Document:

GUARANTY OF RECOURSE OBLIGATIONS

 

This GUARANTY
OF RECOURSE OBLIGATIONS (this “Guaranty”) is executed as of April 8, 2014 by DANIEL A.
HOFFLER, an individual, having an office at 222 Central Park Avenue, Suite 2100, Virginia Beach, Virginia 23462
(“Hoffler”), LOUIS S. HADDAD, an individual, having an office at 222 Central Park Avenue,
Suite 2100, Virginia Beach, Virginia 23462 (“Haddad”) and AMERICAN REALTY CAPITAL HOSPITALITY
TRUST, INC., a Maryland corporation, having an office at 405 Park Avenue, 15th Floor, New York, NY 10022, Attn: Jon
Mehlman (“ARC REIT”; each of the foregoing, a “Guarantor”, and
collectively, “Guarantors”), for the benefit of GERMAN AMERICAN CAPITAL CORPORATION, a
Maryland corporation, having an address at 60 Wall Street, 10th Floor, New York, New York 10005 (together with its successors
and/or assigns, “Lender”).

 

W I T N E S S E T H:

 

A.          
Pursuant to that certain Promissory Note, dated of even date herewith, executed by TCA BLOCK 7 HOTEL, L.L.C., a Virginia
limited liability company (“Borrower”) and payable to the order of Lender in the original principal amount
of TWENTY MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS ($20,700,000.00) (together with all renewals, modifications,
increases and extensions thereof, the “Note”), Borrower has become indebted, and may from time to time
be further indebted, to Lender with respect to a loan (the “Loan”) which is made pursuant to that certain
Loan Agreement, dated of even date herewith, between Borrower and Lender (as the same may be amended, modified, supplemented, replaced
or otherwise modified from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

 

B.           
Lender is not willing to make the Loan, or otherwise extend credit, to Borrower unless Guarantors unconditionally guarantee
the payment and performance to Lender of the Guaranteed Obligations (as herein defined).

 

C.           
Guarantors are the owners of direct or indirect interests in Borrower, and each Guarantor will directly benefit from Lender’s
making the Loan to Borrower.

 

NOW, THEREFORE, as
an inducement to Lender to make the Loan to Borrower and to extend such additional credit as Lender may from time to time agree
to extend under the Loan Documents, and for other good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the parties do hereby agree as follows:

 

ARTICLE
1

NATURE AND SCOPE OF GUARANTY

 

Section 1.1           
Guaranty of Obligation.

 

(a)          
Each Guarantor hereby irrevocably and unconditionally guarantees to Lender and its successors and assigns the payment and
performance of the Guaranteed Obligations (as defined below) as and when the same shall be due and payable, whether by lapse of
time, by acceleration of maturity or otherwise. Each Guarantor hereby irrevocably and unconditionally covenants and agrees that
it is liable for the Guaranteed Obligations as a primary obligor.

 

    	 

    	 

    

 

(b)         
As used herein, the term “Guaranteed Obligations” means (i) Borrower's Recourse Liabilities
and (ii) from and after the date that any Springing Recourse Event occurs, payment and performance of all of the Obligations.
Notwithstanding the foregoing, Guarantors shall not be liable to Lender under this Guaranty with respect to subclause (ii)(A) set
forth in Section 10.1 of the Loan Agreement, and Lender shall not assert any claim against the Guarantors under this Guaranty,
with respect to any obligation set forth in the Environmental Indemnity, unless and until the Environmental Insurance Policy (as
defined in the Loan Agreement) lapses, expires, terminates, is cancelled or otherwise ceases to be in full force and effect for
any reason whatsoever (including, without limitation, coverage of Lender as mortgagee, loss payee and additional insured) (a “Contingency
Event”). Upon the occurrence of a Contingency Event, Guarantors shall automatically and without notice become liable
to Lender under this Guaranty, and Lender shall have the right to assert any claim against Guarantors under this Guaranty, with
respect to any obligation under the Environmental Indemnity created as a result of such Contingency Event. If Borrower or Guarantors
subsequently deliver a replacement Environmental Insurance Policy in accordance with the requirements of the Loan Agreement, and
provided that there are no gaps between the policy periods and coverages provided by the prior Environmental Insurance Policy and
such replacement Environmental Insurance Policy, Guarantors shall, subject to the terms set forth in this Section 1.1(b) and subclause
(ii)(A) set forth in Section 10.1 of the Loan Agreement, have no further liability for environmental matters.

 

(c)          
Notwithstanding anything to the contrary in this Guaranty or in any of the other Loan Documents, 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 Obligations or to require that all collateral shall continue to secure all of the
Obligations owing to Lender in accordance with the Loan Documents.

 

(d)         
Notwithstanding anything to the contrary contained herein, this Guaranty shall be deemed discharged with respect to the
Guarantors solely with respect to any Guaranteed Obligations first arising from and after the occurrence of any of the following
events: (i) the indefeasible satisfaction in full of the Debt (other than obligations for which no claim has arisen but which survive
satisfaction), (ii) Lender (or any designee, nominee or Affiliate of Lender) accepts title to the Property upon foreclosure or
deed in lieu of foreclosure pursuant to the terms of the Loan Documents, (iii) the consummation of a Transfer and Assumption pursuant
to, and in accordance with, Section 7.1 or Section 7.2 of the Loan Agreement or (iv) the occurrence of a Defeasance pursuant to
Section 2.4.2 of the Loan Agreement (each a “Satisfaction Event”).

 

Section 1.2          
Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance
and not a guaranty of collection. This Guaranty may not be revoked by any Guarantor and shall continue to be effective with respect
to any Guaranteed Obligations arising or created after any attempted revocation by any Guarantor and after (if such Guarantor
is a natural person) such Guarantor’s death (in which event this Guaranty shall be binding upon such Guarantor’s estate
and such Guarantor’s legal representatives and heirs). The fact that at any time or from time to time the Guaranteed Obligations
may be increased or reduced shall not release or discharge the obligation of any Guarantor to Lender with respect to the Guaranteed
Obligations. This Guaranty may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the
assignment or negotiation of all or part of the Note.

 

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Section 1.3          
Guaranteed Obligations Not Reduced by Offset. The Guaranteed Obligations and the liabilities and obligations
of Guarantors to Lender hereunder shall not be reduced, discharged or released because or by reason of any existing or future
offset, claim or defense of Borrower or any other party against Lender or against payment of the Guaranteed Obligations, whether
such offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed
Obligations) or otherwise.

 

Section 1.4          
Payment By Guarantors. If all or any part of the Guaranteed Obligations is or shall give rise to a monetary
obligation, and such monetary obligation shall not be punctually paid when due, whether at demand, maturity, acceleration or otherwise,
Guarantors shall, immediately upon demand by Lender and without presentment, protest, notice of protest, notice of non-payment,
notice of intention to accelerate the maturity, notice of acceleration of the maturity or any other notice whatsoever, all such
notices being hereby waived by Guarantors, pay in lawful money of the United States of America, the amount due on the Guaranteed
Obligations to Lender at Lender’s address as set forth herein. Such demand(s) may be made at any time coincident with or
after the time for payment of all or part of the Guaranteed Obligations and may be made from time to time with respect to the
same or different items of Guaranteed Obligations. Such demand shall be deemed made, given and received in accordance with the
notice provisions hereof.

