Document:

Master Repurchase Agreement

 Exhibit 10.1 
  
 EXECUTION VERSION 
  

 MASTER REPURCHASE AGREEMENT 
  
 Between: 
  
 Merrill Lynch Bank USA, as Buyer 
  
 and 
  
 Encore Credit Corp., as a Seller 
  
 and 
  
 ECC Capital Corporation,
as a Seller 
  
 and 
  
 Bravo Credit Corporation, as a Seller 
  
 Dated as of February 14, 2005 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 SECTION 1.
	  	APPLICABILITY	  	1
			
	 SECTION 2.
	  	DEFINITIONS	  	1
			
	 SECTION 3.
	  	INITIATION; TERMINATION	  	18
			
	 SECTION 4.
	  	MARGIN AMOUNT MAINTENANCE	  	23
			
	 SECTION 5.
	  	INCOME PAYMENTS	  	23
			
	 SECTION 6.
	  	REQUIREMENTS OF LAW	  	24
			
	 SECTION 7.
	  	TAXES.	  	25
			
	 SECTION 8.
	  	SECURITY INTEREST	  	29
			
	 SECTION 9.
	  	PAYMENT, TRANSFER AND CUSTODY	  	29
			
	 SECTION 10.
	  	HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN	  	30
			
	 SECTION 11.
	  	REPRESENTATIONS	  	30
			
	 SECTION 12.
	  	COVENANTS	  	36
			
	 SECTION 13.
	  	EVENTS OF DEFAULT	  	42
			
	 SECTION 14.
	  	REMEDIES	  	46
			
	 SECTION 15.
	  	INDEMNIFICATION AND EXPENSES; RECOURSE	  	49
			
	 SECTION 16.
	  	SERVICING	  	51
			
	 SECTION 17.
	  	SINGLE AGREEMENT	  	52
			
	 SECTION 18.
	  	SET-OFF	  	52

  

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	 SECTION 19.
	  	NOTICES AND OTHER COMMUNICATIONS	  	52
			
	 SECTION 20.
	  	ENTIRE AGREEMENT; SEVERABILITY	  	53
			
	 SECTION 21.
	  	NON-ASSIGNABILITY	  	53
			
	 SECTION 22.
	  	TERMINABILITY	  	54
			
	 SECTION 23.
	  	GOVERNING LAW	  	55
			
	 SECTION 24.
	  	SUBMISSION TO JURISDICTION; WAIVERS	  	55
			
	 SECTION 25.
	  	NO WAIVERS, ETC.	  	56
			
	 SECTION 26.
	  	NETTING	  	56
			
	 SECTION 27.
	  	DUE DILIGENCE	  	56
			
	 SECTION 28.
	  	NON-UTILIZATION FEE	  	57
			
	 SECTION 29.
	  	COMMITMENT FEE	  	57
			
	 SECTION 30.
	  	BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT	  	57
			
	 SECTION 31.
	  	MISCELLANEOUS	  	59
			
	 SECTION 32.
	  	CONFIDENTIALITY	  	59
			
	 SECTION 33.
	  	INTENT	  	60
			
	 SECTION 34.
	  	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS	  	60
			
	 SECTION 35.
	  	CONFLICTS	  	61
			
	 SECTION 36.
	  	AUTHORIZATIONS	  	61
			
	 SECTION 37.
	  	ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES.	  	61

  

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 EXHIBITS 
  

			
	 SCHEDULE 1
	  	Representations and Warranties Re: Mortgage Loans
		
	 SCHEDULE 2
	  	Existing Indebtedness
		
	 EXHIBIT I
	  	Form of Confirmation Letter
		
	 EXHIBIT II
	  	Form of Opinion Letter
		
	 EXHIBIT III
	  	UCC Filing Jurisdictions
		
	 EXHIBIT IV
	  	Form of Account Agreement
		
	 EXHIBIT V
	  	Mortgage Loan Schedule Fields
		
	 EXHIBIT VI
	  	Mortgage File Documents
		
	 EXHIBIT VII
	  	Underwriting Guidelines
		
	 EXHIBIT VIII
	  	Seller’s Officer’s Certificate
		
	 EXHIBIT IX
	  	Form of Servicer Notice
		
	 EXHIBIT X
	  	Authorized Representatives
		
	 EXHIBIT XI
	  	Responsible Officers
		
	 EXHIBIT XII
	  	Form of Section 7 Certificate

  
  

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 MASTER REPURCHASE AGREEMENT 
  
 This is a MASTER REPURCHASE AGREEMENT, dated as of February 14, 2005, between ENCORE CREDIT CORP., a California corporation
(“Encore” and a “Seller”), ECC Capital Corporation, a Maryland corporation (“ECC” and a “Seller”), Bravo Credit Corporation, a California corporation (“Bravo” and a
“Seller”, and together with Encore and ECC, collectively, the “Sellers”) and MERRILL LYNCH BANK USA, a Utah industrial loan corporation (the “Buyer”). 
  
 SECTION 1. APPLICABILITY 
  
 From time to time the parties hereto shall enter into transactions in which
the respective Seller agrees to transfer to Buyer Mortgage Loans against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to the Sellers such Mortgage Loans at a date certain after the related Purchase Date, against
the transfer of funds by the Sellers. Each such transaction shall be referred to herein as a “Transaction” and shall be governed by this Repurchase Agreement, unless otherwise agreed in writing. 
  
 SECTION 2. DEFINITIONS 
  
 As used herein, the following terms shall have the following meanings (all terms defined in this Section 2 or in other provisions of this
Repurchase Agreement in the singular to have the same meanings when used in the plural and vice versa): 
  
 “Accepted Servicing Practices” shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage
lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located. 
  
 “Account Agreement” shall mean a letter agreement between any one or more of the Sellers, the Buyer, and a depository institution
acceptable to Buyer in its sole discretion substantially in the form of Exhibit IV attached hereto as the same may be amended from time to time. 
  
 “Actual Purchase Price” shall have the meaning specified in Section 3(b)(vii)(A). 
  
 “Additional Purchased Mortgage Loans” shall mean Mortgage
Loans or cash provided by the Sellers to Buyer or its designee pursuant to Section 4 of this Repurchase Agreement. 
  
 “Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy
Code. 
  
 “Aged Loan” shall mean a Mortgage Loan
which has been subject to a Transaction hereunder for a period of greater than 120 days but not greater than 180 days. 

 “Agency” shall mean Freddie Mac, Fannie Mae or Ginnie Mae, as applicable. 
  
 “Appraised Value” shall mean the value set forth in an
appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property. 
  
 “Asset Value” shall have the meaning set forth in the Pricing Side Letter. 
  
 “Assignment and Acceptance” shall have the meaning specified in Section 21 hereof. 
  
 “Assignment of Mortgage” shall mean an assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage to Buyer. 
  
 “Authorized Representative” shall mean, for the purposes of
this Repurchase Agreement only, an agent or Authorized Representative of the respective Seller listed on Exhibit X hereto, as such Exhibit X may be amended from time to time. 
  
 “Bailee Letter” shall have the meaning assigned to such term
in the Custodial Agreement. 
  
 “Bankruptcy Code”
shall mean the United States Bankruptcy Code of 1978, as amended from time to time. 
  
 “Bravo” shall mean Bravo Credit Corporation, its permitted successors and assigns. 
  
 “Business Day” shall mean a day other than (i) a Saturday or Sunday, (ii) any day on which banking institutions are authorized or
required by law, executive order or governmental decree to be closed in the States of New York or California or (iii) any day on which the New York Stock Exchange is closed. 
  
 “Buyer” shall mean Merrill Lynch Bank USA, its successors in interest and assigns and, with respect to
Section 7, its participants. 
  
 “Capital Lease
Obligations” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Repurchase Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. 
  
 “Cash Equivalents” shall mean (a) securities with maturities
of 90 days or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of Buyer or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase 

  

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obligations of Buyer or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with
respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in
either case maturing within 90 days after the day of acquisition, (e) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of 90 days or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. 
  
 “Change in Control” shall mean: 
  
 (a) Prior to the REIT Event: 
  
 (i) any transaction or event as a result of which Steve
Holder and Shabi Asghar cease together to own, directly or indirectly at least 51% of the stock of each Seller; 
  
 (ii) the sale, transfer, or other disposition of all or substantially all of a Seller’s assets (excluding any such action taken in
connection with any securitization transaction); or 
  
 (iii) the consummation of a merger or consolidation of a Seller with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s stock outstanding
immediately after such merger, consolidation or such other reorganization is owned by persons who were not stockholders of such Seller immediately prior to such merger, consolidation or other reorganization; 
  
 (b) On and after the REIT Event: 
  
 (i) any transaction or event as a result of which the Seller
that becomes a REIT ceases to own, directly or indirectly 100% of the stock of any other Seller; 
  
 (ii) the sale, transfer, or other disposition of all or substantially all of a Seller’s assets (excluding any such action taken in
connection with any securitization transaction); or 
  
 (iii) the consummation of a merger or consolidation of a Seller with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s stock outstanding
immediately after such merger, consolidation or such other reorganization is owned by persons who were not stockholders of such Seller immediately prior to such merger, consolidation or other reorganization; 

  

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provided, that in no event shall the REIT Event be deemed a Change in Control. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 
  
 “Collection Account” shall mean the account established by a
financial institution acceptable to Buyer subject to an Account Agreement, into which all Income shall be deposited after the occurrence of a Default or an Event of Default. 
  
 “Combined Loan to Value Ratio” or “CLTV” shall mean, with respect to any Second Lien
Mortgage Loan, the sum of the original principal balance of such Mortgage Loan and the outstanding principal balance of any related first lien as of the date of origination of the Mortgage Loan, divided by the Appraised Value of the Mortgaged
Property as of the origination date. 
  
 “Commitment
Fee” shall have the meaning set forth in the Pricing Side Letter. 
  
 “Committed Mortgage Loan” shall mean a Mortgage Loan which is the subject of a Takeout Commitment with a Takeout Investor. 
  
 “Confirmation” shall mean a Confirmation Letter in the form of Exhibit I hereto. 
  
 “Custodial Agreement” shall mean that certain Custodial
Agreement dated as of the date hereof, among Sellers, Buyer and Custodian as the same may be amended from time to time. 
  
 “Custodian” shall mean Deutsche Bank National Trust Company, or any successor thereto under the Custodial Agreement. 
  
 “Default” shall mean an Event of Default or an event that
with notice or lapse of time or both would become an Event of Default. 
  
 “Delinquent Mortgage Loan” shall mean any Mortgage Loan as to which any Monthly Payment, or part thereof, remains unpaid for more than 30 days from the original Due Date for such Monthly Payment. 
  
 “Disbursement Account” shall mean the account established by
the Disbursement Agent subject to the Disbursement Agreement, into which the Purchase Price for the Purchased Mortgage Loans that are Wet-Ink Mortgage Loans shall be deposited. 
  
 “Disbursement Agent” shall mean Deutsche Bank National Trust Company, its successor or assigns. 

 
 “Disbursement Agreement” shall mean that certain
Disbursement Agreement by and among the Disbursement Agent, the Sellers and the Buyer, dated as of the date hereof as the 

  

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same may be amended from time to time, setting forth the terms pursuant to which the Disbursement Agent shall disburse funds related to Wet-Ink Mortgage
Loans from the Disbursement Account. 
  
 “Dollars” and “$” shall mean lawful money of the United States of America. 
  
 “Due Date” shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.

  
 “Due Diligence Costs” shall have the meaning
set forth in Section 27 hereof. 
  
 “Due Diligence
Review” shall mean the performance by Buyer of any or all of the reviews permitted under Section 27 hereof with respect to any or all of the Mortgage Loans, as desired by the Buyer from time to time. 
  
 “ECC” shall mean ECC Capital Corporation, its permitted
successors and assigns. 
  
 “Effective Date”
shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied. 
  
 “Electronic Tracking Agreement” shall mean an Electronic Tracking Agreement among Buyer, Sellers, MERS and MERSCORP, Inc., to the extent
applicable as the same may be amended from time to time. 
  
 “Eligible Mortgage Loan” shall mean a Purchased Mortgage Loan which complies with the representations and warranties set forth on Schedule 1 to this Repurchase Agreement. 
  
 “Encore” shall mean Encore Credit Corp., its permitted
successors and assigns. 
  
 “ERISA” shall, with
respect to any Person, mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued thereunder. 
  
 “ERISA Affiliate” shall, with respect to any Person, mean
any Person which is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which such Person is a member, or (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which such Person is a member. 
  
 “Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents,
taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage or any other document. 
  

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 “Estimated Purchase Price” shall have the meaning set forth in Section 3(b) hereof.

  
 “Event of Default” shall have the meaning
specified in Section 13.01 hereof. 
  
 “Event of
Insolvency” shall mean, for any Person: 
  
 (a) that
such Person shall discontinue or abandon operation of its business; or 
  
 (b) that such Person shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or 
  
 (c) a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person
in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator,
conservator or other similar official of such Person, or for any substantial part of its property, or for the winding-up or liquidation of its affairs and such proceeding shall not have been dismissed within thirty (30) days of its filing; or

  
 (d) the commencement by such Person of a voluntary case under
any applicable bankruptcy, insolvency or other similar Law now or hereafter in effect, or such Person’s consent to the entry of an order for relief in an involuntary case under any such Law, or consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or 
  
 (e) that such Person shall become insolvent. 
  
 “Event of Termination” shall, with respect to any Seller,
mean (i) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such
event, or (ii) the withdrawal of any Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the failure by any Seller or any ERISA Affiliate
thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the
Code or Section 302(e) of ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by any Seller or any ERISA Affiliate thereof to terminate any Plan, or (v) the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if any Seller or any ERISA Affiliate thereof fails to timely
provide security to the Plan in accordance with the provisions of said Sections, or (vi) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (vii)
the receipt by any Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vi) has been taken by the PBGC with respect to such Multiemployer Plan, or (viii) any event or

  

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circumstance exists which may reasonably be expected to constitute grounds for any Seller or any ERISA Affiliate thereof to incur liability under Title IV of
ERISA or under Sections 412(c)(11) or 412(n) of the Code with respect to any Plan. 
  
 “Excluded Taxes” shall have the meaning specified in Section 7(e). 
  
 “Expenses” shall mean all present and future expenses incurred by or on behalf of the Buyer in connection with this Repurchase Agreement
or any of the other Repurchase Documents and any amendment, supplement or other modification or waiver related hereto or thereto, whether incurred heretofore or hereafter, which expenses shall include the cost of title, lien, judgment and other
record searches; attorneys’ fees; and costs of preparing and recording any UCC financing statements or other filings necessary to perfect the security interest created hereby. 
  
 “Fannie Mae” shall mean Fannie Mae, or any successor thereto. 
  
 “Fidelity Insurance” shall mean insurance coverage with
respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Sellers’ regulators.

  
 “Financial Statements” shall mean the
consolidated financial statements of the Sellers prepared in accordance with GAAP for the year or other period then ended. Such financial statements will be audited, in the case of annual statements, by Grant Thornton LLP or such other independent
certified public accountants approved by the Buyer (which approval shall not be unreasonably withheld). 
  
 “First Payment Default” shall mean, with respect to a Mortgage Loan, the failure of the Mortgagor to make the first Monthly Payment due
under the Mortgage Loan on or before its scheduled Due Date. 
  
 “Fitch” shall mean Fitch Ratings, Inc., or any successor thereto. 
  
 “Freddie Mac” shall mean Freddie Mac, or any successor thereto. 
  
 “GAAP” shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to
both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors. 
  
 “Ginnie Mae” shall mean the Government National Mortgage
Association and any successor thereto. 
  
 “Governmental
Authority” shall mean any nation or government, any state, county, municipality or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing
authority) or any instrumentality or officer of any of the foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity directly or indirectly owned by or controlled by the foregoing. 
  

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 “Ground Lease” shall mean the original executed instrument evidencing a leasehold estate
with respect to a Mortgaged Property. 
  
 “Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other
Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise); provided that
the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee”
and “Guaranteed” used as verbs shall have correlative meanings. 
  
 “High Cost Mortgage Loan” shall mean a Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and Equity Protection Act of 1994 or (b) a “high cost,”
“threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law whose subject is predatory or abusive lending practices (or a similarly classified loan using different terminology
under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees). 
  
 “Income” shall mean, with respect to any Mortgage Loan at any time, any principal thereof then payable and
all interest, dividends or other distributions payable thereon. 
  
 “Indebtedness” shall mean, with respect to any Person, (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to
another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than
trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business, so long as such trade accounts payable are payable within 90 days of the date the respective goods are delivered or
the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of
such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under
repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person;
and (i) Indebtedness of general partnerships of which such Person is a general partner. 
  

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 “Indemnified Party” shall have the meaning specified in Section 15 hereof. 

 
 “Interest Only Adjustment Date” shall mean, with respect
to each Interest Only Loan, the date specified in the related Mortgage Note on which the Monthly Payment will be adjusted to include principal as well as interest. 
  
 “Interest Only Loan” shall mean a Mortgage Loan which only requires payments of interest for a period of
time and is originated in accordance with a Seller’s Underwriting Guidelines. 
  
 “Interest Rate Protection Agreement” shall mean, with respect to any or all of the Purchased Mortgage Loans, any short sale of a US Treasury Security, or futures contract, or mortgage related
security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement or Takeout Commitment, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of
nominal interest obligations, either generally or under specific contingencies, entered into by a Seller and an Affiliate of the Buyer, and acceptable to the Buyer. 
  
 “Jumbo Mortgage Loan” shall mean a first lien Mortgage Loan with a principal balance greater than $750,000
and not more than $1,200,000 that (i) except with respect to the original principal balance thereof, conforms to the requirements for securitization or cash purchase by an Agency and (ii) that either (a) is intended to be sold or securitized by a
Seller or (b) is subject to Takeout Commitment. 
  
 “Late
Payment Fee” shall mean the excess of the Price Differential paid as a result of its calculation at the Post-Default Rate over the Price Differential as would have been calculated at the Pricing Rate. 
  
 “Law” shall mean, any law, treaty, rule or regulation or
determination of an arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 
  
 “LIBOR Period” shall mean, with respect to each Payment
Date, the period from and including the immediately preceding Payment Date (or, with respect to the first LIBOR Period for each Transaction, from and including the related Purchase Date) to but excluding such Payment Date, unless otherwise agreed to
by the Buyer and the Sellers and set forth in the related Confirmation. 
  
 “LIBOR Period Commencement Date” shall mean (a) with respect to the initial LIBOR Period with respect to a Transaction, the Purchase Date, and (b) with respect to each succeeding LIBOR Period with respect to a Transaction,
the Payment Date, or if the LIBOR Period is other than one month, the last day of the immediately preceding LIBOR Period. 
  
 “LIBOR Rate” shall mean, with respect to each day during the applicable LIBOR Period, the rate per annum equal to the one month British
Bankers Association Rate as reported on the display designated as “BBAM” “Page DG8 4a” on Bloomberg (or such other display as may replace “BBAM” “Page DG8 4a on Bloomberg), as of 8:00 a.m., New York City time, on
the date two Business Days prior to the commencement of such LIBOR Period, and if such rate 

  

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shall not be so quoted, or if the related LIBOR Period shall be less than one month, the rate per annum at which the Buyer or its Affiliate is offered dollar
deposits at or about 8:00 a.m., New York City time, on the date two Business Days prior to the commencement of the such LIBOR Period, by prime banks in the interbank eurodollar market where the eurodollar and foreign currency exchange operations in
respect of its Transactions are then being conducted for delivery on such day for a period of one month or such other period as agreed upon in writing by the Buyer and the Sellers and in an amount comparable to the amount of the Transactions
outstanding on such day. 
  
 “Lien” shall mean
any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance. 
  
