Document:

Exhibit 105 (Mezzanine Loan Agreement)

		
			Exhibit 10.5
		

		
			Execution Version
		

		
			Location of Property:

STREET ADDRESS, SECTION, BLOCK AND LOT INFORMATION SET FORTH ON SCHEDULE OF PROPERTY INFORMATION ATTACHED HERETO

City of New York, County of New York, State of New York
		

		
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			_______________________________________________________________
		

		
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			MEZZANINE LOAN AGREEMENT
		

		
			Dated as of April 29, 2016
		

		
			Between
		

		
			CINDAT HERSHA OWNER JV ASSOCIATES, LLC,
as Borrower
		

		
			and
		

		
			CINDAT HERSHA LESSEE JV ASSOCIATES, LLC,
as Operating Lessee Owner
		

		
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			and
		

		
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			HERSHA MEZZ GAP LENDER, LLC,
		

		
			as Lender
		

		
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			_________________________________________________________________
		

		
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			102103837.9

		

 

		Schedule of Property Information
		

		
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						Property Location

					
					
						Borough

					
					
						Block

					
					
						Lot

					
					
						City

					
					
						County

					
					
						State

				
	
					
						337 West 39th Street

					
					
						1

					
					
						763

					
					
						14

					
					
						NY

					
					
						NY

					
					
						NY

				
	
					
						339-341 West 39th Street

					
					
						1

					
					
						763

					
					
						13

					
					
						NY

					
					
						NY

					
					
						NY

				
	
					
						343 West 39th Street

					
					
						1

					
					
						763

					
					
						12

					
					
						NY

					
					
						NY

					
					
						NY

				
	
					
						116 West 31st Street

					
					
						1

					
					
						806

					
					
						52

					
					
						NY

					
					
						NY

					
					
						NY

				
	
					
						108-110 West 24th Street

					
					
						1

					
					
						799

					
					
						46

					
					
						NY

					
					
						NY

					
					
						NY

				
	
					
						51 Nassau Street

					
					
						1

					
					
						64

					
					
						1

					
					
						NY

					
					
						NY

					
					
						NY

				
	
					
						124-126 Water Street

					
					
						1

					
					
						39

					
					
						38

					
					
						NY

					
					
						NY

					
					
						NY

				

		
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			TABLE OF CONTENTS

		

		

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		1.DEFINITIONS; PRINCIPLES OF CONSTRUCTION.....................................................................................1
		

		
			1.1Terms and Definitions.......................................................................................................................1
		

		
			1.1.1Key Terms and Definitions.............................................................................................1
		

		
			1.1.2Additional Terms and Definitions.....................................................................................2
		

		
			1.2Index of Other Definitions...............................................................................................................19
		

		
			1.3Principles of Construction...............................................................................................................19
		

		
			2.GENERAL LOAN TERMS.........................................................................................................................20
		

		
			2.1The Loan.......................................................................................................................................20
		

		
			2.2Interest; Monthly Payments...........................................................................................................20
		

		
			2.2.1Generally.......................................................................................................................20
		

		
			2.2.2Default Rate...............................................................................................................21
		

		
			2.2.3Taxes...........................................................................................................................21
		

		
			2.2.4Requirements of Law...................................................................................................21
		

		
			2.2.5Breakage Indemnity.....................................................................................................22
		

		
			2.3Loan Repayment...........................................................................................................................22
		

		
			2.3.1Repayment.................................................................................................................22
		

		
			2.3.2Liquidation Events.......................................................................................................23
		

		
			2.3.3Optional Prepayments.................................................................................................23
		

		
			2.3.4Intentionally Omitted...................................................................................................23
		

		
			2.3.5Pro Rata Prepayments & Repayments.............................................................................23
		

		
			2.4Release of Collateral.....................................................................................................................25
		

		
			2.5Payments and Computations...........................................................................................................25
		

		
			2.5.1Making of Payments...................................................................................................25
		

		
			2.5.2Computations.............................................................................................................25
		

		
			2.5.3Late Payment Charge.................................................................................................25
		

		
			2.6Interest Rate Protection Agreements...............................................................................................25
		

		
			2.6.1Interest Rate Protection Agreement...............................................................................25
		

		
			2.6.2Execution of Documents...............................................................................................27
		

		
			2.6.3No Obligation of Lender...............................................................................................27
		

		
			2.6.4Receipts from Interest Rate Protection Agreements.........................................................27
		

		
			2.6.5Downgrade of Counterparty.........................................................................................27
		

		
			2.6.6Intentionally Omitted...................................................................................................27
		

		
			2.7Fees...............................................................................................................................................27
		

		
			2.7.1Structuring Fee...........................................................................................................27
		

		
			2.7.2Intentionally Omitted...................................................................................................27
		

		
			2.7.3Administrative Fee.......................................................................................................27
		

		
			2.8Extension Options.........................................................................................................................27
		

		
			2.9Certain Payments.........................................................................................................................29
		

		
			3.CASH MANAGEMENT AND RESERVES...................................................................................................29
		

		
			3.1Cash Management Arrangements...................................................................................................29
		

		
			3.2Reserves.........................................................................................................................................30
		

		
			3.3Cash Collateral Reserve.................................................................................................................30
		

		
			3.4Grant of Security Interest; Application of Funds.................................................................................30
		

		
			3.5Distributions from the Mortgage Loan Parties...................................................................................31
		

		

		

		 

		

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		4.REPRESENTATIONS AND WARRANTIES.................................................................................................31
		

		
			4.1Organization; Special Purpose.........................................................................................................31
		

		
			4.2Proceedings; Enforceability.............................................................................................................31
		

		
			4.3No Conflicts.................................................................................................................................31
		

		
			4.4Litigation.........................................................................................................................................32
		

		
			4.5Agreements.................................................................................................................................32
		

		
			4.6Title...............................................................................................................................................32
		

		
			4.7No Bankruptcy Filing.....................................................................................................................33
		

		
			4.8Full and Accurate Disclosure...........................................................................................................33
		

		
			4.9No Plan Assets.............................................................................................................................34
		

		
			4.10Compliance...................................................................................................................................34
		

		
			4.11Contracts.......................................................................................................................................34
		

		
			4.12Federal Reserve Regulations; Investment Company Act.....................................................................34
		

		
			4.13Utilities and Public Access.............................................................................................................35
		

		
			4.14Physical Condition.........................................................................................................................35
		

		
			4.15Leases...........................................................................................................................................35
		

		
			4.16Fraudulent Transfer.......................................................................................................................35
		

		
			4.17Ownership of Borrower.................................................................................................................36
		

		
			4.18Management Agreement.................................................................................................................36
		

		
			4.19Hazardous Substances...................................................................................................................36
		

		
			4.20Principal Place of Business.............................................................................................................36
		

		
			4.21Other Debt...................................................................................................................................37
		

		
			4.22Embargoed Person.........................................................................................................................37
		

		
			4.23Anti–Money Laundering.................................................................................................................37
		

		
			4.24Operating Lease...........................................................................................................................37
		

		
			4.25Franchise Agreement.....................................................................................................................37
		

		
			4.26Labor Agreements.........................................................................................................................38
		

		
			4.27Pledged Collateral.........................................................................................................................38
		

		
			4.28Contractual Obligations...................................................................................................................39
		

		
			4.29Mortgage Loan Representations.....................................................................................................39
		

		
			4.30Hudson Yards Improvement Fund Deposits.......................................................................................39
		

		
			4.31Tax Matters.................................................................................................................................39
		

		
			4.32Required Sponsor Equity.................................................................................................................40
		

		
			5.COVENANTS...........................................................................................................................................40
		

		
			5.1Existence.......................................................................................................................................40
		

		
			5.2Taxes.............................................................................................................................................40
		

		
			5.3Repairs; Maintenance and Compliance; Alterations...........................................................................41
		

		
			5.3.1Repairs; Maintenance and Compliance...........................................................................41
		

		
			5.3.2Alterations.................................................................................................................41
		

		
			5.4Performance of Other Agreements.................................................................................................42
		

		
			5.5Cooperate in Legal Proceedings.....................................................................................................42
		

		
			5.6Further Assurances.......................................................................................................................42
		

		
			5.7Environmental Matters...................................................................................................................42
		

		
			5.7.1Hazardous Substances.................................................................................................42
		

		
			5.7.2Environmental Monitoring.............................................................................................43
		

		

		

		 

		

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		5.8Title to the Property; Liens; Title to the Pledged Collateral.................................................................45
		

		
			5.8.1Title to the Property; Liens...........................................................................................45
		

		
			5.8.2Title to the Pledged Collateral.......................................................................................45
		

		
			5.9Leases...........................................................................................................................................45
		

		
			5.9.1Generally.......................................................................................................................45
		

		
			5.9.2Entering into Leases.....................................................................................................45
		

		
			5.9.3Additional Covenants with respect to Leases...................................................................46
		

		
			5.9.4Operating Lease.........................................................................................................46
		

		
			5.10Estoppel Statement.......................................................................................................................46
		

		
			5.11Property Management...................................................................................................................47
		

		
			5.11.1Operation of Property...................................................................................................47
		

		
			5.11.2Termination of Manager...............................................................................................47
		

		
			5.12Special Purpose Entity...................................................................................................................48
		

		
			5.13Assumption in Non–Consolidation Opinion.......................................................................................48
		

		
			5.14Change In Business or Operation of Property...................................................................................48
		

		
			5.15Certain Prohibited Actions...............................................................................................................49
		

		
			5.16Prohibited Transfers.......................................................................................................................49
		

		
			5.17Expenses.........................................................................................................................................49
		

		
			5.18Indemnity.....................................................................................................................................50
		

		
			5.19Embargoed Person.........................................................................................................................51
		

		
			5.20Anti–Money Laundering.................................................................................................................52
		

		
			5.21ERISA...........................................................................................................................................52
		

		
			5.22Franchise Agreement.....................................................................................................................52
		

		
			5.22.1Affirmative Covenants.................................................................................................52
		

		
			5.22.2Negative Covenants.....................................................................................................53
		

		
			5.22.3Rights after Event of Default.........................................................................................53
		

		
			5.22.4Termination of Franchisor.............................................................................................54
		

		
			5.22.5Default; Right to Cure.................................................................................................54
		

		
			5.22.6Replacement Franchise Agreement...............................................................................54
		

		
			5.23[Intentionally Omitted]...................................................................................................................55
		

		
			5.24PIP Project...................................................................................................................................55
		

		
			5.24.1PIP Project Deliverables; Performance of the PIP Project...............................................55
		

		
			5.24.2Inspections by Lender.................................................................................................55
		

		
			5.24.3PIP Agreements.........................................................................................................55
		

		
			5.24.4Contracts, Invoices, Etc.; Incorporated Materials.............................................................56
		

		
			5.24.5Defects.........................................................................................................................56
		

		
			5.25Lost Notes...................................................................................................................................56
		

		
			5.26Asset Management Agreement.......................................................................................................57
		

		
			5.27Required Repairs...........................................................................................................................57
		

		
			5.28Notices...........................................................................................................................................57
		

		
			5.29Special Distributions.......................................................................................................................57
		

		
			5.30Incurrence of Expenses.................................................................................................................57
		

		
			5.31Interests in Borrower Certificates; Limitations on Securities Issuances.................................................58
		

		
			5.32Limitations on Distributions.............................................................................................................58
		

		
			5.33Bankruptcy-Related Covenants.......................................................................................................58
		

		
			5.34Contractual Obligations...................................................................................................................58
		

		
			5.35Labor Agreements.........................................................................................................................59
		

		

		

		 

		

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		6.NOTICES AND REPORTING.....................................................................................................................59
		

		
			6.1Notices...........................................................................................................................................59
		

		
			6.2Borrower Notices and Deliveries.....................................................................................................59
		

		
			6.3Financial Reporting.......................................................................................................................60
		

		
			6.3.1Bookkeeping...............................................................................................................60
		

		
			6.3.2Annual Reports...........................................................................................................60
		

		
			6.3.3Monthly Reports.........................................................................................................61
		

		
			6.3.4Other Reports.............................................................................................................61
		

		
			6.3.5Annual Budget...........................................................................................................62
		

		
			6.3.6Breach.........................................................................................................................62
		

		
			7.INSURANCE; CASUALTY; AND CONDEMNATION.................................................................................62
		

		
			7.1Insurance.....................................................................................................................................62
		

		
			7.2Casualty.........................................................................................................................................63
		

		
			7.2.1Notice; Restoration.....................................................................................................63
		

		
			7.2.2Settlement of Proceeds.................................................................................................63
		

		
			7.3Condemnation...............................................................................................................................63
		

		
			7.3.1Notice; Restoration.....................................................................................................63
		

		
			7.3.2Collection of Award.....................................................................................................64
		

		
			7.4Application of Proceeds or Award; Restoration.................................................................................64
		

		
			8.DEFAULTS...............................................................................................................................................64
		

		
			8.1Events of Default...........................................................................................................................64
		

		
			8.2Remedies.....................................................................................................................................67
		

		
			8.2.1Acceleration...............................................................................................................67
		

		
			8.2.2Remedies Cumulative...................................................................................................68
		

		
			8.2.3Severance...................................................................................................................68
		

		
			8.2.4Delay...........................................................................................................................69
		

		
			8.2.5Lender’s Right to Perform...........................................................................................69
		

		
			8.2.6Licenses.......................................................................................................................69
		

		
			9.SECONDARY MARKET PROVISIONS.....................................................................................................69
		

		
			9.1Transfer of Loan...........................................................................................................................69
		

		
			9.2Use of Information.........................................................................................................................73
		

		
			9.3Borrower Indemnity.......................................................................................................................73
		

		
			9.4Restructuring of Loan.....................................................................................................................75
		

		
			9.5Syndication...................................................................................................................................76
		

		
			9.6Costs and Expenses.......................................................................................................................76
		

		
			9.7Intentionally Omitted.....................................................................................................................77
		

		
			9.8Certain Limitations.........................................................................................................................77
		

		
			10.MISCELLANEOUS...................................................................................................................................77
		

		
			10.1Exculpation...................................................................................................................................77
		

		

		

		 

		

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		10.2Brokers and Financial Advisors.......................................................................................................82
		

		
			10.3Retention of Servicer.....................................................................................................................82
		

		
			10.4Survival...........................................................................................................................................82
		

		
			10.5Lender’s Discretion.......................................................................................................................82
		

		
			10.6Governing Law.............................................................................................................................83
		

		
			10.7Modification, Waiver in Writing.......................................................................................................83
		

		
			10.8Trial by Jury.................................................................................................................................84
		

		
			10.9Headings/Exhibits.........................................................................................................................84
		

		
			10.10Severability...................................................................................................................................84
		

		
			10.11Preferences.................................................................................................................................84
		

		
			10.12Waiver of Notice...........................................................................................................................84
		

		
			10.13Remedies of Borrower and Operating Lessee Owner.......................................................................85
		

		
			10.14Prior Agreements...........................................................................................................................85
		

		
			10.15Offsets, Counterclaims and Defenses...............................................................................................85
		

		
			10.16Publicity.........................................................................................................................................85
		

		
			10.17No Usury.....................................................................................................................................85
		

		
			10.18Conflict; Construction of Documents...............................................................................................86
		

		
			10.19No Third Party Beneficiaries...........................................................................................................86
		

		
			10.20Return Differential.........................................................................................................................86
		

		
			10.21Assignment...................................................................................................................................87
		

		
			10.22Counterparts.................................................................................................................................87
		

		
			10.23EEA Financial Institutions...............................................................................................................87
		

		
			10.23.1Terms and Definitions...................................................................................................87
		

		
			10.23.2Acknowledgement and Agreement Regarding EEA Financial Institutions...........................88
		

		
			10.24Partial Releases.............................................................................................................................88
		

		
			10.25Intercreditor Agreement.................................................................................................................91
		

		
			10.26Sale of Membership Interests.........................................................................................................91
		

		
			10.27Protective Advances.....................................................................................................................91
		

		
			11.MULTIPLE OBLIGORS.............................................................................................................................91
		

		
			11.1Multiple Borrowers and Operating Lessees.......................................................................................91
		

		
			11.1.1Inducement.................................................................................................................91
		

		
			11.1.2Separate Foreclosures.................................................................................................91
		

		
			11.1.3Intentionally Omitted....................................................................................................91
		

		
			11.1.4Separate Exercise of Remedies.....................................................................................91
		

		
			11.1.5Breach Under Agreement.............................................................................................92
		

		
			11.2Waivers.........................................................................................................................................92
		

		
			11.2.1General.........................................................................................................................92
		

		
			11.2.2Waivers of Rights and Defenses...................................................................................92
		

		
			11.2.3Additional Waivers.......................................................................................................93
		

		
			11.3Deferral of Reimbursement.............................................................................................................93
		

		
			11.4Deferral of Subrogation.................................................................................................................93
		

		
			11.4.1Deferral.......................................................................................................................93
		

		
			11.4.2Effect of Invalidation...................................................................................................93
		

		
			11.5Intentionally Omitted.....................................................................................................................94
		

		
			11.6No Merger...................................................................................................................................94
		

		

		

		 

		

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		12.MORTGAGE LOAN...................................................................................................................................94
		

		
			12.1Compliance With Mortgage Loan Documents...................................................................................94
		

		
			12.2Mortgage Loan Defaults.................................................................................................................94
		

		
			12.3Mortgage Loan Estoppels...............................................................................................................96
		

		
			12.4No Amendment to Mortgage Loan Documents.................................................................................96
		

		
			12.5Acquisition of Mortgage Loan.........................................................................................................96
		

		
			12.6Intentionally Omitted.....................................................................................................................97
		

		
			12.7Refinancing or Prepayment of the Mortgage Loan.............................................................................97
		

		
			
		

		
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			Schedule 1–Index of Other Definitions
		

		
			Schedule 2–Hotel Locations, Mortgage Borrowers, Operating Lessees
		

		
			Schedule 3–Organization of Borrower and Operating Lessee Owner
		

		
			Schedule 4–Definition of Special Purpose Entity
		

		
			Schedule 5–PIP Budgets
		

		
			Schedule 6–PIPs 
		

		
			Schedule 7–Operating Lease
		

		
			Schedule 8–Franchise Agreement
		

		
			Schedule 9–Calculation of UNCF
		

		
			Schedule 10–Approved Press Release
		

		
			Schedule 11(a)–Allocated Loan Amounts
		

		
			Schedule 11(b)–Aggregate Allocated Loan Amounts
		

		
			Schedule 12–Hampton Inn Chelsea Lost Notes
		

		
			Schedule 13–Required Repairs
		

		
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			Exhibit A–Intentionally Omitted
		

		
			Exhibit B–Intentionally Omitted
		

		
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		MEZZANINE LOAN AGREEMENT
		

		
			This MEZZANINE LOAN AGREEMENT (as the same may be modified, supplemented, amended or otherwise changed, this “Agreement”), is made as of April 29, 2016, by and among CINDAT HERSHA OWNER JV ASSOCIATES, LLC, a Delaware limited liability company (together with its permitted successors and assigns, “Borrower”), CINDAT HERSHA LESSEE JV ASSOCIATES, LLC, a Delaware limited liability company (together with its permitted successors and assigns, “Operating Lessee Owner”), and HERSHA MEZZ GAP LENDER, LLC, a Delaware limited liability company (together with its successors and assigns, “Lender”).
		

			
	
			
				 1.
			DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Terms and Definitions
		
			.  The following terms have the meanings set forth below:
		
Key Terms and Definitions
		
			.  
		

		
			“Actual Return Amount” shall mean the aggregate sum actually paid to Agent (on behalf of Lenders) of all interest payments made at the Interest Rate with respect to the Outstanding Principal Balance , in each case excluding, interest at the Default Rate, repayment of Protective Advances, any Late Payment Charges, other fees of Lender or any Affiliate thereof (including, without limitation, the Structuring Fee, the Extension Fee, the Administrative Fee and servicing fees) and any reimbursement or other payment of costs or expenses incurred by Lender required to be reimbursed by Borrower or Operating Lessee Owner to Lender hereunder or under the other Loan Documents.
		

		
			Borrower Representative:  individually and collectively, Cindat Hersha Owner JV LLC and Cindat Hersha Lessee JV LLC, each a Delaware limited liability company.
		

		
			Cindat Entity:  individually and collectively, (i) Cindat Capital Management Limited, a limited company formed under the laws of the Cayman Islands (“Cindat”), (ii) Cindat Manhattan Hotel Portfolio GP Limited, a limited company formed under the laws of the Cayman Islands, (ii) Cindat USA LLC, a Delaware limited liability company (“Cindat USA”),(iii) AT-BCM Management LLC, a Delaware limited liability company and (iv) Cindat Manhattan Hotel Portfolio (US) LLC, a Delaware limited liability company (“Cindat JV Member”).
		

		
			Deposit Bank:  PNC Bank, National Association, or such other bank or depository selected by Lender in its discretion.
		

		
			Guarantor:  Hersha Hospitality Trust, a Maryland real estate investment trust.
		

		
			Interest Rate:  shall mean, for any Interest Period, the Spread plus the greater of (a) LIBOR for such Interest Period and (b) 0.30% (or, when applicable pursuant to this Agreement or any other Loan Document, the Default Rate).
		

		
			Manager:  Hersha Hospitality Management L.P., a Pennsylvania limited partnership, or any successor, assignee or replacement manager appointed by Operating Lessee in accordance with Section 5.11 hereof and Section 5.11 of the Mortgage Loan Agreement.
		

		
			Monthly Debt Service Payment Amount:  shall mean interest on the unpaid Principal accrued and accruing through the last day of the Interest Period.
		

		

		

		 

		

			

		

 

		

			 

		

		Principal:  shall mean the original principal amount of the Loan, or so much thereof as shall from time to time remain outstanding.
		

		
			Property:  individually and collectively, the parcels of real property and Improvements thereon owned by Mortgage Borrower and leased by Operating Lessee and encumbered by the Security Instrument; together with all rights pertaining to such real property and Improvements, and all other collateral for the Loan as more particularly described in the Granting Clauses of the Security Instrument.  The term “Individual Property” refers to each of seven (7) separate parcels of real property and Improvements thereon owned by the applicable Mortgage Borrower and leased by the applicable Operating Lessee that comprise the Property and are encumbered by the Security Instrument; together with all rights pertaining to such real property and Improvements, and all other collateral for the Mortgage Loan owned or leased by such Mortgage Borrower and such Operating Lessee as more particularly described in the Granting Clauses of the Security Instrument.  Each Individual Property is currently improved with a hotel located in New York City, as more particularly described on Schedule 2 attached hereto.
		

		
			Return Differential: an amount equal to the positive difference, if any, between (x) $8,204,068.00, minus (y) the Actual Return Amount.
		

		
			Spread:  9.00%.
		

		
			Stated Maturity Date:  May 9, 2019, as the same may be extended pursuant to Section 2.8.
		
Additional Terms and Definitions
		
			.
		

		
			Affiliate:  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.
		

		
			Aggregate Allocated Loan Amount:  the aggregate senior and mezzanine allocated loan amount indicated on Schedule 11(b) for the applicable Individual Property.
		

		
			Allocated Loan Amount:  the mezzanine allocated loan amount indicated on Schedule 11(a) for the applicable Individual Property.
		

		
			Approved Capital Expenses:  Capital Expenses incurred by Mortgage Borrower or Operating Lessee which are (i) with respect to any Individual Property, no greater than one hundred and five percent (105%) of the amounts included in the approved Capital Budget for such Individual Property for the current calendar month (per line item and in the aggregate) or (ii) approved by Lender and Mortgage Lender.
		

		
			Approved Operating Expenses:  operating expenses incurred by Mortgage Borrower or Operating Lessee which (i) with respect to any Individual Property, are no greater than one hundred and five percent (105%) of the amounts included in the approved Operating Budget for such Individual Property for the current calendar month (per line item and in the aggregate), (ii) are for real estate taxes, insurance premiums, electric, gas, oil, water, sewer or other utility service to any Individual Property, or (iii) have been approved by Lender and Mortgage Lender; provided, however, the fees and any reimbursable expenses payable pursuant to the Asset Management Agreement shall not, under any circumstance, constitute Approved Operating Expenses.  The management fees payable by Mortgage Borrower and Operating Lessee pursuant to the Management Agreement, are acceptable to Lender and shall be deemed to be Approved Operating Expenses.
		

		

		

		 

		

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		Approved PIP Expenses:  Capital Expenses incurred by Mortgage Borrower or Operating Lessee on account of the PIP Project pursuant to the PIP Budget.
		

		
			Asset Management Agreement:  that certain Asset Management Agreement dated on or about the date hereof, among Cindat USA LLC and 44 New England Management Company, each as asset manager thereunder, and Borrower Representative.
		

		
			Available Cash:  “Available Cash” as such quoted term is defined in the Mortgage Loan Agreement.
		

		
			Borrower Company Agreement:  the limited liability company agreement of Borrower.
		

		
			Business Day:  any day other than a Saturday or a Sunday or any day on which commercial banks in New York, New York are authorized or required to close.
		

		
			Capital Expenses:  expenses that are capital in nature or required under GAAP to be capitalized.
		

		
			Cash Management Period:  shall commence upon Lender giving notice to Borrower, Mortgage Lender and Clearing Bank of the occurrence of any of the following:  (i) an Event of Default, (ii) the failure by Borrower or Mortgage Borrower, after the end of a calendar quarter, to maintain a Combined Debt Yield (ANCF) of at least eight and sixty one hundredths percent (8.60%); or (iii) the failure by Borrower or Mortgage Borrower, after the end of a calendar quarter, to maintain a Debt Service Coverage Ratio of at least 1.25:1.00; and shall end upon Lender giving notice to Borrower, Mortgage Lender and the Clearing Bank that the Cash Management Period has ended, which notice Lender shall only be required to give if (1) the Loan and all other obligations under the Loan Documents have been repaid in full, (2) with respect to a Cash Management Period triggered due to clause (i) above, Lender has, in its sole discretion, accepted a cure of such Event of Default hereunder in writing, (3) with respect to a Cash Management Period triggered due to clause (ii) above, for six (6) consecutive months since the commencement of the existing Cash Management Period (A) no Default or Event of Default has occurred, (B) no event that would trigger another Cash Management Period has occurred that is continuing and (C) the Combined Debt Yield (ANCF) is at least equal to or greater than nine and ten and hundredths percent (9.10%), or (4) with respect to a Cash Management Period triggered due to clause (iii) above, for six (6) consecutive months since the commencement of the existing Cash Management Period (A) no Default or Event of Default has occurred, (B) no event that would trigger another Cash Management Period has occurred that is continuing and (C) the Debt Service Coverage Ratio is at least equal to or greater than 1.30:1.00.
		

		
			Clearing Account:  individually and collectively, each of the seven (7) accounts established by Operating Lessee for the benefit of Mortgage Lender at the Clearing Bank for the direct deposit by Tenants (if any) and Credit Card Companies (and the direct deposit by Mortgage Borrower, Operating Lessee or Manager, as applicable) of all Rents for each Individual Property.
		

		
			Clearing Account Agreement:  individually and collectively, each of the seven (7) agreements by and among Mortgage Lender, the applicable Mortgage Borrower, the applicable Operating Lessee and Clearing Bank setting forth such Mortgage Borrower’s, such Operating Lessee’s and Clearing Bank’s obligations relating to the establishment of the applicable Clearing Account and the direct deposit by Tenants (if any) and Credit Card Companies (and the direct deposit by such Mortgage Borrower or such Operating Lessee, as applicable) of all Rents related the applicable Individual Property to such Clearing Account.
		

		

		

		 

		

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		Clearing Bank:  Manufacturers and Traders Trust Company, New York banking corporation, or such other bank selected by Mortgage Borrower and approved by Lender and Mortgage Lender, in their respective sole discretion.
		

		
			Code:  the Internal Revenue Code of 1986, as amended and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.
		

		
			Combined Debt Yield (ANCF):  shall mean, for any date of determination, the percentage obtained by dividing (a) the Net Operating Income for the twelve (12) month period ending with the most recently completed calendar month by (b) the sum of (x) the outstanding principal balance of the Loan, plus (y) the outstanding principal balances of the Mortgage Project Loan and the Mortgage Term Loan, together with any amounts of the Mortgage Project Loan remaining to be advanced under the Mortgage Project Loan Agreement.
		

		
			Combined Debt Yield (UNCF):  shall mean, for any date of determination, the percentage obtained by dividing (a) the UNCF (Underwritten Net Cash Flow) by (b) the sum of (x) the outstanding principal balance of the Loan, plus (y) the outstanding principal balances of the Mortgage Project Loan and the Mortgage Term Loan, together with any amounts of the Mortgage Project Loan remaining to be advanced under the Mortgage Project Loan Agreement.
		

		
			Comfort Letter:  individually and collectively, each of the seven (7) comfort letters, each dated on or about the date hereof, among Lender, the applicable Franchisor and the applicable Operating Lessee, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
		

		
			Collateral:  the Pledged Collateral and all amounts on deposit in any reserve account established under the Loan Documents and any and all other property or collateral in which Lender is granted a security interest under any of the Loan Documents.
		

		
			Contractual Obligation:  as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound, or any provision of the foregoing.
		

		
			Completion:  shall mean the performance and satisfaction by Mortgage Borrower of the PIP Project substantially in accordance with the PIP Budget, in compliance in all material respects with all Legal Requirements, this Agreement, the Mortgage Loan Agreement, the applicable PIP and the applicable Franchise Agreement, and in a good and workmanlike manner, free and clear of liens (inchoate or otherwise) or claims for liens for material supplied or labor or services performed in connection therewith (in each case, other than Permitted Encumbrances).
		

		
			Completion Date:  with respect to each PIP Project, the applicable completion date set forth in the PIP that relates to such PIP Project, as such date may be extended by Franchisor, subject to Section 5.24.3(i) hereof.
		

		
			Control:  with respect to any Person, either (i) ownership, directly or indirectly, of forty–nine percent (49%) or more of all equity interests in such Person or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the ownership of voting securities, by contract or otherwise.
		

		

		

		 

		

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		Credit Card Companies:  shall mean each of the banks, issuers, processors, credit card companies or other entities with which Mortgage Borrower, Manager or Operating Lessee has entered into merchant’s or other credit card or similar agreements with respect to the processing of charge card, credit card, debit card or comparable forms of payment.
		

		
			Debt:  the unpaid Principal, all interest accrued and unpaid thereon, any Return Differential, the Administrative Fee, any Extension Fee (if applicable), any Protective Advances and all other sums due to Lender in respect of the Loan or under any Loan Document.
		

		
			Debt Service:  with respect to any particular period, the scheduled Principal (if any) and interest payments due under the Note in such period.
		

		
			Debt Service Coverage Ratio:  as of any date of determination, the ratio calculated by Lender of (i) the UNCF (Underwritten Net Cash Flow) for the twelve (12) month period ending with the most recently completed calendar month to (ii) the sum of (A) the Debt Service with respect to such period, (B) the “Debt Service” (as such quoted term is defined in the Mortgage Term Loan Agreement) with respect to such period, and (C) the “Debt Service” (as such quoted term is defined in the Mortgage Project Loan Agreement) with respect to such period.
		

		
			Default:  the occurrence of any event under any Loan Document which, with the giving of notice or passage of time, or both, would be an Event of Default.
		

		
			Default Rate:  a rate per annum equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) four percent (4%) above the Interest Rate, compounded monthly.
		

		
			Deposit Account:  the Eligible Account at the Deposit Bank established and controlled by Mortgage Lender to receive Rents from the Clearing Bank that have been deposited into each Clearing Account.
		

		
			Deposit Account Agreement:  that certain agreement by and among Mortgage Lender, Mortgage Borrower, Operating Lessee and Deposit Bank establishing the Deposit Account and setting forth the parties’ obligations relating to the funds transferred from each Clearing Account pursuant to the provisions of the Mortgage Loan Agreement.
		

		
			Eligible Account:  shall mean either (i) an account (A) maintained with the Deposit Bank or another depository institution or trust company; provided the short term unsecured debt obligations or commercial paper of such other depository institution or trust company are rated at least A‐1 (or equivalent) by each Rating Agency 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 and the long term unsecured debt obligations of which are rated at least A+ (or equivalent) by each Rating Agency) or (B) as to which Lender has received a Rating Comfort Letter from each of the applicable Rating Agencies with respect to holding funds in such account or (ii) a segregated trust account maintained with the trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which institution or trust company is subject to regulations 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 is subject to federal and state authority, or any other institution with respect to which Lender has received a Rating Comfort Letter.
		

		
			ERISA:  the Employment Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.
		

		

		

		 

		

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		ERISA Affiliate:  all members of a controlled group of corporations and all trades and business (whether or not incorporated) under common Control and all other entities which, together with Borrower and/or Mortgage Borrower, are treated as a single employer under any or all of Section 414(b), (c), (m) or (o) of the Code.
		

		
			Escrows:  amounts paid by Mortgage Borrower into Subaccounts (as defined in the Mortgage Loan Agreement) established for the purpose of paying Taxes, the premiums for Policies, ground rents, franchise and license fees.
		

		
			Excluded Taxes:  any of the following taxes imposed on or with respect to Lender or required to be withheld or deducted from a payment to Lender, (a) taxes imposed on or measured by net income (however denominated), franchise taxes, and branch profits taxes, in each case, (i) imposed as a result of Lender being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. Federal withholding taxes imposed on amounts payable to or for the account of Lender with respect to the Loan pursuant to a law in effect on the date on which (i) Lender acquires such interest in the Loan or (ii) Lender changes its lending office, except in each case to the extent that pursuant to Section 2.2.3, amounts with respect to such taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changes its applicable lending office, (c) taxes attributable to Lender’s failure to comply with Section 2.2.3 and (d) any U.S. Federal withholding Taxes imposed under FATCA.
		

		
			Extension Fee:  an amount equal to 0.25% of the outstanding principal balance of the Loan as of the commencement of the applicable Extension Term.
		

		
			Eurodollar Business Day:  shall mean a day on which commercial banks are open for general business (including dealings in U.S. Dollar deposits) in London, England.
		

		
			FATCA:  Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.
		

		
			FF&E:  all furniture, furnishings, fixtures, equipment, and soft goods (i.e., sheets, pillows, blankets, bedspreads, curtains, towels or similar items) used in connection with the operation of the Property.
		

		
			Force Majeure:  shall mean  (a) an act of God, war, strikes or similar labor troubles affecting the PIP Project and other similar projects in Manhattan, fire, severe weather, including, without limitation, flood, earthquakes or other casualty directly preventing the performance of the obligations under this Agreement, or (b) United States Secretary of Treasury certified domestic “act of terrorism” directly affecting construction activities in Manhattan, including construction of the PIP Project; provided that, with respect to any of the circumstances described in the foregoing clauses (a) or (b):
		

			
	
			
				 (i)
			for the purposes of this Agreement, any period of Force Majeure shall apply only to such Person’s performance of the obligations necessarily affected by such circumstance and shall continue only so long as such Person is continuously and diligently using all reasonable efforts to minimize the effect and duration thereof;

			
	
			
				 (ii)
			notwithstanding anything to the contrary set forth herein, Force Majeure shall not include the unavailability or insufficiency of funds;

		 

		

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				 (iii)
			notwithstanding anything to the contrary set forth herein, the parties hereto agree that any acts, events or other occurrences that are within the reasonable control of the Borrower, Operating Lessee Owner, any Mortgage Loan Party or any of their Affiliates shall not constitute a Force Majeure hereunder; and

			
	
			
				 (iv)
			Borrower shall have notified (or shall have caused Mortgage Borrower to notify) Lender of any Force Majeure promptly following the occurrence thereof.

		
			Franchise Agreement:  individually and collectively, those certain Franchise Agreements between the applicable Franchisor and the applicable Operating Lessee described on Schedule 8 attached hereto, as each of 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, the Replacement Franchise Agreement executed in accordance with the terms and provisions of this Agreement.
		

		
			Franchisor:  individually and collectively, (A) (i) Holiday Hospitality Franchising, Inc., a Delaware corporation with respect to the Candlewood Suites Times Square, the Holiday Inn Express Times Square, the Holiday Inn Wall Street and the Holiday Inn Express Water Street and (ii) Hilton Franchise Holding LLC, a Delaware limited liability company with respect to the Hampton Inn Times Square South, Hampton Inn Chelsea and the Hampton Inn Herald Square or (B) if the context requires, a Qualified Franchisor.
		

		
			GAAP:  generally accepted accounting principles in the United States of America as of the date of the applicable financial report.
		

		
			Governmental Authority:  any court, board, agency, commission, office or authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) now or hereafter in existence.
		

		
			Hotel Transactions:  collectively, occupancy arrangements for customary hotel transactions in the ordinary course of Mortgage Borrower’s or Operating Lessee’s business conducted at the hotels located at the Property, including, without limitation, nightly rentals (or licensing) of individual hotel rooms or suites, banquet room use and food and beverage services.
		

		
			Hudson Yards Improvement Fund Declaration: individually and collectively, (i) with respect to the Individual Property known as Hampton Inn Times Square South, that certain Hudson Yards District Improvement Fund and Bonus Restrictive Declaration dated April 4, 2007 by Metro Eleven Hotel LLC, as Declarant (predecessor to Borrower) recorded April 19, 2007, under CRFN 2007000203489, (ii) with respect to the Individual Property known as Candlewood Suites Times Square, Hudson Yards District Improvement Fund and Bonus Restrictive Declaration dated April 4, 2007 by Metro Eleven Hotel LLC, as Declarant (predecessor to Borrower) recorded April 19, 2007, under CRFN 2007000203488, and (iii) with respect to the Individual Property known as the Holiday Inn Express Times Square, Hudson Yards District Improvement Fund and Bonus Restrictive Declaration dated April 4, 2007 by M&R Hotel 343 West LLC, as Declarant (predecessor to Borrower) recorded April 19, 2007, under CRFN 2007000203660.
		

		
			Interest Period:  (i) the period from the date hereof through the first day thereafter that is the eighth (8th) day of a calendar month, and (ii) each period thereafter from the ninth (9th) day of each calendar month through the eighth (8th) day of the next calendar month; except that the Interest Period, if any, that would otherwise commence before and end after the Maturity Date shall end on the Maturity Date.  Notwithstanding the foregoing, in the event Mortgage Lender shall have elected to change the date on which scheduled payments under the Mortgage Loan are due, as described in the definition of 
		

		 

		

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		“Payment Date” under the Mortgage Loan Agreement, from and after the effective date of such election, each Interest Period shall commence on the day of each month in which occurs such changed Payment Date under the Mortgage Loan Agreement and end on the day immediately preceding the following Payment Date under the Mortgage Loan Agreement, as so changed.
		

		
			Leases:  all leases and other agreements or arrangements heretofore or hereafter entered into (other than Hotel Transactions) affecting the use, enjoyment or occupancy of, or the conduct of any activity upon or in, the Property, including any guarantees, extensions, renewals, modifications or amendments thereof and all additional remainders, reversions and other rights and estates appurtenant thereunder other than Hotel Transactions.
		

		
			Legal Requirements:  statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities applicable to Borrower, Mortgage Borrower, Operating Lessee Owner, Operating Lessee, any Loan Document, any Mortgage Loan Document, or all or part of the Collateral or the Property or the construction, ownership, use, alteration or operation 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 instrument, either of record or known to Borrower, Mortgage Borrower, Operating Lessee Owner, or Operating Lessee, at any time in force affecting all or part of the Collateral or the Property.
		

		
			LIBOR:  with respect to any Interest Period, the rate per annum which is equal to the rate for deposits in U.S. Dollars, for a period equal to one month, which appears on Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on the related LIBOR Determination Date.  If such interest rate shall cease to be available from Telerate News Service, LIBOR shall be determined from such financial reporting service as Lender shall reasonably determine and use with respect to its other loan facilities on which interest is determined based on LIBOR.  If two or more such rates appear on Reuters Screen LIBOR01 Page or associated pages, the rate in respect of such Interest Period will be the arithmetic mean of such offered rates, absent manifest error.
		

		
			LIBOR Determination Date:  shall mean, with respect to any Interest Period, the date which is two (2) Eurodollar Business Days prior to the fifteenth (15th) day of the calendar month occurring during such Interest Period; provided, however, that Lender may elect once during the Term, in its sole discretion, to change the LIBOR Determination Date upon written notice thereof to Borrower setting forth such changed date, in which event, upon the effective date of such notice, the LIBOR Determination Date hereunder shall be the date set forth therein.
		

		
			Lien:  any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, easement, restrictive covenant, preference, assignment, security interest or any other encumbrance, charge or transfer of, or any agreement to enter into or create any of the foregoing, on or affecting all or any part of the Collateral or the Property or any interest therein, or any direct or indirect interest in Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, excluding therefrom any Permitted REIT Transfer but including 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.
		

		
			Loan:  the loan in the maximum principal amount up to the Loan Amount, to be advanced by Lender to Borrower in accordance with this Agreement.
		

		
			Loan Amount:  $50,000,000.00.
		

		

		

		 

		

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		Loan Budget Amounts:  the portion of the Loan Amount, as set forth on the PIP Budget, to be funded by Loan proceeds for each category of costs as set forth on the PIP Budget.
		

		
			Loan Documents:  this Agreement and all other documents, agreements and instruments now or hereafter evidencing, securing or delivered to Lender in connection with the Loan, including, without limitation, the following, each of which is dated as of the date hereof, unless otherwise indicated:  (i)  Mezzanine Promissory Note made by Borrower to Lender in the principal amount equal to the Loan Amount (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or supplemented from time to time, the “Note”), (ii) the Pledge and Security Agreement (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or supplemented from time to time, the “Borrower Pledge”) made by Borrower in favor of Lender which covers 100% of the membership interests in Mortgage Borrower, (iii) the Pledge and Security Agreement (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or supplemented from time to time, the “Operating Lessee Owner Pledge”; and together with the Borrower Pledge, the “Pledge”) made by Operating Lessee Owner in favor of Lender which covers 100% of the membership interests in Operating Lessee, (iii) the Guaranty of Recourse Obligations made by Guarantor, (iv) the Consent of Manager (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or supplemented from time to time, the “Subordination of Management Agreement”) dated as of the date hereof made by Operating Lessee Owner and Manager to Lender and (v) the Comfort Letters; as each of the foregoing have been or may be (and each of the foregoing defined terms shall refer to such documents as they may be) amended, restated, replaced, supplemented or otherwise modified from time to time.
		

		
			Management Agreement:  individually and collectively, the management agreements between the applicable Operating Lessee and Manager, pursuant to which Manager is to manage each Individual Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with Section 5.11.
		

		
			Material Alteration:  any (i) individual alteration affecting (A) structural elements of any Individual Property, (B) a roof of any Individual Property (but excluding necessary repairs or maintenance of a roof of any Individual Property) or (C) any building system of any Individual Property (but excluding necessary repairs or maintenance of any building system of any Individual Property), or (ii) non-structural alteration affecting an Individual Property the cost of which exceeds $750,000; provided, however, that in no event shall any of the following constitute a Material Alteration (a) any tenant improvement work performed pursuant to any Lease existing on the date hereof or entered into hereafter in accordance with the provisions of this Agreement, (b) alterations performed as part of a Restoration or (c) the work required to be undertaken to achieve Completion, so long as such work is undertaken in accordance with this Agreement.
		