 

Section 1.5          
No Duty To Pursue Others. It shall not be necessary for Lender (and each Guarantor hereby waives any rights
which such Guarantor may have to require Lender), in order to enforce the obligations of Guarantors hereunder, first to (i) institute
suit or exhaust its remedies against Borrower or others liable on the Loan or the Guaranteed Obligations or any other Person,
(ii) enforce Lender’s rights against any collateral which shall ever have been given to secure the Loan, (iii) enforce
Lender’s rights against any other guarantors of the Guaranteed Obligations, (iv) join Borrower or any others liable
on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (v) exhaust any remedies available to Lender
against any collateral which shall ever have been given to secure the Loan, or (vi) resort to any other means of obtaining
payment of the Guaranteed Obligations. Lender shall not be required to mitigate damages or take any other action to reduce, collect
or enforce the Guaranteed Obligations.

 

Section 1.6          
Waivers. Each Guarantor agrees to the provisions of the Loan Documents and hereby waives notice of (i) any
loans or advances made by Lender to Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or extension of
the Note, the Mortgage, the Loan Agreement or any other Loan Document, (iv) the execution and delivery by Borrower and Lender
of any other loan or credit agreement or of Borrower’s execution and delivery of any promissory note or other document arising
under the Loan Documents or in connection with the Property, (v) the occurrence of (A) any breach by Borrower of any
of the terms or conditions of the Loan Agreement or any of the other Loan Documents, or (B) an Event of Default, (vi) Lender’s
transfer or disposition of the Guaranteed Obligations, or any part thereof, (vii) the sale or foreclosure (or the posting
or advertising for the sale or foreclosure) of any collateral for the Guaranteed Obligations, (viii) protest, proof of non-payment
or default by Borrower, or (ix) any other action at any time taken or omitted by Lender and, generally, all demands and notices
of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating
to any of the Guaranteed Obligations and/or the obligations hereby guaranteed.

 

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Section 1.7          
Payment of Expenses. In the event that any Guarantor shall breach or fail to timely perform any provisions of
this Guaranty, Guarantors shall, immediately upon demand by Lender, pay Lender all costs and expenses (including court costs and
reasonable attorneys’ fees) incurred by Lender in the enforcement hereof or the preservation of Lender’s rights hereunder,
together with interest thereon at the Default Rate from the date requested by Lender until the date of payment to Lender. The
covenant contained in this Section shall survive the payment and performance of the Guaranteed Obligations.

 

Section 1.8          
Effect of Bankruptcy. In the event that pursuant to any insolvency, bankruptcy, reorganization, receivership
or other debtor relief law or any judgment, order or decision thereunder, Lender must rescind or restore any payment or any part
thereof received by Lender in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge
from the terms of this Guaranty given to Guarantors by Lender shall be without effect and this Guaranty shall remain (or shall
be reinstated to be) in full force and effect. It is the intention of Borrower and Guarantors that Guarantors’ obligations
hereunder shall not be discharged except by Guarantors’ performance of such obligations and then only to the extent of such
performance.

 

Section 1.9          
Waiver of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in
this Guaranty, each Guarantor hereby unconditionally and irrevocably waives, releases and abrogates any and all rights it may
now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantors
to the rights of Lender), to assert any claim against or seek contribution, indemnification or any other form of reimbursement
from Borrower or any other party liable for the payment of any or all of the Guaranteed Obligations for any payment made by Guarantors
under or in connection with this Guaranty or otherwise.

 

ARTICLE
2

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTORS’ OBLIGATIONS

 

Each Guarantor hereby
consents and agrees to each of the following and agrees that such Guarantor’s obligations under this Guaranty shall not be
released, diminished, impaired, reduced or adversely affected by any of the following and waives any common law, equitable, statutory
or other rights (including, without limitation, rights to notice) which such Guarantor might otherwise have as a result of or in
connection with any of the following:

 

Section 2.1         
Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part
of the Guaranteed Obligations, the Note, the Mortgage, the Loan Agreement, the other Loan Documents or any other document, instrument,
contract or understanding between Borrower and Lender or any other parties pertaining to the Guaranteed Obligations or any failure
of Lender to notify Guarantors of any such action.

 

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Section 2.2          
Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to
Borrower or any Guarantor.

 

Section 2.3         
Condition of Borrower or Guarantors. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation,
disability, dissolution or lack of power of Borrower, any Guarantor or any other Person at any time liable for the payment of
all or part of the Guaranteed Obligations; or any dissolution of Borrower or any Guarantor or any sale, lease or transfer of any
or all of the assets of Borrower or any Guarantor or any changes in the direct or indirect shareholders, partners or members,
as applicable, of Borrower or any Guarantor; or any reorganization of Borrower or any Guarantor.

 

Section 2.4           
Invalidity of Guaranteed Obligations. The invalidity, illegality or unenforceability of all or any part of the
Guaranteed Obligations or any document or agreement executed in connection with the Guaranteed Obligations for any reason whatsoever,
including, without limitation, the fact that (i) the Guaranteed Obligations or any part thereof exceeds the amount permitted
by law, (ii) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the officers or
representatives executing the Note, the Mortgage, the Loan Agreement or the other Loan Documents or otherwise creating the Guaranteed
Obligations acted in excess of their authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v) the
Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations
wholly or partially uncollectible from Borrower, (vi) the creation, performance or repayment of the Guaranteed Obligations
(or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed
in connection with the Guaranteed Obligations or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible
or unenforceable, or (vii) the Note, the Mortgage, the Loan Agreement or any of the other Loan Documents have been forged
or otherwise are irregular or not genuine or authentic, it being agreed that Guarantors shall remain liable hereon regardless
of whether Borrower or any other Person be found not liable on the Guaranteed Obligations or any part thereof for any reason.

 

Section 2.5           
Release of Obligors. Any full or partial release of the liability of Borrower for the Guaranteed Obligations
or any part thereof, or of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations,
or any part thereof, it being recognized, acknowledged and agreed by each Guarantor that such Guarantor may be required to pay
the Guaranteed Obligations in full without assistance or support from any other Person, and no Guarantor has been induced to enter
into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other Persons (including Borrower)
will be liable to pay or perform the Guaranteed Obligations or that Lender will look to other Persons (including Borrower) to
pay or perform the Guaranteed Obligations.

 

Section 2.6           
Other Collateral. The taking or accepting of any other security, collateral or guaranty, or other assurance
of payment, for all or any part of the Guaranteed Obligations.

 

Section 2.7          
Release of Collateral. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment
(including, without limitation, negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security
at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations.

 

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Section 2.8          
Care and Diligence. The failure of Lender or any other party to exercise diligence or reasonable care in the
preservation, protection, enforcement, sale or other handling or treatment of all or any part of any collateral, property or security,
including, but not limited to, any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action
for the collection of any of the Guaranteed Obligations, or (ii) to foreclose, or initiate any action to foreclose, or, once
commenced, prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any
action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations.

 

Section 2.9          
Unenforceability. The fact that any collateral, security, security interest or lien contemplated or intended
to be given, created or granted as security for the repayment of the Guaranteed Obligations, or any part thereof, shall not be
properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by each Guarantor that such Guarantor is not entering into this Guaranty in reliance on, or in contemplation
of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Guaranteed Obligations.

