitted under Section 2.4.1
hereof to voluntarily defease all or any portion of the Loan by and upon satisfaction of the following conditions (such event being a “Defeasance Event”): 
  
 (i) Borrower shall provide not less than thirty (30) days prior written notice to Lender specifying the
Payment Date (the “Defeasance Date”) on which the Defeasance Event is to occur and the principal amount of the Loan to be defeased; 
  
 (ii) Borrower shall pay to Lender all accrued and unpaid interest on the principal balance of the Loan to and including the Defeasance
Date; 
  
 (iii) Borrower shall pay to Lender all
other sums, not including scheduled interest or principal payments, then due under the Note, this Agreement, the Mortgage and the other Loan Documents; 
  
 (iv) Borrower shall deliver to Lender the Defeasance Deposit applicable to the Defeasance Event; 
  
 (v) In the event only a portion of the Loan is the subject
of the Defeasance Event, Borrower shall cause Lender to prepare all necessary documents to modify this Agreement and to amend and restate the Note and issue two substitute notes, one note having a principal balance equal to the defeased portion of
the original Note and a maturity date equal to Maturity Date (the “Defeased Note”) and the other note having a principal balance equal to the undefeased portion of the Note (the “Undefeased Note”). The Defeased Note
and Undefeased Note shall otherwise have terms identical to the Note, except that a Defeased Note cannot be the subject of any further Defeasance Event; 
  
 (vi) Borrower shall execute and deliver a pledge and security agreement, in form and substance that would be reasonably satisfactory to a
prudent lender creating a first priority lien on the Defeasance Deposit and the U.S. Obligations purchased with the Defeasance Deposit in accordance with the provisions of this Section 2.5 (the “Security Agreement”);

  
 (vii) Borrower shall deliver an opinion of
counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that 
  

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 Borrower has legally and validly transferred and assigned the U.S. Obligations and all obligations,
rights and duties under and to the Note or Defeased Note (as applicable) to the Successor Borrower, that Lender has a perfected first priority security interest in the Defeasance Deposit and the U.S. Obligations delivered by Borrower and that any
REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of such Defeasance Event; 
  
 (viii) Borrower shall deliver confirmation in writing from
the applicable Rating Agencies to the effect that such release will not result in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior to such Defeasance Event for the Securities issued in connection with
the Securitization which are then outstanding. If required by the applicable Rating Agencies, Borrower shall also deliver or cause to be delivered a non-consolidation opinion with respect to the Successor Borrower in form and substance satisfactory
to the applicable Rating Agencies; 
  
 (ix)
Borrower shall deliver an Officer’s Certificate certifying that the requirements set forth in this Section 2.5.1(a) have been satisfied; 
  
 (x) Borrower shall deliver a certificate of Borrower’s independent certified public accountant certifying that the U.S. Obligations
purchased with the Defeasance Deposit generate monthly amounts equal to or greater than the Scheduled Defeasance Payments; 
  
 (xi) Borrower shall deliver such other certificates, documents or instruments as Lender may reasonably request; and 
  
 (xii) Borrower shall pay all costs and expenses of Lender
incurred in connection with the Defeasance Event, including (A) any costs and expenses associated with a release of the Lien of the related Mortgage as provided in Section 2.6 hereof, (B) reasonable attorneys’ fees and expenses incurred
in connection with the Defeasance Event, (C) the costs and expenses of the Rating Agencies, and (D) any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection with the transfer of the Note, or otherwise required
to accomplish the defeasance. 
  
 (b) In connection with each
Defeasance Event, Borrower shall use the Defeasance Deposit to purchase U.S. Obligations which provide payments on or prior to, but as close as possible to, all successive scheduled Payment Dates after the Defeasance Date upon which interest and
principal payments are required under this Agreement and the Note, in the case of a Defeasance Event for the entire outstanding principal balance of the Loan, or the Defeased Note, in the case of a Defeasance Event for only a portion of the
outstanding principal balance of the Loan, as applicable, and in amounts equal to the scheduled payments due on such Payment Dates under this Agreement and the Note or the Defeased Note, as applicable (including, without limitation, scheduled
payments of principal, interest, servicing fees (if any), and any other amounts due under the Loan Documents on such dates) and assuming such Note or 
  

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 Defeased Note is prepaid in full on the Open Repayment Date (the “Scheduled Defeasance Payments”).
Borrower, pursuant to the Security Agreement or other appropriate document, shall authorize and direct that the payments received from the U.S. Obligations may be made directly to the Cash Management Account (unless otherwise directed by Lender) and
applied to satisfy the obligations of Borrower under this Agreement and the Note or the Defeased Note, as applicable. Any portion of the Defeasance Deposit in excess of the amount necessary to purchase the U.S. Obligations required by this
Section 2.5 and satisfy Borrower’s other obligations under this Section 2.5 and Section 2.6 shall be remitted to Borrower. 
  
 2.5.2 Collateral. Each of the U.S. Obligations that are part of the defeasance collateral shall be duly endorsed by the holder thereof as
directed by Lender or accompanied by a written instrument of transfer in form and substance that would be satisfactory to a prudent lender (including, without limitation, such instruments as may be required by the depository institution holding such
securities or by the issuer thereof, as the case may be, to effectuate book-entry transfers and pledges through the book-entry facilities of such institution) in order to perfect upon the delivery of the defeasance collateral a first priority
security interest therein in favor of the Lender in conformity with all applicable state and federal laws governing the granting of such security interests. 
  
 2.5.3 Successor Borrower. In connection with any Defeasance Event, Borrower may at its option, or if so required by the applicable Rating
Agencies shall, establish or designate a successor entity (the “Successor Borrower”) which shall be a single purpose bankruptcy remote entity with one (1) Independent Director or Independent Member approved by the Rating Agencies,
and Borrower shall transfer and assign all obligations, rights and duties under and to the Note or the Defeased Note, as applicable, together with the pledged U.S. Obligations to such Successor Borrower. Such Successor Borrower shall assume the
obligations under the Note or the Defeased Note, as applicable, and the Security Agreement and Borrower shall be relieved of its obligations under such documents. Borrower shall pay $1,000 to any such Successor Borrower as consideration for assuming
the obligations under the Note or the Defeased Note, as applicable, and the Security Agreement. Notwithstanding anything in this Agreement to the contrary, no other assumption fee shall be payable upon a transfer of the Note or the Defeased Note, as
applicable, in accordance with this Section 2.5.3, but Borrower shall pay all costs and expenses incurred by Lender, including Lender’s reasonable attorneys’ fees and expenses and any fees and expenses of any Rating Agencies,
incurred in connection therewith. 
  
 Section 2.6. Release
of Property. Except as set forth in this Section 2.6, no repayment, prepayment or defeasance of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any
Mortgage on any Individual Property. 
  
 2.6.1 Release of
all Properties. (a) If Borrower has elected to defease the entire Loan and the requirements of Section 2.5 and this Section 2.6 have been satisfied, all of the Properties shall be released from the Liens of their respective
Mortgages and the U.S. Obligations, pledged pursuant to the Security Agreement, shall be the sole source of collateral securing the Note, provided that, at Borrower’s request, Lender shall terminate the Environmental Indemnity, the
Guaranty and other Loan Documents requested by Borrower to the same extent as if the Loan was paid in full. 
  

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 (b) In connection with the release of the Mortgages, Borrower shall submit to Lender, not less than
thirty (30) days prior to the Defeasance Date, a release of Lien (and related Loan Documents) for each Individual Property for execution by Lender. Such release shall be in a form appropriate in each jurisdiction in which an Individual Property is
located and that would be satisfactory to a prudent lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s
Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such releases in accordance with the terms of this Agreement. 
  
 2.6.2 Release of Individual Property. If Borrower has elected to defease a portion of the Loan and the
requirements of Section 2.5 and this Section 2.6 have been satisfied, Borrower may obtain the release of an Individual Property from the Lien of the Mortgage thereon (and related Loan Documents) and the release of Borrower’s
obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions: 
  
 (a) The principal balance of the Defeased Note shall equal or exceed the Adjusted Release Amount for the applicable
Individual Property; provided, however, if the undefeased portion of the Loan at the time a release is requested is less than the Adjusted Release Amount, the Defeased Note shall equal the remaining undefeased portion of the Loan at
the time of release; 
  
 (b) Borrower shall submit to Lender, not
less than thirty (30) days prior to the date of such release, a release of Lien (and related Loan Documents) for such Individual Property for execution by Lender. Such release shall be in a form appropriate in each jurisdiction in which the
Individual Property is located and that contains standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in
connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, (ii) will effect such release in accordance with the terms of this Agreement, and (iii)
will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being
released); 
  
 (c) After giving effect to such release, the Debt
Service Coverage Ratio for the Properties then remaining subject to the Liens of the Mortgages shall be equal to or greater than the greater of (i) the Debt Service Coverage Ratio for the twelve (12) full calendar months immediately preceding the
Closing Date and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including the Individual Property to be released and taking into account the Debt evidenced by the Defeased Note in question) for the twelve (12) full
calendar months immediately preceding the release of the Individual Property; 
  
 (d) The Individual Property to be released shall be conveyed to a Person other than a Borrower or any of its Affiliates; and 
  

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 (e) The Adjusted Release Amount paid to Lender in connection with any such release shall be applied (i)
first, to reduce the Release Amount of the Individual Property being released to zero and (ii) second, to the Debt in any order and priority as determined in Lender’s sole discretion immediately following such release. 
  
 2.6.3 Assignment of New York Mortgage upon Defeasance. If
Borrower has specified in the notice delivered pursuant to Section 2.5.1 that it desires to effectuate a Defeasance Event in a manner which will permit the assignment of that certain Mortgage encumbering the Individual Property located in
Hauppauge, New York (the “New York Mortgage”) and the related Defeased Note to a new lender providing a portion of the funds necessary to acquire the Defeasance Deposit (and the U.S. Obligations purchased with the Defeasance
Deposit) in order to save mortgage recording tax, Borrower and Lender shall cooperate to effect such proposed assignment in the following manner: Lender shall assign the Defeased Note and the New York Mortgage, each without recourse, covenant or
warranty of any nature, express or implied, to such new lender designated by Borrower (other than Borrower or a nominee of Borrower) provided that Borrower (a) has executed and delivered to such new lender a new note to be secured by the Defeasance
Deposit (and the U.S. Obligations purchased with the Defeasance Deposit) pursuant to the Security Agreement between Borrower and such new lender (such new note to have the same term, interest rate, unpaid principal balance and all other material
terms and conditions of the Note), which new note, together with the Security Agreement and the rights of such new lender in and to the Defeasance Deposit (and the U.S. Obligations purchased with the Defeasance Deposit), shall be assigned by such
new lender to Lender simultaneously with the assignment of the Defeased Note and New York Mortgage by Lender and (b) has complied with all other provisions of Section 2.5 to the extent not inconsistent with this Section 2.6.3. In
addition, any such assignment shall be conditioned on the following: (i) payment by Borrower of (A) Lender’s then customary administrative fee for processing assignments of mortgage; (B) the reasonable expenses of Lender incurred in connection
therewith; and (C) Lender’s reasonable attorney’s fees for the preparation, delivery and performance of such an assignment; (ii) Borrower shall have caused the delivery of an executed Statement of Oath under Section 275 of the New York
Real Property Law; (iii) such new lender shall materially modify the Defeased Note such that it shall be treated as a new loan for federal tax purposes; (iv) such an assignment is not then prohibited by any federal, state or local law, rule,
regulation, order or by any other governmental authority; (v) such assignment and the actions described above do not constitute a prohibited transaction for any REMIC Trust formed pursuant to a Securitization and will not disqualify such REMIC Trust
as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of such assignment and the Defeasance Event, and an opinion of counsel to Borrower to that effect is delivered to Lender in a form
and substance delivered by counsel that would be reasonably satisfactory to a prudent lender, and, if requested by Lender, appropriate rulings or opinions from applicable taxing authorities to that effect are delivered to Lender; and (F) Borrower
shall provide such other opinions, items, information and documents which a prudent lender would require to effectuate such assignment. Borrower shall be responsible for all mortgage recording taxes, recording fees and other charges payable in
connection with any such assignment. Lender agrees that the assignment of the Defeased Note and the New York Mortgage to the new lender and the assignment of the new note, the Defeasance Deposit (and the U.S. Obligations purchased with the
Defeasance Deposit) and the Security Agreement by the new lender to Lender shall be accomplished by an escrow closing conducted through an escrow 
  

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 agent satisfactory to Lender and pursuant to an escrow agreement reasonably satisfactory to Lender in form and substance.
Notwithstanding the foregoing, Lender reserves the right to impose different requirements or procedures on such an assignment of the Defeased Note and the New York Mortgage in order to accommodate applicable legal requirements at the time of such
Defeasance Event in the State of New York if a prudent lender would impose such requirements or procedures. 
  
 2.6.4 Release on Payment in Full. Lender shall, upon the written request and at the expense of Borrower, upon payment in full of all
principal and interest due on the Loan and all other amounts due and payable under the Loan Documents in accordance with the terms and provisions of the Note and this Agreement, release the Lien of the Mortgage on each Individual Property not
theretofore released or assign the Mortgage, pursuant to documentation reasonably satisfactory to Lender without recourse to or representation or warranty by Lender. 
  
 2.6.5 Release of Out Parcel. At any time after the Closing Date, Borrower may transfer and obtain a release of
the Out Parcel from the Lien of the applicable Mortgage upon at least ten (10) Business Days prior written notice, provided that any such release shall only be granted if the following conditions have been met or satisfied: 
  
 (a) Borrower shall (i) pay Lender a processing fee equal to $10,000 and (ii)
reimburse Lender for any costs and expenses it reasonably incurs arising from the transfer of the Out Parcel and any release of the Out Parcel from the Lien of the applicable Mortgage (including, without limitation, reasonable attorneys’ fees
and expenses); 
  
 (b) If an Event of Default is continuing at the
time of such release, then Borrower shall remit to Lender one hundred percent (100%) of the net sales proceeds received by Borrower in connection with the release of the Out Parcel and such amount shall be applied to the Debt in accordance with
Section 2.4.3 hereof; 
  
 (c) The Out Parcel has not been
developed, improved or subject to construction in any manner; 
  
 (d) As of the Closing Date, the contract for the sale of the Out Parcel provides that the intended use of the Out Parcel shall be for activities consistent or complementary with the use of the related Individual Property and there shall
have been no material modifications or amendments to such contract since the Closing Date; 
  
 (e) Upon the transfer and release of the Out Parcel and after the completion of the standard approval process for tax lot-splits by the applicable municipal authority exercising jurisdiction over the Out Parcel, no
part of the remaining Individual Property shall be part of a tax lot which includes any portion of the related Out Parcel; 
  
 (f) Each applicable municipal authority exercising jurisdiction over the Out Parcel shall have approved, as part of its standard approval process, a
lot-split ordinance or other applicable action under local law dividing the Out Parcel from the remainder of the related Individual Property and the required procedures or processes necessary for the assignment of separate tax identification numbers
to each shall be initiated concurrently with the release and transfer of the Out Parcel; 
  

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 (g) All requirements under all laws, statutes, rules and regulations (including, without limitation, all
zoning and subdivision laws, setback requirements, sideline requirements, parking ratio requirements, use requirements, building and fire code requirements, environmental requirements and wetlands requirements) applicable to the related Individual
Property necessary to accomplish the lot split shall have been fulfilled, and all necessary variances, if any, shall have been obtained, and evidence thereof has been delivered to Lender which in form and substance is appropriate for the
jurisdiction in which the related Individual Property is located; 
  
 (h) As a result of the lot split, the remaining Individual Property with all easements appurtenant and other Permitted Encumbrances thereto will not be in material violation of any then applicable law, statute, rule or regulation
(including, without limitation, all zoning and subdivision laws, setback requirements, sideline requirements, parking ratio requirements, use requirements, building and fire code requirements, environmental requirements and wetland requirements) and
all necessary variances, if any, shall have been obtained and evidence thereof has been delivered to Lender which in form and substance is appropriate for the jurisdiction in which the related Individual Property is located; 
  
 (i) Lender shall receive an Officer’s Certificate certifying that the
single purpose nature and bankruptcy remoteness of Borrower and Principal following such release have not been adversely affected and are in accordance with the terms and provisions of the Loan Documents; 
  
 (j) Appropriate reciprocal easement agreements for the benefit and burden of
the remaining Individual Property and the Out Parcel regarding the use of common facilities of such parcels, including, but not limited to, roadways, parking areas, utilities and community facilities, in a form and substance that would be reasonably
acceptable to an ordinary prudent lender, requiring no cost or expense to Borrower other than customary and usual costs and expenses and which easements will not materially adversely affect the remaining Individual Property, shall be declared and
recorded, and the remaining Individual Property and the Out Parcel shall be in compliance with all applicable covenants under all easements and property agreements contained in the Permitted Encumbrances for the related Individual Property;

  
 (k) Lender shall have received (i) an appropriate title policy
endorsement to the effect that the release of the Out Parcel will not have an adverse affect on the priority of the Lien of the related Mortgage on the remaining Individual Property, provided, however, the Lien of the Mortgage on the
remaining Individual Property shall be subordinated to any easements created in connection with the release of the Out Parcel pursuant to this Section 2.6.5, and (ii) an appropriate title policy endorsement or other evidence reasonably
satisfactory to Lender that there are no new or additional subordinate Liens on the remaining Individual Property other than Permitted Encumbrances; and 
  
 (l) Borrower has delivered an Officer’s Certificate to the effect that, to such officer’s knowledge after diligent inquiry, the conditions in
subsection (a)-(k) hereof have occurred or shall occur concurrently with the transfer and release of the Out Parcel. 
  

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 Section 2.7. Cash Management. 
  
 2.7.1 Lockbox Account. (a) Borrower shall establish and
maintain with respect to each Individual Property a segregated Eligible Account (collectively, the “Lockbox Account”) with Lockbox Bank in trust for the benefit of Lender, which Lockbox Account shall be under the sole dominion and
control of Lender. The Lockbox Account shall be entitled “JPMorgan Chase Bank, as Lender, pursuant to Loan Agreement dated as of August 19, 2004-Lockbox Account”. Borrower hereby grants to Lender a first priority security interest in the
Lockbox Account and all deposits at any time contained therein and the proceeds thereof and will take all actions necessary to maintain in favor of Lender a perfected first priority security interest in the Lockbox Account, including, without
limitation, executing and filing UCC-1 Financing Statements and continuations thereof. All costs and expenses for establishing and maintaining the Lockbox Account shall be paid by Borrower. 
  
 (b) Borrower shall, or shall cause Operating Lessee or Manager to deliver
irrevocable written instructions to (i) all tenants under Leases to deliver all Rents payable thereunder directly to the Lockbox Account, and (ii) each of the credit card companies or credit card clearing banks with which Borrower, Operating Lessee
or Manager has entered into merchant’s agreements to deliver all receipts payable with respect to the Properties directly to the Lockbox Account. Borrower shall, and shall cause Operating Lessee and Manager to, deposit all amounts received by
Borrower, Operating Lessee or Manager constituting Rents into the Lockbox Account within one (1) Business Day after receipt. 
  
 (c) Pursuant to the terms of the Lockbox Agreement Borrower shall, or shall cause Operating Lessee to, obtain from Lockbox Bank its agreement to transfer
to the Cash Management Account in immediately available funds by federal wire transfer all amounts on deposit in the Lockbox Account once every Business Day throughout the term of the Loan upon notice from Lender that a Lockbox Event has occurred.
Provided that no Lockbox Event has occurred and is continuing, all funds on deposit in the Lockbox Account shall be disbursed to the account or accounts designated by Borrower to Lockbox Bank in accordance with the related Lockbox Agreement.

  
 2.7.2 Cash Management Account. (a) Borrower
shall establish and maintain a segregated Eligible Account (the “Cash Management Account”) to be held by Servicer in trust for the benefit of Lender, which Cash Management Account shall be under the sole dominion and control of
Lender. The Cash Management Account shall be entitled “JPMorgan Chase Bank, as Lender, pursuant to Loan Agreement dated as of August 19, 2004 – Cash Management Account”. Borrower hereby grants to Lender a first priority security
interest in the Cash Management Account and all deposits at any time contained therein and the proceeds thereof and will take all actions necessary to maintain in favor of Lender a perfected first priority security interest in the Cash Management
Account, including, without limitation, executing and filing UCC-1 Financing Statements and continuations thereof. Borrower will not in any way alter or modify the Cash Management Account and will notify Lender of the account number thereof. Lender
and Servicer shall have the sole right to make withdrawals from the Cash Management Account and all costs and expenses for establishing and maintaining the Cash Management Account shall be paid by Borrower. 
  

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 (b) Provided that no Lockbox Event is occurring, Borrower shall pay to Lender on each Payment Date all
amounts so required pursuant to the Loan Documents. On each Payment Date during the occurrence of a Lockbox Event (or, if such Payment Date is not a Business Day, on the immediately preceding Business Day), all funds on deposit in the Cash
Management Account shall be applied by Lender to the payment of the following items in the order indicated: 
  
 (i) first, payments to the Tax and Insurance Escrow Fund in accordance with the terms and conditions of Section 7.2 hereof; 
  
 (ii) second, payment of the Monthly Debt Service Payment Amount;

  
 (iii) third, payments to the Replacement Escrow Fund
in accordance with the terms and conditions of Section 7.3 hereof; 
  
 (iv) fourth, payment to Lender of any other amounts then due and payable under the Loan Documents; 
  
 (v) fifth, payments to Borrower or Operating Lessee for monthly Operating Expenses incurred in accordance with the related Approved Annual Budget
pursuant to a written request for payment submitted by Borrower to Lender specifying the individual Operating Expenses in a form acceptable to Lender; 
  
 (vi) sixth, payments to Borrower or Operating Lessee for Extraordinary Expenses approved by Lender, if any; 
  
 (vii) seventh, payment to Mezzanine Lender of the monthly debt
service amount due under the Mezzanine Loan; 
  
 (viii)
eighth, if the Lockbox Event is occurring solely as a result of a Mezzanine Loan Default, then during the occurrence and continuance of such Mezzanine Loan Default payment of all Excess Cash Flow to Mezzanine Lender; and 
  
 (ix) lastly, subject to subsection (viii) above, payment of all Excess Cash
Flow to the Excess Cash Flow Escrow Fund in accordance with the terms and conditions of Section 7.4 hereof. 
  
 (c) The insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower from the obligation to make any payments, as and when
due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever. 
  
 (d) Notwithstanding anything contained herein to the contrary, all funds on deposit in the Cash Management Account following
the occurrence of an Event of Default may be applied by Lender in such order and priority as Lender shall determine. 
  
 2.7.3 Payments Received Under the Cash Management Agreement. Notwithstanding anything to the contrary contained in this Agreement and the
other Loan 
  

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 Documents, and provided no Event of Default has occurred and is continuing, Borrower’s obligations with respect to
the payment of the Monthly Debt Service Payment Amount and amounts due for the Tax and Insurance Escrow Fund, Required Repair Fund, Replacement Escrow Fund and any other payment reserves established pursuant to this Agreement or any other Loan
Document shall be deemed satisfied to the extent sufficient amounts are deposited in the Cash Management Account established pursuant to the Cash Management Agreement to satisfy such obligations on the dates each such payment is required, regardless
of whether any of such amounts are so applied by Lender. 
  
 III. CONDITIONS PRECEDENT 
  
 Section
3.1. Conditions Precedent to Closing. The obligation of Lender to make the Loan hereunder is subject to the fulfillment by Borrower or waiver by Lender of the following conditions precedent no later than the Closing Date: 
  
 3.1.1 Representations and Warranties; Compliance with
Conditions. The representations and warranties of Borrower contained in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on and as of
such date, and no Default or an Event of Default shall have occurred and be continuing; and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed. 
  
 3.1.2 Loan Agreement
and Note. Lender shall have received a copy of this Agreement and the Note, in each case, duly executed and delivered on behalf of Borrower. 
  
 3.1.3 Delivery of Loan Documents; Title Insurance; Reports; Leases. 
  
 (a) Mortgages, Assignments of Leases. Lender shall have received from Borrower fully executed and acknowledged
counterparts of the Mortgages and the Assignments of Leases and evidence that counterparts of the Mortgages and Assignments of Leases have been delivered to the title company for recording, in the reasonable judgment of Lender, so as to effectively
create upon such recording valid and enforceable Liens upon each Individual Property, of the requisite priority, in favor of Lender (or such other trustee as may be required or desired under local law), subject only to the Permitted Encumbrances and
such other Liens as are permitted pursuant to the Loan Documents. Lender shall have also received from Borrower fully executed counterparts of the other Loan Documents. 
  
 (b) Title Insurance. Lender shall have received pro-forma Title Insurance Policies issued by a title company
acceptable to Lender and dated as of the Closing Date, with reinsurance and direct access agreements reasonably acceptable to Lender. Such Title Insurance Policies shall (i) provide coverage in the aggregate amount of the Loan, (ii) insure Lender
that the relevant Mortgage creates a valid lien on the Individual Property encumbered thereby of the requisite priority, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from
coverage (as modified by the terms of any endorsements), (iii) contain such endorsements and affirmative coverages as Lender may reasonably request, and (iv) name Lender as the insured. The Title Insurance Policies shall be assignable to the extent
permitted under applicable law. Lender also shall have received evidence that all premiums in respect of such Title Insurance Policies have been paid. 
  

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 (c) Survey. Lender shall have received a current Survey for each Individual Property,
certified to the title company, Borrower and Lender and their successors and assigns, in form and content satisfactory to Lender and prepared by a professional and properly licensed land surveyor satisfactory to Lender in accordance with the
Accuracy Standards for ALTA/ACSM Land Title Surveys as adopted by ALTA, American Congress on Surveying & Mapping and National Society of Professional Surveyors in 1999. Each such Survey shall reflect the same legal description contained in the
Title Insurance Policies relating to such Individual Property and shall include, among other things, a metes and bounds description of the real property comprising part of such Individual Property reasonably satisfactory to Lender. The
surveyor’s seal shall be affixed to each Survey and the surveyor shall provide a certification for each Survey in form and substance reasonably acceptable to Lender. 
  
 (d) Insurance. Lender shall have received valid certificates of insurance for the Policies required hereunder,
satisfactory to Lender in its sole discretion, and evidence of the payment of all Insurance Premiums payable for the existing policy period. 
  
 (e) Environmental Reports. Lender shall have received Environmental Reports with respect to each Individual Property. 
  
 (f) Zoning. With respect to each Individual Property, Lender
shall have received, at Lender’s option, (i) either (x) letters or other evidence with respect to each Individual Property from the appropriate municipal authorities (or other Persons) concerning applicable zoning and building laws or (y) a
report of Urban Concepts, and (ii) if available in the applicable State, an ALTA 3.1 zoning endorsement for the applicable Title Insurance Policy. 
  
 (g) Encumbrances. Borrower shall have taken or caused to be taken such actions in such a manner so that Lender has a valid and perfected
first priority Lien as of the Closing Date with respect to each Mortgage on the applicable Individual Property, subject only to applicable Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents, and Lender shall
have received satisfactory evidence thereof. 
  
 3.1.4
Related Documents. Each additional document not specifically referenced herein, but relating to the transactions contemplated herein, shall be in form and substance reasonably satisfactory to Lender, and shall have been duly authorized,
executed and delivered by all parties thereto and Lender shall have received and approved certified copies thereof. 
  
 3.1.5 Delivery of Organizational Documents. Borrower shall deliver or cause to be delivered to Lender copies certified by Borrower of all
organizational documentation related to Borrower and/or the formation, structure, existence, good standing and/or qualification to do business, as Lender may request in its sole discretion, including, without limitation, good standing certificates,
qualifications to do business in the appropriate jurisdictions, resolutions authorizing the entering into of the Loan and incumbency certificates as may be requested by Lender. 
  

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 3.1.6 Opinions of Borrower’s Counsel. Lender shall have received opinions from
Borrower’s counsel with respect to non-consolidation and the due execution, authority, enforceability of the Loan Documents and such other matters as Lender may require, all such opinions in form, scope and substance satisfactory to Lender and
Lender’s counsel in their sole discretion. 
  
 3.1.7
Budgets. Borrower shall have delivered, and Lender shall have approved, the Annual Budget for the current Fiscal Year. 
  
 3.1.8 Basic Carrying Costs. Borrower shall have paid all Basic Carrying Costs relating to the Properties which are in arrears, including
without limitation, (a) accrued but unpaid Insurance Premiums, (b) currently due Taxes (including any in arrears) and (c) currently due Other Charges, which amounts shall be funded with proceeds of the Loan. 
  
 3.1.9 Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions contemplated by this Agreement and other Loan Documents and all documents incidental thereto shall be satisfactory in form and substance to Lender, and Lender shall have received
all such counterpart originals or certified copies of such documents as Lender may reasonably request. 
  
 3.1.10 Payments. All payments, deposits or escrows required to be made or established by Borrower under this Agreement, the Note and the
other Loan Documents on or before the Closing Date shall have been paid. 
  
 3.1.11 Tenant Estoppels. Lender shall have received an executed tenant estoppel letter, which shall be in form and substance reasonably satisfactory to Lender, with respect to the following Leases: (a)
LaGrotta at Ravinia, Inc., at the Individual Property located in Atlanta, Georgia, (b) Ruth’s Chris Steakhouse #35, L.P., at the Individual Property located in Parsippany, New Jersey, and (c) (i) The Boston LECO Corp. d/b/a NYC Jukebox, (ii)
Ladco Management Company Inc. Management Agreement, and (iii) Boston Ballroom Corporation, each at the Individual Property located in Boston, Massachusetts. 
  
 3.1.12 Transaction Costs. Borrower shall have paid or reimbursed Lender for all Title Insurance premiums, recording and filing fees, costs
of environmental reports, Physical Conditions Reports, appraisals and other reports, the reasonable fees and costs of Lender’s counsel and all other third party out-of-pocket expenses incurred in connection with the origination of the Loan.

  
 3.1.13 Material Adverse Change. There shall have
been no material adverse change in the financial condition or business condition of Borrower or the Properties since the date of the most recent financial statements delivered to Lender. The income and expenses of the Properties, the occupancy
thereof, and all other features of the transaction shall be as represented to Lender without material adverse change. Neither Borrower nor Principal, Operating Lessee or Guarantor shall be the subject of any bankruptcy, reorganization, or insolvency
proceeding. 
  

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 3.1.14 Tax Lot. Lender shall have received evidence that each Individual Property
constitutes one (1) or more separate tax lots, which evidence shall be reasonably satisfactory in form and substance to Lender. 
  
 3.1.15 Physical Conditions Reports. Lender shall have received Physical Conditions Reports with respect to each Individual Property.

  
 3.1.16 Management Agreement. Lender shall have
received a copy of the Management Agreement for each Individual Property which shall be satisfactory in form and substance to Lender. 
  
 3.1.17 Franchise Agreement. With the exception of the Individual Property located in Hauppauge, New York and the Individual Property located
in Boston, Massachusetts, which franchise license in each case is included in and a part of the related Management Agreement, Lender shall have received a copy of the Franchise Agreement for each Individual Property which shall be satisfactory in
form and substance to Lender. 
  
 3.1.18 Appraisal.
Lender shall have received an appraisal of each Individual Property, which shall be satisfactory in form and substance to Lender. 
  
 3.1.19 Financial Statements. Lender shall have received a balance sheet with respect to each Individual Property for the two most recent
Fiscal Years and statements of income and statements of cash flows with respect to each Individual Property for the three most recent Fiscal Years, each in form and substance reasonably satisfactory to Lender. 
  
 3.1.20 Further Documents. Lender or its counsel shall have
received such other and further approvals, opinions, documents and information as Lender or its counsel may have reasonably requested including the Loan Documents in form and substance satisfactory to Lender and its counsel. 
  
 IV. REPRESENTATIONS AND WARRANTIES 
  
 Section 4.1. Borrower Representations. Borrower represents and
warrants as of the date hereof and as of the Closing Date that: 
  
 4.1.1 Organization. Borrower, Principal and Operating Lessee have been duly organized and are validly existing and in good standing with requisite power and authority to own their properties and to transact the businesses in
which each is now engaged. Borrower, Principal and Operating Lessee are duly qualified to do business and are in good standing in each jurisdiction where each is required to be so qualified in connection with its properties, businesses and
operations. Borrower, Principal and Operating Lessee possess all rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle each to own its properties and to transact the businesses in which each is now engaged,
and the sole business of Borrower and Operating Lessee is the ownership, management and operation of the Properties. The ownership interests of Borrower and Operating Lessee are as set forth on the organizational chart attached hereto as Schedule
IV. 
  

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 4.1.2 Proceedings. Each of Borrower and Operating Lessee has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party. This Agreement and such other Loan Documents to which it is a party have been duly executed and delivered by or on behalf of
each of Borrower and Operating Lessee, as applicable, and constitute legal, valid and binding obligations of Borrower and Operating Lessee, as applicable, enforceable against Borrower and Operating Lessee, as applicable, in accordance with their
respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). 
  
 4.1.3 No
Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower and Operating Lessee, as applicable, will not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower or Operating Lessee pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, partnership agreement, management agreement or other agreement or instrument to which Borrower or Operating Lessee is a party or by which any of Borrower’s or Operating Lessee’s property
or assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over Borrower or Operating Lessee or any of Borrower’s or
Operating Lessee’s properties or assets, and any consent, approval, authorization, order, registration or qualification of or with any such Governmental Authority required for the execution, delivery and performance by Borrower and Operating
Lessee of this Agreement or any other Loan Documents has been obtained and is in full force and effect. 
  
 4.1.4 Litigation. There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority or other agency now
pending or, to their respective knowledge, threatened against or affecting Borrower, Principal, Operating Lessee, Guarantor or any Individual Property, which actions, suits or proceedings, if determined against Borrower, Principal, Operating Lessee,
Guarantor or any Individual Property, would have a Material Adverse Effect. 
  
 4.1.5 Agreements. Neither Borrower nor Operating Lessee is a party to any agreement or instrument or subject to any restriction which might materially and adversely affect Borrower, Operating Lessee or
any Individual Property, or Borrower’s nor Operating Lessee business, properties or assets, operations or condition, financial or otherwise. Neither Borrower nor Operating Lessee is in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party or by which Borrower, Operating Lessee or any of the Properties are bound. Neither Borrower nor Operating
Lessee has any material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Borrower or Operating Lessee is a party or by which Borrower, Operating Lessee or the Properties is
otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Properties as permitted pursuant to clause (t) of the definition of “Special Purpose Entity” set forth in Section 1.1 hereof, (b)
obligations under the Loan Documents and any Operating Lease, or (c) any obligation expressly permitted under this Agreement. 
  