 “Loan to Value Ratio” or “LTV” shall mean with respect to any Mortgage Loan, the ratio of the original outstanding
principal amount of such Mortgage Loan to the lesser of (a) the Appraised Value of the Mortgaged Property at origination or (b) if the Mortgaged Property was purchased within 12 months of the origination of such Mortgage Loan, the purchase price of
the Mortgaged Property. 
  
 “Margin Call” shall
have the meaning specified in Section 4. 
  
 “Margin
Deficit” shall have the meaning specified in Section 4. 
  
 “Market Value” shall mean, as of any date with respect to any Purchased Mortgage Loan, the price at which such Mortgage Loan could readily be sold as determined by the Buyer in its good faith discretion. 
  
 “Material Adverse Effect” shall mean a material adverse
effect on (a) the Property (taken as a whole), business, operations, financial condition or prospects of any Seller, (b) the ability of any Seller to perform its obligations under any of the Repurchase Documents to which it is a party, (c) the
validity or enforceability of any of the Repurchase Documents, (d) the rights and remedies of the Buyer or any Affiliate under any of the Repurchase Documents, (e) the timely payment of any amounts payable under the Repurchase Documents, or (f) the
Market Value of the Purchased Mortgage Loans. 
  
 “Maximum
Purchase Price” shall have the meaning set forth in the Pricing Side Letter. 
  
 “MERS” shall mean Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto. 
  
 “MERS System” shall mean the system of recording transfers
of mortgages electronically maintained by MERS. 
  
 “Minimum Purchase Price” shall have the meaning set forth in the Pricing Side Letter. 
  

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 “Monthly Payment” shall mean the scheduled monthly payment of principal and/or interest
on a Mortgage Loan. 
  
 “Moody’s” shall mean
Moody’s Investor’s Service, Inc. or any successors thereto. 
  
 “Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents,
security agreement and fixture filing, or similar instrument creating and evidencing a first lien or second lien on real property and other property and rights incidental thereto. 
  
 “Mortgage File” shall mean, with respect to a Mortgage Loan, the documents and instruments relating to such
Mortgage Loan and set forth in Exhibit VI hereto. 
  
 “Mortgage Interest Rate” shall mean the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note. 
  
 “Mortgage Loan” shall mean any first or second lien, one-to-four-family residential mortgage loan evidenced
by a Mortgage Note and secured by a Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no event shall include any mortgage loan which (a) is subject to Section 226.32 of Regulation Z or any similar state law (relating to
high interest rate credit/lending transactions), (b) includes any single premium credit life or accident and health insurance or disability insurance, or (c) is a High Cost Mortgage Loan. 
  
 “Mortgage Loan Schedule” shall mean with respect to any Transaction as of any date, a mortgage loan
schedule in the form of a computer tape or other electronic medium generated by the Sellers and delivered to Buyer and the Custodian, which provides information (including, without limitation, the information set forth on Exhibit V attached
hereto) relating to the Purchased Mortgage Loans in a format acceptable to the Buyer. 
  
 “Mortgage Loan Schedule and Exception Report” shall have the meaning set forth in the applicable Custodial Agreement. 
  
 “Mortgage Note” shall mean the promissory note or other evidence of the indebtedness of a Mortgagor secured
by a Mortgage. 
  
 “Mortgaged Property” shall
mean the real property securing repayment of the debt evidenced by a Mortgage Note. 
  
 “Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder. 
  
 “Multiemployer Plan” shall mean, with respect to any Person,
a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by such Person or any ERISA Affiliate thereof on behalf of its
employees and which is covered by Title IV of ERISA. 
  

 -11- 

 “Net Income” shall mean, for any Person for any period, the net income of such Person
for such period as determined in accordance with GAAP. 
  
 “Non-Excluded Taxes” shall have the meaning set forth in Section 7(a) hereof. 
  
 “Non-Exempt Buyer” shall have the meaning specified in Section 7(e) hereof. 
  
 “Non-Utilization Fee” shall have the meaning set forth in the Pricing Side Letter. 
  
 “Obligations” shall mean (a) any amounts due and payable by
the Sellers to Buyer in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar proceeding) and all other fees or
expenses which are payable hereunder or under any of the Repurchase Documents and (b) all other obligations or amounts due and payable by the Sellers to the Buyer or an Affiliate of Buyer under any other contract or agreement. 
  
 “OFAC” shall have the meaning set forth in Section 11(cc)
hereof. 
  
 “Other Taxes” shall have the meaning
set forth in Section 7(b) hereof. 
  
 “Overestimate
Amount” shall have the meaning specified in Section 3(c)(viii). 
  
 “Payment Date” shall mean the fifteenth (15th) day of each month,
or if such date is not a Business Day, the Business Day immediately preceding the fifteenth day of the month. 
  
 “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

  
 “Periodic Advance Repurchase Payment” shall
have the meaning specified in Section 5(a). 
  
 “Permitted
Contributions” shall mean a contribution of capital to (a) a wholly owned special purpose entity created for purposes of securitization transactions or (b) a wholly owned special purpose Subsidiary of a Seller the assets of which consist
solely of (i) residential real estate acquired in connection with the foreclosure of a residential mortgage loan, and (ii) no more than $1,000,000 in cash contributed for the purpose of capitalizing such Subsidiary and for use by such Subsidiary in
managing the real estate acquired pursuant to clause (i) hereof. 
  
 “Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or
political subdivision thereof). 
  
 “Piggy-Back Second
Lien Mortgage Loan” shall mean a second lien Mortgage Loan where the second lien on the related Mortgaged Property is incurred simultaneously with the first lien on the related Mortgaged Property. 
  
 “Plan” shall mean, with respect to any Person, any employee
benefit or similar plan that is or was at any time during the current year or immediately preceding five years established or maintained by such Person or any ERISA Affiliate thereof and that is covered by Title IV of ERISA, other than a
Multiemployer Plan. 
  

 -12- 

 “PMI Policy” shall mean a policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Repurchase Agreement with respect to certain Mortgage Loans. 
  
 “Post-Default Rate” shall have the meaning set forth in the Pricing Side Letter. 
  
 “Price Differential” shall mean, with respect to any
Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for such Transaction to the Purchase
Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of
such Price Differential previously paid by Sellers to Buyer with respect to such Transaction). 
  
 “Pricing Side Letter” shall mean that certain Pricing Side Letter, dated as of the date hereof, between the Buyer and the Sellers, as the same may be amended from time to time. 
  
 “Pricing Rate” shall mean a rate per annum equal to the sum
of (a) the LIBOR Rate plus (b) the Pricing Spread. 
  
 “Prohibited Person” shall have the meaning set forth in Section 11(cc) hereof. 
  
 “Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible. 
  
 “Purchase Date” shall
mean each date on which Purchased Mortgage Loans are transferred by Sellers to the Buyer or its designee. 
  
 “Purchase Price” shall mean, 
  
 (a) on the Purchase Date, the Asset Value on such date; and 
  
 (b) thereafter, except where Buyer and Sellers agree otherwise, such Purchase Price decreased by the amount of any cash, Income and Periodic Advance
Repurchase Payments actually received by Buyer pursuant to Sections 5 or applied to reduce Sellers’ obligations under Section 4(b) hereof. 
  
 “Purchase Price Percentage” shall have the meaning set forth in the Pricing Side Letter. 
  
 “Purchased Mortgage Loan Report” shall mean a report,
delivered with each Transaction Request, on the last day of each month (or if such date is not a Business Day, the next preceding Business Day), or upon the request of the Buyer, including a Mortgage Loan Schedule in the form of Exhibit V
hereto, setting forth information with respect to the Purchased Mortgage Loans (and Mortgage Loans proposed to be the subject of a Transaction on the related Purchase Date, if applicable). 
  

 -13- 

 “Purchased Mortgage Loans” shall mean the Mortgage Loans sold by the Sellers to Buyer in
a Transaction, and any Additional Purchased Mortgage Loans as evidenced by a Confirmation and a Trust Receipt. 
  
 “Qualified Insurer” shall mean an insurance company duly qualified as such under the laws of the states in which the Mortgaged Property
is located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided, and whose claims paying ability is rated X:A or better by A.M. Best’s with respect to hazard and flood
insurance. 
  
 “Rating Agency” shall mean any of
S&P, Moody’s or Fitch. 
  
 “Records”
shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Sellers or any other person or entity with respect to a Purchased Mortgage Loan. Records
shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to the Purchased Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan. 
  
 “Register” shall have the meaning specified in Section 21
hereof. 
  
 “Regulations T, U and X” shall mean
Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time. 
  
 “REIT” shall mean a real estate investment trust within the meaning of Sections 856 through 860 of the
Code. 
  
 “REIT Event” shall mean the formation
transactions, including without limitation, the merger of a wholly-owned subsidiary of ECC with and into Encore, and the initial public offering of common stock, par value $.001 per share, of ECC, in each case as further described in the
registration statement on Form S-11 filed on August 13, 2004 (such registration statement, as amended as of the date hereof, together with the documents incorporated by reference therein, the “Registration Statement”) by ECC with
the SEC under the Securities Act of 1933, as amended, relating to the registration of shares of common stock, as set forth in the prospectus contained in the Registration Statement. 
  
 “REO Property” shall mean real property acquired by a Seller, including a Mortgaged Property acquired
through foreclosure of a Mortgage Loan or by deed in lieu of such foreclosure. 
  
 “Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .21, .22, .24, .26,
..27 or .28 of PBGC Reg. § 4043. 
  

 -14- 

 “Repurchase Agreement” shall mean this Master Repurchase Agreement between Buyer and the
Sellers, dated as of the date hereof as the same may be further amended, supplemented or otherwise modified in accordance with the terms hereof. 
  
 “Repurchase Assets” shall have the meaning provided in Section 8 hereof. 
  
 “Repurchase Date” shall mean the date on which the Sellers are to repurchase the Purchased Mortgage Loans
subject to a Transaction from Buyer as specified in the related Confirmation, or if not so specified on a date requested pursuant to Section 3(d) or on the Termination Date, including any date determined by application of the provisions of Sections
3 or 14, or the date identified to Buyer by the Sellers as the date that the related Mortgage Loan is to be sold pursuant to a Takeout Commitment. 
  
 “Repurchase Documents” shall mean this Repurchase Agreement, the Pricing Side Letter, the Custodial Agreement, the Electronic Tracking
Agreement, if applicable, a Servicer Notice, if any, and the Account Agreement. 
  
 “Repurchase Price” shall mean the price at which Purchased Mortgage Loans are to be transferred from Buyer or its designee to the Sellers upon termination of a Transaction, which will be determined in
each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination. 
  
 “Repurchased Mortgage Loan” shall mean a Mortgage Loan (a) which is repurchased by a Seller from any third party purchaser as a result of
(i) a breach of representations and warranties under the agreed upon terms in which the claimed breach is not a result of fraud or material misrepresentation of fact by any party to the Mortgage Loan or consumer credit law violation or (ii) an early
payment default repurchase obligation, (b) where the claimed breach or early payment default is expressly identified to Buyer in writing, (c) which is subject to a Transaction hereunder for no more than 180 days and (d) which has not been foreclosed
upon or converted to REO Property. In addition to the foregoing, in no event will a Mortgage Loan be subject to a Transaction hereunder as a “Repurchased Mortgage Loan” if there is a breach of representation and warranty in respect of such
Repurchased Mortgage Loan other than the breach identified in writing to the Buyer pursuant to subclause (b) of this definition. 
  
 “Requirement of Law” shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule, regulation, procedure or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such
Person or any of its Property is subject. 
  
 “Responsible
Officer” shall mean an officer of the Sellers listed on Exhibit XI hereto, as such Exhibit XI may be amended from time to time. 
  
 “Reset Date” shall mean the last day of the related LIBOR Period. 
  
 “S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto. 
  

 -15- 

 “SEC” shall mean the Securities and Exchange Commission. 
  
 “Second Lien Mortgage Loan” shall mean a Mortgage Loan
secured by a second lien on the Mortgaged Property and which is underwritten in conformity with the applicable Seller’s Underwriting Guidelines and either (i) is intended to be securitized by such Seller or (ii) is eligible for sale pursuant to
a Takeout Commitment. 
  
 “Section 7 Certificate”
shall have the meaning specified in Section 7(e)(ii) hereof. 
  
 “Seller” shall mean, as applicable. Encore Credit Corp., ECC Capital Corporation and Bravo Credit Corporation, or their respective successors in interest thereto. 
  
 “Servicer” shall mean Option One Mortgage Corporation,
HomeEq Mortgage Servicing Corp. or any of their successors or permitted assigns or any other servicer that may hereafter be appointed by a Seller and approved by Buyer. 
  
 “Servicer Notice” shall mean the notice acknowledged by each Servicer substantially in the form of
Exhibit IX hereto. 
  
 “Servicing
Agreement” shall mean any servicing agreement entered into among a Seller and a Servicer, as the same may be amended from time to time. 
  
 “Settlement Account” shall have the meaning set forth in of the Custodial Agreement. 
  
 “Settlement Account Control Agreement” shall mean a
Settlement Account Control Agreement entered into among the Buyer, one or more of the Sellers and the Custodian, dated as of the date hereof as the same may be further amended, supplemented or otherwise modified in accordance with its terms.

  
 “Settlement Agent” with respect to any
Transaction the subject of which is a Wet-Ink Mortgage Loan, the entity approved by Buyer, in its sole discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the
related Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed approved unless Buyer notifies Sellers otherwise at any time electronically or in writing. 
  
 “Single-Employer Plan” shall mean a single-employer plan as defined in Section 4001(a)(15) of ERISA which
is subject to the provisions of Title IV of ERISA. 
  
 “Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or
classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person. 
  

 -16- 

 “Sub-Prime Mortgage Loan” shall mean a first or second lien Mortgage Loan and which is
underwritten in conformity with a Seller’s Underwriting Guidelines and either (i) will be securitized by such Seller or (ii) is eligible for sale pursuant to a Takeout Commitment. 
  
 “Takeout Commitment” shall mean a commitment of a Seller to sell one or more Mortgage Loans to a Takeout
Investor, and the corresponding Takeout Investor’s commitment back to such Seller to effectuate the foregoing. 
  
 “Takeout Investor” shall mean any institution which has made a Takeout Commitment and has been approved by Buyer. 
  
 “Tangible Net Worth” shall mean, for any Person as of a
particular date, on a consolidated basis, 
  
 (a) all amounts
which would be included under capital on a balance sheet of such Person at such date, determined in accordance with GAAP, less 
  
 (b) (i) amounts owing to such Person from Affiliates, or from officers, employees, shareholders or other Persons similarly affiliated with such Person,
(ii) intangible assets and (iii) deferred tax charge. 
  
 “Taxes” shall have the meaning set forth in Section 7(a) hereof. 
  
 “Termination Date” shall have the meaning set forth in the Pricing Side Letter. 
  
 “Termination Event” shall have the meaning set forth in Section 13.02 hereof. 
  
 “Test Period” shall mean any period of three (3) consecutive
months. 
  
 “Transaction” shall have the meaning
specified in Section 1. 
  
 “Transaction Request”
shall mean a request from a Seller to Buyer to enter into a Transaction. 
  
 “Trust Receipt” shall have the meaning set forth in the Custodial Agreement. 
  
 “Underwriting Guidelines” shall mean, with respect to each Seller, the underwriting guidelines (including all matrices appended thereto)
of that Seller, attached hereto as Exhibit VII, as they may be amended by Sellers from time to time. 
  
 “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York. 
  
 “Wet-Ink Mortgage Loan” shall mean a Mortgage Loan which any
Seller is selling to Buyer simultaneously with the origination thereof and for which the Mortgage Loan Documents have not been delivered to the Custodian. 
  

 -17- 

 “Wet-Ink Trust Receipt” shall mean a trust receipt issued by Custodian evidencing
Purchased Mortgage Loans which are Wet-Ink Mortgage Loans, substantially in the form attached to the Custodial Agreement. 
  
 “Wiring Schedule” shall mean, for each Wet-Ink Mortgage Loan, a schedule setting forth the loan identification number, the loan amount to
be funded by wire transfer and wiring directions for such Wet-Ink Mortgage Loan. 
  
 SECTION 3. INITIATION; TERMINATION 
  
 (a)
Conditions Precedent to Initial Transaction. Buyer’s obligation to enter into the initial Transaction hereunder with respect to each Seller is subject to the satisfaction, immediately prior to or concurrently with the making of such
Transaction, of the condition precedent that Buyer shall have received from the Sellers any fees and expenses payable hereunder, and all of the following documents with respect to that Seller and in all cases, Encore, (unless otherwise expressly
indicated), each of which shall be satisfactory to Buyer and its counsel in form and substance: 
  
 (i) The following Repurchase Documents delivered to the Buyer: 
  
 (A) Repurchase Agreement. This Repurchase Agreement, duly executed by all of the parties hereto;

  
 (B) Pricing Side Letter. The Pricing
Side Letter, duly executed by all of the parties hereto; 
  
 (C) Custodial Agreement. The Custodial Agreement, duly executed by all of the parties thereto; 
  
 (D) Account Agreement. One or more Account Agreements, duly executed by the parties thereto in form and substance acceptable to the
Buyer; and 
  
 (E) Electronic Tracking
Agreement. To the extent a Seller is selling Mortgage Loans which are registered on the MERS® System, an Electronic Tracking Agreement entered into, duly executed and delivered by all of the parties thereto, in full force and effect, free of
any modification, breach or waiver. 
  
 (F)
Disbursement Agreement. A Disbursement Agreement, duly executed by the parties thereto in form and substance acceptable to the Buyer and the Sellers and the accounts and computer systems with the Disbursement Agent necessary for distributing
the Purchase Price related to Wet-Ink Mortgage Loans from the Disbursement Account under the Disbursement Agreement shall have been established. 
  
 (G) Settlement Account Control Agreement. The Settlement Account Control Agreement, executed and delivered by a duly authorized
officer of each of the Buyer, Sellers and Custodian. 
  

 -18- 

 (ii) Opinions of Counsel. An opinion or opinions of outside counsel to the
relevant Seller, substantially in the form of Exhibit II. 
  
 (iii) Seller Organizational Documents. A certificate of corporate existence of the relevant Seller delivered to Buyer prior to the Effective Date (or if unavailable, as soon as available thereafter) and
certified copies of the charter and by-laws (or equivalent documents) of the relevant Seller and of all corporate or other authority for such Seller with respect to the execution, delivery and performance of the Repurchase Documents and each other
document to be delivered by that Seller from time to time in connection herewith. 
  
 (iv) Security Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect
Buyer’s interest in the Purchased Mortgage Loans and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1. 
  
 (v) Underwriting Guidelines. A true and correct copy
of the Underwriting Guidelines certified by an officer of the relevant Seller. 
  
 (vi) Other Documents. Such other documents as Buyer may reasonably request, in form and substance reasonably acceptable to Buyer.