 

Section 2.10       
Offset. Any existing or future right of offset, claim or defense of Borrower against Lender, or any other party,
or against payment of the Guaranteed Obligations, whether such right of offset, claim or defense arises in connection with the
Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise.

 

Section 2.11       
Merger. The reorganization, merger or consolidation of Borrower or any Guarantor into or with any other Person.

 

Section 2.12       
Preference. Any payment by Borrower to Lender is held to constitute a preference under the Bankruptcy Code or
for any reason Lender is required to refund such payment or pay such amount to Borrower or to any other Person.

 

Section 2.13       
Other Actions Taken or Omitted. Any other action taken or omitted to be taken with respect to the Loan Documents,
the Guaranteed Obligations or the security and collateral therefor, whether or not such action or omission prejudices Guarantors
or increases the likelihood that Guarantors will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it
being the unambiguous and unequivocal intention of Guarantors that such Guarantors shall be obligated to pay the Guaranteed Obligations
when due, notwithstanding any occurrence, circumstance, event, action or omission whatsoever, whether contemplated or uncontemplated,
and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and
final payment and satisfaction of the Guaranteed Obligations.

 

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ARTICLE
3

REPRESENTATIONS AND WARRANTIES

 

To induce Lender to
enter into the Loan Documents and to extend credit to Borrower, each Guarantor represents and warrants to Lender as follows:

 

Section 3.1          
Benefit. Each Guarantor is an Affiliate of Borrower, is the owner of a direct or indirect interest in Borrower
and has received, or will receive, direct or indirect benefit from the making of this Guaranty with respect to the Guaranteed
Obligations.

 

Section 3.2          
Familiarity and Reliance. Each Guarantor is familiar with, and has independently reviewed books and records
regarding, the financial condition of Borrower and is familiar with the value of any and all collateral intended to be created
as security for the payment of the Note or Guaranteed Obligations; however, such Guarantor is not relying on such financial condition
or the collateral as an inducement to enter into this Guaranty.

 

Section 3.3          
No Representation By Lender. Neither Lender nor any other party has made any representation, warranty or statement
to any Guarantor in order to induce such Guarantor to execute this Guaranty.

 

Section 3.4          
Each Guarantor’s Financial Condition. As of the date hereof, and after giving effect to this Guaranty
and the contingent obligation evidenced hereby, each Guarantor (a) is and will be solvent, (b) has and will have assets
which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and (c) has and will
have property and assets sufficient to satisfy and repay its obligations and liabilities, including the Guaranteed Obligations.

 

Section 3.5          
Legality. The execution, delivery and performance by each Guarantor of this Guaranty and the consummation of
the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever
to which such Guarantor is subject, or constitute a default (or an event which, with notice or lapse of time or both, would constitute
a default) under, or result in the breach of, any indenture, mortgage, charge, lien, contract, agreement or other instrument to
which such Guarantor is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation
of each Guarantor and is enforceable against such Guarantor in accordance with its terms, except as limited by bankruptcy, insolvency
or other laws of general application relating to the enforcement of creditors’ rights.

 

Section 3.6          
Litigation. There is no action, suit, proceeding or investigation pending or, to the best of any Guarantor’s
knowledge, threatened in writing against any Guarantor in any court or by or before any other Governmental Authority which, if
adversely determined, would reasonably be expected to materially and adversely affect the condition (financial or otherwise) or
business of such Guarantor (including the ability of such Guarantor to carry out the obligations contemplated by this Guaranty).

 

Section 3.7           
Survival. All representations and warranties made by each Guarantor herein shall survive the execution hereof.

 

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ARTICLE
4

SUBORDINATION OF CERTAIN INDEBTEDNESS

 

Section 4.1           
Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims”
shall mean all debts and liabilities of Borrower to Guarantors, whether such debts and liabilities now exist or are hereafter
incurred or arise, and whether the obligations of Borrower thereon be direct, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts or liabilities may, at their inception, have been,
or may hereafter be, created, or the manner in which they have been, or may hereafter be, acquired by Guarantors. The Guarantor
Claims shall include, without limitation, all rights and claims of Guarantors against Borrower (arising as a result of subrogation
or otherwise) as a result of Guarantors’ payment of all or a portion of the Guaranteed Obligations. So long as any portion
of the Obligations or the Guaranteed Obligations remain outstanding, no Guarantor shall receive or collect, directly or indirectly,
from Borrower or any other Person any amount upon the Guarantor Claims.

 

Section 4.2           
Claims in Bankruptcy. In the event of any receivership, bankruptcy, reorganization, arrangement, debtor’s
relief or other insolvency proceeding involving any Guarantor as a debtor, Lender shall have the right to prove its claim in any
such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian
dividends and payments which would otherwise be payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends and
payments to Lender. Should Lender receive, for application against the Guaranteed Obligations, any dividend or payment which is
otherwise payable to any Guarantor and which, as between Borrower and Guarantors, shall constitute a credit against the Guarantor
Claims, then, upon payment to Lender in full of the Obligations and the Guaranteed Obligations, such Guarantor shall become subrogated
to the rights of Lender to the extent that such payments to Lender on the Guarantor Claims have contributed toward the liquidation
of the Guaranteed Obligations, and such subrogation shall be with respect to that proportion of the Guaranteed Obligations which
would have been unpaid if Lender had not received dividends or payments upon the Guarantor Claims.

 

Section 4.3           
Payments Held in Trust. Notwithstanding anything to the contrary contained in this Guaranty, in the event that
any Guarantor should receive any funds, payments, claims and/or distributions which are prohibited by this Guaranty, such Guarantor
agrees to hold in trust for Lender an amount equal to the amount of all funds, payments, claims and/or distributions so received,
and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims and/or distributions so received
except to pay such funds, payments, claims and/or distributions promptly to Lender, and such Guarantor covenants promptly to pay
the same to Lender.

 

Section 4.4           
Liens Subordinate. Each Guarantor agrees that any liens, security interests, judgment liens, charges or other
encumbrances upon Borrower’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate
to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment
of the Guaranteed Obligations, regardless of whether such encumbrances in favor of Guarantors or Lender presently exist or are
hereafter created or attach. Without the prior written consent of Lender, no Guarantor shall (i) exercise or enforce any creditor’s
rights it may have against Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including, without limitation, the commencement of, or the joinder in, any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests,
collateral rights, judgments or other encumbrances on the assets of Borrower held by any Guarantor. The foregoing shall in no
manner vitiate or amend, nor be deemed to vitiate or amend, any prohibition in the Loan Documents against Borrower granting liens
or security interests in any of its assets to any Person other than Lender.

 

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ARTICLE
5

COVENANTS

 

Section 5.1           
Definitions. As used in this Article 5, the following terms shall have the respective meanings set forth
below:

 

(a)          
“GAAP” shall mean generally accepted accounting principles, consistently applied.

 

(b)         
“Liquid Asset” shall mean any of the following, but only to the extent owned individually, free
of all security interests, liens, pledges, charges or any other encumbrance: (a) cash, (b) certificates of deposit (with a maturity
of two years or less) issued by, or savings account with, any bank or other financial institution reasonably acceptable to Lender,
(c) money market accounts or (d) marketable securities listed on a national or international exchange reasonably acceptable to
Lender, marked to market; provided that Liquid Assets shall not include any asset that is a part of any of the Properties or that
is otherwise part of the collateral for the Loan.