		
			Maturity Date:  the date on which the final payment of principal of the Note becomes due and payable as therein provided, whether at the Stated Maturity Date, by declaration of acceleration, or otherwise.
		

		
			Mortgage Borrower:  individually and collectively, jointly and severally, HCIN Maiden Hotel Associates, LLC, HCIN Water Street Associates, LLC, HCIN Chelsea Grand East Associates, LLC, HCIN Herald Square Associates, LLC, HCIN Duo Three Associates, LLC, HCIN Duo Two Associates, LLC and HCIN Duo One Associates, LLC, each a Delaware limited liability company.
		

		
			Mortgage Borrower Company Agreement:  individually and collectively, the limited liability company agreement of each Mortgage Borrower.
		

		

		

		 

		

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		Mortgage Debt:  individually and collectively, the Mortgage Project Debt and the Mortgage Term Debt.
		

		
			Mortgage Debt Yield (ANCF):  shall mean, for any date of determination, the percentage obtained by dividing (a) the Net Operating Income for the twelve (12) month period ending with the most recently completed calendar month by (b) the sum of the outstanding principal balances of the Mortgage Project Loan and the Mortgage Term Loan, together with any amounts of the Mortgage Project Loan remaining to be advanced under the Mortgage Project Loan Agreement.
		

		
			Mortgage Debt Yield (UNCF):  shall mean, for any date of determination, the percentage obtained by dividing (a) the UNCF (Underwritten Net Cash Flow) by (b) the sum of the outstanding principal balances of the Mortgage Project Loan and the Mortgage Term Loan, together with any amounts of the Loan remaining to be advanced under the Mortgage Project Loan Agreement.
		

		
			Mortgage Guaranty:  the Guaranty of Recourse Obligations dated as of the date hereof, made by Guarantor in favor of Mortgage Lender in connection with the Mortgage Loan, as the same has heretofore and may hereafter be amended, restated, replaced, supplemented or otherwise modified from time to time, with the written consent of Lender.
		

		
			Mortgage Lender:  Natixis Real Estate Capital LLC, a Delaware limited liability company, or any successor or assign.
		

		
			Mortgage Loan:  individual and collectively, the Mortgage Term Loan and the Mortgage Project Loan.
		

		
			Mortgage Loan Agreement:  individual and collectively, the Mortgage Project Loan Agreement and the Mortgage Term Loan Agreement, as each of the same has heretofore and may hereafter be amended, restated, replaced, supplemented or otherwise modified from time to time, with the written consent of Lender.
		

		
			Mortgage Loan Documents:  individual and collectively, the Mortgage Project Loan Documents and the Mortgage Term Loan Documents.
		

		
			Mortgage Loan Event of Default:  an “Event of Default” as such quoted term is defined in the Mortgage Loan Agreement.
		

		
			Mortgage Loan Parties:  individual and collectively, Mortgage Borrower and Operating Lessee.
		

		
			Mortgage Loan Party Company Agreements:  individual and collectively, the Mortgage Borrower Company Agreement and the Operating Lessee Company Agreement.
		

		
			Mortgage Note:  individual and collectively, the Mortgage Project Note and the Mortgage Term Note.
		

		
			Mortgage Project Debt:  the “Debt” as such quoted term is defined in the Mortgage Project Loan Agreement.
		

		
			Mortgage Project Loan:  the $5,000,000.00 project mortgage loan made by Mortgage Lender to Mortgage Borrower in accordance with the Mortgage Project Loan Agreement.
		

		

		

		 

		

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		Mortgage Project Loan Agreement:  the Project Loan Agreement dated as of the date hereof, by and among Mortgage Borrower, Operating Lessee, Mortgage Lender, Compass Bank, an Alabama banking corporation, as documentation agent, and Manufacturers and Traders Trust Company, a New York banking corporation, as syndication agent, as the same has heretofore and may hereafter be amended, restated, replaced, supplemented or otherwise modified from time to time, with the written consent of Lender.
		

		
			Mortgage Project Loan Documents:  the “Loan Documents” as such quoted term is defined in the Mortgage Project Loan Agreement.
		

		
			Mortgage Project Note:  the “Note” as such quoted term is defined in the Mortgage Project Loan Agreement.
		

		
			Mortgage Term Debt:  the “Debt” as such quoted term is defined in the Mortgage Term Loan Agreement.
		

		
			Mortgage Term Loan:  the $280,000,000.00 term mortgage loan made by Mortgage Lender to Mortgage Borrower in accordance with the Mortgage Term Loan Agreement.
		

		
			Mortgage Term Loan Agreement:  the Term Loan Agreement dated as of the date hereof, by and among Mortgage Borrower, Operating Lessee, Mortgage Lender, Compass Bank, an Alabama banking corporation, as documentation agent, and Manufacturers and Traders Trust Company, a New York banking corporation, as syndication agent, as the same has heretofore and may hereafter be amended, restated, replaced, supplemented or otherwise modified from time to time, with the written consent of Lender.
		

		
			Mortgage Term Loan Documents:  the “Loan Documents” as such quoted term is defined in the Mortgage Term Loan Agreement.
		

		
			Mortgage Term Note:  the “Note” as such quoted term is defined in the Mortgage Term Loan Agreement.
		

		
			Net Liquidation Proceeds after Debt Service:  with respect to any Liquidation Event, all amounts paid to or received by or on behalf of Mortgage  Borrower in connection with such Liquidation Event, including, without limitation, proceeds of any sale, refinancing or other disposition or liquidation, less (a) Lender’s and/or Mortgage Lender’s reasonable and actual, out-of-pocket costs incurred in connection with the recovery thereof, (b) the costs incurred by Mortgage  Borrower in connection with a restoration of all or any portion of the Property made in accordance with the Mortgage Loan Documents, (c) amounts required or permitted to be deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to Mortgage Lender, including, without limitation, the amount of any prepayments required pursuant to the Mortgage Loan Documents in connection with any Liquidation Event, (d) in the case of a foreclosure sale, disposition or Transfer of the Property in connection with realization thereon following a Mortgage Loan Event of Default, such reasonable and customary costs and expenses of sale or other disposition (including attorneys’ fees and brokerage commissions), (e) in the case of a foreclosure sale, such costs and expenses incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender shall be entitled to receive reimbursement for under the terms of the Mortgage Loan Documents and (f) in the case of a refinancing of the Mortgage Loan, such costs and expenses (including attorneys’ fees) of such refinancing as shall be reasonably approved by Lender.
		

		

		

		 

		

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		Net Operating Income:  for any period, the actual net operating income of the Property after deducting therefrom deposits to (but not withdrawals from) any reserves required under this Agreement and/or the Mortgage Loan Agreement.
		

		
			Officer’s Certificate:  a certificate delivered to Lender by Borrower which is signed by a senior executive officer of Borrower Representative.
		

		
			Operating Lease:  individually and collectively, those certain Lease Agreements dated on or about the date hereof, between the applicable Mortgage Borrower and the applicable Operating Lessee described on Schedule 7 attached hereto.
		

		
			Operating Lessee:  individually and collectively, jointly and severally, HCIN Maiden Hotel Lessee, LLC, HCIN Water Street Lessee, LLC, HCIN Chelsea Grand East Lessee, LLC, HCIN Herald Square Lessee, LLC, HCIN Duo Three Lessee, LLC, HCIN Duo Two Lessee, LLC and HCIN Duo One Lessee, LLC, each a Delaware limited liability company.
		

		
			Operating Lessee Company Agreement:  individually and collectively, the limited liability company agreement of each Operating Lessee.
		

		
			Operating Lessee Owner Company Agreement:  the limited liability company agreement of Operating Lessee Owner.
		

		
			Other Connection Taxes:  with respect to Lender, taxes imposed as a result of a present or former connection between Lender and the jurisdiction imposing such tax (other than connections arising solely from Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in the Loan or any Loan Document).
		

		
			Payment Date:  the ninth  (9th) day of each calendar month or, if such day is not a Business Day, the immediately preceding Business Day; provided, however, that Mortgage Lender may elect once during the term of the Mortgage Loan, in its sole discretion, to change the date on which scheduled payments are due under the Mortgage Loan upon 30 days prior written notice thereof to Mortgage Borrower setting forth such changed date, in which event, upon the effective date of such notice, the Payment Date hereunder shall be the date set forth in the Mortgage Loan Agreement.
		

		
			Permitted Encumbrances:  (a) with respect to the Property, (i) the Liens created by the Mortgage Loan Documents on the date hereof, (ii)  all Liens and other matters disclosed in the title insurance policy insuring the Lien of the Security Instrument, (iii) Liens, if any, for Taxes or other charges not yet due and payable and not delinquent, (iv) any workers’, mechanics’ or other similar Liens on the Property provided that any such Lien is bonded or discharged within thirty (30) days after Borrower, Operating Lessee Owner or any Mortgage Loan Party first receives notice of such Lien, and (v) such other title and survey exceptions or any other liens or encumbrances as Lender approves in writing in Lender’s discretion, and (b) with respect to the Collateral, the Liens created under the Loan Documents.
		

		
			Permitted Indebtedness:  (a) with respect to the Mortgage Loan Parties and the Property, “Permitted Indebtedness” (as such quoted term is defined in the Mortgage  Loan Agreement), and (b) with respect to Borrower, Operating Lessee Owner and the Collateral, (i) the Debt and (ii) unsecured trade payables incurred in the ordinary course of business relating to the ownership of the Collateral which do not exceed, at any time, a maximum amount of $10,000 and are paid within thirty (30) days of the date incurred.
		

		

		

		 

		

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		Permitted Cindat Transfer: shall mean with respect to Cindat JV Member, the sale, conveyance, transfer, disposition, alienation, hypothecation, pledge or encumbering of all or any portion of the direct or indirect ownership interests in Cindat JV Member, provided, however, that after giving effect to such Permitted Cindat Transfer: (i) Cindat continues to possess, directly or indirectly, the power to direct or cause the direction of the management and policies of Cindat JV Member, through the ownership of voting securities, by  contract or otherwise; (ii) Greg Peng and Erh-Fei Liu continue to Control (under both clauses (i) and (ii) of such definition) Cindat; and (iii) Borrower, Operating Lessee Owner and the Mortgage Loan Parties each continue to be in compliance with Section 5.19 and Section 5.20 hereof.
		

		
			Permitted REIT Transfer:  shall mean (i) with respect to Hersha Hospitality Limited Partnership, a Virginia limited partnership, the sale, conveyance, transfer, disposition, alienation, hypothecation, pledge or encumbering of all or any portion of the direct or indirect ownership interests in such limited partnership, provided,  however, that after such Permitted REIT Transfer (a) such limited partnership shall not be required to file, with respect to the equity interests of such company, periodic reports with the Securities and Exchange Commission under Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, and (b) no Person together with such Person’s Affiliates other than the Guarantor, owns, Controls or holds a lien or pledge on, more than forty-nine percent (49%) of the direct or indirect ownership interests in such limited partnership, and (c) such limited partnership, Borrower, Operating Lessee Owner, the Mortgage Loan Parties and Guarantor each continue to be in compliance with Section 5.19 and Section 5.20 hereof; and (ii) with respect to the Guarantor, the sale, conveyance, transfer, disposition, alienation, hypothecation, pledge or encumbering of all or any portion of the direct or indirect ownership interests in Guarantor, provided,  however, that after such Permitted REIT Transfer (a) Guarantor remains a publicly traded company and (b) Guarantor continues to be in compliance with Section 5.19 and Section 5.20 hereof.
		

		
			Permitted Transfers:  
		

			
	
			
				 (i)
			a Lease entered into in accordance with the Loan Documents and the Mortgage Loan Documents,

			
	
			
				 (v)
			a Permitted Encumbrance,

			
	
			
				 (vi)
			provided that no Default or Event of Default shall then exist, (a) a Transfer of any indirect interest in Borrower or Operating Lessee Owner (other than (1) the direct or indirect membership interest in Borrower or Operating Lessee Owner held by Borrower Representative or (2) the direct interest in the Mortgage Loan Parties held by Borrower and Operating Lessee Owner) or (b) a Transfer of any direct or indirect interest in Borrower Representative to any Person, provided that, in the case of any Transfer described in the preceding clauses (a) or (b) above, (A) prior to a Secondary Market Transaction (1) such Transfer shall not (w) cause the transferee (together with its Affiliates) to acquire Control of Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, (x) cause a change of Control of Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, (y) cause the transferee (together with its Affiliates) to acquire a direct or indirect interest in Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties to an amount which equals or exceeds 49% or (z) result in Guarantor, either by itself or on a unanimous basis with Cindat, no longer possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties through the ownership of voting securities, by contact or otherwise, (2) after giving effect to such Transfer, Guarantor shall continue to own at least 30% of all equity interests (direct or indirect) in Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties, (3) Lender 
		

		 

		

			13

		

 

		

			 

		

			determines in its sole but reasonable discretion that a Rating Comfort Letter would be obtainable had a Secondary Market Transaction occurred, (4) if any such Transfer will result in any Person owning ten percent (10%) or more of the direct and/or indirect equity interests in Borrower, Operating Lessee Owner, any Mortgage Loan Party, the Collateral and/or any Individual Property and such Person owned less than ten percent (10%) of the direct and/or indirect equity interests in Borrower, Operating Lessee Owner, any Mortgage Loan Party, the Collateral and/or such Individual Property as of the closing of the Loan, Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer not less than ten (10) days prior to the date of such Transfer, (5) for any Transfer not described in the preceding clause, (4) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer not less than ten (10) days following the date of such Transfer, (6) such Transfer shall be permitted by the Franchise Agreement, and if and to the extent required, has been consented to in writing by Franchisor, and (7) Borrower shall reimburse Lender for all reasonable out-of-pocket expenses incurred by it in connection with such Transfer and (B) after a Secondary Market Transaction (1) such Transfer shall not (w) cause the transferee (together with its Affiliates) to acquire Control of Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, (x) cause a change of Control of Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, (y) cause the transferee (together with its Affiliates) to acquire a direct or indirect interest in Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties to an amount which equals or exceeds 49%, or (z) result in Guarantor, either by itself or on a unanimous basis with Cindat, no longer possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties through the ownership of voting securities, by contract or otherwise, unless Borrower, at its sole cost and expense, (I) shall have first obtained the prior written consent of Lender (including, if applicable, the consent of the holder(s) of any participation or other interests in the Loan) to such Transfer and (II) shall have first (A) delivered (or caused to be delivered) to Lender, a Rating Comfort Letter, (B) delivered (or caused to be delivered) to Lender and the applicable Rating Agencies, a substantive non consolidation opinion with respect to Borrower in form and substance satisfactory to Lender and the applicable Rating Agencies, and (C) reimbursed Lender for all reasonable out-of-pocket expenses incurred by it in connection with such Transfer, (2) after giving effect to such Transfer, Guarantor shall continue to own at least 30% of all equity interests (direct or indirect) in Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties, (3) such Transfer shall be permitted by the Franchise Agreement, if and to the extent required, has been consented to in writing by Franchisor, (4) if any such Transfer will result in any Person owning ten percent (10%) or more of the direct and/or indirect equity interests in Borrower, Operating Lessee Owner, any Mortgage Loan Party, the Collateral and/or any Individual Property and such Person owned less than ten percent (10%) of the direct and/or indirect equity interests in Borrower, Operating Lessee Owner, any Mortgage Loan Party, the Collateral and/or such Individual Property as of the closing of the Loan, Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer not less than ten (10) days prior to the date of such Transfer and (5) for any Transfer not described in the preceding clause (4) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer not less than ten (10) days following the date of such Transfer,

			
	
			
				 (vii)
			a Permitted REIT Transfer,

			
	
			
				 (viii)
			a Permitted Cindat Transfer,

		 

		

			14

		

 

		

			 

		

			
	
			
				 (ix)
			a Transfer of an Individual Property made in accordance with Section 10.24 hereof and Section 10.24 of the Mortgage Loan Agreement, or

			
	
			
				 (x)
			any other Transfer expressly approved in writing by Lender and Mortgage Lender as a “Permitted Transfer” (such approval to be granted or withheld in Lender’s sole and absolute discretion);

		
			provided, however, that, if any Transfer described in clause (iii) above will result in any Person owning ten percent (10%) or more of the direct or indirect equity interests in Borrower, Operating Lessee and/or any Individual Property and such Person owned less than ten percent (10%) of the direct or indirect equity interests in Borrower, Operating Lessee and/or such Individual Property as of the closing of the Loan, Lender shall have confirmed that such Person satisfies Lender’s (and any Co-Lender’s, if applicable) then applicable institution-wide “Know Your Customer” requirements and that the results of Lender’s (and any Co-Lender’s, if applicable) customary background searches (including, credit, judgment, lien, bankruptcy, UCC and litigation searches) are reasonably acceptable to Lender (and any Co-Lender, if applicable).
		

		
			Notwithstanding the above, or anything elsewhere in this Agreement to the contrary, no Transfers of the direct ownership interests (I) in Borrower, (II) in Operating Lessee Owner, or (III) of Borrower or Operating Lessee Owner in any Mortgage Loan Party shall be permitted (and each of Borrower and Operating Lessee Owner shall, in all events, continue to own 100% of the membership interests in Mortgage Borrower and Operating Lessee, as applicable), except for the pledge of Borrower’s and Operating Lessee Owner’s ownership interests in Mortgage Borrower and Operating Lessee, as applicable, under and pursuant to the Pledge in connection with, and as security for, the Loan.
		

		
			Person:  any individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association, any other person or entity, and 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.
		

		
			PIP:  individually and collectively, the property improvement plans that relate to each Individual Property, which such property improvement plans are attached hereto as Schedule 6.
		

		
			PIP Agreements:  means all material construction agreements, material trade contracts, material purchase orders and other material agreements entered into by Mortgage Borrower or Operating Lessee in connection with the performance of the PIP Project.  For purposes of this definition, “material” shall mean a PIP Agreement involving the payment of $100,000 or more.
		

		
			PIP Budget:  a final and detailed budget(s) to prosecute and complete all components of the PIP Project; Lender acknowledges that it has reviewed and approved the PIP Budget attached hereto as Schedule 5.
		

		
			PIP Project:  collectively, the components of the PIP required to be performed with respect to each applicable Individual Property in accordance with the terms and provisions of this Agreement, the applicable Franchise Agreement for such Individual Property and the applicable PIP for such Individual Property as set forth on Schedule 6 attached hereto.
		

		
			Plan:  (i) an employee benefit or other plan established or maintained by Borrower, Mortgage Borrower or any ERISA Affiliate or to which Borrower, Mortgage Borrower or any ERISA Affiliate makes or is obligated to make contributions and (ii) which is covered by Title IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
		

		

		

		 

		

			15

		

 

		

			 

		

		Pledged Collateral:  collectively, the “Collateral”, the “Pledged Interests” and the “Pledged Certificates” (as each such quoted term is defined in the Pledge).
		

		
			Protective Advances:  all sums advanced by Lender for the purpose of payment of (i) Taxes (including special payments in lieu of Taxes), (ii) maintenance costs, insurance premiums or other items (including capital items and operating expenses) reasonably necessary to preserve, protect, maintain or defend the Property, the Collateral or the Lien (or priority of the Lien) of the Loan Documents and the Mortgage Loan Documents (including, but not limited to, all reasonable attorneys’ fees, costs relating to the entry upon the Property to make repairs and the payment, purchase, contest or compromise of any Lien which in the judgment of Lender appears to be prior or superior to the Security Instrument or the Pledge), respectively, from any intervening lien, forfeiture, casualty, loss, waste, diminution or reduction in value, (iii) curing any default or Mortgage Loan Event of Default under the Mortgage Loan Documents, and (iv) all actual, out-of-pocket costs and expenses incurred by Lender in connection with protecting and preserving the rights and interests of Lender in the Loan and/or the Collateral.
		

		
			Qualified Franchisor:  shall mean either (a) Franchisor or (b) a reputable and experienced franchisor possessing experience in flagging hotel properties similar in size, scope, use and value as the hotels located on the Property as of the date hereof; provided that (1) prior to a Secondary Market Transaction, Borrower shall have obtained the prior written consent of Lender for such Person and (2) after a Secondary Market Transaction, in addition to Lender’s consent, Borrower shall have obtained a Rating Comfort Letter with respect to such franchisor.
		

		
			Qualified Manager:  shall mean either (a) Manager or (b) a reputable and experienced manager (which may be an Affiliate of Borrower, Operating Lessee Owner or the Mortgage Loan Parties) possessing experience in managing hotel properties similar in size, scope, use and value as the hotels located on the Property as of the date hereof; provided that (1) prior to a Secondary Market Transaction, Borrower shall have obtained the prior written consent of Lender for such Person and (2) after a Secondary Market Transaction, in addition to Lender’s consent, Borrower shall have obtained a Rating Comfort Letter with respect to such manager.
		

		
			Rating Agency:  each of Standard & Poor’s Ratings Services, a division of The McGraw–Hill Companies, Inc. (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), and Fitch, Inc. or any other nationally–recognized statistical rating organization to the extent any of the foregoing have been engaged by Lender or Mortgage Lender or its designee in connection with or in anticipation of any Secondary Market Transaction hereunder or under the Mortgage Loan.
		

		
			Rating Comfort Letter:  a letter issued by each of the applicable Rating Agencies which confirms that the taking of the action referenced to therein will not result in any qualification, withdrawal or downgrading of any existing ratings of Securities created in a Secondary Market Transaction.
		

		
			Regulation AB:  shall mean Regulation AB under the Securities Act and the Exchange Act, as such Regulation may be amended from time to time.
		

		
			Related Property:  shall mean a parcel of real property, together with improvements thereon and personal property related thereto, that is “related” within the meaning of the definition of Significant Obligor, to any Individual Property.
		

		
			Release Amount:  one hundred and forty percent (140%) of the Aggregate Allocated Loan Amount for the applicable Individual Property that is the subject of a Release; provided, that, with respect to the last Individual Property remaining as security for the Debt, the Release Amount shall be equal to 
		

		 

		

			16

		

 

		

			 

		

		the remaining outstanding Debt (as defined hereunder, under the Mortgage Term Loan Agreement and under the Mortgage Project Loan Agreement).
		

		
			REMIC Trust:  a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note.
		

		
			Rents:  all rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a Bankruptcy Proceeding) or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and bonuses), income, fees, receivables, receipts, revenues, deposits (including security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other payment and consideration of whatever form or nature received by or paid to or for the account of or benefit of Mortgage Borrower, Operating Lessee, Manager or any of their agents or employees from any and all sources arising from or attributable to the Property, including all revenues and credit card receipts collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and recreational facilities, receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of the Property or rendering of services by Mortgage Borrower, Manager, Operating Lessee or any other operator or manager of the hotels or the commercial space located in the Property or any of their respective agents or employees 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, and 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, trademark and license agreement with a Qualified Franchisor in the same form and substance as the Franchise Agreement, or (b) a franchise, trademark and license agreement with a Qualified Franchisor, which franchise, trademark and license agreement shall be acceptable to Lender in form and substance, provided, with respect to this subclause (b), if a Secondary Market Transaction has occurred, in addition to Lender’s approval, Lender, at its option, may require that Borrower shall have obtained a Rating Comfort Letter with respect to such franchise, trademark and license agreement.
		

		
			Replacements:    Approved Capital Expenses and repairs and replacements to FF&E.
		

		
			Satisfactory Environmental Report:  individually and collectively, Phase I Environmental Site Assessments (together with follow up Phase II Environmental Site Assessments if required by any Phase I Environmental Site Assessment) for each Individual Property in form reasonably acceptable to Lender ordered by Lender at Borrower’s sole cost and expense upon written request to Lender in connection with a requested release from liability in accordance with the last paragraph of Article 4 that (i) is performed by an environmental firm reasonably satisfactory to Lender, (ii) expressly authorizes Lender and its successors and assigns to rely upon such Phase I Environmental Site Assessments (and Phase II Environmental Site Assessments if applicable), (iii) does not limit liability to less than the amount of such environmental firm’s professional liability insurance coverage, (iv) does not identify any environmental conditions that require removal, remediation or cure or violate any Environmental Laws, (v) is dated and describes the environmental condition of each Individual Property as of a date on or about the Release Date and (vi) is performed in accordance with most current version of ASTM “Standard Practice for Environmental Site Assessments:  Phase I Environmental Site Assessment Process (or Phase II Environmental Assessment Process, as applicable)”, ASTM International.
		

		

		

		 

		

			17

		

 

		

			 

		

		Security Documents:  collectively, (i) each Pledge, (ii) each notice of pledge to Mortgage Borrower and Operating Lessee, (iii) all Uniform Commercial Code financing statements required by this Agreement to be filed with respect to the security interests in personal property created pursuant to the other Security Documents and (iv) all other documents and agreements executed or delivered to Lender by Borrower and/or Operating Lessee Owner in connection with any of the foregoing documents.
		

		
			Security Instrument:  individual or collectively, (i) the “Security Instrument” as such quoted term is defined in the Mortgage Project Loan Agreement, and (ii) the “Security Instrument” as such quoted term is defined in the Mortgage Term Loan Agreement.
		

		
			Servicer:  a servicer selected by Lender to service the Loan.
		

		
			Significant Obligor:  shall have the meaning set forth in Item 1101(k) of Regulation AB.
		

		
			State:  the state in which the Property is located.
		

		
			Tax and Insurance Subaccount:  the “Tax and Insurance Subaccount” as such quoted term is defined in the Mortgage Loan Agreement.
		

		
			Taxes:  all real estate and personal property taxes, assessments, water rates or sewer rents, maintenance charges, impositions, vault charges and license fees, now or hereafter levied or assessed or imposed against all or part of the Property.
		

		
			Tenant:  any existing tenant, replacement tenant or proposed tenant under any existing Lease or any proposed Lease (in each case, other than an Operating Lease).
		

		
			Term:  the entire term of this Agreement, which shall expire upon repayment in full of the Debt and full performance of each and every obligation to be performed by Borrower pursuant to the Loan Documents.
		

		
			Tour Desk Leases:  individually and collectively, (i) that certain Tour, Transportation & Theater Desk (Lobby) Lease dated as of January 1, 2015, by and between HHLP Duo One Lessee, LLC, as lessor and Apple Concierge, Inc., as lessee and (ii) that certain Tour, Transportation & Theater Desk (Lobby) Lease dated as of January 1, 2015, by and between HHLP Duo Three Lessee, LLC, as lessor and Apple Concierge, Inc., as lessee.
		

		
			Toxic Mold:  any toxic mold or fungus at the Property which is of a type (i) that might pose a significant risk to human health or the environment or (ii) that would negatively impact the value of the Property.
		

		
			Transfer:  any sale, conveyance, transfer, lease, assignment or any deed-in-lieu of the Property (or any Individual Property) or any portion thereof or the entry into any agreement to sell, convey, transfer, lease, assign or provide a deed-in-lieu of the Property (or any Individual Property), whether by law or otherwise, of, on, in or affecting (i) all or part of any Individual Property (including any legal or beneficial direct or indirect interest therein), (ii) any direct or indirect interest in Borrower, Operating Lessee Owner, Borrower Representative or the Mortgage Loan Parties (including any profit interest), (iii) the direct or indirect right or power to direct or cause the direction of the management and policies of Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, through the ownership of voting securities, by contract or otherwise, or (iv) all or any part of the Collateral including any legal or beneficial direct or indirect interest therein.  Notwithstanding the foregoing, if Borrower, Operating Lessee Owner or any Mortgage Loan Party enters into any agreement (including, without 
		

		 

		

			18

		

 

		

			 

		

		limitation, any letter of intent) to sell, convey or transfer the Collateral or the Property, then the mere entry into such agreement shall not constitute a “Transfer” hereunder so long as Borrower, Operating Lessee Owner or the applicable Mortgage Loan Borrower is not obligated to transfer the applicable portion of the Collateral or the subject Property, unless prior to or concurrently with the closing of the transaction contemplated in such agreement (1) with respect to the sale of an Individual Property and the applicable portion of the Collateral, the terms and provisions of Section 10.24 hereof have been satisfied in full, (2) the Debt is paid in full in accordance with the terms of this Agreement) or (3) Lender otherwise approves such agreement in writing, in its sole and absolute discretion.
		

		
			UCC:  the Uniform Commercial Code as in effect in the State or the state in which any of the Collateral or the Cash Management Accounts are located, as the case may be.
		

		
			UNCF (Underwritten Net Cash Flow):  the stabilized, recurring net cash flow of the Property determined by Lender in its sole discretion, in accordance with the provisions contained in Schedule 9.
		

		
			Uniform System of Accounts:  the most recent edition of the Uniform System of Accounts for the Lodging Industry, as adopted by the American Hotel and Motel Association.
		

		
			Welfare Plan:  an employee welfare benefit plan, as defined in Section 3(1) of ERISA.
		
Index of Other Definitions
		
			.  An index of other terms which are defined in this Agreement or in other Loan Documents is set forth on Schedule 1.  All capitalized terms used herein shall have the respective meanings set forth in Article 1 hereof or, if not defined herein, shall have the meaning ascribed to such terms in the Mortgage Loan Agreement.
		
Principles of Construction
		
			.
		

			
	
			
				 (b)
			Unless otherwise specified, (i) all references to sections and schedules are to those in this Agreement, (ii) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision, (iii) all definitions are equally applicable to the singular and plural forms of the terms defined, (iv) the word “including” means “including but not limited to,” and (v) accounting terms not specifically defined herein shall be construed in accordance with GAAP and the Uniform System of Accounts, as applicable.  For the purposes of this Agreement the phrases “knowledge of” or “awareness of” Borrower or Operating Lessee Owner shall be deemed to include the knowledge or awareness of Mortgage Borrower or Operating Lessee, respectively.

			
	
			
				 (c)
			With respect to references to the Mortgage Loan Documents (including, without limitation, terms defined by cross-reference to the Mortgage Loan Documents), such references shall refer to the Mortgage Loan Documents as in effect on the date of this Agreement (and any such defined terms shall have the definitions set forth in the Mortgage Loan Documents as of the date hereof) and no amendments, restatements, replacements, supplements, waivers or other modifications to or of the Mortgage Loan Documents shall have the effect of changing such references (including, without limitation, any such definitions) for the purposes of this Agreement unless Lender expressly agrees in writing that such references or definitions, as appearing, incorporated into or used in this Agreement, have been revised.

			
	
			
				 (d)
			Notwithstanding anything stated herein to the contrary, any provisions in this Agreement cross-referencing provisions of the Mortgage Loan Documents shall be effective notwithstanding the termination of the Mortgage Loan Documents by payment in full of the Mortgage Loan or otherwise.

		 

		

			19

		

 

		

			 

		

			
	
			
				 (e)
			To the extent that any terms, provisions or definitions of any Mortgage Loan Documents that are incorporated herein by reference are incorporated into the Mortgage Loan Documents by reference to any other document or instrument, such terms, provisions or definitions that are incorporated herein by reference shall at all times be deemed to incorporate each such term, provision and definition of the applicable other document or instrument as the same is set forth in such other document or instrument as of the date hereof, without regard to any amendments, restatements, replacements, supplements, waivers or other modifications to or of such other document or instrument occurring after the date hereof, unless Lender expressly agrees that such term, provision or definition as appearing, incorporated into, or used in this Agreement have been revised.

			
	
			
				 (f)
			The words “Borrower shall cause”, or “Borrower shall not permit” (or words of similar meaning) shall mean “Borrower shall cause Mortgage Borrower” to” or “Borrower shall not permit or suffer Mortgage Borrower to”, as the case may be, to so act or not to so act, as applicable, and the words “Operating Lessee Owner shall cause”, or “Operating Lessee Owner shall not permit” (or words of similar meaning) shall mean “Operating Lessee Owner shall cause Operating Lessee” to” or “Operating Lessee Owner shall not permit or suffer Operating Lessee to”, as the case may be, to so act or not to so act, as applicable.

			
	
			
				 2.
			GENERAL LOAN TERMS

The Loan
		
			.  On the basis of the representations, warranties and covenants made by Borrower in this Agreement, Lender agrees to make the Loan to Borrower in an amount equal to the Loan Amount, to be advanced on the date hereof in a single advance in accordance with the terms and conditions set forth in this Agreement.  Borrower acknowledges receipt of the Loan, the proceeds of which are being and shall be used to (i) repay and discharge any loans secured by or relating to the Collateral, (ii) make a contribution to Mortgage Borrower to refinance the Property or as otherwise specified in Section 2.1 of the Mortgage Loan Agreement, and (iii) pay transaction costs.  Any excess proceeds may be used for any lawful purpose subject to the provisions of the Loan Documents.  No amount borrowed and repaid in respect of the Loan may be reborrowed.
		
Interest; Monthly Payments
		
			.
		
Generally
		
			.  From and after the date hereof, interest on the outstanding and unpaid Principal shall accrue at the Interest Rate and be payable as hereinafter provided.  On the date hereof, Borrower shall pay interest on the unpaid Principal from the date hereof through and including May 8, 2016.  On June 9, 2016 (the “First Payment Date”) and each Payment Date thereafter through and including the Payment Date immediately preceding the Stated Maturity Date, Borrower shall pay an amount equal to the Monthly Debt Service Payment Amount.  The Monthly Debt Service Payment Amount due on any Payment Date shall be applied (x) to the payment of interest accrued on the Note from the scheduled Payment Date preceding the Payment Date on which such Monthly Debt Service Payment Amount is paid through the day of the month immediately preceding the Payment Date on which such Monthly Debt Service Payment Amount is paid, notwithstanding that the actual Payment Date may not have been the scheduled Payment Date because the scheduled Payment Date is not a Business Day and (y) [intentionally omitted].  All accrued and unpaid interest shall be due and payable on the Maturity Date.  If the Loan is repaid on any date other than on a Payment Date (whether prior to or after the Stated Maturity Date), Borrower shall also pay interest that would have accrued on such repaid Principal to but not including the next Payment Date, however, Borrower shall not be required to pay breakage under Section 2.2.5 hereof with respect to such repayment.  In addition, notwithstanding anything to the contrary in this Section 2.2.1, after an Event of Default the provisions of Section 8.2.2 hereof shall apply.
		

		 

		

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Default Rate
		
			.  After the occurrence and during the continuance of an Event of Default, the entire unpaid Principal shall bear interest at the Default Rate, and shall be payable upon demand from time to time, to the extent permitted by applicable law.
		
Taxes
		
			.  Any and all payments by Borrower hereunder and under the other Loan Documents shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding Excluded Taxes (all such non–excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to in this Section 2.2.3 as “Applicable Taxes”).  If Borrower shall be required by law to deduct any Applicable Taxes from or in respect of any sum payable hereunder to Lender, the following shall apply:  (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.2.3), and after deduction for any other taxes imposed on additional sums payable under this Section 2.2.3, Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions and (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.  Payments pursuant to this Section 2.2.3 shall be made within ten (10) days after the date Lender makes written demand therefor.  In the event Lender incurs Applicable Taxes, Borrower shall indemnify, defend and hold Lender harmless for the full amount of any such Applicable Taxes (including any taxes imposed or asserted on or attributable to amounts payable under this Section 2.2.3) payable or paid by Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Applicable Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority in accordance with applicable law.  A certificate as to the amount of such payment or liability delivered to Borrower by Lender shall be conclusive absent manifest error.  Each Lender shall deliver to the Borrower on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower), properly completed and executed copies of IRS Form W-9 or the applicable IRS Form W-8, as applicable.
		
Requirements of Law
		
			.
		

			
	
			
				 (a)
			If any Legal Requirement or any change in the interpretation or application thereof or compliance by Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

			
	
			
				 (i)
			shall subject Lender to any tax of any kind whatsoever with respect to this Agreement, the Note or the Loan (excluding Excluded Taxes) or change the basis of taxation of payments to Lender in respect thereof;

			
	
			
				 (ii)
			shall impose, modify or hold applicable any reserve, special deposit, compulsory advance or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances or other extensions of credit by, or any other acquisition of funds by, any office of Lender which is not otherwise included in the determination of the LIBOR hereunder;

			
	
			
				 (iii)
			shall impose on Lender any other condition;

		
			and the result of any of the foregoing is to increase the cost to Lender, by an amount which Lender deems to be material, of making or maintaining the Loan or to reduce any amount receivable hereunder in respect thereof, then, in any such case, Borrower shall, from time to time, upon receipt of prior written notice of not less than ten (10) Business Days of such fact and a reasonably detailed description of the circumstances, promptly pay Lender such additional amount or amounts as will compensate Lender for 
		

		 

		

			21

		

 

		

			 

		

		such increased cost or reduced amount receivable (provided such additional amounts are not prohibited by such Legal Requirement to be charged back).
		

			
	
			
				 (b)
			If Lender shall have determined that the adoption of or any change in any Legal Requirement regarding capital adequacy or in the interpretation or application thereof or compliance by Lender or any corporation controlling Lender with any request or directive regarding capital adequacy or liquidity (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on Lender’s or such corporation’s capital as a consequence of its obligations hereunder by an amount deemed by Lender to be material (taking into consideration Lender’s or such corporation’s policies with respect to capital adequacy and liquidity), then from time to time, Borrower shall promptly, upon notice from Lender, pay to Lender such additional amount or amounts as will compensate Lender for such reduction (provided such additional amounts are then being charged by Lender to its borrowers under similar loans generally).

			
	
			
				 (c)
			If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.2.4, it shall promptly notify Borrower of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this Section 2.2.4 submitted by Lender to Borrower shall be conclusive absent manifest error.

Breakage Indemnity
		
			.  Borrower shall indemnify Lender against any loss or expense which Lender may actually sustain or incur in liquidating or redeploying deposits from third parties acquired to effect or maintain the Loan or any part thereof as a consequence of (i) any payment or prepayment of the Loan or any portion thereof made on a date other than a Payment Date and (ii) any default in payment or prepayment of the Principal or any part thereof or interest accrued thereon, as and when due and payable (at the date thereof or otherwise, and whether by acceleration or otherwise).  Lender shall deliver to Borrower a statement for any such sums which it is entitled to receive pursuant to this Section 2.2.5, which statement shall be binding and conclusive absent manifest error.  Borrower’s obligations under this Section 2.2.5 are in addition to Borrower’s obligations to pay any Return Differential applicable to a payment or prepayment of Principal.
		
Loan Repayment
		
			.
		
Repayment
		
			.  Borrower shall repay the entire outstanding principal balance of the Note in full on the Maturity Date, together with interest thereon to (but excluding) the date of repayment and any other amounts due and owing under the Loan Documents.  Except during the continuance of an Event of Default, all proceeds of any repayment (including, without limitation, any proceeds of the Interest Rate Protection Agreement paid to Lender), including permitted prepayments, of the Loan, shall be applied by Lender as follows in the following order of priority:  First, accrued and unpaid interest on the Note at the Interest Rate; Second, to the Principal; and Third, to any other amounts then due and owing under the Loan Documents, including the Return Differential.  If prior to the Stated Maturity Date the Debt is accelerated by reason of an Event of Default, then Lender shall be entitled to receive, in addition to the unpaid Principal and accrued interest and other sums due under the Loan Documents, an amount equal to the Return Differential applicable to such prepayment.  During the continuance of an Event of Default, all proceeds of repayment, including any payment or recovery on the Collateral (whether through foreclosure, assignment-in-lieu of foreclosure or otherwise) shall, unless otherwise provided in the Loan Documents, be applied in such order and in such manner as Lender shall elect in Lender’s discretion. In addition, notwithstanding anything to the contrary in this Section 2.3.1, after an Event of Default the provisions of Section 8.2.2 hereof shall apply.
		

		 

		

			22

		

 

		

			 

		

Liquidation Events
		
			.
		

			
	
			
				 (d)
			In the event of (i) any Casualty to all or any portion of the Property (or any Individual Property), (ii) any Condemnation of all or any portion of the Property (or any Individual Property), (iii) a Transfer of the Property (or any Individual Property) in connection with realization thereon following an Event of Default under the Mortgage Loan, including without limitation, a foreclosure sale, (iv) any refinancing of the Property (or any Individual Property) or the Mortgage Loan, or (v) the receipt by Mortgage Borrower of any excess proceeds realized under its owner’s title insurance policy after application of such proceeds by Mortgage Borrower to cure any title defect (each, a “Liquidation Event”), Borrower shall cause such Net Liquidation Proceeds After Debt Service to be paid directly to Lender.  On each date on which Lender actually receives a distribution of Net Liquidation Proceeds After Debt Service, the outstanding principal balance of the Loan shall be prepaid in an amount equal to one hundred percent (100%) of such Net Liquidation Proceeds After Debt Service, together with interest that would have accrued on the Principal prepaid to but not including the next Payment Date other than in connection with a Liquidation Event occurring under subclauses (i), (ii) or (v) above.  Notwithstanding anything to the contrary, any such mandatory prepayment under this Section 2.3.2 shall be subject to the payment of the Return Differential (other than in connection with a Liquidation Event under subclauses (i) or (ii) above of this Section 2.3.2(a)).

			
	
			
				 (e)
			Borrower shall (and shall cause Mortgage Borrower to) promptly notify Lender of any Liquidation Event once Borrower (or Mortgage Borrower) has knowledge of such event.  Borrower (and Mortgage Borrower) shall be deemed to have knowledge of (i) a sale (other than a foreclosure sale) of the Property (or any Individual Property) on the date on which a contract of sale for such sale is entered into, and a foreclosure sale, on the date notice of such foreclosure sale is given to Borrower or Mortgage Borrower, and (ii) a refinancing of the Property (or any Individual Property), on the date on which a commitment, letter of intent, term sheet or similar document for such refinancing has been entered into.  The provisions of this Section 2.3.2 shall not be construed to contravene in any manner the restrictions and other provisions regarding refinancing of the Mortgage Loan or Transfer of the Property (or any Individual Property) set forth in this Agreement and the other Loan Documents and the Mortgage Loan Documents.

Optional Prepayments
		
			.  Borrower shall have the right from time to time to prepay all or any portion of the Principal on any Payment Date provided that Borrower gives Lender at least thirty (30) days prior written notice thereof and such prepayment is accompanied by the applicable pro rata portion of the Return Differential (if applicable) in connection therewith.  If any such prepayment is not made on a Payment Date, Borrower shall also pay interest that would have accrued on such prepaid Principal to but not including the next Payment Date.
		
Intentionally Omitted
		
			.
		
Pro Rata Prepayments & Repayments
		
			.
		