  
 (b) Conditions Precedent to all Transactions. Upon
satisfaction of the conditions set forth in this Section 3(b), the Buyer shall enter into a Transaction with a Seller. Buyer’s obligation to enter into each Transaction (including the initial Transaction) is subject to the satisfaction of the
following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof: 
  
 (i) Buyer shall have executed and delivered a Confirmation in accordance with the procedures set forth in
Section 3(c); 
  
 (ii) No Termination Event,
Default or Event of Default shall have occurred and be continuing under the Repurchase Documents; 
  
 (iii) Both immediately prior to the Transaction and also after giving effect thereto and to the intended use of the proceeds thereof, the
representations and warranties made by each Seller in Section 11 hereof, shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); 
  
 (iv) After giving effect to the requested Transaction, (A) the aggregate outstanding Purchase Price for all Purchased Mortgage Loans
subject to then outstanding Transactions under this Repurchase Agreement shall not exceed the Maximum Purchase Price and (B) the Purchase Price shall be no less than the Minimum Purchase Price; 
  

 -19- 

 (v) After giving effect to the requested Transaction, the Asset Value of all Purchased
Mortgage Loans exceeds the aggregate Repurchase Price for such Transactions; 
  
 (vi) With respect to Transactions the subject of which are Mortgage Loans other than Wet-Ink Mortgage Loans, at or prior to 10 a.m. (New York Time) one (1) day prior to the related Purchase Date, each applicable
Seller shall have delivered to the Buyer (a) a Transaction Request, and (b) a Purchased Mortgage Loan Report, and with respect to Transactions the subject of which are Wet-Ink Mortgage Loans, at or prior to 5 p.m. (New York Time) one (1) Business
Day prior to the related Purchase Date, such Sellers shall have delivered to the Buyer (a) a Transaction Request, and (b) a report detailing the approximate outstanding principal balance of Wet-Ink Mortgage Loans to be purchased by the Buyer on such
Purchase Date and the approximate amount of the related Purchase Price (the “Estimated Purchase Price”). 
  
 (vii) With respect to Transactions the subject of which are Wet-Ink Mortgage Loans: 
  
 (A) By 3:00 p.m. (New York City time) on the related
Purchase Date, the Buyer and the Disbursement Agent shall have received (a) the final Mortgage Loan Schedule, including, without limitation, a schedule setting forth the mortgage loan identification number, the Mortgagor name and the approximate
outstanding principal balance of Wet-Ink Mortgage Loans to be purchased by Buyer on such Purchase Date, (b) an updated report setting forth the approximate outstanding principal balance of Wet-Ink Mortgage Loans to be purchased by the Buyer on such
Purchase Date and the amount of the related Purchase Price (the “Actual Purchase Price”) and (c) a Wiring Schedule; and 
  
 (B) By 3:00 p.m. (New York City time) on the related Purchase Date, the Buyer shall have received a Wet-Ink Trust Receipt for each Wet-Ink
Mortgage Loan with the related Mortgage Loan Schedule attached thereto; and 
  
 (viii) The Sellers shall have delivered to the Custodian the Mortgage File with respect to each Purchased Mortgage Loan which is not a Wet-Ink Mortgage Loan and the Custodian shall have issued a Trust Receipt with
respect to each such Purchased Mortgage Loan to the Buyer; 
  
 (ix) The Buyer shall have received all fees and expenses of counsel to the Buyer as contemplated by Sections 15(b) and 27 which amounts, at the Buyer’s option, may be withheld from the proceeds remitted by Buyer
to the Sellers pursuant to any Transaction hereunder; 
  
 (x) The following shall not have occurred and/or be continuing: an event or events that in the good faith determination of the Buyer resulting in the effective absence of a “repo market” or comparable “lending market”
for financing debt obligations secured by securities or an event or events shall have occurred resulting in the Buyer not being able to finance Purchased Mortgage Loans through the “repo market” or “lending market” with
traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; 
  

 -20- 

 (xi) Each Transaction Request delivered by a Seller hereunder shall constitute a
certification by such Seller that all the conditions set forth in this Section 3(b) (other than clause (x) hereof) have been satisfied (both as of the date of such notice or request and as of the date of such purchase). 
  
 (c) Initiation; Confirmation. 
  
 (i) The Sellers shall deliver with respect to each Purchased
Mortgage Loan which is not a Wet-Ink Mortgage Loan, a Transaction Request to the Buyer on or prior to 10:00 a.m. on the date one (1) Business Day prior to entering into any Transaction. With respect to each Wet-Ink Mortgage Loan, the Sellers shall
deliver a Transaction Request to the Buyer on or prior to 5 p.m. on the date one (1) Business Day prior to entering into any Transaction. Such Transaction Request shall include a Mortgage Loan Schedule with respect to the Mortgage Loans to be sold
in such requested Transaction. Buyer shall confirm the terms of each Transaction by issuing a written confirmation to the Sellers promptly after the parties enter into such Transaction in the form of Exhibit I attached hereto (a
“Confirmation”). Such Confirmation shall set forth (A) the Purchase Date, (B) the Purchase Price, (C) the Repurchase Date, (D) the Pricing Rate applicable to the Transaction, (E) the applicable Purchase Price Percentages, (F) LIBOR
Period and (G) additional terms or conditions not inconsistent with this Repurchase Agreement. 
  
 (ii) The LIBOR Period for each Transaction shall be one month, unless agreed to in writing by the Buyer. 
  
 (iii) Each Confirmation, together with this Repurchase
Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby unless objected to in writing by the Sellers no more than two (2) Business Days after the date the Confirmation was received by the Sellers or unless a
corrected Confirmation is sent by Buyer. An objection sent by Sellers must state specifically that writing which is an objection, must specify the provision(s) being objected to by the Sellers, must set forth such provision(s) in the manner that the
Sellers believe they should be stated, and must be received by Buyer no more than two (2) Business Days after the Confirmation was received by the Sellers. 
  
 (iv) Subject to the terms and conditions of this Repurchase Agreement, during such period the Sellers may sell, repurchase and resell
Eligible Mortgage Loans hereunder. 
  
 (v) In no
event shall a Transaction be entered into when the Repurchase Date for such Transaction would be later than the Termination Date. 
  
 (vi) With respect to each Wet-Ink Mortgage Loan, by no later than 3:00 p.m. (New York Time) on the seventh Business Day following the
applicable Purchase Date, Sellers shall deliver the Mortgage File to the Custodian. 
  

 -21- 

 (vii) Subject to the provisions of this Section 3, the Purchase Price will then be made
available to the Sellers by the Buyer transferring, via wire transfer, in the aggregate amount of such Purchase Price in funds immediately available. 
  
 (viii) With respect to Transactions the subject of which are Wet-Ink Mortgage Loans: 
  
 (A) The conditions set forth in subsection (b)(vii) of this
Section shall have been satisfied. 
  
 (B)
Notwithstanding the foregoing, the full amount of the Actual Purchase Price shall be deemed to have been made on the Purchase Date for all purposes hereunder. 
  

(C) Upon receipt of the final Wiring Schedule with respect to any Purchase Date, the Buyer shall determine the amount, if any, by which
the Estimated Purchase Price deposited in the Disbursement Account exceeds the Actual Purchase Price (such amount, the “Overestimate Amount”). The Buyer shall cause the Disbursement Agent to promptly wire such Overestimate Amount
directly to the Buyer as a prepayment of the Transaction made on such Purchase Date. 
  
 (d) Repurchase 
  
 (i) The Sellers may repurchase Purchased Mortgage Loans without penalty or premium, subject to the last sentence of this Section 3(d)(i), on any date. The Repurchase Price payable for the repurchase of any such Purchased Mortgage Loan shall
be reduced as provided in Section 5(d). If the Sellers intend to make such a repurchase, the Sellers shall give one (1) Business Day’s prior written notice thereof to the Buyer, designating the Purchased Mortgage Loans to be repurchased. If
such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the designated Purchased Mortgage Loans. If any Purchased
Mortgage Loan is repurchased on any date other than the Reset Date for such Transaction, the Sellers shall pay to the Buyer any amount required to compensate such Buyer for any additional losses, costs or expenses which it may reasonably incur as a
result of such repurchase, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the Buyer to fund or maintain such Transaction. 
  
 (ii) On the Repurchase Date, termination of the Transaction
will be effected by reassignment to a Seller or its designee of the Purchased Mortgage Loans (and any Income in respect thereof received by Buyer not previously credited or transferred to, or applied to the obligations of, the Sellers pursuant to
Section 5) against the simultaneous transfer of the Repurchase Price to an account of Buyer. The Sellers are obligated to obtain the Mortgage Files from Buyer or Custodian at the Sellers’ expense on the Repurchase Date. 
  

 -22- 

 SECTION 4. MARGIN AMOUNT MAINTENANCE 
  
 (a) The Buyer shall determine the Market Value of the Purchased Mortgage Loans on a weekly basis, or at such intervals as
determined by the Buyer in its sole discretion. 
  
 (b) If at any
time the aggregate Asset Value of all related Purchased Mortgage Loans subject to all Transactions is less than the aggregate Purchase Price for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Sellers (as
such notice is more particularly set forth below, a “Margin Call”), require Sellers to transfer to Buyer or its designee cash or Eligible Mortgage Loans approved by the Buyer in its sole discretion (“Additional Purchased
Mortgage Loans”) so that the aggregate Asset Value of the Purchased Mortgage Loans, including any such cash or Additional Purchased Mortgage Loans or cash, will thereupon equal or exceed the aggregate Purchase Price for all Transactions. If
Buyer delivers a Margin Call to the Sellers on or prior to 9:30 a.m. (New York City time) on any Business Day, then the Sellers shall transfer cash or Additional Purchased Mortgage Loans to Buyer no later than 5 p.m. (New York City time) that day.
In the event the Buyer delivers a Margin Call to a Sellers after 9:30 a.m. (New York City time) on any Business Day, the Sellers shall be required to transfer cash or Additional Purchased Mortgage Loans no later than 5 p.m. (New York City time) on
the subsequent Business Day. 
  
 (c) Buyer’s election, in its
sole and absolute discretion, not to make a Margin Call at any time there is a Margin Deficit shall not in any way limit or impair its right to make a Margin Call at any time a Margin Deficit exists. 
  
 (d) Any cash (including Income paid as provided in Section 5 below)
transferred to the Buyer pursuant to Section 4(b) above shall be credited to the Repurchase Price of the related Transactions. 
  
 SECTION 5. INCOME PAYMENTS 
  
 (a) Notwithstanding that Buyer and the Sellers intend that the Transactions hereunder be sales to Buyer of the Purchased Mortgage Loans, other than for
tax purposes, as described in Section 7(h), Sellers shall pay to Buyer the accreted value of the Price Differential (less any amount of such Price Differential previously paid by the Sellers to Buyer) plus the amount of any unpaid Margin Deficit
(each such payment, a “Periodic Advance Repurchase Payment”) on each Payment Date. Notwithstanding the preceding sentence, if Sellers fail to make all or part of the Periodic Advance Repurchase Payment by 3:00 p.m. (New York time)
on any Payment Date, the Pricing Rate shall be equal to the Post-Default Rate until the Periodic Advance Repurchase Payment is received in full by Buyer. 
  
 (b) The Sellers shall hold for the benefit of, and in trust for, Buyer all Income, including without limitation all Income received by or on behalf of the
Sellers with respect to such Purchased Mortgage Loans. All Income shall be held in trust for Buyer, shall constitute the property of Buyer. With respect to each Payment Date, the Sellers shall remit all Income as follows: 
  
 (i) first, to the payment of all costs and fees payable by
the Sellers pursuant to this Repurchase Agreement; 
  

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 (ii) second, to the Buyer in payment of any accrued and unpaid Price Differential; and

  
 (iii) third, without limiting the rights of
Buyer under Section 4 of this Repurchase Agreement, to the Buyer, in the amount of any unpaid Margin Deficit. 
  
 (c) After the occurrence of a Default or an Event of Default, the Sellers shall deposit such Income in a deposit account (the title of which shall
indicate that the funds therein are being held in trust for Buyer) (the “Collection Account”) with a financial institution acceptable to Buyer and subject to the Account Agreement. All such Income shall be held in trust for Buyer,
shall constitute the property of Buyer and shall not be commingled with other property of the Sellers or any Affiliate of any Seller except as expressly permitted above. Funds deposited in the Collection Account during any month shall be held
therein, in trust for the Buyer, until the next Payment Date. 
  
 (d) To the extent that the Buyer receives any funds from a Takeout Investor with respect to the purchase by such Takeout Investor of a Mortgage Loan, the Buyer shall promptly apply such funds in accordance with the same order of priority
set forth in Section 5(b) hereof. 
  
 (e) Notwithstanding the
preceding provisions, if an Event of Default has occurred, all funds in the Collection Account shall be withdrawn and applied as determined by the Buyer. 
  
 (f) Buyer shall offset against the Repurchase Price of each such Transaction all Income and Periodic Advance Repurchase Payments actually received by
Buyer pursuant to this Section, excluding any Late Payment Fees paid pursuant to any Periodic Advance Repurchase Payments made at the Post-Default Rate pursuant to Section 5(a). 
  
 SECTION 6. REQUIREMENTS OF LAW 
  
 (a) If any Requirement of Law (other than with respect to any amendment made to the Buyer’s certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation or application thereof or compliance by the Buyer 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 the Buyer to any tax of any kind whatsoever with respect to this Repurchase Agreement or any Transaction or change the basis of taxation of payments to the Buyer in respect thereof; 
  
 (ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan 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 the Buyer which
is not otherwise included in the determination of the LIBOR Rate hereunder; 
  

 -24- 

 (iii) shall impose on the Buyer any other material condition; 
  
 and the result of any of the foregoing is to increase the cost to the Buyer, by an amount
which the Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, the Sellers shall promptly pay the Buyer such additional amount
or amounts as calculated by the Buyer in good faith as will compensate the Buyer for such increased cost or reduced amount receivable. 
  
 (b) If the Buyer shall have determined that the adoption of or any change in any Requirement of Law (other than with respect to any amendment made to the
Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy or in the interpretation or application thereof or compliance by the Buyer or any corporation controlling the Buyer with
any request or directive regarding capital adequacy (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 the Buyer’s or such
corporation’s capital as a consequence of its obligations hereunder to a level below that which the Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration the Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by the Buyer to be material, then from time to time, the Sellers shall promptly pay to the Buyer such additional amount or amounts as will compensate the Buyer for
such reduction. 
  
 (c) If the Buyer becomes entitled to claim any
additional amounts pursuant to this Section, it shall notify the Sellers of the event by reason of which it has become so entitled provided that Buyer shall not be entitled to claim any amounts with respect to any period more than one hundred eighty
days prior to the date when Buyer notified Sellers of such claim. A certificate as to any additional amounts payable pursuant to this Section submitted by the Buyer to the Sellers shall be conclusive in the absence of manifest error. Within 30 days
following the receipt of any such notice, the Sellers may notify the Buyer of the Sellers’ election to cease entering into further Transactions, and upon repayment in full of all outstanding Obligations and termination of the Repurchase
Agreement any further Non-Utilization Fee will be waived. 
  
 SECTION 7. TAXES.

  
 (a) Any and all payments by the Sellers under or in
respect of this Repurchase Agreement or any other Repurchase Documents to which the Sellers are a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other
Governmental Authority (collectively, “Taxes”), unless required by law. If any Seller shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in
respect of this Repurchase Agreement or any of the other Repurchase Documents to the Buyer, (i) such Seller shall make all such deductions and withholdings in 
  

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 respect of Taxes, (ii) such Seller shall pay the full amount deducted or withheld in respect of Taxes to the relevant
taxation authority or other Governmental Authority in accordance with any applicable Requirement of Law, and (iii) the sum payable by such Seller shall be increased as may be necessary so that after such Seller has made all required deductions and
withholdings (including deductions and withholdings applicable to additional amounts payable under this Section 7) such Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of
Non-Excluded Taxes. For purposes of this Repurchase Agreement the term “Non-Excluded Taxes” are Taxes other than, in the case of a Buyer, Taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the
state or foreign jurisdiction under the laws of which such Buyer is organized or of its principal office, or any political subdivision thereof, unless such Taxes are imposed as a result of such Buyer having executed, delivered or performed its
obligations or received payments under, or enforced, this Repurchase Agreement or any of the other Repurchase Documents (in which case such Taxes will be treated as Non-Excluded Taxes). 
  
 (b) In addition, Sellers hereby agree to pay any present or future stamp, recording, documentary, excise, property or
similar taxes, charges or levies that arise from any payment made under or in respect of this Repurchase Agreement or any other Repurchase Document or from the execution, delivery or registration of, any performance under, or otherwise with respect
to, this Repurchase Agreement or any other Repurchase Document (collectively, “Other Taxes”). 
  
 (c) Sellers hereby agree to indemnify Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes and Other Taxes, and the full
amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 7 imposed on or paid by such Buyer and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect
thereto. The indemnity by Sellers provided for in this Section 7(c) shall apply and be made whether or not the Non-Excluded Taxes or Other Taxes for which indemnification hereunder is sought have been correctly or legally asserted. Amounts payable
by Sellers under the indemnity set forth in this Section 7(c) shall be paid within 10 days from the date on which Buyer makes written demand therefor. If Buyer receives a tax refund that is solely attributable to any Taxes as to which Buyer has been
indemnified under this Section 7(c), Buyer will pay to Seller (net of all out of pocket expenses) the amount that, in Buyer’s sole discretion, is solely attributable to such Taxes. 
  
 (d) Within 30 days after the date of any payment of Taxes, Sellers (or any Person making such payment on behalf of Sellers)
shall furnish to Buyer for its own account or for the account of the applicable Buyer, as the case may be, a certified copy of the original official receipt evidencing payment thereof or, if such receipts are not obtainable, other evidence of such
payments by the applicable Seller reasonably satisfactory to the Buyer. For purposes of this subsection (f) of this Section 7, the terms “United States” and “United States person” shall have the meanings specified in Section 7701
of the Internal Revenue Code. 
  
 (e) Each Buyer (including for
avoidance of doubt any assignee, successor or participant) that either (i) is not incorporated under the laws of the United States, any State thereof, or the District of Columbia or (ii) whose name does not include “Incorporated,”
“Inc.,” “Corporation,” “Corp.,” “P.C.,” “insurance company,” or “assurance company” (a “Non-Exempt 

  

 -26- 

 
Buyer”) shall deliver or cause to be delivered to Sellers the following properly completed and duly executed documents: 
  
 (i) a complete and executed (x) U.S. Internal Revenue Form
W-8BEN with Part II completed in which Buyer claims the benefits of a tax treaty with the United States providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S.
Internal Revenue Service Form W-8ECI (or any successor forms thereto); or 
  
 (ii) in the case of an individual, (x) a complete and executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and a certificate substantially in the form of Exhibit XII (a
“Section 7 Certificate”) or (y) a complete and executed Internal Revenue Service Form W-9 (or any successor forms thereto); or 
  
 (iii) in the case of a Non-Exempt Buyer that is organized under the laws of the United States, any State thereof, or the District of
Columbia, (x) a complete and executed Internal Revenue Service Form W-9 (or any successor forms thereto), including all appropriate attachments or (y) if such Non-Exempt Buyer is disregarded for federal income tax purposes, the documents that would
be required by clause (1), (2), (3), (4) or (5) with respect to its beneficial owner if such beneficial owner were Buyer; or 
  
 (iv) in the case of a Non-Exempt Buyer that (i) is not organized under the laws of the United States, any State thereof, or the District
of Columbia and (ii) is treated as a corporation for U.S. federal income tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN claiming a zero rate of withholding (or any successor forms thereto) and a Section 7
Certificate; or 
  
 (v) in the case of a
Non-Exempt Buyer that (A) is treated as a partnership or other non-corporate entity, or is disregarded for U.S. federal income tax purposes and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia,
a (x) a complete and executed Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (y)(i) a Section 7 Certificate, and (ii) without duplication, with respect to each of its
beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes (all such owners, “beneficial
owners”), the documents that would be required by clause (1), (2), (3), (4) or this clause (5) with respect to each such beneficial owner if such beneficial owner were Buyer, provided, however, that no such documents will be required with
respect to a beneficial owner to the extent the actual Buyer is determined to be in compliance with the requirements for certification on behalf of its beneficial owner as may be provided in applicable U.S. Treasury regulations, or the requirements
of this clause (5) are otherwise determined to be unnecessary, all such determinations under this clause (5) to be made in the sole discretion of Sellers, provided, however, that Buyer shall be provided an opportunity to establish such compliance as
reasonable. 
  