 

(c)          
“Net Worth” shall mean, as of a given date, (i) a Guarantor’s total assets as of such date
(exclusive of any interest in the Property or in any other asset that is part of the collateral for the Loan) less (ii) such Guarantor’s
total liabilities (taking into consideration contingent liabilities but exclusive of any liability under the Loan Documents) as
of such date, determined in accordance with GAAP (or such other accounting method reasonably acceptable to Lender; it being acknowledged
that a cash basis of accounting consistently applied shall be reasonably acceptable to Lender for purposes hereof).

 

Section 5.2           
Covenants and Representations. As of the Closing Date, Guarantors represent and warrant to Lender that Guarantors
have (x) a collective Net Worth of not less than $20,700,000.00 (the “Net Worth Threshold”) and (y)
collective Liquid Assets of not less than $2,070,000.00 (the “Liquid Assets Threshold”). Until
all of the Obligations and the Guaranteed Obligations have been paid in full no Guarantor shall sell, pledge, mortgage or otherwise
transfer any of its assets, or any interest therein, on terms materially less favorable than would be obtained in an arms-length
transaction or if such transaction would cause the Net Worth of Guarantors to fall below the Net Worth Threshold or the Liquid
Assets of Guarantors to fall below the Liquid Assets Threshold.

 

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Section 5.3           
Prohibited Transactions.

 

(a)          
No Guarantor shall, at any time while a default in the payment of the Guaranteed Obligations has occurred and is continuing,
either (i) enter into or effectuate any transaction with any Affiliate that would reduce the Net Worth of such Guarantor (including
the payment of any dividend or distribution to a shareholder, or the redemption, retirement, purchase or other acquisition for
consideration of any stock or other ownership interest in such Guarantor) or (ii) sell, pledge, mortgage or otherwise transfer
to any Person any of such Guarantor’s assets, or any interest therein except in exchange for consideration of equivalent
value and in accordance with the terms and conditions set forth in the Loan Documents.

 

Section 5.4           
Financial Statements. Each Guarantor shall deliver to Lender:

 

(a)          
With respect to any ARC REIT, within 90 days after the end of each fiscal year of such Guarantor, a complete copy of such
Guarantor’s unaudited annual financial statements internally prepared in accordance with GAAP (or such other accounting method
reasonably acceptable to Lender, it being acknowledged by Lender that a cash basis of accounting shall be deemed reasonably acceptable
for purposes hereof) and the requirements of Regulation AB (if applicable), including statements of income and expense and cash
flow, together with a certificate of the chief financial officer of such Guarantor (A) setting forth in reasonable detail such
Guarantor’s Net Worth and Liquid Assets as of the end of such prior calendar year and based on such annual financial statements,
and (B) certifying that such annual financial statements are true, correct, accurate and complete and fairly present the financial
condition and results of the operations of such Guarantor; and

 

(b)         
With respect to Hoffler and Haddad:

 

(i)           
within 30 days after the date filed, a complete copy of such Guarantor’s tax return certified by such Guarantor; and

 

(ii)         
20 days after request by Lender, such other reasonable financial information with respect to such Guarantor as Lender may
reasonably request.

 

ARTICLE
6

MISCELLANEOUS

 

Section 6.1          
Waiver. No failure to exercise, and no delay in exercising, on the part of Lender, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right. The rights of Lender hereunder shall be in addition to all other rights provided by law. No modification
or waiver of any provision of this Guaranty, nor any consent to any departure therefrom, shall be effective unless in writing
and no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.

 

Section 6.2          
Notices. All notices, demands, requests, consents, approvals or other communications (any of the foregoing,
a “Notice”) required, permitted or desired to be given hereunder shall be in writing and shall be sent
by telefax (with answer back acknowledged) or by registered or certified mail, postage prepaid, return receipt requested, or delivered
by hand or by reputable overnight courier, addressed to the party to be so notified at its address hereinafter set forth, or to
such other address as such party may hereafter specify in accordance with the provisions of this Section 6.2. Any Notice
shall be deemed to have been received: (a) three (3) days after the date such Notice is mailed, (b) on the date of sending
by telefax if sent during business hours on a Business Day (otherwise on the next Business Day), (c) on the date of delivery
by hand if delivered during business hours on a Business Day (otherwise on the next Business Day), and (d) on the next Business
Day if sent by an overnight commercial courier, in each case addressed to the parties as follows:

 

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	If to Lender:	German American Capital Corporation
	 	60 Wall Street, 10th Floor
	 	New York, NY  10005
	 	Attention:  Robert W. Pettinato, Jr.
	 	Facsimile No.  (212) 797-4489
	 	 
	and to:	German American Capital Corporation
	 	60 Wall Street, 10th Floor
	 	New York, NY  10005
	 	Attention:  General Counsel
	 	Facsimile No.  (646)736-5721
	 	 
	with a copy to:	Cassin & Cassin LLP
	 	711 Third Avenue, 20th Floor
	 	New York, New York 10017
	 	Attention:  Michael J. Hurley, Jr., Esq.
	 	Facsimile No. (212) 557-2952
	 	 
	with a copy to:	Wells Fargo Commercial Mortgage Servicing
	 	550 S Tryon St., 12th Floor
	 	Charlotte NC, 28202
	 	Attention: Alex Groot
	 	Facsimile No. (704) 715-0473
	 	 
	If to Guarantors:	American Realty Capital Hospitality Trust, Inc.
	 	405 Park Avenue, 15th Floor
	 	New York, NY  10022
	 	Attention:  Jon Mehlman
	 	 
	and to:	Daniel A. Hoffler
	 	222 Central Park Avenue, Suite 2100
	 	Virginia Beach, Virginia 23462
	 	Facsimile No. (757) 523-0370

 

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	and to:	Louis S. Haddad
	 	222 Central Park Avenue, Suite 2100
	 	Virginia Beach, Virginia 23462
	 	Facsimile No. (757) 523-0370
	 	 
	with a copy to:	Faggert & Frieden, P.C.
	 	222 Central Park Avenue, Suite 1300
	 	Virginia Beach, Virginia 23462
	 	Attention:  David Y. Faggert
	 	Facsimile No. (757) 424-0102

 

Any party may change the address to which
any such Notice is to be delivered by furnishing ten (10) days’ written notice of such change to the other parties in accordance
with the provisions of this Section 6.2. Notices shall be deemed to have been given on the date set forth above, even if
there is an inability to actually deliver any Notice because of a changed address of which no Notice was given or there is a rejection
or refusal to accept any Notice offered for delivery. Notice for any party may be given by its respective counsel. Additionally,
Notice from Lender may also be given by Servicer.