			
	
			
				 (f)
			Notwithstanding anything to the contrary contained in the Loan Documents and the Mortgage Loan Documents, so long as no Mortgage Loan Event of Default exists and is continuing under the Mortgage Loan Documents, Borrower shall cause (and shall cause Mortgage Borrower to cause) all principal prepayments and repayments of the Loan and the Mortgage Loan, including any prepayments or repayments made pursuant to Section 2.8 and Section 10.24 hereof (but excluding (A)(i)(x) any prepayments or repayments of principal made in accordance with Section 2.3.2 of this Agreement, all of which shall be applied by Lender exclusively and wholly in reduction of the Debt under this Agreement, and (y) any prepayments or repayments of principal made in accordance Section 2.3.2 of the Mortgage Loan Agreement, all of which shall be applied by Mortgage Lender exclusively and wholly 
		

		 

		

			23

		

 

		

			 

		

			in reduction of the Mortgage Debt under the Mortgage Loan Agreement, (ii) application of any prepayments or repayments of principal during the continuance of a Mortgage Loan Event of Default, all of which shall be applied by Mortgage Lender exclusively and wholly in reduction of the Mortgage Debt under the Mortgage Loan Agreement, and (iii) any amortization payments with respect to the Mortgage Loan during the Extension Terms (if any) as required pursuant to Section 2.10 of the Mortgage Loan Agreement, all of which shall be applied by Mortgage Lender exclusively and wholly in reduction of the Mortgage Debt under the Mortgage Loan Agreement, (B) any prepayments or repayments of principal made by Borrower to repay protective advances made by Lender, all of which shall be paid over to, and applied by, Lender exclusively and wholly in reduction of the Debt hereunder and (C) any prepayments or repayments of principal made by Mortgage Borrower to repay protective advances made by Mortgage Lender, all of which shall be paid over to, and applied by, Mortgage Lender exclusively and wholly in reduction of the Mortgage Debt under the Mortgage Loan Agreement) to be allocated among the Loan and the Mortgage Loan and applied by Lender and Mortgage Lender pro rata in accordance with the respective then outstanding principal balances of the Loan and the Mortgage Loan (but including, in the case of the Mortgage Project Loan, any amounts thereof remaining to be advanced).  If Borrower, Operating Lessee Owner or any Mortgage Loan Party fails to apply any such principal prepayments or repayments in accordance with this Section 2.3.5(a), each of Borrower and Operating Lessee Owner, on behalf of themselves and the Mortgage Loan Parties, hereby authorizes Lender to pay over to Mortgage Lender for application to the outstanding principal amount of the Mortgage Loan, to the extent of any excess proceeds received by Lender, the amount necessary to cause the prepayment or repayment of the Loan and the Mortgage Loan to be pro rata in accordance with this Section 2.3.5(a) and the same shall be deemed to be a contribution by Borrower to Mortgage Borrower in accordance with the provisions of Section 2.3.5(c) below.

			
	
			
				 (g)
			Each of Borrower and Operating Lessee Owner acknowledges and agrees that (i) each of Borrower and Operating Lessee Owner have been advised that any amounts received by Lender during the continuance of a Mortgage Event of Default are required, pursuant to the Intercreditor Agreement, to be paid by Lender to Mortgage Lender and if such turnover occurs, Lender shall take commercially reasonable efforts to advise Borrower and Operating Lessee Owner of the same, and (ii) in all events, any amounts so turned over by Lender to Mortgage Lender pursuant to the provisions of this Section 2.3.5 shall be (and are deemed to be) payments, prepayments and/or repayments by Mortgage Borrower of the Mortgage Loan and the Mortgage Debt and not payments, prepayments or repayments by Borrower or Operating Lessee Owner of the Loan or the Debt.

			
	
			
				 (h)
			All funds transferred to or for the benefit of Mortgage Lender from Mezzanine Lender in accordance with this Section 2.3.5 and Section 2.3.5 of the Mortgage Loan Agreement are intended by Borrower, to constitute, and shall constitute, capital contributions from Borrower to Mortgage Borrower, and, pursuant to Section 2.3.5(c) of the Mortgage Loan Agreement, Mortgage Borrower acknowledges that any such fund transfers shall be deemed capital contributions to Mortgage Borrower.

			
	
			
				 (i)
			All funds transferred to or for the benefit of Lender from Mortgage Lender in accordance with this Section 2.3.5 and Section 2.3.5 of the Mortgage Loan Agreement are intended by Mortgage Borrower, pursuant to Section 2.3.5(d) of the Mortgage Loan Agreement, to constitute, and shall constitute, distributions from Mortgage Borrower to Borrower, and Borrower acknowledges that any such fund transfers shall be deemed distributions to Borrower.

			
	
			
				 (j)
			No provision of the Loan Documents or the Mortgage Loan Documents shall create a debtor-creditor relationship between Borrower and Operating Lessee Owner, on one hand, and Mortgage Borrower and Operating Lessee, on the other hand.

		 

		

			24

		

 

		

			 

		

			
	
			
				 (k)
			Notwithstanding the foregoing or anything to the contrary herein, nothing in this Section 2.3.5 shall cause Borrower, Operating Lessee Owner, Mortgage Borrower, or Operating Lessee to violate the terms and provisions of Section 5.12,  Schedule 4, or the special purpose entity provisions set forth in each such party’s respective limited liability company agreements

Release of Collateral
		
			.  In addition to any Release which may occur under Section 10.24 hereof, Lender shall further, upon the written request and at the expense of Borrower, upon payment in full of the Debt in accordance herewith, release the Lien of the Loan Documents, release the Lien of the Pledge and release the Lien of the other Security Documents if not theretofore released.
		
Payments and Computations
		
			.
		
Making of Payments
		
			.  Each payment by Borrower shall be made in funds settled through the New York Clearing House Interbank Payments System or other funds immediately available to Lender by 2:00 p.m., New York City time, on the date such payment is due, to Lender by deposit to such account as Lender may designate by written notice to Borrower.  Whenever any such payment shall be stated to be due on a day that is not a Business Day, such payment shall be made on the preceding Business Day.  All such payments shall be made irrespective of, and without any deduction, set–off or counterclaim whatsoever and are payable without relief from valuation and appraisement laws and with all costs and charges incurred in the collection or enforcement thereof, including attorneys’ fees and court costs.
		
Computations
		
			.  Interest payable under the Loan Documents shall be computed on the basis of the actual number of days elapsed over a 360–day year.
		
Late Payment Charge
		
			.  If any Principal, interest or other sum due under any Loan Document (other than the payment of the outstanding Principal balance of the Loan due on the Maturity Date) is not paid by Borrower on the date on which it is due, subject to any applicable grace or cure period, if any, Borrower shall pay to Lender upon demand an amount equal to the lesser of four percent (4%) of such unpaid sum or the maximum amount permitted by applicable law (the “Late Payment Charge”), 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.  Such amount shall be secured by the Loan Documents.
		
Interest Rate Protection Agreements
		
			.
		
Interest Rate Protection Agreement
		
			.  As of the date hereof, Borrower has entered into, made all payments required under, and satisfied all conditions precedent to the effectiveness of, an interest rate protection agreement that satisfies all of the following conditions (such interest rate protection agreement together with (i) any extension thereof or (ii) any other interest rate protection agreement entered into pursuant to Section 2.8, being referred to herein as the “Interest Rate Protection Agreement”):
		

			
	
			
				 (l)
			The Interest Rate Protection Agreement is with a financial institution having a long term, unsecured and unsubordinated debt rating of at least (i) “AA” by S&P and “Aa2” by Moody’s or, (ii) if such financial institution is an Affiliate of Lender or of Natixis Real Estate Capital LLC, “A” by S&P or “A2” by Moody’s; has a term ending no earlier than the Stated Maturity Date; is an interest rate cap in respect of a notional amount not less than the Loan Amount that shall have the effect of capping LIBOR at (x) 3.00% per annum for the period commencing on the date hereof through and including the originally scheduled Stated Maturity Date and (y) the rate set forth in Section 2.8(g) with respect to each 
		

		 

		

			25

		

 

		

			 

		

			Extension Term; and provides that the only obligation of Borrower thereunder is the making of a single payment upon the execution and delivery thereof.

			
	
			
				 (m)
			Borrower’s interest in such Interest Rate Protection Agreement has been assigned to Lender pursuant to documentation satisfactory to Lender in form and substance (it being acknowledged and agreed that if a new assignment of Interest Rate Protection Agreement is required in connection with Section 2.8(g), Lender shall accept documentation in substantially the same form delivered at the origination of the Loan), and the counterparty to such Interest Rate Protection Agreement has executed and delivered to Lender an acknowledgment of such assignment, which acknowledgment shall be satisfactory to Lender in form and substance and, without limitation, shall include such counterparty’s agreement to (i) pay directly to Lender all sums payable by such counterparty pursuant to the Interest Rate Protection Agreement and (ii) if the long term, unsecured and unsubordinated debt rating of such counterparty is downgraded below (1) “A” by S&P or “A2” by Moody’s or, (2) if such counterparty is an Affiliate of Lender or of Natixis Real Estate Capital LLC, “A–” by S&P or “A3” by Moody’s, or if any such rating in the foregoing subclause (1) or (2) is withdrawn or qualified by the applicable Rating Agency, designate a successor counterparty under the Interest Rate Protection Agreement, which successor counterparty shall satisfy the criteria set forth in subsection (a) above and this subsection (b), not later than ten (10) Business Days after any such downgrade, withdrawal or qualification, as applicable, unless, in either case, such counterparty deposits with Lender collateral, in form, value and substance acceptable to Lender in its sole discretion and pursuant to documentation acceptable to Lender in its sole discretion.

			
	
			
				 (n)
			Intentionally Omitted.

			
	
			
				 (o)
			In connection with an Interest Rate Protection Agreement entered into pursuant to Section 2.8, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the counterparty (which counsel may be in–house counsel for the counterparty) (upon which Lender and its successors and assigns and the Rating Agencies may rely) which shall provide, in relevant part, that:

			
	
			
				 (i)
			the counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or organization and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Protection Agreement;

			
	
			
				 (ii)
			the execution and delivery of the Interest Rate Protection Agreement by the counterparty, and any other agreement which the counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by–laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;

			
	
			
				 (iii)
			all consents, authorizations and approvals required for the execution and delivery by the counterparty of the Interest Rate Protection Agreement, and any other agreement which the counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and

			
	
			
				 (iv)
			the Interest Rate Protection Agreement, and any other agreement which the counterparty has executed and delivered pursuant thereto, has been duly executed and 
		

		 

		

			26

		

 

		

			 

		

			delivered by the counterparty and constitutes the legal, valid and binding obligation of the counterparty, enforceable against the counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights 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).

Execution of Documents
		
			.  Borrower shall promptly execute and deliver to the counterparty of the Interest Rate Protection Agreement such confirmations and agreements as may be requested by such counterparty in connection with such Interest Rate Protection Agreement.
		
No Obligation of Lender
		
			.  Borrower agrees that Lender shall not have any obligation, duty or responsibility to Borrower or any other Person by reason of, or in connection with, any Interest Rate Protection Agreement (including any duty to provide or arrange any Interest Rate Protection Agreement, to consent to any mortgage or pledge of the Property or any portion thereof as security for Borrower’s performance of its obligations under any Interest Rate Protection Agreement, or to provide any credit or financial support for the obligations of Borrower or any other Person thereunder or with respect thereto).  No Interest Rate Protection Agreement shall alter, impair, restrict, limit or modify in any respect the obligation of Borrower to pay interest on the Loan as and when the same becomes due and payable in accordance with the provisions of the Loan Documents.
		
Receipts from Interest Rate Protection Agreements
		
			.  All payments made by the counterparty to the Interest Rate Protection Agreement shall be deposited with and held by Lender and applied to the payment of Monthly Debt Service Payment Amount then due and payable.
		
Downgrade of Counterparty
		
			.  Borrower shall cause any counterparty under any Interest Rate Protection Agreement to be replaced with a successor counterparty, which successor counterparty shall satisfy the criteria set forth in Section 2.6.1(a), not later than ten (10) Business Days after the long term unsecured and unsubordinated debt rating of such counterparty is downgraded below (i) “A” by S&P or “A2” by Moody’s or, (ii) if such counterparty is an Affiliate of Lender or of Natixis Real Estate Capital LLC, “A–” by S&P or “A3” by Moody’s, or if any such rating in the foregoing subclause (i) or (ii) is withdrawn or qualified by the applicable Rating Agency, unless, in either case, such counterparty deposits with Lender collateral, in form, value and substance acceptable to Lender in its sole discretion and pursuant to documentation acceptable to Lender in its sole discretion.
		
Intentionally Omitted
		
			.
		
Fees
		
			.
		
Structuring Fee
		
			.  On the date hereof, Borrower shall pay to Lender a loan structuring fee of $500,000.00 (the “Structuring Fee”).
		
Intentionally Omitted
		
			.
		
Administrative Fee
		
			.  Borrower shall pay to Lender an annual loan servicing fee of $15,000.00, which shall be paid to Lender on a monthly basis in equal payments in the amount of $1,250.00 (the “Administrative Fee”).
		
Extension Options
		
			.  Borrower shall have the right to request that Lender (i) extend the Stated Maturity Date (the “First Extension Option”) for a period of twelve (12) months to May 9, 2020 (the “First Extended Stated Maturity Date”) (such period of time, the “First Extension Term”) and (ii) further extend the Stated Maturity Date (the “Second Extension Option” and together with the First 
		

		 

		

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		Extension Option, each individually an “Extension Option” and collectively, the “Extension Options”) for a period of twelve (12) months to May 9, 2021 (the “Second Extended Stated Maturity Date”) (such period of time the “Second Extension Term”; and together with the First Extension Term, each individually an “Extension Term” and collectively, the “Extension Terms”), provided that Borrower shall have previously timely exercised the First Extension Option to extend the Stated Maturity Date to the First Extended Stated Maturity Date in compliance with the terms hereof.  The Stated Maturity Date will be so extended upon the satisfaction of the following conditions:
		

			
	
			
				 (p)
			Borrower shall give Lender its written notice requesting such extension not less than sixty (60) days prior to (i) the originally scheduled Stated Maturity Date with respect to the First Extension Option and (ii) the First Extended Stated Maturity Date with respect to the Second Extension Option;

			
	
			
				 (q)
			no Event of Default exists at the time such request is made and, with respect to the First Extension Option, on the originally scheduled Stated Maturity Date and with respect to the Second Extension Option, the First Extended Stated Maturity Date;

			
	
			
				 (r)
			Borrower delivers to Lender an Officer’s Certificate confirming the accuracy of the information contained in clause (b) above;

			
	
			
				 (s)
			(i) with respect to any PIP Project that is required to be completed as of the date of the commencement of the applicable Extension Term pursuant to the applicable PIP and the applicable Franchise Agreement, Borrower shall (or shall have caused Mortgage Borrower to) have achieved Completion of such PIP Project and (ii) with respect to any PIP Project that is not required to be completed as of the date of the commencement of the applicable Extension Term pursuant to the applicable PIP and the applicable Franchise Agreement, to the extent that Borrower (or Mortgage Borrower) has actually commenced such PIP Project, Borrower (and Mortgage Borrower) shall be in compliance with the construction timelines and milestones set forth in the applicable PIP and the applicable Franchise Agreement and shall be using best efforts to diligently prosecute the Completion of such PIP Project;

			
	
			
				 (t)
			the (A) Mortgage Debt Yield (UNCF) is not less than (i) 11.0% at the time of Borrower’s exercise of the First Extension Option and upon the commencement of the First Extension Term, and (ii) 11.5% at the time of Borrower’s exercise of the Second Extension Option and upon the commencement of the Second Extension Term, and (B) Combined Debt Yield (UNCF) is not less than (i) 9.5% at the time of Borrower’s exercise of the First Extension Option and upon the commencement of the First Extension Term, and (ii) 10.0% at the time of Borrower’s exercise of the Second Extension Option and upon the commencement of the Second Extension Term; provided, that, in the event Borrower fails to satisfy the Debt Yield (UNCF) requirements set forth in this clause (e), Borrower may make a prepayment sufficient to bring the Property into compliance therewith, so long as such prepayment is made in accordance with the terms of this Agreement (including, without limitation, Sections 2.3.3);

			
	
			
				 (u)
			Borrower pays the Extension Fee to Lender not later than the commencement of each Extension Term;

			
	
			
				 (v)
			on or prior to the originally scheduled Stated Maturity Date with respect to the First Extension Option or the First Extended Stated Maturity Date with respect to the Second Extension Option, Borrower either (i) extends the term of the Interest Rate Protection Agreement until the First Extended Stated Maturity Date for the First Extension Option or the Second Extended Stated Maturity Date for the Second Extension Option, or (ii) enters into a new interest rate protection agreement that expires on or after the First Extended Stated Maturity Date for the First Extension Option or the Second 
		

		 

		

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			Extended Stated Maturity Date for the Second Extension Option, and which extension or new agreement that shall have the effect of capping LIBOR at 3.00% per annum (unless if, as of the Stated Maturity Date or First Extension Maturity Date, as applicable, LIBOR is greater than 3.00%, such extension or new agreement shall have a strike price equal to a number, expressed as a percentage, that if inserted as clause (a) of the definition of “Interest Rate” in lieu of existing clauses (a) thereof, would result in a Debt Service Coverage Ratio equal to 1.45:1.00 or greater) and is otherwise on the same terms set forth in Section 2.6.1;

			
	
			
				 (w)
			[intentionally omitted]; and

			
	
			
				 (x)
			Lender shall have received evidence that (i) Mortgage Borrower has satisfied the conditions set forth in Section 2.8 of the Mortgage Term Loan Agreement and that the Mortgage Term Loan has been extended through a date not earlier than First Extended Stated Maturity Date for the First Extension Option or the Second Extended Stated Maturity Date for the Second Extension Option, and (ii) Mortgage Borrower has satisfied the conditions set forth in Section 2.8 of the Mortgage Project Loan Agreement and that the Mortgage Project Loan has been extended through a date not earlier than the First Extended Stated Maturity Date for the First Extension Option or the Second Extended Stated Maturity Date for the Second Extension Option.

		
			If Borrower is unable to satisfy all of the foregoing conditions within the applicable time frames for each, Lender shall have no obligation to extend the Stated Maturity Date hereunder.
		
Certain Payments
		
			.  Notwithstanding anything to the contrary contained in this Agreement, in connection with and for the purposes of any payment or prepayment of all or any portion of the Loan pursuant to Sections 2.2.1,  2.3.2 or 2.3.3 on any date after the Payment Date and prior to the LIBOR Determination Date with respect to the next succeeding Interest Period, LIBOR shall be determined as of the Eurodollar Business Day immediately preceding the date of such payment or prepayment and Lender shall thereafter, reasonably promptly after the occurrence of such next succeeding LIBOR Determination Date, make any necessary adjustment in the amount actually required to be paid or prepaid based upon LIBOR as determined on such next succeeding LIBOR Determination Date.
		

			
	
			
				 3.
			CASH MANAGEMENT AND RESERVES

Cash Management Arrangements
		
			.
		

			
	
			
				 (a)
			Borrower and Operating Lessee Owner shall cause the Mortgage Loan Parties to establish and maintain each Clearing Account with the Clearing Bank pursuant to each Clearing Account Agreement.

			
	
			
				 (b)
			Borrower and Operating Lessee Owner shall cause the Mortgage Loan Parties to establish and maintain the Deposit Account with the Deposit Bank pursuant to the Deposit Account Agreement and otherwise comply with the provisions of Article 3 of the Mortgage Loan Agreement.  Funds deposited into each Clearing Account shall be swept by the Clearing Bank on a daily basis into the Deposit Account and applied and disbursed in accordance with the Mortgage Loan Agreement.  Neither Borrower nor Operating Lessee Owner shall permit any Mortgage Loan Party to amend the terms of any Clearing Account Agreement or the Deposit Account Agreement without the prior written consent of Lender.

			
	
			
				 (c)
			In addition to the foregoing, Borrower and Operating Owner Lessee shall cause the Mortgage Loan Parties to deposit and maintain each of the Subaccounts (as defined in the Mortgage Loan Agreement) as more particularly set forth in the Mortgage Loan Agreement and to perform and 
		

		 

		

			29

		

 

		

			 

		

			comply with all the terms and provisions relating thereto.  Borrower and Operating Lessee Owner shall cause the Mortgage Loan Parties to pay all costs and expenses incurred in maintaining the Cash Management Accounts.

Reserves
		
			.  If at any time during the Term, Mortgage Lender is not requiring the Mortgage Loan Parties to make the required deposits pursuant to Article 3 of the Mortgage Loan Agreement of Escrows or other reserves or has otherwise waived any such Escrows or other reserves, or if the Mortgage Loan shall have been repaid in full, and such Escrows and reserves are not required under any new mortgage financing, then Lender shall have the right, at its option, to require Borrower and Operating Lessee Owner to enter into new clearing account agreements and a new deposit account agreement substantially similar to the arrangements entered into between the Mortgage Lender and the Mortgage Loan Parties on the date hereof and otherwise in form and substance reasonably acceptable to Borrower, Operating Lessee Owner and Lender, and to establish and maintain all accounts (and subaccounts) required thereunder for the benefit of Lender, and thereafter to make all deposits required by the Mortgage Loan Agreement on the date hereof, with all funds deposited in such accounts (or subaccounts) to be disbursed by Lender substantially in accordance with applicable terms and provisions of the Mortgage Loan Agreement.
		
Cash Collateral Reserve
		
			.  Following the commencement, and at all times during the continuance, of a Cash Management Period, all Available Cash, if any, shall be deposited with Lender which shall be transferred to into an account designated by Lender (the “Cash Collateral Reserve Account”) unless such Available Cash is being held in the Cash Collateral Reserve Subaccount (as defined in the Mortgage Loan Agreement) pursuant to and in accordance the Mortgage Loan Agreement.  All funds deposited into the Cash Collateral Reserve Account shall be held by Lender as additional security for the Debt and neither Borrower nor Operating Lessee Owner shall have any right to receive any disbursements therefrom.  Notwithstanding the foregoing, upon the termination of any Cash Management Period, no further deposits shall be made into the Cash Collateral Reserve Account and, provided that no Event of Default has occurred and is continuing and no other Cash Management Period is then in effect, all funds then on deposit in the Cash Collateral Reserve Subaccount shall be promptly paid to Operating Lessee Owner (or as Borrower or Operating Lessee Owner may otherwise elect in writing to Lender).
		
Grant of Security Interest; Application of Funds
		
			.  As security for payment of the Debt and the performance by Borrower and Operating Lessee Owner of all other terms, conditions and provisions of the Loan Documents, Borrower and Operating Lessee Owner each hereby pledge and assign to Lender, and grant to Lender a security interest in, all of Borrower’s and Operating Lessee Owner’s right, title and interest in and to (i) all payments to or monies held in the Cash Collateral Reserve Account and all other accounts and subaccounts thereof created pursuant to this Agreement (including any accounts and subaccounts created pursuant to Section 3.2) (collectively, the “Cash Management Accounts”), and (ii) the Cash Management Accounts.  Borrower and Operating Lessee Owner each hereby grant to Lender a continuing security interest in, and agree to hold in trust for the benefit of Lender, all such amounts in its possession prior to the (i) payment of such amounts to Lender or (ii) deposit of such amounts into the applicable Cash Management Account.  Neither Borrower nor Operating Lessee Owner shall, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in any Cash Management Account, or permit any Lien to attach thereto, or any levy to be made thereon, or any UCC Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.  This Agreement is, among other things, intended by the parties to be a security agreement for purposes of the UCC.  Upon the occurrence and during the continuance of an Event of Default, Lender may apply any sums in any Cash Management Account in any order and in any manner as Lender shall elect in Lender’s discretion without seeking the appointment of a receiver and without adversely affecting the rights of Lender to foreclose the Lien of the Pledge or 
		

		 

		

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		exercise its other rights under the Loan Documents.  Cash Management Accounts shall not constitute trust funds and may not be commingled with other monies held by Lender.  Borrower shall be entitled to receive on a semi–annual basis interest on any balance in the Cash Management Accounts other than subaccounts established for the collection of Escrows at a rate equal to the U.S. and Regional Composite National Bank Average Retail Savings Money Market CD Yield, from time to time.  Upon repayment in full of the Debt, all remaining funds in the Cash Management Accounts, if any, shall be promptly disbursed to Borrower.
		
Distributions from the Mortgage Loan Parties
		
			.  All funds transferred to or for the benefit of Lender pursuant to this Agreement, the Mortgage Loan Agreement or any of the other Loan Documents or Mortgage Loan Documents are intended by Borrower, Operating Lessee Owner and the Mortgage Loan Parties to constitute, and shall constitute, distributions from Mortgage Borrower to Borrower, and from Operating Lessee to Operating Lessee Owner, as applicable.  No provision of the Loan Documents or the Mortgage Loan Documents shall create a debtor-creditor relationship between Borrower and Operating Lessee Owner, on one hand, and Mortgage Borrower and Operating Lessee, on the other hand.
		
REPRESENTATIONS AND WARRANTIES
		
			.  Each of Borrower and Operating Lessee Owner represents and warrants to Lender as of the date hereof that:
		
Organization; Special Purpose
		
			.  Each of Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties has been duly organized and is validly existing and in good standing under the laws of the state of its formation, with requisite power and authority, and all rights, licenses, permits and authorizations, governmental or otherwise, necessary to own its properties and to transact the business in which it is now engaged.  Each of Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties is duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified in connection with its properties, business and operations.  Each of Borrower, Operating Lessee Owner and the Mortgage Loan Parties is a Special Purpose Entity.
		
Proceedings; Enforceability
		
			.  Each of Borrower and Operating Lessee Owner has taken all necessary action to authorize the execution, delivery and performance of the Loan Documents.  The Loan Documents have been duly executed and delivered by Borrower and Operating Lessee Owner and constitute legal, valid and binding obligations of Borrower and Operating Lessee Owner enforceable against Borrower and Operating Lessee Owner in accordance with their respective terms, subject to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and general principles of equity.  The Loan Documents are not subject to, and none of Borrower, Operating Lessee Owner or any Mortgage Loan Party has asserted, any right of rescission, set–off, counterclaim or defense, including the defense of usury.  No exercise of any of the terms of the Loan Documents, or any right thereunder (in accordance with applicable law), will render any Loan Document unenforceable.
		
No Conflicts
		
			.  The execution, delivery and performance of the Loan Documents by Borrower and Operating Lessee Owner and the transactions contemplated hereby 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 (other than pursuant to the Loan Documents) upon any of the property of Borrower, Operating Lessee Owner or any Mortgage Loan Party pursuant to the terms of, any agreement or instrument to which Borrower, Operating Lessee Owner or any Mortgage Loan Party is a party or by which its respective property 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, Operating Lessee Owner any Mortgage Loan Party or any of their respective properties.  Borrower’s, Operating Lessee Owner’s and/or Mortgage Loan Parties’ rights under the 
		

		 

		

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		Licenses, the Franchise Agreement and the Management Agreement will not be adversely affected by the execution and delivery of the Loan Documents or the Mortgage Loan Documents, Borrower’s, Operating Lessee’s or Mortgage Loan Parties’ performance thereunder, the recordation of the Security Instrument, or the exercise of any remedies by Lender or Mortgage Lender.  Any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Borrower or Operating Lessee Owner of the Loan Documents has been obtained and is in full force and effect or required for the execution, delivery and performance by the Mortgage Loan Parties of the Mortgage Loan Documents has been obtained and is in full force and effect.
		
Litigation
		
			.  There are no actions, suits or other proceedings at law or in equity by or before any Governmental Authority now pending or, to Borrower’s knowledge, threatened against or affecting Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, or to the Borrower’s knowledge, the Property or the Collateral, which, if adversely determined, would be reasonably likely to materially adversely affect the condition (financial or otherwise) or business of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or to the Borrower’s knowledge, the condition or ownership of the Property or the Collateral.
		
Agreements
		
			.  None of Borrower, Operating Lessee Owner or any Mortgage Loan Party is a party to any agreement or instrument or subject to any restriction which would be reasonably likely to adversely affect Borrower, Operating Lessee Owner, any Mortgage Loan Party, the Property or the Collateral, or Borrower’s, Operating Lessee Owner’s or any Mortgage Loan Party’s business, properties, operations or condition, financial or otherwise.  None of Borrower, Operating Lessee Owner or any Mortgage Loan Party is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or the Property or the Collateral is bound.
		
Title
		
			.  Borrower and Operating Lessee Owner, as applicable, is the record owner of and has good title to the Collateral, free and clear of all Liens whatsoever (other than the Liens created by the Loan Documents).  Mortgage Borrower has good, marketable and indefeasible title in fee to the real property and good title to the balance of the Property not owned by Operating Lessee, free and clear of all Liens except the Permitted Encumbrances.  Operating Lessee has good, marketable and indefeasible leasehold title to the real property and good title to the balance of the Property owned by Operating Lessee and not owned by Borrower, free and clear of all Liens except the Permitted Encumbrances.  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 in connection with the Collateral and the transfer of the Property to Mortgage Borrower have been paid.  The Security Instrument when properly recorded in the appropriate records, together with any UCC Financing Statements required to be filed in connection therewith, will create a valid, perfected first priority lien on Mortgage Borrower’s and Operating Lessee’s respective interests in the Property and (ii) to the extent that a security interest can be created therein under the UCC, valid and perfected first priority 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.  All mortgage, recording, stamp, intangible or other similar taxes required to be paid by any Person under applicable Legal Requirements in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Mortgage Loan Documents have been paid.  The Pledge, together with any UCC Financing Statements required to be filed in connection therewith, will create a valid, perfected first priority Lien on and perfected security interest in Borrower’s and Operating Lessee Owner’s interest in the Pledged Collateral.  All mortgage, recording or other similar taxes required to be paid by any Person under applicable Legal Requirements in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including the Security Documents, have been paid.  The Permitted Encumbrances do not materially adversely affect the value, operation or use of the 
		

		 

		

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		Collateral or Borrower’s ability to repay the Loan, or the Property, or Mortgage Borrower’s ability to repay the Mortgage Loan.  No Condemnation or other proceeding has been commenced or, to Borrower’s, Operating Lessee Owner’s, or any Mortgage Loan Party’s actual knowledge, is contemplated with respect to all or part of the Property or for the relocation of roadways providing access to the Property.  There are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Mortgage Loan Documents.  To the actual knowledge of Borrower, there are no outstanding options to purchase or rights of first refusal affecting all or any portion of the Property or the Collateral.  To Borrower’s knowledge, the surveys for the Property delivered to Lender do not fail to reflect any material matter affecting the Property or the title thereto.  Based solely on and subject to any disclosures in any of the surveys of the Property delivered to Lender, all of the Improvements included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvement on an adjoining property encroaches upon the Property, and no easement or other encumbrance upon the Property encroaches upon any of the Improvements, except those insured against by the title insurance policy insuring the Lien of the Security Instrument.  Each parcel comprising the Property is a separate tax lot and is not a portion of any other tax lot that is not a part of the Property.  To Borrower’s knowledge, there are no pending or proposed special or other assessments for public improvements or otherwise affecting the Property, or any contemplated improvements to the Property that may result in such special or other assessments.
		
No Bankruptcy Filing
		
			.  None of Borrower, Operating Lessee Owner or any Mortgage Loan Party is contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency law or the liquidation of all or a major portion of its property (a “Bankruptcy Proceeding”), and none of Borrower, Operating Lessee Owner or any Mortgage Loan Party has any knowledge of any Person contemplating the filing of any such petition against Borrower, Operating Lessee Owner or any Mortgage Loan Party.  In addition, neither Borrower nor Borrower Representative nor Operating Lessee Owner nor the Mortgage Loan Parties nor any principal nor Affiliate of any of the foregoing has been a party to, or the subject of a Bankruptcy Proceeding for the past ten years.
		
Full and Accurate Disclosure
		
			.  No statement of fact made by Borrower or Operating Lessee Owner in any Loan Document contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained therein not misleading.  There is no material fact presently known to Borrower or Operating Lessee Owner that has not been disclosed to Lender which adversely affects, or, as far as Borrower or Operating Lessee Owner can foresee, would be reasonably likely to adversely affect, the Property, the Collateral or the business, operations or condition (financial or otherwise) of Borrower, Operating Lessee Owner or any Mortgage Loan Party, except any material facts disclosed in any third party reports or assessments of the Collateral or any of the Property obtained by or delivered to Lender in connection with the closing of the Loan that have not been shared with Borrower, Operating Lessee Owner and the Mortgage Loan Parties.  All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Lender by or on behalf of Borrower or Operating Lessee Owner in respect of Borrower, Operating Lessee Owner, the Mortgage Loan Parties, the Collateral and the Property (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of  Borrower, Operating Lessee Owner, the Mortgage Loan Parties, the Collateral and the Property as of the date of such reports, and (iii) to the extent prepared by an independent certified public accounting firm, have been prepared in accordance with GAAP and the Uniform System of Accounts, as applicable, consistently applied throughout the periods covered, except as disclosed therein.  None of Borrower, Operating Lessee Owner or any Mortgage Loan Party has any contingent liabilities, liabilities for taxes, unrealized or anticipated losses from any unfavorable commitments or any liabilities or obligations not expressly permitted by this Agreement.  Since the date of the most recent financial statements delivered to Lender, there has been no materially adverse change in the financial condition, operations or business of Borrower, Operating Lessee Owner, any Mortgage Loan Party, the Collateral or the Property from that set forth in said financial statements.
		

		 

		

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No Plan Assets
		
			.  None of Borrower, Operating Lessee Owner or any Mortgage Loan Party 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, Operating Lessee Owner or any Mortgage Loan Party constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3–101.
		
Compliance
		
			.  To Borrower’s and Operating Lessee Owner’s knowledge, and except as disclosed in any third party reports or assessments of any of the Property obtained by or delivered to Lender in connection with the closing of the Loan, (i) Borrower, Operating Lessee Owner, each Mortgage Loan Party, the Collateral and the Property and the use thereof comply in all material respects with all applicable Legal Requirements (including with respect to parking and applicable zoning and land use laws, regulations and ordinances) and (ii) none of Borrower, Operating Lessee Owner or any Mortgage Loan Party is in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority, the violation of which would be reasonably likely to materially adversely affect the condition (financial or otherwise) or business of Borrower, Operating Lessee Owner or any Mortgage Loan Party.  Each Individual Property is used exclusively for hotel and other appurtenant and related uses.  Except as disclosed in any third party reports or assessments of any of the Property obtained by or delivered to Lender in connection with the closing of the Loan, in the event that all or any part of the Improvements are destroyed or damaged, said Improvements can be legally reconstructed to their condition prior to such damage or destruction, and thereafter exist for the same use without violating any zoning or other ordinances applicable thereto and without the necessity of obtaining any variances or special permits or if the improvements are legal nonconforming, Mortgage Borrower has in place “Ordinance or Law Coverage” in form and amounts required by Lender.  No legal proceedings are pending or, to the actual knowledge of Borrower and Operating Lessee Owner’s knowledge, threatened with respect to the zoning of the Property.  Neither the zoning nor any other right to construct, use or operate any Individual Property is in any way dependent upon or related to any property other than such Individual Property.  To Borrower’s and Operating Lessee Owner’s knowledge, all certifications, permits, licenses and approvals, including, without limitation, certificates of completion, occupancy permits and liquor licenses required for the legal use, occupancy and operation of the Property (collectively, the “Licenses”), have been obtained and are in full force and effect.  To Borrower’s and Operating Lessee Owner’s knowledge, the use being made of each Individual Property is in conformity with the certificate of occupancy issued for such Individual Property and all other restrictions, covenants and conditions affecting such Individual Property.  All permits, licenses and approvals required by Governmental Authorities and all Legal Requirements that are necessary to commence and perform the PIP to Completion have been obtained and are in full force and effect.  The PIP Project does not contemplate any alterations to the exterior or structural elements of the buildings located on the Property.  Upon Completion of the PIP Project, to Borrower’s knowledge, the Individual Property associated with such PIP Project will comply with all applicable Legal Requirements (including, without limitation, all applicable zoning laws, all applicable administrative ordinance and code requirements).
		
Contracts
		
			.  There are no material service, maintenance or repair contracts affecting the Property that are not terminable on one month’s notice or less without cause and without penalty or premium (for purposes of this sentence (and this sentence only), the term “material” means a contract having annual payments in excess of $35,000 or a term of greater than one year).  All service, maintenance or repair contracts affecting the Property have been entered into at arms–length in the ordinary course of Operating Lessee’s business and provide for the payment of fees in amounts and upon terms comparable to existing market rates.
		
Federal Reserve Regulations; Investment Company Act
		
			.  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 that would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for 
		

		 

		

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		any purpose prohibited by Legal Requirements or any Loan Document.  None of Borrower or any Mortgage Borrower is (i) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (ii) 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 2005, as amended; or (iii) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
		
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 it for its intended uses.  All public utilities necessary or convenient to the full use and enjoyment of each Individual Property are located in the public right–of–way abutting such Individual Property, and all such utilities are connected so as to serve such Individual Property without passing over other property absent a valid easement.  All roads necessary for the use of each Individual Property for its current purpose have been completed and dedicated to public use and accepted by all Governmental Authorities.
		
Physical Condition
		
			.  Except as disclosed in the property condition reports delivered to Lender in connection with the closing of the Loan, to Borrower’s and Operating Lessee Owner’s knowledge, the Property, including all Improvements, parking facilities, systems, Equipment and landscaping, are in good condition, order and repair in all material respects; there exists no structural or other material defect or damages to the Property, whether latent or otherwise.  None of Borrower, Operating Lessee Owner or any Mortgage Loan Party has received notice from any insurance company or bonding company of any defect or inadequacy in the Property, or any part thereof, which would adversely affect its insurability or cause the imposition of extraordinary premiums or charges thereon or any termination of any policy of insurance or bond.  No portion of the Property is located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards.
		
Leases
		
			.  There are no Leases affecting the use, enjoyment or occupancy of, or the conduct of any activity upon or in, the Property or the Improvements, or any portion(s) thereof, other than the Operating Leases and the Tour Desk Leases.  Borrower has delivered (or caused Mortgage Borrower to deliver) to Lender true, correct and complete copies of the Tour Desk Leases.  The Tour Desk Leases are terminable on ninety (90) days’ notice without cause and without penalty or premium.  The lessees under the Tour Desk Leases have accepted possession of and are in occupancy of all of their respective demised premises, have commenced the payment of rent under the Tour Desk Leases, and there are no offsets, claims or defenses to the enforcement thereof.  All rents due and payable under the Tour Desk Leases have been paid and no portion thereof has been paid for any period more than one (1) month in advance.  No lessee has made any claim against the lessor under any Tour Desk Lease which remains outstanding there are no defaults on the part of the lessor under any Tour Desk Lease, and no event has occurred which, with the giving of notice or passage of time, or both, would constitute such a default.  There is no present material default by the lessee under any Tour Desk Lease.  The Tour Desk Leases do not contain any option to purchase or right of first refusal to purchase the Property or any part thereof.  Other than the Operating Lessee and the lessees under the Tour Desk Leases, there are no tenants or any other Persons (other than hotel guests) with any rights to use or occupy the Property or the Improvements, or any portion(s) thereof. Neither the Leases nor the Rents have been assigned or pledged except to Mortgage Lender in accordance with the Mortgage Loan Documents, and no other Person has any interest therein except the Tenants thereunder.
		
Fraudulent Transfer
		
			.  Neither Borrower nor Operating Lessee Owner has entered into the Loan or any Loan Document with the actual intent to hinder, delay, or defraud any creditor, and Borrower and Operating Lessee Owner have received reasonably equivalent value in exchange for their obligations under the Loan Documents.  Giving effect to the transactions contemplated by the Loan 
		

		 

		

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		Documents, the fair saleable value of Borrower’s assets exceeds and will, immediately following the execution and delivery of the Loan Documents, exceed Borrower’s total liabilities, including subordinated, unliquidated, disputed or contingent liabilities, including the maximum amount of its contingent liabilities or its debts as such debts become absolute and matured.  Borrower’s assets do not and, immediately following the execution and delivery of the Loan Documents will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted.  Borrower does not intend to, and does not believe that it will, incur debts and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of Borrower).
		
Ownership of Borrower
		
			.  The organizational chart attached hereto as Schedule 3 is complete and accurate and illustrates all Persons who have a ten percent (10%) or greater direct or indirect ownership interest in Borrower, Operating Lessee Owner and each Mortgage Loan Party.
		
Management Agreement
		
			.  The Management Agreement is in full force and effect.  There is no default, breach or violation existing thereunder, and no event has occurred (other than payments due but not yet delinquent) that, with the passage of time or the giving of notice, or both, would constitute a default, breach or violation thereunder, by either party thereto.  Pursuant to and as provided in the Subordination of Management Agreement, the management fees are subordinate to the Loan Documents.  Hersha Hospitality Management L.P. is not an affiliate of Borrower, Operating Lessee Owner, any Mortgage Loan Party or Guarantor.
		
Hazardous Substances
		
			.  Except as otherwise disclosed in those certain phase I environmental reports delivered to Lender in connection with the closing of the Loan (collectively, the “Environmental Reports”), (i) to the knowledge of Borrower and Operating Lessee Owner, the Property is not in violation of any Legal Requirement pertaining to or imposing liability or standards of conduct concerning environmental regulation, contamination or clean–up, including the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Emergency Planning and Community Right–to–Know Act of 1986, the Hazardous Substances Transportation Act, the Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic Substance Control Act, the Safe Drinking Water Act, the Occupational Safety and Health Act, any Legal Requirements relating to Toxic Mold, any state super–lien and environmental clean–up statutes, any local law requiring related permits and licenses, any common law relating to Toxic Mold or other Hazardous Substances, and all amendments to and regulations in respect of the foregoing laws (collectively, “Environmental Laws”); (ii) the Property is not subject to any private or governmental Lien or judicial or administrative notice or action or inquiry, investigation or claim relating to hazardous, toxic or dangerous substances, including, without limitation, Toxic Mold, or any other substances or materials which are included under or regulated by Environmental Laws (collectively, “Hazardous Substances”); (iii) to the knowledge of Borrower and Operating Lessee Owner after due inquiry, no Hazardous Substances are or have been (including the period prior to Mortgage Borrower’s acquisition of the Property), discharged, released, generated, treated, disposed of or stored on, incorporated in, or removed or transported from the Property other than in compliance with all Environmental Laws; (iv) to the knowledge of Borrower and Operating Lessee Owner after due inquiry, no Hazardous Substances are present in, on or under any nearby real property which could migrate to or otherwise affect the Property; (v) to the knowledge of Borrower and Operating Lessee Owner, no underground storage tanks exist on the Property and the Property has never been used as a landfill; and (vi) there have been no environmental investigations, studies, audits, reviews or other analyses conducted by or on behalf of Borrower or Operating Lessee Owner which have not been provided to Lender.
		
Principal Place of Business
		
			.  The principal place of business of Borrower is its primary address for notices as set forth in Section 6.1 and the principal place of business of Mortgage Borrower is 
		

		 

		

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		its primary address for notices set forth in Section 6.1 of the Mortgage Loan Agreement, and except for the hotels located on the Property and the registered office of Borrower and Mortgage Borrower in the State of Delaware as provided for in its certificate of formation filed with the Secretary of State of the State of Delaware, neither Borrower nor Mortgage Borrower has any other place of business.  The principal place of business of Operating Lessee Owner is its primary address for notices as set forth in Section 6.1 and the principal place of business for Operating Lessee is its primary address for notices as set forth in Section 6.1 of the Mortgage Loan Agreement, and except for the hotels located on the Property and the registered office of Operating Lessee Owner and Operating Lessee in the State of Delaware as provided for in its certificate of formation filed with the Secretary of State of the State of Delaware, neither Operating Lessee Owner nor Operating Lessee has any other place of business.
		
Other Debt
		
			.  There is no indebtedness with respect to the Property, the Collateral or any indebtedness secured by excess cash flow or any residual interest therein, whether secured or unsecured, other than Permitted Encumbrances and Permitted Indebtedness.
		