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 4.1.6 Title. Borrower has good, marketable and insurable fee simple title (and leasehold
title with respect to the applicable portion of the Individual Property located in Hauppauge, New York) to the real property comprising part of each Individual Property and good title to the balance of such Individual Property, free and clear of all
Liens whatsoever except the Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. The Permitted Encumbrances in the aggregate do not materially and adversely affect the
value, operation or use of the applicable Individual Property (as currently used) or Borrower’s ability to repay the Loan. Each Mortgage, 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 applicable Individual 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. To the best of Borrower’s knowledge, there are no claims for payment for work, labor or materials affecting the Properties which are or may become a Lien
prior to, or of equal priority with, the Liens created by the Loan Documents. 
  
 4.1.7 Solvency. Borrower and Operating Lessee have (a) not entered into the transaction or executed the Note, this Agreement or any other Loan Documents, as applicable, with the actual intent to hinder,
delay or defraud any creditor and (b) received reasonably equivalent value in exchange for their respective obligations under such Loan Documents. The fair saleable value of each of Borrower’s and Operating Lessee’s assets exceeds and
will, immediately following the making of the Loan, exceed Borrower’s and Operating Lessee’s total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of each
of Borrower’s and Operating Lessee’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s and Operating Lessee’s probable liabilities, including the maximum amount of its contingent
liabilities on its debts as such debts become absolute and matured. Each of Borrower’s and Operating Lessee’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted. Neither Borrower nor Operating Lessee intends to, nor believes that it will, incur debt and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such
debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrower and Operating Lessee and the amounts to be payable on or in respect of obligations of Borrower). No petition in bankruptcy has been
filed against Borrower, Operating Lessee, Principal or Guarantor, and neither Borrower, Operating Lessee, Principal nor Guarantor has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of
debtors. Neither Borrower, Operating Lessee, Principal nor Guarantor are contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of Borrower’s or
Operating Lessee’s assets or properties, and neither Borrower nor Operating Lessee has any knowledge of any Person contemplating the filing of any such petition against it or Principal or Guarantor. 
  

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 4.1.8 Full and Accurate Disclosure. To Borrower’s knowledge, no statement of fact made
by Borrower or Operating Lessee in this Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading.
There is no material fact presently known to Borrower or Operating Lessee which has not been disclosed to Lender which adversely affects, nor as far as Borrower can foresee, might adversely affect, any Individual Property or the business, operations
or condition (financial or otherwise) of Borrower or Operating Lessee. 
  
 4.1.9 No Plan Assets. Neither Borrower nor Operating Lessee is an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of Borrower or Operating Lessee
constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) neither Borrower nor Operating Lessee is a “governmental plan” within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower or Operating Lessee are not subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans similar to the provisions of Section 406
of ERISA or Section 4975 of the Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Loan Agreement. 
  
 4.1.10 Compliance. Each of Borrower, Operating Lessee and the Properties (including the use thereof) comply in all material respects with
all applicable Legal Requirements, including, without limitation, building and zoning ordinances and codes. Neither Borrower nor Operating Lessee is in default or violation of any order, writ, injunction, decree or demand of any Governmental
Authority, except where a failure to comply will not have a Material Adverse Effect. There has not been committed by Borrower or Operating Lessee any act or omission affording the federal government or any other Governmental Authority the right of
forfeiture as against any Individual Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. 
  
 4.1.11 Financial Information. All financial data, including, without limitation, the statements of cash flow
and income and operating expense, that have been delivered to Lender in connection with the Loan (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of the Properties in all material
respects as of the date of such reports, and (iii) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance with GAAP throughout the periods covered, except as disclosed therein and
except for an intercompany transaction shown on the income statements for the Individual Property located in Hauppauge, New York as previously disclosed to Lender. Except for Permitted Encumbrances, Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and reasonably likely to have a Materially Adverse Effect, except as referred to or
reflected in said financial statements. Since the date of such financial statements, there has been no material adverse change in the financial condition, operation or business of Borrower from that set forth in said financial statements.

  

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 4.1.12 Condemnation. No Condemnation or other proceeding has been commenced or, to
Borrower’s best knowledge, is threatened or contemplated with respect to all or any portion of any Individual Property or for the relocation of roadways providing access to any Individual Property. 
  
 4.1.13 Federal Reserve Regulations. No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents. 
  
 4.1.14 Utilities and Public Access. Each Individual Property
has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service such Individual Property for its respective intended uses. All public utilities necessary or convenient to the full use
and enjoyment of each Individual Property are located either in the public right-of-way abutting such Individual Property (which are connected so as to serve such Individual Property without passing over other property) or in recorded easements
serving such Individual Property and such easements are set forth in and insured by the Title Insurance Policies. All roads necessary for the use of each Individual Property for their current respective purposes have been completed and dedicated to
public use and accepted by all Governmental Authorities. 
  
 4.1.15 Not a Foreign Person. Neither Borrower nor Operating Lessee is a “foreign person” within the meaning of § 1445(f)(3) of the Code. 
  
 4.1.16 Separate Lots. Each Individual Property is comprised of one (1) or more parcels which constitute a
separate tax lot or lots and does not constitute a portion of any other tax lot not a part of such Individual Property. 
  
 4.1.17 Assessments. To the best of Borrower’s knowledge, there are no pending or proposed special or other assessments for public
improvements or otherwise affecting any Individual Property, nor to the best of Borrower’s knowledge, are there any contemplated improvements to any Individual Property that may result in such special or other assessments. 
  
 4.1.18 Enforceability. The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, Principal, Operating Lessee or Guarantor, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right
thereunder, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and neither Borrower,
Principal, Operating Lessee nor Guarantor have asserted any right of rescission, set-off, counterclaim or defense with respect thereto. 
  
 4.1.19 No Prior Assignment. To the best of Borrower’s knowledge, there are no prior assignments of the Leases, the Operating Lease or
any portion of the Rents due and payable or to become due and payable which are presently outstanding. 
  

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 4.1.20 Insurance. Borrower has obtained and has delivered to Lender certified copies of all
Policies reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. No claims, which if determined adversely to Borrower are reasonably likely to have a Material Adverse Effect, have been made under any such
Policies, and no Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any such Policies. 
  
 4.1.21 Use of Property. Each Individual Property is used exclusively as a hotel and other appurtenant and related uses. 
  
 4.1.22 Certificate of Occupancy; Licenses. All certifications,
permits, licenses and approvals, including without limitation, certificates of completion and occupancy permits and any applicable liquor licenses required for the legal use, occupancy and operation of each Individual Property as a hotel
(collectively, the “Licenses”), have been obtained and are in full force and effect, except for (a) the liquor licenses designated on Schedule XI hereto that cannot be assigned to Borrower on the Closing Date, but under which
Borrower has the right to continue operating after the Closing Date pursuant to the Liquor License Agreements, and (b) where the failure to obtain such licenses or for such licenses to not be in full force and effect does not have a Material Adverse
Effect with respect to the Individual Property or Borrower. Borrower and Operating Lessee, as applicable, shall keep and maintain all Licenses necessary for the operation of each Individual Property as a hotel. The use being made of each Individual
Property is in conformity with the certificate of occupancy issued for such Individual Property. Each Liquor License Agreement is in full force and effect and there is no material default, breach or violation existing thereunder by Borrower or the
applicable licensee thereunder and no event has occurred that, with the passage of time or the giving of notice, or both, would constitute a default, breach or violation by any party thereunder. The terms and provisions of the Liquor License
Agreements are subordinate to this Agreement and the Mortgages. Neither the execution and delivery of the Loan Documents, Borrower’s performance thereunder, nor the exercise of any remedies by Lender, will adversely affect Borrower’s
rights under the Liquor License Agreements. 
  
 4.1.23 Flood
Zone. None of the Improvements on any Individual Property are located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards or, if so located, the flood insurance required pursuant to
Section 6.1(a)(i) is in full force and effect with respect to each such Individual Property. 
  
 4.1.24 Physical Condition. Except as disclosed in the applicable Physical Conditions Report, each Individual Property, including, without
limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping,
irrigation systems and all structural components, are in good condition, order and repair in all material respects; there exists no structural or other material defects or damages in any Individual Property, whether latent or otherwise, and neither
Borrower nor Operating Lessee has received notice from any insurance company or bonding company of any defects or inadequacies in any Individual Property, or any part thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond. 
  

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 4.1.25 Boundaries. To Borrower’s knowledge, all of the improvements which were
included in determining the appraised value of each Individual Property lie wholly within the boundaries and building restriction lines of such Individual Property, and no improvements on adjoining properties encroach upon such Individual Property,
and no easements or other encumbrances upon the applicable Individual Property encroach upon any of the improvements, so as to affect the value or marketability of the applicable Individual Property except those which are insured against by the
Title Insurance Policy. 
  
 4.1.26 Leases. The
Properties are not subject to any Leases in excess of three thousand (3,000) square feet other than (a) the Leases described in Schedule II attached hereto and made a part hereof, and (b) the Operating Leases. Borrower is the owner and lessor
of landlord’s interest in the Operating Leases and Operating Lessee is the owner and lessor of landlord’s interest in the Leases. No Person has any possessory interest in any Individual Property or right to occupy the same except under and
pursuant to the provisions of the Leases. The current Leases are in full force and effect and there are no defaults thereunder by either party and there are no conditions that, with the passage of time or the giving of notice, or both, would
constitute defaults thereunder. To the best of Borrower’s knowledge, no Rent has been paid more than one (1) month in advance of its due date. To the best of Borrower’s knowledge, all work to be performed by Borrower or Operating Lessee
under each Lease has been performed as required and has been accepted by the applicable tenant, and any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by Borrower or
Operating Lessee to any tenant has already been received by such tenant. There has been no prior sale, transfer or assignment, hypothecation or pledge of any Lease or of the Rents received therein which is still in effect. To the best of
Borrower’s knowledge, no tenant listed on Schedule II has assigned its Lease or sublet all or any portion of the premises demised thereby, no such tenant holds its leased premises under assignment or sublease, nor does anyone except such
tenant and its employees occupy such leased premises. No tenant under any Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of the leased premises or the building of which the leased premises are a part. To
the best of Borrower’s knowledge, no tenant under any Lease has any right or option for additional space in the Improvements. 
  
 4.1.27 Survey. To Borrower’s knowledge, the Survey for each Individual Property delivered to Lender in connection with this Agreement
has been prepared in accordance with the provisions of Section 3.1.3(c) hereof, and does not fail to reflect any material matter affecting such Individual Property or the title thereto. 
  
 4.1.28 Principal Place of Business; State of Organization.
Borrower’s principal place of business as of the date hereof is the address set forth in the introductory paragraph of this Agreement. Borrower and Operating Lessee are each organized under the laws of the State of Delaware. 
  
 4.1.29 Filing and Recording Taxes. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the transfer of the Properties to Borrower have been paid. All
mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements 
  

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 currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the Mortgages, have been paid, and, under current Legal Requirements, each of the Mortgages is enforceable in accordance with their respective terms by Lender (or any
subsequent holder thereof), subject to principles of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights and the enforcement of debtors’ obligations. 
  
 4.1.30 Special Purpose Entity/Separateness. (a) Until the Debt
has been paid in full, Borrower hereby represents, warrants and covenants that (i) Borrower is, shall be and shall continue to be a Special Purpose Entity, (ii) Principal is, shall be and shall continue to be a Special Purpose Entity and (iii)
Operating Lessee is, shall be and shall continue to be a Special Purpose Entity; provided, however, that Lender agrees that, in the event that Borrower, Operating Lessee or Principal fails to maintain an Independent Director or an
Independent Manager solely as a result of the failure of Corporation Services Company or other similar service organization to appoint and maintain an independent director or independent manager who complies with the definition of “Independent
Director” or “Independent Manager” contained herein, Borrower, Operating Lessee or Principal shall have thirty (30) days (or such shorter period of time which is necessary to ensure that an “Independent Director” or
“Independent Manager” is available to vote on any matter required by the Loan Documents or the relevant entity’s organizational documents) from the date that Borrower, Operating Lessee or Principal becomes aware of such failure to
replace such independent director or independent manager with an independent director or independent manager who complies with the definition of “Independent Director” or “Independent Manager” contained herein and such failure
shall not constitute an Event of Default herein unless Borrower, Operating Lessee or Principal fails to consummate such replacement within such thirty (30) day period. 
  
 (b) The representations, warranties and covenants set forth in Section 4.1.30(a) shall survive for so long as any
amount remains payable to Lender under this Agreement or any other Loan Document. 
  
 (c) All of the assumptions made in the Insolvency Opinion with respect to the Restricted Parties, including, but not limited to, any exhibits attached thereto, are true and correct in all respects and any assumptions
made in any subsequent non-consolidation opinion required to be delivered in connection with the Loan Documents (an “Additional Insolvency Opinion”), including, but not limited to, any exhibits attached thereto, will have been and
shall be true and correct in all respects. Borrower has complied and will comply with, and Principal and Operating Lessee have complied and Borrower will cause Principal and Operating Lessee to comply with, all of the assumptions made with respect
to Borrower, Operating Lessee and Principal in the Insolvency Opinion. Borrower will have complied and will comply with all of the assumptions made with respect to Borrower, Operating Lessee and Principal in any Additional Insolvency Opinion. Each
entity other than Borrower, Operating Lessee and Principal which is a Restricted Party with respect to which an assumption shall be made in any Additional Insolvency Opinion will have complied and will comply with all of the assumptions made with
respect to it in any Additional Insolvency Opinion. 
  
 4.1.31
Management Agreement. Each Management Agreement is in full force and effect and (a) to the knowledge of Borrower, there is no default thereunder by Manager and 
  

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 no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder,
and (b) there is no default by Operating Lessee thereunder and no event has occurred that, with the passage of time and/or the giving of notice would constitute a default by Operating Lessee thereunder. 
  
 4.1.32 Illegal Activity. No portion of any Individual Property
has been or will be purchased with proceeds of any illegal activity. 
  
 4.1.33 No Change in Facts or Circumstances; Disclosure. All information submitted by Borrower to Lender and in all financial statements, reports, certificates and other documents submitted by or on behalf of Borrower in
connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower in this Agreement or in any other Loan Document, are accurate, complete and correct in all material respects. There has been no material
adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise would have a Material Adverse Effect. Borrower has disclosed
to Lender all material facts and has not failed to disclose any material fact that could cause any Provided Information or representation or warranty made herein to be materially misleading. 
  
 4.1.34 Investment Company Act. Neither Borrower nor Operating
Lessee is (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (c) subject
to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money. 
  
 4.1.35 Embargoed Person. At all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to
the Loan Documents, (a) none of the funds or other assets of Borrower, Principal, Operating Lessee and Guarantor constitute property of, or are beneficially owned, directly or, to their respective knowledge, indirectly, by any person, entity or
government subject to trade restrictions under U.S. law, including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and any Executive Orders or regulations promulgated thereunder with the result that the investment in Borrower, Principal, Operating Lessee or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan
made by the Lender is in violation of law (“Embargoed Person”); (b) no Embargoed Person has any interest of any nature whatsoever in Borrower, Principal, Operating Lessee or Guarantor, as applicable, with the result that the
investment in Borrower, Principal, Operating Lessee or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower, Principal, Operating Lessee or
Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in Borrower, Principal, Operating Lessee or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in
violation of law. 
  

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 4.1.36 Cash Management Account. (a) This Agreement, together with the other Loan Documents,
creates a valid and continuing security interest (as defined in the Uniform Commercial Code of the State of New York) in the Lockbox Account and Cash Management Account in favor of Lender, which security interest is prior to all other Liens, other
than Permitted Encumbrances, and is enforceable as such against creditors of and purchasers from Borrower. Other than in connection with the Loan Documents and except for Permitted Encumbrances, neither Borrower nor Operating Lessee has sold or
otherwise conveyed the Lockbox Account or the Cash Management Account; 
  
 (b) Each of the Lockbox Account and Cash Management Account constitutes a “deposit account” or “security account” within the meaning of the Uniform Commercial Code of the State of New York; 
  
 (c) Pursuant and subject to the terms hereof and the Cash Management
Agreement, the Lockbox Bank has agreed to comply with all instructions originated by Lender, without further consent by Borrower, directing disposition of the Lockbox Account and all sums at any time held, deposited or invested therein, together
with any interest or other earnings thereon, and all proceeds thereof (including proceeds of sales and other dispositions), whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities; and 

 
 (d) The Lockbox Account and Cash Management Account are not in the name of
any Person other than Borrower and Operating Lessee, collectively, as pledgor, or Lender, as pledgee. 
  
 4.1.37 Franchise Agreement. Each Franchise Agreement is in full force and effect and (a) to the knowledge of Borrower, there is no default
thereunder by Franchisor and no event that, with the passage of time and/or the giving of notice would constitute a default by Franchisor thereunder, and (b) there is no default thereunder by Operating Lessee and no event has occurred that, with the
passage of time and/or giving of notice, would constitute a default by Operating Lessee thereunder. 
  
 4.1.38 Operating Lease. The Operating Lease is in full force and effect and there is no material default, breach or violation existing
thereunder by Borrower or Operating Lessee and no event has occurred that, with the passage of time or the giving of notice, or both, would constitute a default, breach or violation by any party thereunder. The terms and provisions of the Operating
Lease, are subordinate to this Agreement and the Mortgages. Neither the execution and delivery of the Loan Documents, Borrower’s performance thereunder, nor the exercise of any remedies by Lender, will adversely affect Borrower’s rights
under the Operating Lease. 
  
 Section 4.2. Survival of
Representations. Borrower agrees that all of the representations and warranties of Borrower set forth in Section 4.1 and elsewhere in this Agreement and in the other Loan Documents shall survive for so long as any amount remains owing
to Lender under this Agreement or any of the other Loan Documents by Borrower. All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by
Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf. 
  

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 V. BORROWER COVENANTS 
  
 Section 5.1. Affirmative Covenants. From the date hereof and until payment and performance in full of all
obligations of Borrower under the Loan Documents in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that: 
  
 5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises and comply in all material respects with all Legal Requirements applicable to Borrower, Operating Lessee and the Properties. There
shall never be committed by Borrower or Operating Lessee and Borrower any act or omission affording the federal government or any state or local government the right of forfeiture against any Individual Property or any part thereof or any monies
paid in performance of Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. Borrower and Operating Lessee
shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its business and shall keep the Properties in good working order and repair, and from
time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the Mortgages. Borrower and Operating Lessee shall keep the Properties insured at
all times by financially sound and reputable insurers, to such extent and against such risks, and maintain liability and such other insurance, as is more fully provided in this Agreement. Borrower and Operating Lessee shall operate any Individual
Property that is the subject of an O&M Agreement in accordance with the terms and provisions thereof in all material respects. After prior notice to Lender, Borrower or Operating Lessee, at its own expense, may contest by appropriate legal
proceeding promptly initiated and conducted in good faith and with due diligence, the validity of any Legal Requirement, the applicability of any Legal Requirement to Borrower, Operating Lessee or any Individual Property or any alleged violation of
any Legal Requirement, provided that (i) no Default or Event of Default has occurred and remains uncured; (ii) Borrower or Operating Lessee is permitted to do so under the provisions of any mortgage or deed of trust superior in lien to the
applicable Mortgage; (iii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Borrower or Operating Lessee is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (iv) no Individual Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (v)
Borrower or Operating Lessee shall promptly upon final determination thereof comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement; (vi) such proceeding shall suspend the
enforcement of the contested Legal Requirement against Borrower, Operating Lessee and any Individual Property; and (vii) Borrower or Operating Lessee shall furnish such security as reasonably may be required in the proceeding, or as may be requested
by Lender, to insure compliance with such Legal Requirement, together with all interest and penalties payable in connection therewith. Lender may apply any such security, as necessary to 
  

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 cause compliance with such Legal Requirement at any time when, in the reasonable judgment of Lender, the validity,
applicability or violation of such Legal Requirement is finally established or any Individual Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost. 
  
 5.1.2 Taxes and Other Charges. Borrower shall pay all Taxes and
Other Charges now or hereafter levied or assessed or imposed against the Properties or any part thereof as the same become due and payable; provided, however, Borrower’s obligation to directly pay Taxes shall be suspended for so
long as Borrower complies with the terms and provisions of Section 7.2 hereof. Borrower will deliver to Lender receipts for payment or other evidence satisfactory to Lender that the Taxes and Other Charges have been so paid or are not then
delinquent no later than ten (10) days prior to the date on which the Taxes and/or Other Charges would otherwise be delinquent if not paid. Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the
date the same shall become delinquent provided, however, Borrower is not required to furnish such receipts for payment of Taxes in the event that such Taxes have been paid by Lender pursuant to Section 7.2 hereof. Borrower shall
not suffer and shall promptly cause to be paid and discharged (or bonded in a manner reasonably acceptable to Lender) any Lien or charge whatsoever which may be or become a Lien or charge against the Properties, and shall promptly pay for all
utility services provided to the Properties. After prior notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any Taxes or Other Charges, provided that (a) no Default or Event of Default has occurred and remains uncured; (b) Borrower is permitted to do so under the provisions of any mortgage or deed of trust superior in
lien to the applicable Mortgage; (c) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower or Operating Lessee is subject and shall not constitute a default thereunder
and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (d) no Individual Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost;
(e) Borrower and/or Operating Lessee shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (f) such proceeding
shall suspend the collection of such contested Taxes or Other Charges from the applicable Individual Property; and (g) Borrower shall furnish such security as reasonably may be required in the proceeding, or as may be requested by Lender, to insure
the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender,
the entitlement of such claimant is established or any Individual Property (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of any Mortgage
being primed by any related Lien. 
  
 5.1.3
Litigation. Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or threatened against Borrower, Principal, Operating Lessee and Guarantor which might materially adversely affect
Borrower’s, Principal’s, Operating Lessee’s or Guarantor’s condition (financial or otherwise) or business or any Individual Property. 
  

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 5.1.4 Access to Properties. Borrower shall permit, and cause Operating Lessee to permit,
agents, representatives and employees of Lender to inspect the Properties or any part thereof at reasonable hours upon reasonable advance notice. 
  
 5.1.5 Notice of Default. Borrower shall promptly advise Lender of any material adverse change in Borrower’s, Principal’s,
Operating Lessee’s or Guarantor’s condition, financial or otherwise, or of the occurrence of any Default or Event of Default of which Borrower has knowledge. 
  
 5.1.6 Cooperate in Legal Proceedings. Borrower shall cooperate fully with Lender with respect to any
proceedings before any court, board or other Governmental Authority which Lender reasonably believes would have a Material Adverse Effect upon the rights of Lender hereunder or any rights obtained by Lender under any of the other Loan Documents and,
in connection therewith, permit Lender, at its election, to participate in any such proceedings. 
  
 5.1.7 Perform Loan Documents. Borrower shall observe, perform and satisfy all the terms, provisions, covenants and conditions of, and shall
pay when due all costs, fees and expenses to the extent required under the Loan Documents executed and delivered by, or applicable to, Borrower. 
  
 5.1.8 Award and Insurance Benefits. Borrower shall cooperate with Lender in obtaining for Lender the benefits of any Awards or Insurance
Proceeds lawfully or equitably payable in connection with any Individual Property, and Lender shall be reimbursed for any expenses incurred in connection therewith (including reasonable attorneys’ fees and disbursements, and the payment by
Borrower of the expense of an appraisal on behalf of Lender in case of Casualty or Condemnation affecting any Individual Property or any part thereof) out of such Insurance Proceeds. 
  
 5.1.9 Further Assurances. Borrower shall, or cause Operating Lessee to, at Borrower’s sole cost and
expense: 
  
 (a) to the extent in Borrower’s possession or
reasonably obtainable by Borrower or Operating Lessee, furnish to Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement and instrument required to be furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested by Lender in connection therewith and which are
consistent with the terms thereof; 
  
 (b) execute and deliver to
Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time securing or intended to secure the obligations of
Borrower under the Loan Documents, as Lender may reasonably require and which are consistent with the terms thereof; and 
  
 (c) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time and which are consistent with the terms thereof. 
  

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 5.1.10 Supplemental Mortgage Affidavits. Borrower represents that it has paid all state,
county and municipal recording and all other taxes imposed upon the execution and recordation of the Mortgages. If at any time Lender determines, based on applicable law, that Lender is not being afforded the maximum amount of security available
from any one or more of the Properties as a direct or indirect result of applicable taxes not having been paid with respect to any Individual Property, Borrower agrees that Borrower will execute, acknowledge and deliver to Lender, immediately upon
Lender’s request, supplemental affidavits increasing the amount of the Debt attributable to any such Individual Property (as set forth as the Release Amount on Schedule I annexed hereto) for which all applicable taxes have been paid to
an amount determined by Lender to be equal to the lesser of (a) the greater of the fair market value of the applicable Individual Property (i) as of the date hereof and (ii) as of the date such supplemental affidavits are to be delivered to Lender,
and (b) the amount of the Debt attributable to any such Individual Property (as set forth as the Release Amount on Schedule I annexed hereto), and Borrower shall, on demand, pay any additional taxes. 
  
 5.1.11 Financial Reporting. (a) Borrower will keep and
maintain or will cause to be kept and maintained on a Fiscal Year basis, in accordance with the Uniform System of Accounts and GAAP, which for each Individual Property shall be prepared as part of the audited financial statements of Highland
Hospitality Corporation, proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower and all items of income and expense in connection with the operation on an individual basis of the Properties. Lender shall
have the right from time to time at all times during normal business hours upon reasonable notice to examine such books, records and accounts at the office of Borrower or any other Person maintaining such books, records and accounts and to make such
copies or extracts thereof as Lender shall desire. During the continuance of an Event of Default, Borrower shall pay any costs and expenses incurred by Lender to examine Borrower’s accounting records with respect to the Properties, as Lender
shall determine to be necessary or appropriate in the protection of Lender’s interest. 
  
 (b) Borrower will furnish to Lender annually, within ninety (90) days following the end of each Fiscal Year of Borrower, a complete copy of Highland Hospitality Corporation’s consolidated annual financial
statements audited by a “Big Four” accounting firm in accordance with the Uniform System of Accounts and GAAP covering the Properties on a combined basis as well as each Individual Property for such Fiscal Year and containing statements of
profit and loss for each of the Properties and a balance sheet for each Individual Property. Such statements shall set forth the financial condition and the results of operations for the Properties for such Fiscal Year, and shall include, but not be
limited to, amounts representing annual Net Operating Income, Gross Income from Operations and Operating Expenses. Such annual financial statements shall be accompanied by the following for each Individual Property (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal Year for each Individual Property, (ii) a review report of a “Big Four” accounting firm or other independent certified public accountant reasonably acceptable to
Lender, (iii) occupancy statistics for the Properties on a combined basis as well as for each Individual Property, and (iv) an Officer’s Certificate certifying that each annual financial statement presents 
  

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 fairly the financial condition and the results of operations of Borrower and the Properties being reported upon and that
such financial statements have been prepared in accordance with the Uniform System of Accounts and GAAP and as of the date thereof whether there exists an event or circumstance which constitutes a Default or Event of Default under the Loan Documents
executed and delivered by, or applicable to, Borrower or Operating Lessee, and if such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same. 
  
 (c) Borrower will furnish, or cause to be furnished, to Lender on or before
twenty-five (25) days after the end of each calendar month prior to the occurrence of a Securitization and on or before forty-five (45) days after the end of each calendar quarter following the Securitization of the Loan the following items,
accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete and fairly present the financial condition and results of the operations of Borrower and the Properties on a combined basis as well as
each Individual Property (subject to normal year-end adjustments) as applicable: (i) monthly and year-to-date operating statements (including Capital Expenditures) prepared for each calendar month, noting Net Operating Income, Gross Income from
Operations, and Operating Expenses (not including any contributions to the Replacement Reserve Fund), and, upon Lender’s request, other information necessary and sufficient to fairly represent the financial position and results of operation of
the Properties during such calendar month, and containing a comparison of budgeted income and expenses and the actual income and expenses together with a detailed explanation of any variances of five percent (5%) or more between budgeted and actual
amounts for such periods, all in form reasonably satisfactory to Lender; and (ii) the amount of all operating rent due pursuant to the Operating Lease for the subject month. In addition, such Officer’s Certificate shall also state that the
representations and warranties of Borrower set forth in Section 4.1.30 are true and correct as of the date of such certificate and that there are no trade payables outstanding for more than sixty (60) days (subject to Borrower’s right to
contest in accordance with this Agreement). All calculations of the operating rent due under each Operating Lease shall be subject to verification by Lender. 
  
 (d) For the partial year period commencing on the date hereof, and for each Fiscal Year thereafter, Borrower shall submit to Lender an Annual Budget not
later than thirty (30) days prior to the commencement of such period or Fiscal Year in form reasonably satisfactory to Lender. The Annual Budget for each Fiscal Year shall be subject to Lender’s approval not to be unreasonably withheld (each
such Annual Budget, an “Approved Annual Budget”). The Annual Budget for the Fiscal Year 2004 has been approved by Lender as of the Closing Date as the Approved Annual Budget for such Fiscal Year. In the event that Lender objects to
a proposed Annual Budget submitted by Borrower which requires the approval of Lender hereunder, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description
of such objections) and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to
Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise the same in accordance with the process described in this subsection until Lender approves the Annual Budget. Until such time that Lender approves a
proposed Annual Budget which requires the approval of Lender hereunder, the most recently Approved Annual Budget shall apply; provided, that such Approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Insurance
Premiums and Other Charges. 
  

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 (e) In the event that Borrower must incur an extraordinary Operating Expense or Capital Expenditure not
set forth in the Approved Annual Budget (each, an “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender’s approval.

  
 (f) If requested by Lender, Borrower shall provide Lender,
promptly upon request, with the following financial statements (the costs and expenses of which shall be paid by Lender) if, at the time a Disclosure Document is being prepared for a Securitization, it is expected that the principal amount of the
Loan together with any Affiliated Loans at the time of Securitization may, or if the principal amount of the Loan together with any Affiliated Loans at any time during which the Loan and any Affiliated Loans are included in a Securitization does,
equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Securitization: 
  
 (i) A balance sheet with respect to each Individual Property for the two (2) most recent fiscal years,
meeting the requirements of Section 210.3-01 of Regulation S-X of the Securities Act and statements of income and statements of cash flows with respect to each Individual Property for the three most recent fiscal years, meeting the requirements of
Section 210.3-02 of Regulation S-X, and, to the extent that such balance sheet is more than 135 days old as of the date of the document in which such financial statements are included, interim financial statements of each Individual Property meeting
the requirements of Section 210.3-01 and 210.3-02 of Regulation S-X (all of such financial statements, collectively, the “Standard Statements”); provided, however, that with respect to each Individual Property (other
than properties that are hotels, nursing homes, or other properties that would be deemed to constitute a business and not real estate under Regulation S-X or other legal requirements) that has been acquired by Borrower from an unaffiliated third
party (such Property, “Acquired Property”), as to which the other conditions set forth in Section 210.3-14 of Regulation S-X for provision of financial statements in accordance with such Section have been met, in lieu of the
Standard Statements otherwise required by this Section, Borrower shall instead provide the financial statements required by such Section 210.3-14 of Regulation S-X (“Acquired Property Statements”). 
  
 (ii) Not later than thirty (30) days after the end of each
fiscal quarter following the date hereof, a balance sheet of each Individual Property as of the end of such fiscal quarter, meeting the requirements of Section 210.3-01 of Regulation S-X, and statements of income and statements of cash flows of each
Individual Property for the period commencing following the last day of the most recent fiscal year and ending on the date of such balance sheet and for the corresponding period of the most recent fiscal year, meeting the requirements of Section
210.3-02 of Regulation S-X (provided, that if for such corresponding period of the most recent fiscal year Acquired Property Statements were permitted to be provided hereunder pursuant to subsection (i) above, Borrower shall instead provide Acquired
Property Statements for such corresponding period). 
  

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 (iii) Not later than seventy-five (75) days after the end of each fiscal year following
the date hereof, a balance sheet of each Individual Property as of the end of such fiscal year, meeting the requirements of Section 210.3-01 of Regulation S-X, and statements of income and statements of cash flows of the each Individual Property for
such fiscal year, meeting the requirements of Section 210.3-02 of Regulation S-X. 
  
 (iv) Within ten (10) Business Days after notice from the Lender in connection with the Securitization of this Loan, such additional
financial statements, such that, as of the date (each, an “Offering Document Date”) of each Disclosure Document, Borrower shall have provided Lender with all financial statements as described in subsection (f)(i) above;
provided, that the fiscal year and interim periods for which such financial statements shall be provided shall be determined as of such Offering Document Date. 
  
 (g) If requested by Lender, Borrower shall provide Lender, promptly upon request, with summaries of the financial statements
referred to in Section 5.1.11(f) hereof if, at the time a Disclosure Document is being prepared for a Securitization, it is expected that the principal amount of the Loan and any Affiliated Loans at the time of Securitization may, or if the
principal amount of the Loan and any Affiliated Loans at any time during which the Loan and any Affiliated Loans are included in a Securitization does, equal or exceed ten percent (10%) (but is less than twenty percent (20%)) of the aggregate
principal amount of all mortgage loans included or expected to be included, as applicable, in a Securitization. Such summaries shall meet the requirements for “summarized financial information,” as defined in Section 210.1-02(bb) of
Regulation S-X, or such other requirements as may be determined to be necessary or appropriate by Lender. 
  
 (h) All financial statements provided by Borrower hereunder pursuant to Section 5.1.11(f) and (g) hereof shall be prepared in accordance
with GAAP, and shall meet the requirements of Regulation S-X and other applicable legal requirements. All financial statements referred to in Sections 5.1.11(f)(i) and 5.1.11(f)(iii) above shall be audited by independent accountants of
Borrower acceptable to Lender in accordance with Regulation S-X and all other applicable legal requirements, shall be accompanied by the manually executed report of the independent accountants thereon, which report shall meet the requirements of
Regulation S-X and all other applicable legal requirements, and shall be further accompanied by a manually executed written consent of the independent accountants, in form and substance acceptable to Lender, to the inclusion of such financial
statements in any Disclosure Document and any Exchange Act Filing and to the use of the name of such independent accountants and the reference to such independent accountants as “experts” in any Disclosure Document and Exchange Act Filing,
all of which shall be provided at the same time as the related financial statements are required to be provided. All financial statements (audited or unaudited) provided by Borrower under Section 5.1.11(f) and (g) shall be accompanied
by an Officer’s Certificate, which certification shall state that such financial statements meet the requirements set forth in the first sentence of this Section 5.1.11(h). 
  

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 (i) If requested by Lender, Borrower shall provide Lender, promptly upon request, with any other or
additional financial statements, or financial, statistical or operating information, as Lender shall determine to be required pursuant to Regulation S-X or any amendment, modification or replacement thereto or other legal requirements in connection
with any Disclosure Document or any filing under or pursuant to the Exchange Act in connection with or relating to a Securitization (hereinafter, an “Exchange Act Filing”) or as shall otherwise be reasonably requested by the Lender.

  
 (j) In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to comply with Regulation S-X or other legal requirements are other than as provided herein, then notwithstanding the provisions of Section 5.1.11(f), (g) and (h)
hereof, Lender may request, and Borrower shall promptly provide, such combination of Acquired Property Statement and/or Standard Statements or such other financial statements as Lender determines to be necessary or appropriate for such compliance.