 

Section 6.3           
Governing Law; Jurisdiction; Service of Process. (a)  THIS GUARANTY WAS NEGOTIATED IN THE STATE
OF NEW YORK, AND MADE BY EACH GUARANTOR AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE 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
RELATED HERETO, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS GUARANTY 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 (WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY AND/OR
THE OTHER LOAN DOCUMENTS, AND THIS GUARANTY AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

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(b)ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST LENDER OR ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY, AT LENDER’S OPTION,
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW, AND EACH GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. EACH GUARANTOR DOES HEREBY DESIGNATE AND APPOINT:

 

O’HALLORAN RYAN LLP

275 MADISON AVENUE, SUITE 2005

NEW YORK, NEW YORK 10016

ATTN: NEIL
J. O’HALLORAN

 

AS ITS AUTHORIZED
AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND EACH GUARANTOR AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID
ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO SUCH GUARNATOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.
EACH GUARANTOR (I) SHALL 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 SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS AND WHICH SUBSITUTE AGENT SHALL BE THE SAME AGENT
DESIGNATED BY BORROWER UNDER THE LOAN AGREEMENT), 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. NOTHING CONTAINED HEREIN SHALL AFFECT
THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION. 

 

Section 6.4          
Invalid Provisions. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under
present or future laws effective during the term of this Guaranty, such provision shall be fully severable and this Guaranty shall
be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty,
and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Guaranty, unless such continued effectiveness of this Guaranty,
as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.

 

Section 6.5          
Amendments. This Guaranty may be amended only by an instrument in writing executed by the party(ies) against
whom such amendment is sought to be enforced.

 

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Section 6.6          
Parties Bound; Assignment. This Guaranty shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, permitted assigns, heirs and legal representatives. Lender shall have the right to assign
or transfer its rights under this Guaranty in connection with any assignment of the Loan and the Loan Documents. Any assignee
or transferee of Lender shall be entitled to all the benefits afforded to Lender under this Guaranty. No Guarantor shall have
the right to assign or transfer its rights or obligations under this Guaranty without the prior written consent of Lender, and
any attempted assignment without such consent shall be null and void.

 

Section 6.7          
Headings. Section headings are for convenience of reference only and shall in no way affect the interpretation
of this Guaranty.

 

Section 6.8          
Recitals. The recitals and introductory paragraphs hereof are a part hereof, form a basis for this Guaranty
and shall be considered prima facie evidence of the facts and documents referred to therein.

 

Section 6.9          
Counterparts. To facilitate execution, this Guaranty may be executed in as many counterparts as may be convenient
or required. It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons
required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single instrument. It
shall not be necessary in making proof of this Guaranty to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties hereto. Any signature page to any counterpart may be detached from
such counterpart without impairing the legal effect of the signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.

 

Section 6.10       
Rights and Remedies. If any Guarantor becomes liable for any indebtedness owing by Borrower to Lender, by endorsement
or otherwise, other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby and the rights
of Lender hereunder shall be cumulative of any and all other rights that Lender may ever have against Guarantor. The exercise
by Lender of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.

 

Section 6.11       
Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTORS AND LENDER WITH RESPECT TO GUARANTORS’
GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS AND LENDER AS A FINAL AND
COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTORS AND LENDER, NO COURSE OF PERFORMANCE,
NO TRADE PRACTICES AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE
OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY. THERE ARE NO ORAL AGREEMENTS BETWEEN
GUARANTORS AND LENDER.

 

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Section 6.12      
Waiver of Right To Trial By Jury. EACH GUARANTOR HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE
OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THIS GUARANTY, THE NOTE, THE MORTGAGE, THE LOAN AGREEMENT OR THE OTHER 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 EACH
GUARANTOR AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY GUARANTORS.

 

Section 6.13       
Cooperation. Each Guarantor acknowledges that Lender and its successors and assigns may (i) sell this Guaranty,
the Note and the other Loan Documents to one or more investors as a whole loan, (ii) participate the Loan secured by this
Guaranty to one or more investors, (iii) deposit this Guaranty, the Note and the other Loan Documents with a trust, which
trust may sell certificates to investors evidencing an ownership interest in the trust assets, or (iv) otherwise sell the
Loan or one or more interests therein to investors (the transactions referred to in clauses (i) through (iv) are hereinafter each
referred to as “Secondary Market Transaction”). Subject to the terms, conditions and limitations set
forth in the Loan Agreement, each Guarantor shall at no material cost to any Guarantor, cooperate with Lender in effecting any
such Secondary Market Transaction, shall cooperate to implement all requirements imposed by any of the Rating Agencies involved
in any Secondary Market Transaction and shall provide (or cause Borrower to provide) such information, indemnities and materials
as may be required or necessary pursuant to Article 9 of the Loan Agreement.

 

Section 6.14       
Reinstatement in Certain Circumstances. If at any time any payment of the principal of or interest under the
Note or any other amount payable by Borrower under the Loan Documents is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise, Guarantors’ obligations hereunder with respect
to such payment shall be reinstated as though such payment had been due but not made at such time.

 

Section 6.15       
Gender; Number; General Definitions. Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, (a) words used in this Guaranty may be used interchangeably in the singular or plural form,
(b) any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, (c) the word “Borrower”
shall mean “each Borrower and any subsequent owner or owners of the Property or any part thereof or interest therein”,
(d) the word “Lender” shall mean “Lender and any subsequent holder of the Note”, (e) the
word “Note” shall mean “the Note and any other evidence of indebtedness secured by the Loan Agreement”,
(f) the word “Property” shall include any portion of the Property and any interest therein, and
(g) the phrases “attorneys’ fees”, “legal fees” and “counsel fees” shall include
any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements
at the pre-trial, trial and appellate levels, incurred or paid by Lender in protecting its interest in the Property, the Leases
and/or the Rents and/or in enforcing its rights hereunder.

 

    	15

    	 

    

 

 

Section 6.16       
Joint and Several. The obligations of each Guarantor hereunder are joint and several.

 

Section 6.1          Special
State Provision. Guarantor waives the benefit of the provisions of Sections 49-25 and
49-26 of the Code of Virginia (1950), as amended. 

 

[NO FURTHER TEXT ON THIS PAGE]

 

    	16

    	 

    

 

IN WITNESS WHEREOF,
each Guarantor has executed this Guaranty as of the day and year first above written.

 

 

	 	
        GUARANTORS:

         

        AMERICAN REALTY CAPITAL HOSPITALITY 

TRUST, INC., a Maryland
        corporation

         

         

        By: /s/ Jesse C. Galloway                     

        Name: Jesse C. Galloway

        Title:Authorized Signatory

 

 

 

	 	
        /s/ Daniel
        A. Hoffler                             

        DANIEL A. HOFFLER, an individual

         

         

        /s/ Louis S. Haddad                              

        LOUIS S. HADDAD, an individualPERMANENT LOAN CROSS INDEMNITY

 

THIS PERMANENT LOAN
CROSS INDEMNITY (this "Agreement"), made effective as of the 1st day of April, 2014, by TCA BLOCK 7,
INC., a Virginia corporation ("TCAB7"), ARMADA/HOFFLER PROPERTIES II, L.L.C., a Virginia limited liability company
("AHPII"), DANIEL A. HOFFLER ("Hoffler"), LOUIS S. HADDAD ("Haddad"), CHRI VIRGINIA
BEACH HOTEL (A/H) MINORITY HOLDING, LLC, a Delaware limited liability company ("CVBH"), AMERICAN REALTY CAPITAL
HOSPITALITY TRUST, INC., a Maryland corporation ("ARC REIT"), HAMPTON W COMPANY, LLC, a Virginia limited liability
company ("HWC"), HAMPTON UNIVERSITY, a private non-stock foundation ("HU"), LEGACY HOSPITALITY, LLC,
a Maryland limited liability company ("Legacy"), and VB CITY HOTELS LLC, a Virginia limited liability company
("VBCH").