Embargoed Person
		
			.  None of the funds or assets of Borrower, Borrower Representative, Guarantor, any Cindat Entity, Operating Lessee Owner or the Mortgage Loan Parties, as applicable, constitute property of, or are beneficially owned directly or, to Borrower’s and Operating Lessee Owner’s best knowledge, indirectly, by any Embargoed Person (as hereinafter defined) and no Embargoed Person has any direct interest, and to Borrower’s and Operating Lessee Owner’s best knowledge, as of the date hereof, based upon reasonable inquiry by Borrower and Operating Lessee Owner, indirect interest, of any nature whatsoever in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor, any Cindat Entity or the Mortgage Loan Parties, as applicable, with the result that the investment in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor, any Cindat Entity or the Mortgage Loan Parties, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.
		
Anti–Money Laundering
		
			.  None of the funds of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor, any Cindat Entity or the Mortgage Loan Parties, as applicable, that are used to consummate this transaction are derived from or are the proceeds of any unlawful activity, with the result that the investment in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor, any Cindat Entity or the Mortgage Loan Parties, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law or may cause any of the Property to be subject to forfeiture or seizure.  Borrower has ascertained the identity of all persons and entities that have provided funds to capitalize Borrower and has conducted verification procedures which are sufficient to establish the identity and source of such funds.
		
Operating Lease
		
			.  Operating Lessee Owner has delivered (or has caused Operating Lessee to deliver) to Lender a true, correct and complete copy of the Operating Lease; (i) the Operating Lease is in full force and effect and has not been modified, amended or assigned, (ii) neither Operating Lessee nor Mortgage Borrower is in default under any of the terms, covenants or provisions of the Operating Lease and Operating Lessee Owner knows of no event which, but for the passage of time or the giving of notice or both, would constitute a default under the Operating Lease, (iii) none of Operating Lessee Owner, Borrower or any Mortgage Loan Party has commenced any action or given or received any notice for the purpose of terminating the Operating Lease and (iv) all sums due and payable to Operating Lessee or to Mortgage Borrower under the Operating Lease have been (or will timely be) paid in full.
		
Franchise Agreement
		
			.  Operating Lessee Owner has delivered (or has caused Operating Lessee to deliver) to Lender true, correct and complete copies of the Franchise Agreement and the PIP.  Operating Lessee Owner represents and warrants to Lender that:  (i) the Franchise Agreement is in full 
		

		 

		

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		force and effect; (ii) neither Operating Lessee Owner nor Operating Lessee has previously received or delivered any notice of material default under the Franchise Agreement or the PIP which has not been cured within applicable notice and/or cure periods; (iii) no material default by Operating Lessee or Franchisor currently exists under the Franchise Agreement or the PIP, nor is Operating Lessee Owner aware of any event or condition which if not cured within applicable notice and/or cure periods would result in Operating Lessee or Franchisor being in material default of the Franchise Agreement or the PIP; (iv) with respect to each Individual Property, the applicable Franchise Agreement and the applicable PIP (if any) set forth the entire agreement between the applicable Franchisor and the applicable Operating Lessee concerning such Individual Property, or any portion thereof, and there are no other agreements, written or oral, to which such Franchisor and such Operating Lessee are parties concerning such Individual Property, or any portion thereof other than the Comfort Letter; (v) other than the PIP Project which shall be performed in accordance with the applicable PIP and this Agreement, Operating Lessee Owner has performed (or has caused Operating Lessee to perform) all capital or other property improvements currently required to be performed by the franchisee under the Franchise Agreement; (viii) other than the PIP and except as expressly set forth in the Franchise Agreement, neither Operating Lessee Owner nor Operating Lessee has received any notice from Franchisor or any of its subsidiaries or affiliates of any capital or other property improvements or property improvement plans required under the Franchise Agreement; (ix) neither Operating Lessee Owner nor Operating Lessee has any knowledge of any capital or other property improvements which Franchisor is contemplating or considering requiring to be performed by the franchisee under the Franchise Agreement in the future; and (x) neither the Franchise Agreement nor the PIP has been modified, changed, supplemented, altered or amended and Operating Lessee has not released any of its rights or remedies under the Franchise Agreement, in any respect, either orally or in writing.  As between Lender, Operating Lessee Owner and Operating Lessee, on one hand, and Borrower and Mortgage Borrower on the other hand, to the extent of any conflict or inconsistency among the provisions of the Loan Documents and the Mortgage Loan Documents, on one hand, and the Franchise Agreement or any other similar document on the other hand, the provisions of the Loan Documents and the Mortgage Loan Documents shall control.
		
Labor Agreements
		
			.  There are no:  (A) collective bargaining agreements and/or other labor agreements  to which Borrower, Operating Lessee or any Mortgage Loan Party is a party or by which either of the foregoing is or may be bound; (B) employment, profit sharing, deferred compensation, bonus, stock option, stock purchase, pension, retainer, consulting, retirement, health, welfare, or incentive plans and/or contracts to which Borrower, Operating Lessee Owner, any Mortgage Loan Party or by which any of the foregoing is or may be bound, or (C) plans and/or agreements under which “fringe benefits” (including, but not limited to, vacation plans or programs, and related or similar dental or medical plans or programs, and related or similar benefits) are afforded to employees of Borrower, Operating Lessee Owner or any Mortgage Loan Party. None of Borrower, Operating Lessee Owner or any Mortgage Loan Party has violated any applicable laws, rules and regulations relating to the employment of labor, including those relating to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by appropriate Governmental Authorities.
		
Pledged Collateral
		
			.
		

			
	
			
				 (d)
			Borrower and Operating Lessee Owner, as applicable, is the sole beneficial owner of the Pledged Collateral and no Lien exists or will exist (except the applicable Permitted Encumbrances) upon the Pledged Collateral at any time (and no right or option to acquire the same exists in favor of any other Person). The Pledged Collateral is not and will not be subject to any contractual restriction upon the Transfer thereof (except for any such restriction contained in the Pledge).

			
	
			
				 (e)
			The chief place of business of Borrower and Operating Lessee Owner and the offices where Borrower and Operating Lessee Owner keep their records concerning the Pledged 
		

		 

		

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			Collateral will be located at all times at the addresses specified as Borrower’s and Operating Lessee Owner’s addresses in Section 6.1.

			
	
			
				 (f)
			The Pledged Certificates (as defined in the Pledge) have been duly authorized and validly issued and are fully paid and non-assessable and are not subject to any options to purchase or similar rights of any Person.

			
	
			
				 (g)
			The Security Documents create a valid security interest in the Pledged Collateral, securing the payment of the Debt, and upon the delivery to Lender of the Pledged Certificates (as defined in the Pledge) and the filing in the appropriate filing offices of the UCC Financing Statements authorized to be filed pursuant to this Agreement or the Pledge, such security interests will be perfected, first priority security interests, and all filing and other actions necessary to perfect such security interests will have been duly taken.  Upon the exercise of its rights and remedies under the Pledge, Lender and/or its designee will succeed to all of the rights, titles and interest of Borrower in Mortgage Borrower and of Operating Lessee Owner in Operating Lessee, in each case, without the consent of any other Person and will, without the consent of any other Person, be admitted as the sole member in Mortgage Borrower and Operating Lessee, as applicable.

Contractual Obligations
		
			.  Other than the Loan Documents, the Borrower Company Agreement, the Operating Lessee Owner Company Agreement and each Mortgage Loan Party Company Agreement, as of the date of this Agreement, neither Borrower nor Operating Lessee Owner is subject to any Contractual Obligations and has not entered into any agreement, instrument or undertaking by which it or its assets are bound or incurred any indebtedness, and prior to the date of this Agreement.  Neither Borrower nor Operating Lessee Owner has entered into any Contractual Obligation, or any agreement, instrument or undertaking by which it or its respective assets are bound or incurred any indebtedness.
		
Mortgage Loan Representations
		
			.  The Mortgage Term Loan has been fully advanced and the outstanding principal balance of the Mortgage Term Loan, as of the date hereof, is $280,000,000.00.  The outstanding principal balance of the Mortgage Project Loan, as of the date hereof, is $0.00 and the unadvanced principal balance of the Mortgage Loan is $5,000,000.00.  No Default, breach, violation or Event of Default has occurred under the Mortgage Loan Documents which remains uncured or unwaived.  All of the representations and warranties contained in the Mortgage Loan Documents are true, correct, complete and accurate as of the date hereof and are hereby incorporated into this Agreement and deemed made hereunder as and when made thereunder and shall remain incorporated herein without regard to any waiver, amendment or other modification thereof by Mortgage Lender or to whether the related Mortgage Loan Document has been repaid or otherwise terminated, unless otherwise consented to in writing by Lender.
		
Hudson Yards Improvement Fund Deposits
		
			.  The following amounts have been paid on or prior to the date hereof pursuant to and in accordance with the Hudson Yards Improvement Fund Declaration: (i) $3,200,788.80 with respect to the Individual Property known as the Holiday Inn Express Times Square, (ii) $3,413,557.14 with respect to the Individual Property known as Candlewood Suites Times Square, and (iii) $2,979,502.06 with respect to the Individual Property known as Hampton Inn Times Square South.
		
Tax Matters
		
			.  To the extent required, Borrower, Operating Lessee Owner, each Mortgage Borrower, each Operating Lessee, and any subsidiary of any of them has timely filed (or has obtained effective extensions for filing) all federal, state and local tax returns and reports required to be filed by such Persons and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by such Persons.  None of Borrower, Operating Lessee Owner, any Mortgage Borrower or any Operating Lessee is or will at any time be treated for applicable 
		

		 

		

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		income tax purposes other than as a partnership or disregarded entity pursuant to Treasury Regulation 301.7701-3(b)(1)(ii).
		
Required Sponsor Equity
		
			.  As of the date hereof, direct and indirect investors in Borrower have collectively contributed to Borrower and invested in the Property at least $240,000,000.00 of new cash equity in the aggregate (which shall be comprised of non-borrowed cash and not any imputed or "marked-up" equity).
		

		
			All of the representations and warranties in this Article 4 and elsewhere in the Loan Documents (i) shall survive for so long as any portion of the Debt remains owing to Lender and (ii) shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf, provided, however, that the representations, warranties and covenants set forth in Section 4.19 shall survive in perpetuity.  Notwithstanding anything to the contrary contained herein, the representations, warranties and covenants set forth in Section 4.19 shall expire upon the fifth (5th) anniversary of (x) the indefeasible repayment in full of the Debt or (y) the date that Lender acquires title to the Property by foreclosure, deed in lieu of foreclosure or similar proceeding (the “Release Date”), provided that at the time of such Release Date, Lender receives a Satisfactory Environmental Report, and further provided that such termination of liability under such Section 4.19 shall not apply to any claims that have been asserted by any Person prior to such fifth (5th) year anniversary.
		
COVENANTS
		
			.  Until the end of the Term, Borrower and Operating Lessee Owner each hereby covenant and agree with Lender that:
		
Existence
		
			.  Each of Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties shall (i) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, and franchises, (ii) continue to engage in the business presently conducted by it, (iii) obtain and maintain all Licenses (and, with respect to the Individual Property known as the Holiday Inn Wall Street, Borrower and Operating Lessee Owner shall diligently prosecute and secure (or cause the Mortgage Loan Parties to diligently prosecute and secure) a permanent certificate of occupancy in accordance with applicable Legal Requirements), and (iv) qualify to do business and remain in good standing under the laws of each jurisdiction, in each case as and to the extent required for the ownership, maintenance, management and operation of the Collateral and the Property, as applicable.
		
Taxes
		
			.  Borrower shall pay (or cause to be paid) all Taxes as the same become due and payable, and deliver to Lender receipts for payment or other evidence satisfactory to Lender that the Taxes have been so paid no later than thirty (30) days before they would be delinquent if not paid (provided, however, that Borrower need not pay (or cause to be paid) such Taxes nor furnish (nor cause Mortgage Borrower to furnish) such receipts for payment of Taxes that will be paid by Mortgage Lender pursuant to Section 3.3 of the Mortgage Loan Agreement).  Borrower shall promptly pay (or cause to be paid), all franchise fees, income taxes and other impositions and taxes imposed by Governmental Authorities on Mortgage Borrower.  Borrower shall not suffer and shall promptly cause to be paid and discharged, or cause Mortgage Borrower to pay and discharge, any Lien against the Property (other than Permitted Encumbrances or Liens resulting solely from Mortgage Lender’s failure to apply funds on deposit in the Tax and Insurance Subaccount to the payment of Taxes, provided that sufficient funds are on deposit in the Tax and Insurance Subaccount to pay such Taxes in full and the disbursement conditions set forth in Section 3.3 of the Mortgage Loan Agreement have been satisfied in full), and shall promptly pay (or cause Mortgage Borrower to pay) for all utility services provided to the Property.  Notwithstanding the foregoing, after prior notice to Lender, Borrower may, or may cause Mortgage Borrower to, at Borrower’s or Mortgage Borrower’s own expense, contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity 
		

		 

		

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		or application of any Taxes, provided that (i) no Event of Default has occurred and is continuing, (ii) such proceeding shall suspend the collection of the Taxes, (iii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower or Mortgage Borrower is subject, and shall not constitute a default thereunder, (iv) no part of or interest in the Property will be in danger of being sold, forfeited, terminated, canceled or lost, (v) Borrower or Mortgage Borrower shall have furnished such security as may be required in the proceeding, or as may be requested by Lender, to insure the payment of any such Taxes, together with all interest and penalties thereon, which shall not be less than one hundred twenty–five percent (125%) of the Taxes being contested, and (vi) Borrower shall promptly upon final determination thereof pay, or cause Mortgage Borrower to pay, the amount of such Taxes, together with all costs, interest and penalties.  Lender may pay over any such security or part thereof held by Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender, the entitlement of such claimant is established or all or a portion of the Property is under imminent threat of being lost as a result of such unresolved claim.  Borrower shall not be required to provide any security described in clause (v) above to the extent same is furnished by Mortgage Borrower pursuant to the Mortgage Loan Documents.
		
Repairs; Maintenance and Compliance; Alterations
		
			.
		
Repairs; Maintenance and Compliance
		
			.  Borrower and Operating Lessee Owner shall, or shall cause Mortgage Borrower and Operating Lessee to, at all times maintain, preserve and protect all franchises and trade names owned by Borrower, Operating Lessee Owner and the Mortgage Loan Parties, and Borrower shall cause (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to cause) the Property to be maintained in a good and safe condition and repair and shall not, and shall not permit Operating Lessee Owner or any Mortgage Loan Party to, remove, demolish or alter the Improvements or Equipment (except for the PIP Project performed in accordance with this Agreement, alterations performed in accordance with Section 5.3.2 and Section 5.3.2 of the Mortgage Loan Agreement and normal replacement of Equipment with Equipment of equivalent value and functionality).  Borrower shall promptly comply (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to promptly comply) with all Legal Requirements and promptly cure properly any violation of a Legal Requirement.  Borrower shall notify (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to notify) Lender in writing within five (5) Business Days after any of them first receives notice of any such non–compliance.  Borrower shall promptly repair, replace or rebuild (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to promptly repair, replace or rebuild) any part of the Property that becomes damaged, worn or dilapidated and shall complete and pay (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to complete and pay) for any Improvements at any time in the process of construction or repair.
		
Alterations
		
			.  Notwithstanding Section 5.3.1, Borrower or Operating Lessee Owner may, without Lender’s consent, perform, or cause the Mortgage Loan Parties to perform, alterations to the Improvements and Equipment which (i) do not constitute a Material Alteration, (ii) do not adversely affect Borrower’s, Operating Lessee Owner’s or any Mortgage Loan Party’s financial condition or the value or Net Operating Income of the Property and (iii) are in the ordinary course of Borrower’s,  Operating Lessee Owner’s or any Mortgage Loan Party’s business.  Neither Borrower nor Operating Lessee Owner shall perform, nor permit any Mortgage Loan Party to perform, any Material Alteration without Lender’s prior written consent, which consent shall not be unreasonably withheld or delayed; provided, however, that Lender may, in its sole and absolute discretion, withhold consent to any alteration the cost of which is reasonably estimated to exceed $1,500,000 with respect to any Individual Property or which is likely to result in a decrease of Net Operating Income by two and one–half percent (2.5%) or more for a period of thirty (30) days or longer.  Lender may, as a condition to giving its consent to a Material Alteration, require that Borrower and Operating Lessee Owner deliver to Lender security for payment of the cost of such Material Alteration in an amount equal to one hundred twenty–five percent 
		

		 

		

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		(125%) of the cost of the Material Alteration as estimated by Lender, provided such requirement shall be waived if such security is provided to Mortgage Lender pursuant to the Mortgage Loan Documents.  Upon substantial completion of the Material Alteration, Borrower or Operating Lessee Owner shall (or shall cause the Mortgage Loan Parties to) provide evidence satisfactory to Lender that (i) the Material Alteration was constructed in a good and workmanlike manner and in accordance with applicable Legal Requirements and substantially in accordance with plans and specifications approved by Lender (which approval shall not be unreasonably withheld or delayed), (ii) all contractors, subcontractors, materialmen and professionals who provided work, materials or services in connection with the Material Alteration have been paid in full and have delivered unconditional releases of lien (except with respect to Permitted Encumbrances) and (iii) all material Licenses necessary for the use, operation and occupancy of the Material Alteration (other than those which depend on the performance of Tenant improvement work) have been issued.  Borrower shall (or shall cause Mortgage Borrower to) reimburse Lender upon demand for all out–of–pocket reasonable costs and expenses (including the reasonable fees of any architect, engineer or other professional engaged by Lender) incurred by Lender in reviewing plans and specifications or in making any determinations necessary to implement the provisions of this Section 5.3.2.
		
Performance of Other Agreements
		
			.  Borrower and Operating Lessee Owner shall observe and perform (and cause each Mortgage Loan Party to observe and perform) each and every term to be observed or performed by such party pursuant to the terms of any agreement or instrument affecting or pertaining to the Collateral or the Property, including the Loan Documents and the Mortgage Loan Documents.
		
Cooperate in Legal Proceedings
		
			.  Borrower and Operating Lessee Owner shall (and shall cause each Mortgage Loan Party to) cooperate fully with Lender with respect to, and permit Lender, at its option, to participate in, any proceedings before any Governmental Authority which may in any way affect the rights of Lender under any Loan Document.
		
Further Assurances
		
			.  Borrower shall (or shall cause Operating Lessee Owner and each Mortgage Loan Party to), at Borrower’s sole cost and expense, (i) unless the same would result in a breach of the Mortgage Loan Documents by any Mortgage Loan Party, execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve or protect the collateral at any time securing or intended to secure the Debt or for the better and more effective carrying out of the intents and purposes of the Loan Documents, as Lender may reasonably require from time to time, including, without limitation, the execution and delivery of all such writings necessary to transfer any liquor licenses with respect to the Property into the name of Lender or its designee after the occurrence and during the continuance of an Event of Default; and (ii) upon Lender’s request therefor given from time to time after the occurrence and during the continuance of any Default or Event of Default pay for (a) reports of UCC, federal tax lien, state tax lien, judgment and pending litigation searches with respect to Borrower, Operating Lessee Owner, Borrower Representative and the Mortgage Loan Parties and (b) searches of title to the Collateral and the Property, each such search to be conducted by search firms reasonably designated by Lender in each of the locations reasonably designated by Lender.
		
Environmental Matters
		
			.
		
Hazardous Substances
		
			.  So long as Mortgage Borrower owns or is in possession of the Property, Borrower and Operating Lessee Owner shall, or shall cause the Mortgage Loan Parties to, (i) keep the Property free from Hazardous Substances (except such customary types and quantities thereof that are used, handled and stored in compliance in all material respects with all Environmental Laws for the normal operation of the Property as hotels) and in compliance with all Environmental Laws, (ii) 
		

		 

		

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		promptly notify Lender if Borrower, Operating Lessee Owner or any Mortgage Loan Party shall become aware that (A) any Hazardous Substance is on or near the Property (other than Hazardous Substances permitted under subsection (i) above), (B) the Property is in violation of any Environmental Laws or (C) any condition on or near the Property might pose a threat to the health, safety or welfare of humans and (iii) remove such Hazardous Substances or cure such violations or remove such threats, as applicable, as required by law (or as shall be required by Lender in the case of removal which is not required by law, but in response to the opinion of a licensed hydrogeologist, licensed environmental engineer or other qualified environmental consulting firm engaged by Lender (“Lender’s Consultant”) is required), promptly after Borrower, Operating Lessee Owner or any Mortgage Loan Party becomes aware of same, at Borrower’s or Mortgage Borrower’s sole expense.  Any removal, remediation or cure of any violation relating to Toxic Mold shall include, without limitation, all acts required to clean and disinfect any portions of the Property affected by Toxic Mold and to eliminate the source(s) of Toxic Mold in or on the Property, including providing any necessary moisture control systems at the Property. Nothing herein shall prevent Borrower, Operating Lessee Owner or any Mortgage Loan Party from recovering such expenses from any other party that may be liable for such removal, remediation or cure.
		
Environmental Monitoring
		
			.
		

			
	
			
				 (h)
			Borrower shall (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to) give prompt written notice to Lender of (i) any proceeding or inquiry by any party (including any Governmental Authority) with respect to the presence of any Hazardous Substance on, under, from or about the Property, (ii) all claims made or threatened by any third party in writing (including any Governmental Authority) against Borrower, Operating Lessee Owner, any Mortgage Loan Party or the Property (or any other party occupying the Property, to the extent that Borrower, Operating Lessee Owner or any Mortgage Loan Party has received a copy of such claim) relating to any loss or injury resulting from any Hazardous Substance, and (iii) Borrower’s, Operating Lessee Owner’s or any Mortgage Loan Party’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could reasonably be expected to cause the Property to be subject to any investigation, remediation or cleanup pursuant to any Environmental Law.  Borrower and Operating Lessee Owner shall permit (and shall cause the Mortgage Loan Parties to permit) Lender to join and participate in, as a party if it so elects, any legal or administrative proceedings or other actions initiated with respect to the Property in connection with any Environmental Law or Hazardous Substance, and Borrower shall pay all out-of-pocket reasonable attorneys’ fees and disbursements incurred by Lender in connection therewith.

			
	
			
				 (i)
			At any time and from time to time, within thirty (30) days following Lender’s written request, Borrower shall (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to) provide a Phase I environmental assessment of the Property performed in accordance with the most current version of ASTM “Standard Practice for Environmental Site Assessments:  Phase I Environmental Site Assessment Process”, ASTM International, prepared by a licensed hydrogeologist, licensed environmental engineer or qualified environmental consulting firm approved by Lender (in its reasonable discretion) assessing the presence or absence of Hazardous Substances on, in or under the Property (or near the Property and Lender, in consultation with Lender’s Consultant, reasonably determines that the same poses a threat to the Property), and if Lender in its good faith judgment determines that reasonable cause exists for the performance of such Phase I environmental assessment, then the reasonable out-of-pocket cost and expense thereof shall be paid by Borrower or Mortgage Borrower. If such Phase I recommends a Phase II assessment, Borrower shall (or shall cause Mortgage Borrower to), at Borrower’s or Mortgage Borrower’s expense, obtain such Phase II assessment, which assessment may include soil borings and ground water monitoring.  If Borrower fails (or shall fail to cause Operating Lessee Owner or the Mortgage Loan Parties) to commence any such environmental assessments within five (5) days after such request or deliver the same within thirty (30) days after such request, Lender may order same, and Borrower and Operating Lessee Owner hereby grant, and shall cause each Mortgage Loan Party to grant, 
		

		 

		

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			to Lender and its employees and agents access to the Property and a license to undertake such environmental assessments.

			
	
			
				 (j)
			If any environmental site assessment report of the Property recommends that an operations and maintenance plan be implemented for any Hazardous Substance, whether such Hazardous Substance existed prior to the ownership of the Property by Mortgage Borrower, or presently exists or is reasonably suspected of existing, Borrower shall (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to) cause such operations and maintenance plan to be prepared and implemented at its expense upon request of Lender.  If any investigation, site monitoring, containment, cleanup, removal, restoration or other work of any kind is required under an applicable Environmental Law (“Remedial Work”), Borrower shall commence (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to commence) all such Remedial Work within thirty (30) days after written demand by Lender and thereafter diligently prosecute to completion all such Remedial Work within such period of time as may be required under applicable law.  All Remedial Work shall be performed by licensed contractors approved in advance by Lender and under the supervision of a consulting engineer approved by Lender, in each case in its reasonable discretion.  All costs of such Remedial Work shall be paid by Borrower or Mortgage Borrower, including Lender’s out-of-pocket reasonable attorneys’ fees and disbursements incurred in connection with the monitoring or review of such Remedial Work.  If Borrower does not (or fails to cause Operating Lessee Owner or the Mortgage Loan Parties to) timely commence and diligently prosecute to completion the Remedial Work, unless Mortgage Lender is exercising similar rights under Section 5.7.2(c) of the Mortgage Loan Agreement, Lender may (but shall not be obligated to) cause such Remedial Work to be performed at Borrower’s expense.  Notwithstanding the foregoing, Borrower shall not be required to commence (or to cause Operating Lessee Owner or the Mortgage Loan Parties to commence) such Remedial Work within the above specified time period:  (x) if prevented from doing so by any Governmental Authority, (y) if commencing such Remedial Work within such time period would result in Borrower, Operating Lessee Owner or any Mortgage Loan Party or such Remedial Work violating any Environmental Law, or (z) if Borrower, Operating Lessee Owner or the Mortgage Loan Parties, at their expense and after prior written notice to Lender, are contesting by appropriate legal, administrative or other proceedings, conducted in good faith and with due diligence, the need to perform Remedial Work.  Borrower, Operating Lessee Owner or the Mortgage Loan Parties shall have the right to contest the need to perform such Remedial Work, provided that, (1) Borrower, Operating Lessee Owner or the Mortgage Loan Parties are permitted by the applicable Environmental Laws to delay performance of the Remedial Work pending such proceedings, (2) neither the Property nor any part thereof or interest therein will be sold, forfeited or lost if Borrower, Operating Lessee Owner or the Mortgage Loan Parties fails to promptly perform the Remedial Work being contested, and if Borrower, Operating Lessee Owner or the Mortgage Loan Parties fail to prevail in such contest, Borrower, Operating Lessee Owner or the Mortgage Loan Parties would thereafter have the opportunity to perform such Remedial Work, (3) Lender would not, by virtue of such permitted contest, be reasonably likely to be exposed to any risk of any civil liability for which Borrower or Operating Lessee has not furnished additional security as provided in clause (4) below, or to any risk of criminal liability, and neither the Property nor any interest therein would be subject to the imposition of any Lien for which Borrower or Operating Lessee has not furnished additional security as provided in clause (4) below, as a result of the failure to perform such Remedial Work and (4) Borrower shall have furnished (or shall have caused Operating Lessee Owner to furnish) to Lender additional security in respect of the Remedial Work being contested and the loss or damage that is reasonably likely to result from Borrower’s, Operating Lessee Owner’s or the Mortgage Loan Parties’ failure to prevail in such contest in such amount as may be reasonably requested by Lender but in no event less than one hundred twenty–five percent (125%) of the cost of such Remedial Work as reasonably estimated by Lender or Lender’s Consultant and any loss or damage that is reasonably likely to result from Borrower’s, Operating Lessee Owner’s or the Mortgage Loan Parties’ failure to prevail in such contest.  Borrower shall not be required to provide any security to the extent same is furnished by Mortgage Borrower pursuant to the Mortgage Loan Documents.

		 

		

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				 (k)
			Borrower and Operating Lessee shall not (and shall not cause or permit any Mortgage Loan Party to) install or permit to be installed on the Property any underground storage tank.

Title to the Property; Liens; Title to the Pledged Collateral
		
			.
		
Title to the Property; Liens
		
			.  Borrower will cause Mortgage Borrower to warrant and defend the title to the Property, and the validity and priority of all Liens granted or otherwise given to Mortgage Lender under the Mortgage Loan Documents, subject only to Permitted Encumbrances, against the claims of all Persons.  Without Lender’s prior written consent, neither Borrower nor Operating Lessee Owner shall (nor shall Borrower or Operating Lessee Owner cause or permit any Mortgage Loan Party to) create, incur, assume, permit or suffer to exist any Lien on all or any portion of the Property or any Lien on any direct or indirect legal or beneficial ownership interest in Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, except Liens in favor of Lender and Permitted Encumbrances, unless such Lien is bonded or discharged within thirty (30) days after Borrower or Mortgage Borrower first receives notice of such Lien.
		
Title to the Pledged Collateral
		
			.  Borrower and Operating Lessee Owner will warrant and defend the title to the Collateral, and the validity and priority of all Liens granted or otherwise given to Lender under the Loan Documents, subject only to Permitted Encumbrances, against the claims of all Persons.  Without Lender’s prior written consent, neither Borrower nor Operating Lessee Owner shall (nor shall Borrower or Operating Lessee Owner cause or permit any Mortgage Loan Party to) create, incur, assume, permit or suffer to exist any Lien on all or any portion of the Collateral or any Lien on any direct or indirect legal or beneficial ownership interest in Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties, except Liens in favor of Lender and Permitted Encumbrances, unless such Lien is bonded or discharged within thirty (30) days after Borrower first receives notice of such Lien.
		
Leases
		
			.  
		
Generally
		
			.  Upon request, Borrower and Operating Lessee Owner shall furnish (or cause the Mortgage Loan Parties to furnish) Lender with executed copies of all Leases then in effect.  All renewals of Leases and all proposed leases shall provide for rental rates and terms comparable to existing local market rates and shall be arm’s length transactions with bona fide, independent third–party tenants; provided, that Lender consents to the Operating Lease (and any renewals thereof provided for therein) in the form delivered to Lender as of the date of the closing of the Loan.
		
Entering into Leases
		
			.  Neither Borrower nor Operating Lessee Owner shall (nor shall Borrower or Operating Lessee Owner cause any Mortgage Loan Party to) enter into a proposed Lease without the prior written consent of Lender, not to be unreasonably withheld, conditioned or delayed.  Lender shall endeavor to approve or disapprove each proposed Lease within ten (10) Business Days of the submission by Borrower or Operating Lessee Owner, as applicable, to Lender of a written request for such approval, accompanied by a final copy of the proposed Lease.  If requested by Borrower or Operating Lessee Owner, as applicable, Lender will grant conditional approvals of a proposed Lease at any stage of the leasing process, from initial “term sheet” through negotiated lease drafts, provided that Lender shall retain the right to disapprove any such proposed Lease or particular terms thereof if subsequent to any preliminary approval material changes are made to the terms previously approved by Lender, or additional material terms are added that had not previously been considered and approved by Lender in connection with such proposed Lease.  Provided that no Event of Default is continuing, if Borrower or Operating Lessee Owner, as applicable, provides Lender with a written request for approval (which written request shall specifically refer to this Section 5.9.2 and shall explicitly state that failure by Lender to approve or disapprove within ten (10) Business Days will constitute a deemed approval) (a 
		

		 

		

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		“Lease Approval Request”) and Lender fails to respond to the request in writing delivered by Borrower or Operating Lessee Owner, as applicable, within ten (10) Business Days after receipt by Lender of the Lease Approval Request, and Borrower or Operating Lessee Owner, as applicable, sends a second request containing a legend clearly marked in not less than fourteen (14) point bold face type, underlined, in all capital letters “REQUEST DEEMED APPROVED IF NO RESPONSE WITHIN FIVE (5) BUSINESS DAYS”, Lender shall be deemed to have approved or consented to the proposed Lease if Lender fails to respond to such second written request before the expiration of such five (5) Business Day period, and Borrower or Operating Lessee Owner, as applicable, shall be entitled to enter into such proposed Lease.
		
Additional Covenants with respect to Leases
		
			.  Borrower or Operating Lessee Owner, as applicable, shall (or shall cause the applicable Mortgage Loan Party to) (i) observe and perform the material obligations imposed upon the lessor under the Leases and shall not do or permit anything to impair the value of the Leases as security for the Debt; (ii) promptly send copies to Lender of all notices of default that Operating Lessee shall send or receive under any Lease; (iii) enforce, in accordance with commercially reasonable practices for properties similar to the Property, the terms, covenants and conditions in the Leases to be observed or performed by the lessees; (iv)  not collect any of the Rents more than one month in advance (other than security deposits); (v) not execute any other assignment of lessor’s interest in the Leases or the Rents (except as contemplated by the Loan Documents and the Mortgage Loan Documents); (vi) not modify any Lease in a manner inconsistent with the Loan Documents or the Mortgage Loan Documents; (vii) not convey or transfer or suffer or permit a conveyance or transfer of the Property so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees under Leases; (viii) not consent to any assignment of or subletting under any Lease unless required in accordance with its terms without the prior consent of Lender; and (ix) shall not cancel or terminate any Lease or accept a surrender thereof (other than in accordance with its terms) without the prior consent of Lender, which consent shall not, so long as no Event of Default is continuing be unreasonably withheld or delayed.
		
Operating Lease
		
			.  
		

			
	
			
				 (l)
			Without the prior written consent of Lender, neither Borrower nor Operating Lessee Owner shall (and neither Borrower nor Operating Lessee Owner shall cause or permit any Mortgage Loan Party to) (i) cancel or terminate the Operating Lease or accept a surrender thereof; (ii) execute any assignment of either party’s interest in the Operating Lease or the Rents (except as contemplated by the Loan Documents and the Mortgage Loan Documents); (iii) sublease (or consent to the subletting) of the Operating Lease, or (iv) amend, modify or waive any material provisions of the Operating Lease.

			
	
			
				 (m)
			Each of Borrower and Operating Lessee shall (and shall cause each Mortgage Loan Party to) (i) observe and perform their respective obligations imposed under the Operating Lease; (ii) promptly send copies to Lender of all notices of default that Operating Lessee Owner or Operating Lessee shall send or receive under the Operating Lease; and (iii) enforce the material terms, covenants and conditions in the Operating Lease.

Estoppel Statement
		
			.
		

			
	
			
				 (n)
			After request by Lender, Borrower shall within ten (10) Business Days furnish Lender with a statement addressed to Lender, its successors and assigns, duly acknowledged and certified, setting forth (i) the unpaid Principal, (ii) the Interest Rate, (iii) the date installments of interest or Principal were last paid, (iv) any offsets or defenses to the payment of the Debt, (v) that no Default or 
		

		 

		

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			Event of Default exists under the Loan Documents, and (vi) that the Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification.

			
	
			
				 (o)
			After request by Lender, Borrower shall within ten (10) Business Days cause Mortgage Borrower to furnish Lender with a statement addressed to Lender, its successors and assigns, duly acknowledged and certified, setting forth (i) the unpaid Principal (as defined in the Mortgage Loan Agreement), (ii) the Interest Rate (as defined in the Mortgage Loan Agreement), (iii) the date installments of interest or Principal (as defined in the Mortgage Loan Agreement) were last paid, (iv) any offsets or defenses to the payment of the Debt (as defined in the Mortgage Loan Agreement), (v) that no Default or Event of Default (each as defined in the Mortgage Loan Agreement) exists under the Mortgage Loan Documents, and (vi) that the Mortgage Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification.

Property Management
		
			.
		
Operation of Property
		
			.
		

			
	
			
				 (p)
			Borrower shall (and shall cause Operating Lessee Owner and the Mortgage Loan Parties to) (i) cause the Property to be managed pursuant to the Management Agreement; (ii) promptly perform and observe in all material respects all of the covenants required to be performed and observed by it under the Management Agreement and do all things necessary to preserve and to keep unimpaired its rights thereunder; (iii) promptly notify Lender of any monetary default or material non-monetary default under the Management Agreement of which it is aware; (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditure plan, and property improvement plan and any other notice, report and estimate received by Borrower, Operating Lessee Owner or any Mortgage Loan Party under the Management Agreement; and (v) promptly enforce the performance and observance in all material respects of all covenants required to be performed and observed by Manager under the Management Agreement.

			
	
			
				 (q)
			Without Lender’s prior written consent, Operating Lessee Owner shall not (and shall not cause or permit Operating Lessee to) (a) surrender, terminate, cancel, extend or renew the Management Agreement or otherwise replace the Manager or enter into any other management agreement (except pursuant to Section 5.11.2); (b) reduce or consent to the reduction of the term of the Management Agreement; (c) except as provided for thereunder, increase or consent to the increase of the amount of any charges under the Management Agreement; (d) otherwise modify, change, supplement, alter or amend in any material respect, or waive or release any of its rights and remedies under, the Management Agreement; or (e) suffer or permit the occurrence and continuance of a default beyond any applicable cure period under the Management Agreement (or any successor management agreement) if such default permits the Manager to terminate the Management Agreement (or such successor management agreement).

Termination of Manager
		
			.  If Mortgage Borrower or Borrower fails to maintain a Debt Service Coverage Ratio of at least 1.0:1 as a result of Manager’s failure to manage the Property in accordance with generally accepted management standards for properties similar in size, operation and location as the Property and not due to general market conditions unrelated to the acts, omission or performance by Manager of its duties; or (ii) an Event of Default shall be continuing, or (iii) Manager is in default under the Management Agreement in any material respect beyond all applicable notice and cure periods, Operating Lessee Owner, shall, at the request of Lender, cause Operating Lessee to terminate the Management Agreement and replace Manager with a replacement manager that is either a Qualified Manager or otherwise acceptable to Lender in Lender’s reasonable discretion and the applicable Rating Agencies on terms and conditions satisfactory to Lender and the applicable Rating Agencies.  All 
		

		 

		

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		calculations of Debt Service Coverage Ratio for purposes of this Section 5.11.2 shall be subject to verification by Lender.  Operating Lessee Owner’s failure to cause Operating Lessee to appoint a Qualified Manager or other acceptable manager within thirty (30) days after Lender’s request of Operating Lessee Owner to cause Operating Lessee to terminate the Management Agreement shall constitute an immediate Event of Default.  Operating Lessee Owner cause Operating Lessee Owner from time to time appoint a successor manager to manage the Property, which successor manager and Management Agreement shall be approved in writing by Lender in Lender’s discretion and the applicable Rating Agencies.
		
Special Purpose Entity
		
			.  Borrower, Operating Lessee Owner and the Mortgage Loan Parties shall at all times be a Special Purpose Entity.  Notwithstanding the foregoing, the covenant set forth in the immediately preceding sentence shall be deemed satisfied so long as each of Borrower, Operating Lessee Owner and the Mortgage Loan Parties is in compliance with the special purpose entity provisions set forth in its respective limited liability company agreement in effect as of the date hereof.  Borrower covenants and agrees that Borrower shall provide Lender with thirty (30) days’ prior written notice prior to the removal of an Independent Director or Independent Manager, as applicable, of Borrower, Operating Lessee Owner or any Mortgage Loan Party. For purposes hereof, a “Special Purpose Entity” shall have the meaning set forth on Schedule 4 hereto.
		
Assumption in Non–Consolidation Opinion
		
			.  Borrower, Borrower Representative, Operating Lessee Owner and the Mortgage Loan Parties  shall each conduct its business so that the assumptions (with respect to each Person) made in that certain substantive non–consolidation opinion letter dated the date hereof delivered by Borrower’s counsel in connection with the Loan, shall be true and correct in all respects.
		
Change In Business or Operation of Property
		
			.  
		

			
	
			
				 (r)
			Borrower shall not purchase or own any property or assets other than the applicable Collateral owned by Borrower and shall not enter into any line of business other than the ownership of such Collateral, or make any 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 or otherwise cease to own such Collateral or terminate such ownership for any reason whatsoever.  Operating Lessee Owner shall not purchase, own, lease or manage any property or assets other than the applicable Collateral owned by Operating Lessee Owner and shall not enter into any line of business other than the ownership of such Collateral, or make any 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 or otherwise cease to such Collateral or terminate such ownership for any reason whatsoever.

			
	
			
				 (s)
			Borrower shall not cause or permit any Mortgage Borrower to (i) purchase or own any real property other than the applicable Individual Property owned by such Mortgage Borrower or (ii) enter into any line of business other than the ownership and operation of such Individual Property, or make any material change in the scope or nature of such Mortgage  Borrower’s business objectives, purposes or operations, or undertake or participate in activities other than the continuance of such Mortgage  Borrower’s present business or otherwise cease to operate a hotel on such Individual Property or terminate such business for any reason whatsoever (other than temporary cessation in connection with renovations to such Individual Property in accordance with the terms of this Agreement).  Operating Lessee Owner shall not cause or permit any Operating Lessee to (i) purchase, own, lease or manage any real property other than the applicable Individual Property leased by such Operating Lessee or (ii) enter into any line of business other than the ownership of a leasehold interest in and operation of such Individual Property, or make any material change in the scope or nature of such Operating Lessee’s 
		

		 

		

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			business objectives, purposes or operations, or undertake or participate in activities other than the continuance of its present business or otherwise cease to operate a hotel on such Individual Property or terminate such business for any reason whatsoever (other than temporary cessation in connection with renovations to such Individual Property in accordance with the terms of this Agreement).

Certain Prohibited Actions
		
			.  Neither Borrower nor Operating Lessee Owner shall (nor shall Borrower or Operating Lessee Owner cause or permit any Mortgage Loan Party to) directly or indirectly do any of the following:  (i) change Borrower’s, Operating Lessee Owner’s or any Mortgage Loan Party’s principal place of business or chief executive office without first giving Lender thirty (30) days’ prior notice; (ii) cancel or otherwise forgive or release any material claim or debt owed to Borrower, Operating Lessee Owner or any Mortgage Loan Party, as applicable, by any Person, except for adequate consideration and in the ordinary course of Borrower’s, Operating Lessee’s Owner’s or such Mortgage Loan Party’s business in such party’s reasonable judgment; (iii) Transfer or allow any Mortgage Loan Party to Transfer any License required for the operation of the Property or the Collateral; or (iv) maintain, sponsor, contribute to or become obligated to contribute to, or suffer or permit any ERISA Affiliate of Borrower, Operating Lessee Owner or any Mortgage Loan Party to, maintain, sponsor, contribute to or become obligated to contribute to, any Plan or any Welfare Plan or permit the assets of Borrower,  Operating Lessee Owner or any Mortgage Loan Party to become “plan assets,” whether by operation of law or under regulations promulgated under ERISA.
		
Prohibited Transfers
		
			.  Borrower and Operating Lessee shall not (and shall not cause or permit any Mortgage Loan Party to) directly or indirectly make, suffer or permit the occurrence of any Transfer other than a Permitted Transfer.
		