  
 (k) Any reports, statements or other information required to
be delivered under this Agreement shall be delivered (i) in paper form, (ii) on a diskette, and (iii) if requested by Lender and within the capabilities of Borrower’s data systems without change or modification thereto, in electronic form and
prepared using a Microsoft Word for Windows or WordPerfect for Windows files (which files may be prepared using a spreadsheet program and saved as word processing files). Borrower agrees that Lender may disclose information regarding the Properties,
Operating Lessee and Borrower that is provided to Lender pursuant to this Section 5.1.11 in connection with the Securitization to such parties requesting such information in connection with such Securitization. 
  
 5.1.12 Business and Operations. Borrower shall, and shall cause
Operating Lessee to, continue to engage in the businesses presently conducted by Borrower and Operating Lessee as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Properties. Borrower shall,
and shall cause Operating Lessee to, qualify to do business and will remain in good standing under the laws of each jurisdiction as and to the extent the same are required for the ownership, maintenance, management and operation of the
Properties. 
  
 5.1.13 Title to the Properties.
Borrower will warrant and defend (a) the title to each Individual Property and every part thereof, subject only to Liens permitted hereunder (including Permitted Encumbrances) and (b) the validity and priority of the Liens of the Mortgages and
the Assignments of Leases, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each case against the claims of all Persons whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or expenses (including
reasonable attorneys’ fees and court costs) incurred by Lender if an interest in any Individual Property, other than as permitted hereunder, is claimed by another Person. 
  
 5.1.14 Costs of Enforcement. In the event (a) that any Mortgage encumbering any Individual Property is
foreclosed in whole or in part or that any such Mortgage is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to any Mortgage encumbering any Individual
Property in which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other 
  

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 similar proceeding in respect of Borrower or Operating Lessee or any of their constituent Persons or an assignment by
Borrower or Operating Lessee or any of their constituent Persons for the benefit of its creditors, Borrower, its successors or assigns, shall be chargeable with and agrees to pay all costs of collection and defense, including attorneys’ fees
and costs, incurred by Lender or Borrower in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, together with all required service or use taxes. 
  
 5.1.15 Estoppel Statement. (a) After request by Lender,
Borrower shall within ten (10) Business Days furnish Lender with a statement, duly acknowledged and certified, setting forth (i) the original principal amount of the Loan, (ii) the unpaid principal amount of the Loan, (iii) the Applicable Interest
Rate of the Loan, (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses to the payment of the Debt, if any, and (vi) that the Note, this Agreement, the Mortgages and the other Loan Documents are valid,
legal and binding obligations and have not been modified or if modified, giving particulars of such modification. 
  
 (b) After request by Borrower, Lender shall within ten (10) Business Days furnish Borrower with a statement, duly acknowledged and certified, setting
forth (i) the original principal amount of the Loan, (ii) the unpaid principal amount of the Loan, (iii) the Applicable Interest Rate of the Loan, (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses to
the payment of the Debt, if any, (vi) that the Note, this Agreement, the Mortgages and the other Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving the particulars of such modification, and
(vii) whether any written notice of a Default is then outstanding. 
  
 (c) Borrower shall use commercially reasonable efforts to deliver to Lender upon request, tenant estoppel certificates from each commercial tenant leasing space at the Properties in form and substance reasonably satisfactory to Lender
provided that Borrower shall not be required to deliver such certificates more frequently than two (2) times in any calendar year. 
  
 5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan received by it on the Closing Date only for the purposes set forth in
Section 2.1.4. 
  
 5.1.17 Performance by
Borrower. Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision of each Loan Document executed and delivered by, or applicable to, Borrower, and shall not enter into or otherwise suffer or
permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed and delivered by, or applicable to, Borrower without the prior consent of Lender. 
  
 5.1.18 Confirmation of Representations. Borrower shall deliver,
in connection with any Securitization, (a) one or more Officer’s Certificates certifying as to the accuracy of all representations made by Borrower in the Loan Documents as of the date of the closing of such Securitization in all relevant
jurisdictions, and (b) certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower, Operating Lessee and Principal and the good standing of Guarantor as of the date
of the Securitization. 
  

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

 
 5.1.20 Leasing Matters. Any Leases with respect to an
Individual Property executed after the date hereof, for more than three thousand (3,000) square feet shall be approved by Lender, which approval shall not be unreasonably withheld, conditioned or delayed. If (a) Borrower submits to Lender a proposed
Lease for which Lender’s consent is required hereunder together with reasonably detailed financial information relating to the tenant under such Lease and such other information as Lender may reasonably request, accompanied by a notice in
capitalized, bold faced 14 point type containing the following statement at the top of the first page: “THIS IS A REQUEST FOR LEASE APPROVAL. IF LENDER FAILS TO APPROVE OR DISAPPROVE THE ENCLOSED LEASE WITHIN TEN (10) BUSINESS DAYS, BORROWER
MAY DELIVER A DEEMED APPROVAL NOTICE,” (b) Lender fails to either approve or reject said Lease within such ten (10) Business Day period after receipt of the first notice, and Borrower delivers the Lease to Lender accompanied by a notice in
capitalized, bold faced 14 point type containing the following statement at the top of the first page: “THIS IS A SECOND REQUEST FOR LEASE APPROVAL. IF LENDER FAILS TO APPROVE OR DISAPPROVE THE ENCLOSED LEASE WITHIN FIVE (5) BUSINESS DAYS,
SUCH LEASE WILL BE DEEMED APPROVED BY LENDER,” and (c) Lender fails to approve or reject the Lease within such five (5) Business Day period (approval or rejection by notice by facsimile on the same day being acceptable), then the Lease
shall be deemed approved by Lender. Upon request, Borrower shall furnish Lender with copies of all executed Leases. All renewals of Leases and all proposed Leases shall provide for rental rates comparable to existing local market rates. All proposed
Leases shall be on commercially reasonable terms and shall not contain any terms which would materially affect Lender’s rights under the Loan Documents. All Leases executed after the date hereof shall provide that they are subordinate to the
Mortgage encumbering the applicable Individual Property and that the lessee agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of sale. Lender agrees to enter into a subordination, no disturbance and attornment agreement
in such form and substance as is reasonably acceptable to Lender with any tenant (other than the Operating Lessee) whose Lease is in excess of three thousand (3,000) square feet and has been approved by Lender. Borrower shall, and shall cause
Operating Lessee to, (i) observe and perform the obligations imposed upon the lessor under the Leases in a commercially reasonable manner; (ii) enforce and may amend or terminate the terms, covenants and conditions contained in the Leases upon the
part of the lessee thereunder to be observed or performed in a commercially reasonable manner and in a manner not to impair the value of the Individual Property involved except that no termination by Borrower or acceptance of surrender by a tenant
of any Leases shall be permitted unless by reason of a tenant default and then only in a commercially reasonable manner to preserve and protect the Individual Property; provided, however, that no such termination or surrender of any
Lease covering more than three thousand (3,000) square 
  

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 feet will be permitted without the consent of Lender (which consent shall not be unreasonably withheld, conditioned or
delayed); (iii) not collect any of the rents more than one (1) month in advance (other than security deposits); (iv) not execute any other assignment of lessor’s interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) not alter, modify or change the terms of the Leases in a manner inconsistent with the provisions of the Loan Documents; and (vi) execute and deliver at the request of Lender all such further assurances, confirmations and assignments
in connection with the Leases as Lender shall from time to time reasonably require. Notwithstanding anything to the contrary contained herein, neither Borrower nor Operating Lessee shall enter into a lease of all or substantially all of any
Individual Property without Lender’s prior consent. 
  
 5.1.21 Alterations. Borrower shall obtain Lender’s prior consent to any alterations to any Improvements, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing provided no
Event of Default has occurred and is continuing, Lender’s consent shall not be required in connection with (a) any alterations to the Improvements (excluding Decorative Changes) that will not have a Material Adverse Effect, provided that such
alterations (i) are made in connection with tenant improvement work performed pursuant to the terms of any Lease executed on or before the date hereof, (ii) do not adversely affect any structural component of any Improvements, any utility or HVAC
system contained in any Improvements or the exterior of any building constituting a part of any Improvements and the aggregate cost thereof does not exceed One Million Dollars ($1,000,000), or (iii) consist of repair or replacement of (x) parking
areas or resurfacing or restriping of parking areas, (y) lighting, or (z) grounds keeping, or (iv) are performed in connection with the Restoration of an Individual Property after the occurrence of a Casualty in accordance with the terms and
provisions of this Agreement; (b) any Decorative Changes; (c) any Required Repairs made in accordance with Section 7.1 hereof; or (d) any Replacements made in accordance with Section 7.3 hereof. If the total unpaid amounts due and
payable with respect to alterations to the Improvements at any Individual Property (other than such amounts to be paid or reimbursed by tenants under the Leases) shall at any time exceed the lesser of four percent (4%) of the Release Amount for the
applicable Individual Property or Three Million Dollars ($3,000,000) (the “Threshold Amount”) and such cost will not be paid from amounts on deposit in the Replacement Reserve Fund or the Required Repair Fund, then prior to the
commencement of such alterations, Borrower shall promptly deliver to Lender as security for the payment of such amounts and as additional security for Borrower’s obligations under the Loan Documents any of the following: (A) cash, (B) U.S.
Obligations, (C) other collateral, credit enhancement or rated securities acceptable to Lender and that the applicable Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or any class thereof in connection with any Securitization, or (D) a completion and performance bond or an irrevocable letter of credit (payable on sight draft only) issued by a
financial institution having a rating by S&P of not less than “A-1+” if the term of such bond or letter of credit is no longer than three (3) months or, if such term is in excess of three (3) months, issued by a financial institution
having a rating that is acceptable to Lender and that the applicable Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if higher, then current ratings
assigned to any Securities or any class thereof in connection with any Securitization. Such security shall be in an amount equal to the excess of the total unpaid amounts with respect to alterations to the Improvements on the applicable Individual
Property 
  

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 (other than such amounts to be paid or reimbursed by tenants under the Leases) over the Threshold Amount and, if any
Event of Default shall occur and be continuing, Lender may apply such security from time to time at the option of Lender to pay for such alterations. Provided no Event of Default is then continuing, any security delivered to Lender pursuant to this
Section 5.1.21 (less the cost of completing any applicable “punch list” items as reasonably estimated by Lender) shall be returned to Borrower upon the payment in full and lien-free, substantial completion of the alterations for
which such security was delivered. 
  
 5.1.22
Operation of Property. (a) Borrower shall cause the Properties to be operated, in all material respects, in accordance with the Management Agreement (or Replacement Management Agreement) as applicable. In the event that the Management
Agreement expires or is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to any termination or modification of the Management Agreement in accordance with the terms and provisions of this Agreement), Borrower
shall promptly enter into a Replacement Management Agreement with Manager or another Qualified Manager, as applicable. In the event that the Franchise Agreement expires or is terminated (without limiting any obligation of Borrower to obtain
Lender’s consent to any termination or modification of the Franchise Agreement in accordance with the terms and provisions of this Agreement), Borrower shall promptly enter into a Replacement Franchise Agreement with Franchisor or another
Qualified Franchisor, as applicable. 
  
 (b) Borrower
shall, and shall cause Operating Lessee to: (i) promptly perform and/or observe, in all material respects, all of the covenants and agreements required to be performed and observed by it under the Management Agreement and the Franchise Agreement and
do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any material default under the Management Agreement and the Franchise Agreement of which it is aware; and (iii) enforce the
performance and observance of all of the covenants and agreements required to be performed and/or observed by Manager under the Management Agreement, in a commercially reasonable manner. 
  
 5.1.23 Operating Lease. Borrower shall (a) cause the hotel located on each Individual Property to be operated
pursuant to the Operating Lease; (b) promptly perform and/or observe all of the material covenants, agreements and obligations required to be performed and observed by Borrower under the Operating Lease and do all things necessary to preserve and to
keep unimpaired its material rights thereunder; (c) promptly notify Lender of any default under the Operating Lease; (d) promptly enforce in a commercially reasonable manner the performance and observance of all of the covenants and agreements
required to be performed and/or observed by Operating Lessee under the Operating Lease; and (e) cause Operating Lessee to operate the Properties and conduct its business and operations in accordance with the terms of this Agreement as if it were a
Borrower hereunder and not allow or permit Operating Lessee to take any of the actions that Borrower is prohibited from taking pursuant to the terms of this Agreement. 
  

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 Section 5.2. Negative Covenants. From the date hereof until payment and performance in full
of all obligations of Borrower under the Loan Documents or the earlier release of the Liens of all Mortgages in accordance with the terms of this Agreement and the other Loan Documents, Borrower covenants and agrees with Lender that it will not do,
directly or indirectly, any of the following: 
  
 5.2.1
Operation of Property. (a) Borrower shall not, and shall not permit or allow Operating Lessee to, without Lender’s prior consent (which consent shall not be unreasonably withheld, conditioned or delayed): (i) surrender, terminate or
cancel the Management Agreement; provided, that Borrower may, or may allow Operating Lessee to, without Lender’s consent, replace the Manager so long as the replacement manager is a Qualified Manager pursuant to a Replacement Management
Agreement; (ii) surrender, terminate or cancel the Franchise Agreement; provided, that Borrower may, or may allow Operating Lessee to, without Lender’s consent, replace the Franchisor so long as the replacement franchisor is a Qualified
Franchisor pursuant to a Replacement Franchise Agreement; (iii) reduce or consent to the reduction of the term of the Management Agreement or the Franchise Agreement; (iv) increase or consent to the increase of the amount of any charges under the
Management Agreement or the Franchise Agreement; or (v) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Management Agreement or the Franchise Agreement in any material
respect. 
  
 (b) Following the occurrence and during the
continuance of an Event of Default, Borrower shall not, and shall not permit or allow Operating Lessee to, exercise any rights, make any decisions, grant any approvals or otherwise take any action under the Management Agreement or the Franchise
Agreement without the prior consent of Lender, which consent may be withheld in Lender’s sole discretion. 
  
 5.2.2 Liens. Borrower shall not create, incur, assume or suffer to exist any Lien on any portion of any Individual Property or permit any
such action to be taken, except: 
  
 (i)
Permitted Encumbrances; 
  
 (ii) Liens created by
or permitted pursuant to the Loan Documents; and 
  
 (iii) Liens for Taxes or Other Charges not yet due. 
  
 5.2.3 Dissolution. Borrower shall not (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (b) engage in any business activity not related to the ownership and operation
of the Properties, (c) transfer, lease or sell, in one transaction or any combination of transactions, the assets or all or substantially all of the properties or assets of Borrower except to the extent permitted by the Loan Documents, (d) modify,
amend, waive or terminate its organizational documents or its qualification and good standing in any jurisdiction or (e) cause Principal or Operating Lessee to (i) dissolve, wind up or liquidate or take any action, or omit to take an action, as a
result of which Principal or Operating Lessee would be dissolved, wound up or liquidated in whole or in part, or (ii) amend, modify, waive or terminate the organizational documents of Principal or Operating Lessee, in each case, without obtaining
the prior consent of Lender. 
  
 5.2.4 Change in
Business. (a) Borrower shall not enter into any line of business other than the ownership and operation of Operating Lessee and the Properties, or make any material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance of its present business. 
  

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 (b) Borrower shall not permit, allow or otherwise cause Operating Lessee to enter into any line of
business other than the operation of the Properties pursuant to the Operating Lease, or make any material change in the scope or nature of its business objectives, purposes or operations, or undertake or participate in activities other than the
continuance of its present business. 
  
 5.2.5 Debt
Cancellation. Borrower shall not cancel or otherwise forgive or release any material claim or debt (other than termination of Leases in accordance herewith) owed to Borrower by any Person, except for adequate consideration and in the
ordinary course of Borrower’s business. 
  
 5.2.6
Zoning. Borrower shall not initiate or consent to any zoning reclassification of any portion of any Individual Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of any Individual
Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the prior consent of Lender. 
  
 5.2.7 Intentionally Omitted. 
  
 5.2.8 Principal Place of Business and Organization. Borrower
shall not change its principal place of business set forth in the introductory paragraph of this Agreement without first giving Lender thirty (30) days prior notice. Borrower shall not change the place of its organization as set forth in Section
4.1.28 without the consent of Lender, which consent shall not be unreasonably withheld. Upon Lender’s request, Borrower shall execute and deliver additional financing statements, security agreements and other instruments which may be
necessary to effectively evidence or perfect Lender’s security interest in the Properties as a result of such change of principal place of business or place of organization. 
  
 5.2.9 ERISA. (a) Neither Borrower nor Operating Lessee shall engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA. 
  
 (b) Borrower further covenants
and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term of the Loan, as requested by Lender in its sole discretion, that (i) neither Borrower nor Operating Lessee is an “employee benefit
plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (ii) neither Borrower nor Operating Lessee is subject to any state statute
regulating investments of, or fiduciary obligations with respect to, governmental plans; and (iii) one or more of the following circumstances is true: 
  
 (A) Equity interests in Borrower and Operating Lessee are publicly offered securities, within the meaning of 29 C.F.R.
§2510.3-101(b)(2); 
  

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 (B) Less than twenty-five percent (25%) of each outstanding class of equity interests in
Borrower and Operating Lessee is held by “benefit plan investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2); or 
  
 (C) Each of Borrower and Operating Lessee qualifies as an “operating company” or a “real estate operating company”
within the meaning of 29 C.F.R. §2510.3-101(c) or (e). 
  
 5.2.10 Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its general partners, members, principals and (if Borrower is a trust) beneficial owners in owning and operating
properties such as the Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership of the Properties as a means of maintaining the value of the Properties as security for repayment of the Debt and the performance
of the obligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of
the obligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Properties. 
  
 (b) Without the prior consent of Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not
permit any Restricted Party to, (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) any Individual Property or any part thereof or any legal or beneficial interest therein or (ii) permit a Sale or Pledge of an interest in any Restricted Party (collectively, a
“Transfer”), other than (A) pursuant to Leases of space in the Improvements to tenants in accordance with the provisions of Section 5.1.20 and (B) the disposition of equipment and other personal property pursuant to the
replacement thereof or otherwise in the ordinary course of operation of the Properties. 
  
 (c) A Transfer shall include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell an Individual Property or any part thereof for a price to be paid in installments; (ii) with the
exception of the Operating Lease, an agreement by Borrower leasing all or a substantial part of an Individual Property for other than actual occupancy by a space tenant thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s or Operating Lessee’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock
or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the
partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the
creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no
managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating 
  

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 to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of
new non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or
beneficial interests. 
  
 (d) Notwithstanding the provisions of
this Section 5.2.10, the following transfers shall not be deemed to be a Transfer: (i) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the stock in a Restricted Party or other beneficial
interest, and (ii) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or membership interests (as the case may be) in a Restricted Party; provided,
however, in the case of each of the foregoing (i) and (ii), (A) no such sales or transfers shall result in the change of voting control in the Restricted Party, (B) as a condition to each such sale or transfer, Lender shall receive not less
than thirty (30) days prior notice of such proposed sale or transfer, (C) if after giving effect to any such Sale or Pledge, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any
Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the
Rating Agencies, (D) no such Sale or Pledge of any direct ownership interests in Borrower, Principal or Operating Lessee shall be permitted, and (E) Borrower, Principal and Operating Lessee shall each continue to be a Special Purpose Entity
following such Sale or Pledge. In addition, at all times, Guarantor must continue to control Borrower, Principal, Operating Lessee, and any Affiliated Manager and own, directly or indirectly, at least a one hundred percent (100%) interest in
Borrower, Operating Lessee, Principal and Affiliated Manager. Lender’s consent or approval shall not be required with respect to (I) the trading or issuance of shares or other securities of Highland Hospitality Corporation on a nationally
recognized stock exchange, or (II) the transfer, sale or issuance of operating partnership units or other securities of Guarantor to a Qualified Transferee, provided that such Qualified Transferee or Highland Hospitality Corporation controls
Guarantor and owns not less than a thirty percent (30%) interest in Guarantor, or (III) the transfer, sale or issuance of operating partnership units of Guarantor in connection with the merger, reorganization or consolidation of Highland Hospitality
Corporation or Guarantor, provided that the surviving entity is a publicly listed company on a nationally recognized exchange and such entity has a net worth greater than the net worth of Highland Hospitality Corporation immediately before such
merger, reorganization or consolidation, provided further, that with respect to (II) and (III), (x) as a condition to each such transfer, sale or issuance, Lender shall receive not less than fifteen (15) days prior notice of such proposed transfer,
sale or issuance, and (y) if after giving effect to any such transfer, sale or issuance, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned
less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Rating Agencies. 
  
 (e) Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or
whether or not Lender has consented to any previous Transfer. 
  

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 (f) No consent to any assumption of the Loan shall occur on or before the first (1st) anniversary of the first (1st) Payment Date. Thereafter, Lender’s consent to a one (1) time Transfer of the Properties shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of
such Transfer and no Event of Default has occurred and is continuing, and further provided that the following additional requirements are satisfied: 
  
 (i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of
such transfer; 
  
 (ii) the proposed transferee
(“Transferee”) shall be a Qualified Transferee; 
  
 (iii) if the Manager shall not be the manager of the Properties following such transfer, then the Manager must be a Qualified Manager pursuant to a Replacement Management Agreement; 
  
 (iv) if required by Lender, delivery of confirmation in
writing from each Rating Agency to the effect that such transfer and assumption of the Loan will not result in a reduction, downgrade, withdrawal or qualification of the ratings in effect immediately prior to such proposed transfer for the
Securities or any class thereof which then are outstanding; 
  
 (v) the Transferee shall have executed and delivered to Lender an assumption agreement in form and substance reasonably acceptable to Lender, evidencing such Transferee’s agreement to abide and be bound by the
terms of this Agreement (including, without limitation, Sections 4.1.30 and 5.2.9 hereof), the Note, the Mortgages and the other Loan Documents, as applicable, together with such legal opinions as may be reasonably requested by Lender;

  
 (vi) Lender shall have received an Additional
Insolvency Opinion covering the Transferee and such other persons reasonably required by Lender and the Rating Agencies, such Additional Insolvency Opinion to be reasonably satisfactory to Lender and the Rating Agencies; 
  
 (vii) Borrower shall deliver, at its sole cost and expense,
an endorsement to the Title Insurance Policies, as modified by the assumption agreement, as a valid first lien on the Properties and naming the Transferee as owner of the Properties, which endorsement shall insure that, as of the date of the
recording of the assumption agreement, the Properties shall not be subject to any additional exceptions or liens other than those contained in the relevant Title Insurance Policies issued on the Closing Date and the Permitted Encumbrances relating
thereto; 
  
 (viii) the delivery of evidence
satisfactory to Lender that the single purpose nature and bankruptcy remoteness of Borrower, its shareholders, partners or members, as the case may be, following such Transfer is in accordance with the then current standards of Lender and the Rating
Agencies; 
  

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 (ix) prior to any release of Guarantor, a substitute guarantor reasonably acceptable to
Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and the Environmental Indemnity executed by Guarantor or executed a replacement guaranty and environmental reasonably satisfactory to Lender; and

  
 (x) payment of all of fees and expenses
reasonably incurred by or on behalf of Lender in connection with such Transfer including, without limitation, the cost of any required third party reports, reasonable legal fees and expenses, Lender’s out-of-pocket expenses, recording fees,
title insurance premiums, mortgage and intangible taxes, Rating Agency fees and expenses or required legal opinions. 
  
 5.2.11 Operating Lease. Without Lender’s prior written consent, Borrower shall not (a) surrender, terminate or cancel the Operating
Lease; (b) reduce or consent to the reduction of the term of the Operating Lease; (c) increase or consent to the increase of the amount of any charges under the Operating Lease; (d) modify, change, supplement, alter or amend the Operating Lease or
waive or release any of Borrower’s rights and remedies under the Operating Lease, provided, that an Operating Lease may be amended to reduce the rent payable thereunder if such reduction in rents (i) is consistent with market conditions, (ii)
would be agreed to in a comparable arms-length transaction with an unrelated third party, and (iii) provides for rent payable in the aggregate under all Operating Leases of no less than an amount equal to 1.2 times the Debt Service due under the
Loan and the debt service due under the Mezzanine Loan; or (e) waive, excuse, condone or in any way release or discharge Operating Lessee of or from Operating Lessee’s material obligations, covenants and/or conditions under the Operating Lease.
 
  
 VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED
REPAIRS 
  
 Section 6.1. Insurance. (a)
Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Properties providing at least the following coverages: 
  
 (i) comprehensive all risk insurance on the Improvements and the Personal Property, including contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements, in each case (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost”, which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation, but the amount shall in no event be less than the outstanding principal balance of the Loan; (B) containing an
agreed amount endorsement with respect to the Improvements and Personal Property waiving all co-insurance provisions; (C) providing for no deductible in excess of Twenty-Five Thousand and No/100 Dollars ($25,000) for all risk insurance coverage
(other than flood insurance coverage); and (D) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement if any of the Improvements or the use of the Individual Property shall at any time constitute 
  

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 legal non-conforming structures or uses. In addition, Borrower shall obtain: (x) if any portion of the
Improvements is currently or at any time in the future located in a federally designated “special flood hazard area”, flood hazard insurance in an amount equal to the lesser of (1) the Full Replacement Cost of such Improvements or (2) the
maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended or such greater amount as Lender shall
require; (y) earthquake insurance in amounts and in form and substance reasonably satisfactory to Lender in the event the Individual Property is located in an area with a high degree of seismic activity and (z) coastal windstorm insurance in amounts
and in form and substance satisfactory to Lender in the event the Individual Property is located in any coastal region, provided that the insurance pursuant to clauses (x), (y) and (z) hereof shall be on terms consistent with the comprehensive all
risk insurance policy required under this Section 6.1(a)(i); 
  
 (ii) commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about the Individual Property, such insurance (A) to be on the so-called
“occurrence” form with a combined limit of not less than Two Million and No/100 Dollars ($2,000,000) in the aggregate and One Million and No/100 Dollars ($1,000,000) per occurrence; (B) to continue at not less than the aforesaid limit
until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an
“if any” basis; (3) independent contractors; (4) blanket contractual liability for all legal contracts; (5) contractual liability covering the indemnities contained in Article 8 of the Mortgages to the extent the same is available; and (6)
other coverages usual to hotel operations including, but not limited to, Inn Keepers Legal Liability and Liquor Liability. 
  
 (iii) business income insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above; (C) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and Personal Property has been repaired, the continued loss of income will be insured until such
income either returns to the same level it was at prior to the loss, or the expiration of one hundred eighty (180) days (or with respect to the Individual Property where insurance is maintained and provided by the Hyatt Corporation, sixty (60) days
from the date that the applicable Individual Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; and (D) in an amount equal to one
hundred percent (100%) of the business interruption value from each Individual Property for a period of eighteen (18) months from the date of such Casualty (assuming such Casualty had not occurred) or actual loss sustained and notwithstanding that
the policy may expire at the end of such period. The amount of such business income insurance shall be determined prior to the date hereof 
  

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 and at least once each year thereafter based on Borrower’s reasonable estimate of the Gross Income
from Operations each Individual Property for the succeeding eighteen (18) month period. Notwithstanding anything to the contrary in Section 2.7 hereof, all proceeds payable to Lender pursuant to this subsection shall be held by Lender and
shall be applied at Lender’s sole discretion to (I) the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note or (II) Operating Expenses approved by Lender in its sole discretion;
provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance; 
  
 (iv) at all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only
if the Individual Property coverage form does not otherwise apply, (A) owner’s contingent or protective liability insurance covering claims not covered by or under the terms or provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in subsection (i) above written in a so-called builder’s risk completed value form (1) on a non-reporting basis, (2) against all risks insured against pursuant to subsection (i) above, (3)
including permission to occupy the Individual Property, and (4) with an agreed amount endorsement waiving co-insurance provisions; 
  
 (v) if an Individual Property includes commercial property, worker’s compensation insurance with respect to any employees of
Borrower, as required by any Governmental Authority or Legal Requirement; 
  
 (vi) comprehensive boiler and machinery insurance, if applicable, in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance policy required under Section
6.1(a)(i) above; 
  
 (vii) umbrella liability
insurance in an amount not less than Seventy-Five Million and No/100 Dollars ($75,000,000) per occurrence on terms consistent with the commercial general liability insurance policy required under Section 6.1(a)(ii) above, if the aggregate
limits are shared with other hotels insured in the same insurance program, the minimum limit of required umbrella liability insurance shall be One Hundred Million and No/100 Dollars ($100,000,000); 
  
 (viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence, including umbrella coverage, of Seventy-Five Million and No/100 Dollars ($75,000,000); 
  
 (ix) if an Individual Property is or becomes a legal “non-conforming” use, ordinance or law
coverage and insurance coverage to compensate for the cost 
  

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 of demolition or rebuilding of the undamaged portion of the Individual Property along with any reduced
value and the increased cost of construction in amounts as requested by Lender; 
  
 (x) the insurance required under Sections 6.1(a)(i) and (iii) above shall cover perils of terrorism and acts of terrorism
and Borrower shall maintain income insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under Sections 6.1(a)(i) and (iii) above at all times during the term of the
Loan; provided, however, in the event that perils of terrorism and acts of terrorism (“Terrorism Losses”) are excluded from the insurance required under Sections 6.1(a)(i) and (iii) above, then Borrower
shall obtain a stand-alone policy or policies that covers the Properties against Terrorism Losses, which stand-alone policy or policies shall be on terms consistent with those required under Sections 6.1(a)(i) and (iii) above with a
deductible of not greater than $250,000 and such coverage is in an amount equal to, the lesser of (a) the outstanding principal balance of the Loan (provided such policy contains a waiver of coinsurance) or (b) the sum of the business income
insurance equal to 100% of the projected gross income from each Individual Property for a period of eighteen (18) months from the date that the Individual Property is repaired or replaced and operations are resumed plus the Full Replacement Cost.
Notwithstanding the foregoing, in no event shall Borrower be required to pay annual premiums for such stand-alone policy insurance covering Terrorism Losses in excess of the Terrorism Premium Limit (i.e., if the cost exceeds the Terrorism Premium
Limit, Borrower shall obtain as much coverage as is available at a cost equal to the Terrorism Premium Limit); and 
  
 (xi) upon sixty (60) days’ notice, such other reasonable insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time are commonly insured against for property similar to the Individual Property located in or around the region in which the Individual Property is located. 
  
 (b) All insurance provided for in Section 6.1(a) shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be subject to the reasonable approval of Lender as to insurance companies, amounts, deductibles, loss
payees and insureds. The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the State and having a claims paying ability rating of “A” or better from S&P and A:X or better
from A.M. Best Company, Inc. (and the equivalent thereof) by at least two (2) of the Rating Agencies rating the Securities (one of which shall be S&P if they are rating the Securities and one of which will be Moody’s if they are rating the
Securities), or if only one Rating Agency is rating the Securities, then only by such Rating Agency. The Policies described in Section 6.1(a) (other than those strictly limited to liability protection) shall designate Lender as loss payee.
Not less than ten (10) days prior to the expiration dates of the Policies theretofore furnished to Lender, certificates of insurance evidencing the Policies accompanied by evidence satisfactory to Lender of payment of the premiums due thereunder
(the “Insurance Premiums”), shall be delivered by Borrower to Lender. 
  

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 (c) Any blanket insurance Policy shall provide the same protection as would a separate Policy insuring
only the Properties in compliance with the provisions of Section 6.1(a). 
  
 (d) All Policies provided for or contemplated by Section 6.1(a), except for the Policy referenced in Section 6.1(a)(v), shall name Borrower as an additional insured and Lender as an additional insured,
as its interests may appear, and in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain a so-called New York standard non-contributing mortgagee clause in favor of Lender providing that the loss
thereunder shall be payable to Lender. 
  
 (e) All Policies
provided for in Section 6.1 shall contain clauses or endorsements to the effect that: 
  
 (i) no act or negligence of Borrower, or anyone acting for Borrower, or of any tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the validity or enforceability of the insurance insofar as Lender is concerned; 
  
 (ii) the Policies shall not be materially changed (other
than to increase the coverage provided thereby) or canceled without at least thirty (30) days’ notice to Lender and any other party named therein as an additional insured; 
  
 (iii) the issuers thereof shall give notice to Lender if the Policies have not been renewed fifteen (15)
days prior to its expiration; and 
  
 (iv) Lender
shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder. 
  
 (f) If at any time Lender is not in receipt of written evidence that all Policies are in full force and effect, Lender shall have the right, without
notice to Borrower, to take such action as Lender deems necessary to protect its interest in the Properties, including, without limitation, the obtaining of such insurance coverage as Lender in its sole discretion deems appropriate. All premiums
incurred by Lender in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and, until paid, shall be secured by the Mortgages and shall bear interest at the Default Rate.

  
 Section 6.2. Casualty. If the Individual
Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt notice of such damage to Lender and shall promptly commence and diligently prosecute the completion of
the Restoration of the Individual Property (other than work required to be completed by Tenants, under Leases) as nearly as possible to the condition the Individual Property was in immediately prior to such Casualty, with such alterations as may be
reasonably approved by Lender and otherwise in accordance with Section 6.4. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated to make proof of loss if
not made promptly by Borrower. In addition, Lender may participate in any settlement discussions with any insurance companies with respect to any Casualty in which the Net Proceeds or the costs of completing the Restoration are equal to or

  

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 greater than four percent (4%) of the Release Amount for the related Individual Property (and shall approve the final
settlement, which approval shall not be unreasonably withheld, conditioned or delayed) and Borrower shall deliver to Lender all instruments required by Lender to permit such participation. 
  
 Section 6.3. Condemnation. Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the Condemnation of any Individual Property and shall deliver to Lender copies of any and all papers served in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all instruments requested by it to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys
and experts, and cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including, but not limited to, any transfer made in
lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until any Award shall have
been actually received and applied by Lender, after the deduction of expenses of collection, to the reduction or discharge of the Debt in accordance with Section 2.4.2. Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. If any Individual Property or any portion thereof is taken by a condemning authority, Borrower shall promptly
commence and diligently prosecute the Restoration of the applicable Individual Property (other than work required to be completed by tenants under Leases) and otherwise comply with the provisions of Section 6.4. If any Individual Property is
sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt. 
  
 Section 6.4.
Restoration. The following provisions shall apply in connection with the Restoration of any Individual Property: 
  
 (a) If the Net Proceeds shall be less than four percent (4%) of the Release Amount for the applicable Individual Property and the costs of completing the
Restoration shall be less than four percent (4%) of the Release Amount for the applicable Individual Property, the Net Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all of the conditions set forth in Section
6.4(b)(i) are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement. 
  