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 If the forms referred to above in this Section 7(e) that are provided by a Buyer at the time such Buyer
first becomes a party to this Repurchase Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be treated as Taxes other than “Non-Excluded Taxes” (“Excluded
Taxes”) and shall not qualify as Non-Excluded Taxes unless and until such Buyer provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate shall be considered Excluded Taxes solely for
the periods governed by such form. If, however, on the date of the Buyer Assignment and Acceptance pursuant to which a Buyer assignee becomes a party to this Repurchase Agreement, Buyer assignor was entitled to indemnification or additional amounts
under this Section 7, then the Buyer assignee shall be entitled to indemnification or additional amounts to the extent (and only to the extent), that the Buyer assignor was entitled to such indemnification or additional amounts for Non-Excluded
Taxes, and the Buyer assignee shall be entitled to additional indemnification or additional amounts for any other or additional Non-Excluded Taxes. Any additional Taxes in respect of a Buyer that result solely and directly from a change in the
applicable lending office of such Buyer shall be treated as Excluded Taxes (and shall not qualify as Non-Excluded Taxes) unless (A) any such additional Taxes are imposed as a result of a change in the applicable Requirement of Law, or in the
interpretation or application thereof, occurring after the date of such change or (B) such change is made at the request of the Sellers for Buyer to change its applicable lending office. 
  
 (f) For any period with respect to which Buyer has failed to provide Sellers with the appropriate form, certificate or other
document described in subsection (e) of this Section 7 (other than (i) if such failure is due to a change in any applicable Requirement of Law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or
other document originally was required to be provided (ii) if such form, certificate or other document otherwise is not required under subsection (f) of this Section 7 or (iii) if it is legally inadvisable or otherwise commercially disadvantageous
for such Buyer to deliver such form, certificate or other document), such Buyer shall not be entitled to indemnification or additional amounts under subsection (a) or (c) of this Section 7 with respect to Non-Excluded Taxes imposed by the United
States by reason of such failure; provided, however, that should a Buyer become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Sellers shall take such steps as such Buyer
shall reasonably request to assist such Buyer in recovering such Non-Excluded Taxes. 
  
 (g) Without prejudice to the survival of any other agreement of the Sellers hereunder, the agreements and obligations of the Sellers contained in this Section 7 shall survive the termination of this Repurchase
Agreement. Nothing contained in this Section 7 shall require the Buyer to make available any of its tax returns or any other information that it deems to be confidential or proprietary. 
  
 (h) Each party to this Repurchase Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local
income and franchise taxes, to treat the Transaction as indebtedness of the Sellers that is secured by the Purchased Mortgage Loans and the Purchased Mortgage Loans as owned by the Sellers for federal income tax purposes in the absence of an Event
of Default by the Sellers and the exercise of remedies by the Buyer. All parties to this Repurchase Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law. 
  

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 SECTION 8. SECURITY INTEREST 
  
 Although the parties intend that all Transactions hereunder be sales and purchases (other than for accounting and tax
purposes) and not loans, in the event any such Transactions are deemed to be loans, each Seller hereby pledges to Buyer as security for the performance by the Sellers of their Obligations and hereby grants, assigns and pledges to Buyer a security
interest in the Purchased Mortgage Loans, the Records, and all servicing rights related to the Purchased Mortgage Loans, the Repurchase Documents (to the extent such Repurchase Documents and such Seller’s right thereunder relate to the
Purchased Mortgage Loans), any Property relating to any Purchased Mortgage Loan or the related Mortgaged Property, any Takeout Commitments relating to any Purchased Mortgage Loan, all insurance policies and insurance proceeds relating to any
Purchased Mortgage Loan or the related Mortgaged Property, including but not limited to any payments or proceeds under any related primary insurance, hazard insurance, any Income relating to any Purchased Mortgage Loan, the Collection Account, any
Interest Rate Protection Agreements relating to any Purchased Mortgage Loan, and any other contract rights, accounts (including any interest of such Seller in escrow accounts), payments, rights to payment (including payments of interest or finance
charges) and general intangibles to the extent that the forgoing relates to any Purchased Mortgage Loan and any other assets relating to the Purchased Mortgage Loans (including, without limitation, any other accounts) or any interest in the
Purchased Mortgage Loans, all collateral under any other secured debt facility (including, without limitation, any facility documented as a repurchase agreement or similar purchase and sale agreement) between the Sellers or their Affiliates on the
one hand and the Buyer or the Buyer’s Affiliates on the other, and any proceeds (including the related securitization proceeds) and distributions and any other property, rights, title or interests as are specified on a Trust Receipt and
Mortgage Loan Schedule and Exception Report with respect to any of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Repurchase Assets”). 
  
 The Sellers hereby authorizes the Buyer to file such financing statement or
statements relating to the Repurchase Assets as the Buyer, at its option, may deem appropriate in order to perfect the security interest hereby granted. The Sellers shall pay the filing costs for any financing statement or statements prepared
pursuant to this Section 8. 
  
 SECTION 9. PAYMENT, TRANSFER AND CUSTODY

  
 (a) Unless otherwise mutually agreed in writing, all
transfers of funds to be made by the Sellers hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Buyer at the following account maintained by the Buyer: MLBUSA Account No. 62030, for
the account of MLBUSA Matchbook, Bankers Trust, ABA No. 124-084-669, cOpER id: 154787016, not later than 4:00 p.m. New York City time, on the date on which such payment shall become due (and each such payment made after such time shall be deemed to
have been made on the next succeeding Business Day). The Sellers acknowledge that they have no rights of withdrawal from the foregoing account. 
  
 (b) On the Purchase Date for each Transaction, ownership of the Purchased Mortgage Loans shall be transferred to the Buyer or its designee against the
simultaneous transfer of the Purchase Price to the following account of the Sellers (or as otherwise directed by 

  

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the Sellers): Account No. 023-821958, for the account of Encore Credit Corp., City National Bank, ABA No. 122016066. With respect to the Purchased Mortgage
Loans being sold by a Seller on a Purchase Date, the Sellers hereby sell, transfer, convey and assign to Buyer or its designee without recourse, but subject to the terms of this Repurchase Agreement, all the right, title and interest of the Sellers
in and to the Purchased Mortgage Loans together with all right, title and interest in and to the proceeds of any related Repurchase Assets. 
  
 (c) In connection with such sale, transfer, conveyance and assignment, on or prior to each Purchase Date, the Sellers shall deliver or cause to be
delivered and released to Buyer or Custodian the Mortgage File for the related Purchased Mortgage Loans. 
  
 SECTION 10. HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN 
  
 Title to all Purchased Mortgage Loans and Repurchase Assets shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Mortgage
Loans. Nothing in this Repurchase Agreement shall preclude the Buyer from engaging in repurchase transactions with the Purchased Mortgage Loans or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Mortgage
Loans. Nothing contained in this Repurchase Agreement shall obligate the Buyer to segregate any Purchased Mortgage Loans delivered to the Buyer by the Sellers. 
  

SECTION 11. REPRESENTATIONS 
  
 (1) Each Seller represents and warrants to the Buyer that as of the Purchase Date for any Purchased Mortgage Loans purchased by the Buyer from a Seller
and as of the date of this Repurchase Agreement and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder is in full force and effect: 
  
 (a) Acting as Principal. Each Seller will engage in such Transactions as principal (or, if agreed in writing in
advance of any Transaction by the other party hereto, as agent for a disclosed principal). 
  
 (b) No Broker. No Seller has dealt with any broker, investment banker, agent, or other person, except for the Buyer, who may be entitled to any commission or compensation in connection with the sale of
Purchased Mortgage Loans pursuant to this Repurchase Agreement. 
  
 (c) Financial Statements. The Sellers have heretofore furnished to the Buyer a copy of their (a) consolidated balance sheet and the consolidated balance sheets of their consolidated Subsidiaries for the fiscal year ended December 31,
2003 and the related consolidated statements of income and retained earnings and of cash flows for the Sellers and their consolidated Subsidiaries for such fiscal year, as well as an interim audited consolidated balance sheet and consolidated
statements of income and retained earnings and of cash flows as of September 30, 2004, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of Grant Thornton LLP and (b) consolidated balance
sheet and the consolidated balance sheets of its respective consolidated Subsidiaries for the quarterly fiscal period(s) of the Sellers ended March 31, 2004, June 30, 2004 and September 30, 
  

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2004 and the related consolidated statements of income and retained earnings and of cash flows for such Seller and their consolidated Subsidiaries for such
quarterly fiscal period(s), setting forth in each case in comparative form the figures for the previous year. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition
of the Seller and their consolidated Subsidiaries and the consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. Since December 31, 2003, there has been no
material adverse change in the consolidated business, operations or financial condition of the Sellers and their consolidated Subsidiaries taken as a whole from that set forth in said financial statements nor are the Sellers aware of any state of
facts which (without notice or the lapse of time) would or could result in any such material adverse change. No Seller has, on the date of the statements delivered pursuant to this section (the “Statement Date”), any liabilities,
direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related
statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of any Seller except as heretofore disclosed to the Buyer in writing. 
  
 (d) Organization, Etc. Encore is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. ECC is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland. Bravo is a corporation duly organized, validly existing and
in good standing under the laws of the State of California. Each Seller (a) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its respective assets and carry on its
respective business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; (b) is qualified to do business and is
in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Repurchase Documents. 
  
 (e) Authorization, Compliance, Etc. The execution and delivery of, and the performance by each Seller of its obligations under, the Repurchase
Documents to which they are a party (a) are within each Seller’s powers, (b) have been duly authorized by all requisite action, (c) do not violate any provision of applicable law, rule or regulation, or any order, writ, injunction or decree of
any court or other Governmental Authority, or its organizational documents, (d) do not violate any indenture, agreement, document or instrument to which each Seller or any of its respective Subsidiaries are a party, or by which any of them or any of
their properties, any of the Repurchase Assets are bound or to which any of them are subject and (e) are not in conflict with, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may
be provided by any Repurchase Document, result in the creation or imposition of any Lien upon any of the property or assets of any Seller or any of their respective Subsidiaries pursuant to, any such indenture, agreement, document or instrument. No
Seller is required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions contemplated herein and
the execution, delivery or performance of the Repurchase Documents to which it is a party. 
  

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 (f) Litigation. There are no actions, suits, arbitrations, investigations (including, without
limitation, any of the foregoing which are pending or threatened) or other legal or arbitrable proceedings affecting any Seller or any of its Subsidiaries or affecting any of the Repurchase Assets or any of the other properties of the Sellers before
any Governmental Authority which (i) questions or challenges the validity or enforceability of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim or claims in an aggregate
amount greater than $2 million, (iii) individually or in the aggregate, if adversely determined, would have a Material Adverse Effect, or (iv) requires filing with the SEC in accordance with its regulations. 
  
 (g) Purchased Mortgage Loans. 
  
 (i) No Seller has assigned, pledged, or otherwise conveyed
or encumbered any Purchased Mortgage Loan to any other Person, and immediately prior to the sale of such Mortgage Loan to the Buyer, the applicable Seller was the sole owner of such Purchased Mortgage Loan and had good and marketable title thereto,
free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to the Buyer hereunder. 
  
 (ii) The provisions of this Repurchase Agreement are effective to either constitute a sale of Repurchase Assets to the Buyer or to create
in favor of the Buyer a valid security interest in all right, title and interest of the Sellers in, to and under the Repurchase Assets. 
  
 (h) Chief Executive Office/Jurisdiction of Organization. On the Effective Date, each Seller’s chief executive office is, and has been, located
at 1833 Alton Parkway, Irvine, California 92606. 
  
 (i)
Location of Books and Records. The location where the Sellers keep their books and records, including all computer tapes and records related to the Repurchase Assets is their chief executive office. 
  
 (j) Filing and Payment of Taxes. Each Seller and its Subsidiaries have
timely filed all tax returns that are required to be filed by them and have timely paid all Taxes, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been provided. 
  
 (k)
Enforceability. This Repurchase Agreement and all of the other Repurchase Documents executed and delivered by the Sellers in connection herewith are legal, valid and binding obligations of the Sellers and are enforceable against the Sellers
in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors rights generally and (ii) general principles of
equity. 
  

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 (l) Ability to Perform. No Seller believes, nor does it have any reason or cause to believe, that
it cannot perform each and every covenant contained in the Repurchase Documents to which it is a party on its part to be performed. 
  
 (m) Material Adverse Effect. Since September 30, 2004, there has been no development or event nor, to any Seller’s knowledge, any prospective
development or event, which has had or could have a Material Adverse Effect. 
  
 (n) No Default. No Default or Event of Default has occurred and is continuing. 
  
 (o) Underwriting Guidelines. The Underwriting Guidelines provided to Buyer are the true and correct Underwriting Guidelines of the Sellers.

  
 (p) Adverse Selection. No Seller has selected the
Purchased Mortgage Loans from among its loans meeting the criteria for inclusion hereunder in a manner so as to adversely affect Buyer’s interests (it being understood that Sellers’ loans generally are of non-prime quality). 
  
 (q) Tangible Net Worth. On the initial Purchase Date, the consolidated
Tangible Net Worth of the Sellers is not less than $40 million. 
  
 (r) Indebtedness. No Seller has any Indebtedness, except as disclosed on Schedule 2 to this Repurchase Agreement and as thereafter disclosed in writing to Buyer. 
  
 (s) Filing Jurisdictions. There are no UCC filing jurisdictions other than those listed on Exhibit III to this
Repurchase Agreement. 
  
 (t) Accurate and Complete
Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of any Seller to the Buyer in connection with the negotiation, preparation or delivery of this Repurchase Agreement and the
other Repurchase Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of any Seller to the Buyer in connection with this Repurchase Agreement and the other
Repurchase Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is
stated or certified. There is no fact known to any Seller, after due inquiry, that could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Repurchase Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to the Buyer for use in connection with the transactions contemplated hereby or thereby. 
  
 (u) Margin Regulations. The use of all funds acquired by the Sellers under this Repurchase Agreement will not
conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified. 
  

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 (v) Investment Company. No Seller nor any of its respective Subsidiaries is an “investment
company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (w) Solvency. As of the date hereof and immediately after giving effect to each Transaction, the fair value of the respective assets of each Seller
is greater than the fair value of the liabilities (including, without limitation, contingent liabilities if and to the extent required to be recorded as a liability on the financial statements of such Seller in accordance with GAAP) of such Seller
and such Seller is solvent and, after giving effect to the transactions contemplated by this Repurchase Agreement and the other Repurchase Documents, will not be rendered insolvent or left with an unreasonably small amount of capital with which to
conduct its business and perform its obligations. The Sellers do not intend to incur, nor do they believe that they have incurred, debts beyond their ability to pay such debts as they mature. The Sellers are not contemplating the commencement of an
insolvency, bankruptcy, liquidation, or consolidation proceeding or the appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of themselves or any of their property. 
  
 (x) ERISA. 
  
 (i) No liability under Section 4062, 4063, 4064 or 4069 of
ERISA has been or is expected by any Seller to be incurred by any Seller or any ERISA Affiliate thereof with respect to any Plan which is a Single-Employer Plan in an amount that could reasonably be expected to have a Material Adverse Effect.

  
 (ii) No Plan of any Seller which is a
Single-Employer Plan had an accumulated funding deficiency, whether or not waived, as of the last day of the most recent fiscal year of such Plan ended prior to the date hereof. Neither any Seller nor any ERISA Affiliate thereof is (i) required to
give security to any Plan which is a Single-Employer Plan pursuant to Section 401(a) (29) of the Code or Section 307 of ERISA, or (ii) subject to a Lien in favor of such a Plan under Section 302(f) of ERISA. 
  
 (iii) Each Plan of the Sellers, each of their Subsidiaries
and each of its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code, except where the failure to comply would not result in any Material Adverse Effect. 
  
 (iv) Neither the Sellers nor any of their respective
Subsidiaries has incurred a tax liability under Section 4975 of the Code or a penalty under Section 502(i) of ERISA in respect of any Plan which has not been paid in full, except where the incurrence of such tax or penalty would not result in a
Material Adverse Effect. 
  
 (v) Neither the
Sellers nor any of their respective Subsidiaries or any ERISA Affiliate thereof has incurred or reasonably expects to incur any withdrawal liability under Section 4201 of ERISA as a result of a complete or partial withdrawal from a Multiemployer
Plan which will result in withdrawal liability to any Seller, any of its respective Subsidiaries or any ERISA Affiliate thereof in an amount that could reasonably be expected to have a Material Adverse Effect. 
  

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 (y) Agency Approvals. Each Seller is or, in the case of ECC, will, prior to consummation of any
Transaction be, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, such Seller is in good standing, with no event having occurred or such Seller having any
reason whatsoever to believe or suspect will occur prior to the issuance of the consummation of the related Takeout Commitment, as the case may be, including, without limitation, a change in insurance coverage which would either make such Seller
unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the Department of Housing and Urban Development, FHA or VA. 
  
 (z) Mortgage Loan Schedule. The information set forth in the related Mortgage Loan Schedule and all other information
or data furnished by, or on behalf of, Sellers to Buyer is complete, true and correct in all material respects, and Sellers acknowledge that Buyer has not verified the accuracy of such information or data. 
  
 (aa) No Reliance. The Sellers have made their own independent
decisions to enter into the Repurchase Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and
accountants) as it has deemed necessary. Sellers are not relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions. 
  
 (bb) Plan Assets. No Seller is an employee benefit plan as defined in
Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Mortgage Loans are not “plan assets” within the meaning of 29 CFR §2510.3-101 in such Seller’s hands. 
  
 (cc) No Prohibited Persons. No Seller nor any of its Affiliates,
officers, directors, partners or members, is an entity or person (or to any Seller’s knowledge, owned or controlled by an entity or person): (i) that is listed in the Annex to, or is otherwise subject to the provisions of Executive Order 13224
issued on September 24, 2001 (“EO13224”); (ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National
and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to commit or supports
“terrorism”, as that term is defined in EO13224; or (iv) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in clauses (i) through (iv) above are herein referred to as a
“Prohibited Person”). 
  
 (dd) Real Estate
Investment Trust. On and after the REIT Event, ECC has not engaged in any “prohibited transactions” as defined in Section 857(b)(6)(B)(iii) and (C) of the Code, which would cause ECC to be subject to a tax equal to 100% of the net
income derived from such prohibited transaction in excess of $2,000,000. Commencing with its taxable year ending December 31, 2005, ECC will be entitled to a dividends paid deduction, as described in Section 857(b)(2)B) of the Code, with respect to
applicable dividends paid or deemed paid by it with respect to each tax year for which it claims such a deduction in its Form 1120-REIT filed with the United States Internal Revenue Service. 
  

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 SECTION 12. COVENANTS 
  
 On and as of the date of this Repurchase Agreement and each Purchase Date and until this Repurchase Agreement is no longer in force with respect to any
Transaction, each Seller covenants as follows: 
  
 (a)
Preservation of Existence; Compliance with Law. Each Seller shall: 
  
 (i) Preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business; 
  
 (ii) Comply with the requirements of all applicable laws,
rules, regulations and orders, whether now in effect or hereafter enacted or promulgated by any applicable Governmental Authority (including, without limitation, all environmental laws); 
  
 (iii) Maintain all licenses, permits or other approvals necessary for such Seller to conduct its business
and to perform its obligations under the Repurchase Documents, and shall conduct its business strictly in accordance with applicable law; 
  
 (iv) Keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied; and

  
 (v) Permit representatives of the Buyer, upon
reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Buyer, subject to the provisions set forth in Section 27 hereof. 
  
 (b) Taxes. 
  
 Each Seller and its respective Subsidiaries shall timely file all tax returns that are required to be filed by them and shall timely pay all Taxes due,
except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. 
  