Expenses
		
			.  Borrower shall reimburse Lender upon receipt of written notice for all reasonable out–of–pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with the Loan, including (i) the preparation, negotiation, execution and delivery of the Loan Documents and the consummation of the transactions contemplated thereby and all the costs of furnishing all opinions by counsel for Borrower or Operating Lessee Owner; (ii) Borrower’s, Operating Lessee Owner’s and Lender’s ongoing performance under and compliance with the Loan Documents, including confirming compliance with environmental and insurance requirements; (iii) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications of or under any Loan Document and any other documents or matters reasonably requested by Lender, Borrower or Operating Lessee Owner; (iv) filing and recording of any Loan Documents; (v) title insurance with respect to the Pledged Collateral, surveys, inspections and appraisals as required in accordance with the Loan Documents; (vi) the creation, perfection or protection of Lender’s Liens on the Collateral and the Cash Management Accounts (including reasonable out-of-pocket fees and expenses for title and lien searches, intangibles taxes, personal property taxes, mortgage recording taxes, due diligence expenses, travel expenses, accounting firm fees, costs of appraisals, environmental reports and Lender’s Consultant, surveys and engineering reports); (vii) enforcing or preserving any rights in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower or Operating Lessee Owner, the Loan Documents, the Collateral, any other security given for the Loan, the Property, or any other security given for the Mortgage Loan; (viii) fees charged by Rating Agencies in connection with the issuance of any Rating Comfort Letter required to be obtained hereunder; (ix) enforcing any obligations of or collecting any payments due from Borrower or Operating Lessee Owner under any Loan Document or with respect to the Property, the Collateral or in connection with any refinancing or restructuring of the Loan in the nature of a “work–out”, or any insolvency or bankruptcy proceedings; (x) the fees and expenses of any special servicer retained in respect of the Loan and (xi) all costs of completion of the PIP Project incurred by Lender in the event that Completion does not occur by the Completion Date.  Any costs and expenses due and payable to Lender hereunder which are not paid by Borrower within ten (10) days after written 
		

		 

		

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		demand issued to Borrower may be paid from any amounts in any Cash Management Account or otherwise then being held by Lender, if any, with written notice thereof to Borrower.  The obligations and liabilities of Borrower under this Section 5.17 shall survive the Term and the exercise by Lender of any of its rights or remedies under the Loan Documents, including the acquisition of the Collateral by foreclosure or assignment in lieu of foreclosure.
		
Indemnity
		
			.  Borrower shall defend, indemnify and hold harmless Lender and each of its Affiliates and their respective successors and assigns, including the directors, officers, partners, members, shareholders, participants, employees, professionals and agents of any of the foregoing (including any Servicer) and each other Person, if any, who Controls Lender, its Affiliates or any of the foregoing (each, an “Indemnified Party”), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the out-of-pocket reasonable fees and disbursements of counsel for an Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not Lender shall be designated a party thereto, court costs and costs of appeal at all appellate levels, investigation and laboratory fees, reasonable consultant fees and litigation expenses), that may be imposed on, incurred by, or asserted against any Indemnified Party (collectively, the “Indemnified Liabilities”) in any manner, relating to or arising out of or by reason of the Loan, including:  (i) any breach by Borrower or Operating Lessee Owner of their respective obligations under, or any misrepresentation contained in, any Loan Document; (ii) the use or intended use of the proceeds of the Loan; (iii) any information provided by or on behalf of Borrower or Operating Lessee Owner, or contained in any documentation approved by Borrower or Operating Lessee Owner; (iv) ownership of the Security Documents, the Collateral or any of the other Loan Documents, or any Individual Property or any interest therein, or receipt of any Rents; (v) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about any Individual Property or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vi) any use, nonuse or condition in, on or about any Individual Property or on adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vii) performance of any labor or services or the furnishing of any materials or other property in respect of any Individual Property; (viii) the presence, disposal, escape, seepage, leakage, spillage, discharge, emission, release, or threatened release of any Hazardous Substance on, from or affecting any Individual Property; (ix) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Substance; (x) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Substance; (xi) any violation of the Environmental Laws which is based upon or in any way related to such Hazardous Substance, including the costs and expenses of any Remedial Work; (xii) any failure of any Individual Property to comply with any Legal Requirement; (xiii) any claim by brokers, finders or similar persons claiming to be entitled to a commission in connection with any Lease or other transaction involving any Individual Property or any part thereof, or any liability asserted against Lender with respect thereto; and (xiv) the claims of any lessee of any portion of any Individual Property or any Person acting through or under any lessee or otherwise arising under or as a consequence of any Lease; provided, however, that Borrower shall not have any obligation to any Indemnified Party hereunder if and to the limited extent that it is finally judicially determined that such Indemnified Liabilities arose solely from the gross negligence, illegal acts, fraud or willful misconduct of an Indemnified Party or from Hazardous Substances that were not present in, on, above, under or migrating from the applicable Individual Property prior to the date (1) any Indemnified Party, its nominee or a purchaser at a foreclosure sale (unaffiliated with any Indemnified Party) acquired title to such Individual Property or the applicable Collateral, whether by foreclosure, assignment in lieu of foreclosure, exercise of power of sale or otherwise or (2) a receiver took possession of the Property or the applicable Collateral.  Any amounts payable to any Indemnified Party by reason of the application of this Section 5.18 shall be payable on demand and shall bear interest at the Default Rate from the date that such demand is made by any Indemnified Party until paid.  The obligations and liabilities of Borrower under this Section 5.18 shall survive the Term and the 
		

		 

		

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		exercise by Lender of any of its rights or remedies under the Loan Documents, including the acquisition of the Collateral by foreclosure or an assignment in lieu of foreclosure.  Subject to Lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed, Borrower shall be permitted to take over the defense of any such litigation and/or claim described in this Section 5.18 with counsel reasonably acceptable to Lender so long as (x) no Event of Default exists, (y) Lender does not believe that a conflict of interest exists and (z) Lender believes that such counsel is adequately defending such Indemnified Party, in which case, no additional counsel shall be engaged in connection with such matter).
		
Embargoed Person
		
			.   At all times throughout the Term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (i) none of the funds or assets of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, whether or not used to repay the Loan, shall constitute property of, or shall be beneficially owned directly or, to Borrower’s and Operating Lessee Owner’s best knowledge, indirectly, by any person, entity or government subject to sanctions or trade restrictions under United States law (“Embargoed Person” or “Embargoed Persons”) that are identified on (A) the “List of Specially Designated Nationals and Blocked Persons” maintained by the Office of Foreign Assets Control (“OFAC”), U.S. Department of the Treasury’s FINCEN list, or to Borrower’s and Operating Lessee Owner’s best knowledge, as of the date thereof, based upon reasonable inquiry by Borrower or Operating Lessee Owner, as applicable, on any other similar list maintained by OFAC or FINCEN pursuant to any authorizing statute 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 Order or regulation promulgated thereunder, with the result that the investment in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, as applicable (whether directly or indirectly), is prohibited by law, or the Loan made by Lender would be in violation of law, or (B) Executive Order 13224 (September 23, 2001) issued by the President of the United States (“Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), any related enabling legislation or any other similar Executive Orders, and (ii) no Embargoed Person shall have any direct interest or, to Borrower’s and Operating Lessee Owner’s best knowledge, indirect interest, of any nature whatsoever in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, as applicable, with the result that the investment in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.
		

			
	
			
				 (t)
			At all times throughout the Term of the Loan, none of any of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, nor any Person Controlling, Controlled by or under common Control with any of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, nor any Person having a beneficial interest in, or for whom any of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties is acting as agent or nominee in connection with the investment, is (a) a country, territory, person or entity named on an OFAC or FINCEN list, or is a Person that resides in or has a place of business in a country or territory named on such lists; (b) a Person residing in, or organized or chartered under the laws of a jurisdiction identified as non–cooperative by the Financial Action Task Force (“FATF”); or (c) a Person whose funds originate from or will be routed through , an account maintained at a foreign shell bank or “offshore bank.”

			
	
			
				 (u)
			None of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, nor any Person Controlling, Controlled by or under common Control with Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties is a “senior foreign political figure” or an “immediate family” member or “close associate” (as all such terms are defined below) of a senior foreign political figure within the meaning of the USA 
		

		 

		

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			PATRIOT Act (i.e., the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, H.R. 3162, Public Law 107–56, as amended).  For the purposes of this subsection (c), (i) “senior foreign political figure” means a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party or a senior executive of a foreign government–owned corporation, and such term also includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure, (ii) “immediate family” of a senior foreign political figure includes the figure’s parents, siblings, spouse, children and in–laws, and (iii) “close associate” of a senior foreign political figure means a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.

Anti–Money Laundering
		
			.  At all times throughout the Term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, none of the funds of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, as applicable, that are used to consummate this transaction or to repay the Loan shall be derived from or are the proceeds of any unlawful activity, with the result that the investment in Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or the Mortgage Loan Parties, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law or may cause any of the Collateral or the Property to be subject to forfeiture or seizure.  Borrower has ascertained the identity of all persons and entities that have provided funds to capitalize Borrower and Mortgage Borrower and has conducted verification procedures which are sufficient to establish the identity and source of such funds.
		
ERISA
		
			.  At all times throughout the Term, upon the request of Lender or any of Lender’s successors, assigns or participants in the Loan, the management of Borrower and Operating Lessee Owner shall consult, and cause the management of the Mortgage Loan Parties to consult, with Lender or any of Lender’s successors, assigns or participants on significant business issues relating to the operation of the Property and the ownership of the Collateral and make itself available quarterly either personally or by telephone at mutually agreeable times for such consultation; provided, however, that such consultation need not result in any change in Borrower’s, Operating Lessee Owner’s or any Mortgage Loan Party’s course of action, subject to Section 8.1.  The aforementioned consultation rights are intended to satisfy the requirement of management rights for purposes of the Department of Labor “plan assets” regulation 29 C.F.R., Section 2510.3–101.
		
Franchise Agreement
		
			.
		
Affirmative Covenants
		
			. Operating Lessee Owner shall cause Operating Lessee (and Borrower shall cause Operating Lessee Owner to cause Operating Lessee to):
		

			
	
			
				 (v)
			operate the Improvements on each Individual Property in accordance with the terms and conditions of the applicable Franchise Agreement;

			
	
			
				 (w)
			pay all sums required to be paid by Operating Lessee under the Franchise Agreement;

			
	
			
				 (x)
			promptly and diligently perform, observe and enforce in all material respects all of the terms, covenants and conditions of the Franchise Agreement on the part of Operating Lessee (or Borrower, Mortgage Borrower or Operating Lessee Owner) to be performed, observed and enforced to the end that all things shall be done which are necessary to keep unimpaired the rights of Operating Lessee under the Franchise Agreement;

		 

		

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				 (y)
			promptly notify Lender of the giving of any written notice by Franchisor of any default by Operating Lessee in the performance or observance of any of the terms, covenants or conditions of the Franchise Agreement on the part of Operating Lessee (or Borrower, Mortgage Borrower or Operating Lessee Owner) to be performed and observed and deliver to Lender a true copy of each such notice, and promptly notify Lender of any other default under the Franchise Agreement of which Operating Lessee is aware;

			
	
			
				 (z)
			promptly deliver to Lender a copy of each financial statement, business plan, capital expenditure plan, and property improvement plan and any other notice, report and estimate received by Operating Lessee (or by Borrower, Mortgage Borrower or Operating Lessee Owner) under the Franchise Agreement; and

			
	
			
				 (aa)
			promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by Franchisor under the Franchise Agreement.

Negative Covenants
		
			.  Operating Lessee Owner shall not cause or permit (and Borrower shall not cause or permit Operating Lessee Owner to cause or permit Operating Lessee to), without the prior consent of Lender:
		

			
	
			
				 (bb)
			surrender the Franchise Agreement or terminate or cancel the Franchise Agreement or modify, change, supplement, alter or amend the Franchise Agreement or release any of its rights or remedies under the Franchise Agreement, in any respect, either orally or in writing, and Operating Lessee Owner hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Agreement, all the rights, privileges and prerogatives of Operating Lessee Owner to surrender the Franchise Agreement or to terminate, cancel, modify, change, supplement, alter or amend the Franchise Agreement, or release any of its rights or remedies under the Franchise Agreement in any respect, and any such surrender of the Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of the Franchise Agreement or release of rights or remedies under the Franchise Agreement without the prior written consent of Lender shall be void and of no force and effect;

			
	
			
				 (cc)
			reduce or consent to the reduction of the term of the Franchise Agreement;

			
	
			
				 (dd)
			increase or consent to the increase of the amount of any charges under the Franchise Agreement;

			
	
			
				 (ee)
			waive or release any of its rights and remedies under, the Franchise Agreement in any respect; or

			
	
			
				 (ff)
			enter into transactions with any Affiliate, including, without limitation, any arrangement providing for the management of the hotel business on the Property, the rendering or receipt of services or the purchase or sale of inventory, except any such transaction in the ordinary course of business of Operating Lessee if the monetary or business consideration arising therefrom would be substantially as advantageous to Operating Lessee as the monetary or business consideration that would obtain in a comparable transaction with a Person not an Affiliate of Operating Lessee.

Rights after Event of Default
		
			.  Following   the occurrence and during the continuance of an Event of Default, other than actions that are required for the normal, customary and day-to-day operations of the Property, Operating Lessee Owner shall not cause or permit Operating Lessee (and Borrower shall not cause or permit Operating Lessee Owner to cause or permit Operating Lessee to) exercise any rights, make any decisions, grant any approvals or otherwise take any action 
		

		 

		

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		under the Franchise Agreement without the prior written consent of Lender, which consent may be granted, conditioned or withheld in Lender’s sole discretion.
		
Termination of Franchisor
		
			.  If (i) the Debt has been accelerated pursuant to this Agreement, (ii) Franchisor shall become insolvent or the subject of any proceeding under any state or federal bankruptcy or insolvency law or for the liquidation of all or a major portion of its property, or (iii) a default beyond applicable cure periods by Franchisor occurs under the Franchise Agreement, or Franchisor is grossly negligent or commits malfeasance, provided Operating Lessee has the right to do so under the Franchise Agreement, Operating Lessee Owner shall cause Operating Lessee to (and Borrower shall cause Operating Lessee Owner to cause Operating Lessee to), 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 Qualified Franchisor shall not exceed then prevailing market rates.
		
Default; Right to Cure
		
			.  If Operating Lessee Owner or Operating Lessee shall default in the performance or observance of any term, covenant or condition of the Franchise Agreement on the part of Operating Lessee Owner or Operating Lessee to be performed or observed, past any applicable notice and grace period, then, without limiting the generality of the other provisions of this Agreement, and without waiving or releasing Operating Lessee Owner from any of its obligations hereunder, upon ten (10) days prior written notice to Operating Lessee Owner (except in the case of an emergency or if failure to make such payment may result in the termination of the Franchise Agreement), unless Mortgage Lender is exercising similar rights under Section 5.22.5 of the Mortgage Loan Agreement, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of the Franchise Agreement on the part of Operating Lessee, Operating Lessee Owner, Mortgage Borrower or Borrower to be performed or observed to be promptly performed or observed on behalf of Operating Lessee, Operating Lessee Owner, Mortgage Borrower or Borrower, to the end that the rights of Operating Lessee in, to and under the Franchise Agreement shall be kept unimpaired and free from default.  Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action.  If Franchisor shall deliver to Lender a copy of any notice sent to Operating Lessee or Operating Lessee Owner of default under the Franchise Agreement, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in good faith, in reliance thereon.  Operating Lessee Owner shall cause Operating Lessee to exercise each individual option, if any, to extend or renew the term of the Franchise Agreement upon demand by Lender made at any time within one (1) year of the last day upon which any such option may be exercised, and Operating Lessee Owner, on behalf of itself and Operating Lessee, hereby expressly authorizes and appoints Lender as its attorney-in-fact to exercise (or cause Operating Lessee to exercise) any such option in the name of and upon behalf of Operating Lessee, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest.  Any sums expended by Lender pursuant to this Section 5.22 shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Lender, shall be deemed to constitute a portion of the Debt, shall be secured by the lien of the Pledge and the other Loan Documents and shall be immediately due and payable upon demand by Lender therefore.  In the event that the Franchise Agreement expires or is terminated (without limiting any obligation of Operating Lessee Owner to obtain Lender’s consent to any termination or modification of the Franchise Agreement in accordance with the terms and provisions of this Agreement), Operating Lessee Owner shall promptly cause Operating Lessee to replace the Franchisor with a Qualified Franchisor approved by Lender on terms and conditions satisfactory to Lender.
		
Replacement Franchise Agreement
		
			.  In the event that the Franchise Agreement expires or is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to any 
		

		 

		

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		termination, surrender, cancellation, release, amendment, or modification of the Franchise Agreement in accordance with the terms and provisions of this Agreement), Operating Lessee Owner shall cause Operating Lessee (and Borrower shall cause Operating Lessee Owner to cause Operating Lessee to) promptly enter into a Replacement Franchise Agreement with Franchisor or another Qualified Franchisor, as applicable, and shall cause Franchisor or such other Qualified Franchisor, as applicable, to deliver to Lender a franchisor comfort letter in form and substance acceptable to Lender.
		
[Intentionally Omitted]
		
			.
		
PIP Project
		
			.
		
PIP Project Deliverables; Performance of the PIP Project
		
			.  On or prior to the date hereof, Mortgage Borrower has satisfied the conditions set forth in clauses (ii), (iii), (vi) and (vii) of Section 2.1.3(a) of the Mortgage Project Loan Agreement.  Borrower shall perform or cause to be performed the PIP Project in accordance with the applicable PIP, this Section 5.24.1, Section 5.24.1 of the Mortgage Project Loan Agreement and the other applicable terms and provisions of this Agreement and the Mortgage Project Loan Agreement.  Borrower shall not perform or cause to be performed any part of the PIP Project unless all of the conditions set forth in Section 2.1.3(a) of the Mortgage Project Loan Agreement have been satisfied.  Once the PIP Project is commenced, Borrower shall (or shall cause Mortgage Borrower to) (1) cause the same to be prosecuted with diligence and continuity in a good and workmanlike manner in accordance with the PIP Budget, the applicable PIP, the applicable Franchise Agreement, this Agreement and the Mortgage Project Loan Agreement, and in compliance with all Legal Requirements, using only materials, fixtures, furnishings and equipment that are not used or obsolete, and (2) cause Completion to occur no later than the Completion Date, provided, however, that, if a Force Majeure event occurs that delays Completion beyond the Completion Date, Lender will agree to a reasonable extension of the Completion Date so long as Franchisor has agreed to the same extension period and Borrower delivers to Lender written evidence thereof, such extension not to exceed the date that is ninety (90) days prior to the originally scheduled Stated Maturity Date.
		
Inspections by Lender
		
			.  Upon receipt of reasonable prior notice, Borrower and Operating Lessee Owner shall permit (and shall cause the Mortgage Loan Parties to permit) Lender and its representatives to enter upon the Property, inspect the PIP Project and all materials to be used in the performance thereof and examine all detailed plans and shop drawings which are or may be kept at the applicable Property.  All inspections by Lender and its representatives shall be for the sole benefit of Lender.  Neither Lender nor any of Lender’s representatives assumes or shall have any responsibility, obligation or liability to any Person (including Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor or any Cindat Entity) by reason of such inspections and no Person (including Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor or any Cindat Entity) may rely on such inspections for any purpose (including stage of completion, adequacy or workmanship, compliance with applicable Legal Requirements, conformance with the applicable PIP, or other matters related to the performance of the PIP Project).  Lender’s inspection and/or approval of an item shall not result in any waiver of Lender’s rights in the event such item does not conform to this Agreement unless Lender specifically approves such non-conformance in writing.
		
PIP Agreements
		
			.  Borrower and Operating Lessee Owner shall (and shall cause the Mortgage Loan Parties to) (i) not modify, or amend any PIP without Lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed, (ii) not enter into, materially modify, amend, restate, qualify or affect a PIP Agreement without Lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed, (iii) perform, observe and enforce in all material respects all of the covenants and agreements contained in any PIP Agreement, (iv) promptly give Lender notice of any material defaults under any PIP Agreement, and (v) not modify or permit the modification of the PIP 
		

		 

		

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		Budget or the PIP without Lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed.  If Borrower, Operating Lessee Owner or any Mortgage Loan Party receives from any Person any notice or claim of a monetary default or material non-monetary default or material nonperformance by Borrower or Mortgage Borrower under any PIP Agreement, Borrower will (or will cause Mortgage Borrower to) promptly transmit a complete copy of each such notice or claim to Lender and, upon Lender’s request, will at all times keep Lender informed, on a timely and current basis, of the status of such claim and any resolution or non-resolution thereof.  Borrower shall (or shall cause Mortgage Borrower to) pay all amounts due and owing under the PIP Agreements or otherwise with respect to the PIP Project as they become due and owing (subject to Borrower’s right to contest Liens in accordance with this Agreement and Mortgage Borrower’s rights to context Liens in accordance with the Mortgage Loan Agreement), notwithstanding that Mortgage Lender may not be obligated to make an advance under the Mortgage Project Loan Agreement or that the amount of any such particular advance may be insufficient to pay such costs.
		
Contracts, Invoices, Etc.; Incorporated Materials
		
			.  Borrower shall (or shall cause Mortgage Borrower to), upon request, deliver to Lender copies of all material contracts, bills of sale, statements, receipted vouchers or material agreements under which Borrower, Operating Lessee Owner or any Mortgage Loan Party claims title to any materials, fixtures or articles incorporated in the Improvements or subject to the lien of the Security Instrument, or under which it has incurred costs for which it is entitled to a Loan advance, and deliver to Lender such other data or documents in connection with the PIP Project as Lender may from time to time reasonably request.
		
Defects
		
			.  Borrower will promptly notify Lender upon Borrower’s, Operating Lessee Owner’s or any Mortgage Loan Party’s discovery of any material defects in performance of or any material departures from any PIP.  Borrower shall (or shall cause Mortgage Borrower to) promptly, including upon demand of Lender, correct any such defects or departures not approved by Lender.
		
Lost Notes
		
			.  As an accommodation to Mortgage Borrower, in respect of the Mortgage Term Loan, and at Mortgage Borrower’s request and expense, Mortgage Lender has accepted the assignment of and modified certain existing mortgages and notes secured thereby, which evidence or secure in part, the Mortgage Term Loan.  In connection with the foregoing, it was brought to Lender’s, Mortgage Lender’s, Borrower’s and Mortgage Borrower’s attention that the following historical notes had been lost by the prior lenders:  (1) that certain Promissory Note in the original principal amount of $2,300,000 dated as of August 7, 2001, made by Brisam Hotel LLC payable to 116 West 31 Street Associates, (2) that certain Line Note in the original principal amount of $175,000,000 dated October 14, 2008, made by Hersha Hospitality Limited Partnership  payable to TD Bank, N.A. and (3) the notes secured by the instruments listed on Schedule 12 attached hereto that relate to the Individual Property improved with the Hampton Inn Chelsea hotel (individually and collectively, the “Lost Notes”).  With respect to the Lost Notes, Borrower and Operating Lessee hereby represents, warrants and covenants as follows:
		

			
	
			
				 (gg)
			Borrower and Operating Lessee Owner shall defend, indemnify and hold harmless Lender and all other Indemnified Parties, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the out-of-pocket reasonable fees and disbursements of counsel for an Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not Lender or Mortgage Lender shall be designated a party thereto, court costs and costs of appeal at all appellate levels, investigation and laboratory fees, reasonable consultant fees and litigation expenses), that may be imposed on, incurred by, or asserted against any Indemnified Party in any manner, relating to or arising out of or by reason of the Lost Notes and the failure of the prior lenders to deliver originals of same, including in (x) enforcing the Note, the Pledge or 
		

		 

		

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			the Security Documents as a result of Lender’s inability to produce originals of the Lost Notes or hold originals of the Lost Notes or if any claims are raised with respect to the Lost Notes by any Person, including by any Person claiming to be the holder(s) thereof or, (y) enforcing the Mortgage Note or the Security Instrument as a result of Mortgage Lender’s inability to produce originals of the Lost Notes or hold originals of the Lost Notes or if any claims are raised with respect to the Lost Notes by any Person, including by any Person claiming to be the holder(s) thereof.

			
	
			
				 (hh)
			None of Borrower, Operating Lessee Owner or any Mortgage Loan Party shall raise any defense to the enforcement of Lender’s rights and remedies hereunder or under the other Loan Documents (including, without limitation, the foreclosure of the Pledge, the Security Documents or other Loan Documents) or Mortgage Lender’s rights and remedies under the Mortgage Loan Agreement or under the other Mortgage Loan Documents (including, without limitation, the foreclosure of the Mortgage Note, the Security Instrument or other Mortgage Loan Documents), in each case, based on, or by reason of, the Lost Notes and/or Lender’s or Mortgage Lender’s inability to produce originals of the same or to hold the same.

			
	
			
				 (ii)
			Borrower and Operating Lessee Owner hereby irrevocably waive, release and forever discharge any and all claims, counterclaims, actions, causes of action, suits, and defenses which such party may have the right to assert based on, or by reason of, the Lost Notes and/or Lender’s or Mortgage Lender’s inability to produce originals of the same or to hold the same.

Asset Management Agreement
		
			.  Borrower and Operating Lessee Owner hereby acknowledge and agree that Section 3.1(d) of the Asset Management Agreement shall not be amended or modified without the prior written consent of Lender. 
		
Required Repairs
		
			.  Borrower and/or Operating Lessee Owner shall (or shall cause the Mortgage Loan Parties to), within twelve (12) months after the date hereof, complete the required repair items set forth on Schedule 13 attached hereto.
		
Notices
		
			.  Borrower shall give notice, or cause notice to be given to Lender, promptly upon the occurrence of:
		

			
	
			
				 (jj)
			any Mortgage Loan Event of Default; and

			
	
			
				 (kk)
			any default or event of default under any Contractual Obligation of Borrower, Operating Lessee Owner or any Mortgage Loan Party or, to the knowledge of Borrower, Operating Lessee Owner or any Mortgage Loan Party, that could reasonably be expected to have a material adverse effect on Borrower or Operating Lessee Owner, the ability of Borrower or Operating Lessee Owner to perform under the Loan Documents or the rights and remedies of Lender under the Loan Documents.

Special Distributions
		
			.  On each date on which amounts are required to be disbursed to Lender pursuant to the terms of Mortgage Loan Agreement or are required to be paid to Lender under any of the Loan Documents, (x) Borrower shall exercise its rights under the Mortgage Borrower Company Agreement to cause Mortgage Borrower to make to Borrower a distribution in an aggregate amount such that Lender shall receive the amount required to be disbursed to Lender on such date, and (y) Operating Lessee Owner shall exercise its rights under the Operating Lessee Company Agreement to cause Operating Lessee to make to Operating Lessee Owner a distribution in an aggregate amount such that Lender shall receive the amount required to be disbursed to Lender on such date.
		
Incurrence of Expenses
		
			.  Neither Borrower nor Operating Lessee Owner shall cause or permit any Mortgage Loan Party to incur any operating expense, Capital Expenses, leasing expense or 
		

		 

		

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		other expense unless such expense is (i) set forth in the approved Annual Budget, the approved Capital Budget, the approved Operating Budget, or the approved PIP Budget, or (ii) an Approved Capital Expense, an Approved Operating Expense or an Approved PIP Expense.
		
Interests in Borrower Certificates; Limitations on Securities Issuances
		
			.
		

			
	
			
				 (ll)
			The limited liability company interests in each Mortgage Loan Party are and shall at all times during the Term be evidenced by a “certificated security” governed by Article 8 of the UCC.  Each Mortgage Loan Party has “opted in” to Article 8 of the UCC, has not opted out and shall not opt out (and neither Borrower nor Operating Lessee Owner shall cause or permit any Mortgage Loan Party to opt out) of such Article 8 of the UCC, and Borrower and Operating Lessee Owner shall cause each Mortgage Loan Party to cause a registry of the holders of limited liability company interests in such Mortgage Loan Party to be maintained at all times.

			
	
			
				 (mm)
			None of Borrower, Operating Lessee Owner or any Mortgage Loan Party shall issue any limited liability company interests or other equity securities other than those issued and outstanding as of the date hereof.

Limitations on Distributions
		
			.  Following the occurrence and during the continuance of an Event of Default, neither Borrower nor Operating Lessee Owner shall make or permit any distributions to its members, partners or shareholders, as applicable.
		
Bankruptcy-Related Covenants
		
			.
		

			
	
			
				 (nn)
			To the extent permitted by applicable law, neither Borrower nor Operating Lessee Owner shall, nor shall Borrower or Operating Lessee Owner cause or permit any Mortgage Loan Party to, seek substantive consolidation of Borrower, Operating Lessee Owner or any Mortgage Loan Party into the bankruptcy estate of Guarantor in connection with a proceeding under the Bankruptcy Code or under any other federal, state or foreign insolvency law involving Guarantor.

			
	
			
				 (oo)
			To the extent permitted by applicable law, neither Borrower nor Operating Lessee Owner shall, nor shall Borrower or Operating Lessee Owner cause or permit any Mortgage Loan Party to, contest, oppose or object to any motion made by Lender to obtain relief from the automatic stay or seek to reinstate the automatic stay in connection with a proceeding under the Bankruptcy Code or under any other federal, state or foreign insolvency law involving Guarantor.

			
	
			
				 (pp)
			To the extent permitted by applicable law, neither Borrower nor Operating Lessee Owner shall, nor shall Borrower or Operating Lessee Owner cause or permit any Mortgage Loan Party to provide, originate, acquire an interest in or solicit (in writing) or accept from Guarantor or any Affiliate of Guarantor, any debtor-in-possession financing on behalf of Guarantor in the event that Guarantor is the subject of a proceeding under the Bankruptcy Code or under any other federal, state or foreign insolvency law involving Guarantor.

Contractual Obligations
		
			. Other than the Loan Documents, the Borrower Company Agreement, the Operating Lessee Owner Company Agreement and each Mortgage Loan Party Company Agreement (and the limited liability company interests in each Mortgage Loan Party issued pursuant thereto), or as otherwise approved by Lender in writing, neither Borrower nor Operating Lessee Owner nor any of their respective assets shall be subject to any Contractual Obligations, and neither Borrower nor Operating Lessee Owner shall not enter into any agreement, instrument or undertaking by which it or its assets are bound, except for such liabilities that are incidental to its activities as a member of the applicable Mortgage Loan Party and owner of the Collateral.
		

		 

		

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Labor Agreements
		
			.  Neither Borrower nor Operating Lessee Owner shall (and neither Borrower nor Operating Lessee Owner shall cause or permit any Mortgage Loan Party to) enter into, assume or be bound by any (A) collective bargaining agreements and/or other labor agreements, (B) any employment, profit sharing, deferred compensation, bonus, stock option, stock purchase, pension, retainer, consulting, retirement, health, welfare, or incentive plans and/or contracts, or (C) plans and/or agreements under which “fringe benefits” (including, but not limited to, vacation plans or programs, and related or similar dental or medical plans or programs, and related or similar benefits) are afforded to employees of Borrower, Operating Lessee Owner or any Mortgage Loan Party. Neither Borrower nor Operating Lessee Owner shall (and neither Borrower nor Operating Lessee Owner shall cause or permit any Mortgage Loan Party to) violate any applicable laws, rules and regulations relating to the employment of labor, including those relating to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by appropriate Governmental Authorities.
		

			
	
			
				 4.
			NOTICES AND REPORTING

Notices
		
			.  All notices, consents, approvals and requests required or permitted hereunder or under any other Loan Document (a “Notice”) shall be given in writing and shall be effective for all purposes if either hand delivered with receipt acknowledged, or by a nationally recognized overnight delivery service (such as Federal Express), or by certified or registered United States mail, return receipt requested, postage prepaid, in each case addressed as follows (or to such other address or Person as a party shall designate from time to time by Notice to the other party):  If to Lender:  Hersha Mezz GAP Lender, LLC, c/o Oaktree Capital Management, L.P., 333 South Grand Avenue, 28th Floor, Los Angeles, California, 90071, Attention:  Cary Kleinman and Warren Min, with a copy to:  Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, California, 90071, Attention:  Jesse Shapiro, Esq; if to Borrower and/or Operating Lessee Owner:  c/o Hersha Hospitality Trust, 510 Walnut Street, 9th Floor, Philadelphia, PA 19106, Attention:  Ashish R. Parikh, Chief Financial Officer, with a copy to:  Cindat USA LLC, 745 Fifth Avenue, Fifth Floor, New York, New York 10151, Attention:  Rodrigo Real, and a copy to:  Hunton and Williams LLP, 2200 Pennsylvania Avenue NW, Washington, DC 20037, Attention:  Rori Malech, Esq.; and a copy to:  Sidley Austin LLP, 555 West Fifth Street, Los Angeles, CA 90013, Attention:  Joel H. Rothstein, Esq.  A Notice shall be deemed to have been given:  (a) in the case of hand delivery, at the time of delivery; (b) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or (c) in the case of overnight delivery, upon the first attempted delivery on a Business Day.
		
Borrower Notices and Deliveries
		
			.  Borrower and Operating Lessee Owner shall (and shall cause the Mortgage Loan Parties to) (a) give prompt written notice to Lender of:  (i) any litigation, governmental proceedings or claims or investigations pending or threatened against Borrower, Borrower Representative, Operating Lessee Owner or the Mortgage Loan Parties which might materially adversely affect Borrower’s, Borrower Representative’s, Operating Lessee Owner’s or the Mortgage Loan Parties’ condition (financial or otherwise) or business, the Property or the Collateral; (ii) any material adverse change in Borrower’s, Borrower Representative’s, Operating Lessee Owner’s or the Mortgage Loan Parties’ condition, financial or otherwise, or of the occurrence of any Event of Default of which Borrower, Operating Lessee Owner or any Mortgage Loan Party has knowledge; and (b) furnish and provide to Lender all instruments, documents, certificates, plans and specifications, appraisals and insurance reports and agreements, reasonably requested, from time to time, by Lender.  In addition, after request by Lender (but no more frequently than twice in any year), (x) Borrower shall furnish to Lender within ten (10) Business Days of request, a certificate addressed to Lender, its successors and assigns reaffirming all representations and warranties of Borrower and Operating Lessee Owner set forth in the Loan Documents as of the date requested by Lender or, to the extent of any changes to any such representations and warranties, so stating such changes, (y) Borrower shall (or shall cause Mortgage Borrower to) furnish to Lender within thirty (30) days of request, Tenant estoppel certificates addressed to 
		

		 

		

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		Lender, its successors and assigns, from each Tenant at the Property in form and substance reasonably satisfactory to Lender, and (z) Borrower shall (or shall cause Mortgage Borrower to) furnish to Lender, within ten (10) days of request, an estoppel certificate addressed to Lender, its successors and assigns from Franchisor stating that (1) the Franchise Agreement is in full force and effect and has not been modified, amended or assigned, (2) neither Franchisor nor Operating Lessee is in default under any of the terms, covenants or provisions of the Franchise Agreement and Franchisor knows, to the extent true, of no event which, but for the passage of time or the giving of notice or both, would constitute a default under the Franchise Agreement, (3) none of Franchisor, Operating Lessee Owner or Operating Lessee has commenced any action or given or received any notice for the purpose of terminating the Franchise Agreement and (4) all sums due and payable to Franchisor under the Franchise Agreement have been paid in full.  Lender agrees that it shall not request the estoppels described in the foregoing clause (y) and clause (z) more than one (1) time in any calendar year unless such request is made after the occurrence of an Event of Default or in connection with or contemplation of a Secondary Market Transaction.  Borrower shall not be in Default hereunder for failing to provide the estoppel certificates described in clauses (y) or (z) so long as Borrower uses commercially reasonable efforts to obtain (or cause Mortgage Borrower to obtain) the same and keeps Lender reasonably apprised of its progress with respect thereto.
		
Financial Reporting
		
			.
		
Bookkeeping
		
			.  Borrower and Operating Lessee Owner shall keep, and shall cause the Mortgage Loan Parties to keep, on a calendar year basis, in accordance with GAAP and the Uniform System of Accounts, as applicable, or any other accounting method, consistently applied, proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower, Operating Lessee Owner and the Mortgage Loan Parties and all items of income and expense and any services, Equipment or furnishings provided in connection with the operation of the Property and the ownership of the Collateral, whether such income or expense is realized by Borrower, Operating Lessee Owner, the Mortgage Loan Parties Manager or any Affiliate of any of the foregoing.  Lender shall have the right from time to time during normal business hours upon reasonable notice to examine such books, records and accounts at the office of Borrower or other Person maintaining them, and to make such copies or extracts thereof as Lender shall reasonably require.  After and during the continuance of an Event of Default, Borrower shall pay any actual reasonable costs incurred by Lender to examine such books, records and accounts, as Lender shall determine to be reasonably necessary or appropriate in the protection of Lender’s interest.
		
Annual Reports
		
			.  Borrower or Operating Lessee Owner shall, and shall cause the Mortgage Loan Parties to, furnish to Lender annually, (i) within forty (40) days after each calendar year, unaudited financial statements of Borrower, Operating Lessee Owner and each Mortgage Loan Party, and (ii) within ninety (90) days after each calendar year, a complete copy of Borrower’s, Operating Lessee Owner’s and each Mortgage Loan Party’s annual financial statements prepared by Borrower in form and content reasonably acceptable to Lender, prepared in accordance with GAAP and the Uniform System of Accounts, as applicable, or any other accounting method, consistently applied, and containing balance sheets and statements of profit and loss for Borrower, Operating Lessee Owner, each Mortgage Loan Party, the Collateral and each Individual Property in such detail as Lender may reasonably request.  Each such statement (x) shall be in form and substance reasonably satisfactory to Lender, (y) shall set forth the financial condition and the income and expenses for the Collateral and each Individual Property for the immediately preceding calendar year, including statements of annual Net Operating Income as well as, to the extent applicable, (1) a list of Tenants, if any, occupying more than twenty percent of the rentable space of any Individual Property, (2) a breakdown showing (a) the year in which each Lease then in effect expires, (b) the percentage of rentable space covered by such Lease, expressed both on a per year and a cumulative basis, and (c) the percentage of base rent with respect to which Leases shall expire in each such year, and (3) occupancy statistics for each Individual Property, expressed both on a per year 
		

		 

		

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		and a cumulative basis and (z) shall be accompanied by an Officer’s Certificate certifying (1) that such statement is true, correct, complete and accurate in all material respects and presents fairly the financial condition of the Property and the Collateral and has been prepared in accordance with GAAP and the Uniform System of Accounts, as applicable, or any other accounting method consistently applied and (2) whether to Borrower’s knowledge there exists a Default or Event of Default, and if so, the nature thereof, the period of time it has existed and the action then being taken to remedy it.
		
Monthly Reports
		
			.  Borrower or Operating Lessee Owner shall furnish to Lender within twenty (20) days after the end of each calendar month or quarter, as applicable, the following items:  (i) monthly and year–to–date operating statements, noting Net Operating Income and other information necessary and sufficient under GAAP and the Uniform System of Accounts, as applicable, or any other accounting method, consistently applied, to fairly represent the financial position and results of operation of each Individual Property and the Collateral during such calendar month, all in form satisfactory to Lender; (ii) a balance sheet for such calendar month; (iii) a statement of the actual income and expenses for each Individual Property for such month and a comparison of the budgeted income and expenses and the actual income and expenses for such month and year–to–date for each Individual Property and the Collateral, together with a detailed explanation of any variances of ten percent (10%) or more between budgeted and actual amounts for such period and year–to–date; (iv) a certification that Borrower and Operating Lessee Owner have paid (or have caused Mortgage Borrower and Operating Lessee to pay) all operating expenses due and payable with respect to each Individual Property during such calendar month, (v) a statement of the actual Capital Expenses made by Borrower,  Operating Lessee Owner or each Mortgage Loan Party during each calendar quarter as of the last day of such calendar quarter; (vi) a statement that none of Borrower, Operating Lessee Owner or any Mortgage Loan Party has incurred any indebtedness other than indebtedness permitted hereunder or under the Mortgage Loan Documents, as applicable; (vii) an aged receivables report, (viii) to the extent applicable rent rolls identifying the leased premises, names of all tenants, units leased, monthly rental and all other charges payable under each Lease, date to which paid, term of Lease, date of occupancy, date of expiration, material special provisions, concessions or inducements granted to Tenants, and a year–by–year schedule showing by percentage the rentable area of the Improvements and the total base rent attributable to Leases expiring each year) and a delinquency report for each Individual Property, (ix) the most current Smith Travel Research Reports reflecting market penetration and relevant hotel properties competing with each Individual Property and ADR reports for each Individual Property; (x) occupancy statements or reports, including average daily room rates, Rev Par calculations and room revenues for the preceding month, as well as annual averages of the same; and (xi) any and all franchise inspection reports or other reports of inspection or compliance from the Manager or Franchisor received by Borrower, Operating Lessee or any Mortgage Loan Party during the subject reporting period.  Each such statement shall be accompanied by an Officer’s Certificate certifying (1) that such items are true, correct, accurate, and complete and fairly present the financial condition and results of the operations of Borrower, Operating Lessee Owner, the Mortgage Loan Parties, the Collateral and the Property in accordance with GAAP and the Uniform System of Accounts, as applicable, or any other accounting method, consistently applied (subject to normal year–end adjustments) and (2) whether to Borrower’s knowledge there exists a Default or Event of Default, and if so, the nature thereof, the period of time it has existed and the action then being taken to remedy it.
		
Other Reports
		
			.
		

			
	
			
				 (a)
			Borrower and Operating Lessee Owner shall furnish (or cause the Mortgage Loan Parties to furnish) to Lender, within ten (10) Business Days after request, such further detailed information with respect to the ownership of the Collateral or the operation of the Property and the financial affairs of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Manager as may be reasonably requested by Lender or any applicable Rating Agency.

		 

		

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				 (b)
			Borrower shall furnish (or cause Mortgage Borrower to furnish) to Lender on or before February 15th of each year and within ten (10) Business Days of Lender’s request (or as soon thereafter as may be reasonably possible), an Officer’s Certificate certifying that to the Borrower’s knowledge the requirements set forth in Section 5.19 and Section 5.20 hereof have been satisfied and that Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor and each Cindat Entity are each in compliance with the terms thereof.

Annual Budget
		
			.  Borrower or Operating Lessee shall prepare and submit (or shall cause the Mortgage Loan Parties or Manager to prepare and submit) to Lender by December 1st of each year during the Term, for approval by Lender, which approval shall not be unreasonably withheld or delayed, a proposed pro forma budget for each Individual Property for the succeeding calendar year (individually and collectively, the “Annual Budget”), and, promptly after preparation thereof, any revisions to such Annual Budget.  Lender’s failure to approve or disapprove any Annual Budget or revision within thirty (30) days after Lender’s receipt thereof shall be deemed to constitute Lender’s approval thereof.  The Annual Budget shall consist of (i) an operating expense budget for each Individual Property (individually and collectively, (the “Operating Budget”) showing, on a month–by–month basis, in reasonable detail, each line item of Borrower’s, Operating Lessee Owner’s and each Mortgage Loan Party’s anticipated operating income and operating expenses (on a cash and accrual basis), including amounts required to establish, maintain or increase any monthly payments required hereunder and under the Mortgage Loan Documents, and (ii) a Capital Expense budget for each Individual Property (individually and collectively, the “Capital Budget”) showing, on a month–by–month basis, in reasonable detail, each line item of anticipated Capital Expenses.
		