 (b) If the Net Proceeds are equal to or greater than four percent (4%) of the
Release Amount for the applicable Individual Property or the costs of completing the Restoration is equal to or greater than four percent (4%) of the Release Amount for the applicable Individual Property, the Net Proceeds will be held by Lender and
Lender shall make the Net Proceeds available for the Restoration in accordance with the provisions of this Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4 shall mean: (i) the net amount of all
insurance proceeds received by Lender pursuant to Section 6.1 (a)(i), (iv), (vi), (ix) and (x) as a result of such damage or destruction, after deduction of its reasonable costs and expenses (including, but

  

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 not limited to, reasonable counsel fees), if any, in collecting same (“Insurance Proceeds”), or (ii) the
net amount of the Award, after deduction of its reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case may be. 
  
 (i) The Net Proceeds shall be made available to Borrower for
Restoration upon the approval of Lender in its sole discretion that the following conditions are met: 
  
 (A) no Event of Default shall have occurred and be continuing; 
  
 (B) (1) in the event the Net Proceeds are Insurance Proceeds, less than thirty percent (30%) of the total
floor area of the Improvements on the Individual Property has been substantially damaged, destroyed or rendered unusable as a result of such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds, less than fifteen percent (15%) of
the land constituting the Individual Property is taken, and such land is located along the perimeter or periphery of the Individual Property, and no material portion of the Improvements is located on such land; 
  
 (C) Intentionally Omitted; 
  
 (D) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than sixty (60) days after such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion; 
  
 (E) Lender shall be reasonably satisfied that any operating
deficits, including all scheduled payments of principal and interest under the Note, which will be incurred with respect to the Individual Property as a result of the occurrence of any such Casualty or Condemnation, whichever the case may be, will
be covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(iii), if applicable, or (3) by other funds of Borrower; 
  

(F) Lender shall be reasonably satisfied that the Restoration will be completed on or before the earliest to occur of (1) six (6)
months prior to the Maturity Date, (2) such time as may be required under applicable Legal Requirements or (3) the expiration of the insurance coverage referred to in Section 6.1(a)(iii); 
  
 (G) the Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable Legal Requirements; 
  
 (H) the Restoration shall be done and completed by Borrower in an expeditious and diligent fashion and in compliance with all applicable
Legal Requirements; 
  

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 (I) such Casualty or Condemnation, as applicable, does not result in the loss of access
to the Individual Property or the related Improvements; 
  
 (J) the Debt Service Coverage Ratio for the affected Individual Property, after giving effect to the Restoration, shall be equal to or greater than 1.2 to 1.0; 
  
 (K) the Loan-to-Value Ratio for the effected Individual
Property, after giving effect to the Restoration, shall be equal to or less than seventy and one-half percent (70.5%); 
  
 (L) Borrower shall deliver, or cause to be delivered, to Lender a signed detailed budget approved in writing by Borrower’s architect
or engineer stating the entire cost of completing the Restoration, which budget shall be acceptable to Lender; and 
  
 (M) the Net Proceeds together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s
reasonable discretion to cover the cost of the Restoration. 
  
 (ii) The Net Proceeds shall be paid directly to Lender and deposited in an interest-bearing account (with interest earned thereon added to the Net Proceeds) and, until disbursed in accordance with the provisions of
this Section 6.4(b), shall constitute additional security for the Debt and other obligations under the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence reasonably satisfactory to Lender that (A) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the
Restoration have been paid for in full (subject to commercially reasonable retainages), and (B) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or
encumbrances of a material nature on the Individual Property which have not either been fully bonded to the reasonable satisfaction of Lender and discharged of record or in the alternative fully insured to the satisfaction of Lender by the title
company issuing the Title Insurance Policy. 
  
 (iii) All plans and specifications required in connection with the Restoration (the cost of which is reasonably estimated to exceed four percent (4%) of the Release Amount for the applicable Individual Property) shall be subject to prior
review and reasonable acceptance in all material respects by Lender and by an independent consulting engineer selected by Lender (the “Casualty Consultant”). Lender shall have the use of the plans and specifications and all
permits, licenses and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which 
  

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 they have been engaged, shall be subject to prior review and reasonable acceptance by Lender and the
Casualty Consultant (which acceptance shall not be unreasonably withheld conditioned or delayed). All costs and expenses incurred by Lender in connection with making the Net Proceeds available for the Restoration including, without limitation,
reasonable counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by Borrower. 
  
 (iv) In no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage” shall mean, as to each contractor, subcontractor or
materialman engaged in the Restoration, an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until such time as the Casualty Consultant certifies
to Lender that fifty percent (50%) or more of the Restoration has been completed following which the Casualty Retainage shall be reduced to five percent (5%) until the Restoration has been substantially completed. The Casualty Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in this Section 6.4(b), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty
Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 6.4(b) and that all approvals necessary for the re-occupancy and use
of the Individual Property have been obtained from all Governmental Authorities, and Lender receives evidence reasonably satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty
Retainage; provided, however, that Lender will release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or
materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the
title company issuing the Title Insurance Policy, and Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the lien of the related Mortgage. If required by Lender, the release of any such portion of the
Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman. 
  
 (v) Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every
calendar month. 
  

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 (vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the
reasonable opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration,
Borrower shall either (A) deposit the deficiency (the “Net Proceeds Deficiency”) with Lender, or (B) provide reasonably satisfactory evidence to Lender that Borrower has directly paid the costs of the Restoration in an amount at
least equal to the Net Proceeds Deficiency, before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall be disbursed for costs actually incurred in connection
with the Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 6.4(b) shall constitute additional security for the Debt and other obligations under the Loan
Documents. 
  
 (vii) The excess, if any, of the
Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency (less the costs of any “punch-list” items) deposited with Lender after the Casualty Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 6.4(b), and the receipt by Lender of evidence reasonably satisfactory to Lender that all costs incurred in connection with the Restoration have been paid in full (other than the costs of any
“punch-list” items), shall be remitted by Lender to Borrower, provided no Event of Default shall have occurred and shall be continuing. 
  
 (c) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant to
Section 6.4(b)(vii) may be retained and applied by Lender in accordance with Section 2.4.2 hereof toward the payment of the Debt whether or not then due and payable in such order, priority and proportions as Lender in its sole
discretion shall deem proper, or, at the discretion of Lender, the same may be paid, either in whole or in part, to Borrower for such purposes as Lender shall approve, in its discretion. 
  
 (d) In the event of foreclosure of the Mortgage with respect to the Individual Property, or other transfer of title to the
Individual Property in extinguishment in whole or in part of the Debt all right, title and interest of Borrower in and to the Policies that are not blanket Policies then in force concerning the Individual Property and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of title. 
  
 VII. RESERVE FUNDS 
  
 Section 7.1. Required Repair Funds. 
  
 7.1.1 Deposits. Borrower shall perform the PIP Requirements, repairs and environmental remediation at the Properties, as more particularly
set forth on Schedule III hereto (such PIP Requirements, repairs and environmental remediation hereinafter collectively referred to as “Required Repairs”). Borrower shall complete the Required Repairs on or before the

  

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 required deadline for each repair as set forth on Schedule III, which period of time shall be extended as a result
of any force majeure delays unless such extension would cause a default under the applicable Franchise Agreement or Management Agreement which has not been waived by the applicable Franchisor or Manager. It shall be an Event of Default under this
Agreement if (a) Borrower does not complete the Required Repairs at each Individual Property by the required deadline for each repair and environmental remediation as set forth on Schedule III (as such date may be extended as provided above),
or (b) Borrower does not satisfy each condition contained in Section 7.1.2 hereof. Upon the occurrence of such an Event of Default, Lender, at its option, may withdraw all Required Repair Funds from the Required Repair Account and Lender may
apply such funds either to completion of the Required Repairs at one or more of the Properties or toward payment of the Debt in such order, proportion and priority as Lender may determine in its sole discretion. Lender’s right to withdraw and
apply Required Repair Funds shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents. On the Closing Date, Borrower shall deposit with Lender (x) the amount for each Individual
Property set forth on such Schedule III hereto to perform the Required Repairs for such Individual Property multiplied by (i) one hundred twenty-five percent (125%) with respect to those Required Repairs determined pursuant to the Physical
Conditions Reports, (ii) one hundred twenty-five percent (125%) with respect to those Required Repairs that are environmental remediation recommended in the Environmental Reports (other than building exterior reports), (iii) one hundred fifty
percent (150%) with respect to those Required Repairs that are environmental remediation recommended in the Environmental Reports that are building exterior reports, and (iv) one hundred percent (100%) of the PIP Requirements identified on
Schedule III, and (y) one hundred twenty-five percent (125%) of the amount reasonably estimated by Lender to be due for those PIP Requirements not specifically identified on Schedule III, which amount shall be reduced to one hundred
percent (100%) for those PIP Requirements specifically identified by Borrower in a manner reasonably satisfactory to Lender. Amounts so deposited with Lender shall be held by Lender in accordance with Section 7.5 hereof. Amounts so deposited
shall hereinafter be referred to as Borrower’s “Required Repair Fund” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Required Repair Account”. 
  
 7.1.2 Release of Required Repair Funds. Lender shall disburse
to Borrower (or to Operating Lessee, if so directed by Borrower) the Required Repair Funds from the Required Repair Account from time to time, but not more frequently than once in any thirty (30) day period, upon satisfaction by Borrower of each of
the following conditions: (a) Borrower shall, or shall cause Operating Lessee to, submit a written request for payment to Lender at least ten (10) Business Days prior to the date on which Borrower or Operating Lessee, as applicable, requests such
payment be made and specifies the Required Repairs to be paid, (b) on the date such request is received by Lender and on the date such payment is to be made, no Default or Event of Default shall exist and remain uncured, (c) Lender shall have
received an Officer’s Certificate (i) stating that all Required Repairs at the applicable Individual Property to be funded by the requested disbursement have been completed in good and workmanlike manner and in accordance with all applicable
federal, state and local laws, rules and regulations, such Officer’s Certificate to be accompanied by a copy of any license, permit or other approval by any Governmental Authority required to commence and/or complete the Required Repairs, (ii)
identifying each Person that supplied materials or labor in connection with the Required Repairs performed at such Individual Property to be funded by the requested disbursement, and 
  

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 (iii) stating that each such Person has been paid in full or will be paid in full upon such disbursement, such
Officer’s Certificate to be accompanied by lien waivers or other evidence of payment satisfactory to Lender, (d) at Lender’s option, a title search for such Individual Property indicating that such Individual Property is free from all
liens, claims and other encumbrances not previously approved by Lender, and (e) Lender shall have received such other evidence as Lender shall reasonably request that the Required Repairs at such Individual Property to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such disbursement to Borrower or Operating Lessee, as applicable. Lender shall not be required to make disbursements from the Required Repair Account with respect to any
Individual Property unless such requested disbursement is in an amount greater than $5,000 (or a lesser amount if the total amount in the Required Repair Account is less than $5,000, in which case only one disbursement of the amount remaining in the
account shall be made) and such disbursement shall be made only upon satisfaction of each condition contained in this Section 7.1.2. 
  
 Section 7.2. Tax and Insurance Escrow Fund. Borrower shall pay to Lender on each Payment Date (a) one-twelfth of the Taxes that Lender
estimates will be payable during the next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all such Taxes at least thirty (30) days prior to their respective due dates, and (b) one-twelfth of the Insurance
Premiums that Lender reasonably estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate with Lender sufficient funds to pay all such Insurance Premiums at least thirty
(30) days prior to the expiration of the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Escrow Fund”). Lender will apply the Tax and Insurance Escrow Fund to payments of Taxes and Insurance
Premiums required to be made by Borrower pursuant to Section 5.1.2 hereof and under the Mortgages. In making any payment relating to the Tax and Insurance Escrow Fund, Lender may do so according to any bill, statement or estimate procured
from the appropriate public office (with respect to Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture,
tax lien or title or claim thereof, provided, however, Borrower shall have the right to contest the same in good faith in accordance with the terms and conditions of this Agreement. Provided (x) no Event of Default exists, (y) Borrower
has not elected to make the Static Cash Deposit, and (z) the amount on deposit in the Tax and Insurance Escrow Fund is sufficient, then (i) Borrower shall not be liable for any late charges or penalties imposed by any Governmental Authority and/or
insurance providers as a result of Lender’s failure to make any payments of Taxes and Insurance Premiums required hereunder, and (ii) Lender shall be responsible for the payment of any such amounts. If the amount of the Tax and Insurance Escrow
Fund shall exceed the amounts due for Taxes and Insurance Premiums pursuant to Section 5.1.2 and Section 6.1 hereof, Lender shall, in its sole discretion, return any excess to Borrower or credit such excess against the next due
payments to be made to the Tax and Insurance Escrow Fund. Any amount remaining in the Tax and Insurance Escrow Fund after the Debt has been paid in full shall be returned to Borrower. In allocating such excess, Lender may deal with the Person shown
on the records of Lender to be the owner of the Properties. If at any time Lender reasonably determines that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes and Insurance Premiums by the dates set forth in (a) and (b)
above, Lender shall notify Borrower of such determination and Borrower shall increase its monthly payments to Lender by the amount that Lender reasonably estimates is sufficient to 
  

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 make up the deficiency at least thirty (30) days prior to the due date of the Taxes and/or thirty (30) days prior to
expiration of the Policies, as the case may be. Notwithstanding the foregoing, if Borrower (i) elects upon thirty (30) days written notice to Lender to deposit into the Tax and Insurance Fund the amount reasonably estimated by Lender to be due for
Taxes and Insurance Premiums during the immediately succeeding twelve (12) month period (which amount may be reasonably adjusted by Lender from time to time to reflect any increases in the Taxes and Insurance Premiums due in the next twelve (12)
month period) (the “Static Cash Deposit”), and (ii) thereafter provides continuing and current evidence reasonably satisfactory to Lender that all Taxes have been paid by Borrower prior to their respective due dates and all
Insurance Premiums have been paid by Borrower prior to the expiration of the Policies, then Borrower shall not be required to pay to Lender on each Payment Date the amount otherwise required to be deposited into the Tax and Insurance Escrow Fund.

  
 Section 7.3. Replacements and Replacement
Reserve. 
  
 7.3.1 Replacement Reserve Fund.
Borrower shall pay to Lender on each Payment Date the applicable Replacement Reserve Monthly Deposit to fund the costs of replacements, repairs and maintenance required to be made to the Properties during the calendar year (collectively, the
“Replacements”). Amounts so deposited shall hereinafter be referred to as Borrower’s “Replacement Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s
“Replacement Reserve Account”. Any amount held in the Replacement Reserve Account and allocated for an Individual Property shall be retained by Lender and credited toward the future Replacement Reserves Monthly Deposits required by
Lender hereunder in the event such Individual Property is released from the Lien of its related Mortgage in accordance with Section 2.6.2 hereof. 
  

7.3.2 Disbursements from Replacement Reserve Account. Lender shall make disbursements from the Replacement Reserve Fund as requested by
Borrower, and approved by Lender in its reasonable discretion (taking into consideration any applicable requirements and obligations of Borrower with respect to the Replacements under the related Management Agreement), no more frequently than once
in any thirty (30) day period of no less than $5,000.00 upon delivery by Borrower or Operating Lessee of Lender’s standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by Lender for
requests in excess of $25,000.00 for a single item, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment. Lender may require an inspection of the related Individual Property at
Borrower’s expense prior to making a monthly disbursement in order to verify completion of replacements and repairs of items in excess of $100,000.00 for which reimbursement is sought. 
  
 7.3.3 Balance in the Replacement Reserve Account. The
insufficiency of any balance in the Replacement Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. 
  
 Section 7.4. Excess Cash Flow Escrow Fund. Upon the occurrence
of a Cash Flow Trigger Event, Borrower shall deposit with Lender all Excess Cash Flow in the Cash Management Account, which shall be held by Lender as additional security for the Loan and amounts so held shall be hereinafter referred to as the
“Excess Cash Flow Escrow Fund” and 
  

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 the account to which such amounts are held shall hereinafter be referred to as the “Excess Cash
Flow Escrow Account”. Upon the occurrence of a Cash Flow Trigger Cure and provided that no Event of Default or Mezzanine Loan Default shall have occurred and be continuing, all funds on deposit in the Excess Cash Flow Escrow Account
shall be remitted to Borrower. All funds held in the Excess Cash Flow Escrow Fund shall be treated as a “Reserve Fund” for purposes of Section 7.5 hereof. All additional amounts deposited under this Section 7.4 shall
be additional security for the repayment of the Debt and may be withdrawn by Lender upon the occurrence of an Event of Default and applied by Lender in such order and priority as Lender may determine.  
  
 Section 7.5. Reserve Funds, Generally. (a) Borrower grants to
Lender a first-priority perfected security interest in each of the Reserve Funds and any and all monies now or hereafter deposited in each Reserve Fund as additional security for payment of the Debt. Until expended or applied in accordance herewith,
the Reserve Funds shall constitute additional security for the Debt. During the continuance of an Event of Default, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present in any or all of
the Reserve Funds to the payment of the Debt in any order in its sole discretion. The Reserve Funds shall not constitute trust funds and may be commingled with other monies held by Lender. 
  
 (b) Borrower shall not, without obtaining the prior consent of Lender,
further pledge, assign or grant any security interest in any Reserve Fund or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming
Lender as the secured party, to be filed with respect thereto. 
  
 (c) The Reserve Funds shall be held in an Eligible Account and invested in Permitted Investments. All interest or other earnings on a Reserve Fund shall be added to and become a part of such Reserve Fund and shall be disbursed in the same
manner as other monies deposited in such Reserve Fund. Borrower shall be responsible for payment of any federal, state or local income or other tax applicable to the interest or income earned on the Reserve Funds. No other investments of the sums on
deposit in the Reserve Funds shall be permitted except as set forth in this Section 7.5. Borrower shall bear all reasonable costs associated with the investment of the sums in the account in Permitted Investments. Such costs shall be deducted
from the income or earnings on such investment, if any, and to the extent such income or earnings shall not be sufficient to pay such costs, such costs shall be paid by Borrower promptly on demand by Lender. Lender shall have no liability for the
rate of return earned or losses incurred on the investment of the sums in Permitted Investments. 
  
 (d) Borrower shall indemnify Lender and hold Lender harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages,
obligations and costs and expenses (including litigation costs and reasonable attorneys fees and expenses) arising from or in any way connected with the Reserve Funds or the performance of the obligations for which the Reserve Funds were
established. Borrower shall assign to Lender all rights and claims Borrower may have against all Persons supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided, however, that
Lender may not pursue any such right or claim unless an Event of Default has occurred and remains uncured. 
  

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 VIII. DEFAULTS 
  
 Section 8.1. Event of Default. (a) Each of the following events shall constitute an event of default hereunder
(an “Event of Default”): 
  
 (i) if any portion of the Debt is not paid when due; 
  
 (ii) subject to Section 2.7.3 hereof, if any of the Taxes or Other Charges are not paid when the same are due and payable, other
than Taxes or Other Charges being contested pursuant to Section 5.1.2 hereof; 
  
 (iii) if the Policies are not kept in full force and effect, or if certificates satisfactorily evidencing the Policies are not delivered
to Lender within ten (10) days after request (provided that, as long as Borrower has not elected to make a Static Cash Deposit, it shall not constitute an Event of Default if Lender fails to pay Insurance Premiums in accordance with Section
7.2 hereof when sufficient funds to make such payments are on deposit in the Tax and Insurance Escrow Fund); 
  
 (iv) if Borrower Transfers or otherwise encumbers any portion of the Properties without Lender’s prior consent in violation of the
provisions of this Agreement or Article 6 of the Mortgage; 
  
 (v) if any representation or warranty made by Borrower herein or in any other Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Lender shall have
been false or misleading in any material respect as of the date the representation or warranty was made; 
  
 (vi) if Borrower, Principal, Operating Lessee or Guarantor shall make an assignment for the benefit of creditors; 
  
 (vii) if a receiver, liquidator or trustee shall be
appointed for Borrower, Principal, Operating Lessee or Guarantor, or if Borrower, Principal, Operating Lessee or Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, Borrower, Principal, Operating Lessee or Guarantor, or if any proceeding for the dissolution or liquidation of Borrower,
Principal, Operating Lessee or Guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower, Principal, Operating Lessee or Guarantor, upon
the same not being discharged, stayed or dismissed within sixty (60) days; 
  
 (viii) if Borrower attempts to assign its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the Loan Documents; 
  

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 (ix) if Borrower breaches any of its respective negative covenants contained in
Section 5.2 or any covenant contained in Section 4.1.30 or Section 5.1.11 hereof, provided, however, that a breach of any covenant contained in Section 4.1.30 or in Section 5.2 shall not constitute an
Event of Default if (A) such breach is inadvertent, immaterial and non-recurring, (B) if such breach is curable, Borrower shall promptly cure such breach within thirty (30) days after notice thereof from Lender, and (C) with respect to a breach of
any covenant contained in Section 4.1.30, within fifteen (15) Business Days of the request of Lender, Borrower delivers to Lender an additional Insolvency Opinion, or a modification of the Insolvency Opinion, to the effect that such breach
shall not in any way impair, negate or amend the opinions rendered in the Insolvency Opinion, which opinion or modification any counsel delivering such opinion or modification shall be acceptable to Lender in its reasonable discretion; 

 
 (x) with respect to any term, covenant or provision set
forth herein which specifically contains a notice requirement or grace period, if Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such grace period; 
  
 (xi) if any of the assumptions relating to the Restricted
Parties contained in the Insolvency Opinion delivered to Lender in connection with the Loan, or in the Additional Insolvency Opinion delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect; 
  
 (xii) if a material default has occurred and continues
beyond any applicable cure period under the Management Agreement (or any Replacement Management Agreement) and if such default permits the Manager thereunder to terminate or cancel the Management Agreement (or any Replacement Management Agreement);

  
 (xiii) if a material default has occurred and
continues beyond any applicable cure period under the Franchise Agreement if such default permits the Franchisor to terminate or cancel the Franchise Agreement; 
  
 (xiv) if Borrower ceases to do business as a hotel at the Properties or terminates such business for any
reason whatsoever (other than temporary cessation in connection with any continuous and diligent Restoration of any Individual Property following a Casualty or Condemnation); 
  
 (xv) if (A) a material default has occurred and continues beyond any applicable cure period under the
Operating Lease, (B) the Operating Lease is amended, modified or terminated in violation of the terms of this Agreement, or (C) Borrower fails to enforce the material terms and provisions of each Operating Lease; 
  
 (xvi) if Borrower shall continue to be in Default under any
of the other terms, covenants or conditions of this Agreement not specified in subsections 
  

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 (i) to (xiv) above, for ten (10) days after notice to Borrower from Lender, in the case of any Default
which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default; provided, however, that if such non-monetary Default is susceptible of cure but cannot reasonably
be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day
period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed sixty (60) days; or 
  
 (xvii) if there shall be default under any of the other Loan
Documents beyond any applicable cure periods contained in such documents, whether as to Borrower or any Individual Property. 
  
 (b) Upon the occurrence and during the continuance of an Event of Default (other than an Event of Default described in clauses (vi), (vii) or (viii)
above) and at any time thereafter, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in and to all or any Individual Property, including, without limitation, declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all
rights or remedies provided in the Loan Documents against Borrower and any or all of the Properties, including, without limitation, all rights or remedies available at law or in equity; and upon any Event of Default described in clauses (vi), (vii)
or (viii) above, the Debt and all other obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice
or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding. 
  
 Section 8.2. Remedies. (a) Upon the occurrence of an Event of Default, all or any one or more of the rights, powers, privileges and other
remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether
or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to
all or any Individual Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents. Without limiting the
generality of the foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender is not subject to any “one action” or “election of remedies” law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Properties and each Mortgage has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the
Debt has been paid in full. 
  

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 (b) With respect to Borrower and the Properties, nothing contained herein or in any other Loan Document
shall be construed as requiring Lender to resort to any Individual Property for the satisfaction of any of the Debt in preference or priority to any other Individual Property, and Lender may seek satisfaction out of all of the Properties or any part
thereof, in its absolute discretion in respect of the Debt. In addition, Lender shall have the right from time to time to partially foreclose the Mortgages in any manner and for any amounts secured by the Mortgages then due and payable as determined
by Lender in its sole discretion including, without limitation, the following circumstances: (i) in the event Borrower defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and interest, Lender may
foreclose one or more of the Mortgages to recover such delinquent payments, or (ii) in the event Lender elects to accelerate less than the entire outstanding principal balance of the Loan, Lender may foreclose one or more of the Mortgages to recover
so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by one or more of the Mortgages as Lender may elect. Notwithstanding one or more partial foreclosures, the Properties shall remain subject to the
Mortgages to secure payment of sums secured by the Mortgages and not previously recovered. 
  
 (c) Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”)
in such denominations as Lender shall determine in its sole discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall execute and deliver to Lender from time to time, promptly after the request of
Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney
shall do by virtue thereof; provided, however, Lender shall not make or execute any such documents under such power until five (5) Business Days after notice has been given to Borrower by Lender of Lender’s intent to exercise its
rights under such power. Except as may be required in connection with a Securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be obligated to pay any costs or expenses incurred in connection with the preparation, execution,
recording or filing of the Severed Loan Documents, and (ii) the Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan Documents and any such representations and warranties contained in the
Severed Loan Documents will be given by Borrower only as of the Closing Date. 
  
 (d) The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singularly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole
discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver 
  

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 thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient.
A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon. 
  
 IX. SPECIAL PROVISIONS 
  
 Section 9.1. Sale of Notes and Securitization. Borrower
acknowledges and agrees that the Lender may sell all or any portion of the Loan and the Loan Documents, or issue one or more participations therein, or consummate one or more private or public securitizations of rated single- or multi-class
securities (the “Securities”) secured by or evidencing ownership interests in all or any portion of the Loan and the Loan Documents or a pool of assets that include the Loan and the Loan Documents (such sales, participations and/or
securitizations, collectively, a “Securitization”). At the request of Lender, and to the extent not already required to be provided by Borrower under this Agreement, Borrower shall use reasonable efforts to provide information not
in the possession of Lender or which may be reasonably required by Lender in order to satisfy the market standards to which Lender customarily adheres or which may be reasonably required by prospective investors and/or the Rating Agencies in
connection with any such Securitization including, without limitation, to: 
  
 (a) provide additional and/or updated Provided Information, together with appropriate verification and/or consents related to the Provided Information; 
  
 (b) assist in preparing descriptive materials for presentations to any or all of the Rating Agencies, and work with, and if
requested, supervise, third-party service providers engaged by Borrower, Principal and their respective affiliates to obtain, collect, and deliver information requested or required by Lender or the Rating Agencies; 
  
 (c) deliver (i) updated opinions of counsel as to non-consolidation, due
execution and enforceability with respect to the Properties, Borrower, Principal, Operating Lessee and Guarantor, the Operating Lease and the Loan Documents, which updated opinions shall be consistent with those opinions of counsel delivered as of
the Closing Date, and (ii) if required by any Rating Agency, revised organizational documents for Borrower, which counsel opinions and organizational documents shall be reasonably satisfactory to the Rating Agencies; 
  
 (d) if required by any Rating Agency, use commercially reasonable efforts to
deliver such additional tenant estoppel letters, subordination agreements or other agreements from parties to agreements that affect the Properties, which estoppel letters, subordination agreements or other agreements shall be substantially in the
form used in connection with the closing of the Loan and if not, then reasonably satisfactory to the Rating Agencies; 
  
 (e) make such representations and warranties as of the closing date of the Securitization with respect to the Properties, Borrower, Principal, Operating
Lessee, the Operating Lease and the Loan Documents as may be reasonably requested by Lender or the Rating Agencies and consistent with the facts covered by such representations and warranties as they exist on the date thereof, to the extent of the
representations and warranties made in the Loan Documents; 
  

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 (f) execute such amendments to the Loan Documents as may be requested by Lender or the Rating Agencies to
effect the Securitization (provided that, no such amendments shall increase the obligations of Borrower or Guarantor or reduce the rights of Borrower or Guarantor under the Loan Documents); 
  
 (g) if requested by Lender, review any information regarding the Properties,
Borrower, Principal, Operating Lessee, the Manager, the Mezzanine Loan and the Loan which is contained in a preliminary or final private placement memorandum, prospectus, prospectus supplement (including any amendment or supplement to either
thereof), or other disclosure document to be used by Lender or any affiliate thereof; and 
  
 (h) supply to Lender such documentation, financial statements and reports concerning Borrower, Principal, Guarantor, Operating Lessee, the Loan, the Mezzanine Loan and/or any Individual Property in form and substance
required in order to comply with any applicable securities laws. 
  
 Borrower shall not be responsible for any costs and expenses incurred by Lender in connection with a Securitization of the Loan (including, without limitation, the fees and expenses of the Rating Agencies). Borrower shall be responsible for
all costs and expenses incurred by Borrower in connection with Borrower’s complying with requests made under Article IX hereof. 
  
 9.1.2 Loan Components; Mezzanine Loans. (a) Notwithstanding the provisions of Section 9.1 to the contrary, Borrower covenants and
agrees that in connection with any Securitization of the Loan, upon Lender’s request Borrower shall deliver one or more new component notes to replace the original note or modify the original note and other Loan Documents, as reasonably
required, to reflect multiple components of the Loan and such new notes or modified note shall at all times shall have the same initial weighted average coupon as the original note (except following an Event of Default or any prepayment of the Loan
pursuant to Section 2.4.2 hereof), but such new notes or modified note may subsequently change the interest rate and apply principal, interest rates and amortization of the Loan between the components in a manner specified by Lender in its
sole discretion, and modify the Cash Management Agreement with respect to the newly created components such that the pricing and marketability of the Securities and the size of each class of Securities and the rating assigned to each such class by
the Rating Agencies shall provide the most favorable rating levels and achieve the optimum bond execution for the Loan; provided, that, except as expressly set forth in this Section 9.1.2, none of the foregoing actions shall have an
adverse affect on Borrower or effect any of the rights or obligations of Borrower or Guarantor under the Loan Documents in any adverse respect. 
  
 (b) Notwithstanding the provisions of Section 9.1 to the contrary, Borrower covenants and agrees that after the Closing Date, Lender shall have the
right to establish different interest rates and to reallocate the amortization and principal balances (including, without limitation, the reallocation of the Release Amounts on a pro rata basis) of the Loan and the Mezzanine Loan between each other
and to require the payment of the Loan and the Mezzanine Loan in such order of priority as may be designated by Lender in its sole discretion; provided, that (i) in no event shall the initial weighted average spread of the Loan and the
Mezzanine Loan 
  

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 following any such reallocation or modification change from the initial weighted average spread in effect immediately
preceding such reallocation or modification (except in connection with a prepayment of the Loan in accordance with Section 2.4.2 hereof or a prepayment of the Mezzanine Loan pursuant to Section 2.4.2 of the Mezzanine Loan Agreement or
following an Event of Default or a Mezzanine Loan Default), but, provided, further, that such modifications may subsequently change the weighted average spread and apply principal, interest rates and amortization between the Loan and
the Mezzanine Loan in a manner specified by Lender in its sole discretion; provided, that, except as expressly set forth in this Section 9.1.2, none of the foregoing actions shall have an adverse affect on Borrower, Mezzanine Borrower
or Guarantor or effect any of the rights or obligations of Borrower under the Loan Documents or Mezzanine Borrower under the Mezzanine Loan Documents in any adverse respect. 
  
 Section 9.2. Securitization Indemnification. (a) Borrower understands that certain of the Provided Information
may be included in Disclosure Documents in connection with the Securitization and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”),
or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be revised prior to the sale of all Securities, Borrower will cooperate with the holder of the Note in updating the Disclosure Document by providing all current information
necessary to keep the Disclosure Document accurate and complete in all material respects. 
  
 (b) The Indemnifying Persons agree to provide, in connection with the Securitization, an indemnification agreement (i) certifying that (A) the
Indemnifying Persons have carefully examined the Provided Information included within the sections of the Disclosure Documents entitled “Risk Factors,” “Special Considerations,” “Description of the Mortgages,”
“Description of the Mortgage Loans and Mortgaged Property,” “The Manager,” “The Borrower” and “Certain Legal Aspects of the Mortgage Loan,” and (B) such sections and such other information in the Disclosure
Documents (to the extent such information relates to or includes any Provided Information) (the “Covered Disclosure Information”) do not contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in the light of the circumstances under which they were made, not misleading, (ii) indemnifying Lender, JPMorgan (whether or not it is the Lender), any Affiliate of JPMorgan that has filed any registration
statement relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of JPMorgan that acts as an underwriter, placement agent or initial purchaser of Securities issued in the
Securitization, any other co-underwriters, co-placement agents or co-initial purchasers of Securities issued in the Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates and
each Person or entity who controls any such Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Indemnified Persons”), for any losses, claims, damages, liabilities,
costs or expenses (including, without limitation, legal fees and expenses for enforcement of these obligations (collectively, the “Liabilities”)) to which any such Indemnified Person may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement of any material fact contained in the Covered Disclosure Information or arise out of or are based upon the omission to state in the Covered Disclosure Information a material fact required to be
stated 
  

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 therein or necessary in order to make the statements in the Covered Disclosure Information, in light of the circumstances
under which they were made, not misleading and (iii) agreeing to reimburse each Indemnified Person for any legal or other expenses incurred by such Indemnified Person, as they are incurred, in connection with investigating or defending the
Liabilities. This indemnity agreement will be in addition to any liability which Borrower may otherwise have. Moreover, the indemnification provided for in clauses (ii) and (iii) above shall be effective whether or not an indemnification agreement
described in clause (i) above is provided. 
  
 (c) In connection
with filings under the Exchange Act, the Indemnifying Persons jointly and severally agree to indemnify (i) the Indemnified Persons for Liabilities to which any such Indemnified Person may become subject insofar as the Liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact in the Covered Disclosure Information, or the omission or alleged omission to state in the Covered Disclosure Information a material fact required to be stated therein
or necessary in order to make the statements in the Covered Disclosure Information, in light of the circumstances under which they were made, not misleading and (ii) reimburse each Indemnified Person for any legal or other expenses incurred by such
Indemnified Persons, as they are incurred, in connection with defending or investigating the Liabilities; provided, however, that Borrower shall not be liable for any omission of a material fact if information containing such material
fact is provided in writing to Lender and designated by Borrower in writing for inclusion in a Disclosure Document but is not actually included in such Disclosure Document. 
  
 (d) Promptly after receipt by an Indemnified Person of notice of any claim or the commencement of any action, the
Indemnified Person shall, if a claim in respect thereof is to be made against any Indemnifying Person, notify such Indemnifying Person in writing of the claim or the commencement of that action; provided, however, that the failure to
notify such Indemnifying Person shall not relieve it from any liability which it may have under the indemnification provisions of this Section 9.2 except to the extent that it has been materially prejudiced by such failure and, provided
further that the failure to notify such Indemnifying Person shall not relieve it from any liability which it may have to an Indemnified Person otherwise than under the provisions of this Section 9.2. If any such claim or action shall be
brought against an Indemnified Person, and it shall notify any Indemnifying Person thereof, such Indemnifying Person shall be entitled to participate therein and, to the extent that it wishes, assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Person. After notice from any Indemnifying Person to the Indemnified Person of its election to assume the defense of such claim or action, such Indemnifying Person shall not be liable to the Indemnified Person for any
legal or other expenses subsequently incurred by the Indemnified Person in connection with the defense thereof except as provided in the following sentence; provided, however, if the defendants in any such action include both an
Indemnifying Person, on the one hand, and one or more Indemnified Persons on the other hand, and an Indemnified Person shall have reasonably concluded that there are any legal defenses available to it and/or other Indemnified Persons that are
different or in addition to those available to the Indemnifying Person, the Indemnified Person or Persons shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Person or Persons. The Indemnified Person shall instruct its counsel to maintain reasonably detailed billing records for fees and disbursements for which such Indemnified Person is seeking reimbursement hereunder and shall
submit copies of such detailed billing 
  

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 records to substantiate that such counsel’s fees and disbursements are solely related to the defense of a claim for
which the Indemnifying Person is required hereunder to indemnify such Indemnified Person. No Indemnifying Person shall be liable for the expenses of more than one (1) such separate counsel unless such Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different from or additional to those available to another Indemnified Person. 
  