 

WITNESSETH:

 

WHEREAS, the parties
hereto and/or their affiliates are members in TCA Block 7 Hotel, L.L.C., a Virginia limited liability company (the "Borrower");

 

WHEREAS, the Borrower
obtained a loan (the "Loan") from German American Capital Corporation, a Maryland corporation (the "Lender")
in the original principal amount of $20,700,000.00 for permanent financing for a hotel and various other improvements (collectively,
the "Hotel") on a parcel of land located in the City of Virginia Beach, Virginia, which Loan and some of the documents
(the "Loan Documents") evidencing such Loan are more particularly described on Exhibit A attached hereto;

 

WHEREAS, in connection
with the Loan, Hoffler, Haddad and ARC REIT (the "Guarantors") executed a Guaranty of Recourse Obligations (the "Guaranty")
providing for "non-recourse carve-out" indemnification to the Lender;

 

WHEREAS, the Lender
would not have made the Loan but for the agreement of the Guarantors to execute and deliver the Guaranty;

 

WHEREAS, TCAB7, AHPII,
Hoffler, Haddad, CVBH, ARC REIT, HWC, HU, VBCH and Legacy each directly or indirectly have an ownership interest in the Borrower
and will benefit directly by the Borrower obtaining the Loan and Guarantors providing the Guaranty to Lender and, as an inducement
to Guarantors to execute and deliver the Guaranty to Lender, have agreed to execute this Agreement.

 

NOW, THEREFORE, THIS PERMANENT LOAN CROSS
INDEMNITY WITNESSETH:

 

That for and in consideration
of the mutual undertakings set forth herein and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

    	1

    	 

    

 

1.Definitions.
Unless otherwise defined herein, the following shall have the meanings and definitions provided below:

 

"Affiliate"
means any Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For
the purposes of this definition, "control" means the ability, directly or indirectly, to direct the management and policies
of the respective Person whether through the ownership of voting interests, through a contract that provides for the delegation
of that Person's managerial rights and duties, or otherwise. The parties agree that ARC REIT is controlled by its Board of Directors
and not by its investors, nor its external advisors, and as such, none of such investors or advisors qualify as "Affiliates"
of ARC REIT. AHCC is an Affiliate of the AH Parties.

 

"AH Parties" means TCAB7, AHPII,
Hoffler and Haddad. "ARC REIT Parties" means CVBH and ARC REIT.

 

"Franchise
Agreement" means that certain New Build License Agreement, with an effective date of December 28, 2004, between the Borrower
and Westin Hotel Management, L.P., as assigned by an Assignment and Assumption Agreement, dated July 20, 2005 (the "Assignment"),
as amended by a First Amendment, dated July 21, 2005, as amended by that Second Amendment, dated May 26, 2006, and as amended by
a Third Amendment, dated January 28, 2008, and as amended by a Fourth Amendment, dated March 21, 2014, together with that certain
Reservations and Technology Systems Agreement, with an effective date of December 28, 2004, between the Borrower and Westin Hotel
Management, L.P.

 

"Franchise
Guaranty" means that certain guarantee of Franchise Agreement obligations by Armada Hoffler Construction Co. ("AHCC"),
pursuant to a Guarantee, dated July 20, 2005, pursuant to the Assignment, which Guarantee replaced a Guarantee, dated December
28, 2004, executed by Armada Hoffler Development Company, Inc.

 

"Guarantors" means ARC REIT, Hoffler
and Haddad.

 

"Guaranty"
means collectively the Franchise Guaranty and the Loan Guaranty (hereinafter defined).

 

"HU Parties" means HWC and HU.

 

"Loan
Guaranty" means the Guaranty of Recourse Obligations, dated April , 2014, executed by the Guarantors in favor of Lender.

 

"Losses"
means any and all loss, liability, damage, cost, judgment, charge and expense, of every kind and nature, including, but not
limited to, reasonable attorney's fees, which Guarantors, or any of them, may suffer or incur arising out of the Guaranty.

 

"Ownership
Interest" means the percentage interest of a Party as set forth on Exhibit B attached hereto. For purposes
of this Agreement TCAB7, AHPII, Hoffler and Haddad

 

    	2

    	 

    

 

shall be treated as one entity/group and
are listed as AH Parties on Exhibit B, HWC and HU shall be treated as one entity/group and are listed as HU Parties
on Exhibit B. and CVBH and ARC REIT, as an Affiliate of CVBH, shall be treated as having the Ownership Interest of
CVBH as set forth on Exhibit B.

 

"Party"
means each of, and "Parties" mean more than one or all of, as the context may require, TCAB7, AHPII, Hoffler,
Haddad, HWC, HU, CVBH, ARC REIT, VBCH and Legacy.

 

"Person"
means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated organization, or government or any agency or political subdivision thereof.

 

"Pro Rata
Share" means an allocation based upon Ownership Interests of the Parties responsible, i.e. each Party who is responsible
for Losses will be liable in an amount equal to such Losses multiplied by a fraction whose numerator is the Ownership Interest
percentage of such Party and whose denominator is the sum of the Ownership Interest percentages of all of Parties responsible for
such Losses. (For example, applying the Parties' current ownership percentages, the parties' Pro Rata Shares of a Loss that is
not covered by Section 3 of this Agreement would be as follows: AH Parties: 22.8137% (20.5323%/90%); HU Parties: 22.6164% (20.3548%/90%);
CVBH: 33.9248% (30.5323%/90%); and Legacy: 20.6451% (18.5806%/90%).

 

2.Each of AH Parties,
ARC REIT Parties, HU Parties and Legacy agrees to be responsible for its Pro Rata Share of Losses and each agrees to indemnify
and hold harmless each other Party and/or any of its Affiliates which have executed the Guaranty to the extent of such Pro Rata
Share of such Losses. Each of the AH Parties shall be jointly and severally liable for the Pro Rata Share of Losses for which the
AH Parties are responsible pursuant to the terms hereof Each of the ARC REIT Parties shall be jointly and severally liable for
the Pro Rata Share of Losses for which the ARC REIT Parties are responsible pursuant to the terms hereof. Each of the HU Parties
shall be jointly and severally liable for the Pro Rata Share of Losses for which the HU Parties are responsible pursuant to the
terms hereof.

 

3.Notwithstanding
anything contained herein to the contrary, each Party and its Affiliates shall be solely responsible for any Losses to the extent
such Losses arise as a result of its, or any of its Affiliates', acts, negligence, recklessness, bad faith or willful misconduct.
Each Party and its Affiliates shall indemnify, defend and hold harmless the other Parties and their Affiliates (including, without
limitation, any Guarantor) from any liabilities arising (a) under the Loan Guaranty, the Franchise Guaranty, or (b) as a result
of a default under the Loan Documents, in each event to the extent arising as a result of such Party's, or its Affiliates', acts,
negligence, recklessness, bad faith or willful misconduct. For the purposes of this Agreement, Crestline Hotel & Resorts, LLC
("CHRLLC"), while acting in its capacity as manager of the Hotel, will not be considered to be an Affiliate of ARC REIT
and the liability of CHRLLC, if any, will be governed by the terms of that certain management agreement in connection with the
management of the Hotel by and between Borrower and CHRLLC ("Management Agreement"). However, CHRLLC shall be considered
to be an Affiliate of ARC REIT with respect to actions

 

    	3

    	 

    

 

by CHRLLC taken outside of its capacity
as manager of the Hotel pursuant to the Management Agreement.