Breach
		
			.  If Borrower or Operating Lessee Owner fails to provide (or fails to cause the Mortgage Loan parties to provide) to Lender or its designee any of the financial statements, certificates, reports or information (the “Required Records”) required by this Section 6.3 within thirty (30) days after the date upon which such Required Record is due, Borrower shall pay to Lender, at Lender’s option and in its discretion, an amount equal to $2,500 for each Required Record that is not delivered; provided Lender has given Borrower at least fifteen (15) days prior notice of such failure (and further provided that such payment shall be in addition to any other remedies Lender may have hereunder as a result of an Event of Default that occurs as a result of Borrower’s or Operating Lessee’s failure to provide the Required Records within thirty (30) days after Lender’s written request therefor).  In addition, thirty (30) days after Borrower’s or Operating Lessee Owner’s failure to deliver (or failure to cause the Mortgage Loan parties to deliver) any Required Records, Lender shall have the option, upon fifteen (15) days’ notice to Borrower to gain access to Borrower’s, Operating Lessee’s and the Mortgage Loan Party’s books and records and prepare or have prepared at Borrower’s expense, any Required Records not delivered by Borrower or Operating Lessee.
		

			
	
			
				 5.
			INSURANCE; CASUALTY; AND CONDEMNATION

Insurance
		
			.  Borrower, at its sole cost, or at Mortgage Borrower’s sole cost, for the mutual benefit of Borrower and Mortgage Borrower, on one hand, and Lender, on the other hand, shall obtain and maintain (or cause Operating Lessee Owner or the Mortgage Loan Parties to obtain and maintain) during the Term those policies of insurance required under Section 7.1 of the Mortgage Loan Agreement and to meet all insurer requirements thereunder. In addition, Borrower shall cause Lender, Borrower, Operating Lessee and each Mortgage Loan Party to each be named as an additional insured or loss payee, as applicable, on each Policy. Borrower shall also cause (or cause Mortgage Borrower to cause) all Policies required under Section 7.1 of the Mortgage Loan Agreement to provide for at least thirty (30) days’ prior notice to Lender in the event of any Policy cancellation or expiration or material changes.  Borrower shall provide Lender with evidence of insurance required under the Mortgage Loan Agreement simultaneously with the Mortgage Loan Party’s provision of evidence to Mortgage Lender.
		

		 

		

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Casualty
		
			.
		
Notice; Restoration
		
			.  If any Individual Property is damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to give) prompt notice thereof to Lender.  Following the occurrence of a Casualty, Borrower, regardless of whether insurance proceeds are available, shall promptly proceed to restore, repair, replace or rebuild (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to promptly proceed to restore, repair, replace or rebuild) such Individual Property in accordance with Legal Requirements to be of at least equal value and of substantially the same character as prior to such damage or destruction.  Notwithstanding the foregoing, in the event of a Casualty with respect to which Borrower reasonably estimates that Borrower cannot complete (or cause the Mortgage Loan Parties to complete) Restoration of the applicable Individual Property prior to the Stated Maturity Date, and in the event that the available Proceeds are sufficient, then in lieu of Restoration, Borrower may (or may cause the Mortgage Loan Parties to), upon not less than sixty (60) days prior written notice, either:  (i) apply the Proceeds to repay the Mortgage Loan and the Loan in its entirety, or (ii) so long as the Proceeds equal not less than the Release Amount for the applicable Individual Property, apply the Proceeds to obtain a Release of the applicable Individual Property in accordance with Section 10.24 hereof and Section 10.24 of the Mortgage Loan Agreement (provided that in such instance a transfer to a third party shall not be required).
		
Settlement of Proceeds
		
			.  If a Casualty covered by any of the Policies (an “Insured Casualty”) occurs at an Individual Property where the loss does not exceed fifteen percent (15%) of the Allocated Loan Amount of such Individual Property, provided no Default or Event of Default has occurred and is continuing, Borrower may settle and adjust any (or cause Operating Lessee or the Mortgage Loan Parties to settle and adjust) claim without the prior consent of Lender; provided such adjustment is carried out in a competent and timely manner, and Borrower is hereby authorized to (and to permit the Mortgage Loan Parties to) collect and receipt for the insurance proceeds (the “Proceeds”).  In the event of an Insured Casualty at an Individual Property where the loss equals or exceeds fifteen percent (15%) of the Allocated Loan Amount of such Individual Property (a “Significant Casualty”), Lender may, in its sole but reasonable discretion, but subject to the prior rights of the Mortgage Lender, settle and adjust any claim with the consent of Borrower which shall not be unreasonably withheld, conditioned or delayed and agree with the insurer(s) on the amount to be paid on the loss, and the Proceeds shall, subject to the rights of Mortgage Lender under the Mortgage Loan Documents, be due and payable solely to Lender and held by Lender in a casualty/condemnation subaccount of the Cash Management Accounts and disbursed in accordance with the terms of the Mortgage Loan Agreement.  Subject to the rights of Mortgage Lender, if Borrower, Operating Lessee Owner, any Mortgage Loan Party or any party other than Lender is a payee on any check representing Proceeds with respect to a Significant Casualty, Borrower, Operating Lessee or the applicable Mortgage Loan Party, as applicable, shall immediately endorse, and cause all such third parties to endorse, such check payable to the order of Lender.  Borrower and Operating Lessee Owner, on behalf of themselves and each Mortgage Loan Party, hereby irrevocably appoint Lender as attorney–in–fact for each of Borrower, Operating Lessee Owner and each Mortgage Loan Party, coupled with an interest, to endorse such check payable to the order of Lender.  The expenses incurred by Lender in the settlement, adjustment and collection of the Proceeds shall become part of the Debt and shall be reimbursed by Borrower to Lender upon demand.
		
Condemnation
		
			.
		
Notice; Restoration
		
			.  Borrower shall promptly give (or shall cause Operating Lessee Owner or the Mortgage Loan Parties to give) Lender notice of the actual or threatened commencement of any condemnation or eminent domain proceeding affecting any Individual Property (a “Condemnation”) and shall deliver (or cause Operating Lessee Owner or the Mortgage Loan Parties to 
		

		 

		

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		deliver) to Lender copies of any and all papers served in connection with such Condemnation.  Following the occurrence of a Condemnation, Borrower, regardless of whether an Award is available, shall promptly proceed (or cause Operating Lessee Owner or the Mortgage Loan Parties to promptly proceed) to restore, repair, replace or rebuild such Individual Property in accordance with Legal Requirements to the extent practicable to be of at least equal value and of substantially the same character (and to have the same utility) as prior to such Condemnation.
		
Collection of Award
		
			.  Subject to the rights of Mortgage Lender under the Mortgage Loan Documents, Lender is hereby irrevocably appointed as Borrower’s, Operating Lessee’s and each Mortgage Loan Party’s attorney–in–fact, coupled with an interest, with exclusive power to collect, receive and retain any award or payment in respect of a Condemnation (an “Award”) and to make any compromise, adjustment or settlement in connection with such Condemnation.  Notwithstanding any Condemnation (or any transfer made in lieu of or in anticipation of such Condemnation), Borrower shall continue to pay the Debt at the time and in the manner provided for in the Loan Documents, and the Debt shall not be reduced unless and until any Net Liquidation Proceeds After Debt Service shall have been actually received and applied by Lender to expenses of collecting the Award and to discharge of the Debt. 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 Net Liquidation proceeds After Debt Service interest at the rate or rates provided in the Note.  If any Individual Property is sold, through foreclosure or otherwise, prior to the receipt by Lender or Mortgage Lender of such Award, subject to the rights of Mortgage Lender under the Mortgage Loan Documents, Lender shall have the right, whether or not a deficiency judgment on the Note shall be recoverable or shall have been sought, recovered or denied, to receive all or a portion of the Award sufficient to pay the Debt that remains outstanding.  Subject to the rights of Mortgage Lender under the Mortgage Loan Documents, Borrower and Operating Lessee shall cause any Award that is payable to Mortgage Borrower or to Operating Lessee to be paid directly to Lender.  Lender shall hold such Award in a casualty/condemnation subaccount of the Cash Management Accounts with respect to such Individual Property and disburse such Award in accordance with the terms of the Mortgage Loan Agreement.
		
Application of Proceeds or Award; Restoration
		
			. Borrower and Operating Lessee shall cause the Mortgage Loan Parties to comply in all respects with the terms and provisions of Section 7.4 of the Mortgage Loan Agreement in connection with the application of any Proceeds or Award a Restoration (as defined in the Mortgage Loan Agreement) following a casualty or Condemnation.
		

			
	
			
				 6.
			DEFAULTS

Events of Default
		
			.  An “Event of Default” shall exist with respect to the Loan if any of the following shall occur:
		

			
	
			
				 (a)
			any (i) any payment of principal or interest (including without limitation the Monthly Debt Service Payment Amount) due with respect to the Loan is not paid on the Payment Date when due, or (ii) the entire Debt is not paid in full on the Maturity Date, or (iii) any other amount under Section 3.2 or Section 3.3 is not paid in full when due (unless sufficient funds are available in the relevant Cash Management Account on the applicable date) or (iv) any other monetary sum owed to Lender hereunder is not paid within five (5) Business Days after written demand from Lender;

			
	
			
				 (b)
			any of the Taxes are not paid when due (unless Mortgage Lender is paying such Taxes pursuant to Section 3.3 of the Mortgage Loan Agreement), subject to Borrower’s and Mortgage Borrower’s right to contest Taxes in accordance with Section 5.2 hereof and Section 5.2 of the Mortgage Loan Agreement, as applicable;

		 

		

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				 (c)
			the Policies are not kept in full force and effect (unless sufficient funds are available in the relevant Subaccount (as defined in the Mortgage Loan Agreement) on the applicable date for the payment of such amounts and all conditions to the disbursement thereof set forth in the Mortgage Loan Agreement have been satisfied in full), or are not delivered to Lender upon request;

			
	
			
				 (d)
			a Transfer other than a Permitted Transfer occurs;

			
	
			
				 (e)
			any representation or warranty made by or on behalf of Borrower, Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative, Guarantor or any Cindat Entity in any Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished by or on behalf of any of the foregoing in connection with any Loan Document, shall be false or misleading in any material respect as of the date the representation or warranty was made; provided that Borrower (or Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative, Guarantor or the Cindat Entity, if applicable) shall have ten (10) days after notice from Lender to cure the event or circumstance that caused such representation or warranty to be false or misleading in any material respect provided that such event or circumstance is susceptible to cure; provided, however, that if any immaterial breach of a representation or warranty is susceptible of cure but cannot reasonably be cured within such ten (10)-day period, and Borrower (or Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative, Guarantor or the Cindat Entity, if applicable) shall have commenced to cure such breach within such ten (10)-day period and thereafter diligently and expeditiously proceeds to cure the same, such ten (10)-day period shall be extended for an additional period of time as is reasonably necessary for Borrower (or Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative, Guarantor or the Cindat Entity, if applicable) in the exercise of due diligence to cure such breach, such additional period not to exceed thirty (30) days; provided further, however, Borrower (or Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative, Guarantor or the Cindat Entity, if applicable) shall have no opportunity to cure any breach of a representation or warranty if (1) such representation or warranty was (A) made to Borrower’s (or Operating Lessee Owner’s, the Mortgage Loan Parties’, Borrower Representative’s, Guarantor’s or the Cindat Entity’s, if applicable) actual knowledge (i.e., such party knew was false or misleading when made), (B) otherwise intentionally misrepresented or (C) made pursuant to the last sentence of Section 4.1 hereof or (2) the granting of such cure period shall have a materially adverse effect upon (a) the ability of Borrower, Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative or Guarantor to perform the respective obligations under any Loan Document to which it is a party, (b) the use, value or operations of any Individual Property, (c) the ongoing revenues and expenses generated by any Individual Property, (d) compliance of any Individual Property with any Legal Requirements, (e) the validity, priority or enforceability of any Loan Document or the liens, rights (including, without limitation, recourse against any Individual Property) or remedies of Lender hereunder or thereunder, (f) the Collateral, or (g) the validity, priority or enforceability of any Mortgage Loan Document or the liens, rights (including, without limitation, recourse against any Individual Property) or remedies of Mortgage Lender under the Mortgage Loan Documents;

			
	
			
				 (f)
			Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall (i) make an assignment for the benefit of creditors or (ii) generally not be paying its debts as they become due;

			
	
			
				 (g)
			a receiver, liquidator or trustee shall be appointed for Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor; or Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall be adjudicated a bankrupt or insolvent; or 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, Borrower Representative, Operating Lessee Owner, the 
		

		 

		

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			Mortgage Loan Parties or Guarantor, as the case may be; or any proceeding for the dissolution or liquidation of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor, as the case may be, only upon the same not being discharged, stayed or dismissed within ninety (90) days;

			
	
			
				 (h)
			any covenant contained in Sections 5.11.1 (a) – (b),  5.12,  5.14,  5.15,  5.16,  5.31,  5.32,  5.33,  5.35,  12.4,  12.5(a), or 12.7 is breached

			
	
			
				 (i)
			except as expressly permitted hereunder, the actual alteration, improvement, demolition or removal of all or any material portion of the Improvements without the prior written consent of Lender or the physical waste of any portion of any Individual Property;

			
	
			
				 (j)
			an Event of Default as defined or described elsewhere in this Agreement or in any other Loan Document occurs; or any other event shall occur or condition shall exist, if the effect of such event or condition is to accelerate or to permit Lender to accelerate the maturity of any portion of the Debt;

			
	
			
				 (k)
			a default occurs under any term, covenant or provision set forth herein or in any other Loan Document which specifically contains a notice requirement or grace period and such notice has been given and such grace period has expired;

			
	
			
				 (l)
			any of the assumptions with respect to (x) the truth, accuracy or existence of any current state of facts or (y) any past act or omission of Borrower (as opposed to assumptions with respect to actions or omissions (or compliance with covenants) from and after the date of the opinion) contained in any substantive non–consolidation opinion, delivered to Lender by Borrower’s counsel in connection with the Loan or otherwise hereunder, were not true and correct as of the date of such opinion or thereafter became untrue or incorrect;

			
	
			
				 (m)
			Borrower fails to comply fully, completely and timely with the covenants and agreements set forth in Article 9 and, with respect to Sections 9.1(b),  (f) and (g), such default continues for ten (10) days after notice from Lender;

			
	
			
				 (n)
			if a monetary default or material non-monetary default has occurred and continues beyond any applicable cure period under the Operating Lease or the Operating Lease expires or terminates or is surrendered;

			
	
			
				 (o)
			if the Operating Lease is amended or modified in any material respect without the prior written consent of Lender;

			
	
			
				 (p)
			if a default is declared under the Franchise Agreement and such default continues beyond any applicable cure period and such default permits the Franchisor thereunder to terminate or cancel the Franchise Agreement or the Franchise Agreement expires or terminates or is surrendered;

			
	
			
				 (q)
			if the Franchise Agreement, is amended or modified without the prior written consent of Lender;

			
	
			
				 (r)
			if Operating Lessee ceases to do business as a hotel at any Individual Property or terminates such business for any reason whatsoever (other than temporary cessation in connection with 
		

		 

		

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			any continuous and diligent renovation or restoration of an Individual Property following the occurrence of a Casualty or Condemnation at such Individual Property);

			
	
			
				 (s)
			if Borrower or Mortgage Borrower fails to achieve Completion by the Completion Date (unless such failure is solely the result of Borrower’s or Mortgage Borrower’s inability to pay for labor or materials due to Mortgage Lender’s failure to advance Mortgage Project Loan proceeds to Mortgage Borrower for payment of Approved PIP Expenses in accordance with the Mortgage Project Loan Agreement notwithstanding that Mortgage Borrower has satisfied the advance conditions under the Mortgage Project Loan Agreement with respect to such Approved PIP Expenses), provided, however, that, if a Force Majeure event occurs that delays Completion beyond the Completion Date, Lender will agree to a reasonable extension of the Completion Date so long as Franchisor has agreed to the same extension period and Borrower delivers (or causes Mortgage Borrower to deliver) to Lender written evidence thereof, such extension not to exceed the date that is ninety (90) days prior to the originally scheduled Stated Maturity Date; 

			
	
			
				 (t)
			Borrower fails to comply fully, completely and timely with the covenants and agreements set forth in Section 5.29,  5.30,  5.34,  12.3 or 12.5(b) and such default continues for five (5) Business Days;

			
	
			
				 (u)
			a default shall be continuing under any of the other terms, covenants or conditions of this Agreement or any other Loan Document not otherwise specified in this Section 8.1, for ten (10) Business 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 Borrower (or Operating Lessee Owner or Guarantor, if applicable) shall have commenced to cure such default within such thirty (30)-day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30)-day period shall be extended for an additional period of time as is reasonably necessary for Borrower (or Operating Lessee Owner or Guarantor, if applicable) in the exercise of due diligence to cure such default, such additional period not to exceed ninety (90) days.

			
	
			
				 (v)
			a breach of any of the representations in Section 4.27,  4.28 or 4.30 occurs; or

			
	
			
				 (w)
			Mortgage Loan Event of Default occurs.

Remedies
		
			.
		
Acceleration
		
			.  Upon the occurrence and during the continuance of an Event of Default (other than an Event of Default described in subsection (f) or (g) of Section 8.1) and at any time and from time to time thereafter, in addition to any other rights or remedies available to it pursuant to the 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 Operating Lessee Owner and in and to the Collateral; including declaring the Debt to be immediately due and payable (including unpaid interest, Default Rate interest, Late Payment Charges, Return Differential, Protective Advances and any other amounts owing by Borrower), without notice or demand; and upon any Event of Default described in subsection (f) or (g) of Section 8.1, the Debt (including unpaid interest, Default Rate interest, Late Payment Charges, Return Differential, Protective Advances and any other amounts owing by Borrower) shall immediately and automatically become due and payable, without notice or demand, and Borrower and Operating Lessee Owner each hereby expressly waive any such notice or demand, anything contained in any Loan Document to the contrary notwithstanding.
		

		 

		

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Remedies Cumulative
		
			.  Upon the occurrence and during the continuance of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower and Operating Lessee Owner under the Loan Documents or at law or in equity (including, without limitation, the making of any Protective Advances) 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, or be automatically, 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.  Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its 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 in the Loan Documents.  Without limiting the generality of the foregoing, Borrower and Operating Lessee Owner each agree that if an Event of Default is continuing, (i) to the extent permitted by applicable law, 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 all of the Collateral, the Pledge and other Security Documents has been foreclosed, all of the Collateral has been sold or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.  To the extent permitted by applicable law, nothing contained in any Loan Document shall be construed as requiring Lender to resort to any portion of the Collateral for the satisfaction of any of the Debt in preference or priority to any other portion, and Lender may seek satisfaction out of the entire Collateral or any part thereof, in its discretion.  In addition, Lender shall have the right from time to time to partially foreclose the Pledge in any manner and in any order and for any amount secured by such Pledge 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/or interest on the Note, Lender may foreclose the Pledge to recover such delinquent payments or (ii) in the event Lender elects to accelerate less than the entire Principal, Lender may foreclose the Pledge to recover so much of principal balance of the Loan as Lender may accelerate and such other sums secured by the Pledge as Lender may elect. Notwithstanding one or more partial foreclosures, the Collateral shall remain subject to the Pledge to secure payment of sums secured by such Pledge and not previously recovered.  Any amounts recovered from the Collateral or any other collateral for the Loan after an Event of Default may be applied by Lender toward the payment of any interest and/or Principal and/or any other amounts due under the Loan Documents in such order, priority and proportions as Lender in its sole discretion shall determine.
		
Severance
		
			.  Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, pledge and security agreements and other security documents (and, in connection therewith, to bifurcate or otherwise modify the nature of the collateral that secures such notes) in such denominations and priorities of payment and liens as Lender shall determine in its discretion for purposes of evidencing and enforcing its rights and remedies.  Borrower and Operating Lessee Owner shall (and shall cause the Mortgage Loan Parties to) 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 and Operating Lessee Owner hereby, for itself and the Mortgage Loan Parties, 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 such severance, Borrower and Operating Lessee Owner ratifying all that such attorney shall do by virtue thereof, provided that Lender shall first have requested Borrower and Operating Lessee Owner to execute such documents and Borrower and/or Operating Lessee Owner, as applicable, shall have failed to do so for a period of three (3) Business Days.
		

		 

		

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Delay
		
			.  No delay or omission to exercise any remedy, right or power accruing upon an Event of Default, or the granting of any indulgence or compromise by Lender shall impair any such remedy, right or power hereunder or be construed as a waiver 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 shall not be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or power consequent thereon.  Notwithstanding any other provision of this Agreement, Lender reserves the right to seek a deficiency judgment or preserve a deficiency claim in connection with the foreclosure on any portion of the Collateral to the extent necessary to foreclose on all or any portion of the Collateral, the Cash Management Accounts or any other collateral.
		
Lender’s Right to Perform
		
			.  
		

			
	
			
				 (x)
			If Borrower or Operating Lessee Owner fails to perform (or fails to cause the Mortgage Loan Parties to perform) any covenant or obligation contained herein and such failure constitutes an Event of Default, without in any way limiting Lender’s right to exercise any of its rights, powers or remedies as provided hereunder, or under any of the other Loan Documents, Lender may, while such Event of Default is continuing, but shall have no obligation to, perform, or cause the performance of, such covenant or obligation, and all costs, expenses, liabilities, penalties and fines of Lender incurred or paid in connection therewith shall be payable by Borrower to Lender upon demand and if not paid shall be added to the Debt (and to the extent permitted under applicable laws, secured by the Security Documents and other Loan Documents) and shall bear interest thereafter at the Default Rate.

			
	
			
				 (y)
			Upon the occurrence and during the continuance of any Event of Default, and at any time and from time to time thereafter while any Event of Default is continuing, in addition to any other rights and remedies available to Lender pursuant to the Loan Documents or at law or in equity, Lender, personally, or by its agents or attorneys, may enter into and upon all or any part of the Property, and each and every part thereof, and is hereby given a right and license and appointed Borrower’s and Mortgage Borrower’s attorney-in-fact and exclusive agent to do so, and may exclude Borrower, Mortgage Borrower, their respective agents and servants wholly therefrom, and, having and holding the same, may, either personally or by its superintendents, managers, agents, servants, attorneys or receivers, complete the PIP Project, or any components thereof, and, in the course of such completion, may make such changes to the PIP Budget (but for the avoidance of doubt, not to the scope of the PIP) as Lender may deem reasonably necessary in order to achieve Completion of the PIP Project, and may insure the same and may use, operate, manage and control the Improvements and the Property (or any portion thereof) and conduct the business thereof, all at the expense of Borrower.

Licenses
		
			.  Moreover, subject to the rights of Mortgage Lender under the Mortgage Loan Documents, Borrower and Operating Lessee Owner hereby agree that, upon an Event of Default, they will cause the Mortgage Loan Parties to (x) assign the Licenses to Lender if such Licenses are assignable or otherwise continue to hold such Licenses for the benefit of Lender until such time as Lender can obtain such Licenses in its own name or the name of a nominee and (y) execute and deliver all documents, applications and other written instruments necessary to transfer any liquor licenses or such other Licenses with respect to the Property into the name of Lender or its designee.
		

			
	
			
				 7.
			SECONDARY MARKET PROVISIONS

Transfer of Loan
		
			.   Lender may, at any time, sell, transfer or assign the Loan together with the Loan Documents and any or all servicing rights with respect thereto, or grant participations therein or enter into a Syndication or issue mortgage pass–through certificates or other securities evidencing a beneficial interest in a rated or unrated public offering or private placement (the 
		

		 

		

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		“Securities”) secured by or evidencing ownership interests in the Note and the Pledge (each such sale, assignment, participation, Syndication or securitization, a “Secondary Market Transaction”).  Lender may forward to each purchaser, transferee, assignee, servicer, participant, investor in such Securities or any Rating Agency (all of the foregoing entities collectively referred to as the “Investor”) and each prospective Investor, all documents and information which Lender now has or may hereafter acquire relating to the Loan and to Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor and any Cindat Entity, the Collateral and the Property, whether furnished by Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, such Cindat Entity or otherwise, as Lender determines necessary or appropriate.
		

			
	
			
				 (a)
			If requested by Lender, Borrower and Operating Lessee Owner shall (and shall cause the Mortgage Loan Parties to) assist Lender in satisfying the market standards to which Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies or applicable Legal Requirements in connection with any Secondary Market Transactions, including to:

			
	
			
				 (i)
			(A) provide updated financial and other information with respect to the Collateral, the Property, the business operated at the Property, Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, any Cindat Entity, any Affiliate of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, any Cindat Entity or Manager, (B) provide updated budgets and rent rolls relating to the Property, and (C) provide updated appraisals, market studies, environmental reviews (Phase I’s and, if appropriate, Phase II’s), property condition reports and other due diligence investigations of the Property (the information referred to in clauses (A), (B) and (C) shall hereinafter be referred to collectively as “Updated Information”), together, if customary, with appropriate verification of the Updated Information through letters of auditors, certificates of third party service providers or opinions of counsel acceptable to Lender and the Rating Agencies;

			
	
			
				 (ii)
			provide opinions of counsel, which may be relied upon by Lender and the Rating Agencies, and their respective counsel, agents and representatives, as to bankruptcy non-consolidation, fraudulent conveyance and true sale, or any other opinion customary in Secondary Market Transactions or required by the Rating Agencies with respect to the Property, Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, any Cindat Entity and any Affiliate of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor or any Cindat Entity, which counsel and opinions shall be satisfactory to Lender and the Rating Agencies;

			
	
			
				 (iii)
			provide updated (as of the closing date of any Secondary Market Transaction) representations and warranties made in the Loan Documents and such additional representations and warranties as Lender or the Rating Agencies may reasonably require;

			
	
			
				 (iv)
			subject to Section 9.4 hereof, execute modifications and amendments to the Loan Documents and Borrower’s, Operating Lessee Owner’s and the Mortgage Loan Parties’ organizational documents as Lender or the Rating Agencies may reasonably require, including, without limitation, the addition of one or more Independent Directors pursuant to the terms and provisions of Schedule 4 attached hereto; provided, however, no such modification or amendment shall result in a material economic change to the transactions set forth in this Agreement or otherwise materially increase the obligations or materially decrease the rights of Borrower or Operating Lessee Owner hereunder;

			
	
			
				 (v)
			provide access to, and conduct tours of, the Property; and

		 

		

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				 (vi)
			provide certifications or other evidence of reliance reasonably acceptable to Lender and the Rating Agencies with respect to third party reports and other information obtained in connection with the origination of the Loan or any Updated Information.

			
	
			
				 (b)
			If, at the time a Disclosure Document (as hereinafter defined) is being prepared for a Secondary Market Transaction, Lender expects that Borrower alone or Borrower and one or more Affiliates of Borrower (including Guarantor or any other Person that is directly or indirectly committed by contract or otherwise to make payments on all or a part of the Loan) collectively, or an Individual Property alone or an Individual Property and any Related Property collectively, will be a Significant Obligor, the Borrower shall furnish to Lender upon request the following financial information:

			
	
			
				 (i)
			if Lender expects that the principal amount of the Loan together with any Related Loans, as of the cut-off date for such Secondary Market Transaction, may equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal amount of all mortgage loans included or expected to be included in the Secondary Market Transaction, net operating income for such Individual Property and any Related Property for the most recent fiscal year and interim period as required under Item 1112(b)(1) of Regulation AB (or, if the Loan is not treated as a non-recourse loan under Instruction 3 for Item 1101(k) of Regulation AB, selected financial data meeting the requirements and covering the time periods specified in Item 301 of Regulation S-K and Item 1112(b)(1) of Regulation AB); or

			
	
			
				 (ii)
			if Lender expects that the principal amount of the Loan together with any Related Loans, as of the cut-off date for such Secondary Market Transaction, may equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included in the Secondary Market Transaction, the financial statements required under Item 1112(b)(2) of Regulation AB (which includes, but may not be limited to, a balance sheet with respect to the entity that Lender determines to be a Significant Obligor for the two most recent Fiscal Years and applicable interim periods, meeting the requirements of Rule 3-01 of Regulation S-X (17 C.F.R. Part 210), and statements of income and statements of cash flows with respect to such Individual Property for the three most recent Fiscal Years and applicable interim periods, meeting the requirements of Rule 3-02 of Regulation S-X (or if Lender determines that such Individual Property is the Significant Obligor and such 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) was acquired from an unaffiliated third party and the other conditions set forth in Rule 3-14 of Regulation S-X have been met, the financial statements required by Rule 3-14 of Regulation S-X)).

			
	
			
				 (c)
			Further, if requested by Lender, Borrower shall (and shall cause Mortgage Borrower to), promptly upon Lender’s request, furnish to Lender financial data or financial statements meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender, for any Tenant of the Property if, in connection with a Secondary Market Transaction, Lender expects there to be, as of the cutoff date for such Secondary Market Transaction, a concentration with respect to such Tenant or group of Affiliated Tenants within all of the mortgage loans included or expected to be included in the Secondary Market Transaction such that such Tenant or group of Affiliated Tenants would constitute a Significant Obligor. Borrower shall (and shall cause Mortgage Borrower to) furnish to Lender, in connection with the preparation of the Disclosure Documents and on an ongoing basis, financial data and/or financial statements with respect to such Tenants meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender, but only for so long as such entity or entities are a Significant Obligor and either (x) filings pursuant to the Exchange Act in connection with or relating to the Secondary Market Transaction (an “Exchange Act Filing”) are required to be made under applicable 
		

		 

		

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			Legal Requirements or (y) comparable information is required to otherwise be “available” to holders of the Securities under Regulation AB or applicable Legal Requirements.

			
	
			
				 (d)
			If Lender determines that Borrower alone or Borrower and one or more Affiliates of Borrower collectively, or an Individual Property alone or an Individual Property and any Related Property collectively, are a Significant Obligor, then Borrower shall (and shall cause Mortgage Borrower to) furnish to Lender, on an ongoing basis, selected financial data or financial statements meeting the requirements of Item 1112(b)(1) or (2) of Regulation AB, as specified by Lender, but only for so long as such entity or entities are a Significant Obligor and either (x) Exchange Act Filings are required to be made under applicable Legal Requirements or (y) comparable information is required to otherwise be “available” to holders of the Securities under Regulation AB or applicable Legal Requirements.

			
	
			
				 (e)
			Any financial data or financial statements provided pursuant to this Section 9.1 shall be furnished to Lender within the following time periods:

			
	
			
				 (i)
			with respect to information requested in connection with the preparation of Disclosure Documents for a Secondary Market Transaction, within ten (10) Business Days after notice from Lender; and

			
	
			
				 (ii)
			with respect to ongoing information required under Section 9.1(d) and (e) above, (A) not later than forty-five (45) days after the end of each fiscal quarter of Borrower and (B) not later than ninety (90) days after the end of each fiscal year of Borrower.

			
	
			
				 (f)
			If requested by Lender, Borrower shall (and shall cause Mortgage Borrower to) provide Lender, promptly, and in any event within three (3) Business Days following Lender’s request therefor, with any other or additional financial statements, or financial, statistical or operating information, as Lender shall reasonably determine to be required pursuant to Regulation S-K or Regulation S-X, as applicable, Regulation AB, or any amendment, modification or replacement thereto or other Legal Requirements relating to a Secondary Market Transaction or as shall otherwise be reasonably requested by the Lender.

			
	
			
				 (g)
			If requested by Lender, whether in connection with a Secondary Market Transaction or at any time thereafter during which the Loan and any Related Loans are included in a Secondary Market Transaction, Borrower shall (and shall cause Mortgage Borrower to) provide Lender, promptly upon request, a list of Tenants (including all affiliates of such Tenants) that in the aggregate (1) occupy 10% or more (but less than 20%) of the total floor area of the improvements or represent 10% or more (but less than 20%) of aggregate base rent, and (2) occupy 20% or more of the total floor area of the Improvements or represent 20% or more of aggregate base.

			
	
			
				 (h)
			All financial statements provided (or caused to be provided) by Borrower pursuant to this Section 9.1(c),  (d),  (e) or (f) shall be prepared in accordance with GAAP and shall meet the requirements of Regulation S-K or Regulation S-X, as applicable, Regulation AB, and other applicable Legal Requirements.  All financial statements provided (or caused to be provided) by Borrower pursuant to this Section 9.1(c),  (d),  (e) or (f) relating to a Fiscal Year shall be audited by independent accountants in accordance with generally accepted auditing standards, Regulation S-X or Regulation S-K, as applicable, Regulation AB, 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-K or Regulation S-X, as applicable, Regulation AB, 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 
		

		 

		

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			of such independent accountants and the reference to such independent accountants as “experts” in any Disclosure Document and Exchange Act Filing (or comparable information is required to otherwise be available to holders of the Securities under Regulation AB or applicable Legal Requirements), all of which shall be provided at the same time as the related financial statements are required to be provided.  All other financial statements shall be certified by the chief financial officer of Borrower, which certification shall state that such financial statements meet the requirements set forth in the first sentence of this paragraph.

Use of Information
		
			.  Borrower and Operating Lessee Owner each understand that information provided to Lender by Borrower and Operating Lessee Owner and their agents, counsel and representatives may be included in preliminary and final disclosure documents in connection with the Secondary Market Transaction, including an offering circular, a prospectus, prospectus supplement, private placement memorandum or other offering document (each, a “Disclosure Document”) 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”), and may be made available to investors or prospective investors in the Securities, investment banking firms, Rating Agencies, accounting firms, law firms and other third-party advisory and service providers relating to the Secondary Market Transaction.  Borrower and Operating Lessee Owner each also understand that the findings and conclusions of any third-party due diligence report obtained by the Lender, the Issuer (as hereinafter defined) or the placement agent or underwriter of the Secondary Market Transaction may be made publicly available if required, and in the manner prescribed, by Section 15E(s)(4)(A) of the Exchange Act and any rules promulgated thereunder.
		
Borrower Indemnity
		
			.   Borrower hereby agrees to indemnify Lender (and for purposes of this Section 9.3, Lender shall include its officers and directors) and each Person who controls the Lender within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Lender Group”), the issuer of the Securities (the “Issuer” and for purposes of this Section 9.3, Issuer shall include its officers, director and each Person who controls the Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and any placement agent or underwriter with respect to the Secondary Market Transaction, each of their respective officers and directors and each Person who controls the placement agent or underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or liabilities (collectively, the “Liabilities”) to which Lender, the Lender Group, the Issuer or the Underwriter Group may become subject insofar as the Liabilities arise out of, or are based upon, (i) any untrue statement of any material fact contained in the information provided to Lender by Borrower, Operating Lessee Owner, any Mortgage Loan Party and their agents, counsel and representatives, (ii) the omission or alleged omission to state therein a material fact required to be stated in such information or necessary in order to make the statements in such information, in light of the circumstances under which they were made, not misleading, or (iii) a breach of the representations and warranties made by Borrower or Operating Lessee Owner in Section 4.8 of this Agreement (Full and Accurate Disclosure).  Borrower also agrees to reimburse Lender, the Lender Group, the Issuer and/or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Lender Group, the Issuer and/or the Underwriter Group in connection with investigating or defending the Liabilities.  Borrower’s liability under this paragraph will be limited to Liabilities that arise out of, or are based upon, an untrue statement or omission made in reliance upon, and in conformity with, information furnished to Lender by or on behalf of Borrower, Operating Lessee Owner or any Mortgage Loan Party in connection with the preparation of the Disclosure Document or in connection with the underwriting or closing of the Loan, including financial statements of Borrower, Operating Lessee Owner and the Mortgage Loan Parties, operating statements and rent rolls with respect to the Property.  This indemnification provision will be in addition to any liability which Borrower may otherwise have.
		

		 

		

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				 (i)
			In connection with any Exchange Act Filing or other reports containing comparable information that is required to be made “available” to holders of the Securities under Regulation AB or applicable Legal Requirements, Borrower agrees to (i) indemnify Lender, the Lender Group, the Issuer and the Underwriter Group for Liabilities to which Lender, the Lender Group, the Issuer and/or the Underwriter Group may become subject insofar as the Liabilities arise out of, or are based upon, an alleged untrue statement or alleged omission or an untrue statement or omission made in reliance upon, and in conformity with, information furnished to Lender by or on behalf of Borrower, Operating Lessee Owner or any Mortgage Loan Party in connection with the preparation of the Disclosure Document or in connection with the underwriting or closing of the Loan, including financial statements of Borrower, Operating Lessee Owner and the Mortgage Loan Parties, operating statements and rent rolls with respect to the Property, and (ii) reimburse Lender, the Lender Group, the Issuer and/or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Lender Group, the Issuer and/or the Underwriter Group in connection with defending or investigating the Liabilities.

			
	
			
				 (j)
			Promptly after receipt by an indemnified party under this Section 9.3 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9.3, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to the indemnifying party.  In the event that any action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified party.  After notice from the indemnifying party to such indemnified party under this Section 9.3, such indemnified party shall pay for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party at the cost of the indemnifying party.  The indemnifying party shall not be liable for the expenses of more than one separate counsel unless an indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to the indemnifying party.  Without the prior written consent of Lender (which consent shall not be unreasonably withheld or delayed), no indemnifying party 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 party is an actual or potential party to such claim, action, suit or proceeding) unless the indemnifying party shall have given Lender reasonable prior written notice thereof and shall have obtained an unconditional release of each indemnified party hereunder from all liability arising out of such claim, action, suit or proceedings.

			
	
			
				 (k)
			In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 9.3(a) or (b) is for any reason held to be unenforceable as to an indemnified party in respect of any Liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 9.3(a) or (b), the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was 
		

		 

		

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			not guilty of such fraudulent misrepresentation.  In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered:  (i) the Issuer’s and Borrower’s relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances.  Lender and Borrower hereby agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.

			
	
			
				 (l)
			The liabilities and obligations of both Borrower and Lender under this Section 9.3 shall survive the termination of this Agreement and the satisfaction and discharge of the Debt.

Restructuring of Loan
		
			.  Lender, without in any way limiting Lender’s other rights hereunder, in its sole and absolute discretion, shall have the right at any time to require Borrower and Operating Lessee Owner to restructure the Loan into multiple notes (which may include component notes or senior and junior notes) or to create participation interests in the Loan, and which restructuring may include reallocation of principal amounts of the Loan (including, by way of example, the increase or decrease in the principal amount of the senior note and instrument securing same, and the corresponding decrease or increase in the principal amounts of the junior note(s) and the security instrument(s) securing same), the establishment of different interest rates and debt service payments for such notes and the order of priority as may be designated by Lender with respect to such notes; provided, that (i) the total amounts of such notes shall equal the amount of the Loan immediately prior to the restructuring, (ii) except in the case of an Event of Default under the Loan, the weighted average interest rate of such notes, if any, shall, in the aggregate, equal the interest rate which was applicable to the Loan immediately prior to the restructuring, (iii) except in the case of an Event of Default under the Loan, the debt service payments on such notes shall equal the debt service payment which was due under the Loan immediately prior to the restructuring, (iv) subject to Section 9.6 hereof, any such restructuring carried out after the closing of the Loan shall be at Borrower’s cost and (v) such restructuring shall not have a material adverse effect on the Term or the other economic terms and conditions of the Loan or decrease the rights of Borrower or increase the obligations of Borrower other than to a de minimis extent and/or as would be typical given the nature of the obligations of a borrower under a standard subordinate loan or a loan with component notes.  Borrower and Operating Lessee Owner shall cooperate (and shall cause the Mortgage Loan Parties to cooperate) with all reasonable requests of Lender in order to restructure the Loan and shall (A) execute and deliver such documents and (B) cause Borrower’s counsel to deliver such legal opinions as, in the case of each of (A) and (B) above, shall be reasonably required by Lender and required by any Rating Agency in connection therewith, all in form and substance reasonably satisfactory to Lender and satisfactory to any such Rating Agency, including the severance of this Agreement, the Security Documents and other Loan Documents if requested.  In the event Borrower and Operating Lessee Owner fail to execute and deliver (or cause the Mortgage Loan Parties to fail to execute and deliver) such documents to Lender within ten (10) Business Days following such request by Lender, Borrower and Operating Lessee Owner hereby absolutely and irrevocably appoints, on behalf of themselves and the Mortgage Loan Parties, 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 such transactions, Borrower and Operating Lessee Owner each ratifying all that such attorney shall do by virtue thereof.  It shall be an Event of Default if Borrower or Operating Lessee Owner fails to comply with any of the terms, covenants or conditions of this Section 9 after the expiration of fifteen (15) Business Days after notice thereof.  Borrower covenants and agrees that any such reallocation (as described above) will be in compliance with the representations and warranties set forth in Section 4.1 and Section 5.12 hereof.
		

		 

		

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Syndication
		
			.
		

			
	
			
				 (m)
			In connection with any syndication of all or a portion of the Loan to one or more lenders (each a “Syndication”), Lender may, at its option, without Borrower’s or Operating Lessee Owner’s consent, sell with novation all or any part of its right, title and interest in, to, and under the Loan, to one or more additional Persons (each a “Co-Lender”).  From and after the effective date of a Syndication (A) each Co-Lender shall be a party hereto and to each Loan Document, and, except as specified otherwise herein, shall succeed to the rights and obligations of Lender and the Co-Lenders hereunder and thereunder in respect of the Loan, and (B) Lender, as lender and each Co-Lender, as applicable, shall, to the extent such rights and obligations have been assigned by it, relinquish its rights and be released from its obligations hereunder and under the Loan Documents that arise from and after the effective date of any such Syndication.

			
	
			
				 (n)
			The liabilities of Lender and each of the Co-Lenders shall be several and not joint.  Neither Lender nor any Co-Lender shall be responsible for the obligations of any other Co-Lender.  Lender and each Co-Lender shall be liable to Borrower only for their respective proportionate shares of the Loan.

			
	
			
				 (o)
			Lender (or an Affiliate of Lender) shall act as administrative noteholder for itself and any Co-Lenders (together with any successor administrative noteholder, the “Agent”).  Borrower acknowledges that Lender, as Agent, shall have the sole and exclusive authority to execute, perform and administer this Agreement and each Loan Document on behalf of itself, as Lender and as Agent for itself and the Co-Lenders, subject to the terms of any co-lending agreement.  Except as otherwise provided herein, no Co-Lender shall have any right to deal directly with Borrower with respect to the rights, benefits and obligations of Borrower under this Agreement, the Loan Documents or any one or more documents or instruments in respect thereof.  Borrower may rely conclusively on the actions of Lender as Agent to bind Lender and the Co-Lenders, notwithstanding that the particular action in question may, pursuant to this Agreement or any co-lending agreement be subject to the consent or direction of some or all of the Co-Lenders.  Lender may resign as Agent of the Co-Lenders, in its sole discretion, or if required to by the Co-Lenders, in accordance with the term of any co-lending agreement.  The term Agent shall mean any successor Agent.

			
	
			
				 (p)
			Lender, as Agent, shall have the same rights and powers under this Agreement as any other Co-Lender and may exercise the same as though it were not Agent, respectively.  The term “Co-Lender” or “Co-Lenders” shall, unless otherwise expressly indicated, include Lender in its individual capacity.  Lender and the other Co-Lenders and their respective Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, Borrower, or any Affiliate of Borrower and any Person who may do business with or own securities of Borrower or any Affiliate of Borrower, all as if they were not serving in such capacities hereunder and without any duty to account therefor to each other.