 (e) Without the prior consent of JPMorgan (which consent shall not be unreasonably withheld), no Indemnifying Person shall settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such claim, action,
suit or proceeding) unless the Indemnifying Person shall have given JPMorgan reasonable prior notice thereof and shall have obtained an unconditional release of each Indemnified Person hereunder from all liability arising out of such claim, action,
suit or proceedings. As long as an Indemnifying Person has complied with its obligations to defend and indemnify hereunder, such Indemnifying Person shall not be liable for any settlement made by any Indemnified Person without the consent of such
Indemnifying Person (which consent shall not be unreasonably withheld). 
  
 (f) The Indemnifying Persons agree that if any indemnification or reimbursement sought pursuant to this Section 9.2 is finally judicially determined to be unavailable for any reason or is insufficient to hold any Indemnified Person
harmless (with respect only to the Liabilities that are the subject of this Section 9.2), then the Indemnifying Persons, on the one hand, and such Indemnified Person, on the other hand, shall contribute to the Liabilities for which such
indemnification or reimbursement is held unavailable or is insufficient: (x) in such proportion as is appropriate to reflect the relative benefits to the Indemnifying Persons, on the one hand, and such Indemnified Person, on the other hand, from the
transactions to which such indemnification or reimbursement relates; or (y) if the allocation provided by clause (x) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to
in clause (x) but also the relative faults of the Indemnifying Persons, on the one hand, and all Indemnified Persons, on the other hand, as well as any other equitable considerations. Notwithstanding the provisions of this Section 9.2, (A) no
party found liable for a fraudulent misrepresentation shall be entitled to contribution from any other party who is not also found liable for such fraudulent misrepresentation, and (B) the Indemnifying Persons agree that in no event shall the amount
to be contributed by the Indemnified Persons collectively pursuant to this paragraph exceed the amount of the fees (by underwriting discount or otherwise) actually received by the Indemnified Persons in connection with the closing of the Loan or the
Securitization. 
  
 (g) The Indemnifying Persons agree that the
indemnification, contribution and reimbursement obligations set forth in this Section 9.2 shall apply whether or not any Indemnified Person is a formal party to any lawsuits, claims or other proceedings. The Indemnifying Persons further agree
that the Indemnified Persons are intended third party beneficiaries under this Section 9.2. 
  

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 (h) The liabilities and obligations of the Indemnified Persons and the Indemnifying Persons under this
Section 9.2 shall survive the termination of this Agreement and the satisfaction and discharge of the Debt. 
  
 (i) Notwithstanding anything to the contrary contained herein, Borrower shall have no obligation to act as depositor with respect to the Loan or an issuer
or registrant with respect to the Securities issued in any Securitization. 
  
 Section 9.3. Intentionally Omitted. 
  
 Section 9.4. Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the obligations contained in the Note, this
Agreement, the Mortgages or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgages and the other Loan Documents, or in the Properties, the Rents, or any other collateral given to Lender pursuant
to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the
Properties, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgages and the other Loan Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding under, or by reason of, or in connection with, the Note, this Agreement, the Mortgages or the other Loan Documents. The provisions of this Section 9.4 shall not, however, (a) constitute a waiver,
release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under any of the Mortgages; (c) affect the
validity or enforceability of or any Guaranty made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of any of the
Assignments of Leases; (f) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by each of the Mortgages or to commence any other appropriate action or proceeding in
order for Lender to exercise its remedies against all of the Properties; or (g) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost,
expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following: 
  
 (i) fraud or intentional misrepresentation by Borrower, Operating Lessee or any Guarantor in connection with
the Loan; 
  
 (ii) the willful misconduct of
Borrower or Operating Lessee in connection with the Loan; 
  
 (iii) the misappropriation or conversion by Borrower or Operating Lessee of (A) any Insurance Proceeds paid by reason of any Casualty, (B) any Awards 
  

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 received in connection with a Condemnation of all or a portion of any Individual Property, (C) any Rents
received during the continuance of an Event of Default, or (D) any Rents paid more than one (1) month in advance; 
  
 (iv) the misappropriation or conversion by Borrower or Operating Lessee of any security deposits, advance deposits or any other deposits
collected with respect to the Properties which are not delivered to Lender upon a foreclosure of any Individual Property or action in lieu thereof, except to the extent any such deposits were applied in accordance with the terms and conditions of
any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof; 
  
 (v) if Borrower or Operating Lessee fails to maintain its status as a Special Purpose Entity as required by and in accordance with the
terms and provisions of this Agreement or the Mortgages; or 
  
 (vi) if Borrower fails to obtain Lender’s prior written consent to (A) any voluntary transfer of any Individual Property or (B) direct or indirect transfer in Borrower, in each case as required by the terms of
the Loan Documents. 
  
 Notwithstanding anything to the contrary in this
Agreement, the Note or any of the Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the Debt secured by the Mortgages or to require that all collateral shall continue to secure all of the Debt owing to Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower in the event of: (i)
Borrower or Operating Lessee filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (ii) Borrower or Operating Lessee filing an answer consenting to or otherwise acquiescing in or joining in
any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, unless there are no legitimate grounds for contesting such petition (in which case an answer
consenting otherwise acquiescing in or joining in any involuntary petition will not cause recourse liability under this Section 9.4), or soliciting or causing to be solicited petitioning creditors for any involuntary petition from any Person;
(iii) Borrower or Operating Lessee consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or Operating Lessee or any portion of any Individual Property; or (iv)
Borrower or Operating Lessee making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability generally to pay its debts as they become due. 
  
 Section 9.5. Matters Concerning Manager. If (a) Manager shall
become bankrupt or insolvent, or (b) a material default by Manager occurs under the Management Agreement beyond any applicable grace and cure periods, Borrower shall, at the request of Lender, terminate the Management Agreement and replace the
Manager with a Qualified Manager pursuant to a Replacement Management Agreement, it being understood and agreed that the management fee for such replacement manager shall not exceed then prevailing market rates. 
  

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 Section 9.6. Matters Concerning Franchisor. If (a) Franchisor shall become bankrupt or
insolvent, or (b) a material default occurs under the Franchise Agreement beyond any applicable grace and cure periods, Borrower shall, at the request of Lender, terminate the Franchise Agreement and replace the Franchisor with a Qualified
Franchisor pursuant to a Replacement Franchise Agreement, it being understood and agreed that the franchise fee for such replacement franchisor shall not exceed then prevailing market rates. 
  
 Section 9.7. Servicer. At the option of Lender, the Loan may be
serviced by a servicer/trustee (the “Servicer”) selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to the Servicer pursuant to a servicing
agreement (the “Servicing Agreement”) between Lender and Servicer. Borrower shall not be responsible for any fees or any other initial or ongoing costs relating to or arising under the Servicing Agreement. 
  
 X. MISCELLANEOUS 
  
 Section 10.1. Survival. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to
include the legal representatives, successors and assigns of such party. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of
Lender. 
  
 Section 10.2. Lender’s
Discretion. Whenever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide
whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive. Whenever this Agreement expressly provides that
Lender may not withhold its consent or its approval of an arrangement or term, such provisions shall also be deemed to prohibit Lender from delaying or conditioning such consent or approval. 
  
 Section 10.3. Governing Law. (A) THIS AGREEMENT WAS NEGOTIATED IN
THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE 
  

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 STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 
  
 (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT
IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION
OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT: 
  
 HOGAN & HARTSON L.L.P. 
 875 THIRD AVENUE 
 NEW YORK, NEW YORK 10022 
 ATTN: ALAN SCHACTER 
  
 AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL
PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN
THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF 
  

 -91- 

 ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A
SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR. 
  
 Section 10.4. Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of
this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then
such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice
or demand in the same, similar or other circumstances. 
  
 Section 10.5. Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or
the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other
amount. 
  
 Section 10.6. Notices. All
notices, consents, approvals and requests required or permitted hereunder or under any other Loan Document shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) certified or registered United States mail,
postage prepaid, return receipt requested or (b) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, and by telecopier (with answer back acknowledged), addressed as follows (or at
such other address and Person as shall be designated from time to time by any party hereto, as the case may be, in a notice to the other parties hereto in the manner provided for in this Section 10.6): 
  

			
	            If to Lender:	  	JPMorgan Chase Bank
	 	  	c/o ARCap Servicing, Inc.
	 	  	5605 N. MacArthur Blvd. Suite 950
	 	  	Irving, Texas 75038
	 	  	Attention: Clyde Greenhouse – Director of Administration
	 	  	Facsimile No.: (972) 580-3888

  

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	            with a copy to:	  	Cadwalader, Wickersham & Taft LLP
	 	  	100 Maiden Lane
	 	  	New York, New York 10038
	 	  	Attention: William P. McInerney, Esq.
	 	  	Facsimile No. (212) 504-6666
		
	            If to Borrower:	  	Highland Hospitality Corporation
	 	  	8405 Greensboro Drive, Suite 500
	 	  	McLean, Virginia 22102
	 	  	Attention: General Counsel
	 	  	Facsimile No. (703) 336-4910
		
	            With a copy to:	  	Highland Hospitality Corporation
	 	  	8405 Greensboro Drive, Suite 500
	 	  	McLean, Virginia 22102
	 	  	Attention: Chief Financial Officer
	 	  	Facsimile No. (703) 336-4905

  
 A notice shall be deemed to have been
given: in the case of hand delivery or delivery by a reputable overnight courier, at the time of delivery; in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or in the case of expedited
prepaid delivery and telecopy, upon the first attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a machine-generated confirmation of successful transmission after advice by telephone to recipient that a
telecopy notice is forthcoming. 
  
 Section 10.7. Trial by
Jury. 
  
 LENDER AND BORROWER 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. THE PARTIES ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTY. 
  
 Section 10.8. Headings. The Article and/or Section headings and the Table of Contents in this Agreement are
included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 
  
 Section 10.9. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement. 
  

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 Section 10.10. Preferences. Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment
or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender. 
  
 Section 10.11. Waiver of Notice. Borrower hereby expressly
waives, and shall not be entitled to, any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to
Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice.  
  
 Section 10.12. Remedies of Borrower. In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the other Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees
that neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment. 
  
 Section 10.13. Expenses; Indemnity. (a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt
of notice from Lender for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with (i) the preparation, negotiation, execution and delivery of this Agreement
and the other Loan Documents and, except as otherwise set forth in Section 9.1 hereof, the consummation of the transactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including
without limitation any opinions requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with respect to the Properties); (ii) Borrower’s ongoing performance of and compliance with Borrower’s
respective agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date, including, without limitation, confirming compliance with environmental and insurance
requirements; (iii) except as otherwise expressly provided in this Agreement, Lender’s ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other Loan 
  

 - 94 - 

 Documents on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Lender; (v) securing Borrower’s compliance with
any requests made pursuant to the provisions of this Agreement; (vi) the filing and recording fees and expenses, Title Insurance and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other
similar expenses reasonably incurred in creating and perfecting the Liens in favor of Lender pursuant to this Agreement and the other Loan Documents; (vii) enforcing or preserving any rights, either in response to third party claims or in
prosecuting or defending any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, the other Loan Documents, the Properties, or any other security given for the Loan; and (viii) enforcing any
obligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with respect to the Properties or in connection with any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or of any insolvency or bankruptcy proceedings; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any cost and expenses due and payable to Lender may be paid from any amounts in the Lockbox Account. 
  
 (b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not Lender shall be designated a party thereto), that may be imposed on, incurred by, or asserted
against Lender in any manner relating to or arising out of (i) any breach by Borrower of its obligations under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, or (ii) the use or intended use
of the proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to Lender hereunder to the extent that such Indemnified Liabilities arise from
the gross negligence, illegal acts, fraud or willful misconduct of Lender. To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Lender. 
  
 (c) Borrower covenants and agrees to pay for or, if Borrower fails to pay, to
reimburse Lender for, any fees and expenses incurred by any Rating Agency (after the Loan has been included in a Securitization) in connection with any Rating Agency review of the Loan, the Loan Documents or any transaction contemplated thereby or
any consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of this Agreement or any other Loan Document and the Lender shall be entitled to require payment of such fees and expenses as a
condition precedent to the obtaining of any such consent, approval, waiver or confirmation. 
  
 Section 10.14. Schedules Incorporated. The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof. 

 

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 Section 10.15. Offsets, Counterclaims and Defenses. Any assignee of Lender’s
interest in and to this Agreement, the Note and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor
of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated
offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower. 
  
 Section 10.16. No Joint Venture or Partnership; No Third Party Beneficiaries. (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor to
grant Lender any interest in the Properties other than that of mortgagee, beneficiary or lender. 
  
 (b) This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or the other
Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein. All conditions to the obligations of
Lender to make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender
will refuse to make the Loan in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part
by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so. 
  
 Section 10.17. Publicity. Except as may be required by applicable Legal Requirements, all news releases, publicity or advertising by
Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, JPMorgan, or any of their Affiliates shall be subject to the prior
approval of Lender. 
  
 Section 10.18. Cross-Default;
Cross-Collateralization; Waiver of Marshalling of Assets. (a) Borrower acknowledges that Lender has made the Loan to Borrower upon the security of its collective interest in the Properties and in reliance upon the aggregate of the Properties
taken together being of greater value as collateral security than the sum of each Individual Property taken separately. Borrower agrees that the Mortgages are and will be cross-collateralized and cross-defaulted with each other so that (i) an Event
of Default under any of the Mortgages shall constitute an Event of Default under each of the other Mortgages which secure the Note; (ii) an Event of Default under the Note or this Loan Agreement shall constitute an Event of Default under each
Mortgage; (iii) each Mortgage shall constitute security for the Note as if a single blanket lien were placed on all of the Properties as security for the Note; and (iv) such cross-collateralization shall in no event be deemed to constitute a
fraudulent conveyance. 
  

 - 96 - 

 (b) To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives
all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Properties, or to a sale in inverse order of alienation in the event of foreclosure of all or any of the Mortgages, and
agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Properties for the collection of the Debt without any prior or different resort for collection or of the right of Lender to the payment of the Debt out of the net proceeds of the
Properties in preference to every other claimant whatsoever. In addition, Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Mortgages, any equitable right otherwise available to Borrower
which would require the separate sale of the Properties or require Lender to exhaust its remedies against any Individual Property or any combination of the Properties before proceeding against any other Individual Property or combination of
Properties; and further in the event of such foreclosure Borrower does hereby expressly consent to and authorize, at the option of Lender, the foreclosure and sale either separately or together of any combination of the Properties. 
  
 Section 10.19. Waiver of Counterclaim. Borrower hereby waives
the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents. 
  
 Section 10.20. Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of this Loan Agreement and
any of the other Loan Documents, the provisions of this Loan Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and
that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may
acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender
engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates. 
  
 Section 10.21. Brokers and Financial Advisors. Each of Lender
and Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Each of Lender and Borrower hereby agrees to
indemnify, defend and hold the other harmless from and against any and all claims, liabilities, costs and expenses of any kind (including reasonable attorneys’ fees and expenses) in any way relating to or arising from a 
  

 - 97 - 

 claim by any Person that such Person acted on behalf of Borrower or Lender, as the case may be, in connection with the
transactions contemplated herein. The provisions of this Section 10.21 shall survive the expiration and termination of this Agreement and the payment of the Debt. 
  
 Section 10.22. Prior Agreements. This Agreement and the other Loan Documents contain the entire agreement of
the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, including, without limitation, that certain Loan Commitment dated June
24, 2004 (as amended) between Borrower and Lender are superseded by the terms of this Agreement and the other Loan Documents. 
  
 Section 10.23. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the same instrument. 
  
 [NO FURTHER TEXT ON THIS PAGE] 
  

 - 98 - 

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

			
	 HH FP PORTFOLIO LLC, a Delaware
 limited liability company

		
	 By:
	 	 /s/ Tracy M.J. Colden

	Name:	 	Tracy M.J. Colden
	Title:	 	Vice President
	
	 JPMORGAN CHASE BANK, a New York
 banking corporation

		
	 By:
	 	 /s/ Thomas Cosenza

	Name:	 	Thomas M. Cosenza
	Title:	 	Vice President

  

 SCHEDULE I 
  
 (Release Amounts) 
  

						
	 Property Name

	  	 Location

	  	Mortgage Release Amounts

	Crowne Plaza Ravinia	  	Atlanta, GA	  	$	37,680,000
	Hilton Parsippany	  	Parsippany, NJ	  	$	44,500,000
	Hyatt - Wind Watch	  	Hauppauge, NY	  	$	29,350,000
	Tremont - Boston	  	Boston, MA	  	$	23,470,000
	 	  	 	  	
	

	 	  	 	  	$	135,000,000

  

 SCH. I-1 

 SCHEDULE II 
  
 (Rent Roll) 
  

			
	 Property Name

	 	 Lease

	Crowne Plaza Ravinia	 	LaGrotta at Ravinia, Inc.
		
	Hilton Parsippany	 	Ruth’s Chris Steakhouse #35, L.P.
		
	Tremont - Boston	 	The Boston LECO Corp. d/b/a NYC Jukebox
		
	Tremont – Boston	 	Ladco Management Company Inc. Management Agreement
		
	Tremont - Boston	 	Boston Ballroom Corporation

  

 SCH. II-1 

 SCHEDULE III 
  
 (Required Repairs–Deadlines For Completion) 
  

 SCH. III-1 

 SCHEDULE IV 
  
 (Organizational Structure) 
  

					
	 HIGHLAND HOSPITALITY L.P.,
 a Delaware limited partnership

			
	 	 	 	 	100%
			
	 100%
	 	 	 	 HHC TRS HOLDING
 CORPORATION,
 a Maryland corporation

			
	 	 	 	 	100%
			
	 HH FP Portfolio Holding LLC,
 a Delaware limited liability
 company
	 	 	 	 HHC TRS FP
 Portfolio Holding LLC,
 a Delaware limited liability
 company

			
	 100%
	 	 	 	100%
			
	 HH FP Portfolio LLC,
 a Delaware limited liability
 company
	 	 	 	 HHC TRS FP Portfolio LLC,
 a Delaware limited liability
 company

  

 SCH. IV-1 

 SCHEDULE V 
  
 (Environmental Reports) 
  
 Ravinia – (a) Environmental Site Assessment dated July 16, 2004 prepared by Jones, Hill, McFarland & Ellis and (b) Building Exterior Report dated June 15,
2004 prepared by Williamson & Associates, Inc. 
  
 Parsippany –
Environmental Site Assessment dated July 16, 2004 prepared by Jones, Hill, McFarland & Ellis. 
  
 Wind Watch – (a) Environmental Site Assessment dated July 16, 2004 prepared by Jones, Hill, McFarland & Ellis and (b) Building Exterior Report dated June 17, 2004 prepared by Williamson &
Associates, Inc. 
  
 Tremont – Environmental Site Assessment dated
July 16, 2004 prepared by Jones, Hill, McFarland & Ellis. 
  

 SCH. V-1 

 SCHEDULE VI 
  
 (Franchise Agreements) 
  

 SCH. VI-1 

 SCHEDULE VII 
  
 (Management Agreements) 
  

	1.	Ravinia – Management Agreement, dated July 20, 2004, by and between HHC TRS FP Portfolio LLC and Crestline Hotels & Resorts, Inc. 

  

	2.	Parsippany – Management Agreement, dated August 16, 2004, by and between HHC TRS FP Portfolio LLC and Crestline Hotels & Resorts, Inc. 

  

	3.	Tremont – Management Agreement, dated August 17, 2004, by and between HHC TRS FP Portfolio LLC and Crestline Hotels & Resorts, Inc. 

  

 SCH. VII-1 

 SCHEDULE VIII 
  
 (Out Parcel) 
  
 “Release Parcel” shall mean those certain parcels identified as “Office Parcel 1” and “Office Parcel 2” as separately
described and plotted on the Survey of the Individual Property located in Haupaugge, New York. 
  

 SCH. VIII-1 

 SCHEDULE IX 
  
 (Liquor Licenses) 
  

 SCH. IX-1 

 SCHEDULE X 
  
 (Assignments of Management Agreements) 
  
 Assignment of Management Agreement and Subordination of Management Fees by Borrower and Operating Lessee to Lender and
consented and agreed to by Crestline Hotels & Resorts, Inc., a Delaware corporation. 
  
 Assignment of Management Agreement by Borrower and Operating Lessee to Lender and consented and agreed to by Hyatt Corporation, a Delaware corporation. 
  
 [Consent to Collateral Assignment and Subordination, Non-Disturbance and Attornment Agreement] by Borrower and Operating
Lessee to Lender and consented and agreed to by Marriott International, Inc., a Delaware corporation. 
  

 SCH. X-1 

 SCHEDULE XI 
  
 (Lockbox Agreements) 
  
 Three-Party Springing Blocked Account Service Agreement among Borrower, Operating Lessee, Lender, and Fleet National Bank. 
  
 [Lockbox Agreement] among Borrower, Operating Lessee, Lender, and [Bank of
America, N.A.] 
  
 [Lockbox Agreement] among Borrower, Operating
Lessee, Lender, and [JPMorgan Chase Bank] 
  

 SCH. XI-1 

 SCHEDULE XII 
  
 (Physical Conditions Reports) 
  

Ravinia – Property Condition Assessment dated July 16, 2004 prepared by Jones, Hill, McFarland & Ellis. 
  
 Parsippany – Property Condition Assessment dated July 15, 2004 prepared by Jones,
Hill, McFarland & Ellis. 
  
 Wind Watch – Property Condition
Assessment dated July 16, 2004 prepared by Jones, Hill, McFarland & Ellis. 
  
 Tremont – Property Condition Assessment dated July 16, 2004 prepared by Jones, Hill, McFarland & Ellis. 
  

 SCH. XII-1EXHIBIT 10.40

 Exhibit 10.40 
  
 DEED OF TRUST AND SECURITY AGREEMENT 

 DEED OF TRUST AND SECURITY AGREEMENT 
  
 TABLE OF CONTENTS 
  

					
	 	  	 	  	PAGE

	1.	  	Payment of Indebtedness	  	8
	2.	  	Covenants of Title	  	8
	3.	  	Usury	  	9
	4.	  	Impositions	  	9
	5.	  	Tax Deposits	  	10
	6.	  	Change in Taxes	  	13
	7.	  	Insurance	  	13
	8.	  	Insurance/Condemnation Proceeds	  	15
	9.	  	Restoration Following Fire and Other Casualty or Condemnation	  	17
	10.	  	Disposition of Condemnation or Insurance Proceeds	  	22
	11.	  	Fire and Other Casualty; Self-Help	  	23
	12.	  	Rent Insurance Proceeds	  	24
	13.	  	Repair; Alterations; Waste; Environmental	  	24
	14.	  	Environmental Indemnification	  	25
	15.	  	Independence of Security	  	26
	16.	  	No Other Liens	  	26
	17.	  	Management	  	27
	18.	  	Intentionally Deleted.	  	28
	19.	  	Sidewalks, Municipal Charges	  	28
	20.	  	Assignment of Rents and Leases/Future Leases/Obligations of Lessor	  	28
	21.	  	Leases; Foreclosure	  	28
	22.	  	Operating Agreement/Easement Agreements	  	29
	23.	  	Events of Default	  	29
	24.	  	Remedies Upon Default	  	31
	25.	  	Receiver	  	36
	26.	  	Foreclosure of Personalty	  	37
	27.	  	Prepayment Premiums	  	37
	28.	  	Acceleration Interest	  	38
	29.	  	Late Charge	  	38
	30.	  	Waiver of Statutory Rights.	  	39
	31.	  	Security Interest	  	39
	32.	  	Right of Entry	  	40
	33.	  	Estoppel Certificate	  	41
	34.	  	Annual Statements	  	41
	35.	  	Rights Cumulative	  	43
	36.	  	Subrogation	  	43
	37.	  	No Waiver	  	43
	38.	  	Deed of Trust Extension	  	43
	39.	  	Indemnification	  	43
	40.	  	Nonrecourse	  	44
	41.	  	Attorneys’ Fees	  	46
	42.	  	Administrative Fees	  	46
	43.	  	Trustee’s Costs and Expenses; Governmental Charges	  	47
	44.	  	Protection of Security; Costs and Expenses	  	47
	45.	  	Notices	  	48
	46.	  	Release	  	49
	47.	  	Applicable Law	  	49
	48.	  	Tenancy at Will	  	49

  

					
	49.	  	Substitution of Trustee	  	49
	50.	  	Indemnification of Trustee	  	50
	51.	  	Other	  	50
	52.	  	Invalidity	  	50
	53.	  	Captions	  	50
	54.	  	Modifications	  	50
	55.	  	Bind and Inure	  	51
	56.	  	Replacement of Note	  	51
	57.	  	Time of the Essence	  	51
	58.	  	Business Day	  	51
	59.	  	Rights and Remedies of Sureties	  	51

  
 EXHIBIT A - Legal Description 
  

 AFTER RECORDING, RETURN TO: 
  
 Janis H. Loegering, Esq. 
 Locke Liddell &
Sapp LLP 
 2200 Ross Avenue, Suite 2200 
 Dallas, Texas
75201-6776 
  
 DEED OF TRUST AND SECURITY AGREEMENT

  

			
		
	 STATE OF TEXAS
	  	§
		
	 	  	§
		
	 COUNTY OF DALLAS
	  	§

  
 THIS DEED OF TRUST AND
SECURITY AGREEMENT (this “Deed of Trust”) is made as of the 9th day of September, 2004 by HH DFW HOTEL ASSOCIATES, L.P., a Delaware limited partnership and having its principal place of business at c/o Highland Hospitality
Corporation, 8405 Greensboro Drive, Suite 500, McLean, Virginia 22102 (“Borrower”) and HHC TRS OP LLC, a Delaware limited liability company, having its principal place of business at c/o Hospitality Corporation, 8405
Greensboro Drive, Suite 500, McLean, Virginia 22102 (“Operating Tenant” and, together with Borrower, collectively referred to herein as “Grantor”), to JANIS H. LOEGERING, TRUSTEE, subject to substitution as
provided in Section 49 (herein referred to as “Trustee”), in favor of CONNECTICUT GENERAL LIFE INSURANCE COMPANY, a Connecticut corporation, having its principal place of business at c/o CIGNA Realty Investors, 280
Trumbull Street, Hartford, Connecticut 06103, Attention: Debt Asset Management, H-11G (hereinafter referred to as “Beneficiary”). 
  
 W I T N E S S E T H: 
  
 THAT, to secure (i) payment to Beneficiary of the principal indebtedness of
Thirty-Eight Million and No/100 Dollars ($38,000,000.00), together with interest thereon (the “Loan”), as evidenced by that certain Promissory Note of even date herewith in the original principal amount of Thirty-Eight Million and
No/100 Dollars ($38,000,000.00) from Borrower, payable to Beneficiary (the “Note”), and any renewals, extensions or modifications thereof (including, without limitation, any modification increasing the Interest Rate (defined in the
Note), the principal amount, the monthly payments or extending the maturity date) with the final payment of the entire outstanding balance of the Note being due and payable on October 1, 2011, in and by which Note the Grantor promises to pay the
said principal indebtedness and interest at the 
  

 rate and in installments as provided in the Note, (ii) the performance of the covenants herein contained and the payment
of any monies expended by Beneficiary in connection therewith, (iii) the payment of all obligations and the performance of all covenants of Grantor under any other loan documents, agreements or instruments between Grantor and Beneficiary given in
connection with or related to this Deed of Trust or the Note and (iv) any and all additional advances made by Beneficiary to protect or preserve the Security (hereinafter defined) or the security interest created hereby on the Security, or for
taxes, assessments, or insurance premiums as hereinafter provided or for performance of any of Grantor’s obligations hereunder or for any other purpose provided herein (whether or not the original Grantor remains the owner of the Security at
the time of such advances) (all of the aforesaid indebtedness and obligations being herein called the “Indebtedness”, and all of the documents, agreements and instruments now or hereafter evidencing or securing the repayment of, or
otherwise pertaining to, the Indebtedness being herein collectively called the “Loan Documents”), Grantor does hereby mortgage, grant, bargain, sell, assign, pledge, transfer, and convey unto Trustee and to Trustee’s successors
and assigns, in trust, with power of sale and right of entry and possession forever, all of the following described land, improvements real and personal property, rents and leases, and all of its estate, right, title and interest therein and thereto
(hereinafter collectively called the “Security”): 
  
 The real property described in Exhibit A attached hereto and made a part hereof, situated, lying and being in the City of Irving, County of Dallas and State of Texas (the “Land”); 
  
 TOGETHER with all buildings and other improvements now or hereafter located
on the Land or any part thereof including but not limited to, all extensions, betterments, renewals, renovations, substitutes and replacements of, and all additions and appurtenances to the Security (the “Improvements”); 

 
 TOGETHER with all of the right, title and interest, if any, of Grantor in
and to the land lying in the bed of any street, road, highway or avenue in front of or adjoining the Land to the center lines thereof; 
  
 TOGETHER with (to the extent assignable) all of the right, title and interest, if any, that Grantor may have in the right to use, in connection with the
operation of the Security, the name “DFW Marriott” and any other name similar thereto, and any other licenses, trademarks, service marks or trade names, and good will associated therewith, used in connection with the Security; 

 

 TOGETHER with all easements now or hereafter located on or appurtenant to the Land and/or Improvements or
under or above the same or any part thereof, rights-of-way, licenses, permits, approvals, and privileges, belonging or in any way appertaining to the Land and/or Improvements including without limitation (i) any drainage ponds or other like drainage
areas not located on the Land which may be required for water run-off, (ii) any easements necessary to obtain access from the Land to such drainage areas, or to any other location to which Grantor has a right to drain water or sewage, (iii) any land
required to be maintained as undeveloped land by the zoning rules and regulations applicable to the Real Property, and (iv) any easements and agreements which are or may be established to allow inter alia, parking (whether on-site or
off-site), satisfactory ingress to, egress from and operation of the Real Property, and any other easement agreement or covenant or benefit as to land use (collectively, the “Easement Agreements”); 
  
 TOGETHER with any and all awards heretofore made and hereafter to be made by
any municipal or other governmental authorities to the present and all subsequent owners of the Security for the taking of all or any portion of the Security by power of eminent domain, including, without limitation, awards for damage to the
remainder of the Security and any awards for any change or changes of grade of streets affecting the Security, which said awards are hereby assigned to Beneficiary, and Beneficiary, at its option, is hereby authorized, directed and empowered to
collect and receive the proceeds of any such awards from the authorities making the same and to give proper receipts and acquittances therefore, and, subject to the terms hereof, to apply the same toward the payment of the Indebtedness,
notwithstanding the fact that such amount may not then be due and payable; and Grantor hereby covenants and agrees to and with Beneficiary, upon request by Beneficiary, to make, execute and deliver, at Grantor’s expense, any and all assignments
and other instruments sufficient for the purpose of assigning the aforesaid awards to or for the benefit of Beneficiary, free, clear and discharged of any and all encumbrances of any kind or nature whatsoever (all of the foregoing Land,
Improvements, rights, easements, rights-of-way, licenses, privileges, and awards, collectively, the “Real Property”); 
  

 TOGETHER with all proceeds, insurance or otherwise, paid for the damage done to any of the Security and
all proceeds of the conversion, voluntarily or involuntarily, of any of the Security into cash or liquidated claims; 
  
 TOGETHER with all fixtures, machinery, equipment, furniture, goods, and every other article of personal property, tangible and intangible, now or
hereafter attached to or used in connection with the Real Property, or placed on any part thereof and whether or not attached thereto, appertaining or adapted to the use, management, operation or improvement of the Real Property, insofar as the same
and any reversionary right thereto may now or hereafter be owned or acquired by Grantor, including, but without limitation all goods, supplies, equipment, appliances, implements, furniture, furnishings, fixtures, machinery, inventory and
construction materials and all personal property used in the operation of a hotel on the Real Property, including, without limiting the generality of the foregoing, all hotel furniture, furnishings and equipment, heating, lighting, plumbing,
ventilating, refrigerating, incinerating, elevator, escalator, air conditioning and communication plants or systems with appurtenant fixtures; vacuum cleaning systems; call systems; sprinkler systems and other fire prevention and extinguishing
apparatus and materials; all telephone, computer and other electronic equipment and appurtenances thereto, including any software owned by Grantor and necessary for the operation of the Security (except to the extent the transfer thereof would cause
a material breach of any licensing agreement in connection therewith) but expressly excluding software that is owned by or licensed to the Manager under the Management Agreement (as such terms are defined below); and all other machinery, pipes,
poles, appliances, equipment, wiring, fittings, panels and fixtures; and any proceeds therefrom, any replacements thereof or additions or accessions thereto; curtains, draperies, hangings, televisions, radios, phonographs and stereo equipment,
pianos, organs, paintings, pictures, frames, sculptures, mirrors, lamps, bric-a-brac, vases, ornaments, carpets, rugs, beds, springs, mattresses, bedding, pillows, blankets, comforters, spreads, bed linens, vanities, secretaries, bureaus,
chiffonniers, chests, love seats, benches, night stands, costumers, smoking stands, sand jars, statuary, china, glassware, table linens, towels, bath mats, shower curtains, hollowware, flatware, cutlery, cooking, baking, and other kitchen utensils
and apparatus, crockery, kettles, pots, pans, pails, toasters, mixers, trays, racks, electric irons and apparatus, bathroom furniture and furnishings, hamperettes, cash registers, typewriters, typewriter stands, adding machines, calculators,
comptometers, multilith machines, addressographs, graphotypes, time stamps, time recorders, posting machines, 
  

 bookkeeping machines, checking machines, payroll machines, computer reservation systems, accounting and other computer
software, and other office and accounting equipment, drills, presses, planers, saws, and other tools, scales, uniforms, and all other tangible personal property used or to be used or placed or to be placed in the rooms, halls, lounges, offices,
lobbies, lavatories, basements, cellars, vaults and other portions of said Real Property or any building or buildings hereafter constructed or erected thereon, whether herein enumerated or not, and whether or not contained in any such building, and
which are used or useful in the operation and maintenance thereof, or in the business conducted therein, including the operation of any restaurants on the Real Property by or on behalf of Grantor, including but not limited to all restaurant
furnishings and equipment, foodstuffs, and beverages, including (to the extent assignable or transferable) wine and other alcoholic beverages owned by Grantor, and all replacements and substitutions for all personal property from time to time be
located, placed, installed or used in or upon, or procured for use, or useful in connection with the operation of the whole, or any useful part of, the Real Property (the foregoing items of furniture, furnishings, fixtures and equipment collectively
are referred to as “FF&E”); provided, however, FF&E shall not include any of the foregoing items which are owned by parties other than Grantor including, but not limited to, any tenants of the Real Property or the operator
under any management agreement; and all building materials, supplies and other property delivered to the Real Property for incorporation into the Improvements thereon, all of which, to the extent permitted by law, are declared to be a part of the
realty and covered by the lien hereof, but said lien shall not cover any fixture, machinery, equipment or article of personal property which is owned by a tenant, provided said fixture, machinery, equipment or article of personal property is not
permanently affixed to the realty and may be removed without material damage thereto and is not a replacement of any item which shall have been subject to the lien hereof, but said lien shall include any other fixture, machinery, equipment or
article of personal property so incorporated into the Improvements so as to constitute realty under applicable law, whether or not owned by the Grantor; 
  
 TOGETHER with all of Grantor’s books of account and records relating to the Security, including, without limitation, all information stored on
computers and software to the extent relating thereto; 
  
 TOGETHER with all (i) contracts, agreements, assignable permits and licenses, including occupancy permits, business licenses and liquor licenses, warranties and 
  

 representations relating to or governing the use, occupancy, operation, management, hotel group, name or chain
affiliation and/or guest reservation system, repair or service of the Real Property, (ii) all agreements with credit card issuers, sponsors or administrators, (iii) all rights to payment for the rental of guest rooms, banquet rooms, retail premises
and other facilities on the Real Property, (iv) all rights to payment from any credit/charge card organization or entity such as or similar to, and including, without limitation, the organizations or entities which sponsor and administer the
American Express Card, the Discovery Card, the Visa Card, the Carte Blanche Card, the Diners Club card and the MasterCard; and (v) all leases, occupancy agreements, registration and concession agreements, and commitments to provide rooms or
facilities in the future to the extent that they are not solely interests in real estate, including all amendments, modifications and supplements to any of the foregoing; 
  
 TOGETHER with all cars, trucks, trailers, construction and earth moving equipment and other vehicles owned by Grantor
covered by a certificate of title law of any state used in the operation of the Real Property and all tires and other appurtenances to any of the foregoing; 
  
 TOGETHER with all contracts for sale and leases in the nature of sales of the Real Property, or any portion thereof, now and hereafter entered into and
all right, title and interest of Grantor thereunder, including, without limitation, cash or securities deposited thereunder to secure performance by the lessees or contract purchasers; all letter of credit rights; all proceeds and revenues arising
from or out of the Real Property or any part thereof including, without limitation, room revenues, banquet revenues and cancellation payments relating to the use and enjoyment of the Real Property; all sanitary sewer, drainage, water and utility
service agreements benefiting the Real Property or any part thereof, together with all accounts, accounts receivable, credit card receipts, contract rights, reserve accounts required to be established hereunder or under any management agreement
affecting the Real Property; inventory, operating supplies, general intangibles, documents, instruments and chattel paper and proceeds of any of the foregoing arising from or in connection with the Real Property, including all books and records in
connection with the operations of the Real Property; and all rights of Grantor under any leases, covenants, agreements, restrictions or declarations recorded with respect to, or as an appurtenance to, the Real Property or any part thereof (all of
the tangible and intangible personal property described in this and the previous five paragraphs collectively, the “Personal Property”); 
  

 TOGETHER with all of Grantor’s right, title and interest of in, to and under that certain Lease
Agreement dated as of substantially even date herewith (the “Operating Lease”), by and between Borrower and Operating Tenant; 
  
 TOGETHER with all of Grantor’s right, title and interest as lessee in, to and under any equipment or personal property leases (the
“Personalty Leases”) for the lease of any furniture, equipment and/or other personal property used by Grantor in the operation of the Improvements or otherwise located on the Real Property (the “Leased Personalty”).