 (c) Notice of Proceedings or Adverse Change. Each Seller shall give
notice to the Buyer immediately after a Responsible Officer of any Seller has any knowledge of: 
  
 (i) the occurrence of any Default or Event of Default or Termination Event; 
  
 (ii) any (a) default or event of default under any Indebtedness of the Seller or (b) litigation,
investigation, regulatory action or proceeding that is pending or threatened by or against the Sellers in any federal or state court or before any Governmental Authority which, if not cured or if adversely determined, would reasonably be expected to
have a Material Adverse Effect or constitute a Default or Event of Default, and (c) any Material Adverse Effect with respect to any Seller; 
  

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 (iii) any litigation or proceeding that is pending or threatened against (a) any Seller
in which the amount involved exceeds $2 million and is not covered by insurance, in which injunctive or similar relief is sought, or which, would reasonably be expected to have a Material Adverse Effect and (b) any litigation or proceeding that is
pending or threatened in connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect; 
  
 (iv) and, as soon as reasonably possible, notice of any of the following events: 
  
 (A) a change in the insurance coverage of any Seller, with a
copy of evidence of same attached; 
  
 (B) any
material change in accounting policies or financial reporting practices of any Seller; 
  
 (C) promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under
any other Repurchase Document) on, or claim asserted against, any of the Repurchase Assets; and 
  
 (D) any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect.

  
 (d) Financial Reporting. Each Seller shall maintain a
system of accounting established and administered in accordance with GAAP, and furnish to the Buyer: 
  
 (i) Within ninety (90) days after the close of each fiscal year, consolidated Financial Statements of the Sellers, including a statement
of income and changes in shareholders’ equity of the Sellers for such year, and the related balance sheet as at the end of such year, all in reasonable detail and accompanied by an opinion of an accounting firm as to said financial statements;

  
 (ii) Within sixty (60) days after the close
of the Sellers’ first three fiscal quarters in each fiscal year consolidated unaudited balance sheets and income statements, for the period from the beginning of such fiscal year to the end of such fiscal year, subject, however, to year end
adjustments; 
  
 (iii) Within thirty (30) days
after the end of each calendar month, the consolidated unaudited balance sheets of the Sellers as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for Sellers for such
period and the portion of the fiscal year through the end of such period, subject, however, to year end adjustments; 
  
 (iv) Simultaneously with the furnishing of each of the Financial Statements to be delivered pursuant to subsection (ii) above, or monthly
upon Buyer’s request, a certificate in the form of Exhibit VIII hereto and certified by an executive officer of the Sellers; 
  

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 (v) If applicable, copies of any 10-Ks, 10-Qs, registration statements and other
“corporate finance” SEC filings (other than 8-Ks) by the applicable Seller, within 5 Business Days of their filing with the SEC; provided, that, such Seller or any Affiliate will provide the Buyer with a copy of the annual 10-K filed with
the SEC by such Seller or its Affiliates, no later than 90 days after the end of the year; and 
  
 (vi) Promptly, from time to time, such other information regarding the business affairs, operations and financial condition of any Seller
as the Buyer may reasonably request. 
  
 (e) Chief Executive
Office; Jurisdiction of Organization. No Seller shall move its chief executive office from the address referred to in Section 11(h) or change its jurisdiction of organization from the jurisdiction referred to in Section 11(d) unless it shall
have provided Buyer 30 days’ prior written notice of such change. 
  
 (f) Visitation and Inspection Rights. Subject to the provisions of Section 27, the Sellers shall permit the Buyer to inspect, and to discuss with the Sellers’ officers, agents and auditors, the affairs, finances, and accounts of
the Sellers, the Repurchase Assets, and the Sellers’ books and records, and to make abstracts or reproductions thereof and to duplicate, reduce to hard copy or otherwise use any and all computer or electronically stored information or data, in
each case, (i) during normal business hours, (ii) upon reasonable notice (provided, that upon the occurrence of an Event of Default, no notice shall be required), and (iii) at the expense of the Sellers to discuss with its officers, its affairs,
finances, and accounts. 
  
 (g) Reimbursement of Expenses.
On the date of execution of this Repurchase Agreement, the Sellers shall reimburse the Buyer for all direct out-of-pocket expenses incurred by the Buyer on or prior to such date. From and after such date, the Sellers shall promptly reimburse the
Buyer for all direct out-of-pocket expenses incurred in connection with this Repurchase Agreement as the same are incurred by the Buyer and within thirty (30) days of the receipt of invoices therefor. 
  
 (h) Further Assurances. The Sellers shall execute and deliver to the
Buyer all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Buyer may reasonably request, in order to effectuate the transactions contemplated by
this Repurchase Agreement and the Repurchase Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first-priority of the security interests created or intended to be created hereby. The Sellers
shall do all things necessary to preserve the Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, the Sellers will comply with all rules, regulations, and other
laws of any Governmental Authority and cause the Repurchase Assets to comply with all applicable rules, regulations and other laws. The Sellers will not allow any default for which the Sellers are responsible to occur under any Repurchase Assets or
any Repurchase Document and the Sellers shall fully perform or cause to be performed when due all of their obligations under any Repurchase Assets or the Repurchase Documents. 
  

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 (i) True and Correct Information. All information, reports, exhibits, schedules, financial
statements or certificates of Sellers or any of their Affiliates thereof or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of the Sellers are and will be true and complete in all material respects in the context
of all other documents so provided (other than the Mortgage Loan level information which shall be considered solely for the purpose of determining the Market Value of the Purchased Mortgage Loans) and do not omit to disclose any material facts
necessary to make the statements therein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements delivered by the Sellers to the Buyer pursuant to this Repurchase Agreement shall be
prepared in accordance with GAAP, or if applicable, in the case of SEC filings, the appropriate SEC accounting requirements. 
  
 (j) ERISA Events. 
  
 (i) Promptly upon becoming aware of the occurrence of any Event of Termination which together with all other Events of Termination
occurring within the prior 12 months involve a payment of money by or a potential aggregate liability of the Sellers or any ERISA Affiliate thereof or any combination of such entities in excess of $2 million the Sellers shall give the Buyer a
written notice specifying the nature thereof, what action the Sellers or any ERISA Affiliate thereof has taken and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto;

  
 (ii) Promptly upon receipt thereof, the
Sellers shall furnish to the Buyer copies of (i) all notices received by the Sellers or any ERISA Affiliate thereof of the PBGC’s intent to terminate any Plan or to have a trustee appointed to administer any Plan; (ii) all notices received by
the Sellers or any ERISA Affiliate thereof from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA involving a withdrawal liability in excess of $2 million; and (iii) all funding waiver requests filed by the Sellers or any ERISA
Affiliate thereof with the Internal Revenue Service with respect to any Plan, the accrued benefits of which exceed the present value of the plan assets as of the date the waiver request is filed by more than $2 million, and all communications
received by the Sellers or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request. 
  
 (k) Financial Condition Covenants. 
  
 (i) Maintenance of Tangible Net Worth. (A) Prior to the occurrence of the REIT Event, the Sellers, on a consolidated basis shall
maintain a Tangible Net Worth of not less than $40 million, (B) on and after the occurrence of the REIT Event, Encore shall maintain a Tangible Net Worth of not less than $25 million and (C) on and after the occurrence of the REIT Event, the Sellers
shall maintain a Tangible Net Worth on a consolidated basis at the end of any calendar quarter of not less than 80% of their Tangible Net Worth on a consolidated basis at the beginning of the preceding calendar quarter. For example, Sellers shall
maintain a Tangible Net Worth on a consolidated basis on June 30 of not less than 80% of their Tangible Net Worth on a consolidated basis on January 1st. ; 
  

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 (ii) Maintenance of Ratio of Indebtedness to Tangible Net Worth. (A) Prior to the
occurrence of the REIT Event, the Sellers, on a consolidated basis shall maintain the ratio of Indebtedness to Tangible Net Worth no greater than 20:1 and (B) on and after the occurrence of the REIT Event, the Sellers, on a consolidated basis shall
maintain the ratio of Indebtedness to Tangible Net Worth no greater than 15:1. 
  
 (iii) Maintenance of Liquidity. (A) Prior to the occurrence of the REIT Event, the Sellers, on a consolidated basis, shall ensure
that, as of the end of each calendar month, they have Cash Equivalents in an amount not less than $10 million and (B) on and after the occurrence of the REIT Event, the Sellers, on a consolidated basis, shall ensure that, as of the end of each
calendar month, they have Cash Equivalents in an amount equal to 5% of the funds raised from the IPO. 
  
 (l) Hedging. The Sellers shall enter into Interest Rate Protection Agreements if and to the extent the same are in accordance with the
Sellers’ written policies. The Sellers shall deliver to the Buyer their written policy with respect to Interest Rate Protection Agreements no later than February 28, 2005. 
  
 (m) No Adverse Selection. The Sellers shall not intentionally select Eligible Mortgage Loans to be sold to Buyer as
Purchased Mortgage Loans using any type of adverse selection or other selection criteria which would adversely affect the Buyer (it being understood that Sellers’ mortgage loans are non-prime). 
  
 (n) Mortgage Loan Schedule. On the fifteenth (15th) day of each calendar month (or if such date is not a Business Day, the next preceding Business Day), or with such greater
frequency as requested by Buyer, the Sellers shall or shall cause the Servicer to provide to Buyer, electronically, in a format mutually acceptable to Buyer, a Mortgage Loan Schedule. The Sellers shall not cause the Purchased Mortgage Loans to be
serviced by any servicer other than a servicer expressly approved in writing by Buyer, which approval shall be deemed granted by Buyer with respect to the Sellers with the execution of this Repurchase Agreement. 
  
 (o) Insurance. The Sellers shall continue to maintain Fidelity
Insurance in an aggregate amount at least equal to $1,000,000. The Sellers shall maintain Fidelity Insurance in respect of its officers, employees and agents, with respect to any claims made in connection with all or any portion of the Repurchase
Assets. The Sellers shall notify the Buyer of any material change in the terms of any such Fidelity Insurance. 
  
 (p) Books and Records. Each Seller shall, to the extent practicable, maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or obtain, as and when required, all documents, books, records and other information
reasonably necessary or advisable for the collection of all Repurchase Assets. 
  
 (q) Security Interest. The Sellers shall do all things necessary to preserve the Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder. Without limiting the
foregoing, the Sellers will comply with all rules, regulations and 

  

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other laws of any Governmental Authority and cause the Repurchase Assets to comply with all applicable rules, regulations and other laws. The Sellers will
not allow any default for which the Sellers are responsible to occur under any Repurchase Assets or any Repurchase Documents and the Sellers shall fully perform or cause to be performed when due all of their obligations under any Repurchase Assets
or the Repurchase Documents. 
  
 (r) Illegal Activities. No
Seller shall engage in any conduct or activity that could subject its assets to forfeiture or seizure by a Governmental Authority. 
  
 (s) Material Change in Business. No Seller shall make any material change in the nature of its business as carried on at the date hereof; provided,
that in no event shall the REIT Event be deemed such a material change. 
  
 (t) Limitation on Dividends and Distributions. Following the occurrence and during the continuation of an Event of Default, no Seller shall make any payment on account of, or set apart assets for, a sinking or other analogous fund
for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of such Seller, whether now or hereafter outstanding, or make any other distribution in respect of any of the foregoing or to any shareholder or equity
owner of such Seller, either directly or indirectly, whether in cash or property or in obligations of such Seller or any of such Seller’s consolidated Subsidiaries. 
  
 (u) Reserved. 
  
 (v) Transactions with Affiliates. Except for Permitted Contributions, no Seller shall enter into any transaction, including, without limitation,
the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate, unless such transaction is (a) not otherwise prohibited in this Repurchase Agreement, (b) in the ordinary course of such
Seller’s business and (c) upon fair and reasonable terms no less favorable to such Seller, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate. 
  
 (w) ERISA Matters. 
  
 (i) No Seller shall permit any event or condition which is
described in any of clauses (i) through (vii) of the definition of “Event of Termination” to occur or exist with respect to any Plan or Multiemployer Plan if such event or condition, together with all other events or conditions described
in the definition of Event of Termination occurring within the prior 12 months, involves the payment of money by or an incurrence of liability of such Seller or any ERISA Affiliate thereof, or any combination of such entities in an amount in excess
of $2 million. 
  
 (ii) No Seller shall be an
employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code and (b) no Seller shall use “plan assets” within the meaning of 29 CFR §2510.3-101 to engage in this Repurchase
Agreement or the Transactions hereunder. 
  
 (x)
Consolidations, Mergers and Sales of Assets. No Seller shall (i) consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer all or substantially 
  

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 all of its assets to any other Person; provided that any Seller may merge or consolidate with another Person if a
Seller is the Person surviving such merger; and provided further that in no event shall the REIT Event be prohibited by this subsection. 
  
 (y) Mortgage Loan Reports. Each Seller will furnish to Buyer monthly electronic Mortgage Loan performance data, including, without limitation,
delinquency reports, pool analytic reports and static pool reports (i.e., delinquency, foreclosure and net charge-off reports) and monthly stratification reports summarizing the characteristics of the Mortgage Loans. 
  
 (z) Guarantees. No Seller shall create, incur, assume or suffer to
exist any Guarantees, except (i) to the extent the Guarantee or underlying obligation Guaranteed is reflected (or will be reflected when such Seller next issues financial statements) in such Seller’s financial statements or notes thereto and
(ii) to the extent the aggregate Guarantees of such Seller do not exceed (a) prior to the occurrence of the REIT Event, $10 million, and (b) on and after the occurrence of the REIT Event, (b) $25 million. 
  
 (aa) Takeout Payments. With respect to each Mortgage Loan subject to a
Takeout Commitment, the Sellers shall arrange that all payments under the related Takeout Commitment shall be paid directly to the Buyer at the account set forth in Section 9 hereof, or to an account approved by the Buyer in writing prior to such
payment. 
  
 (bb) Underwriting Guidelines. Without the
prior written consent of Buyer, the Sellers shall not amend or otherwise modify the Underwriting Guidelines with respect to any Mortgage Loans that are Purchased Mortgage Loans. Without limiting the foregoing, in the event that the Sellers make any
amendment or modification to the Underwriting Guidelines, the Sellers shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting Guidelines. 
  
 (cc) Opinion of Counsel. On or prior to the earlier of the initial Transaction by ECC or the REIT Event, ECC shall
satisfy all conditions precedent to the initial Transaction set forth in Section 3(a) hereof. 
  
 SECTION 13. EVENTS OF DEFAULT 
  
 Section 13.01 Events of Default. If any of the following events (each an “Event of Default”) occur, the Sellers and Buyer shall have the rights set forth in Section 14, as applicable: 
  
 (a) any Seller shall default in the payment of (i) any Repurchase Price,
Price Differential, or Margin Deficit, when the same shall become due and payable, whether at the due date thereof, or by acceleration or otherwise, or (ii) Expenses, or any other Obligation or any other amount payable by it hereunder or under any
other Repurchase Document (and such failure to pay pursuant to this clause (ii) shall continue for more than 2 Business Days following written demand therefor); or 
  

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 (b) the failure of any Seller to perform, comply with or observe any term, covenant or agreement
applicable to such Seller contained in Sections 12(a)(i), (i), (k), (m), (r), (s), (t), (v), (w), (x), (z) or (aa); or 
  
 (c) any representation, warranty or certification made or deemed made herein or in any other Repurchase Document by any Seller or any certificate
furnished to the Buyer pursuant to the provisions hereof or thereof or any information with respect to the Purchased Mortgage Loans furnished in writing by on behalf of any Seller shall prove to have been untrue or misleading in any material respect
as of the time made or furnished (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Market Value of the Purchased Mortgage Loans; unless (i) such Seller shall
have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined in good faith by the Buyer in its sole
discretion to be materially false or misleading on a regular basis); or 
  
 (d) any Seller shall fail to observe or perform any other covenant or agreement contained in this Repurchase Agreement (and not identified in clause (b) of Section 13.01) or any other Repurchase Document, and if such default shall be
capable of being remedied, and such failure to observe or perform shall continue unremedied for a period of 5 Business Days; or 
  
 (e) a judgment or judgments for the payment of money in excess of $2 million in the aggregate shall be rendered against any Seller or any of its
Affiliates by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be
procured, within 30 days from the date of entry thereof, and such Seller or any such Affiliate shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed or bonded, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or 
  
 (f) any “event of default” or any other default which permits a demand for, or requires, the early repayment of obligations due by any Seller or its respective Affiliates under (i) any agreement (after the expiration of any
applicable grace period under any such agreement) relating to any Indebtedness of any Seller or any respective Affiliate, as applicable, to which the Buyer or any Affiliate is a party or (ii) any agreement (after the expiration of any applicable
grace period under any such agreement) relating to any Indebtedness of any Seller or any respective Affiliate, as applicable; or 
  
 (g) an Event of Insolvency shall have occurred with respect to any Seller; or 
  
 (h) for any reason, this Repurchase Agreement at any time shall not be in full force and effect in all material respects or
shall not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and of first priority on a material portion of the Repurchase Assets, or any Person (other than Buyer)
shall contest the validity, enforceability, perfection or priority of any Lien granted on a material portion of the Repurchase Assets, or any party thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce its obligations
hereunder; or 
  

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 (i) any Seller shall grant, or suffer to exist, any Lien on any Repurchase Asset (except any Lien in
favor of the Buyer); or (A) the Repurchase Assets shall not have been sold to the Buyer, or (B) the Liens contemplated hereby shall cease or fail to be first priority perfected Liens on any Repurchase Assets in favor of the Buyer or shall be Liens
in favor of any Person other than the Buyer; or 
  
 (j) any
material adverse change in the Property (taken as a whole), business, prospects, financial condition or operations of any Seller shall occur, in each case as determined by Buyer in its sole good faith discretion, or any other condition shall exist
which, in Buyer’s sole good faith discretion, constitutes a material impairment of such Seller’s ability to perform its obligations under this Repurchase Agreement or any other Repurchase Document. 
  
 (k) (i) any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan of any Seller, (ii) any material “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Seller or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Plan of any Seller, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Buyer, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Plan of any Seller shall terminate for purposes of Title IV of ERISA, (v) any Seller or any Commonly Controlled Entity shall, or in the reasonable opinion of the Buyer is likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan of any Seller; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or 
  
 (l) any Seller’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or
limited by reference to the status of a Seller as a “going concern” or a reference of similar import. 
  
 (m) on and after the occurrence of the REIT Event, the failure of ECC to satisfy any of the following asset or income tests and Buyer has delivered notice
of an Event of Default to the Sellers with respect thereto: 
  
 (i) At the close of each taxable year, at least 75 percent of ECC’s gross income consists of (i) “rents from real property” within the meaning of Section 856(c)(3)(A) of the Code, (ii) interest on
obligations secured by mortgages on real property or on interests in real property, within the meaning of Section 856(c)(3)(B) of the Code, (iii) gain from the sale or other disposition of real property (including interests in real property and
interests in mortgages on real property) which is not property described in Section 1221(a)(1) of the Code, within the meaning of Section 856(c)(3)(C) of the Code, (iv) dividends or other distributions on, and gain (other than gain from
“prohibited transactions” within the meaning of Section 857(b)(6)(B)(iii) of the Code) from the sale or other disposition of, transferable shares (or transferable certificates of beneficial 
  

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 interest) in other qualifying REITs within the meaning of Section 856(d)(3)(D) of the Code, and (v)
amounts described in Sections 856(c)(3)(E) through 856(c)(3)(I) of the Code. 
  
 (ii) At the close of each taxable year, at least 95 percent of ECC’s gross income consists of (i) the items of income described in paragraph 1 hereof (other than those described in Section 856(c)(3)(I) of the
Code), (ii) gain realized from the sale or other disposition of stock or securities which are not property described in Section 1221(a)(1) of the Code, (iii) interest and (iv) dividends. 
  