			
	
			
				 (q)
			If required by Lender or any Co-Lender, Borrower hereby agrees to execute supplemental notes in the principal amount of such Co-Lender’s pro rata share of the Loan substantially in the form of the Note, and such supplemental note shall (i) be payable to order of such Co-Lender, (ii) be dated as of the closing date of the Syndication, and (iii) mature on the Maturity Date.  Such supplemental note shall provide that it evidences a portion of the existing indebtedness hereunder and under the Note and not any new or additional indebtedness of Borrower.  The term “Note” as used in this Agreement and in all the other Loan Documents shall include all such supplemental notes.

Costs and Expenses
		
			.  In the event that a Secondary Market Transaction closes after the date of this Agreement, Borrower shall be responsible for (i) all of Borrower’s costs and expenses 
		

		 

		

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		(including, without limitation, its attorneys’ fees and expenses) incurred in connection therewith and (ii) all of Lender’s and Agent’s reasonable out-of-pocket costs and expenses incurred in connection therewith (including, without limitation, reasonable attorneys’ fees and expenses and, to the extent required by Lender or Agent, appraisals, environmental reviews and property condition reports) not to exceed $125,000 in the aggregate during the entire Term of the Loan for all such Secondary Market Transactions in the case of such costs and expenses described in this clause (ii).  For the avoidance of doubt, any amounts incurred by Mortgage Lender pursuant to the Mortgage Loan Agreement (including Article 9 thereof) shall not be a credit against or otherwise reduce the $125,000 amount set forth in the preceding sentence.
		
Intentionally Omitted
		
			.
		
Certain Limitations
		
			.  Notwithstanding anything contained herein to the contrary, (1) Borrower shall not be required to (i) modify any Loan Document if such modification would (A) increase the interest rate payable under the Note or any other material monetary obligation under the Loan Documents, (B) shorten the period until the stated maturity of the Note, (C) modify the amortization of principal of the Note other than following the occurrence of an Event of Default, Casualty or Condemnation, (D) modify in a material adverse manner any other material term of the Debt, or (E) materially adversely impair the rights or increase the obligations of Borrower, Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative or Guarantor, or (ii) materially amend the organizational documents or ownership structure of Borrower, Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative or Guarantor and (2) in no event shall Borrower, Operating Lessee Owner, the Mortgage Loan Parties, Borrower Representative or Guarantor be required to reimburse Lender, as applicable, to satisfy any of its obligations under this Article 9 (other than those obligations of Borrower expressly set forth in Sections 9.3 and 9.6 hereof).
		

			
	
			
				 8.
			MISCELLANEOUS

Exculpation
		
			.  Notwithstanding any other provision in the Loan Documents to the contrary, but subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower or Operating Lessee Owner to perform and observe the obligations contained in the Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower or Operating Lessee Owner, 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 and rights under the Loan Documents, or in any or all of the Collateral 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 and Operating Lessee Owner only to the extent of Borrower’s and Operating Lessee Owner’s interest in the Collateral and in any other collateral given to Lender, and Lender shall not sue for, seek or demand any deficiency judgment against Borrower or Operating Lessee Owner in any such action or proceeding under or by reason of or under or in connection with any Loan Document.  In addition, for the avoidance of doubt, in no event shall the Debt or any other liabilities or obligations of Borrower or Operating Lessee Owner be recourse to the Borrower Representative or any Person that directly or indirectly owns any equity interests or otherwise controls any Borrower Representative, or any partner, member, director officer or representative thereof (other than, in each case, the Guarantor).  The provisions of this Section 10.1 shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by any Loan Document, except to the extent Lender has expressly waived in this Section 10.1 the right to sue Borrower and Operating Lessee Owner for a money judgment; (ii) impair the right of Lender to name Borrower or Operating Lessee Owner as a party defendant in any action or suit for foreclosure and sale under any of the Security Documents; (iii) affect the validity or enforceability of any of the Loan Documents or any guaranty made in connection with the Loan or any of the rights and 
		

		 

		

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		remedies of Lender thereunder, except to the extent Lender has expressly waived in this Section 10.1 the right to sue Borrower and Operating Lessee Owner for a money judgment; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) constitute a prohibition against Lender to commence any other appropriate action or proceeding in order for Lender to fully realize the security granted by the Pledge or the other Security Documents or to exercise its remedies against any all or any portion of the Collateral; or (vi) 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 (all such liability and obligation of Borrower for any or all of the following being referred to herein as “Borrower’s Recourse Liabilities”):
		

			
	
			
				 (a)
			fraud or intentional misrepresentation by Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor, any Cindat Entity or any Affiliate of the foregoing in connection with the Loan;

			
	
			
				 (b)
			the gross negligence or willful misconduct of Borrower, Operating Lessee Owner or any Mortgage Loan Party;

			
	
			
				 (c)
			the breach of any representation, warranty, covenant or indemnification in any Loan Document concerning Environmental Laws or Hazardous Substances, including Sections 4.19 and 5.7, and clauses (viii) through (xi) of Section 5.18;

			
	
			
				 (d)
			intentional physical waste of any Individual Property resulting from the acts or omissions of Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor, any Cindat Entity or any Affiliate of the foregoing or after an Event of Default, the removal or disposal of any portion of any Individual Property without the concurrent replacement thereof with property of at least equivalent utility and value, unless such portion of such Individual Property is obsolete and is no longer required for the normal operation of such Individual Property;

			
	
			
				 (e)
			the misapplication or conversion by Borrower, Operating Lessee Owner or any Mortgage Loan Party of (v) any Proceeds paid by reason of any Insured Casualty, (w) any Award received in connection with a Condemnation, (x) any Net Liquidation Proceeds After Debt Service, (y) any Rents, refund of taxes (including Taxes) or amounts in any Cash Management Account, Mortgage Cash Management Account, any Subaccount (as defined in the Mortgage Loan Agreement) (including any distributions or payments to members/partners/shareholders of Borrower, Operating Lessee Owner or any Mortgage Loan Party during a period which Lender did not receive the full amounts required to be paid to Lender under the Loan Documents) or which Mortgage Lender did not receive the full amounts required to be paid to Mortgage Lender under the Mortgage Loan Documents or (z) the proceeds of any sale of any portion of or all of the Collateral or the Property in violation of the Loan Documents; 

			
	
			
				 (f)
			failure to pay charges for labor or materials or other charges that were incurred by or on behalf of Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor, any Cindat Entity or any Affiliate of the foregoing that can create Liens on any portion of any Individual Property unless such charges are the subject of a bona fide dispute in which Borrower, Operating Lessee Owner or a Mortgage Loan Party is contesting the amount or validity thereof and except to the extent that (x) funds to pay the same are held in a Subaccount (as defined in the Mortgage Loan Agreement) and Mortgage Lender fails to make a disbursement from such Subaccount (as defined in the Mortgage Loan Agreement) notwithstanding that Mortgage Borrower has satisfied the conditions precedent thereto in accordance with the terms and provisions set forth herein, (y) cash flow from such Individual Property is insufficient to pay for such charges and the resulting Liens (1) are subordinate to the lien of the Security Instrument, (2) arose for failure to pay charges for labor or materials, and (3) at the time such charges were incurred, 
		

		 

		

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			Borrower and Mortgage Borrower reasonably believed that cash flow from such Individual Property would be sufficient to pay for such charges or (z) such failure occurred after the date that (x) Mortgage Lender acquired title to such Individual Property by foreclosure, deed in lieu of foreclosure or similar proceeding or (y) Lender acquired title to the applicable portion of the Collateral relating to such Individual Property by foreclosure, assignment in lieu of foreclosure or similar proceeding;

			
	
			
				 (g)
			any security deposits collected with respect to any Individual Property which are not delivered to Lender upon a foreclosure of the Pledge or any other Security Document or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof or such security deposits were deposited with Lender prior to such foreclosure or action in lieu thereof;

			
	
			
				 (h)
			an act or omission of any of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, any Cindat Entity or any Affiliate of the foregoing which hinders, delays or interferes with Lender’s enforcement of its rights hereunder or under any other Loan Document or the realization of the collateral, including the assertion by any of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, any Cindat Entity or any Affiliate of the foregoing of defenses or counterclaims (unless such defenses or counterclaims are (a) asserted in good faith and (b) not frivolous), provided, however, if Borrower is the prevailing party in a legal proceeding in connection with such defenses or counterclaims, then Borrower shall have no liability due to the assertion of such defenses or counterclaims;

			
	
			
				 (i)
			Borrower’s indemnifications of Lender set forth in Sections 9.3;

			
	
			
				 (j)
			the amendment, modification, alteration, termination, cancellation or surrender of the Operating Lease without Lender’s prior written consent;

			
	
			
				 (k)
			the amendment, modification, alteration, termination, cancellation or surrender of the Franchise Agreement without Lender’s prior written consent;

			
	
			
				 (l)
			the misrepresentation by Borrower under Section 4.18 hereof;

			
	
			
				 (m)
			(i) the failure of Borrower or Mortgage Borrower to achieve Completion by the Completion Date as required under this Agreement and (ii) the breach of Borrower’s obligations under Section 5.17(xi) hereof; provided, that Borrower shall not be personally liable for any amount incurred by Lender to complete the PIP Project if Mortgage Lender has incurred costs that are duplicative of Lender’s costs and Mortgage Lender is seeking to enforce liability against Guarantor under the Mortgage Guaranty with respect to such duplicative costs, or Mortgage Borrower’s obligations under Section 5.17(xi) of the Mortgage Loan Agreement;

			
	
			
				 (n)
			the failure of Borrower or Mortgage Borrower to make deposits into the Deficiency Deposit Subaccount (as defined in the Mortgage Loan Agreement) as required by and pursuant to the terms of Section 2.1.7 of the Mortgage Project Loan Agreement;

			
	
			
				 (o)
			a breach of any of the terms and conditions set forth in Section 5.12 of this Agreement (other than as described in clause (ii) of the definition of Springing Recourse Event);

			
	
			
				 (p)
			a breach of Mortgage Borrower’s obligations set forth in Section 5.25(a) hereof;

		 

		

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				 (q)
			Borrower, Operating Lessee Owner, any Mortgage Loan Party or any Affiliate of any of the foregoing enters into any Minor Lease without Lender’s prior written consent.  For purposes hereof, the term “Minor Lease” means a Lease that (i) demises space in the lobby of a hotel located at an Individual Property for use as a tour desk or otherwise demises space for any other use in the lobby of a hotel located at an Individual Property in an amount that is less 500 rentable square feet, (ii) is for a term that is less than three (3) years and (iii) is terminable on ninety (90) days’ (or less) notice without cause and without penalty or premium;   

			
	
			
				 (r)
			Borrower’s or Mortgage Borrower’s failure to remediate, remove or pay any fines, charges or penalties with respect to any and all City of New York Fire Department, Environmental Control Board or Building Department violations on record or filed with or issued by the applicable Governmental Authority or municipality or department thereof with respect to the Property as of the date hereof;

			
	
			
				 (s)
			all amounts paid by Lender in connection with any transfer fees, new application fees, or similar fees payable under or in connection with the Franchise Agreement (except to the extent incurred in connection with the consummation of a Secondary Market Transaction);

			
	
			
				 (t)
			payment of any transfer taxes in connection with an exercise of remedies by Lender or realization on all or any portion of the Collateral;

			
	
			
				 (u)
			(A) any obligation of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties, Guarantor, any Cindat Entity or any Affiliate of the foregoing (each of the foregoing, a “Borrower Related Party”) to indemnify any Person that, immediately prior to any acquisition of title to the Collateral pursuant to a UCC foreclosure sale, a UCC strict foreclosure, an assignment in lieu of foreclosure or other enforcement action under the Loan Documents (collectively, an “Equity Collateral Enforcement Action”; and the date on which an Equity Collateral Enforcement Action is consummated, an “Equity Collateral Transfer Date”), was an Affiliate of any Borrower Related Party, to the extent such obligation continues to be the obligation of the transferee at such Equity Collateral Enforcement Action and is not expressly waived in writing by the Persons covered by such indemnification obligation and (B) any obligation of any Borrower Related Party accruing prior to, on or after the Equity Collateral Transfer Date to pay (1) legal fees to legal counsel engaged by any Borrower Related Party prior to the Equity Collateral Transfer Date, (2) amounts due under any contract between any Borrower Related Party, on the one hand, and any Affiliate of any Borrower Related Party, on the other hand (unless such contract is assumed in writing by the Person acquiring the Collateral on or after the Equity Collateral Transfer Date) or (3) amounts due under any contract between any Borrower Related Party, on the one hand, and any Person not Affiliated with any Borrower Related Party, on the other hand, that has been entered into without the prior written approval of Lender to the extent such prior written approval was required under the Loan Documents (unless such contract is assumed in writing by the Person acquiring the Collateral on or after the Equity Collateral Transfer Date) and/or following the completion of any Equity Collateral Enforcement Action, any accounts payable of any Mortgage Borrower or any Borrower Related Party or any income tax or indemnity liability of any Borrower Related Party to third parties or to other Borrower Related Parties;

			
	
			
				 (v)
			a breach of the representations and warranties set forth in Section 4.30 hereof (which shall include, without limitation, the amount of the applicable deposit set forth in Section 4.30 hereof);

			
	
			
				 (w)
			a breach of the representations and warranties set forth in Section 4.26 hereof or Borrower’s obligations set forth in Section 5.35 hereof or the failure of Borrower, Operating Lessee 
		

		 

		

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			Owner or any Mortgage Loan Party to maintain adequate amounts on deposit with respect to any pension or other employee liability; or

			
	
			
				 (x)
			any challenge, claim or other action brought or asserted against Borrower or Operating Lessee Owner by any purchaser of all or any portion of the membership interests in any Mortgage Loan Party.

		
			Notwithstanding anything to the contrary in this Agreement 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 Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt in accordance with the Loan Documents, and (B) Lender’s agreement not to pursue personal liability of Borrower as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect, and the Debt shall be fully recourse to Borrower in the event that one or more of the following occurs (each, a “Springing Recourse Event”):
		

			
	
			
				 (i)
			an Event of Default described in Section 8.1(d) or Section 8.1(d) of the Mortgage Loan Agreement shall have occurred (provided, however, that, if Borrower, Operating Lessee Owner or any Affiliate thereof enters into any Minor Lease without Lender’s prior written consent, the same shall not constitute a “Springing Recourse Event”),

			
	
			
				 (ii)
			a breach of the covenant set forth in Section 5.12 hereof and such breach is cited by a court as a contributing factor in the substantive consolidation of the Property (or any portion thereof) or the Collateral (or any portion thereof) with the assets of any Person (other than Borrower and/or Operating Lessee Owner),

			
	
			
				 (iii)
			(a) Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall make an assignment for the benefit of creditors; or (b) a receiver, liquidator or trustee shall be appointed for Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor at the request of any such Person or any affiliate or direct or indirect owner of any such Person (each, a “Recourse Person”); or Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall file a voluntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law; or an involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed against Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor and either (i) a Recourse Person aids, solicits, supports, or otherwise cooperates or colludes in the filing of such petition or (ii) the Person against whom such petition is filed acquiesces in, or consents to, such filing; or any proceeding for the dissolution or liquidation of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall be instituted by  a Recourse Person or a Recourse Person aids, solicits, supports, or otherwise cooperates or colludes in the initiation of such proceeding,

			
	
			
				 (iv)
			a breach of the covenant set forth in Section 5.25(b) hereof and Section 5.25(c) hereof, respectively,

			
	
			
				 (v)
			a breach of the covenants set forth in Section 5.31 hereof, or

			
	
			
				 (vi)
			any purchaser of any direct or interest membership interest in any Mortgage Loan Party shall file an involuntary petition for bankruptcy, reorganization or 
		

		 

		

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			arrangement pursuant to federal bankruptcy law  or any similar federal or state law, against Borrower, Borrower Representative, Operating Lessee Owner, any Mortgage Loan Parties or Guarantor and either (i) a Recourse Person aids, solicits, supports, or otherwise cooperates or colludes in the filing of such petition or (ii) the Person against whom such petition is filed acquiesces in, or consents to, such filing; or any proceeding for the dissolution or liquidation of Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties or Guarantor shall be instituted by  a Recourse Person or a Recourse Person aids, solicits, supports, or otherwise cooperates or colludes in the initiation of such proceeding.

Brokers and Financial Advisors
		
			.  Borrower and Operating Lessee Owner each hereby represent that they have dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders who will not be paid from the proceeds of the Loan at closing.  Borrower shall indemnify and hold Lender harmless from and against any and all claims, liabilities, costs and expenses (including out-of-pocket reasonable attorneys’ fees, whether incurred in connection with enforcing this indemnity or defending claims of third parties) of any kind in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Operating Lessee Owner in connection with the transactions contemplated herein.  The provisions of this Section 10.2 shall survive the expiration and termination of this Agreement and the repayment of the Debt.  Borrower, Borrower Representative, Operating Lessee Owner, the Mortgage Loan Parties and any sponsor of Borrower acknowledge and agree that Lender and any of Lender’s agents or correspondents, reserve the right, in their sole and absolute discretion, to provide additional compensation to any broker, correspondent or originator of the Loan, at Lender’s sole cost and expense.
		
Retention of Servicer
		
			.  Lender reserves the right to retain the Servicer and any special servicer to act as its agent(s) hereunder with such powers as are specifically delegated to the Servicer and any special servicer by Lender, whether pursuant to the terms of this Agreement, any pooling and servicing agreement or similar agreement entered into as a result of a Secondary Market Transaction or otherwise, together with such other powers as are reasonably incidental thereto.  Borrower shall pay any fees and expenses of the Servicer (other than any regularly scheduled monthly third party servicing fees) and any out-of-pocket reasonable third-party fees and expenses, including, without limitation, special servicing fees, work-out fees, liquidation fees and attorney’s fees and disbursements and fees and expenses in connection with a prepayment, release of the Collateral (or any portion thereof) or the Property (or any Individual Property or portion thereof), approvals under the Loan Documents requested by Borrower or Operating Lessee Owner, assumption of Borrower’s or Operating Lessee Owner’s obligations or modification of the Loan, special servicing or work-out of the Loan or enforcement of the Loan Documents.
		
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 any of the Debt is unpaid or such longer period if expressly set forth in this Agreement.  All Borrower’s and Operating Lessee Owner’s covenants and agreements in this Agreement shall inure to the benefit of the respective legal representatives, successors and assigns of Lender.
		
Lender’s Discretion
		
			.  Whenever pursuant to this Agreement or any other Loan Document, Lender exercises any right given to it to approve or disapprove, or consent or withhold consent, or any arrangement or term is to be satisfactory to Lender or is to be in Lender’s discretion, the decision of Lender to approve or disapprove, to consent or withhold consent, or to decide whether arrangements or terms are satisfactory or not satisfactory, or acceptable or unacceptable or in Lender’s discretion shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive.
		

		 

		

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Governing Law
		
			.
		

			
	
			
				 (y)
			THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE NOTE 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 MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND OPERATING LESSEE EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO § 5–1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

			
	
			
				 (z)
			ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER OR OPERATING LESSEE OWNER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK COUNTY, NEW YORK AND BORROWER AND OPERATING LESSEE OWNER EACH WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH OF BORROWER OPERATING LESSEE OWNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.  BORROWER AND OPERATING LESSEE OWNER DO EACH HEREBY DESIGNATE AND APPOINT CT CORPORATION AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011, AS THEIR AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON THEIR BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE OF BORROWER AND/OR OPERATING LESSEE OWNER MAILED OR DELIVERED TO BORROWER AND OPERATING LESSEE OWNER, AS APPLICABLE, IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER AND OPERATING LESSEE OWNER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD OF SERVICE), IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.  BORROWER AND OPERATING LESSEE OWNER (i) SHALL EACH GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE 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.

Modification, Waiver in Writing
		
			.  No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement or of any other Loan Document, nor consent to any departure by Borrower or Operating Lessee Owner 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.  
		

		 

		

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		Except as otherwise expressly provided herein, no notice to or demand on Borrower or Operating Lessee Owner shall entitle Borrower or Operating Lessee Owner to any other or future notice or demand in the same, similar or other circumstances.  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 any other Loan Document, 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 any 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 the Loan Documents, or to declare an Event of Default for failure to effect prompt payment of any such other amount.
		
Trial by Jury
		
			.  BORROWER, OPERATING LESSEE OWNER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, OPERATING LESSEE OWNER 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.  EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER.
		
Headings/Exhibits
		
			.  The Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.  The Exhibits attached hereto, are hereby incorporated by reference as a part of the Agreement with the same force and effect as if set forth in the body hereof.
		
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.
		
Preferences
		
			.  Upon the occurrence and continuance of an Event of Default, Lender shall have the continuing and exclusive right to apply or reverse and reapply (or having so applied, to reverse and reapply) any and all payments by Borrower to any portion of the Debt.  To the extent Borrower makes a payment to Lender, or Lender receives proceeds of any collateral, which is in whole or in part 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 Debt 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.  This provision shall survive the expiration or termination of this Agreement and the repayment of the Debt.
		
Waiver of Notice
		
			.  Neither Borrower nor Operating Lessee Owner shall be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or any other Loan Document specifically and expressly requires the giving of notice by Lender to Borrower or Operating Lessee Owner and except with respect to matters for which Borrower and Operating Lessee Owner are not, pursuant to applicable Legal Requirements, permitted to waive the 
		

		 

		

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		giving of notice.  Borrower and Operating Lessee Owner hereby expressly waive the right to receive any notice from Lender with respect to any matter for which no Loan Document specifically and expressly requires the giving of notice by Lender to Borrower and Operating Lessee Owner.
		
Remedies of Borrower and Operating Lessee Owner
		
			.  If a claim or adjudication is made that Lender or any of its agents, including Servicer, has acted unreasonably or unreasonably delayed acting in any case where by law or under any Loan Document, Lender or any such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower and Operating Lessee Owner agree that neither Lender nor its agents, including Servicer, shall be liable for any monetary damages, and Borrower’s and Operating Lessee Owner’s sole remedy shall be to commence an action seeking injunctive relief or declaratory judgment.  Any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.  Borrower and Operating Lessee Owner specifically waive any claim against Lender and its agents, including Servicer, with respect to actions taken by Lender or its agents on Borrower’s or Operating Lessee Owner’s behalf.
		
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, understandings and negotiations among or between such parties, whether oral or written, are superseded by the terms of this Agreement and the other Loan Documents.
		
Offsets, Counterclaims and Defenses
		
			.  Borrower and Operating Lessee Owner hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against either or both of them by Lender or its agents, including Servicer, or otherwise offset any obligations to make payments required under the Loan Documents.  Any assignee of Lender’s interest in and to the Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which Borrower or Operating Lessee Owner may otherwise have against any assignor of such documents, and no such offset, counterclaim or defense shall be interposed or asserted by Borrower or Operating Lessee Owner in any action or proceeding brought by any such assignee upon such documents, and any such right to interpose or assert any such offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower and Operating Lessee Owner .
		
Publicity
		
			.  All news releases, publicity or advertising by Borrower or Operating Lessee Owner or their Affiliates through any media intended to reach the general public, which refers to the Loan Documents, the Loan, Lender, Oaktree Capital Management, L.P., any Affiliate of Oaktree Capital Management, L.P., or any other Person that contains “Oaktree” in its name (provided such reference is in connection with the Mortgage Loan, the Loan, the Property (or any Individual Property) or the Collateral (or any portion thereof)), a Loan purchaser, the Servicer or the trustee in a Secondary Market Transaction, shall be subject to the prior written approval of Lender.  All news releases, publicity or advertising by Lender 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 Borrower or any of its Affiliates shall be subject to the prior approval of Borrower, provided, however, Lender is not required to obtain the prior approval of Borrower for a so-called “tombstone” which contains the amount of the loan, the type of property, the location of the Property, a photograph of the Property and the name of Borrower and Operating Lessee Owner so long as the same does not name Guarantor or any of its Affiliates.  In addition, notwithstanding anything to the contrary contained herein, Borrower and Operating Lessee Owner hereby approve the write-up of the transaction set forth on Schedule 10 attached hereto and acknowledge and agree that Lender may release the same to the media and the general public.
		
No Usury
		
			.  Borrower and Lender intend at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of interest than under state law) and that this Section 10.17 shall 
		

		 

		

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		control every other agreement in the Loan Documents.  If the applicable law (state or federal) is ever judicially interpreted so as to render usurious any amount called for under the Note or any other Loan Document, or contracted for, charged, taken, reserved or received with respect to the Debt, or if Lender’s exercise of the option to accelerate the maturity of the Loan or any prepayment by Borrower results in Borrower having paid any interest in excess of that permitted by applicable law, then it is Borrower’s and Lender’s express intent that all excess amounts theretofore collected by Lender shall be credited against the unpaid Principal and all other Debt (or, if the Debt has been or would thereby be paid in full, refunded to Borrower), and the provisions of the Loan Documents immediately be deemed reformed and the amounts thereafter collectible thereunder reduced, without the necessity of the execution of any new document, so as to comply with applicable law, but so as to permit the recovery of the fullest amount otherwise called for thereunder.  All sums paid or agreed to be paid to Lender for the use, forbearance or detention of 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 Debt does not exceed the maximum lawful rate from time to time in effect and applicable to the Debt for so long as the Debt is outstanding.  Notwithstanding anything to the contrary contained in any Loan Document, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.
		
Conflict; Construction of Documents
		
			.  In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control.  The parties hereto acknowledge that each is represented by separate counsel in connection with the negotiation and drafting of the Loan Documents and that the Loan Documents shall not be subject to the principle of construing their meaning against the party that drafted them.
		
No Third Party Beneficiaries
		
			.  The Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in any Loan Document 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 therein.
		
Return Differential
		
			.  Borrower acknowledges that (a) Lender is making the Loan in consideration of the receipt by Lender of all interest and other benefits intended to be conferred by the Loan Documents and (b) if payments of Principal are made to Lender on or prior to the full payment of the Return Differential, for any reason whatsoever, whether voluntary, as a result of Lender’s acceleration of the Loan after an Event of Default, by operation of law or otherwise, Lender will not receive all such interest and other benefits and may, in addition, incur costs.  For these reasons, and to induce Lender to make the Loan, Borrower agrees that, except as expressly provided in Section 2.3.2 of this Agreement or any other applicable provisions of any Loan Documents, all prepayments, if any, whether voluntary or involuntary, will be accompanied by the Return Differential.  Such Return Differential shall be required whether payment is made by Borrower, by a Person on behalf of Borrower, or by the purchaser at any foreclosure sale, and may be included in any bid by Lender at such sale.  Borrower further acknowledges that (A) it is a knowledgeable real estate developer or investor; (B) it fully understands the effect of the provisions of this Section 10.20, as well as the other provisions of the Loan Documents; (C) the making of the Loan by Lender at the Interest Rate and other terms set forth in the Loan Documents are sufficient consideration for Borrower’s obligation to pay a Return Differential (if required); and (D) Lender would not make the Loan on the terms set forth herein without the inclusion of such provisions.  Borrower also acknowledges that the provisions of this Agreement limiting the right of prepayment and providing for the payment of the Return Differential and other charges specified herein were independently negotiated and bargained for, and constitute a specific material part of the consideration given by Borrower to Lender for the making of the Loan except as expressly permitted hereunder.
		

		 

		

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Assignment
		
			.  The Loan, the Note, the Loan Documents or Lender’s rights, title, obligations and interests therein may be assigned by Lender and any of its successors and assigns to any Person at any time in its discretion, in whole or in part, whether by operation of law (pursuant to a merger or other successor in interest) or otherwise.  Upon such assignment, all references to Lender in this Agreement and in any Loan Document shall be deemed to refer to such assignee or successor in interest and such assignee or successor in interest shall thereafter stand in the place of Lender.  Notwithstanding any such assignment by Lender, the Loan shall be administered and serviced by the same administrative agent and/or servicer(s).  Lender, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a register for the recordation of the names and addresses of each assignee and the principal amount of and interest on the Loan owing to each assignee pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.  Neither Borrower nor Operating Lessee Owner may assign their respective rights, title, interests or obligations under this Agreement or under any of the Loan Documents.
		
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.
		
EEA Financial Institutions
		
			.
		
Terms and Definitions
		
			.  For purposes of this Section 10.23, the following terms have the meanings set forth below:
		

		
			“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
		

		
			“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of the Bank Recovery and Resolution Directive, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) the then applicable Commission Delegated Regulation (if any) supplementing the Bank Recovery and Resolution Directive in relation to Article 55 thereof.
		

		
			“Bank Recovery and Resolution Directive” means Directive 2014/59/EU of the European Parliament and of the Council of the European Union.
		

		
			“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
		

		
			“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
		

		
			“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
		

		

		

		 

		

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		“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
		

		
			“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
		
Acknowledgement and Agreement Regarding EEA Financial Institutions
		
			.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, each party hereto acknowledges that any liability of any EEA Financial Institution arising under this Agreement or any other Loan Document (including, without limitation, any EEA Financial Institution joining in the Loan as a co-lender or participant), except to the extent such liability is excluded under the Bail-In Legislation from the scope of any Bail-In Action, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
		

			
	
			
				 (aa)
			the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

			
	
			
				 (bb)
			the effects of any Bail-in Action on any such liability, including, if applicable:

			
	
			
				 (i)
			a reduction in full or in part or cancellation of any such liability including without limitation a reduction in any accrued or unpaid interest in respect of such liability;

			
	
			
				 (ii)
			a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

			
	
			
				 (iii)
			the variation of the terms of this Agreement or any other Loan Document to give effect to the exercise of the write-down and conversion powers of any EEA Resolution Authority.

Partial Releases
		
			.  With respect to any Individual Property, in connection with a bona fide, arms’-length sale to a third party not affiliated with Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor or any Cindat Entity or otherwise not an Affiliate of Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor or any Cindat Entity (a “Release Sale”), Lender agrees, upon the prior written request of Borrower to be received by Lender not less than fifteen (15) Business Days prior to the closing of the Release Sale, to release from the lien of the Pledge and the other Loan Documents the portion of the Collateral relating to such Individual Property (a release described in this sentence each being referred to herein as a “Release”), in each case, concurrently with the closing of the Release Sale, provided that each such Release shall be subject to and conditioned upon satisfaction of each of the following conditions:
		

			
	
			
				 (cc)
			no Event of Default shall have occurred and be continuing;

		 

		

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				 (dd)
			Lender shall have received payment, in immediately available funds, of the applicable Release Amount, which Lender shall apply pro rata to the prepayment of the Mortgage Loan and the Mezzanine Loan in accordance with the terms of this Agreement, the Mortgage Term Loan Agreement and the Mortgage Project Loan Agreement (including, without limitation, Section 2.3.3 of this Agreement, the Mortgage Term Loan Agreement and the Mortgage Project Loan Agreement and Section 2.3.4 of the Mortgage Term Loan Agreement), subject to the payment of (x) the applicable Exit Fee and any applicable Yield Maintenance Premium (in each case, as defined  in the Mortgage Term Loan Agreement and the Mortgage Project Loan Agreement) associated therewith and (y) any applicable Return Differential associated therewith;

			
	
			
				 (ee)
			Lender shall have received a fully executed copy of the purchase and sale agreement (including any amendments or modifications thereto) relating to the sale of the subject Individual Property to a third party, which purchase and sale agreement, shall not in any event, without the prior written consent of Lender, impose upon Borrower or any other Mortgage Borrower (other than the Mortgage Borrower which is the seller under the applicable agreement) or Operating Lessee Owner or any Operating Lessee any liabilities or obligations to the purchaser under the purchase and sale agreement which shall survive the closing of the transaction contemplated in the purchase and sale agreement, or require the recording in the public records of any memorandum of sale, option to purchase or any other similar document which may constitute a Lien on the Individual Property pending the consummation and closing of the sale;

			
	
			
				 (ff)
			(1) the Debt Yield (UNCF) and the Debt Service Coverage Ratio, as applicable, after giving effect to the Release shall be equal to or greater than the greater of (A) the Debt Yield (UNCF) and the Debt Service Coverage Ratio, as applicable, as of the date of the closing of the Loan (which the parties hereby acknowledge and agree are 10.34% and 3.58:1 respectively), and (B) the Debt Yield (UNCF) and Debt Service Coverage Ratio, as applicable, immediately prior to such Release, and (2) the Loan-to-Value ratio after giving effect to the Release shall be equal to or less than the lesser of (A) the Loan-to-Value ratio as of the date of the closing of the Loan (which the parties hereby acknowledge and agree is 49.89%), and (B) the Loan-to-Value ratio immediately prior to such Release; provided, that, in the event Borrower fails to satisfy the Debt Yield (UNCF), Debt Service Coverage Ratio and/or the Loan-to-Value ratio requirements set forth in this clause (d), Borrower may make a prepayment sufficient to bring the Property into compliance therewith, so long as such prepayment is made in accordance with the terms of this Agreement, the Mortgage Project Loan Agreement and the Mortgage Term Loan Agreement (including, without limitation, Sections 2.3.3 of this Agreement, the Mortgage Project Loan Agreement and the Mortgage Term Loan Agreement and Section 2.3.4 of the Mortgage Term Loan Agreement) and is subject to payment of (x) the applicable Exit Fee and Yield Maintenance Premium (in each case, as defined in the Mortgage Term Loan Agreement and the Mortgage Project Loan Agreement) in connection therewith and (y) any Return Differential in connection therewith; it being agreed that for purposes of this clause (d) the following terms shall have the meanings set forth below:

			
	
			
				 (i)
			“Debt Yield (UNCF)” shall mean, for any date of determination, the percentage obtained by dividing (a) the UNCF (Underwritten Net Cash Flow) by (b) the sum of the outstanding principal balances of the Loan, the Mortgage Term Loan and the Mortgage Project Loan, together with any amounts of the Loan remaining to be advanced under the Mortgage Project Loan Agreement;

			
	
			
				 (ii)
			“Loan-to-Value” shall mean a fraction expressed as a percentage, the numerator of which is the sum of (i) the outstanding and unpaid principal balance of the Note, (ii) the outstanding and unpaid principal balance of the “Note” evidencing, and as such quoted term is defined in, the Mortgage Term Loan Agreement and (iii) the outstanding and unpaid principal balance of the “Note” evidencing, and as such quoted term is defined in, the Mortgage Project 
		

		 

		

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			Loan Agreement (which shall include any amounts of the Mortgage Project Loan remaining to be advanced under the Mortgage Project Loan Agreement), and the denominator of which is the aggregate appraised value of the Property as determined by Lender based upon the current “as–is” MAI appraisal for each Individual Property obtained by and acceptable to Lender at Borrower’s sole cost and expense;

			
	
			
				 (gg)
			in connection with a Release, not less than three (3) Business Days prior to the date of the Release, Lender shall have received an Officer’s Certificate certifying that the applicable lender or buyer of the applicable Individual Property is a third party that is not affiliated with Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor or any Cindat Entity or otherwise an Affiliate of Borrower, Operating Lessee Owner, any Mortgage Loan Party, Guarantor or any Cindat Entity;

			
	
			
				 (hh)
			Lender shall have received evidence satisfactory to Lender that Mortgage Lender shall have received, effective on the date of the Release, an endorsement to the title insurance policy insuring the Lien of the Security Instrument (1) extending the effective date of the such insurance policy to the effective date of the Release, and (2) confirming no change in the priority of the Security Instrument;

			
	
			
				 (ii)
			Borrower shall submit to Lender, not less than ten (10) days prior to the date of the proposed Release, all documents, in a form appropriate in the jurisdiction in which the Individual Property is located, required to release the Lien of the Pledge on the portion of the Collateral applicable Individual Property and any required modifications of the Pledge and any of the other Loan Documents for execution by Lender, which, provided Borrower has satisfied all applicable conditions of this Section 10.24, Borrower, Operating Lessee Owner and Lender shall execute in each case in form reasonably acceptable to Borrower and Lender;

			
	
			
				 (jj)
			Borrower shall deliver all other documents and items as Lender may reasonably request and Borrower and Lender, as applicable, shall execute such documents and instruments as are typical for transactions similar to such Release, in each case in form reasonably acceptable to Borrower and Lender;

			
	
			
				 (kk)
			Borrower shall pay all out-of-pocket reasonable third party costs, taxes and expenses associated with the release of the Lien of the Pledge and, in connection with a Release Sale and the Transfer of the Individual Property, in each case including Lender’s reasonable attorneys’ fees;

			
	
			
				 (ll)
			Mortgage Borrower shall have satisfied all of the conditions in Section 10.24 of the Mortgage Term Loan Agreement to effect a Release (as such term is defined in the Mortgage Term Loan Agreement) of such Individual Property; and

			
	
			
				 (mm)
			Mortgage Borrower shall have satisfied all of the conditions in Section 10.24 of the Mortgage Project Loan Agreement to effect a Release (as such term is defined in the Mortgage Project Loan Agreement) of such Individual Property.

		
			Notwithstanding the foregoing provisions of this Section 10.24, if the Loan is included in a REMIC and the ratio of the outstanding balance of the Loan to the value of the Individual Property (each as determined by Lender in its reasonable discretion) exceeds 125% immediately after effecting the proposed Release, then no Release will be permitted.
		

		
			Following the occurrence of a Release of an Individual Property and the related portion of the Collateral in accordance with the terms and provisions of this Section 10.24, if the applicable Mortgage Borrower or 
		

		 

		

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		Operating Lessee that owned such Individual Property has breached (or breaches) any representation, warranty, covenant or other provision set forth in the Mortgage Loan Agreement or any other Mortgage Loan Documents, such breach shall not result in a Default or Event of Default under this Agreement or under the other Loan Documents, so long as Lender determines (from time to time) that the same does not have a continuing adverse effect on the Loan or the Mortgage Loan, Borrower’s ability to repay the Loan or Mortgage Borrower’s ability to repay the Mortgage Loan, the remaining Mortgage Borrowers or the remaining collateral for the Loan or the remaining collateral for the Mortgage Loan.
		
Intercreditor Agreement
		
			.  Each of Borrower and Operating Lessee Owner hereby acknowledges and agrees that any intercreditor agreement entered into between Lender and Mortgage Lender (any such agreement, an “Intercreditor Agreement”) will be solely for the benefit of Lender and Mortgage Lender, and that none of Borrower, Operating Lessee Owner or the Mortgage Loan Parties (i) shall be intended third–party beneficiaries of any of the provisions thereof, (ii) shall have any rights thereunder, or (iii) shall be entitled to rely on any of the provisions contained therein and shall not be entitled to receive a copy thereof.  Lender and Mortgage Lender shall have no obligation to disclose to Borrower, Operating Lessee Owner or any Mortgage Loan Party the contents of the Intercreditor Agreement. Borrower’s obligations hereunder are and will be independent of such Intercreditor Agreement and shall remain unmodified by the terms and provisions thereof.
		
Sale of Membership Interests
		
			.  Notwithstanding anything to the contrary in the Loan Documents, to the extent that any Release or Release Sale is consummated by a sale or other Transfer of the membership interests in the related Mortgage Borrower, any purchase and sale or other agreement with respect to such sale shall be subject to Lender’s prior review and approval which shall contain, among other things, a provision providing that the purchaser of such interests irrevocably waives any and all liability on the part of Borrower and Operating Lessee Owner.
		
Protective Advances
		
			.  Notwithstanding anything to the contrary in this Agreement or in any of the other Loan Documents, Lender shall have the right, but not the obligation, to make Protective Advances as and when Lender shall determine in Lender’s sole and absolute discretion.  All Protective Advances shall constitute a portion of the Debt and shall be secured by the Pledge.
		

			
	
			
				 9.
			MULTIPLE OBLIGORS

Multiple Borrowers and Operating Lessees
		
			.  Borrower and Operating Lessee Owner jointly and severally acknowledges, represents and warrants the following:
		
Inducement
		
			.  Each of Borrower and Operating Lessee Owner acknowledges that Lender has made the Loan to Borrower upon the security of each Borrower’s and Operating Lessee Owner’s respective interest in the Collateral and each applicable Individual Property and in reliance upon the aggregate of the Collateral and the parcels of the Property taken together being of greater value as collateral security than the sum of the Collateral and parcels of each Individual Property taken separately.
		
Separate Foreclosures
		
			.  Each of Borrower and Operating Lessee Owner desires and intends that the Pledge may be enforced (by foreclosure or otherwise) separately against any portion of the Collateral without enforcement against the remaining portion of the Collateral.
		
Intentionally Omitted.
		
			.
		
Separate Exercise of Remedies
		
			.  Lender may exercise remedies against each of Borrower and Operating Lessee Owner and its respective portion of the Collateral and interest in the respective Individual Property separately, whether or not Lender exercises remedies against any other 
		

		 

		

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		portion of the Collateral or interest in any other Mortgage Borrower, Operating Lessee or their Individual Property (or Individual Properties).  Lender may enforce Borrower’s or Operating Lessee Owner’s obligations without enforcing the other party’s obligations.  Any failure or inability of Lender to enforce Borrower’s or Operating Lessee Owner’s obligations shall not in any way limit Lender’s right to enforce the obligations of the other .  If Lender forecloses or exercises similar remedies against any portion of the Collateral, then such foreclosure or similar remedy shall be deemed to reduce the balance of the Loan only to the extent of the cash proceeds actually realized by Lender from such foreclosure or similar remedy or, if applicable, Lender’s credit bid at such sale, regardless of the effect of such foreclosure or similar remedy on the Note under the applicable state law.  If Lender accepts an assignment in lieu of foreclosure of a portion of the Collateral from Borrower or Operating Lessee Owner, then such acceptance shall not be deemed to diminish Borrower’s liability for the full amount of the Loan and Borrower’s or Operating Lessee Owner’s other liabilities under this Agreement and the other Loan Documents, except to the extent that Lender agrees otherwise in writing.
		
Breach Under Agreement
		
			.  It is the intent of the parties hereto in determining whether (a) a breach of any representation, warranty or covenant in this Agreement has occurred, or (b) an event has occurred which would create recourse obligations under this Agreement, that any such breach, occurrence or event with respect to Borrower or Operating Lessee Owner shall be deemed to be such a breach, occurrence or event with respect to Borrower or Operating Lessee Owner, as applicable, under this Agreement and that Borrower and Operating Lessee Owner need not have been involved with such breach, occurrence or event in order for the same to be deemed such a breach, occurrence or event with respect to Borrower or Operating Lessee Owner, as applicable, under this Agreement.
		
Waivers
		
			.
		
General
		
			.  Without notice to, or consent by, Borrower or Operating Lessee Owner, and in Lender’s sole and absolute discretion and without prejudice to Lender or in any way limiting or reducing each or any Borrower’s or Operating Lessee Owner’s liability for all of its obligations under this Agreement and the other Loan Documents, Lender may: (a) grant extensions of time, renewals or other indulgences or modifications to Borrower or Operating Lessee Owner or any other party under any of the Loan Document(s), (b) [intentionally omitted], (c) [intentionally omitted], (d) following an Event of Default, sell, exchange, release or exercise remedies with respect to any collateral for the Loan, (e) accept or reject additional collateral for the Loan or any portion thereof, (f) discharge or release any party or parties liable under the Loan Documents, (g) foreclose or otherwise realize on any collateral for the Loan, or attempt to foreclose or otherwise realize on any collateral for the Loan, whether such attempt is successful or unsuccessful, and whether such attempt relates to some or all or only some portion of the collateral for the Loan, (h) accept or make compositions or other arrangements or file or refrain from filing a claim in any bankruptcy, insolvency or similar proceeding, and (i) except as otherwise provided in this Agreement, credit payments in such manner and order of priority to principal, interest or other obligations as Lender may determine in its discretion.  Without limiting the generality of the foregoing, Borrower’s liability for the Loan shall continue even if Lender alters any obligations under the Loan Documents in any respect or Lender’s remedies or rights against Borrower or Operating Lessee Owner or Borrower or Operating Lessee Owner are in any way impaired or suspended without Borrower’s or Operating Lessee Owner’s consent.  If Lender performs any of the actions described in this Section, then Borrower’s and Operating Lessee Owner’s liability shall continue in full force and effect even if Lender’s actions impair, diminish or eliminate Borrower’s or Operating Lessee Owner’s subrogation, contribution or reimbursement rights (if any) against Borrower or Operating Lessee Owner or any other party.
		