 

4.The liabilities
and obligations of each Party under this Agreement are direct and primary and arise upon the occurrence of the matters which are
the subject of this Agreement. The liability of each Party hereunder is not conditioned or contingent upon the occurrence of any
other events or the pursuit by a Party of any other remedies except demand for performance upon a Party.

 

5.Each Party consents
to the exercise of personal jurisdiction over such Party by any state court in the City of Virginia Beach, Virginia and in the
United States District Court for the Eastern District of Virginia (Norfolk Division) and consents to the laying of venue in such
courts. Service shall be effected by any means permitted by the court in which any action is filed, or by mailing process, postage
prepaid, by certified or registered mail, return receipt requested, to the other party at the address provided for herein. Service
shall be deemed effective upon receipt.

 

6.If any clause
or provision contained herein operates or would prospectively operate to invalidate this Agreement in whole or in part, then such
clause or provision shall be held naught as though not contained herein, and the remainder of this Agreement shall remain operative
and in full force and effect.

 

7.All notices,
requests, demands or other communications provided for herein shall be in writing and shall be deemed duly given upon actual receipt,
and shall be delivered (i) in person, (ii) by registered or certified mail, postage prepaid, return receipt requested, (iii) by
nationally recognized overnight courier, or (iv) by facsimile or other generally accepted means of electronic transmission including
email (provided that a copy of any notice delivered pursuant to this clause (iv) shall also be sent pursuant to clause (ii) or
(iii), addressed as follows (or to such other addresses as may be specified by like notice to the other Party):

 

	To TCAB7, AHPII,	 
	Hoffler and Haddad:	 
	 	Armada Hoffler Properties II, L.L.C. 

222 Central Park Avenue, Suite 2100 

Virginia Beach, Virginia 23462

 Facsimile No. (757) 424-2513
	 	Email: mohara@armadahoffler.com 

Attn: Michael P. O'Hara
	 	 
	and a copy to:	Faggert & Frieden, P.C.
	 	222 Central Park Avenue, Suite 1300
	 	Virginia Beach, Virginia 23462 

Facsimile No. (757) 424-0102

 Email: dfaggert@fflaw.com 

Attn: David Y. Faggert, Esq.
	 	 
	To CDBH and 	 
	ARC REIT: 	American Realty Capital Hospitality Trust, Inc.

    	4

    	 

    

 

	 	405 Park Avenue, 15th Floor Drive, Suite 500
	 	New York, New York 10022
	 	Attn: Jon Mehlman
	 	Facsimile No. (646) 381-0539
	 	Email: JMehlman@arlcap.com
	 	 
	To HWC and HU:	Hampton University
	 	Hampton W Company, LLC
	 	100 East Queen Street
	 	Hampton, Virginia 23668
	 	Facsimile No. (757) 727-5746
	 	Email:
	 	Attn: Dr. W. R. Harvey, President
	 	 
	and a copy to:	Hampton University
	 	Hampton W Company, LLC
	 	100 East Queen Street
	 	Hampton, Virginia 23668
	 	Facsimile No. (757) 727-5746
	 	Email: faye.lucas@hamptonu.edu
	 	Attn: Faye Hardy-Lucas, Esq., Vice President and
	 	General Counsel
	 	 
	To Legacy:	Legacy Hospitality, LLC
	 	1390 Piccard Drive
	 	Suite 120
	 	Rockville, Maryland 20850
	 	Facsimile No. (301) 795-1401
	 	Email: tfauquier@vanguardrealty.com
	 	Attn: Thomas D. W. Fauquier, Manager
	 	 
	and a copy to:	Bregman, Berbert, Schwartz & Gilday, LLC
	 	7315 Wisconsin Avenue
	 	Suite 800 West
	 	Bethesda, Maryland 20814
	 	Facsimile No. (301) 961-8625
	 	Email: tschwartz@bergmanlaw.com
	 	Attn: Timothy P. Schwartz
	 	 
	If to VBCH:	VB City Hotels LLC
	 	One Columbus Center
	 	Suite 700
	 	Virginia Beach, Virginia 23462 
	 	Attn: Gerald S. Divaris 
	 	Facsimile: (757) 497-1338 
	 	Email: gdivaris@divaris.com 

 

    	5

    	 

    

 

 

	With a copy to:	Wilcox & Savage, P.C.
	 	222 Central Park Avenue, Suite 1500 
	 	Virginia Beach, Virginia 23462 
	 	Attn: Mark E. Slaughter
	 	Facsimile: (757) 628-5659 
	 	Email: mslaughter@wilsay.com

 

8.This Agreement
shall be construed, performed and enforced in accordance with the laws of the Commonwealth of Virginia without regard to the principles
of conflicts of law. Each Party had an opportunity to seek legal counsel prior to executing this Agreement and each Party participated
in the negotiation of its terms; therefore, this Agreement shall not be construed more favorably toward or against any Party.

 

9.This Agreement
shall be binding upon each Party and its successors, heirs, personal representatives and assigns, and shall inure to the benefit
of each Party and its successors and assigns.

 

10.In any suit,
cause of action, arbitration or other proceeding brought by one Party against another Party or Parties to enforce this Agreement,
the Party which substantially prevails in such enforcement action, as determined by the trier-of-fact, shall be entitled to recover
from the Party or Parties which do not substantially prevail in such enforcement action its reasonable out-of-pocket costs and
expenses, including attorney's fees, as determined by the trier-of-fact.

 

TCAB7, AHPII, CHRI,
HWC, CVBH, and Legacy are each members in the Borrower and are parties to a Second Amended and Restated Operating Agreement of
TCA Block 7 Hotel, L.L.C., dated as of January 1, 2008, as amended by a First Amendment to Second Amended and Restated Operating
Agreement of TCA Block 7 Hotel, L.L.C., dated as of January 1, 2012, and a Second Amendment to Second Amended and Restated Operating
Agreement of TCA Block 7 Hotel, L.L.C., dated as of even date herewith (collectively, the "Operating Agreement"). Should
any Party be in default of its obligations under this Agreement, such Party and/or the group of parties to which it belongs shall
also be in default under the Operating Agreement (for example, if Haddad is in default of this Agreement, then the All Parties
shall also be in default hereunder and the AH Party which is a member of the Borrower shall be in default under the Operating Agreement
(such Party(ies), the "Defaulting Parties"). In such event, to the extent that the Party(ies) that have not received
amounts due to them under this Agreement (the "Unpaid Parties") have not been able to collect the amounts due, and the
majority in interest of the Unpaid Parties elect to pursue the following remedy, then the Defaulting Party and/or the group of
parties to which it belongs hereunder shall each be treated as a Non-Contributing Member under the Operating Agreement and the
Default Amount under the Operating Agreement shall be the amount that such Party has failed to pay under this Agreement (including
any amounts calculated in accordance with the first sentence of this Section 10) and the Ownership Interest of such Party and/or
the group of parties to which it belongs in the Borrower shall be subject to forfeiture and/or reduction in accordance with Sections
6.E, I and J of the Operating Agreement; provided, however, that in the application of such Sections for the purposes of this Agreement,
Additional Capital Contribution(s) shall mean the Losses under this Agreement that a Party has paid or not paid, as the case may
be, and in Section E the numerator