  
 TOGETHER with all of Grantor’s right, title and interest
of in, to and under that certain Amended and Restated Management Agreement dated December 29, 2001, by and between Marriott Hotel Services, Inc., a Delaware corporation (“Manager”) and Host Marriott, L.P., as assigned to and assumed
by Operating Tenant by that certain Assignment and Assumption dated as of May 10, 2004 (the “Management Agreement”); 
  
 TOGETHER with all of the right, title and interest of Grantor in and to all and singular the tenements, hereditaments and appurtenances belonging to or in
any way pertaining to the Security; all the estate, right, title and claim whatsoever of Grantor, either in law or in equity, in and to the Security; and any and all other, further or additional title, estate, interest or right which may at any time
be acquired by Grantor in or to the Security, and if Grantor shall at any time acquire any further estate or interest in or to the Security, the lien of this Deed of Trust shall attach, extend to, cover and be a lien upon such further estate or
interest automatically without further instrument or instruments, and Grantor, upon request of Beneficiary, shall execute such instrument or instruments as shall reasonably be requested by Beneficiary to confirm such lien; 
  
 TO HAVE AND TO HOLD the Security, and each and every part thereof, unto the
Beneficiary and its successors and assigns, for the purposes and uses herein set forth. 
  
 UPON THE TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set forth; 
  
 PROVIDED, HOWEVER, that if Grantor pays or causes to be fully and irrevocably paid to Beneficiary all sums secured by this Deed of Trust on the dates and
in the manner provided in the Note and in this Deed of Trust, and observes and performs all of the terms, conditions and obligations contained in this Deed of Trust and the Note, then the estate, right, title and 
  

 interest of the Beneficiary in and to the Security shall cease, and upon proof being given to the satisfaction of the
Beneficiary that the Indebtedness has been paid or satisfied according to the terms of the Note, and that all of Grantor’s obligations under this Deed of Trust have been fully satisfied, and upon payment of all fees, costs, charges and
liabilities chargeable to or incurred by the Beneficiary pursuant to the Note or otherwise provided for in this Deed of Trust, the Beneficiary shall, on receipt of a written request therefore from Grantor, and at Grantor’s sole expense, (a)
release and discharge the lien of this Deed of Trust, (b) cause this Deed of Trust to be canceled and marked “satisfied” of record, (c) deliver to Grantor the original Note and (d) transfer and deliver to Grantor, without warranty, any
security which is then subject to the lien of this Deed of Trust and is in Beneficiary’s possession. 
  
 AND, Grantor hereby further covenants, agrees and warrants as follows: 
  
 1. Payment of Indebtedness. Grantor will pay the principal indebtedness and interest thereon in accordance with the
provisions of the Note and all prepayment fees, late charges and fees required thereunder, and all extensions, renewals, modifications, amendments and replacements thereof, and will keep and perform all the covenants, promises and agreements, and
pay all sums provided in (i) the Note or any other promissory note or notes at any time hereafter issued to evidence the Indebtedness, (ii) this Deed of Trust and (iii) any and all other Loan Documents, all in the manner herein or therein set forth.
If, at any time in the future transfers shall occur such that Grantor shall become more than one party, then each of the entities constituting a Grantor shall be fully liable for such payment and performance, and such liability shall be joint and
several, subject to all of the terms and provisions of Section 40 of this Deed of Trust. 
  
 2. Covenants of Title. Borrower has good and indefeasible fee simple title to the entire Land, has absolute unencumbered title to the Improvements,
the Personal Property (other than the Leased Personalty) and the Personalty Leases, and has good right and full power to sell, mortgage and convey the same; the Security is free and clear of easements, restrictions, liens, leases and encumbrances,
except those easements, restrictions, liens, leases and encumbrances listed on Schedule B of the policy or policies of title insurance delivered to Beneficiary as of the recordation of this Deed of Trust (the “Permitted
Encumbrances”), to which this Deed of Trust is expressly subject, or which may hereafter be created in accordance with the terms hereof; and Borrower will warrant and defend title to the Security against all claims 
  

 and demands whatsoever except the Permitted Encumbrances. Beneficiary shall have the right, at its option and at such
time or times as it, in its sole discretion, shall deem necessary, to take whatever action it may deem necessary to defend or uphold the lien of this Deed of Trust or otherwise enforce any of the rights of Beneficiary hereunder or any obligation
secured hereby, including without limitation, the right to institute appropriate legal proceedings for such purposes. 
  
 3. Usury. All agreements between Grantor and Beneficiary, whether now existing or hereafter arising and whether written or oral, are hereby limited
so that in no contingency, whether by reason of acceleration of the maturity of the Note or otherwise, shall the interest contracted for, charged or received by Beneficiary exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to Beneficiary in excess of the maximum lawful amount, the interest payable to Beneficiary shall be reduced to the maximum amount permitted under applicable law; and if from any
circumstance Beneficiary shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the reduction of the principal of the Note and not
to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of the Note such excess shall be promptly refunded to Grantor. All amounts paid or agreed to be paid to Beneficiary for the use, forbearance, or
detention of the Indebtedness, whether designated as interest herein or judicially or otherwise interpreted or deemed to be interest, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full
period until payment in full of the principal (including the period of any renewal or extension of the Note) so that the interest on the Note for such full period shall not exceed the maximum amount permitted by applicable law. The terms
“maximum amount permissible under applicable law”, “the maximum lawful amount,” and similar terms refer to the law in effect on the date of the first disbursement of the Note; provided that if it subsequently becomes lawful to
charge more interest on the Note, then such terms shall refer to the maximum interest which may from time to time be lawfully charged. This paragraph shall control all agreements with respect to the Loan between Grantor and Beneficiary. 

 
 4. Impositions. Grantor shall pay, or cause to be paid pursuant to
the Management Agreement (or any Replacement Agreement, as defined below), not later than thirty (30) days before the last day on which the same may be paid without penalty or interest, all real estate 
  

 taxes and payments due in lieu of real estate taxes (collectively, the “Real Estate Taxes”) (unless
there shall be in full force and effect a Tax Escrow Agreement [defined in Section 5 hereinbelow] with respect to which Grantor shall have performed its obligations), and any municipal sewer rents, municipal water charges, municipal electric
and all other municipal and governmental assessments, rates, charges, or impositions which are secured by liens on the Real Property (including the Real Estate Taxes, collectively hereinafter referred to as “Impositions”) which now
or hereafter are imposed by law upon the Security, whether relating directly to the Security or to property adjoining or abutting the Security. If any Imposition is not paid within the time hereinabove specified, Beneficiary shall have the right to
pay the same, together with any penalty and interest thereon, and the amount or amounts so paid or advanced shall forthwith be payable by Grantor to Beneficiary and shall be secured by the lien of this Deed of Trust; but Grantor may in good faith
contest, at Grantor’s sole cost and expense, by proper legal proceedings, the validity or amount of any Imposition, on the condition that Grantor first shall deposit with or provide evidence to Beneficiary that Manager has escrowed an amount
sufficient to pay such contested Imposition, as security for the payment of such contested item, an amount equal to the contested item plus all penalties and interest which would be payable if Grantor is ultimately required to pay such contested
item, and on the further condition that no amount so contested may remain unpaid for such length of time as shall permit the Security, or the lien thereon created by the item being contested, to be sold for the nonpayment thereof, or as shall permit
an action, either of foreclosure or otherwise, to be commenced by the holder of any such lien. Grantor will not claim any credit on, or make any deduction from the Indebtedness by reason of the payment of, any Imposition. 
  
 Grantor hereby assigns to Beneficiary all rights of Grantor now or hereafter
arising in and to the refund of any Imposition and any interest thereon. If following receipt of any such refund by Beneficiary there exists no Event of Default hereunder, then Beneficiary shall pay over the same to Grantor promptly; if there exists
an Event of Default hereunder, Beneficiary may apply said refund in reduction of the Indebtedness in whatever order Beneficiary may elect. 
  
 5. Tax Deposits. Grantor and Beneficiary have entered into a certain Real Estate Tax Escrow and Security Agreement of even date herewith (the
“Tax Escrow Agreement”), the terms of which provide for the escrow and payments of money with respect to Real Estate Taxes imposed on the Real Property under certain circumstances as described therein. 
  

 Notwithstanding the provisions of Section 4 hereof, Grantor covenants to perform its obligations under the Tax
Escrow Agreement and Beneficiary has agreed that Grantor may perform its obligations under this Deed of Trust with respect to the Real Estate Taxes in accordance with the Tax Escrow Agreement. During any period that Grantor shall be in default under
the Tax Escrow Agreement, or the Tax Escrow Agreement shall be terminated for any reason, or in the event that the Tax Escrow Agreement becomes ineffective or otherwise unenforceable, then the balance of the terms and conditions of this Section
5 shall be applicable and control with respect to the payment of Real Estate Taxes imposed on the Real Property. 
  
 On receipt of the Activation Notice (as defined in the Tax Escrow Agreement), Grantor shall thereafter deposit with Beneficiary, or with an escrow agent
selected by Beneficiary, commencing on the Activation Date (as defined in the Tax Escrow Agreement) and on the first day of each calendar month thereafter (each of which dates is hereinafter called the “monthly tax deposit date”)
until the payment in full of the Indebtedness, a sum equal to one-twelfth (1/12) of the Real Estate Taxes to be levied, charged, assessed or imposed upon or for the Security within one (1) year after said monthly tax deposit date. If on any monthly
tax deposit date the amount of Real Estate Taxes to be levied, charged, assessed or imposed within the ensuing one year period shall not be fixed, such amount for the purpose of computing the deposit to be made by Grantor hereunder, shall be
reasonably estimated by Beneficiary based upon prior payments of Real Estate Taxes imposed on the Real Property, with appropriate adjustment when such amount is fixed. 
  
 The sums deposited by Grantor under this Section 5 shall be held in an interest bearing account with interest being
retained by Beneficiary and free of trust except to the extent, if any, that applicable law shall otherwise require and applied in payment of the Real Estate Taxes when due. Grantor or Manager on behalf of Grantor shall give thirty (30) days’
prior written notice to Beneficiary in each instance when an Imposition is due, specifying the Imposition to be paid and the amount thereof, the place of payment and the last day on which the same may be paid in order to be within the time limit
specified in Section 4 hereof entitled “Impositions”. 
  
 Notwithstanding the foregoing provision, so long as Grantor holds title to and controls the Security, Impositions are paid in full when due and there has occurred no Event of Default, or any state of facts which, with
the passage of time or giving of notice, or both, would constitute an Event of Default under the Loan Documents, the interest earned by such escrows, less reasonable escrow costs, will be paid to Grantor on each real estate tax payment date.

  

 If for any reason the sums on deposit with Beneficiary as escrow agent under this Section shall not be
sufficient to pay any Real Estate Taxes within the time specified in Section 4 hereof, then Grantor shall, on the earlier of (A) three (3) Business Days prior to the date the payment of such Impositions becomes delinquent or (B) within ten
(10) Business Days after notice by Beneficiary, deposit sufficient sums so that Beneficiary may pay such Real Estate Taxes in full, together with any penalty and interest thereon. Beneficiary may change its estimate of Real Estate Taxes for any
period, on the basis of a change in an assessment or tax rate or on the basis of a prior miscalculation, in which event Grantor shall deposit with Beneficiary as escrow agent within ten (10) Business Days after demand the amount of any excess of the
deposits which would theretofore have been payable under the revised estimate over the sums actually deposited. 
  
 If any Real Estate Taxes shall be levied, charged, assessed or imposed upon or for the Security, or any portion thereof, and if such Real Estate Taxes
shall also be a levy, charge, assessment or imposition upon or for any other premises not covered by the lien of this Deed of Trust, then the computation of the amounts to be deposited under this Section 5 shall be based upon the entire
amount of such Real Estate Taxes and Grantor shall not have the right to apportion any deposit with respect to such Real Estate Taxes. 
  
 Upon an assignment of this Deed of Trust, Beneficiary shall have the right to arrange to transfer all amounts deposited and still in its possession to the
assignee and Beneficiary shall thereupon be completely released from all liability with respect to such deposit and Grantor or owner of the Security shall look solely to the assignee or transferee in reference thereto. 
  
 Upon the payment in full by Grantor of the entire Indebtedness, any sums then
held by Beneficiary under this Section 5 shall be promptly refunded to Grantor. 
  
 All amounts deposited shall be held by Beneficiary as additional security for the sums secured by this Deed of Trust, and Grantor hereby grants to Beneficiary a security interest in such sums, and upon the occurrence
of an Event of Default hereunder Beneficiary may, in its sole and absolute discretion, apply said amounts to the payment of the Indebtedness in whatever order Beneficiary may elect. 
  

 Immediately upon receipt of such by Grantor, Grantor shall deliver to Beneficiary copies of all notices,
demands, claims, bills, and receipts in relation to the Impositions. 
  
 6. Change in Taxes. In the event any tax shall be due or become due and payable to the United States of America, the State of Texas or any political subdivision thereof with respect to the execution and delivery or recordation of
this Deed of Trust or any other Loan Document or the interest of Beneficiary in the Security except for taxes in the nature of income or franchise taxes, Grantor shall pay such tax at the time and in the manner required by applicable law and Grantor
shall hold Beneficiary harmless and shall indemnify Beneficiary against any liability of any nature whatsoever as a result of the imposition of any such tax. In the event of the enactment, after the date of this instrument, of any law changing in
any way the present law as to the taxation of notes or debts secured by mortgages, for Federal, State, or local purposes (except for changes in income or franchise taxes), or the manner of collection of any Impositions, so as to affect this Deed of
Trust or the Note secured hereby, then Grantor shall upon demand make such payments to Beneficiary and take such other steps, as may be necessary in Beneficiary’s reasonable judgment, to place Beneficiary in the same financial position as it
was prior to any such enactment, failing which, or if the Grantor is not permitted by law to make such payments, the Indebtedness shall, at the option of Beneficiary, immediately become due and payable at par. 
  
 7. Insurance. Borrower (to the extent of Grantor’s obligations
set forth in this Section 7) and Operating Tenant (to the extent of its obligations under the Operating Lease) shall at all times until the Indebtedness shall be paid in full, keep the Security insured against loss or damage in an amount
sufficient to prevent Beneficiary or Grantor from becoming a co-insurer under the terms of the applicable policies, but in any event in an amount not less than 100% of the then full replacement cost of the Improvements (exclusive of the cost of
excavations, foundations and footings below the lowest basement floor) without deduction for physical depreciation (which replacement cost shall be reset once a year at Beneficiary’s option in accordance with then customary insurance
underwriting standards used by reasonable and prudent mortgage lenders for a property of comparable size, mass, construction, type, location, and use) under policies of All Risk Replacement Cost Insurance (including nuclear explosion, if available),
and otherwise upon the following terms and conditions: 
  
 (a) Grantor shall further provide the following insurance in such amounts as shall be reasonably approved by Beneficiary: flood insurance (if the Security is situated in an area that is considered a flood risk area by the federal government
agency thereof); boiler and machinery insurance; earthquake insurance; rent loss insurance in an amount sufficient to cover the total of all rents (including any expenses payable by tenants) accruing from the Security for a one year period;
commercial general liability insurance in a minimum amount of One Million Dollars ($1,000,000), and excess or umbrella liability of at least Ten Million Dollars ($10,000,000); such other appropriate insurance as Beneficiary may require from time to
time. 
  

 (b) Such insurance shall contain no exclusion for acts of terrorism and shall include:
(i) coverage for acts of domestic and international terrorism, (ii) coverage whether or not a specific act is certified under the Terrorism Risk Insurance Act of 2002 as an act of terrorism by the U.S. Secretary of the Treasury, and (iii) coverage
amounts, deductibles and limits/sublimits acceptable to Beneficiary in its sole discretion. 
  
 (c) During any period of restoration, Grantor shall provide a policy or policies of builder’s “all risk” insurance in an
amount not less than the full insurable value of the Security. 
  
 (d) Grantor will assign and deliver to Beneficiary an original certificate of the policy or policies of all insurance required to be provided hereunder and provide copies of the policy or policies described therein to
Beneficiary unless Grantor participates in Manager’s insurance program, in which event Grantor shall provide a copy of the description of coverages provided by Manager to Grantor. Each policy of insurance provided by Grantor shall (i) be issued
by a company or companies approved by Beneficiary and rated not less than a Best’s rating of A-/X, (ii) name Beneficiary as an additional insured or loss payee, as the case may be, (iii) provide that all proceeds shall be payable to
Beneficiary, (iv) provide that it may not be cancelled or modified except upon thirty (30) days prior written notice to Beneficiary, (v) provide that no act or thing done by Grantor shall invalidate the policy as against Beneficiary, (vi) be
endorsed with standard noncontributory mortgagee clauses in favor of and in form acceptable to 
  

 Beneficiary, and (vii) otherwise be in such form as shall be reasonably acceptable to Beneficiary, so
that at all times until the payment in full of the Indebtedness, Beneficiary shall have and hold the said policy and policies as further collateral for the payment of all Indebtedness. 
  
 (e) If Grantor shall fail to obtain any such policy or policies required by Beneficiary, or shall fail to
deliver an original certificate evidencing the same to Beneficiary, then Beneficiary may obtain such insurance and pay the premium or premiums therefore, in which event Grantor shall, on demand of Beneficiary, repay such premium or premiums to
Beneficiary and such repayment shall be secured by the lien of this Deed of Trust. If Grantor fails to maintain the level of insurance required under this Deed of Trust, then Grantor shall indemnify Beneficiary to the extent that a casualty occurs
and insurance proceeds would have been available had such insurance been maintained. 
  
 (f) Grantor shall promptly provide to Beneficiary copies of any and all notices (including notice of non renewal), claims, and demands
which Grantor receives from insurers of the Security. 
  
 (g) Effective from and after any Event of Default, Grantor hereby assigns to Beneficiary all rights of Grantor in and to any unearned premiums on any insurance policy required to be furnished by Grantor. 
  
 Anything in this Section 7 to the contrary notwithstanding, as long as (i) Manager is
managing the Real Property and Grantor participates in Manager’s insurance programs, (ii) there then exists no default under the Management Agreement or Event of Default hereunder, (iii) Manager is making all required insurance payments as and
when due pursuant to the Management Agreement, and (iv) Grantor provides to Beneficiary acceptable evidence that such insurance is, at all times, in full force and effect as regards the Real Property, then Beneficiary acknowledges and agrees that
the insurance requirements set forth in the Management Agreement shall govern and control over any inconsistent provisions set forth in the provisions of this Section 7. 
  
 8. Insurance/Condemnation Proceeds. Grantor hereby assigns to Beneficiary all insurance proceeds or Condemnation
(defined in Section 9 below) awards which Grantor may be entitled to receive for loss or damage to, or a taking of, the Security. In the event of loss or 
  

 damage to, or a taking of, the Security, the proceeds of said insurance or Condemnation award shall be payable to
Beneficiary alone and Grantor hereby authorizes and directs any affected insurance company or government agency to make payment of the insurance proceeds or Condemnation awards directly to Beneficiary. In the event that any such insurance proceeds
or Condemnation awards are paid directly to Grantor, Grantor shall make such proceeds or awards available to Beneficiary within five (5) Business Days of Grantor’s receipt thereof. No such loss or damage shall itself reduce the Indebtedness
unless Beneficiary elects to apply the proceeds and such proceeds are actually applied to the Indebtedness as provided in Section 10 below. Prior to an Event of Default, Grantor and Beneficiary shall jointly and reasonably agree on the prompt
adjustment and compromise of such loss, to collect and receive such proceeds or awards and to endorse any check in payment thereof. During an Event of Default, or in the event of a loss or damage to, or a taking of, the security in excess of
$1,500,000, Beneficiary is authorized to adjust and compromise such loss without the consent of Grantor, to collect and receive such proceeds or awards in the name of Beneficiary and Grantor and to endorse Grantor’s name upon any check in
payment thereof. Furthermore, if an insurance claim is no greater than $250,000 (a “Minor Claim”), Beneficiary agrees that insurance proceeds may be made available directly to the Grantor provided that no Event of Default is then in
existence and so long as Grantor promptly commences and diligently pursues to completion any required restoration Work utilizing such insurance proceeds. Subject to the provisions of Sections 9, 10 and 11 hereof, such proceeds
or awards shall be applied first toward reimbursement of all costs and expenses of Beneficiary in collecting said proceeds or awards, then toward payment of the Indebtedness or any portion thereof, whether or not then due and payable, in whatever
order Beneficiary may elect, or Beneficiary may, at its option, make said insurance proceeds or Condemnation awards available to Grantor in whole or in part toward restoration of the Security for which such insurance proceeds or Condemnation awards
shall have been paid. 
  
 In the event of foreclosure of this Deed
of Trust or other transfer of title to the Security and extinguishment, in whole or in part, of the Indebtedness, all right, title, and interest of Grantor in and to any insurance policy, or premiums or payments in satisfaction of claims or any
other rights thereunder then in force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such foreclosure sale. Nothing contained herein shall prevent the accrual of interest as provided in the Note on any portion of
the principal balance due under the Note until such time as the insurance proceeds or Condemnation awards are actually received and applied to reduce the principal balance outstanding. 
  

 9. Restoration Following Fire and Other Casualty or Condemnation. In the event of damage to the
Security by reason of fire or other hazard or casualty, Grantor shall give prompt written notice thereof to Beneficiary, and, so long as Beneficiary provides its consent that any insurance proceeds can be made available as provided in Section
10 hereof, shall proceed with reasonable diligence to perform repair, replacement and/or rebuilding work (hereinafter referred to as the “Work”) to restore the Security to its condition prior to such damage in full compliance
with all legal requirements; provided, however, in the event that Beneficiary does not provide its consent that any insurance proceeds can be made available, nothing contained herein shall prevent Grantor from using other funds to perform the Work
in Grantor’s sole discretion. In the event of a taking by power of eminent domain or conveyance in lieu thereof (a “Condemnation”), if restoration is feasible as reasonably determined by Beneficiary, then Grantor shall proceed
with reasonable diligence to perform such restoration (also referred to herein as the “Work”). Before commencing the Work, Grantor shall comply with the following requirements: 
  
 (a) With respect to any Work reasonably expected to exceed
One Million Five Hundred Thousand Dollars ($1,500,000) in cost (“Major Work”), Grantor shall furnish to Beneficiary complete plans and specifications for the Work, for Beneficiary’s approval, which approval shall not be
unreasonably withheld. Said plans and specifications shall bear the signed approval thereof by an architect reasonably satisfactory to Beneficiary and shall be accompanied by the architect’s signed estimate, bearing the architect’s seal,
of the entire cost of completing the Work, and shall provide that upon completion of the Work, the Security shall be at least equal in value and general utility to its value and general utility prior to the damage or Condemnation. 
  
 (b) Grantor shall furnish to Beneficiary certified copies of
all permits and approvals required by law in connection with the commencement and conduct of the Work. 
  
 (c) With respect to any Major Work, Grantor shall furnish to Beneficiary, prior to the commencement of the Work, a surety bond for or
guaranty of timely completion of and payment for the Work, which bond or guaranty shall be in form reasonably satisfactory to Beneficiary and shall be signed by a surety or sureties, or guarantor or 
  

 guarantors, as the case may be, who are reasonably acceptable to Beneficiary, and in an amount not less
than the architect’s estimate of the entire cost of completing the Work, less the amount of insurance proceeds or Condemnation award, if any, then held by Beneficiary and which Beneficiary shall have elected or shall be required to apply toward
restoration of the Security as provided in Section 10 hereof. 
  
 Grantor shall not commence any of the Work until Grantor shall have complied with the above requirements, and thereafter Grantor shall perform the Work diligently and in good faith in accordance with the plans and specifications referred to
in subsection (a) above. 
  
 If, as provided in Section 10
hereof, Beneficiary shall have elected or is required to apply any insurance proceeds or Condemnation awards toward repair or restoration of the Security, then so long as the Work is being diligently performed by Grantor in accordance with the
provisions of this Deed of Trust, Beneficiary shall disburse such insurance proceeds or Condemnation awards to Grantor from time to time during the course of the Work in accordance with the following provisions: 
  
 A. The Work shall be in the charge of an experienced
construction manager reasonably satisfactory to Beneficiary with the consultation of an architect or engineer if the scope of the work so requires (provided, the project property manager shall be acceptable so long as it does not constitute Major
Work); 
  
 B. Each request for payment shall not
be made more often than at thirty (30) day intervals, on ten (10) Business Days (as defined in Section 58 hereinbelow) prior notice to Beneficiary, and shall be accompanied by a certificate reasonably satisfactory to Beneficiary, of the
architect or engineer, dated not more than ten (10) days prior to the application for withdrawal of funds, stating: 
  

	 	(i)	that all of the Work for which payment is being requested is in place and has been completed in compliance with the approved plans and specifications and all applicable legal
requirements; 

  

	 	(ii)	that the sum then requested to be withdrawn has been paid by Grantor and/or is justly due to contractors, subcontractors, materialmen, engineers, architects or other persons (whose

  

 names and addresses shall be stated) who have rendered or furnished certain services or materials for
the Work and giving a brief description of such services and materials and the principal subdivisions or categories thereof and the respective amounts so paid or due to each of said persons in respect thereof and stating the progress of the Work up
to the date of said certificate; 
  

	 	(iii)	that the sum requested to be withdrawn, plus all sums previously withdrawn, does not exceed the cost of the Work insofar as actually accomplished up to the date of such certificate;

  

	 	(iv)	that the remainder of the moneys held by Beneficiary will be sufficient to pay in full for the completion of the Work; and 

  

	 	(v)	that no part of the cost of the services and materials described in the foregoing paragraph (ii) of this Clause B has been or is being made the basis of the withdrawal of any funds
in any previous or then pending application. 

  
 Grantor shall also provide Beneficiary with respect to any Major Work such other evidence as Beneficiary shall reasonably require that: (1) all of the Work for which payment is being requested is in place and has been
completed in substantial compliance with all applicable legal requirements; (2) that the sum then requested to be withdrawn, plus all sums previously withdrawn, does not exceed the cost of the Work insofar as actually accomplished up to the date of
such certificate; (3) that the remainder of the moneys held by Beneficiary will be sufficient to pay in full for the completion of the Work; (4) that the Work is anticipated to be completed consistent with all requirements, including applicable
zoning provisions, pertinent to preserve any and all rights, including, without limitation, with respect to any non-conforming use; and (5) that, except for the amounts, if any, specified in the foregoing paragraph (ii) of this Clause B to be due
for services or materials, there is no outstanding indebtedness known, after due inquiry, which is then due and payable for work, labor, services or materials in connection with the Work which, if unpaid, might become the basis of a vendor’s,
mechanic’s, laborer’s or materialmen’s statutory or other similar lien upon the Security or any part thereof. 
  

 C. Grantor shall deliver to Beneficiary reasonably satisfactory evidence that the
Security and every part thereof, and all materials and all property described in the certificate furnished pursuant to the foregoing Clause B, are free and clear of all mortgages, liens, charges or encumbrances, except (a) encumbrances, if any,
securing indebtedness due to persons (whose names and addresses and the several amounts due them shall be stated) specified in said certificate furnished pursuant to the foregoing Clause B, which encumbrances will be discharged upon disbursement of
the funds then being requested, and (b) this Deed of Trust. Beneficiary shall accept as satisfactory evidence under this Clause C a certificate of a title insurance company acceptable to Beneficiary or an endorsement to Beneficiary’s existing
loan title policy insuring the lien of this Deed of Trust, dated as of the date of the making of the disbursement, confirming the foregoing. 
  
 D. If the Work affects the foundation, or changes in the footprint of the Improvements, Grantor shall deliver to Beneficiary a survey of
the Security dated as of a date within ten (10) days prior to the making of the advance (or revised to a date within ten days prior to the advance) showing no encroachments other than those, if any, acceptable to Beneficiary. 
  
 E. There exists no Event of Default, or any state of facts
existing which, with the passage of time or the giving of notice, or both, would constitute an Event of Default. 
  
 Beneficiary at its option may waive any of the foregoing requirements. 
  
 Upon compliance by Grantor with the foregoing Clauses A, B, C, D, and E (except for such requirements, if any, as
Beneficiary at its option may have waived), Grantor shall, to the extent of the insurance proceeds or Condemnation awards, if any, which Beneficiary shall have elected or shall be required to apply to restoration of the Security, pay or cause to be
paid to the persons named in the certificate furnished pursuant to the foregoing Clause B, the respective amounts stated in said certificate to be due them, less ten percent (10%) retainage (“Retainage”), and Beneficiary shall pay
to Grantor the amounts stated in said certificate to have been paid by Grantor, less Retainage. 
  
 If upon completion of the Work there shall be insurance proceeds or Condemnation awards held by Beneficiary over and above the amounts withdrawn pursuant
to 
  

 the foregoing provisions, plus Retainage, then Beneficiary, at Beneficiary’s option, may either retain such proceeds
or awards and apply the same in reduction of the Indebtedness in whatever order Beneficiary may elect (without payment of any prepayment fee or premium with respect to such insurance proceeds or Condemnation awards), or Beneficiary may pay over such
proceeds or awards to Grantor. 
  
 Upon completion of the Work, in
addition to the requirements of the foregoing Clauses A, B, C, D, and E, Grantor shall promptly deliver to Beneficiary: 
  

	 	(1)	With respect to Major Work, a written certificate of the construction manager, architect or engineer that the Work has been fully completed in a good and workmanlike manner in
accordance with the approved plans and specifications and with respect to any other Work, a certificate from Grantor or its property manager to the same effect; 

  

	 	(2)	A written report and policy of a title insurance company reasonably acceptable to Beneficiary insuring the Security against mechanics’ and materialmen’s liens;

  

	 	(3)	A certificate by Grantor reasonably satisfactory to Beneficiary in form and substance, listing all costs and expenses in connection with the completion of the Work and the amount
paid by Grantor with respect to the Work; and 

  

	 	(4)	A temporary certificate of occupancy, if required for occupancy of any of the Improvements affected by the Work and all other applicable certificates, licenses, consents and
approvals issued by governmental agencies or authorities with respect to the Security and by the appropriate Board of Fire Underwriters or other similar bodies acting in and for the locality in which the Security is situated, provided that within
thirty (30) days after completion of the Work, Grantor shall obtain and deliver to Beneficiary a permanent certificate of occupancy for the Security, if a certificate of occupancy is required for any of the Improvements affected by the Work.

  

 Upon receipt of the foregoing items, Beneficiary shall pay any Retainage held by Beneficiary to or for
the benefit of Grantor. 
  