 (iii) At the close of each quarter of ECC’s taxable years, at least 75 percent of the value of
ECC’s total assets (as determined in accordance with Treasury Regulations Section 1.856-2(d)) will consist of real estate assets within the meaning of Sections 856(c)(4) and 856(c)(5)(B) of the Code, cash and cash items (including receivables
which arise in the ordinary course of ECC’s operations, but not including receivables purchased from another person), and Government Securities; unless (a) the test described in this paragraph (3) has been satisfied as of the end of the
immediately preceding quarter of ECC’s taxable year, (b) such test is not satisfied as the result of the acquisition of a security or property during the current quarter of ECC’s taxable year, (c) ECC delivers within 10 days after the end
of the current quarter of ECC’s taxable year to Buyer notice that such test is not satisfied, (d) such test is satisfied within the 30 day period as provided under section 856(c)(4), and (e) an officer of ECC certifies as to such satisfaction
within such 30 day period, and provides documentation, reasonably satisfactory to Buyer evidencing such satisfaction. For purposes of the certifications in Sections 13(m)(iii) and (iv): (i) ECC’s assets will include (x) the assets owned by any
qualified REIT subsidiaries within the meaning of Section 856(i) of the Code (“Qualified REIT Subsidiaries”) and any other disregarded entities for U.S. federal income tax purposes in which ECC owns an interest; and (y) ECC’s
allocable share (based on ECC’s proportionate capital interest) of the assets owned by any entity treated as a partnership for U.S. federal income tax purposes (a “Partnership”) in which ECC owns an interest; and (ii)
ECC’s direct or indirect ownership of the stock of any Qualified REIT Subsidiaries and the equity interests in any disregarded entities or Partnerships shall be disregarded, provided, however, for purposes of the 10% asset test described in
4(ii)(y) below, ECC’s interest in the assets of a Partnership shall be determined in accordance with Section 856(m)(3) of the Code. 
  
 (iv) At the close of each quarter of each of ECC’s taxable years, (a) not more than 25 percent of the value of ECC’s total
assets will be represented by securities (other than those described in paragraph 3), (b) not more than 20 percent of the value of ECC’s total assets will be represented by securities of one or more taxable REIT subsidiaries within the meaning
of Section 856(i) of the CoDe (“Taxable REIT Subsidiaries”), and (c) (i) not more than 5 percent of the value of ECC’s total assets will be represented by securities of any one issuer (other than Government Securities and
securities of Taxable REIT Subsidiaries), and (ii) (x) ECC will not hold securities possessing more than 10 percent of the total voting power of the outstanding securities of any one issuer (other than Government Securities and securities of Taxable
REIT Subsidiaries, and (y) ECC will not hold securities having a value of more than 10 percent of total value of the 
  

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 outstanding securities of any one issuer (other than Government Securities, securities of Taxable REIT
Subsidiaries, and securities described in Section 856(m)(1) of the Code); unless (d) the tests described in this subsection (iv) have been satisfied as of the end of the immediately preceding quarter of ECC’s taxable year, (e) any of the tests
described in this subsection (iv) are not satisfied as the result of the acquisition of a security or property during the current quarter of ECC’s taxable year, (f) ECC delivers within 10 days after the end of the current quarter of ECC’s
taxable year to Buyer notice that such test is not satisfied, (g) such test is satisfied within the 30 day period as provided under section 856(c)(4), and (h) an officer of ECC certifies as to such satisfaction within such 30 day period, and
provides documentation, reasonably satisfactory to Buyer evidencing such satisfaction. 
  
 Section 13.02 Termination Event. (a) If the following event (a “Termination Event”) occurs, the Buyer shall have the rights set forth in Section 13.02(b): 
  
 (i) the senior debt obligations or short-term debt
obligations of Merrill Lynch & Co., Inc. shall be rated below the four highest generic grades (without regard to any pluses and minuses reflecting gradations within such generic grades) by any nationally recognized statistical rating
organization. 
  
 (ii) A Change in Control of any
Seller shall have occurred. 
  
 (iii) any change
or development involving a prospective change in taxation or other applicable law or regulation or interpretation thereof in the United States materially and adversely affecting the Purchased Mortgage Loans or the consequences of Buyer owning, or
holding a security interest in, the Purchased Mortgage Loans; the imposition of exchange controls by the United States, that directly affects the Purchased Mortgage Loans or the consequences of Buyer owning, or holding a security interest in, the
Purchased Mortgage Loans; or the imposition of exchange controls by the United States, that directly affects the financial markets of the United States, and makes it, in the sole judgment of Buyer, inadvisable or impracticable to enter into
Transactions with the Mortgage Loans; or 
  
 (b) Upon the
occurrence of a Termination Event, the Buyer shall have the right, in its sole discretion, to immediately terminate the Buyer’s obligation to enter into any additional Transactions. The Sellers shall repurchase any Purchased Mortgage Loans
subject to a Transaction hereunder within five (5) Business Days following receipt of a request therefor from Buyer following the occurrence of a Termination Event. 
  
 SECTION 14. REMEDIES 
  
 (a) If an Event of Default occurs with respect to any Seller, the following rights and remedies are available to the Buyer; provided, that an Event of
Default shall be deemed to be continuing unless expressly waived by the Buyer in writing. 
  
 (i) At the option of the Buyer, exercised by written notice to the Sellers (which option shall be deemed to have been exercised, even if
no notice is given, immediately 
  

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 upon the occurrence of an Event of Insolvency of any Seller), the Repurchase Date for each Transaction
hereunder, if it has not already occurred, shall be deemed immediately to occur. The Buyer shall (except upon the occurrence of an Event of Insolvency of the Sellers) give notice to the Sellers of the exercise of such option as promptly as
practicable. 
  
 (ii) If the Buyer exercises or
is deemed to have exercised the option referred to in subsection (a)(i) of this Section, 
  
 (A) the Sellers’ obligations in such Transactions to repurchase all Purchased Mortgage Loans, at the Repurchase Price therefor on the
Repurchase Date determined in accordance with subsection (a)(i) of this Section, (1) shall thereupon become immediately due and payable and (2) all Income paid after such exercise or deemed exercise shall be retained by the Buyer and applied to the
aggregate unpaid Repurchase Price and any other amounts owed by the Sellers hereunder; 
  
 (B) to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction shall be increased by the
aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the
Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section (decreased as
of any day by (i) any amounts actually in the possession of Buyer pursuant to clause (C) of this subsection, and (ii) any proceeds from the sale of Purchased Mortgage Loans applied to the Repurchase Price pursuant to subsection (a)(iv) of this
Section; and 
  
 (C) all Income actually received
by the Buyer pursuant to Section 5 (excluding any Late Payment Fees paid pursuant to Section 5(a)) shall be applied to the aggregate unpaid Repurchase Price owed by the Sellers. 
  
 (iii) Upon the occurrence of one or more Events of Default, until and unless the Obligations are paid in
full, the Buyer shall have the right to obtain physical possession of all files of the Sellers relating to the Purchased Mortgage Loans and the Repurchase Assets and all documents relating to the Purchased Mortgage Loans which are then or may
thereafter come in to the possession of the Sellers or any third party acting for the Sellers and the Sellers shall deliver to the Buyer such assignments as the Buyer shall request. The Buyer shall be entitled to specific performance of all
agreements of the Sellers contained in the Repurchase Documents. 
  
 (iv) At any time on the Business Day following notice to the Sellers (which notice may be the notice given under subsection (a)(i) of this Section), in the event the Sellers have not repurchased all Purchased Mortgage
Loans, the Buyer may (A) immediately sell, without demand or further notice of any kind, at a public or private 
  

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 sale and at such price or prices as the Buyer may deem satisfactory any or all Purchased Mortgage Loans
and the Repurchase Assets subject to a such Transactions hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the Sellers hereunder or (B) in its sole discretion elect, in lieu of selling
all or a portion of such Purchased Mortgage Loans, to give the Sellers credit for such Purchased Mortgage Loans and the Repurchase Assets in an amount equal to the Market Value of the Purchased Mortgage Loans against the aggregate unpaid Repurchase
Price and any other amounts owing by the Sellers hereunder. The proceeds of any disposition of Purchased Mortgage Loans and the Repurchase Assets shall be applied first to the actual out-of-pocket costs and expenses incurred by the Buyer in
connection with such Seller’s default; second to costs of cover and/or related hedging transactions; third to the Repurchase Price; and fourth to any other outstanding obligation of the Sellers to the Buyer or its Affiliates. 
  
 (v) The Sellers shall be liable to Buyer for (i) the amount
of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer in connection with the enforcement of this Repurchase Agreement or any other agreement evidencing a Transaction, whether in action, suit or
litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Buyer)
incurred in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising from the occurrence of an Event of Default in respect of a Transaction. 
  
 (vi) The Buyer shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement or applicable law. 
  
 (b) Buyer may exercise one or more of the remedies available to Buyer immediately upon the occurrence of an Event of Default and at any time thereafter without notice to the Sellers (except to the extent notice is a
component of the relevant Event of Default). All rights and remedies arising under this Repurchase Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have. 
  
 (c) Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and each Seller hereby expressly waives any defenses such Seller might otherwise have to require Buyer to enforce its rights by judicial process. Each Seller also waives any defense (other than a defense of payment or
performance) such Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Each Seller recognizes that nonjudicial remedies
are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length. 
  

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 (d) To the extent permitted by applicable law, the Sellers shall be liable to the Buyer for interest on
any amounts owing by the Sellers hereunder, from the date the Sellers become liable for such amounts hereunder until such amounts are (i) paid in full by the Sellers or (ii) satisfied in full by the exercise of the Buyer’s rights hereunder.
Interest on any sum payable by the Sellers to the Buyer under this paragraph 14(d) shall be at a rate equal to the Post-Default Rate. 
  
 SECTION 15. INDEMNIFICATION AND EXPENSES; RECOURSE 
  
 (a) The Sellers agree to hold the Buyer, and its Affiliates and their officers, directors, employees, agents and advisors (each an “Indemnified
Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively,
“Costs”), relating to or arising out of this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Sellers agree to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Purchased Mortgage Loans relating to or arising out of any
taxes incurred or assessed in connection with the ownership of the Purchased Mortgage Loans, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct. In any suit, proceeding or action
brought by an Indemnified Party in connection with any Purchased Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Purchased Mortgage Loan, the Sellers will save, indemnify and hold such Indemnified Party harmless from
and against all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by the Sellers of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from the Sellers. The Sellers also agree to reimburse an Indemnified Party as and when
billed by such Indemnified Party for all the Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of the Buyer’s rights under this Repurchase Agreement, any other Repurchase Document or any
transaction contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of its counsel. 
  
 (b) If any proceeding shall be instituted involving any Person in which indemnification may be sought under this Section, the Indemnified Party shall
promptly notify the Sellers in writing and the Sellers, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any others the Sellers may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party unless representation of both the Sellers and such Indemnified Party by the same counsel would be inappropriate due to actual or 
  

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 potential differing interests between them. The Sellers may at any time upon written notice to the Indemnified Party,
assume the defense of any proceeding and may designate counsel reasonably satisfactory to the Indemnified Party in connection therewith provided that the counsel so designated would have no actual or potential conflict of interest in connection with
such representation. Unless they shall fail to assume the defense of any proceeding the Sellers shall not be liable for any settlement of any proceeding effected without their written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Sellers agree to indemnify the Indemnified Party from and against any loss or liability by reason of such settlement or judgment. If the Sellers assume the defense of any proceeding, the Sellers shall be entitled to
settle such proceeding with the consent of the Indemnified Party or, if such settlement provides for release of the Indemnified Party in connection with all matters relating to the proceeding which have been asserted against the Indemnified Party in
such proceeding by the other parties to such settlement, without the consent of the Indemnified Party. The Sellers will not permit any such settlement to include a statement as to, or an admission of, fault, culpability or a failure to act by or on
behalf of an Indemnified Party, without such Indemnified Party’s prior written consent. 
  
 (c) The Sellers agree to pay as and when billed by the Buyer all of the out-of-pocket costs and expenses incurred by the Buyer in connection with the development, preparation and execution of, and any amendment,
supplement or modification to, this Repurchase Agreement, any other Repurchase Document or any other documents prepared in connection herewith or therewith. The Sellers agree to pay as and when billed by the Buyer all of the reasonable out-of-pocket
costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation filing fees and all the reasonable fees, disbursements and expenses of counsel to the
Buyer which amount shall be deducted from the Purchase Price paid for the first Transaction hereunder. Subject to the limitations set forth in Section 27 hereof, the Sellers agree to pay the Buyer all the reasonable out of pocket due diligence,
inspection, testing and review costs and expenses incurred by the Buyer with respect to Purchased Mortgage Loans submitted by the Sellers for purchase under this Repurchase Agreement, including, but not limited to, those out of pocket costs and
expenses incurred by the Buyer pursuant to Sections 15(b) and 27 hereof. 
  
 (d) The obligations of the Sellers from time to time to pay the Repurchase Price, the Periodic Advance Repurchase Payments, and all other amounts due under this Repurchase Agreement shall be full recourse obligations
of each Seller. 
  
 (e) Each Seller shall be jointly and severally
liable for the full, complete an punctual performance and satisfaction of all obligations of any Seller under this Repurchase Agreement. Accordingly, each Seller waives any and all notice of creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by Buyer upon such Seller’s joint and several liability. Each Seller waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon such Seller with
respect to the Obligations. When pursuing its rights and remedies hereunder against any Seller, Buyer may, but shall be under no obligation, to pursue such rights and remedies hereunder against any Seller or any other Person or against any
collateral security for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect any payments from such Seller or any such other Person to realize upon any such

  

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 collateral security or to exercise any such right of offset, or any release of such Seller or any such other Person or
any such collateral security, or right of offset, shall not relieve such Seller of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Buyer against such
Seller. 
  
 SECTION 16. SERVICING 
  
 (a) The Sellers, on Buyer’s behalf, shall contract with Servicer to, or
if a Seller is the Servicer, such Seller shall, service the Mortgage Loans consistent with the degree of skill and care that such Seller customarily requires with respect to similar Mortgage Loans owned or managed by it and in accordance with
Accepted Servicing Practices. The Servicer shall (i) comply with all applicable Federal, State and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and
(iii) not impair the rights of Buyer in any Purchased Mortgage Loans or any payment thereunder. Buyer may terminate the servicing of any Purchased Mortgage Loan with the then existing servicer in accordance with Section 16(e) hereof. 
  
 (b) The Sellers shall cause the Servicer to hold or cause to be held all
escrow funds collected by the Sellers with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected. 
  
 (c) The Sellers shall cause the Servicer to deposit all collections received by the Sellers on account of the Purchased
Mortgage Loans in the Collection Account no later than two Business Days following receipt. 
  
 (d) The Sellers shall provide promptly to Buyer (i) a Servicer Notice addressed to and agreed to by the Servicer of the related Purchased Mortgage Loans, advising such Servicer of such matters as Buyer may reasonably
request, including, without limitation, recognition by the Servicer of Buyer’s interest in such Purchased Mortgage Loans and the Servicer’s agreement that upon receipt of notice of an Event of Default from Buyer, it will follow the
instructions of Buyer with respect to the Purchased Mortgage Loans and any related Income with respect thereto. 
  
 (e) Upon the occurrence of a material default under the Servicing Agreement, Buyer shall have the right to immediately terminate the Servicer’s right
to service the Purchased Mortgage Loans without payment of any penalty or termination fee. The Sellers shall cooperate in transferring the servicing of the Purchased Mortgage Loans to a successor servicer appointed by Buyer in its sole discretion.

  
 (f) If the Sellers should discover that, for any reason
whatsoever, any entity responsible to the Sellers by contract for managing or servicing any such Purchased Mortgage Loan has failed to perform fully the Sellers’ obligations under the Repurchase Documents or any of the obligations of such
entities with respect to the Purchased Mortgage Loans, the Sellers shall promptly notify Buyer. 
  

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 SECTION 17. SINGLE AGREEMENT 
  
 Buyer and the Sellers acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in
consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and
the Sellers agree (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each
of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transaction hereunder; (iii) that payments, deliveries, and other transfers made by
either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries,
and other transfers may be applied against each other and netted and (iv) to promptly provide notice to the other after any such set off or application. 
  
 SECTION 18. SET-OFF 
  
 In addition to any rights and remedies of the Buyer hereunder and by law, the Buyer shall have the right, without prior notice to the Sellers, any such
notice being expressly waived by the Sellers to the extent permitted by applicable law, upon any amount becoming due and payable by the Sellers hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and
apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Buyer or any Affiliate thereof to or for the credit or the account of the Sellers or any Affiliate thereof. The Buyer agrees promptly to notify the Sellers after any such set-off and
application made by the Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application. 
  
 SECTION 19. NOTICES AND OTHER COMMUNICATIONS 
  
 Except as otherwise expressly permitted by this Repurchase Agreement, all notices, requests and other communications provided for herein (including
without limitation any modifications of, or waivers, requests or consents under, this Repurchase Agreement) shall be given or made in writing (including without limitation by telecopy) delivered to the intended recipient at the “Address for
Notices” specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this
Repurchase Agreement and except for notices given under Section 3 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given electronically via email or personally delivered or mailed, upon receipt,
in each case given or addressed as aforesaid. 
  

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 SECTION 20. ENTIRE AGREEMENT; SEVERABILITY 
  
 This Repurchase Agreement, together with the Repurchase Documents, constitute the entire understanding between Buyer and the
Sellers with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Mortgage Loans. By acceptance of this
Repurchase Agreement, Buyer and Sellers acknowledge that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Repurchase Agreement. Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 
  
 SECTION 21. NON-ASSIGNABILITY 
  
 The rights and obligations of the parties under this Repurchase Agreement and under any Transaction shall not be assigned by any Seller without the prior
written consent of Buyer. Subject to the foregoing, this Repurchase Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Repurchase Agreement
express or implied, shall give to any Person, other than the parties to this Repurchase Agreement and their successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Repurchase Agreement. Buyer may (with
the consent of the Sellers which consent shall not be unreasonably withheld, and provided, that upon the occurrence and continuation of an Event of Default, or in connection with an assignment by the Buyer to an Affiliate of the Buyer, no such
Seller consent shall be required) from time to time assign all or a portion of its rights and obligations under this Repurchase Agreement and the Repurchase Documents; pursuant to an executed assignment and acceptance by Buyer and assignee
(“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. Upon such assignment and recordation of such assignment in the Register, as described below, (a) such assignee shall be a
party hereto and to each Repurchase Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to the extent
that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Repurchase Documents. Unless otherwise stated in the Assignment and Acceptance, the Sellers shall continue to take directions
solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Sellers. 
  
 Subject to acceptance and recording thereof pursuant to the following paragraph of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of Buyer under this Repurchase
Agreement. Any assignment or transfer by Buyer of rights or obligations under this Repurchase Agreement that does not comply with this Section 21 shall be treated for purposes of this Repurchase Agreement as a sale by such Buyer of a participation
in such rights and obligations in accordance with the following paragraph of this Section. 
  

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 The Sellers shall maintain a register (the “Register”) on which it will record the
Buyer’s rights hereunder, and each Assignment and Acceptance and participation. The Register shall include the names and addresses of Buyers (including all assignees, successors and participants) and the percentage or portion of such rights and
obligations assigned. Failure to make any such recordation, or any error in such recordation shall not affect the Sellers’ obligations in respect of such rights. If Buyer sells a participation in its rights hereunder, it shall provide Sellers,
or maintain as agent of Sellers, the information described in this paragraph and permit Sellers to review such information as reasonably needed for Sellers to comply with its obligations under this Repurchase Agreement or under any applicable
Requirement of Law. 
  