 

    	6

    	 

    

 

of the fraction shall be two times the
Default Amount instead of the amount of Additional Capital Contribution which the Non-Contributing Member fails to contribute and
the denominator shall be the Losses. Following the application of this provision, the Default Amount will be deemed to have been
extinguished. Notwithstanding the foregoing, to the extent that two times the Default Amount is more than the amount of the Losses
(meaning that the Non-Contributing Member's full Ownership Interest shall have been extinguished without fully exhausting the Default
Amount, then only so much of the Default Amount as is necessary (after multiplying by two) to equal the amount of the Losses shall
be deemed to have been extinguished, and the remaining Default Amount shall continue to be due and owing to the Unpaid Parties,
who may thereafter pursue recovery of such remaining amount by any legal means. For the purposes of this Agreement, the Ownership
Interest of VBCH shall be subject to the provisions of the above-referenced Sections of the Operating Agreement.

 

To the extent any
Default Amount is unpaid (either because the majority in interest of the Unpaid Parties elects not to pursue the foregoing remedy,
or because a portion of the Default Amount continues to be due following the application of the foregoing remedy), then, as liquidated
damages and not a penalty (the Parties acknowledging that the additional harm to a Party associated with the necessity of pursuing
legal redress is difficult to estimate), the Unpaid Parties shall be entitled to recover from the Non-Contributing Members, in
addition to the unpaid Default Amount ultimately determined by the trier-of-fact to have been due from the Non-Contributing Members,
an amount equal to twenty percent (20%) of such Default Amount.

 

11.No amendment,
modification or supplement of this Agreement shall be binding on any of the Parties hereto unless it is in writing and signed by
the Parties in interest at the time of any such amendment, modification or supplement. No provision hereof may be waived except
in writing signed by the Party against whom any such waiver is sought. The waiver by any Party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any subsequent breach.

 

12.This Agreement
is solely for the benefit of the Parties to this Agreement and should not be deemed to confer upon third-parties any remedy, claim,
liability, reimbursement, claims or actions or other right in excess of those existing without reference to this Agreement.

 

13.This Agreement
may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective
when signed by each of the parties hereto and delivered by each of the parties hereto, in person or by facsimile or other electronic
transmission, to the other parties hereto.

 

[The next page is page 8, the first page
of the signature pages.]

 

    	7

    	 

    

 

WITNESS the following signatures and seals
as of the date first above written.

 

 

	 	/s/ Daniel A. Hoffler
	 	Daniel A. Hoffler
	 	 
	 	/s/ Louis S. Haddad
	 	Louis S. Haddad
	 	 
	 	TCA Block 7, Inc., a Virginia corporation
	 	 
	 	By: 	/s/ Louis S. Haddad	 (SEAL)
	 	 	Louis S. Haddad, President
	 	 	 	 
	 	ARMADA HOFFLER PROPERTIES II, 
	 	L.L.C., a Virginia limited liability company
	 	 	 	 
	 	By: 	/s/ Louis S. Haddad	 (SEAL)
	 	 	Louis S. Haddad, Manager
	 	 	 	 
	 	CHRI VIRGINIA BEACH HOTEL (A/H) 
	 	MINORITY HOLDINGS, L.L.C., a Delaware limited liability company
	 	 	 
	 	By: 	ARC Hospitality TRS Holdings, LLC, 
	 	 	its sole member
	 	 	 	 
	 	 	By:	American Realty Capital Hospital 
	 	 	 	Operating Partnership, L.P., its sole member
	 	 	 	 	 
	 	 	 	By:	/s/ William M. Kahane
	 	 	 	 	Name: William Kahane
	 	 	 	 	Title: Chief Executive Officer
	 	 	 	 	 	 

 

    	8

    	 

    

 

WITNESS the following signatures and seals
as of the date first above written.

 

 

	 	AMERICAN REALTY CAPITAL HOPSPITALITY TRUST, INC., a Maryland corporation
	 	 	 
	 	By: 	/s/ Jesse C. Galloway
	 	Name: 	 Jesse C. Galloway
	 	Title: 	Authorized Signatory 
	 	 	 
	 	HAMPTON W COMPANY, LLC
	 	a Virginia limited liability company
	 	 	 
	 	By: 	Hampton management Company, LLC
	 	 	a Virginia limited liability company
	 	 	 
	 	 	By: Hampton University, Manager
	 	 	 	 	 
	 	 	 	By: 	/s/ Doretha J. Spells
	 	 	 	 	Doretha J. Spells, Vice President for Business Affairs
	 	 	 	 	 
	 	HAMPTON UNIVERSITY
	 	 	 
	 	By: 	/s/ Doretha J. Spells
	 	 	Doretha J. Spells, Vice President for Business Affairs
	 	 	 
	 	LEGACY HOSPITALITY, LLC, a Maryland limited liability company
	 	 	 
	 	By: 	/s/ Thomas D. W. Fauquier
	 	 	Thomas D.W. Fauquier
	 	 	Manager
	 	 	 
	 	VB CITY HOTELS, LLC,
	 	a Virginia limited liability company
	 	 	 	 
	 	By:	/s/ Gerald S. Divaris	 (SEAL)
	 	 	Gerald S. Divaris, Manager
	 	 	 	 
	 	By: 	                                               	 (SEAL)
	 	 	Michael B. Divaris, Manager
	 	 	 	 
	 	By:	/s/ Sanford M. Cohen	 (SEAL)
	 	 	Sanford M. Cohen, Manager
	 	 	 	 	 	 

 

 

 

    	9

    	 

    

 

EXHIBIT A

TO PERMANENT LOAN CROSS INDEMNITY

 

LOAN DOCUMENTS

 

		1.	Promissory Note in the amount of $20,700,000 made by Borrower payable to the order of Lender.

		2.	Loan Agreement between Borrower and Lender.

		3.	Deed of Trust, Assignment of Leases and Rents, and Security Agreement made by Borrower to Equity Title Company, LLC for the
benefit of Lender.

		4.	Assignment of Leases and Rents from Borrower to Lender.

		5.	Guaranty of Recourse Obligations.

		6.	Deposit Account Control Agreement

		7.	Environmental Indemnity Agreement.

		8.	Assignment of Management Agreement and Subordination of Management Fees.

		9.	Assignment of Agreements, Licenses, Permits and Contracts

    	10

    	 

    

 

EXHIBIT B

TO

PERMANENT LOAN CROSS INDEMNITY

 

OWNERSHIP PERCENTAGES

 

	
        TCA Block 7, Inc.

        Armada/Hoffler Properties II, L.L.C.
	 
	 	 
	Daniel A. Hoffler and Louis S. Haddad, collectively AH Parties	20.5323%
	 	 
	Hampton W Company LLC and Hampton University, collectively HU Parties	20.3548%
	 	 
	CHRI Virginia Beach Hotel (A/H) Minority Holding, LLC	30.5323%
	 	 
	Legacy Hospitality, LLC	18.5806%
	 	 
	VB City Hotels LLC	10.0000%
	 	 
	 	Total	100.0000%

 

 

    	11

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