 10. Disposition of Condemnation or
Insurance Proceeds. Except in the case of a Minor Claim, Beneficiary, in its absolute discretion, may decide whether and to what extent, if any, proceeds of insurance or Condemnation awards will be made available to Grantor for repair or
restoration of the Security, but Grantor shall effect such repair or restoration as provided above whether or not Beneficiary agrees that any available insurance proceeds and Condemnation awards may be made available for restoration. Notwithstanding
the foregoing, Beneficiary shall make insurance proceeds or Condemnation awards available to Grantor for repair or restoration provided the following conditions are satisfied: 
  
 (a) Not more than thirty percent (30%) of the Real Property is damaged, and, in the case of a Condemnation,
the portion remaining after the taking is still economically viable in the reasonable opinion of Beneficiary; 
  
 (b) There has been no monetary Event of Default in the prior twelve (12) months and there does not then exist an Event of Default or a
state of facts which, with the passage of time or the giving of notice, or both, would constitute an Event of Default hereunder or under any other Loan Document; 
  
 (c) Grantor can demonstrate to Beneficiary’s reasonable satisfaction that Grantor has the financial
ability to make all scheduled payments when due under the Loan Documents during reconstruction, whether from the proceeds of rent insurance, operation of the Improvements, Grantor’s own funds or otherwise; 
  
 (d) Such damage or destruction occurs prior to the last two
(2) Loan Years (as such term is defined in the Note); 
  
 (e) The funds are released under escrow/construction funding arrangements specified in Section 9 hereof; 
  
 (f) The repairs and restoration will restore the Improvements to substantially the size, design and utility as existed immediately prior
to the casualty or Condemnation; and 
  

 (g) Grantor can demonstrate to Beneficiary’s reasonable satisfaction that Grantor
has the financial ability to complete the repair and restoration, whether from the proceeds of insurance, Grantor’s own funds, or otherwise. 
  
 Provided that there then exists no Event of Default, any application of insurance or Condemnation proceeds required by Beneficiary shall be at par without
payment of any prepayment fee or premium. If Beneficiary has the right under this Deed of Trust and elects not to make the proceeds available for the Work, then such proceeds shall be applied to reduce the Indebtedness in whatever order Beneficiary
may elect. Any principal reduction resulting from an early involuntary prepayment as a result of a Condemnation proceeding or insurance settlement will cause a re-calculation of debt service payments based upon the reduced Loan balance, the
remaining amortization schedule and the Interest Rate. 
  
 11.
Fire and Other Casualty; Self-Help. If within one hundred twenty (120) days after the occurrence of any damage to the Security or the condemnation of any portion of the Security, Grantor shall not have submitted to Beneficiary and received
Beneficiary’s approval of plans and specifications for any Major Work or shall not have obtained approval of such plans and specifications from all governmental authorities whose approval is required for such Work, or if Grantor shall fail to
promptly commence such Work, or if thereafter Grantor fails to perform the Work diligently or is delinquent in the payment to mechanics, materialmen or others of the costs incurred in connection with the Work, or, if Grantor shall fail to complete
the Work promptly, then, in addition to all other rights herein set forth, Beneficiary may give written notice thereof to Grantor and if such failure is not cured within ten (10) Business Days of such written notice, then Beneficiary, or any
lawfully appointed receiver of the Security, may at its respective option, perform or cause the Work to be performed, and may take such other steps as it deems advisable to perform or cause to be performed the Work, and may enter upon the Security
for any of the foregoing purposes, and Grantor hereby waives, for Grantor and all others holding under Grantor, any claim against Beneficiary or such receiver arising out of anything done by Beneficiary or such receiver pursuant to this Section
11, and Beneficiary may apply insurance and/or Condemnation proceeds (without the need to fulfill the requirements of Section 9 hereof) to reimburse Beneficiary, and/or such receiver for all amounts expended or incurred by them,
respectively, in connection with the performance of the Work, and any excess costs shall be paid by Grantor to Beneficiary upon demand, with interest at the Default Rate (hereinafter defined), and such payment shall be secured by the lien of this
Deed of Trust. 
  

 12. Rent Insurance Proceeds. If Grantor shall promptly commence and diligently perform the Work in
accordance with the requirements of Section 11 hereinabove and there shall be no Event of Default under the Loan Documents, then Beneficiary shall each month pay to Grantor out of the rent insurance proceeds held by Beneficiary a sum equal to
that amount, if any, of the rent insurance proceeds paid by the insurer which is allocable to the Rental Loss (as defined below) for the preceding month and any earlier period of time. Beneficiary, at its option, may waive any of the foregoing
conditions to the payment of rent insurance proceeds. If Grantor does not fulfill the foregoing conditions entitling Grantor to monthly disbursements of rent insurance proceeds, then such rent insurance proceeds may be applied by Beneficiary, at
Beneficiary’s option, to the payment of the Indebtedness in whatever order Beneficiary may elect. As used in this Section 12, “Rental Loss” shall mean loss of base rent, minimum rent, percentage rent, additional rent and
all other sums that tenants may owe to Grantor as landlord under leases of the Improvements or Land. 
  
 13. Repair; Alterations; Waste; Environmental. Grantor shall keep all of the Security in good and substantial repair subject to normal wear and
tear, and expressly agrees that it will neither permit nor commit any waste upon the Security, nor do any other act or suffer or permit any act to be done, whereby the Security will become less valuable or the lien hereof may be impaired and shall
comply in all material respects with all zoning laws (including, without limitation, preservation of any rights as to any non-conforming use), building codes, subdivision laws, environmental laws, and other laws, ordinances, rules and regulations
made or promulgated by any government or municipality, or by any agency thereof or by any other lawful authority, which are now or may hereafter become applicable to the Security; provided that nothing herein shall preclude Grantor from contesting
any matter in good faith through appropriate legal means diligently pursued so long as Grantor shall repair or restore any building now or hereafter under construction on the Security and complete the same within a reasonable period of time. Grantor
agrees not to initiate or acquiesce in any zoning variance or reclassification, without Beneficiary’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed so long as it does not impair the value of the
Security. Grantor shall not construct any additional building or buildings or make any other improvements on the Land, nor alter, remove or demolish any building or other Improvements on the Land, without the prior written consent of Beneficiary.

  

 Grantor shall comply with the Americans with Disabilities Act of 1990, as amended, including, without
limitation, any regulations, rulings and orders promulgated pursuant thereto in connection with any Work, any repair to the Security or any tenant improvements to be performed by Grantor and shall comply with and implement the recommendations with
respect to accessible shower rooms contained in that certain Property Condition Assessment, dated November 7, 2003 prepared by Jones, Hill, McFarland & Ellis. 
  
 If Grantor fails to observe any of the provisions of this Section, or suffers or permits any Event of Default to exist under
this Section, Beneficiary or a lawfully appointed receiver of the Security at its option, from time to time, may perform, or cause to be performed, any and all repairs and such other work as it deems necessary to bring the Security into compliance
with the provisions of this Section and may enter upon the Security for any of the foregoing purposes, and Grantor hereby waives any claim against Beneficiary and/or such receiver, arising out of such entry or out of any other act carried out
pursuant to this Section. Grantor shall upon notice repay to Beneficiary and such receiver, with interest at the Default Rate, all amounts expended or incurred by them, respectively, in connection with any action taken pursuant to this Section, and
such repayment shall be secured by the lien of this Deed of Trust. 
  
 Grantor represents and warrants that there are currently at least the number of paved and designated parking spaces (including adequate, properly-sized, delineated and assigned handicap parking spaces) available on of the Real Property as
are shown on the survey delivered to Beneficiary. Grantor covenants and agrees that throughout the Term (as defined in Section 1 of the Note) it shall continue to make available, sufficient parking spaces on the Real Property to comply with all
leases, all applicable government regulations and the Easement Agreements. 
  
 14. Environmental Indemnification. Reference is made to that certain Environmental Indemnification Agreement of even date herewith executed by Grantor and Highland Hospitality, L.P. (collectively, the
“Indemnitors”) (the “Environmental Indemnification Agreement”), and by this reference is incorporated herein in its entirety and made a part hereof. This Deed of Trust also secures the performance of all obligations
due to Beneficiary by Indemnitors under the Environmental Indemnification Agreement. A release of this Deed of Trust shall not be construed as or be deemed to constitute a termination of the Environmental Indemnification Agreement, which instead
shall continue in existence and terminate by its own terms. 
  

 15. Independence of Security. Grantor shall not by act or omission permit any building or other
improvement on any premises not subject to the lien of this Deed of Trust to rely on the Security or any part thereof or any interest therein to fulfill any municipal or governmental requirement, and Grantor hereby assigns to Beneficiary any and all
rights to give consent for all or any portion of the Security or any interest therein to be so used. Similarly, no part of the Security shall rely on any premises not subject to the lien of this Deed of Trust or any interest therein to fulfill any
governmental or municipal requirement. Grantor shall not by act or omission impair the integrity of the Real Property as one or more complete subdivided parcels of land bearing the same zoning classification, and as one or more complete tax parcels
separate and apart from all other premises. Any act or omission by Grantor, which would result in a violation of any of the provisions of this Section, shall be void. 
  
 16. No Other Liens. Grantor shall not consent, agree to, or permit any mortgage lien, or security interest upon or
affecting the Security or any part thereof except (a) as granted or permitted in this Deed of Trust and any other lien or security interest granted to Beneficiary and (b) under any Personalty Leases (to the extent they are deemed to constitute
financing agreements), subject to Grantor’s right to contest involuntary liens as hereinafter provided. 
  
 Grantor will promptly pay and discharge any and all amounts which are now or hereafter become liens against the Security whether or not superior to the
lien hereof or to any assignment of rents and leases given to Beneficiary; provided, however, in the case of an involuntary lien Grantor may contest in good faith contest, at Grantor’s sole cost and expense, by proper legal proceedings, the
validity or amount of any involuntary lien, on the condition that if such involuntary lien exceeds $100,000, Grantor first shall deposit with Beneficiary, as security for the payment of such contested item, an amount equal to the contested item plus
all penalties and interest which would be payable if Grantor is ultimately required to pay such contested item, and on the further condition that no amount so contested may remain unpaid for such length of time as shall permit the Security, or the
lien thereon created by the item being contested, to be sold for the nonpayment thereof, or as shall permit an action, either of foreclosure or otherwise, to be commenced by the holder of any such lien. Grantor will not claim any credit on, or make
any deduction from the Indebtedness by reason of the payment of, any lien. 
  

 The covenants of this Section shall survive any foreclosure and sale of the Security and any conveyance
thereof by deed in lieu of foreclosure with respect to any such liens in existence as of the date of transfer of title. 
  
 17. Management. 
  
 (a) During the term of the Loan, Grantor shall at all times retain a professional management company satisfactory to Beneficiary to
operate and manage the Security pursuant to a management agreement reasonably satisfactory to Beneficiary. If the Management Agreement is terminated for any reason during the term of the Loan, Beneficiary will have the right to declare the entire
indebtedness immediately due and payable unless Grantor enters into a replacement management agreement (the “Replacement Agreement”) on terms and conditions reasonably acceptable to Beneficiary with a substitute manager reasonably
acceptable to Beneficiary within 30 days following termination of the Management Agreement. As a condition to Beneficiary’s approval of any replacement manager, the manager shall consent to an assignment of management agreement substantially
similar in form and substance as to the Assignment of Management Agreement, Subordination, Non-Disturbance and Attornment Agreement and Consent of Manager (the “Assignment of Management Agreement”) dated of even date herewith by and
among Grantor, Manager and Beneficiary. Pursuant to the Assignment of Management Agreement, the rights of Manager, as manager, under the Management Agreement are expressly made subordinate to Beneficiary’s rights under this Deed of Trust and
the other Loan Documents, all as more particularly set forth in the Assignment of Management Agreement. 
  
 (b) Grantor shall furnish to Beneficiary, within five (5) Business Days after receipt thereof, or after the mailing or service thereof by
Grantor, as the case may be, a copy of each notice of default Grantor gives to, or receives from any person, based upon the occurrence, or alleged occurrence, of any default or defaults in the performance of any covenant, condition, promise or
obligation under the Management Agreement. 
  

 18. Ground Lease. Grantor hereby represents and warrants to Beneficiary that there exist no ground
leases relating to or executed in connection with the Security other than the Operating Lease. 
  
 19. Sidewalks, Municipal Charges. Grantor will promptly pay and discharge any and all license fees and similar charges, with penalties and interest thereon, which may be imposed by the municipality in which the
Security is situated, for the use of vaults, chutes, areas and other space beyond the lot line and under or abutting the public sidewalks in front of or adjoining the Security, and Grantor will promptly cure any violation of law and comply with any
order of such municipality respecting the repair, replacement or condition of the sidewalk or curb in front of or adjoining the Security, and in default thereof Beneficiary may, upon five (5) Business Days’ notice to Grantor, pay any and all
such license fees or similar charges, with penalties and interest thereon, and the charges of the municipality for such repair or replacement, and any amount so paid or advanced by Beneficiary and all costs and expenses incurred in connection
therewith (including, without limitation, Attorneys’ Fees (defined in Section 41 hereinbelow)), with interest thereon at the Default Rate, shall be a demand obligation of Grantor to Beneficiary, and, to the extent permitted by law, shall
be added to the Indebtedness and shall be secured by the lien of this Deed of Trust. 
  
 20. Assignment of Rents and Leases/Future Leases/Obligations of Lessor. The terms and provisions of that certain Assignment of Rents and Leases executed by Grantor in favor of Beneficiary of even date herewith
(the “Assignment of Rents and Leases”) are incorporated herein by reference and made a part hereof as if fully set forth herein. 
  
 21. Leases; Foreclosure. Any proceedings or other steps taken by Beneficiary to foreclose this Deed of Trust, or otherwise to protect the interests
of Beneficiary hereunder, shall not operate to terminate the rights of any present or future tenant of space in the Improvements, notwithstanding that said rights may be subject and subordinate to the lien of this Deed of Trust, unless Beneficiary
specifically elects otherwise in the case of any particular tenant. The failure to make any such tenant a defendant in any such foreclosure proceeding and to foreclose such tenant’s rights will not be asserted by Grantor or any other defendant
in such foreclosure proceeding as a defense to any proceeding instituted by Beneficiary to foreclose this Deed of Trust or otherwise protect the interests of Beneficiary hereunder. 
  

 22. Operating Agreement/Easement Agreements. Grantor hereby represents and warrants to Beneficiary
that there exist no agreements affecting the development or operation of the Security, other than the Leases, the Management Agreement, service contracts and Personalty Leases entered into in the ordinary course of the operation of the Security and
the covenants and restrictions included in the Permitted Encumbrances. Grantor shall, at Grantor’s cost and expense, promptly and fully perform each and every covenant, condition, promise and obligation of the owner of the Security under the
Easement Agreements and shall make all payments therein and thereby required to be made by the owner of the Security. Grantor shall not cancel, transfer, amend in any material respect, or assign the Easement Agreements without the prior written
consent of Beneficiary, and Grantor shall not consent to the cancellation, transfer, amendment in any material respect, or assignment of the Easement Agreements by any other party thereto, without the prior written consent of Beneficiary.

  
 23. Events of Default. Each of the following shall
constitute an “Event of Default” hereunder and shall entitle the Beneficiary to exercise its remedies hereunder and under any of the other Loan Documents or as otherwise provided by law: 
  
 (a) Any payment of any installment of principal or interest
under the Note is not received by Beneficiary by 5:00 p.m. (Hartford, Connecticut time) within five (5) Business Days following the date when such payment was due or any escrow payment under the Tax Escrow Agreement or Section 5 hereof is not
received by escrow holder or Beneficiary, as applicable by 5:00 p.m. (Hartford, Connecticut time) within five (5) Business Days following the monthly tax deposit date; 
  
 (b) Failure of Grantor in the observance or performance of any other monetary or non-monetary covenant,
promise or agreement provided in this Deed of Trust or in any other Loan Document (a “failure to perform”), for thirty (30) days after the giving of notice by Beneficiary to Grantor specifying the nature of the failure to perform;
provided, however, that if the nature of such failure to perform is such that the same is not susceptible of cure within such thirty (30) day period, such failure to perform shall not be deemed an Event of Default so long Grantor shall within such
period commence to cure such failure to perform and thereafter diligently prosecute the cure to completion, but in no event more than one hundred twenty (120) days in the aggregate from the date of the original notice of failure to perform.
Notwithstanding anything contained herein to 
  

 the contrary, the notice and cure period provided under this clause (b) shall not be applicable to and
shall not be in addition to any specific notice and cure or performance period provided under any other provision of this Deed of Trust, and the specific notice and cure or performance period provided for in such provision shall control, and a
failure by Grantor to cure a default under such provision within the applicable cure period shall be an Event of Default under this Deed of Trust; 
  
 (c) Any representation, warranty, or statement of Grantor contained herein or in any of the Loan Documents, including without limitation
the Environmental Indemnification Agreement, or in any writing delivered to Beneficiary on or before the execution and delivery of the Loan Documents, proves to be untrue in any material respect as of the date when made; 
  
 (d) Grantor or the general partner of Grantor shall (i) have
an order for relief entered in a proceeding under Title 11, United States Code, whether such order shall result from a voluntary or involuntary petition, (ii) seek or consent to the appointment of a receiver or trustee for itself or for any of the
Security, (iii) file a petition or initiate a proceeding under the bankruptcy, insolvency, receivership, or similar laws of the United States, any state or any other jurisdiction, (iv) make a general assignment for the benefit of creditors, or (v)
be unable to pay its debts as they mature; 
  
 (e) A court shall enter an order, judgment or decree appointing, without the consent of Grantor, a receiver or trustee for it or for any of the Security or approving a petition filed against Grantor which seeks relief under the bankruptcy
or other similar laws of the United States, any state or any other jurisdiction, and such order, judgment or decree shall remain in force, undischarged or unstayed, sixty (60) days after it is entered; 
  
 (f) Without the prior written consent of Beneficiary, except
with respect to Permitted Transfers (as hereinafter defined), (i) the Security or any portion thereof or interest therein shall be mortgaged, encumbered, sold, assigned or otherwise transferred by Grantor or by operation of law (excluding
condemnation and worn-out or obsolete Personal Property that is replaced with Personal Property substantially similar thereto in quality and quantity), (ii) if Grantor is a partnership, joint venture, limited liability company, syndicate or other
group, all or any portion of the interest of any 
  

 partner or member thereof is pledged or otherwise encumbered or is sold or otherwise transferred, or
(iii) any interest in any entity that owns or Controls Grantor is pledged or otherwise encumbered or is sold or otherwise transferred. As used herein, “Controls” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. The term “Person” means with respect to this Deed of Trust any natural person,
general partnership, limited partnership, limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity. As used herein “Permitted
Transfers” means the pledge or transfer of (1) any limited partnership interests or units in Highland Hospitality, L.P. and (2) the membership interests in the general partner of Grantor, provided, that after such any such pledge or
transfer, Highland Hospitality, L.P., Highland Hospitality Corporation or their Affiliates continue to own not less than fifty-one percent (51%) of (A) the partnership interests or units in Highland Hospitality, L.P. and (B) the membership interests
in the general partner of Grantor, as applicable. 
  
 24.
Remedies Upon Default. Immediately upon the occurrence of any Event of Default, Beneficiary shall have the option, in addition to and not in lieu of or substitution for all other rights and remedies provided in this Deed of Trust or any other
Loan Document or provided by law or in equity, and is hereby authorized and empowered by Grantor, to do any or all of the following: 
  
 (a) Declare without notice the entire unpaid amount of the Indebtedness immediately due and payable and, at Beneficiary’s option, (i)
to bring suit therefore, or (ii) to bring suit for any delinquent payment of or upon the Indebtedness, or (iii) to take any and all steps and institute any and all other proceedings at law or in equity that Beneficiary deems necessary to enforce
payment of the Indebtedness and performance of other obligations secured hereunder and to protect the lien of this Deed of Trust. 
  
 (b) Beneficiary may require the Trustee to sell all or part of the Security, at public auction, to the highest bidder, for cash, at the
county court house of the county in Texas in which the Security or any part thereof is situated or if the Security is located in more than one county such sale may be made at the courthouse in any county in which the Security is situated. The sale
shall take place at such area of the courthouse as 
  

 shall be properly designated from time to time by the commissioners court (or, if not so designated by
the commissioners court, at the courthouse door) of the specified county, between the hours of 10:00 o’clock a.m. and 4:00 o’clock p.m. (the commencement of such sale to occur within three (3) hours following the time designated in the
notice of sale as the earliest time at which such sale shall occur, if required by applicable law) on the first Tuesday of any month, after giving notice of the time, place and terms of said sale (including the earliest time at which such sale shall
occur) and of the property to be sold, in the manner hereinafter described. Notice of a sale of all or part of the Security by the Trustee shall be given by posting written notice thereof at the courthouse door (or other area in the courthouse as
may be designated for such public notices) of the county in which the sale is to be made, and by filing a copy of the notice in the office of the county clerk of the county in which the sale is to be made at least twenty-one (21) days preceding the
date of the sale, and if the property to be sold is in more than one county, a notice shall be posted at the courthouse door and filed with the county clerk of each county in which the property to be sold is situated. In addition, Beneficiary shall,
at least twenty-one (21) days preceding the date of sale, serve written notice of the proposed sale by certified mail on Grantor and each debtor obligated to pay the debt secured hereby according to the records of Beneficiary. Service of such notice
shall be completed upon deposit of the notice, enclosed in a postpaid wrapper, properly addressed to Grantor and such debtor at the most recent address as shown by the records of Beneficiary, in a post office or official depository under the care
and custody of the United States Postal Service. The affidavit of any person having knowledge of the facts to the effect that such service was completed shall be prima facie evidence of the fact of service. Any notice that is required or permitted
to be given to Grantor may be addressed to Grantor at Grantor’s address as stated above. Any notice that is to be given by certified mail to any other debtor may, if no address for such other debtor is shown by the records of Beneficiary, be
addressed to such other debtor at the address of Grantor as is shown by the records of Beneficiary. Notwithstanding the foregoing provisions of this paragraph, notice of such sale given in accordance with the requirements of the applicable laws of
the State of Texas in effect at the time of such sale shall constitute sufficient notice of such sale. Trustee may sell all or any portion of the Security, together or in lots or parcels, and may execute and deliver to the purchaser or purchasers of
such property, good and sufficient deeds of conveyance of fee simple 
  

 title with covenants of general warranty made on behalf of Grantor, subject to the Permitted
Encumbrances. In no event shall Trustee be required to exhibit, present or display at any such sale, any of the personalty described herein to be sold at such sale. Trustee making such sale shall receive the proceeds thereof and shall apply the same
as follows: (i) first, he shall pay the reasonable expenses of Trustee; (ii) second, he shall pay, so far as may be possible, the Indebtedness, discharging first that portion of the Indebtedness arising under the covenants or agreements herein
contained and not evidenced by the Note; (iii) third, he shall pay the residue, if any, to the persons legally entitled thereto. Payment of the purchase price to Trustee shall satisfy the obligation of the purchaser at such sale therefor, and such
purchaser shall not be responsible for the application thereof. The sale or sales by Trustee of less than the whole of the Security shall not exhaust the power of sale herein granted, and Trustee is specifically empowered to make successive sale or
sales under such power until the whole of the Security shall be sold; and if the proceeds of such sale or sales of less than the whole of the Security shall be less than the aggregate of the Indebtedness and the expenses thereof, this Deed of Trust
and the lien, security interest and assignment hereof shall remain in full force and effect as to the unsold portion of the Security just as though no sale or sales had been made; provided, however, that Grantor shall never have any right to require
the sale or sales of less than the whole of the Security, but Beneficiary shall have the right, at its sole election, to request Trustee to sell less than the whole of the Security. If default is made hereunder, the holder of the Indebtedness or any
part thereof on which the payment is delinquent shall have the option to proceed with foreclosure in satisfaction of such item either through judicial proceedings or by directing Trustee to proceed as if under a full foreclosure, conducting the sale
as herein provided without declaring the entire Indebtedness due, and if sale is made because of default of an installment, or a part of an installment, such sale may be made subject to the unmatured part of the Indebtedness; and it is agreed that
such sale, if so made, shall not in any manner affect the unmatured part of the Indebtedness, but as to such unmatured part, this Deed of Trust shall remain in full force and effect as though no sale had been made under the provisions of this
paragraph. Several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Indebtedness. At any such sale (1) Grantor hereby agrees, in its behalf and in behalf of its heirs, executors, administrators,
successors, personal representatives and assigns, that any and all 
  

 recitals made in any deed of conveyance given by Trustee with respect to the identity of Beneficiary, the
occurrence or existence of any default, the acceleration of the maturity of any of the Indebtedness, the request to sell, the notice of sale, the giving of notice to all debtors legally entitled thereto, the time, place, terms, and manner of sale,
and receipt, distribution and application of the money realized therefrom, or the due and proper appointment of a substitute Trustee, and, without being limited by the foregoing, with respect to any other act or thing having been duly done by
Beneficiary or by Trustee hereunder, shall be taken by all courts of law and equity as prima facie evidence that the statements or recitals state facts and are without further question to be so accepted, and Grantor hereby ratifies and confirms
every act that Trustee or any substitute Trustee hereunder may lawfully do in the premises by virtue hereof; (2) the purchaser may disaffirm any easement granted, or rental, lease or other contract made in violation of any provision of this Deed of
Trust, and may take immediate possession of the Security free from, and despite the terms of, such grant of easement and rental or lease contract; and, (3) Beneficiary may bid and become the purchaser of all or any part of the Security at any
trustee’s or foreclosure sale hereunder, and the amount of Beneficiary’s successful bid may be credited on the Indebtedness. 
  
 (c) Proceed against the Personal Property in accordance with Beneficiary’s rights and remedies with respect to the Personal Property,
including the right to sell the Personal Property either together with the Real Property or separately and without regard to the remainder of the Security in accordance with Beneficiary’s rights and remedies provided by the Uniform Commercial
Code as enacted in the State of Texas as well as other rights and remedies available at law or in equity. 
  
 (d) Cause to be brought down to date a title examination and tax histories of the Security, procure title insurance or title reports or,
if necessary, procure new abstracts and tax histories. 
  
 (e) Procure an updated or entirely new environmental audit of the Security including building, soil, ground water and subsurface investigations; have the Improvements inspected by an engineer or other qualified inspector and procure a
building inspection report; procure an MAI or other appraisal of the Security or any portion thereof; enter upon the Security at any time and from time to time to accomplish 
  

 the foregoing and to show the Security to potential purchasers and potential bidders at foreclosure sale;
make available to potential purchasers and potential bidders all information obtained pursuant to the foregoing and any other information in the possession of Beneficiary regarding the Security. 
  
 (f) Either by itself or by its agent to be appointed by it
for that purpose or by a receiver appointed by a court of competent jurisdiction, as a matter of strict right, without notice and without regard to the adequacy or value of any security for the Indebtedness or the solvency of any party bound for its
payment, take possession of and operate the Security, Grantor hereby waiving any right Grantor might have to object to or oppose any such possession, and, whether or not Beneficiary has taken possession of the Security, to collect and apply the
Rents, including those past due and unpaid, after payment of all necessary charges and expenses, in reduction of the Indebtedness. The receiver shall have all of the rights and powers permitted under the laws of the State of Texas. Except for damage
caused by Beneficiary’s gross negligence or willful misconduct, Grantor hereby waives any claim Grantor may have against Beneficiary for mismanagement of the Security during Beneficiary’s operation of the Security under this subparagraph
or as mortgagee in actual possession under applicable statutes. 
  
 (g) Beneficiary may, at its option without waiving any Event of Default, pay, perform or observe the same, and all payments made or costs or expenses incurred by Beneficiary in connection therewith shall be secured
hereby and shall be, without demand, immediately repaid by Grantor to Beneficiary with interest thereon at the Default Rate hereunder. Beneficiary shall be the sole judge of the necessity for any such actions and of the amounts to be paid.
Beneficiary is hereby empowered to enter and to authorize others to enter upon the Security or any part thereof for the purpose of performing or observing any such defaulted term, covenant or condition without hereby becoming liable to Grantor or
any person in possession holding under Grantor. 
  
 (h) Apply against the Indebtedness in such order, as Beneficiary shall determine any funds held for the benefit of Grantor in escrow by Beneficiary or by any third-party escrow agent under any of the Loan Documents, including, without
limitation, any funds held under the escrow established pursuant to Section 5 of this Deed of Trust. 
  

 (i) Upon any foreclosure sale, Beneficiary may bid for and purchase the Security and
shall be entitled to apply all or any part of the Indebtedness as a credit to the purchase price. In the event of any sale of the Security by foreclosure, through judicial proceedings, by advertisement, by power of sale, or otherwise, the proceeds
of any such sale which are applied in accordance with this Deed of Trust shall be applied in the following order to: (i) all expenses incurred for the collection of the Indebtedness and the foreclosure of this Deed of Trust, including reasonable
compensation to Trustee and Beneficiary, their agents and attorneys; (ii) all sums expended or incurred by Beneficiary and/or Trustee directly or indirectly in carrying out the terms, covenants and agreements of the Note or notes evidencing the
Indebtedness, of this Deed of Trust and any other Loan Documents, together with interest thereon as therein provided; (iii) all late payment charges, prepayment fees, advances and other amounts due under any of the Loan Documents; (iv) all accrued
and unpaid interest upon the Indebtedness; (v) the unpaid principal amount of the Indebtedness; and (vi) the surplus, if any, to the person or persons legally entitled thereto. 
  
 In the event of any acceleration of the Indebtedness pursuant to the first paragraph of this Section, Grantor shall pay to Beneficiary
together with the principal indebtedness and interest thereon an amount equal to the prepayment fee provided for in the Note and such fee shall be included as part of the Indebtedness. 
  
 Failure to exercise any option to accelerate in the event of a default or other circumstance permitting the exercise of such option, shall
not constitute a waiver of the default or of the right to exercise such option at a later time, or a waiver of the right to exercise such option in the event of any other default or circumstance specified above. 
  
 25. Receiver. If an Event of Default shall have occurred, Beneficiary,
to the maximum extent permitted by law, shall be entitled, as a matter of right, to the appointment of a receiver of the Security, without notice or demand, and without regard to the adequacy of the security for the Indebtedness or the solvency of
Grantor. Grantor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and
duties of Beneficiary in case of entry and shall continue as such and exercise all such powers until the date of confirmation of sale of the Security, unless such receivership is 
  

 sooner terminated. If an Event of Default shall have occurred, Beneficiary shall also be entitled to become a mortgagee
in possession with all the powers, rights and remedies that a duly appointed receiver would have. 
  
 26. Foreclosure of Personalty. Upon the happening of any and every such Event of Default, should Beneficiary elect to cause any of the Security to
be disposed of as personal property because the same is personal property under the applicable laws of the State of Texas, Beneficiary may dispose of all or any part thereof in any manner now or hereafter permitted by the Uniform Commercial Code of
the State of Texas or in accordance with any other remedy provided in law or in equity. Any such disposition may be conducted by an employee or agent of Beneficiary. Both Grantor and Beneficiary shall be eligible to purchase any part or all of such
property at such disposition. Any such disposition may be either public or private as Beneficiary may so elect, in its sole discretion, subject to the provisions of the Uniform Commercial Code of the State of Texas. Beneficiary shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code of the State of Texas. Expenses of retaking, holding, preparing for sale, selling or the like shall include Beneficiary’s Attorney’s Fees and legal expenses, and upon
the occurrence of any Event of Default, Grantor, upon demand of Beneficiary, shall assemble such personal property and make it available to Beneficiary at a place which is deemed to be reasonably convenient to both Beneficiary and Grantor.
Beneficiary shall give Grantor at least five (5) days’ prior written notice (or a longer period if then required in accordance with the laws of the State of Texas) of the time and place of any public sale or other disposition of such property
or of the time at or after which any private sale or any other intended disposition is to be made, and if such notice is sent to Grantor, as the same is provided for the mailing of notices herein, it shall constitute reasonable notice to Grantor.

  
 27. Prepayment Premiums. Immediately upon the first
insertion of any advertisement or notice of any such sale, there shall become due and owing by Grantor all expenses incident to such advertisement or notice, all court costs and all expenses incident to any foreclosure proceedings brought under this
Deed of Trust or otherwise in connection with such sale, plus interest thereon at the Default Rate, and no party shall be required to receive only the aggregate Indebtedness then secured hereby unless it is accompanied by a tender of payment of such
expenses, costs, and interest. In partial consideration for Beneficiary agreeing to make the Loan to Grantor, Grantor agrees that upon the occurrence of an Event of Default and acceleration of the Indebtedness secured hereby, any tender of payment
by or on behalf of 
  

 Grantor of the amount necessary to satisfy all of such Indebtedness made at any time before or at any foreclosure sale
shall constitute an evasion of the payment terms of the Note and hereunder, and shall be deemed to be a voluntary prepayment, and such payment, to the extent permitted by law, shall be accompanied by the prepayment fee, or the default prepayment fee
(as appropriate), as provided in the Note, and Beneficiary shall not be obligated to accept any such tender of payment unless such tender of payment includes such prepayment fee, or such default prepayment fee (as applicable). 
  
 28. Acceleration Interest. In addition to any late payment charge
which may be due under the Note, Grantor shall pay interest on all sums due hereunder at a rate (the “Default Rate”) equal to the lesser of (i) the Interest Rate plus three percent (3%) per annum, or (ii) the maximum rate permitted
by law, from and after the first to occur of the following events: (A) Beneficiary sends notice to Grantor that it elects to cause the acceleration of the Indebtedness; (B) a petition under Title 11, United States Code, shall be filed by or against
Grantor or if Grantor shall seek or consent to the appointment of a receiver or trustee for itself or for any of the Security, file a petition seeking relief under the bankruptcy or other similar laws of the United States, any state or any other
jurisdiction, make a general assignment for the benefit of creditors, or be unable to pay its debts as they become due; (C) a court shall enter an order, judgment or decree appointing, with or without the consent of Grantor, a receiver or trustee
for it or for any of the Security or approving a petition filed against Grantor which seeks relief under the bankruptcy or other similar laws of the United States, any state or any other jurisdiction, and any such order, judgment or decree shall
remain in force, undischarged or unstayed, sixty (60) days after it is entered; or (D) if all sums due hereunder are not paid on the Maturity Date (as defined in the Note). 
  
 29. Late Charge. In the event any sums of principal, interest and applicable escrow amounts due under the Note, this
Deed of Trust or any other Loan Document, are not paid by Grantor when due, without regard to any cure or grace period, Grantor shall pay to Beneficiary for the month during which such payment is not made when due and for each month or fraction
thereof that such sum remains unpaid, a late charge equal to the lesser of three percent (3%) of such installment or the maximum amount allowed by law, as the reasonable estimate by Beneficiary and Grantor of a fair average compensation for the loss
that may be sustained by Beneficiary due to the failure of Grantor to make timely payments, and such amount shall be secured hereby, provided that such late charge shall not apply to the payment of the entire 
  

 outstanding Indebtedness due on the Maturity Date. Such late charge shall be paid without prejudice to the right of
Beneficiary to collect any other amounts provided to be paid or to declare an Event of Default under this Deed of Trust or any other Loan Document. 
  