 The Buyer may sell participations to one
or more Persons in or to all or a portion of its rights and obligations under this Repurchase Agreement; provided, however, that (i) the Buyer’s obligations under this Repurchase Agreement shall remain unchanged, (ii) the Buyer shall remain
solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Sellers shall continue to deal solely and directly with the Buyer in connection with the Buyer’s rights and obligations under this Repurchase
Agreement and the other Repurchase Documents, except as provided in Section 7. 
  
 The Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 21, disclose to the assignee or participant or proposed assignee or participant, as
the case may be, any information relating to the Sellers or any of their respective Subsidiaries or to any aspect of the Transactions that has been furnished to the Buyer by or on behalf of the Sellers or any of their respective Subsidiaries;
provided that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Repurchase Agreement. 
  
 The Buyer may at any time create a security interest in all or any portion of its rights under this Repurchase Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Buyer from its obligations hereunder.

  
 In the event the Buyer assigns all or a portion of its rights
and obligations under this Repurchase Agreement, the parties hereto agree to negotiate in good faith an amendment to this Repurchase Agreement to add agency provisions similar to those included in repurchase agreements for similar syndicated
repurchase facilities. 
  
 SECTION 22. TERMINABILITY 
  
 Each representation and warranty made or deemed to be made by entering into
a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and the Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be
false or misleading, notwithstanding that the Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. Notwithstanding any such termination or the
occurrence of an Event of Default, all of the representations and warranties and covenants hereunder shall continue and survive. The obligations of the Sellers under Section 15 hereof shall survive the termination of this Repurchase Agreement.

  

 -54- 

 SECTION 23. GOVERNING LAW 
  
 THIS REPURCHASE AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF. 
  
 SECTION 24. SUBMISSION TO
JURISDICTION; WAIVERS 
  
 BUYER AND THE SELLERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY: 
  
 (i)
SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS REPURCHASE AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; 
  
 (ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT
PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE
SAME; 
  
 (iii) AGREES THAT SERVICE OF
PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER
ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND 
  
 (iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION. 
  
 (v) THE BUYER AND THE SELLERS HEREBY IRREVOCABLY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS REPURCHASE AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

  

 -55- 

 SECTION 25. NO WAIVERS, ETC. 
  
 No failure on the part of the Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under any Repurchase Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Repurchase Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default shall be deemed to be continuing unless expressly waived by the Buyer in writing.

  
 SECTION 26. NETTING 
  
 If the Buyer and any Seller are “financial institutions” as now or
hereinafter defined in Section 4402 of Title 12 of the United States Code (“Section 4402”) and any rules or regulations promulgated thereunder, 
  
 (a) All amounts to be paid or advanced by one party to or on behalf of the other under this Repurchase Agreement or any Transaction hereunder shall be
deemed to be “payment obligations” and all amounts to be received by or on behalf of one party from the other under this Repurchase Agreement or any Transaction hereunder shall be deemed to be “payment entitlements” within the
meaning of Section 4402, and this Repurchase Agreement shall be deemed to be a “netting contract” as defined in Section 4402. 
  
 (b) The payment obligations and the payment entitlements of the parties hereto pursuant to this Repurchase Agreement and any Transaction hereunder shall
be netted as follows. In the event that either party (the “Defaulting Party”) shall fail to honor any payment obligation under this Repurchase Agreement or any Transaction hereunder, the other party (the “Nondefaulting
Party”) shall be entitled to reduce the amount of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor. 
  
 SECTION 27. DUE DILIGENCE 
  
 The Sellers acknowledge that Buyer has the right to perform continuing due
diligence reviews with respect to the Mortgage Loans and the Sellers, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and the Sellers agree that upon reasonable prior notice
unless an Event of Default shall have occurred, in which case no notice is required, to the Sellers, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the
Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of the Sellers and/or the Custodian. The Sellers also shall make available to Buyer a
knowledgeable financial or accounting officer for the purpose of answering questions respecting 
  

 -56- 

 the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, the Sellers acknowledge that
Buyer may purchase Mortgage Loans from the Sellers based solely upon the information provided by the Sellers to Buyer in the Purchased Mortgage Loan Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its
option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including, without limitation, ordering broker’s price opinions, new credit reports and new
appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such
underwriting. The Sellers agree to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents,
records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of the Sellers. The Sellers further agree that the Sellers shall pay all out-of-pocket costs and expenses incurred by Buyer in
connection with Buyer’s activities pursuant to this Section 27 (“Due Diligence Costs”); provided, that such Due Diligence Costs shall not exceed $25,000 per calendar year unless a Default or Event of Default shall have
occurred, in which event Buyer shall have the right to perform due diligence, at the sole expense of Sellers without regard to the dollar limitation set forth herein. 
  
 SECTION 28. NON-UTILIZATION FEE 
  
 No later than the Payment Date following the end of each calendar quarter and on the Termination Date, Sellers shall pay in immediately available funds to
Buyer the Non-Utilization Fee. Such payment shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at an account designated by Buyer. 
  
 SECTION 29. COMMITMENT FEE 
  
 The Sellers shall pay to Buyer in immediately available funds, the
Commitment Fee due and owing on the date hereof, 50% of which Sellers shall pay on the date hereof, and 50% of which Sellers shall pay six months from the date hereof. Such payment shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, to Buyer at such account designated by Buyer. 
  
 In the event that an event set forth in Section 3(b)(viii) occurs, the Buyer shall refund to the Sellers an amount equal to the Commitment Fee prorated for the number of days remaining prior to the Termination Date.

  
 SECTION 30. BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT 
  
 (a) Each Seller hereby irrevocably constitutes and appoints the Buyer and
any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Seller and in the name of such Seller or in its own name, from time to
time in the Buyer’s discretion, for the purpose of carrying out the terms of this Repurchase Agreement, to take any and all appropriate action and 
  

 -57- 

 to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the
purposes of this Repurchase Agreement, and, without limiting the generality of the foregoing, such Seller hereby gives the Buyer the power and right, on behalf of such Seller, without assent by, but with notice to, such Seller, if an Event of
Default shall have occurred and be continuing, to do the following: 
  
 (i) in the name of such Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to
any Repurchase Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Buyer for the purpose of collecting any and all such moneys due with respect to any Repurchase
Assets whenever payable; 
  
 (ii) to pay or
discharge taxes and Liens levied or placed on or threatened against the Repurchase Assets; 
  
 (iii) (A) to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become
due thereunder directly to the Buyer or as the Buyer shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of
any Repurchase Assets; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets; (E) to defend any suit, action or proceeding brought against such Seller with respect to any
Repurchase Assets; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Buyer may deem appropriate; and (G) generally, to sell,
transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though the Buyer were the absolute owner thereof for all purposes, and to do, at the Buyer’s option and such
Seller’s expense, at any time, and from time to time, all acts and things which the Buyer deems necessary to protect, preserve or realize upon the Repurchase Assets and the Buyer’s Liens thereon and to effect the intent of this Repurchase
Agreement, all as fully and effectively as such Seller might do. 
  
 (b) Each Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. 
  
 (c) Each Seller also authorizes the Buyer, if an Event of Default shall have
occurred, from time to time, to execute, in connection with any sale provided for in Section 14 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets. 
  

 -58- 

 (d) The powers conferred on the Buyer hereunder are solely to protect the Buyer’s interests in the
Repurchase Assets and shall not impose any duty upon it to exercise any such powers. The Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Sellers for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct. 
  
 SECTION 31. MISCELLANEOUS 
  
 (a) Counterparts. This Repurchase Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Repurchase Agreement by signing any such counterpart. 
  
 (b) Captions. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Repurchase Agreement. 
  
 (c) Acknowledgment. The Sellers hereby acknowledge that: 
  
 (i) each has been advised by counsel in the negotiation, execution and delivery of this Repurchase Agreement and the other Repurchase Documents; 
  
 (ii) the Buyer has no fiduciary relationship to the Sellers; and 
  
 (iii) no joint venture exists between the Buyer and the
Sellers. 
  
 (d) Repurchase Documents Mutually Drafted. The
Sellers and the Buyer agree that this Repurchase Agreement and each other Repurchase Document prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents
shall not be construed against either party as the drafter thereof. 
  
 SECTION
32. CONFIDENTIALITY 
  
 The Buyer and the Sellers hereby
acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Repurchase Documents or the Transactions contemplated thereby (the “Confidential
Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, or (iii) in the
event of an Event of Default the Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Mortgage Loans or otherwise to enforce or exercise the Buyer’s rights
hereunder. The provisions set forth in this Section 32 shall survive the termination of this Repurchase Agreement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Repurchase Document, 
  

 -59- 

 the parties hereto may disclose to any and all Persons, without limitation of any kind, the U.S. federal, state and local
tax treatment of the Transactions, any fact that may be relevant to understanding the U.S. federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such U.S.
federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that Sellers may not disclose the name of or identifying information with respect to Buyer or agent or any pricing terms (including,
without limitation, the Pricing Rate, Purchase Price Percentage and Purchase Price) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the U.S. federal, state and local tax
treatment of the Transactions to the taxpayer and is not relevant to understanding the U.S. federal, state and local tax treatment of the Transactions, without the prior written consent of the Buyer. 
  
 SECTION 33. INTENT 
  
 (a) The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101
of Title 11 of the United States Code, as amended (except insofar as the type of Mortgage Loans subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that
term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). 
  
 (b) It is understood that either party’s right to liquidate Mortgage
Loans delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended. 
  
 (c) The parties agree and acknowledge
that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial
contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). 
  
 (d) It is understood that this Repurchase Agreement constitutes a
“netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder
shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial
institution” as that term is defined in FDICIA). 
  
 SECTION 34.
DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS 
  
 The
parties acknowledge that they have been advised that: 
  
 (a) in
the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the
Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder; 

 

 -60- 

 (b) in the case of Transactions in which one of the parties is a government securities broker or a
government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and 
  
 (c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial
institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. 
  
 SECTION 35. CONFLICTS 
  
 In the event of any conflict between the terms of this Repurchase Agreement, any other Repurchase Document and any
Confirmation, the documents shall control in the following order of priority: first, the terms of the Confirmation shall prevail, then the terms of this Repurchase Agreement shall prevail, and then the terms of the other Repurchase Documents
shall prevail. 
  
 SECTION 36. AUTHORIZATIONS 
  
 Any of the persons whose signatures and titles appear on Exhibit X
are authorized, acting singly, to act for Sellers or Buyer, as the case may be, under this Repurchase Agreement. 
  
 SECTION 37. ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES. 
  
 Buyer has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan. 
  
 [THIS SPACE INTENTIONALLY LEFT BLANK] 
  

 -61- 

 IN WITNESS WHEREOF, the parties have entered into this Repurchase Agreement as of the date set forth
above. 
  

			
	 BUYER:

	
	MERRILL LYNCH BANK USA
		
	By:	 	 /s/ John Winchester

	Name:	 	John Winchester
	Title:	 	Vice President
	
	Address for Notices:
	
	4 World Financial Center
	10th Floor
	New York, New York 10080
	
	Attention: James B. Cason
	Telecopier No.: (212) 449-3673
	Telephone No.: (212) 449-1219
	Email: jcason@exchange.ml.com

			
	 SELLER:

	
	ENCORE CREDIT CORP.
		
	By:	 	 /s/ William E. Moffatt

	Name:	 	William E. Moffatt
	Title:	 	Treasurer
	
	Address for Notices:
	
	1833 Alton Parkway
	Irvine, California 92606
	
	Attention: William E. Moffatt
	Telecopier No.:(949) 221-9816
	Telephone No:(949) 856-7698
	Email: bmoffatt@encorecredit.com

			
	 SELLER:

	
	ECC CAPITAL CORPORATION
		
	 By:
	 	 /s/ John Kontoulis

	 Name:
	 	John Kontoulis
	 Title:
	 	EVP
	
	 Address for Notices:

	
	 1833 Alton Parkway

	 Irvine, California 92606

	
	 Attention: William E. Moffatt

	 Telecopier No.:(949) 221-9816

	 Telephone No:(949) 856-7698

	 Email: bmoffatt@encorecredit.com

			
	 SELLER:

		
	By:	 	 /s/ William E. Moffatt

	Name:	 	William E. Moffatt
	Title:	 	Treasurer
	
	 Address for Notices:

	
	 1833 Alton Parkway

	 Irvine, California 92606

	
	 Attention: William E. Moffatt

	 Telecopier No.:(949) 221-9816

	 Telephone No:(949) 856-7698

	 Email: bmoffatt@encorecredit.comAmended and Restated Loan Agrement

  
 Exhibit 10.4.1

  
 AMENDED AND RESTATED LOAN AGREEMENT 
  
 among 
  
 SUNSTONE SH HOTELS L.L.C. 
 SUNSTONE OF PROPERTIES L.L.C. 
 SUNSTONE CHANDLER, LLC 
 SHP OGDEN LLC 
 jointly and severally, as
the Borrowers 
  
 The Lenders Party Hereto 
 as Lenders 
  
 and 
  
 MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY 
 as Administrative Agent 
  
 Financing of portfolio of 30 hotels located in the States of Arizona,
California, Colorado, 
 Minnesota, New Mexico, Utah and Washington 
  
 Dated as of October 26, 2004 
  

					
	 ARTICLE I
	  	CERTAIN DEFINITIONS	  	2
			
	 Section 1.1
	  	 Certain Definitions
	  	2
			
	 (1)
	  	“Access Laws”	  	2
			
	 (2)
	  	“Acceleration”	  	2
			
	 (3)
	  	“ACH”.	  	3
			
	 (4)
	  	“Additional Advance”	  	3
			
	 (5)
	  	“Additional Costs”	  	3
			
	 (6)
	  	“Adjusted Libor Rate”	  	3
			
	 (7)
	  	“Administrative Agent”	  	3
			
	 (8)
	  	“Administrative Agent Lost Servicing Fee”	  	3
			
	 (9)
	  	“Affiliate”	  	3
			
	 (10)
	  	“Agreement”	  	3
			
	 (11)
	  	“Allocated Loan Amount”	  	3
			
	 (12)
	  	“Allocated Percentage”	  	4
			
	 (13)
	  	“Alternate Interest Rate”	  	4
			
	 (14)
	  	“Alternate Interest Rate Loans”	  	4
			
	 (15)
	  	“Annual Budget”	  	4
			
	 (16)
	  	“Applicable Lending Office”	  	4
			
	 (17)
	  	“Appraised Value”	  	4
			
	 (18)
	  	“Approved Budget”	  	4
			
	 (19)
	  	“Approved Financial Institution”	  	4
			
	 (20)
	  	“Approved Franchise Agreements”	  	4
			
	 (21)
	  	“Assignment and Acceptance”	  	4
			
	 (22)
	  	“Assignments of Leases and Rents”	  	5
			
	 (23)
	  	“Assignments of Licenses”	  	5
			
	 (24)
	  	“Award”	  	5
			
	 (25)
	  	“Bankruptcy Party”	  	5
			
	 (26)
	  	“Basel Accord”	  	5
			
	 (27)
	  	“Books and Records”	  	5
			
	 (28)
	  	“Borrower”	  	5
			
	 (29)
	  	“Borrower Party”	  	5
			
	 (30)
	  	“Business Day”	  	5

  

 -i- 

					
	 (31)
	  	“Business Plan”	  	5
			
	 (32)
	  	“Capital Budget”	  	5
			
	 (33)
	  	“Capital Expenditure Reserve”	  	5
			
	 (34)
	  	“Capital Improvement”	  	5
			
	 (35)
	  	“Capital Lease”	  	6
			
	 (36)
	  	“Cash Trap Period”	  	6
			
	 (37)
	  	“Casualty Consultant”	  	6
			
	 (38)
	  	“Casualty Retainage”	  	6
			
	 (39)
	  	“Closed Prepayment Period”	  	6
			
	 (40)
	  	“Closing Date”	  	6
			
	 (41)
	  	“Code”	  	6
			
	 (42)
	  	“Collateral Assignment of Interest Rate Cap Agreement”	  	6
			
	 (43)
	  	“Commercially Reasonable Rates”	  	6
			
	 (44)
	  	“Commitment”	  	6
			
	 (45)
	  	“Concentration Account”	  	6
			
	 (46)
	  	“Condemnation”	  	6
			
	 (47)
	  	“Condemnation Limit”	  	6
			
	 (48)
	  	“Condemnation Proceeds”	  	7
			
	 (49)
	  	“Continue”, “Continuation” and “Continued”	  	7
			
	 (50)
	  	“Control”	  	7
			
	 (51)
	  	“Controlling Lenders”	  	7
			
	 (52)
	  	“Convert”, “Conversion” and “Converted”	  	7
			
	 (53)
	  	“Current Outstanding Principal Amount”	  	7
			
	 (54)
	  	“Debt”	  	7
			
	 (55)
	  	“Debt Service”	  	7
			
	 (56)
	  	“Decisionrnaking Control”	  	7
			
	 (57)
	  	“Default Rate”	  	7
			
	 (58)
	  	“Deferred Maintenance Reserve”	  	8
			
	 (59)
	  	“Deposit Account Control Agreement”	  	8
			
	 (60)
	  	“Depository Account”	  	8
			
	 (61)
	  	“Dollars” and “$”	  	8
			
	 (62)
	  	“DSCR”	  	8
			
	 (63)
	  	“Environmental Laws”	  	8

  

 -ii- 

					
	 (64)
	  	“ERISA”	  	8
			
	 (65)
	  	“Event of Default”	  	8
			
	 (66)
	  	“Exchange Act”	  	8
			
	 (67)
	  	“Extension Fee”	  	8
			
	 (68)
	  	“Extension Right”	  	8
			
	 (69)
	  	“FF&E”	  	8
			
	 (70)
	  	“Fifty Percent Rate”	  	9
			
	 (71)
	  	“Fiscal Year”	  	9
			
	 (72)
	  	“Fitch XE “Fitch””	  	9
			
	 (73)
	  	“Fixed Interest Period”	  	9
			
	 (74)
	  	“Fixed Interest Rate”	  	9
			
	 (75)
	  	“Fixed Lender”	  	9
			
	 (76)
	  	“Fixed Loans”	  	9
			
	 (77)
	  	“Fixed Loan Amount”	  	9
			
	 (78)
	  	“Fixed Loan Prepayment Fee”	  	9
			
	 (79)
	  	“Fixed Loan Reinvestment Yield”	  	9
			
	 (80)
	  	“Fixed Loan Yield Maintenance Amount”	  	10
			
	 (81)
	  	“Fixed Notes”	  	10
			
	 (82)
	  	“Floating Interest Period”	  	10
			
	 (83)
	  	“Floating Interest Rate”	  	10
			
	 (84)
	  	“Floating Lender”	  	10
			
	 (85)
	  	“Floating Loans”	  	11
			
	 (86)
	  	“Floating Loan Amount”	  	11
			
	 (87)
	  	“Floating Notes”	  	11
			
	 (88)
	  	“Franchise Agreement”	  	11
			
	 (89)
	  	“Franchisor Warning Event”	  	11
			
	 (90)
	  	“Funds Release Limit”	  	11
			
	 (91)
	  	“GAAP”	  	11
			
	 (92)
	  	“Ground Lease Rent Reserve”	  	11
			
	 (93)
	  	“Hazardous Materials”	  	11
			
	 (94)
	  	“Hazardous Materials Indemnity Agreement”	  	11
			
	 (95)
	  	“Improvements”	  	11
			
	 (96)
	  	“Indebtedness”	  	11

  