Waivers of Rights and Defenses
		
			.  Each of Borrower and Operating Lessee Owner waives any right to require Lender to (a) proceed against any either Borrower or Operating Lessee 
		

		 

		

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		Owner or any particular portion of the Collateral or in any particular order of realization, (b) proceed against or exhaust any portion of the Collateral, or (c) pursue any other right or remedy.  Each of Borrower and Operating Lessee Owner agrees that Lender may proceed against each or any of Borrower or Operating Lessee Owner with respect to the obligations of Borrower or Operating Lessee Owner under this Agreement and the other Loan Documents without proceeding against or exhausting any portion of the Collateral.  Each of Borrower and Operating Lessee Owner agrees that Lender may unqualifiedly exercise in its sole discretion any or all rights and remedies available to it against either Borrower or Operating Lessee Owner without impairing Lender’s rights and remedies in enforcing the obligations of the other party under this Agreement or the other Loan Documents, under which each of Borrower’s and Operating Lessee Owner’s liabilities shall remain independent and unconditional.  Each of Borrower and Operating Lessee Owner agrees and acknowledges that Lender’s exercise of any such rights or remedies may affect or eliminate Borrower’s or Operating Lessee Owner’s right of subrogation or recovery (if any) against Borrower or Operating Lessee Owner, as applicable, and that Borrower or Operating Lessee Owner may incur a partially or totally non-reimbursable liability in performing its obligations under the Loan Documents.  Without limiting the generality of any other waivers in this Agreement, each of Borrower and Operating Lessee Owner expressly waives any statutory or other right that each or any of them might otherwise have to require Lender to exhaust the collateral for the Loan (or collateral held with respect to any other party) before Lender may proceed against the collateral for the Loan owned by Borrower or Operating Lessee Owner.
		
Additional Waivers
		
			.  Each of Borrower and Operating Lessee Owner waives diligence and all demands, protests, presentments and notices of every kind or nature except notices of default, notices to cure and notices that, in any of the foregoing cases, are either required by law or by the Loan Documents, including notices of protest, dishonor, nonpayment, acceptance of the obligations of Borrower and Operating Lessee Owner under this Agreement and the other Loan Documents and the creation, renewal, extension, modification or accrual of any such obligations.  No failure or delay on Lender’s part in exercising any power, right or privilege under the Loan Documents shall impair or waive any such power, right or privilege.
		
Deferral of Reimbursement
		
			.  Each of Borrower and Operating Lessee Owner waives any right to be reimbursed by the other for any payment(s) made by Borrower or Operating Lessee Owner or from Borrower’s or Operating Lessee Owner’s property on account of the obligations of Borrower or Operating Lessee Owner under this Agreement or any other Loan Document. Each of Borrower and Operating Lessee Owner acknowledges that each of Borrower and Operating Lessee Owner has received adequate consideration for execution of the Loan Documents to which Borrower and Operating Lessee Owner is a party by virtue of Lender’s making the Loan (which benefit each of Borrower and Operating Lessee Owner).  Except as otherwise provided in Section 11.5 hereof, neither Borrower nor Operating Lessee Owner requires or expects, and neither Borrower or Operating Lessee Owner is entitled to, any other right of reimbursement against the other as consideration for entering into the Loan Documents to which Borrower or Operating Lessee Owner is a party.
		
Deferral of Subrogation
		
			.
		
Deferral
		
			.  Borrower shall have no right of subrogation against Lender and no right of subrogation against any collateral for the Loan.
		
Effect of Invalidation
		
			.  To the extent that a court of competent jurisdiction determines that the provisions of Section 11.4.1 are void or voidable for any reason, Borrower’s rights of subrogation against Lender and Borrower’s right of subrogation against any collateral for the Loan shall at all times be junior and subordinate to Lender’s rights against all other Persons and Lender’s right, title and interest in such collateral for the Loan.
		

		 

		

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Intentionally Omitted
		
			.
		
No Merger
		
			.  It being the desire and intention of the parties hereto that the Pledge and the lien thereof do not merge in title to the Collateral, it is hereby understood and agreed that should Lender acquire any additional or other interest in or to the Collateral or the ownership thereof, then, unless a contrary intent is manifested by Lender as evidenced by an express statement to that effect in an appropriate document duly recorded, the Pledge and the lien hereof shall not merge in the title, toward the end that the Pledge may be foreclosed as if owned by a stranger to the title.  In addition, it being the desire and intention of the parties hereto that the Pledge and the liens thereof do not merge with any other pledge or security agreement in favor of Lender encumbering all or any portion of the Collateral and the lien thereof, it is hereby further understood and agreed that should Lender acquire any additional or other lien with respect to the Collateral, then, unless a contrary intent is manifested by Lender as evidenced by an express statement to that effect in an appropriate document duly recorded, the Pledge and the lien thereof shall not merge with any such other pledge or security agreement and the lien thereof, toward the end that the Pledge may be foreclosed as if owned by a stranger to any such other pledge or security agreement and the lien thereof.
		

			
	
			
				 10.
			MORTGAGE LOAN

Compliance With Mortgage Loan Documents
		
			.  Borrower and Operating Lessee Owner shall (or shall cause the Mortgage Loan Parties to):  (a) pay all principal, interest and other sums required to be paid by the Mortgage Loan Parties under and pursuant to the provisions of the Mortgage Loan Documents; (b) diligently perform and observe all of the terms, covenants and conditions of the Mortgage Loan Documents on the part of the Mortgage Loan Parties to be performed and observed, unless such performance or observance shall be waived in writing by Mortgage Lender; (c) promptly notify Lender of the giving of any notice by Mortgage Lender to Borrower, Operating Lessee Owner or any of the Mortgage Loan Parties of any default by any Mortgage Loan Party in the performance or observance of any of the terms, covenants or conditions of the Mortgage Loan Documents on the part of the Mortgage Loan Parties to be performed or observed and deliver to Lender a true copy of each such notice; (d) deliver a true, correct and complete copy of all notices, demands, requests or material correspondence (including electronically transmitted items) given or received by any Mortgage Loan Party or Guarantor to or from Mortgage Lender or its agent; and (e) not enter into or be bound by any Mortgage Loan Documents that are not approved by Lender.  Without limiting the foregoing, Borrower and Operating Lessee Owner shall cause the Mortgage Loan Parties to fund all reserves required to be funded pursuant to the Mortgage Loan Documents.  In the event of a refinancing of the Mortgage Loan permitted by the terms of this Agreement, Borrower and Operating Lessee Owner will cause all reserves on deposit with Mortgage Lender to be utilized by the Mortgage Loan Parties to reduce the amount due and payable to the Mortgage Lender or alternatively shall be remitted to Lender as a mandatory prepayment of the Loan.
		
Mortgage Loan Defaults
		
			.
		

			
	
			
				 (a)
			Without limiting the generality of the other provisions of this Agreement, and without waiving or releasing Borrower or Operating Lessee Owner from any of their obligations hereunder, if there shall occur any default under the Mortgage Loan Documents, each of Borrower and Operating Lessee Owner hereby expressly agrees that Lender shall have the immediate right, without prior notice to Borrower or Operating Lessee Owner, but shall be under no obligation:  (i) to pay all or any part of the Mortgage Loan and any other sums that are then due and payable, and to perform any act or take any action on behalf of Borrower, Operating Lessee Owner or any Mortgage Loan Party as may be appropriate, to cause all of the terms, covenants and conditions of the Mortgage Loan Documents on the part of the Mortgage Loan Parties to be performed or observed thereunder to be promptly performed or observed; and (ii) to pay any other amounts and take any other action as Lender, in its sole and 
		

		 

		

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			absolute discretion, shall deem advisable to protect or preserve the rights and interests of Lender in the Loan and/or the Collateral.  All sums so paid and the costs and expenses incurred by Lender in exercising rights under this Section 12.2 (including attorneys’ fees) (i) shall constitute additional advances of the Loan to Borrower, (ii) shall increase the then unpaid outstanding principal balance of the Note, (iii) shall bear interest at the Default Rate for the period from the date that such costs or expenses were incurred to the date of payment to Lender, (iv) shall constitute a portion of the Debt, and (v) shall be secured by the Pledge.  Neither Borrower nor Operating Lessee Owner shall impede, interfere with, hinder or delay (and neither Borrower nor Operating Lessee Owner shall permit, cause or allow any of the Mortgage Loan Parties to impede, interfere with, hinder or delay), any effort or action on the part of Lender to take any action in accordance with this Section 12.2(a).

			
	
			
				 (b)
			Each of Borrower and Operating Lessee Owner hereby indemnifies Lender from and against all liabilities, obligations, losses, damages, penalties, assessments, actions, or causes of action, judgments, suits, claims, demands, actual, out-of-pocket costs and expenses (including actual, out-of-pocket reasonable attorneys’ and other professional fees, whether or not suit is brought, and settlement costs) and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Lender as a result of the foregoing actions.  Lender shall not have any obligation to Borrower, Operating Lessee Owner, any Mortgage Loan Party or any other party to make any such payment or performance.  Neither Borrower nor Operating Lessee Owner shall not impede, interfere with, hinder or delay, and shall not permit any Mortgage Loan Party to impede, interfere with, hinder or delay, any effort or action on the part of Lender to cure any default or asserted default under the Mortgage Loan, or to otherwise protect or preserve Lender’s interests in the Loan and the Collateral following a default or asserted default under the Mortgage Loan.

			
	
			
				 (c)
			Any default or breach by any Mortgage Loan Party under the Mortgage Loan Documents which is not cured prior to the expiration of any applicable grace, notice or cure period afforded to the Mortgage Loan Parties under the Mortgage Loan Documents shall constitute an Event of Default, without regard to any subsequent payment or performance of any such obligations by Lender.  Each of Borrower and Operating Lessee Owner hereby grants Lender and any person designated by Lender the right to enter upon any Individual Property at any time following the occurrence and during the continuance of any default, or the assertion by Mortgage Lender that a default has occurred under the Mortgage Loan Documents, for the purpose of taking any such action or to appear in, defend or bring any action or proceeding to protect Borrower’s, Operating Lessee Owner’s any Mortgage Loan Party’s and/or Lender’s interest.  Lender may take such action as Lender deem reasonably necessary or desirable to carry out the intents and purposes of this subsection (including communicating with Mortgage Lender with respect to any Mortgage Loan defaults), without prior notice to, or consent from, Borrower, Operating Lessee Owner or any Mortgage Loan Party.  Lender shall not have any obligation to complete any cure or attempted cure undertaken or commenced by Lender.

			
	
			
				 (d)
			If Lender shall receive a copy of any notice of default under the Mortgage Loan Documents sent by Mortgage Lender to any Mortgage Loan Party, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender, in good faith, in reliance thereon.  As a material inducement to Lender’s making the Loan, each of Borrower and Operating Lessee Owner hereby absolutely and unconditionally releases and waives all claims against Lender arising out of Lender’s exercise of its rights and remedies provided in this Section 12.2, except for Lender’s gross negligence or willful misconduct.  In the event that Lender makes any payment in respect of the Mortgage Loan, Lender shall be subrogated to all of the rights of Mortgage Lender under the Mortgage Loan Documents against the Property, in addition to all other rights it may have under the Loan Documents.

			
	
			
				 (e)
			For the purpose of carrying out the provisions and exercising the rights, powers and privileges granted in this Section 12.2, each of Borrower and Operating Lessee Owner hereby 
		

		 

		

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			irrevocably constitutes and appoints Lender its true and lawful attorney-in-fact to, during the continuance of a an Event of Default, execute, acknowledge and deliver any instruments and do and perform any acts such as are referred to in this Section 12.2  in the name and on behalf of Borrower and/or Operating Lessee Owner.  This power of attorney is a power coupled with an interest and cannot be revoked.

			
	
			
				 (f)
			All Protective Advances and other sums paid by Lender and the costs and expenses incurred by Lender in exercising its rights under this Section 12.2 (including, without limitation, actual, out-of-pocket attorneys’ and other professional fees), shall constitute a portion of the Debt and shall be secured by the Pledge.

			
	
			
				 (g)
			Any default or breach by any Mortgage Loan Party under the Mortgage Loan Documents which is not cured prior to the expiration of any applicable grace, notice or cure period afforded to the Mortgage Loan Parties under the Mortgage Loan Documents shall constitute an Event of Default, without regard to any subsequent payment or performance of any such obligations by Lender.

Mortgage Loan Estoppels
		
			.  Borrower and Operating Lessee Owner shall (or shall cause the Mortgage Loan Parties to), from time to time obtain from Mortgage Lender such certificates of estoppel with respect to compliance by the Mortgage Loan Parties with the terms of the Mortgage Loan Documents as may be reasonably requested by Lender.  In the event or to the extent that Mortgage Lender is not legally obligated to deliver such certificates of estoppel and is unwilling to deliver the same, or is legally obligated to deliver such certificates of estoppel but breaches such obligation, then neither Borrower nor Operating Lessee Owner shall not be in breach of this provision so long as Borrower and Operating Lessee Owner furnishes to Lender an estoppel executed by Borrower, Operating Lessee Owner and the Mortgage Loan Parties expressly representing to Lender the information requested by Lender regarding compliance by the Mortgage Loan Parties with the terms of the Mortgage Loan Documents.  Each of Borrower and Operating Lessee Owner hereby indemnifies Lender from and against all liabilities, obligations, losses, damages, penalties, assessments, actions, or causes of action, judgments, suits, claims, demands, actual, out-of-pocket costs and expenses (including actual, out-of-pocket attorneys’ and other professional fees, whether or not suit is brought and settlement costs) and disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against Lender based in whole or in part upon any fact, event, condition, or circumstances relating to the Mortgage Loan which was misrepresented in, or which warrants disclosure and was omitted from such estoppel executed by Borrower, Operating Lessee Owner and the Mortgage Loan Parties.
		
No Amendment to Mortgage Loan Documents
		
			.  Without obtaining the prior written consent of Lender, none of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor, any Cindat Entity or any Mortgage Loan Party shall, or shall cause or permit any Mortgage Loan Party to, (i) enter into any amendment or modification in writing of any of the Mortgage Loan Documents, (ii) grant to Mortgage Lender any consent or waiver in writing, or (iii) exercise any remedy available to the Mortgage Loan Parties under the Mortgage Loan Documents or any right or election under the Mortgage Loan Documents.  Each of Borrower and Operating Lessee Owner shall cause the Mortgage Loan Parties to provide Lender with a copy of any amendment or modification to the Mortgage Loan Documents within five (5) days after the execution thereof.
		
Acquisition of Mortgage Loan
		
			.  
		

			
	
			
				 (h)
			None of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor, any Cindat Entity, any Mortgage Loan Party or any Affiliate of any of the foregoing shall acquire or agree to acquire the Mortgage Loan, or any portion thereof or any interest therein, or any direct or indirect ownership interest in the holder of the Mortgage Loan, via purchase, transfer, exchange or 
		

		 

		

			96

		

 

		

			 

		

			otherwise, and any breach or attempted breach of this provision shall constitute an Event of Default hereunder.  

			
	
			
				 (i)
			If, solely by operation of applicable subrogation law, any such party shall have failed to comply with the foregoing, then Borrower and Operating Lessee Owner:  (i) shall immediately notify Lender of such failure; (ii) shall cause any and all such prohibited parties acquiring any interest in the Mortgage Loan Documents:  (A) not to enforce the Mortgage Loan Documents; and (B) upon the request of Lender, to the extent any of such prohibited parties has or have the power or authority to do so, to promptly:  (1) cancel the promissory note evidencing the Mortgage Loan, (2) reconvey and release the lien securing the Mortgage Loan and any other collateral under the Mortgage Loan Documents, and (3) discontinue and terminate any enforcement proceeding(s) under the Mortgage Loan Documents.

Intentionally Omitted
		
			.
		
Refinancing or Prepayment of the Mortgage Loan
		
			.  None of Borrower, Borrower Representative, Operating Lessee Owner, Guarantor or any Cindat Entity shall (or shall cause any Mortgage Loan Party to) make any partial or full prepayments of amounts owing under the Mortgage Loan or refinance the Mortgage Loan without the prior written consent of Lender, unless such refinancing is expressly permitted pursuant to this Agreement, the Mortgage Loan Agreement or results in the concurrent payment in full of the Debt.
		

		
			[The Remainder of the Page is Intentionally Blank]
		

		
			 
		

		

		

		 

		

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

		
			﻿
		

		
			BORROWER:
		

		
			﻿
		

		
			CINDAT HERSHA OWNER JV ASSOCIATES, LLC, a Delaware limited liability company
		

		
			﻿
		

		
			﻿
		

		
			By:_/s/ Ashish R. Parikh______________________
Name: Ashish R. Parikh
Title: Authorized Signatory
		

		
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			﻿
		

		
			OPERATING LESSEE OWNER:
		

		
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			CINDAT HERSHA LESSEE JV ASSOCIATES, LLC, a Delaware limited liability company
		

		
			By: /s/ Ashish R. Rarikh
Name: Ashish R. Parikh
Title: Authorized Signatory
		

		
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			LENDER:
		

		
			﻿
		

		
			HERSHA MEZZ GAP LENDER, LLC, 
		

		
			a Delaware limited liability company
		

		
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			﻿
		

		
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			By:  /s/ Derek Smith
Name:  Derek Smith
Title:  Authorized Signatory
		

		
			﻿
		

		
			By:  /s/ Warren Min
Name:  Warren Min
Title:  Authorized Signatory
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			

		

 

		

			 

		

		SCHEDULE 1

INDEX OF OTHER DEFINITIONS
		

		
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			Schedule 1 - 1

		

 

		

			 

		

		Schedule 2
		

		
			Hotel Locations, Mortgage Borrower, Operating Lessee
		

		
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			Schedule 2 - 1

		

 

		

			 

		

		Schedule 3
		

		
			Organization of Borrower and Operating Lessee Owner
		

		
			 
		

		

		

		 

		

			Schedule 3 - 1

		

 

		

			 

		

		Schedule 4
		

		
			Definition of Special Purpose Entity
		

		
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			Schedule 4 - 2

		

 

		

			 

		

		Schedule 5
		

		
			PIP Budgets
		

		
			 
		

		

		

		 

		

			Schedule 5 - 1

		

 

		

			 

		

		Schedule 6
		

		
			PIPs
		

		
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			Schedule 6 - 1

		

 

		

			 

		

		Schedule 7
		

		
			Operating Lease
		

		
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			Schedule 7 - 1

		

 

		

			 

		

		Schedule 8
		

		
			Franchise Agreement
		

		
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			Schedule 8 - 1

		

 

		

			 

		

		Schedule 9

Calculation of UNCF
		

		
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			Schedule 9 - 1

		

 

		

			 

		

		Schedule 10

Approved Press Release

		

		
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			Schedule 10 - 1

		

 

		

			 

		

		Schedule 11(a)

Allocated Loan Amounts
		

		
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			Schedule 11(a) - 1

		

 

		

			 

		

		Schedule 11(b)

Aggregate Allocated Loan Amounts
		

		
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			Schedule 11(b) - 1

		

 

		

			 

		

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			Schedule 12

Hampton Inn Chelsea Lost Notes
		

		
			 
		

		

		

		 

		

			Schedule 12 - 1

		

 

		

			 

		

		Schedule 13
		

		
			Required Repairs
		

		
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			Schedule 13 - 1

		

 

		

			 

		

		Exhibit A
		

		
			Intentionally Omitted
		

		
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			Exhibit A - 1

		

 

		

			 

		

		Exhibit B
		

		
			Intentionally Omitted
		

		
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			Exhibit B - 1Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of May 4, 2016, between Synergy Pharmaceuticals Inc., a Delaware corporation (the “Company”), and  each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agrees as follows:

 

ARTICLE I.
 DEFINITIONS

 

1.1                               Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.4.

 

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

 

“Additional Registration Statement” shall mean any registration statement of the Company filed or to be filed with the Commission under the rules and regulations promulgated under the Securities Act, including the related prospectus, amendments and supplements to such registration statement, and including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

 

 

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived, but in no event later than the third Trading Day following the date hereof.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel” means Sichenzia Ross Friedman Ference LLP, with offices located at 61 Broadway, 32nd Floor, New York, NY 10006.

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Insolvent” shall have the meaning ascribed to such term in Section 3.1(i)(ii).

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

“Irrevocable Transfer Agent Instructions” shall have the meaning ascribed to such term in Section 2.2(a)(ii).

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

2

 

“Per Share Purchase Price” equals $3.00, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the final prospectus filed for the Registration Statement.

 

“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.7.

 

“Registrable Shares” means the Shares sold and delivered to the Purchasers pursuant to this  Agreement (as adjusted for stock splits, combinations, recapitalizations, exchange or readjustment of such shares after the date hereof) and any securities issued in respect of such Shares by reason of or in connection with any exchange for or replacement of such shares or any stock dividend, stock distribution, stock split, purchase in any rights offering or in connection with any combination of shares, recapitalization, merger or consolidation, or any other equity securities issued pursuant to any other pro rata distribution with respect to the Company’s capital stock.

 

“Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 4.12 and 4.13, including all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the Financial Industry Regulatory Authority, Inc., transfer taxes, fees of transfer agents and registrars.

 

“Registration Statement” means the effective registration statement with Commission file No. 333-205484 which registers the sale of the Shares to the Purchaser.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

3

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares purchased hereunder as specified below such Purchaser’s name on the signature pages of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

 

“Subsidiary” means any subsidiary of the Company, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Termination Date” shall have the meaning ascribed to such term in Section 5.1.

 

“Trading Day” means a day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Philadelphia Stock Transfer, Inc., the current transfer agent of the Company, with a mailing address of 2320 Haverford Rd., Suite 230, Ardmore, PA 19003, and any successor transfer agent of the Company.

 

4

 

ARTICLE II.
 PURCHASE AND SALE

 

2.1                               Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase that number of Shares specified below such Purchaser’s name on the signature pages of this Agreement and next to the heading “Shares”.  On the Closing Date, each Purchaser shall deliver to the Company via wire transfer, immediately available funds equal to its Subscription Amount as set forth on the signature page hereto executed by each Purchaser and the Company shall deliver to each Purchaser such number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of Company Counsel or such other location as the parties shall mutually agree.

 

2.2                               Deliveries.

 

(a)                                 On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                                     this Agreement and each of the other Transaction Documents to which the Company is a party, each duly executed by the Company;

 

(ii)                                  a copy of the duly executed irrevocable instructions to the Transfer Agent (the “Irrevocable Transfer Agent Instructions”), instructing the Transfer Agent to deliver at the Closing via the Depository Trust Company Deposit Withdrawal Agent Commission System (“DWAC”) such number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of the Purchaser as specified on the signature pages of this Agreement and free of any restrictive legend, which instructions shall have been delivered to and acknowledged in writing by the Transfer Agent, including duly executed copies of the Notice of Effectiveness and opinion of Company counsel in the forms set forth as exhibits to the Irrevocable Transfer Agent Instructions;

 

(iii)                               a certificate, in a form reasonably acceptable to such Purchaser, executed by the Secretary of the Company and dated as of the Closing Date, as to (1) the resolutions consistent with Section 3.1(c) as adopted by the Board of Directors, (2) the Certificate of Incorporation of the Company, (3) the Bylaws of the Company as in effect at the Closing and (4) the Company being in good standing (including attaching a certificate of good standing dated not more than five Business Days prior to the Closing issued by the Secretary of State of the State of Delaware);

 

(iv)                              a certificate, in a form reasonably acceptable to such Purchaser, executed by the Chief Executive Officer of the Company, dated as of the Closing 

 

5

 

Date, certifying the satisfaction of the conditions set forth in Sections 2.3(b)(i),  2.3(b)(ii) and 2.3(b)(iv);

 

(v)                                 a letter from the Company’s transfer agent certifying the number of shares of Common Stock outstanding on the Closing Date immediately prior to the Closing; and

 

(vi)                              the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

(b)                                 On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

 

(i)                                     this Agreement duly executed by such Purchaser; and

 

(ii)                                  such Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by the Company.

 

2.3                               Closing Conditions.

 

(a)                                 The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                                     the accuracy in all material respects on the Closing Date of the representations and warranties of each Purchaser contained herein (unless as of a specific date therein, which shall be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii)                               the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b)                                 The respective obligations of each Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)                                     the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein, which shall be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed, including without limitation the issuance of all Shares prior to the Closing as required by the Transaction Documents;

 

(iii)                               the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

6

 

(iv)                              there shall have been no event, change or development that has had, or would reasonably be expected to have, a Material Adverse Effect with respect to the Company since the date hereof;

 

(v)                                 no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority that prohibits the consummation of any of the transactions contemplated by the Transaction Documents, and no Proceedings shall be in progress or pending by any Person that seeks to enjoin, prohibit or otherwise adversely affect any of the transactions contemplated by the Transaction Documents;

 

(vi)                              the Shares shall be designated for listing or quotation (as the case may be) on the Company’s principal Trading Market; and

 

(vii)                           from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.

 

ARTICLE III.
 REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations and Warranties of the Company.  Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a)                                 Subsidiaries.  All of the direct and indirect Subsidiaries of the Company, and the place and form of organization of each Subsidiary are as set forth in the SEC Reports.  The Company owns equity interests of each Subsidiary as set forth in the Prospectus, free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are duly authorized, validly issued and are fully paid, non-assessable and free of preemptive and similar rights of others to subscribe for or purchase securities.  Except for the capital stock of, or other equity or voting interests in, those Subsidiaries set forth in the SEC Reports, the Company does not own, directly or indirectly, any capital stock of, or other equity or voting interests in, any Person.

 

7

 

(b)                                 Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c)                                  Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action or corporate proceeding is required by the Company, the Board of Directors or the Company’s stockholders in connection therewith other than in connection with the Required Approvals.  This Agreement has been duly and validly executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. Each Transaction Document other than this Agreement to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)                                 No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions 

 

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contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default or breach (or an event that with notice or lapse of time or both would become a default or breach) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise), certificate, authorization, permit, license, or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary  is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e)                                  Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person, including any Trading Market or any shareholder approval under the provisions of the Company’s principal Trading Market, in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)                                   Issuance of the Shares; Registration.  The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens and free of any restrictive legend.  The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on July 14, 2015 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement.  The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.  The Company, if required by the rules and regulations of the Commission, proposes to file the Prospectus Supplement, with the Commission pursuant to Rule 424(b).  At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will 

 

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conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The issuance of the Shares pursuant to this Agreement will be registered pursuant to the Registration Statement and the Prospectus.

 

(g)                                  Capitalization.  The capitalization of the Company (including the authorized capital stock of the Company, the issued and outstanding shares of capital stock of the Company and the number of shares of capital stock of the Company issuable upon the exercise or conversion, as applicable, of any Common Stock Equivalents) is as set forth on Schedule 3.1(g).  Except as disclosed on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  Except as disclosed on Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Shares and as disclosed in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable (or any other securities of the Company which, whether after notice, lapse of time, or payment of monies, are or would be convertible into or exchangeable or exercisable) for, or giving any Person any right to subscribe for or acquire, or any phantom stock or stock appreciation rights relating to, any shares of Common Stock or other capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or other capital stock of the Company.  The issuance and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser). All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares.  Except as disclosed in the SEC Reports, there are no stockholders agreements, voting agreements, “poison pill” or similar anti-takeover agreements or plans or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

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(h)                                 SEC Reports; Financial Statements.  The Company has filed or furnished, as applicable, all reports, schedules, forms, statements and other documents required to be filed or furnished, as applicable, by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, and any rules and regulations promulgated thereunder applicable to such SEC Report, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of the Company is required to file or furnish any report, schedule, form, statement or other document with, or make any other filing with, or furnish any other material to, the Commission.  The financial statements of the Company included in or incorporated by reference into the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared from, and are in accordance with the books and records of the Company and its Subsidiaries and have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations, changes in stockholders’ equity and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(i)                                     Material Changes; Undisclosed Events, Liabilities or Developments.

 

(i)                                     Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (1) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (2) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed by the Company under applicable securities laws in filings made with the Commission, (3) the Company has not altered its method of accounting or the identity of its auditors, (4) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (5) the Company has not issued any equity securities to 

 

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any officer, director or Affiliate, except pursuant to existing Company stock option plans, (6) the Company has not sold any assets outside of the ordinary course of business or (7) the Company has not made any material capital expenditures, individually or in the aggregate, outside of the ordinary course of business.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Shares contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company, any of its Subsidiaries or any of their respective business, prospects, properties, liabilities, operations (including results thereof), assets or condition (financial or otherwise) that (x) would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 3 Trading Days prior to the date that this representation is made, or (y) could reasonably be expected to result in a Material Adverse Effect.

 

(ii)                                  The Company has not taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company have any knowledge or reason to believe that any of its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company is not, and after giving effect to the transactions contemplated by the Transaction Documents to occur at the Closing will not be, Insolvent (as defined below). “Insolvent” means, (x) the present fair saleable value of the Company’s assets is less than the amount required to pay the Company’s total indebtedness, (y) the Company is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (z) the Company intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature. The Company has not engaged in any business or in any transaction, and is not about to engage in any business or in any transaction, for which the Company’s remaining assets constitute unreasonably small capital.

 

(j)                                    Litigation.  There is no action, suit, order, claim, litigation, inquiry, notice of violation, arbitration, mediation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) (i) that have had or would reasonably be expected to have a Material Adverse Effect or (ii) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.  Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment or decree of a court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) that has had or 

 

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would reasonably be expected to have a Material Adverse Effect.  Except as has not had and would not reasonably be expected to have a Material Adverse Effect, there is no investigation or review pending (or, to the knowledge of the Company, threatened) by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) with respect to the Company or any of its Subsidiaries.

 

(k)                                 Labor Relations.  No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.

 

(l)                                     Compliance.  Since January 1, 2015, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or governmental body or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(m)                             Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(n)                                 Title to Assets.  The Company and the Subsidiaries have good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property, do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries which is material to the business of the Company and Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(o)                                 Patents and Trademarks.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service 

 

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marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights, and all applications and registrations therefor, necessary or material to conduct their respective businesses as now conducted and as presently proposed to be conducted (collectively, the “Intellectual Property Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within three (3) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as disclosed in the SEC Reports.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties.

 

(p)                                 Material Contracts.  For purposes of this Agreement, “Material Contracts” means each outstanding contract or agreement to which the Company or any of its Subsidiaries is a party, which is or would be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K under the Securities Act.  Except as has not had and would not reasonably be expected to have a Material Adverse Effect, (i) each Material Contract is in full force and effect (except for those contracts or agreements that have expired in accordance with their terms), is a legal, valid and binding agreement of the Company or such Subsidiary, as the case may be, and, to the knowledge of the Company, of each other party thereto, enforceable against the Company or such Subsidiary, as the case may be, and, to the knowledge of the Company, against the other party or parties thereto, in each case, in accordance with its terms, except (x) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (y) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (z) insofar as indemnification and contribution provisions may be limited by applicable law, (ii) each of the Company and its Subsidiaries has performed or is performing all obligations required to be performed by it under the Material Contracts and is not (with or without notice or lapse of time or both) in breach or default thereunder, and has not knowingly waived or failed to enforce any rights or benefits thereunder (other than in the ordinary course of business consistent with past practice), and, (iii) to the knowledge of the Company, no other party to any of the Material Contracts is (with or without notice or lapse of time or both) in breach in any material respect or default thereunder.

 

(q)                                 Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage 

 

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expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(r)                                    Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company in the ordinary course of business and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(s)                                   Sarbanes-Oxley.  The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.

 

(t)                                    Certain Fees.  Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

 

(u)                                 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(v)                                 Listing and Maintenance Requirements.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

(w)                               Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that 

 

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neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement.   The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

(x)                                 No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

 

(y)                                 Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary (i) has made or filed all United States federal and state income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

(z)                                  Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of 

 

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which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(a)                                 Office of Foreign Asset Control.  Except as has not had and would not reasonably be expected to have a Material Adverse Effect, there is not, and has not been, any pending or, to the Company’s knowledge, threatened, legal, administrative, arbitral or other material proceeding, investigation (formal or informal), litigation, claim, suit or action by any governmental entity against the Company or any of its Subsidiaries, nor is there any judgment, order or decree imposed (or, to the knowledge of the Company, threatened to be imposed) upon the Company or any of its Subsidiaries by or before any governmental entity, in each case, in connection with an alleged violation of laws relating to the import or export (including deemed export) of data, goods or services to any foreign jurisdiction against which the United States or the United Nations maintains sanctions or export controls, including applicable regulations of the United States Department of Commerce, the United States Department of State and the Office of Foreign Asset Control of the United States Department of Treasury.

 

(aa)                          Acknowledgment Regarding Purchasers’ Purchase of Shares.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(bb)                          Acknowledgement Regarding Purchasers’ Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(d) and 4.11 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (y) each Purchaser may engage in hedging activities at various times during the period that the Shares are outstanding, and (z) such 

 

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hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

(cc)                            Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

 

(dd)                          Internal Accounting and Disclosure Controls.  Except as disclosed in the SEC Reports, the Company and each of its Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that is effective and sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. Except as disclosed in the SEC Reports, the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.

 

(ee)                            Off Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed or that otherwise could reasonably be expected to result in a Material Adverse Effect.

 

3.2                               Representations and Warranties of the Purchasers.  Each Purchaser, for itself, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

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(a)                                 Organization; Authority.  Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  This Agreement has been duly and validly executed and delivered by such Purchaser, and is a valid and binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)                                 Purchaser Status.  At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.  Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

 

(c)                                  Experience of such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

(d)                                 Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) as of the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other 

 

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portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.  Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

 

ARTICLE IV.
 OTHER AGREEMENTS OF THE PARTIES

 

4.1                               Furnishing of Information.  For a period of 2 years from the Closing Date, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

4.2                               Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.3                               Securities Laws Disclosure; Publicity.  The Company shall (a), issue a press release disclosing the material terms of the transactions contemplated hereby upon the earlier of (i) filing of the Prospectus Supplement and (ii)  within four (4) Trading Days immediately following the date hereof and (b) file a Current Report on Form 8-K with the Commission, including the Transaction Documents as exhibits thereto, within four (4) Trading Days following the date hereof.  From and after the issuance of such press release, the Company shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.  The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case 

 

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the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents (including signature pages thereto) with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide such Purchaser with prior notice of such disclosure permitted under this clause (b).

 

4.4                               Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.5                               Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will, after the date hereof, provide any Purchaser or their respective agents or counsel with any information that the Company believes constitutes material non-public information, and such Purchaser agrees not to, and shall direct its agents and counsel not to, after the date hereof request any material non-public information from the Company or any Person acting on its behalf, unless prior thereto such Purchaser shall have executed a written agreement with the Company regarding the confidentiality and use of such information.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

4.6                               Use of Proceeds.  Except as set forth on Schedule 4.6 attached hereto, the Company shall use the net proceeds from the sale of the Shares hereunder for commercialization activities for plecanatide, further clinical development of plecanatide and dolcanatide and working capital purposes and shall not use such proceeds for: (a)) the redemption of any Common Stock or Common Stock Equivalents, or (b) the settlement of any outstanding litigation.

 

4.7                               Indemnification of Purchasers.   Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all actions, suits, claims, proceedings, losses, liabilities, obligations, taxes, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Purchaser Party may suffer or 

 

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incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against such Purchaser Party in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing (provided that the failure of Purchaser Party to give notice as provided herein shall not relieve the Company of its obligations under this Section 4.7 unless and to the extent that the Company shall have been actually prejudiced by the failure of such Purchaser Party to so notify he Company), and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of  such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of any Purchaser Party against the Company or others, and (y) any liabilities the Company may be subject to pursuant to law.  If the foregoing indemnification provided for herein is determined to be unavailable for any reason or is insufficient to hold Purchaser Party harmless in respect of any Losses referred to herein, then, in lieu of indemnifying such Purchaser Party hereunder, the Company shall contribute to the amount paid or payable by such Purchaser Party as a result of such Losses (and expenses related thereto) (i) in such proportion as is appropriate to reflect the relative fault of each of the Company and the Purchaser and any other relevant and equitable considerations.

 

4.8                               Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation (as the case may be) of the Common Stock on the Trading Market on which it is currently listed or designated for quotation (as the case may be), and concurrently with or prior to the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly, but in no event later than the Closing Date, secure the listing or designation 

 

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for quotation (as the case may be) of all of the Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly as possible.  The Company will then take all action necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.  The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4.8.

 

4.9                               Certain Transactions and Confidentiality. Each Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3.  Each Purchaser, severally and  not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.3, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.3 and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.3.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.

 

4.10                        Transfer Agent Instructions. The Company hereby covenants and agrees that it will not give the Transfer Agent any instruction with respect to the Shares other than the Irrevocable Transfer Agent Instructions.

 

4.11                        Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Shares to the public without registration, while a public market exists for the Shares, the Company will use its commercially reasonable efforts to:

 

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(a)                                 make and keep public information available, as those terms are understood and defined in Rule 144, at all times while Shares are outstanding; and

 

(b)                                 file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time it is subject to such reporting requirements).

 

4.12                        Shelf Registration.

 

(a)                                 Subject to the limitations set forth in this Section 4.12, the Company agrees to file with the Commission as soon as reasonably practicable following a written request of a Purchaser (but in any event within 30 days after such request) a shelf Additional Registration Statement on Form S-1 or such other form under the Securities Act then available to the Company providing for the resale of any Registrable Shares pursuant to Rule 415 from time to time by the Holders (a “Shelf Registration Statement”).  The Company shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission as soon as practicable after the initial filing thereof  (but in any event within 90 days), except that if the Company is a “well known seasoned issuer” as defined in Rule 405 under the Securities Act as of the date of filing the applicable Additional Registration Statement, the Company shall file or amend an “automatic shelf registration statement” as defined in Rule 405 under the Securities Act.   Any Shelf Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available (excluding a sale of Shares to an underwriter for reoffering to the public), by the holders of any and all Registrable Shares. The Company shall use its reasonable best efforts to keep any Shelf Registration Statement effective until such time as there are no Registrable Shares remaining.

 

(b)                                 During (i) the period following receipt of written notice from the Company that the Board of Directors has determined, in good faith, that permitting continuing offers and sales of Registrable Shares registered under a Shelf Registration Statement would (A) require the disclosure of material non-public information concerning the Company that at the time is not, in the good faith judgment of the Board of Directors, in the best interests of the Company to disclose and is not otherwise required to be disclosed or (B) otherwise materially interfere with financing plans, acquisition activities or business activities of the Company (provided that (x) the Company may not suspend use of the applicable Additional Registration Statement pursuant to this clause (i) for a period of more than 60 days per notice and (y) the total number of days that any such suspensions pursuant to this clause (i) may be in effect in any 12-month period shall not exceed 120 days in the aggregate), (ii) during the period following receipt of written notice from the Company that an Additional Registration Statement, prospectus or prospectus supplement contains or may contain an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading (excluding for purposes of this clause (ii) any event or circumstances to which clause (i) could be applicable) or (iii) the suspension of effectiveness of the Shelf Registration Statement by the Commission, each holder of Registrable Shares shall discontinue its disposition thereof pursuant to the 

 

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applicable Shelf Registration Statement until such holder has received copies of a supplemented or amended prospectus or prospectus supplement, or until such holder is advised in writing by the Company that the use of the prospectus and, if applicable, prospectus supplement may be resumed. If so directed by the Company, in the case of a suspension pursuant to clause (ii), the each holder of Registrable Shares shall deliver to the Company all copies, other than permanent file copies then in their possession, of the prospectus and, if applicable, prospectus supplement covering such Registrable Shares current at the time of receipt of such suspension notice. The Company shall use reasonable best efforts to cure any untrue statement of a material fact or material omission in order to permit the resumption of dispositions at the earliest practicable date following a suspension in accordance with clause (iii).

 

4.13                        Copies of Registration Statements.  The Company will, if requested, prior to filing any Additional Registration Statement pursuant to this Article IV or any amendment or supplement thereto, furnish to the holders of Registrable Shares participating in the offering related to such Additional Registration Statement, and thereafter furnish to such holders, such number of copies of such Additional Registration Statement, amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and the prospectus included in such Additional Registration Statement (including each preliminary prospectus) as such holders may reasonably request in order to facilitate the sale of the Registrable Shares by such holders.

 

4.14                        Expenses.  The Company shall pay all Registration Expenses in connection with its obligations under Sections 4.12 and 4.13.

 

ARTICLE V.
 MISCELLANEOUS

 

5.1                               Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before May 6, 2016 (the “Termination Date”); provided, however, that no such termination will affect the right of any party to sue for any breach by the other party (or parties).

 

5.2                               Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Shares to the Purchasers.

 

5.3                               Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

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5.4                               Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.5                               Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers of the Shares purchased hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

5.6                               Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

5.7                               Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchaser.”

 

5.8                               No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7.

 

5.9                               Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection 

 

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herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.7, the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

5.10                        Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Shares.

 

5.11                        Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

5.12                        Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

5.13                        Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

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5.14                        Replacement of Shares.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Shares.

 

5.15                        Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

5.16                        Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or any Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

5.17                        Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

 

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5.18                        Saturdays, Sundays, Holidays, etc.    If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

5.19                        Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

 

5.20                        WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	
SYNERGY   PHARMACEUTICALS INC.
    	
 
    	
Address   for Notice:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
420   Lexington Avenue, Suite 2012 
    
	
 
    	
 
    	
New   York, NY 10170
    
	
 
    	
 
    	
Attn:   CEO
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Fax:
    
	
Name:
    	
Gary   Jacob
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
 
    
	
With a copy to (which shall not constitute   notice):
    	
 
    	
 
    

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

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[PURCHASER SIGNATURE PAGE TO SYNERGY SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	
Name of Purchaser:                                 
    
	
 
    
	
Signature of Authorized   Signatory of Purchaser:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name of Authorized Signatory:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title of Authorized Signatory:
    	
 
    	
 
    	
 
    
	
 
    
	
Email Address of Authorized Signatory:                                 
    
	
 
    
	
Facsimile Number of Authorized Signatory:                                 
    
	
 
    
	
Address and Contact Number for Notice of   Purchaser:                                 
    

 

 

	
Address   for Delivery of Securities for Purchaser (if not same as address for notice):
    
	
 
    
	
Subscription   Amount: $                                 
    
	
 
    
	
Shares:                                 
    
	
 
    
	
EIN   Number (if applicable):                                 
    
	
 
    
	
Broker   Name:                                 
    
	
 
    
	
Institutional   ID:                                 
    
	
 
    
	
DTC   Participant Number:                                 
    

 

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