 30. Waiver of Statutory Rights. 
  
 (a) Grantor agrees, to the fullest extent permitted by law, that in an Event of Default on the part of Grantor hereunder, neither Grantor
nor anyone claiming through or under Grantor will set up, claim, or seek to take advantage of any moratorium, reinstatement, forbearance, appraisement, valuation, stay, extension or exemption laws now or hereafter in force, in order to prevent or
hinder the enforcement or foreclosure of this Deed of Trust, or the sale of the Security, or the delivery of possession thereof immediately after such sale to the purchaser at such sale, and Grantor, for itself and all who may at any time claim
through or under it, hereby waives to the fullest extent that it may lawfully do so, the benefit of all such laws, and any and all rights to have the assets subject to the security interest of this Deed of Trust marshaled upon any foreclosure or
sale under the power granted herein and agrees that Beneficiary or any court having jurisdiction to foreclose such lien may sell the Security in part or in its entirety. 
  
 (b) TO THE EXTENT NOT PROHIBITED BY LAW, GRANTOR AND BENEFICIARY HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (ORAL OR WRITTEN) OR ACTIONS OF GRANTOR OR BENEFICIARY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY MAKING THE LOAN SECURED HEREBY. 
  
 31. Security Interest. This Deed of Trust shall, as to any equipment and other Personal Property covered hereby, be deemed to constitute a security
agreement, and Grantor, as debtor, hereby grants to Beneficiary, as secured party, a security interest therein pursuant to the Uniform Commercial Code of the State of Texas. Grantor agrees, upon request of Beneficiary, to furnish an inventory of
Personal Property (including the FF&E) owned by Grantor and subject to this Deed of Trust and, upon request by Beneficiary, to execute any supplements 
  

 to this Deed of Trust, any separate security agreement, any financing statements and any continuation statements in order
to include specifically said inventory of Personal Property or otherwise to perfect the security interest granted hereby. Upon any Event of Default, Beneficiary shall have all of the rights and remedies provided in said Code or otherwise provided by
law or by this Deed of Trust, including but not limited to the right to require Grantor to assemble such Personal Property and make it available to Beneficiary at a place to be designated by Beneficiary which is reasonably convenient to both
parties, the right to take possession of the Personal Property with or without demand and with or without process of law and the right to sell and dispose of the same and distribute the proceeds according to law. The parties hereto agree that any
requirement of reasonable notice shall be met if Beneficiary sends such notice to Grantor at least ten (10) days prior to the date of sale, disposition or other event giving rise to the required notice, and that the proceeds of any disposition of
any such Personal Property may be applied by Beneficiary first to the reasonable expenses in connection therewith, including reasonable Attorneys’ Fees and legal expenses incurred, and then to payment of the Indebtedness. With respect to the
Personal Property that has become so attached to the Real Property that an interest therein arises under the real property law of the State of Texas, this Deed of Trust shall also constitute a financing statement and a fixture filing under the Texas
Uniform Commercial Code. Grantor is the record owner of the Real Property and the addresses of Grantor and Beneficiary are as set forth on the first page of this Deed of Trust. Grantor represents and warrants that it is a “registered
organization” organized under the laws of the State of Delaware Grantor covenants that it will not alter such registration without the prior written consent of Beneficiary. Grantor further represents and warrants that its name is exactly as set
forth in the signature page of this Deed of Trust. Grantor also covenants that its name shall not be altered without the prior written consent of Beneficiary. Grantor hereby acknowledges and agrees that this Deed of Trust is an authenticated record,
and authorizes the filing of financing statements by Beneficiary without the execution thereof by Grantor. 
  
 32. Right of Entry. Beneficiary and Beneficiary’s representatives may at all times during normal business hours and with reasonable notice to
Grantor and Manager enter upon the Security and inspect the same, or cause it to be inspected by agents, employees or independent contractors of Beneficiary, and show the same to others, but Beneficiary shall not be obligated to make any such entry
or inspection. 
  

 33. Estoppel Certificate. Grantor, within fifteen (15) days after written request from
Beneficiary, will furnish a signed statement in writing, duly acknowledged, of the amount then due or outstanding hereunder and whether or not any offsets or defenses exist against the Indebtedness, and if so, specifying such offsets and defenses.
Upon request by Beneficiary, Grantor shall exercise any right it may have to request an estoppel certificate from any or all of the tenants on the Security within ten (10) days following Beneficiary’s request. 
  
 34. Annual Statements. Grantor will furnish Beneficiary with the
following financial statements and information, all of which reports will be in hard copy and electronic format: 
  
 (a) within forty-five (45) days after the end of each calendar quarter, an unaudited balance sheet and a statement of revenues and
expenses for such quarter and year-to-date; 
  
 (b) within ninety (90) days after the end of each calendar year, (a) a reviewed balance sheet and (b) a statement of revenues and expenses for the Real Property and Grantor, certified as true and correct by the chief financial officer of
the general partner of Grantor; 
  
 (c) Within
one hundred twenty (120) days after the end of each calendar year, annual capital expenditure summaries for the Real Property; and 
  
 (d) Such other financial information as Beneficiary may reasonably request in writing. 
  
 In addition to the regularly scheduled reports required above, Grantor agrees
to provide Beneficiary within five (5) Business Days after a written request therefor, a balance sheet and year-to-date operating statements for the Real Property certified by the chief financial officer of the general partner of Grantor. Grantor
also agrees to reasonably cooperate with Beneficiary and Beneficiary’s loan servicer in providing information and access to the Real Property in connection with the annual inspection of the Real Property, or such other inspections as
Beneficiary may reasonably require. 
  
 Notwithstanding the
provisions of subsections (a) and (b) above, Beneficiary agrees that subsection (b) above shall be waived by Beneficiary, provided that Beneficiary shall retain the right, in its sole discretion and any time and from time to reinstate the
requirements of subsection (b) by written notice to Grantor, effective upon receipt by Grantor of such notice. 
  

 Grantor acknowledges that Beneficiary may sell, transfer or assign the Loan, or any interest therein
(whether by sale of the entire Loan, the issuance of participation certificates in private unrated transactions, or in connection with a securitization of the Loan individually or as part of a pool of loans in a public or private rated transaction,
or otherwise). In connection therewith, Grantor agrees that Beneficiary shall be entitled to disclose, as Beneficiary may deem necessary or desirable, to any and all investors, purchasers, transferees, servicers, participants, investors, rating
agencies or organizations maintaining databases on the underwriting and performance of commercial mortgage loans, all documents and information which Beneficiary has or may hereafter acquire relating to the Loan, whether furnished by Grantor or any
guarantor or indemnitor. 
  
 If Grantor omits to prepare and
deliver promptly any report required by this Section, and such failure continues for thirty (30) days after written notice thereof, Beneficiary may elect, in addition to exercising any remedy for an Event of Default as provided for in this Deed of
Trust, to make an audit of all books and records of Grantor and its beneficial owners (but excluding Highland Hospitality Corporation), including their bank accounts, which in any way pertain to the Security, and to prepare the statement or
statements which Grantor failed to procure and deliver. Such audit shall be made and such statements shall be prepared by an independent certified public accountant to be selected by Beneficiary. Grantor shall pay all expenses of the audit and other
services, which expenses shall be secured hereby as part of the Indebtedness and shall be immediately due and payable with interest thereon at the Default Rate. 
  

Beneficiary shall afford any information received pursuant to this Section 34 the same degree of confidentiality that Beneficiary affords
similar information proprietary to Beneficiary; provided, however, that Beneficiary does not in any way warrant or represent that such information received from Grantor will remain confidential, and, provided further, that Beneficiary shall have the
unconditional right to disclose, as necessary, any such information in the event Beneficiary sells, transfers, conveys, or assigns this Deed of Trust or any portion of the Indebtedness. 
  

 35. Rights Cumulative. Each right and remedy of Beneficiary under this Deed of Trust, the Note and
the other Loan Documents, shall be in addition to every other right and remedy of Beneficiary and such rights and remedies may be enforced separately, successively and in any combination and order. 
  
 36. Subrogation. To the extent that proceeds of the Indebtedness are
used to pay any outstanding lien, charge or encumbrance affecting the Security, and such proceeds have been advanced by Beneficiary at Grantor’s request, Beneficiary shall be subrogated to all rights, interest and liens owned or held by any
owner or holder of such outstanding liens, charges and encumbrances, irrespective of whether such liens, charges or encumbrances are released of record; provided, however, that the terms and provisions hereof shall govern the rights and remedies of
Beneficiary and shall supersede the terms, provisions, rights, and remedies under the lien or liens to which Beneficiary is subrogated hereunder. 
  
 37. No Waiver. Any failure by Beneficiary to insist upon the strict performance by Grantor of any of the terms and provisions hereof shall not be
deemed to be a waiver of any of the terms and provisions hereof, and Beneficiary, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by Grantor of any and all of the terms and provisions hereof to
be performed by Grantor. 
  
 38. Deed of Trust Extension.
The lien hereof shall remain in full force and effect during any postponement or extension of the time of payment of the Indebtedness, or of any part thereof, and any number of extensions or modifications hereof, or any additional notes taken by
Beneficiary, shall not affect the lien hereof or the liability of Grantor or of any subsequent obligor to pay the Indebtedness unless and until such lien or liability be expressly released in writing by Beneficiary. 
  
 39. Indemnification. Grantor shall indemnify and hold Beneficiary
harmless from and against all obligations, liabilities, losses, costs, expenses, fines, penalties or damages (including Attorneys’ Fees) which Beneficiary may incur by reason of this Deed of Trust or with regard to the Security prior to such
time as Beneficiary takes actual physical possession of and manages and operates the Real Property after an Event of Default, except for such claims that are caused by the gross negligence or willful misconduct of Beneficiary or the escrow holder
under any escrow agreements. Grantor shall defend Beneficiary against any claim or litigation involving Beneficiary for the same, and should Beneficiary incur such obligation, liability, loss, 
  

 cost, expense, fine, penalty or damage, then Grantor shall reimburse Beneficiary upon demand. Any amount payable to
Beneficiary under this provision shall be secured hereby and, if not paid within five (5) days following demand therefor, shall bear interest at the Default Rate. 
  
 40. Nonrecourse. Except as provided in this Section 40 and in Section 16 of the Note, notwithstanding anything
else to the contrary contained herein or in any of the other Loan Documents, no judgment for the repayment of the indebtedness evidenced by the Note or in any action to foreclose this Deed of Trust or to collect any amount payable under the Note or
the other Loan Documents or for the performance or discharge of any covenants, obligations or undertakings of Grantor will be satisfied out of the personal assets of Grantor or of any holders of beneficial interest in Grantor. Beneficiary’s
sole recourse for such judgment(s) shall be against the Real Property and other collateral as provided pursuant to this Deed of Trust and any of the other Loan Documents. The foregoing limitation on liability shall not apply, and Grantor shall be
personally liable, for all damages and losses incurred by Beneficiary and any equitable relief as a court may award for the following acts or omissions, to the extent described: 
  

					
	 	  	 Act or Omission

	  	 Liability

	 (i)
	  	Grantor misapplies any Condemnation (defined in Section 9 of this Deed of Trust) awards or insurance proceeds attributable to the Real Property,	  	To the extent of such misapplication;
			
	 (ii)
	  	Grantor misapplies any security deposits or reserves attributable to the Real Property,	  	To the extent of such misapplication;
			
	 (iii)
	  	Grantor collects rents in advance in violation of any covenant under the Loan Documents,	  	To the extent of such rents collected in advance;
			
	 (iv)
	  	Grantor commits any fraud, misrepresentation or waste,	  	To the extent of any remedies available at law or in equity;
			
	 (v)
	  	Gross revenues from the Real Property are sufficient to pay any portion of the indebtedness, operating and maintenance expenses, insurance premiums deposits into a reserve or escrow account, or
other sums required by the Loan Documents, and Grantor fails to make such payments or deposits when due,	  	To the extent of any funds diverted from such payments or expenses (during the twelve (12) months prior to Beneficiary’s notice of acceleration through the date Beneficiary takes title to
the Real Property);

  

					
	 	  	 Act or Omission

	  	 Liability

	(vi)	  	Grantor enters into any separate guarantee and/or
indemnification agreement(s) and/or master lease(s) in favor
of Beneficiary, in addition to the Environmental
Indemnification
Agreement, which Grantor has concurrently
entered into,	  	As provided in such guarantee, indemnification or master
lease;
			
	 (vii)
	  	Grantor fails to pay Real Estate Taxes and other Impositions which are a lien against the Real Property during the period of Grantor’s ownership,	  	To the extent of any unpaid Real Estate Taxes and other Impositions, and any additional interest, penalties or other charges assessed as a result of such non-payment; provided, however, to the
extent Grantor makes escrow deposits for Real Estate Taxes under the Tax Escrow Agreement or Section 5 hereof, Grantor shall have no liability for nonpayment of such Real Estate Taxes, to the extent of such escrowed funds;
			
	 (viii)
	  	Grantor fails to maintain the levels, coverages and maximum deductibles of insurance required under the Loan Documents, to the extent that a casualty or liability occurs or arises and
insurance proceeds would have been available had such insurance been maintained,	  	In the amount of the loss incurred as the result of such uninsured casualty or uninsured liability.

  
 The provisions of this
Section 40 will not affect other remedies available to Beneficiary or Beneficiary’s rights in the Real Property. There shall be no limitation, in any event, of Grantor’s personal liability under, nor on the exercise of any of
Beneficiary’s rights under, the Environmental Indemnification Agreement, except as may be expressly set forth therein. Nothing contained in this Section 40 shall be deemed to prejudice the rights of Beneficiary to proceed against any
entity or person whatsoever, including Grantor, with respect to the enforcement of any guarantees, leases, master leases, or similar rights of payment hereafter executed. 
  

 41. Attorneys’ Fees. Any reference to “Attorney Fees”,
“Attorneys’ Fees”, or “Attorney’s Fees” in this document includes but is not limited to both the reasonable fees, charges and costs incurred by Beneficiary or Trustee through Beneficiary’s or
Trustee’s retention of outside legal counsel and the allocable reasonable fees, costs and charges for services rendered by Beneficiary’s in-house counsel. Any reference to “Attorney Fees”, “Attorneys’ Fees”, or
“Attorney’s Fees” shall also include but not be limited to those reasonable attorneys or legal fees, costs and charges incurred by Beneficiary or Trustee in the collection of any Indebtedness, the enforcement of any obligations
hereunder, the protection of the Security, the foreclosure of this Deed of Trust, the sale of the Security, the defense of actions arising hereunder and the collection, protection or setoff of any claim the Beneficiary may have in a proceeding under
Title 11, United States Code. Attorneys’ Fees provided for hereunder shall accrue whether or not Beneficiary has provided notice of default or of an intention to exercise its remedies for such default. 
  
 42. Administrative Fees. Beneficiary shall have the right to charge
reasonable administrative fees during the Term of the Note as Beneficiary may determine, its reasonable discretion, in connection with any servicing requests made by Grantor requiring Beneficiary’s evaluation, preparation and processing of any
such requests not to exceed $5,000.00 in any one matter. Administrative fees shall not be charged for routine servicing matters contemplated by the Loan Documents including, without limitation: processing payments; processing insurance and UCC
continuation documentation; processing escrow draws; review of tenant leases, subordination non-disturbance and attornment agreements and tenant estoppels on standard forms approved by Beneficiary without material modifications. Such administrative
fees shall apply to requests for matters not permitted or contemplated by the Loan Documents, including, without limitation requests for transfers or assignments, requests for partial releases; requests for review of new easements and loan
modifications and to requests, which while contemplated by the Loan Documents, because of the nature of the request, will require significantly more time than an institutional lender, acting reasonably, would contemplate for such request (including
without limitation, requests for the approval of tenant leases, tenant estoppels and tenant subordination, non-disturbance and attornment agreements which contain material differences from Beneficiary’s standard forms). Beneficiary shall also
be entitled to 
  

 reimbursement for professional fees it incurs for such administration, including without limitation, those of architects,
engineers and Attorneys’ Fees, provided that Beneficiary shall be entitled to reimbursement of Attorneys’ Fees for either in-house counsel or outside counsel, but not both. 
  
 43. Trustee’s Costs and Expenses; Governmental Charges. Grantor shall pay all costs, fees and expenses of
Trustee, its agents and counsel in connection with the performance of its duties hereunder, including without limitation the cost of any trustee’s sale guaranty or other title insurance coverage ordered in connection with any foreclosure
proceedings hereunder, and shall pay all taxes (except federal and state income taxes) or other governmental charges or impositions imposed by any governmental authority on Trustee or Beneficiary by reason of their interest in the Loan Documents.

  
 44. Protection of Security; Costs and Expenses. Grantor
shall appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary, and shall pay all costs and expenses, including without limitation cost of evidence of title and reasonable
Attorneys’ Fees, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights or remedies of Beneficiary
hereunder. If Grantor fails to perform any of the covenants or agreements contained in this Deed of Trust within any applicable notice and cure periods provided for in this Deed of Trust, or if any action or proceeding is commenced which affects
Beneficiary’s interest in the Security or any part thereof, including, but not limited to, eminent domain, code enforcement, or proceedings of any nature whatsoever under any federal or state law, whether now existing or hereafter enacted or
amended, relating to bankruptcy, insolvency, arrangement, reorganization or other form of debtor relief, or to a decedent, then after compliance with the applicable notice and cure provisions provided for in this Deed of Trust, Beneficiary may, but
without obligation to do so and without further notice to or demand upon Grantor and without releasing Grantor from any obligation hereunder, make such appearances, disburse such sums and take such action as Beneficiary deems necessary or
appropriate to protect Beneficiary’s interest, including, but not limited to, disbursement of reasonable Attorneys’ Fees, entry upon the Security to make repairs or take other action to protect the security hereof, and payment, purchase,
contest or compromise of any encumbrance, charge or lien which in the judgment of Beneficiary appears to be prior or superior hereto. Grantor further agrees to pay all reasonable expenses of Beneficiary and Trustee (including without limitation
Attorney’s Fees and disbursements) 
  

 (i) incident to the protection of the rights of Beneficiary hereunder, or (ii) incident to the enforcement or collection
of payment of the Indebtedness, whether by judicial or non-judicial proceedings, or in connection with any bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding of Grantor, or otherwise, or (iii) in connection with
any title insurance coverage ordered in connection with any foreclosure proceedings hereunder. Grantor also agrees to pay all taxes (except federal and state income taxes) and other governmental charges or impositions imposed by any governmental
authority on Beneficiary by reason of their interest in the Loan Documents. Any amounts disbursed by Beneficiary pursuant to this Section 44 shall be additional indebtedness of Grantor secured by the Loan Documents as of the date of
disbursement and shall bear interest at the Default Rate. All such amounts shall be payable by Grantor immediately without demand. Nothing contained in this Section shall be construed to require Beneficiary to incur any expense, make any appearance,
or take any other action. 
  
 45. Notices. Any notice,
demand, request, statement or consent made hereunder shall be in writing, signed by the party giving such notice, request, demand, statement, or consent, and shall be deemed to have been properly given when either delivered personally, delivered to
a reputable overnight delivery service providing a receipt or deposited in the United States mail, postage prepaid and registered or certified return receipt requested, at the address set forth below, or at such other address within the continental
United States of America as may have theretofore have been designed in writing. The effective date of any notice given as aforesaid shall be the date of personal service, one (1) Business Day after delivery to such overnight delivery service, or
three (3) Business Days after being deposited in the United States Mail, whichever is applicable. For purposes hereof, the addresses are as follows: 
  

			
	 If to Beneficiary:
	    	Connecticut General Life Insurance Company
	 	    	c/o CIGNA Realty Investors
	 	    	280 Trumbull Street
	 	    	Hartford, Connecticut 06103
	 	    	Attn: Debt Asset Management, H-11G
		
	 with a copy to:
	    	CIGNA Realty Investors
	 	    	280 Trumbull Street
	 	    	Hartford, Connecticut 06103
	 	    	Attn: Real Estate Law, H-16C

  

			
	 If to Grantor:
	    	HH DFW Hotel Associates, L.P.
	 	    	c/o Highland Hospitality Corporation
	 	    	8405 Greensboro Drive, Suite 500
	 	    	McLean, Virginia 22102
	 	    	Attention: General Counsel
		
	 with a courtesy
 copy to:
	    	Highland Hospitality Corporation
	 	    	8405 Greensboro Drive, Suite 500
	 	    	McLean, Virginia 22102
	 	    	Attention: Chief Financial Officer

  
 Notwithstanding the foregoing
agreement to provide a courtesy copy to Grantor’s counsel, such copy shall be a courtesy copy only, and failure to provide such courtesy copy shall have absolutely no effect or entitle Grantor to any remedy whatsoever. Any notice duly given to
Grantor as provided above shall be effective whether or not the courtesy copy was given to Grantor’s counsel. 
  
 46. Release. Upon the satisfaction in full of the Indebtedness, Beneficiary shall promptly release of record the Security from the lien hereof and
shall surrender this Deed of Trust and the Assignment of Rents and Leases and all notes evidencing indebtedness secured by this Deed of Trust to Grantor. Grantor shall pay all costs of recordation. 
  
 47. Applicable Law. The provisions hereof shall be construed in
accordance with the laws of the State of Texas, without giving effect to any principles of conflicts of laws. 
  
 48. Tenancy at Will. In the event of a trustee’s sale hereunder, if at the time of such sale Grantor occupies the portion of the Security so
sold or any part thereof, Grantor shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either tenant or landlord, at a rental per day based upon the value of
the portion of the Security so occupied, such rental to be due and payable daily to the purchaser. An action of forcible detainer shall lie if the tenant holds over after a demand in writing for possession of such Security. 
  
 49. Substitution of Trustee. Beneficiary may remove Trustee at any
time or from time to time for any reason (with or without cause) and appoint a successor trustee, and upon such appointment, all powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon become vested in such successor. Such
substitute trustee shall be appointed by written instrument, which appointment may be executed by any authorized agent of Beneficiary or in any other manner permitted by applicable law. 
  

 50. Indemnification of Trustee. Except for gross negligence or willful misconduct, Trustee shall
not be liable for any act or omission or error of judgment. Trustee may rely on any document believed by him in good faith to be genuine. All money received by Trustee shall, until used or applied as herein provided, be held in trust, but need not
be segregated (except to the extent required by law), and Trustee shall not be liable for interest thereon. Grantor hereby indemnifies Trustee against all liability and expenses, which he may incur in the performance of his duties hereunder.

  
 51. Other. If more than one party is named as Trustee
herein, any one party may perform any obligations or duties of the Trustee herein without the joinder of any other party named herein. Beneficiary may exercise any and all other rights, remedies and recourse granted under the Loan Documents now or
hereafter existing in equity or at law for the protection and preservation of the Security. 
  
 52. Invalidity. If any provision of this Deed of Trust shall be held invalid or unenforceable, the same shall not affect in any respect whatsoever the validity of the remainder of this Deed of Trust, except
that if such provision relates to the payment of principal or interest, then the Beneficiary may, at its option, declare the Indebtedness due and payable upon one hundred (120) days prior written notice to Grantor and, provided there exists no Event
of Default hereunder, without prepayment fee. 
  
 53.
Captions. The captions in this instrument are inserted only as a matter of convenience and for reference, and are not and shall not be deemed to be any part hereof. 
  
 54. Modifications. This Deed of Trust may not be changed or terminated except in writing signed by both parties. The
provisions of this Deed of Trust shall extend and be applicable to all renewals, amendments, extensions, consolidations, and modifications of the other Loan Documents, and any and all references herein to the Loan Documents shall be deemed to
include any such renewals, amendments, extensions, consolidations or modifications thereof. 
  

 55. Bind and Inure. The provisions of this Deed of Trust shall be binding on the Grantor and its
heirs, successors and assigns, and any subsequent owners of the Security. The covenants of Grantor herein shall run with the land, and this Deed of Trust and all of the covenants herein contained shall inure to the benefit of the Beneficiary, its
successors and assigns. 
  
 56. Replacement of Note. Upon
receipt of evidence reasonably satisfactory to Grantor of the loss, theft, destruction or mutilation of the Note, and in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to Grantor or,
in the case of any such mutilation, upon surrender and cancellation of the Note, Grantor will execute and deliver, in lieu thereof, a replacement Note, identical in form and substance to the Note and dated as of the date of the Note and upon such
execution and delivery all references in this Deed of Trust to the Note shall be deemed to refer to such replacement Note. 
  
 57. Time of the Essence. Time is of the essence with respect to each and every covenant, agreement and obligation of Grantor under this Deed of
Trust, the Note and any of the other Loan Documents. 
  
 58.
Business Day. The terms “Business Day” and “Business Days” as used in this Deed of Trust shall mean any calendar day other than a Saturday, a Sunday or a federal holiday on which the U.S. Postal
Service’s offices are closed for business in one or more of McLean, Virginia or Hartford, Connecticut. 
  
 59. Rights and Remedies of Sureties. Grantor waives any right or remedy, which Grantor may have or be able to assert pursuant to Chapter 34 of the
Business and Commerce Code of the State of Texas pertaining to the rights and remedies of sureties. 
  
 60. Authority of Beneficiary. As Operating Tenant is not a maker of the Note, Operating Tenant hereby authorizes Beneficiary to perform any of the
following acts at any time and from time to time, all without notice to Operating Tenant and without affecting Beneficiary’s rights or Operating Tenant’s obligations under this Deed of Trust: (i) alter any terms of the Loan Documents,
including renewing, compromising, extending or accelerating, or otherwise changing the time for payment of, or increasing or decreasing the rate of interest under, the Note, (ii) take and hold security for the Loan Documents, accept additional or
substituted security for the Loan Documents, and subordinate, exchange, enforce, waive, release, 
  

 compromise, fail to perfect, sell or otherwise dispose of any such security, (iii) apply any security now or later held
for the Loan Documents in any order that Beneficiary in its sole discretion may choose, and direct the order and manner of any sale of all or any part of it and bid at any such sale, (iv) release any obligor under the Note or any of the other Loan
Documents, including without limitation Borrower (each an “Obligor”) of its liability under any Loan Document, and/or (v) substitute, add or release any one or more guarantors or endorsers of the Loan Documents.  

 
 61. Waivers of Operating Tenant. Operating Tenant absolutely,
unconditionally, knowingly, and expressly waives: 
  
 (a) notice of acceptance hereof; (2) notice of any loans or other financial accommodations made or extended under this Deed of Trust and the Loan Documents to which it is a party or the creation or existence of any Indebtedness; (3) notice
of the amount of the Indebtedness, subject, however, to the Operating Tenant’s right to make inquiry of the Beneficiary to ascertain the amount of the Indebtedness at any reasonable time; (4) notice of any adverse change in the financial
condition of any Obligor or of any other fact that might increase Operating Tenant’s risk hereunder; (5) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan Documents to which the
Operating Tenant is a party; (6) notice of any Event of Default; and (7) all other notices (except if such notice is specifically required to be given to Operating Tenant hereunder or under the Loan Documents to which the Operating Tenant is a
party) and demands to which Operating Tenant might otherwise be entitled. 
  
 (b) its right to require the Beneficiary to institute suit against, or to exhaust any rights and remedies which the Beneficiary has or may have against, any Obligor or any third party, or against any collateral for
the Indebtedness provided by any Obligor or any third party. Operating Tenant further waives any defense arising by reason of any disability or other defense (other than the defense that the Indebtedness shall have been fully and finally performed
and indefeasibly paid) of any Obligor or by reason of the cessation from any cause whatsoever of the liability of any Obligor in respect thereof. 
  
 (c) (1) any rights to assert against Beneficiary any defense (legal or equitable), set-off, counterclaim, or claim which the Operating
Tenant may now or at any 
  

 time hereafter have against any Obligor or any other party liable to the Beneficiary; (2) any defense,
set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Indebtedness or any security therefor; (3) any defense the
Operating Tenant has to performance hereunder arising by reason of: the impairment or suspension of the Beneficiary’s rights or remedies against any Obligor; the alteration by the Beneficiary of the Indebtedness; any discharge of any
Obligor’s obligations to the Beneficiary by operation of law as a result of the Beneficiary’s intervention or omission; or the acceptance by the Beneficiary of anything in partial satisfaction of the Indebtedness; and (4) the benefit of
any statute of limitations affecting Grantor’s liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Indebtedness shall similarly operate to defer or
delay the operation of such statute of limitations applicable to Grantor’s liability hereunder. 
  
 Notwithstanding anything to the contrary in this Deed of Trust, except with respect to the obligations of Grantor set forth in Sections 4 (Impositions), 7 (Insurance), 40 (Nonrecourse), and this Section 61
(Waivers), for all purposes Operating Tenant shall not have any responsibility to perform or provide any obligation, covenant, representation or warranty under this Deed of Trust, except and only to the extent Beneficiary has accelerated the
obligations secured by the Deed of Trust and Beneficiary reasonably determines that Operating Tenant’s performance of an such an excluded obligation or covenant is required in order for Beneficiary to realize upon all or any portion of the
Security. Operating Tenant’s obligations under Section 40 shall be limited to acts or omissions which arise in connection with Operating Tenant’s duties under the Operating Lease. So long as no Event of Default shall have occurred and be
continuing, nothing contained in this Section shall be construed so as to negatively affect Highland Hospitality Corporation’s continued qualification as a real estate investment trust under the Internal Revenue Code. 
  
 62. Obligor’s Financial Condition. Operating Tenant assumes full
responsibility for keeping informed of Obligor’s financial condition and business operations and all other circumstances affecting Obligor’s ability to pay and perform its obligations to Beneficiary, and agrees that Beneficiary shall have
no duty to disclose to Operating Tenant any information which Beneficiary may receive about Obligor’s financial condition, business operations or any other circumstances bearing on Obligor’s ability to perform. 
  
 [SIGNATURES APPEAR ON THE NEXT PAGE] 
  

 IN WITNESS WHEREOF, the Grantor has duly executed this Deed of Trust as a sealed instrument on the day
and year first above written. 
  

					
	GRANTOR:
	
	HH DFW HOTEL ASSOCIATES, L.P., a Delaware limited partnership
		
	 By:
	 	HHC Texas GP LLC (fka Sugar Land GP LLC), a Delaware limited liability company, its general partner
			
	 	 	 By:
	 	 /s/ Tracy M.J. Colden

	 	 	 Name:
	 	 Tracy M.J. Colden

	 	 	 Title:
	 	 Vice President

	
	OPERATING TENANT:
	
	HHC TRS OP LLC, a Delaware limited liability company
		
	 By:
	 	 /s/ Tracy M.J. Colden

	 Name:
	 	 Tracy M.J. Colden

	 Title:
	 	 Vice President

  

			
	 STATE OF    Maryland
	    	§
	 	    	§
	 COUNTY OF    Montgomery
	    	§

  
 This instrument was
acknowledged before me on September 8, 2004, by Tracy M.J. Colden, Vice President of HHC Texas GP LLC (fka Sugar Land GP LLC), a Delaware limited liability company, general partner of HH DFW HOTEL ASSOCIATES, L.P., a Delaware limited
partnership, on behalf of said limited liability company and limited partnership. 
  

			
	 ( S E A L )
	  	 /s/ Sharon A. Rowe

	 	  	 Notary Public in and for
 the above County and State

		
	 My Commission Expires:
	  	Print Name of Notary:
		
	                             10/02/04

	  	 Sharon A. Rowe

  

			
	 STATE OF Maryland
	    	§
	 	    	§
	 COUNTY OF Montgomery
	    	§

  
 This instrument was
acknowledged before me on September 8, 2004, by Tracy M.J. Colden, Vice President of HHC TRS OP LLC, a Delaware limited liability company, on behalf of said limited liability company. 
  

			
	 ( S E A L )
	  	 /s/ Sharon A. Rowe

	 	  	 Notary Public in and for
 the above County and State

		
	 My Commission Expires:
	  	Print Name of Notary:
		
	                             10/02/04

	  	 Sharon A. Rowe

  

 EXHIBIT A 
 TO 
 DEED OF TRUST AND SECURITY AGREEMENT 
  
 Legal Description 
  
 Being a tract of land situated in the Jefferson Tilley Survey, Abstract No. 1474, and being
all of Lot 1, Block H of D.F.W. Freeport, revised First and Second Installment, an addition to the City of Irving according to the revised plat recorded in Volume 80009, Page 2532, Map Records, Dallas County, Texas, and being more particularly
described as follows: 
  
 BEGINNING at a 5/8-inch iron rod with “GSES, INC.,
RPLS 4804” cap found at the most southerly point on a corner clip at the intersection of the southwest line of Royal Lane (a 100 foot R.O.W.) and the southeast line of Freeport Parkway (a 100 foot R.O.W.); 
  
 THENCE, along the southwest line of said Royal Lane the following: 
  
 South 35 degrees 40 minutes 50 seconds East, a distance of 786.15 feet to a 5/8-inch iron
rod with “GSES, INC., RPLS 4804” cap found for corner being the point of curvature to the left; 
  
 Along said curve to the left, having a central angle of 29 degrees 41 minutes 03 seconds, a radius of 780.00 feet, and an arc length of 404.12 feet to a 1/2-inch iron rod found for corner situated in the north line of
Gentry Road (a 40 foot R.O.W.); 
  
 THENCE, North 89 degrees 49 minutes 30 seconds
West, departing said Royal Lane and along the north line of said Gentry Road, a distance of 591.37 feet to a 1/2-inch iron rod found for corner situated in the northeast line of State Highway No. 114 (a variable width R.O.W.); 
  
 THENCE, along the northeast line of State Highway 114 the following; 
  
 North 73 degrees 05 minutes 57 seconds West, a distance of 134.40 feet to a 5/8-inch iron rod
with “GSES, INC., RPLS 4804” cap found for corner; 
  
 North 59 degrees
52 minutes 40 seconds West, a distance of 470.70 feet to a 5/8-inch iron rod with “GSES, INC., RPLS 4804” cap found for corner; 
  
 North 28 degrees 15 minutes 22 seconds West, a distance of 113.10 feet to a 5/8-inch iron rod with “GSES, INC., RPLS 4804” cap found for corner; 
  
 North 00 degrees 14 minutes 00 seconds East, a distance of 46.44 feet to a 5/8-inch iron rod
with “GSES, INC., RPLS 4804” cap found for corner situated in the southeast line of said Freeport Parkway; 
  
 THENCE, along the southeast line of said Freeport Parkway the following: 
  
 North 30 degrees 03 minutes 00 seconds East, a distance of 174.49 feet to a 5/8-inch iron rod with “GSES, INC., RPLS 4804” cap found for corner, being the point
of curvature to the right; 
  

 Along said curve to the right, having a central angle of 24 degrees 16 minutes 10 seconds, a radius 974.67 feet, and an
arc length of 412.85 feet to a 5/8-inch iron rod with “GSES, INC., RPLS 4804” cap found for corner; 
  
 North 54 degrees 19 minutes 10 seconds East, a distance of 32.32 feet to a 5/8-inch iron rod with “GSES, INC., RPLS 4804” cap found for corner; 
  
 South 80 degrees 40 minutes 50 seconds East, a distance of 25.00 feet to the POINT OF BEGINNING and containing 11.5787 acres or 504,367
square feet of land, more or less. 
  
 The property described and shown hereon is
the same property described in LandAmerica Title Insurance Company title commitment no. 121101614 dated August 27, 2004.

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