 -iii- 

					
	 (97)
	  	“Individual Property”	  	11
			
	 (98)
	  	“Initial Interest Rate Cap Agreement”	  	12
			
	 (99)
	  	“Institutional Investors”	  	12
			
	 (100)
	  	“Insurance Premiums”	  	12
			
	 (101)
	  	“Insurance Proceeds”	  	12
			
	 (102)
	  	“Interest Period”	  	12
			
	 (103)
	  	“Interest Rate”	  	12
			
	 (104)
	  	“Interest Rate Cap Agreement”	  	12
			
	 (105)
	  	“IPO”	  	12
			
	 (106)
	  	“Leases”	  	12
			
	 (107)
	  	“Legal Requirements”	  	12
			
	 (108)
	  	“Lender” and “Lenders”	  	13
			
	 (109)
	  	“Libor Base Rate”	  	13
			
	 (110)
	  	“Libor Breakage Fee”	  	13
			
	 (111)
	  	“Licenses”	  	13
			
	 (112)
	  	“Lien”	  	13
			
	 (113)
	  	“Limited Guaranty”	  	14
			
	 (114)
	  	“Loan Documents”	  	14
			
	 (115)
	  	“Loan Month”	  	14
			
	 (116)
	  	“Loan-to-Value Ratio”	  	14
			
	 (117)
	  	“Loan Year”	  	14
			
	 (118)
	  	“Loans”	  	14
			
	 (119)
	  	“Losses”	  	14
			
	 (120)
	  	“Management Agreement”	  	14
			
	 (121)
	  	“Manager”	  	15
			
	 (122)
	  	“Master Management Agreement”	  	15
			
	 (123)
	  	“Material Capital Lease”	  	15
			
	 (124)
	  	“Material Lease”	  	15
			
	 (125)
	  	“Maturity Date”	  	15
			
	 (126)
	  	“Maximum Loan to Value Ratio”	  	15
			
	 (127)
	  	“Membership Pledge”	  	15
			
	 (128)
	  	“Mezzanine Obligation”	  	15
			
	 (129)
	  	“Mezzanine Pledge”	  	15

  

 -iv- 

					
	 (130)
	  	“Minimum DSCR”	  	16
			
	 (131)
	  	“Modification Closing Date”	  	16
			
	 (132)
	  	“Monthly Operating Statement”	  	16
			
	 (133)
	  	“Monthly Payment Differential”	  	16
			
	 (134)
	  	“Moody’s”	  	16
			
	 (135)
	  	“Mortgage”	  	16
			
	 (136)
	  	“Multi-Party Agreement”	  	16
			
	 (137)
	  	“Net Cash Flow”	  	16
			
	 (138)
	  	“Net Operating Income”	  	16
			
	 (139)
	  	“Net Proceeds”	  	17
			
	 (140)
	  	“Net Proceeds Deficiency”	  	17
			
	 (141)
	  	“Net Sales Proceeds”	  	17
			
	 (142)
	  	“Non-Recourse Exceptions”	  	17
			
	 (143)
	  	“Notes”	  	17
			
	 (144)
	  	“OFAC”	  	17
			
	 (145)
	  	“OFAC Programs”	  	17
			
	 (146)
	  	“Operating Account”	  	17
			
	 (147)
	  	“Operating Budget”	  	17
			
	 (148)
	  	“Operating Expenses”	  	18
			
	 (149)
	  	“Operating Lease”	  	18
			
	 (150)
	  	“Operating Revenues”	  	18
			
	 (151)
	  	“Operator”	  	19
			
	 (152)
	  	“Original Closing Date”	  	19
			
	 (153)
	  	“Original Loan”	  	19
			
	 (154)
	  	“Original Loan Agreement”	  	19
			
	 (155)
	  	“Original Loan Amount”	  	19
			
	 (156)
	  	“Participant”	  	19
			
	 (157)
	  	“Payment Date”	  	19
			
	 (158)
	  	“Permitted Encumbrances”	  	19
			
	 (159)
	  	“Permitted Investment”	  	19
			
	 (160)
	  	“Person”	  	20
			
	 (161)
	  	“Personality”	  	20
			
	 (162)
	  	“Policies”	  	20

  

 -v- 

					
	 (163)
	  	“Prepayment Fee”	  	20
			
	 (164)
	  	“Prime Rate”	  	20
			
	 (165)
	  	“Prime Rate Spread”	  	21
			
	 (166)
	  	“Properties”	  	21
			
	 (167)
	  	“Rate Cap Rating Criteria”	  	21
			
	 (168)
	  	“Ratine Agencies”	  	21
			
	 (169)
	  	“Rebranding Renovation”	  	21
			
	 (170)
	  	“Register”	  	21
			
	 (171)
	  	“Regulation D”	  	21
			
	 (172)
	  	“Regulatory Change”	  	21
			
	 (173)
	  	“REIT”	  	22
			
	 (174)
	  	“Related Parties”	  	22
			
	 (175)
	  	“Release”	  	22
			
	 (176)
	  	“Release Amount”	  	22
			
	 (177)
	  	“Release Property”	  	22
			
	 (178)
	  	“Rents”	  	22
			
	 (179)
	  	“Replacement Interest Rate Cap Agreement”	  	23
			
	 (180)
	  	“Reserves”	  	23
			
	 (181)
	  	“Reserve Requirement”	  	23
			
	 (182)
	  	“Restoration”	  	23
			
	 (183)
	  	“S&P”	  	23
			
	 (184)
	  	“Scheduled Payment”	  	23
			
	 (185)
	  	“Secondary Market Transaction”	  	23
			
	 (186)
	  	“Security Agreement”	  	23
			
	 (187)
	  	“Servicer”	  	23
			
	 (188)
	  	“Servicing Agreement”	  	23
			
	 (189)
	  	“Severed Loan Documents”	  	23
			
	 (190)
	  	“Site Assessment”	  	24
			
	 (191)
	  	“Special Purpose Entity”	  	24
			
	 (192)
	  	“State”	  	24
			
	 (193)
	  	“Stock Pledge”	  	24
			
	 (194)
	  	“STR Report”	  	24
			
	 (195)
	  	“Subordination of Management Agreement”	  	24

  

 -vi- 

					
	 (196)
	  	“Sunstone”	  	24
			
	 (197)
	  	“Sunstone Holdco”	  	24
			
	 (198)
	  	“Sunstone Hotel TRS”	  	24
			
	 (199)
	  	“Sunstone LAX”	  	24
			
	 (200)
	  	“Sunstone Parties”	  	25
			
	 (201)
	  	“Tarsadia Floor Release Amount”	  	25
			
	 (202)
	  	“Tarsadia Ground Lease”	  	25
			
	 (203)
	  	“Tarsadia Los Angeles Ground Lease”	  	25
			
	 (204)
	  	“Tarsadia Los Angeles Property”	  	25
			
	 (205)
	  	“Tarsadia Property”	  	25
			
	 (206)
	  	“Tarsadia San Diego Ground Lease”	  	25
			
	 (207)
	  	“Tarsadia San Diego Property”	  	25
			
	 (208)
	  	“Tax and Insurance Reserve”	  	25
			
	 (209)
	  	“Tax Escrow Rebalancing”	  	25
			
	 (210)
	  	“Taxes”	  	25
			
	 (211)
	  	“Terrorism Insurance”	  	26
			
	 (212)
	  	“TIC Amount”	  	26
			
	 (213)
	  	“Title Policy”	  	26
			
	 (214)
	  	“Trailing Twelve-Month NOI”	  	26
			
	 (215)
	  	“Trapped Cash Reserve”	  	26
			
	 (216)
	  	“TRIA”	  	26
			
	 (217)
	  	“Type”	  	26
			
	 (218)
	  	“Uniform System of Accounts”	  	26
			
	 Section 1.2
	  	 Types
	  	26
			
	 Section 1.3
	  	 Borrower; Joint and Several Liability; Suretyship Waivers
	  	26
			
	 Section 1.4
	  	 Interpretation
	  	30
			
	 Section 1.5
	  	 Amendment and Restatement
	  	30
			
	 ARTICLE II
	  	 LOAN TERMS
	  	31
			
	 Section 2.1
	  	 The Commitments, Loans and Notes
	  	31
			
	 Section 2.2
	  	 Interest Rate; Late Charge; Default Rate
	  	33
			
	 Section 2.3
	  	 Terms of Payment
	  	34
			
	 Section 2.4
	  	 Security
	  	38
			
	 Section 2.5
	  	 Payments; Priority; Etc.
	  	38

  

 -vii- 

					
	 Section 2.6
	  	 Yield Protection; Etc.
	  	41
			
	 Section 2.7
	  	 Release of Properties
	  	46
			
	 Section 2.8
	  	 Extension of Floating Loan Terms and Maturity
	  	51
			
	 ARTICLE III
	  	 INSURANCE, CONDEMNATION, RESERVES AND CASH MANAGEMENT
	  	53
			
	 Section 3.1
	  	 Insurance
	  	53
			
	 Section 3.2
	  	 Condemnation Awards
	  	59
			
	 Section 3.3
	  	 Restoration
	  	60
			
	 ARTICLE IV
	  	 ENVIRONMENTAL MATTERS
	  	65
			
	 Section 4.1
	  	 Certain Definitions
	  	65
			
	 Section 4.2
	  	 Representations and Warranties on Environmental Matters
	  	66
			
	 Section 4.3
	  	 Covenants on Environmental Matters
	  	67
			
	 Section 4.4
	  	 Allocation of Risks and Indemnity
	  	68
			
	 Section 4.5
	  	 No Waiver
	  	70
			
	 ARTICLE V
	  	 CERTAIN PROPERTY MATTERS;
	  	70
			
	 Section 5.1
	  	 Leases
	  	70
			
	 Section 5.2
	  	 Lease Covenants and Limitations
	  	71
			
	 Section 5.3
	  	 Budgets
	  	72
			
	 Section 5.4
	  	 Books and Records
	  	73
			
	 Section 5.5
	  	 Notices
	  	73
			
	 Section 5.6
	  	 Management and Franchises
	  	73
			
	 Section 5.7
	  	 Establishment of Depository Accounts
	  	74
			
	 Section 5.8
	  	 Establishment and Funding of Reserves With Administrative Agent
	  	74
			
	 Section 5.9
	  	 Cash Flows; Interest on and Disbursements From Reserves
	  	78
			
	 Section 5.10
	  	 Pledge and Grant of Security Interest
	  	87
			
	 Section 5.11
	  	 Interest on Funds in Reserves
	  	87
			
	 ARTICLE VI
	  	 REPRESENTATIONS AND WARRANTIES
	  	88
			
	 Section 6.1
	  	 Organization, Power and Authority
	  	88
			
	 Section 6.2
	  	 Validity of Loan Documents
	  	88
			
	 Section 6.3
	  	 No Conflicts
	  	88
			
	 Section 6.4
	  	 Liabilities; Litigation
	  	89
			
	 Section 6.5
	  	 Taxes and Assessments
	  	89

  

 -viii- 

					
	 Section 6.6
	  	 Other Agreements; Defaults
	  	89
			
	 Section 6.7
	  	 Title
	  	89
			
	 Section 6.8
	  	 Compliance with Law
	  	90
			
	 Section 6.9
	  	 Location of Borrowers
	  	91
			
	 Section 6.10
	  	 ERISA
	  	91
			
	 Section 6.11
	  	 Forfeiture
	  	91
			
	 Section 6.12
	  	 Tax Filings
	  	91
			
	 Section 6.13
	  	 Solvency
	  	92
			
	 Section 6.14
	  	 Full and Accurate Disclosure
	  	92
			
	 Section 6.15
	  	 Flood Zone
	  	92
			
	 Section 6.16
	  	 Federal Reserve Regulations
	  	93
			
	 Section 6.17
	  	 Not a Foreign Person
	  	93
			
	 Section 6.18
	  	 Separate Lots
	  	93
			
	 Section 6.19
	  	 No Prior Assignment
	  	93
			
	 Section 6.20
	  	 Insurance
	  	93
			
	 Section 6.21
	  	 Use of Properties
	  	93
			
	 Section 6.22
	  	 Certificate of Occupancy; Licenses
	  	93
			
	 Section 6.23
	  	 Physical Condition
	  	93
			
	 Section 6.24
	  	 Boundaries
	  	94
			
	 Section 6.25
	  	 Survey
	  	94
			
	 Section 6.26
	  	 Filing and Recording Taxes
	  	94
			
	 Section 6.27
	  	 Single Purpose Entity
	  	94
			
	 Section 6.28
	  	 Management Agreements
	  	96
			
	 Section 6.29
	  	 Franchise Agreements
	  	96
			
	 Section 6.30
	  	 Investment Company Act
	  	96
			
	 Section 6.31
	  	 Interest Rate Cap Agreement
	  	97
			
	 Section 6.32
	  	 Terrorism and Money Laundering
	  	97
			
	 Section 6.32
	  	 Terrorism and Money Laundering
	  	97
			
	 ARTICLE VII
	  	 FINANCIAL REPORTING
	  	98
			
	 Section 7.1
	  	 Financial Statements
	  	98
			
	 Section 7.2
	  	 Accounting Principles
	  	100
			
	 Section 7.3
	  	 Other Information; Access
	  	100
			
	 Section 7.4
	  	 Format of Delivery
	  	101

  

 -ix- 

					
	 ARTICLE VIII
	  	 COVENANTS
	  	101
			
	 Section 8.1
	  	 Due on Sale and Encumbrance; Transfers of Interests
	  	101
			
	 Section 8.2
	  	 Taxes; Charges
	  	105
			
	 Section 8.3
	  	 Control; Management
	  	106
			
	 Section 8.4
	  	 Operation; Maintenance; Inspection
	  	107
			
	 Section 8.5
	  	 Taxes on Security
	  	107
			
	 Section 8.6
	  	 Legal Existence; Name; Etc.
	  	108
			
	 Section 8.7
	  	 Affiliate Transactions
	  	108
			
	 Section 8.8
	  	 Further Assurances
	  	108
			
	 Section 8.9
	  	 Estoppel Certificates
	  	108
			
	 Section 8.10
	  	 Notice of Certain Events
	  	108
			
	 Section 8.11
	  	 Indemnification
	  	108
			
	 Section 8.12
	  	 Payment for Labor and Materials
	  	109
			
	 Section 8.13
	  	 Alterations
	  	109
			
	 Section 8.14
	  	 Handicapped Access
	  	109
			
	 ARTICLE IX
	  	 EVENTS OF DEFAULT
	  	110
			
	 Section 9.1
	  	 Payments
	  	110
			
	 Section 9.2
	  	 Insurance
	  	110
			
	 Section 9.3
	  	 Single Purpose Entity
	  	111
			
	 Section 9.4
	  	 Taxes
	  	111
			
	 Section 9.5
	  	 Sale, Encumbrance, Etc.
	  	111
			
	 Section 9.6
	  	 Representations and Warranties
	  	111
			
	 Section 9.7
	  	 Other Encumbrances
	  	111
			
	 Section 9.8
	  	 Involuntary Bankruptcy or Other Proceeding
	  	111
			
	 Section 9.9
	  	 Voluntary Petitions, Etc.
	  	111
			
	 Section 9.10
	  	 Budgets; Financial Statements
	  	112
			
	 Section 9.11
	  	 Interest Rate Cap Agreement
	  	112
			
	 Section 9.12
	  	 Default Under Other Agreements
	  	112
			
	 Section 9.13
	  	 Enforcement of Mezzanine Pledge
	  	112
			
	 Section 9.14
	  	 Covenants
	  	112
			
	 ARTICLE X
	  	 REMEDIES
	  	112
			
	 Section 10.1
	  	 Remedies - Insolvency Events
	  	112
			
	 Section 10.2
	  	 Remedies - Other Events
	  	113

  

 -x- 

					
	 Section 10.3
	  	 Lender’s Right to Perform the Obligations
	  	113
			
	 Section 10.4
	  	 Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets
	  	114
			
	 ARTICLE XI
	  	 MISCELLANEOUS
	  	114
			
	 Section 11.1
	  	 Notices
	  	114
			
	 Section 11.2
	  	 Amendments Waivers Etc.
	  	116
			
	 Section 11.3
	  	 Limitation on Interest
	  	117
			
	 Section 11.4
	  	 Invalid Provisions
	  	118
			
	 Section 11.5
	  	 Reimbursement of Expenses
	  	118
			
	 Section 11.6
	  	 Approvals; Third Parties; Conditions
	  	118
			
	 Section 11.7
	  	 Lenders and Administrative Agent Not in Control; No Partnership
	  	119
			
	 Section 11.8
	  	 Time of the Essence
	  	119
			
	 Section 11.9
	  	 Successors and Assigns; Secondary Market Transactions
	  	119
			
	 Section 11.10
	  	 Renewal, Extension or Rearrangement
	  	121
			
	 Section 11.11
	  	 Waivers
	  	121
			
	 Section 11.12
	  	 Cumulative Rights
	  	122
			
	 Section 11.13
	  	 Exhibits and Schedules
	  	122
			
	 Section 11.14
	  	 Titles of Articles, Sections and Subsections
	  	122
			
	 Section 11.15
	  	 Promotional Material
	  	122
			
	 Section 11.16
	  	 Survival
	  	122
			
	 Section 11.17
	  	 WAIVER OF JURY TRIAL
	  	122
			
	 Section 11.18
	  	 Waiver of Punitive or Consequential Damages
	  	123
			
	 Section 11.19
	  	 Governing Law
	  	123
			
	 Section 11.20
	  	 Entire Agreement
	  	124
			
	 Section 11.21
	  	 Counterparts
	  	124
			
	 Section 11.22
	  	 Assignments and Participations
	  	124
			
	 Section 11.23
	  	 Brokers and Financial Advisors
	  	125
			
	 Section 11.24
	  	 Servicer
	  	125
			
	 ARTICLE XII
	  	 LIMITATIONS ON LIABILITY
	  	126
			
	 Section 12.1
	  	 Limitation on Liability
	  	126
			
	 Section 12.2
	  	 Limitation on Liability of the Administrative Agent’s and the Lenders’ Officers, Employees, etc.
	  	128

  

 -xi- 

					
			
	 ARTICLE XIII
	  	 THE ADMINISTRATIVE AGENT
	  	128
			
	 Section 13.1
	  	 Appointment, Powers and Immunities
	  	128
			
	 Section 13.2
	  	 Fees
	  	129
			
	 Section 13.3
	  	 Reliance by Administrative Agent
	  	129
			
	 Section 13.4
	  	 Defaults
	  	129
			
	 Section 13.5
	  	 Rights as a Lender
	  	130
			
	 Section 13.6
	  	 Standard of Care; Indemnification
	  	130
			
	 Section 13.7
	  	 Non-Reliance on Administrative Agent and Other Lenders
	  	130
			
	 Section 13.8
	  	 Failure to Act
	  	131
			
	 Section 13.9
	  	 Resignation of Administrative Agent
	  	131

  

 -xii- 

					
	 LIST OF EXHIBITS AND SCHEDULES

	 EXHIBIT A
	 	 -
	  	 LEGAL DESCRIPTION OF PROPERTIES

	 EXHIBIT B
	 	 -
	  	 FORM OF FIXED NOTE

	 EXHIBIT B
	 	 -
	  	 FORM OF FLOATING NOTE

	 EXHIBIT C
	 	 -
	  	 FORM OF ASSIGNMENT AND ACCEPTANCE

	 EXHIBIT D
	 	 -
	  	 ORGANIZATIONAL CHART OF BORROWER

	 EXHIBIT E
	 	 -
	  	 ALLOCATED LOAN AMOUNTS AND PERCENTAGES

	 EXHIBIT F
	 	 -
	  	 CONDEMNATION AND POTENTIAL CONDEMNATIONS

	 EXHIBIT G
	 	 -
	  	 INTEREST RATE CAP AGREEMENT

	 EXHIBIT H
	 	 -
	  	 FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT

	 EXHIBIT I
	 	 -
	  	 FORM OF MONTHLY OPERATING STATEMENT

	 EXHIBIT J
	 	 -
	  	 FORM OF REMAINDER OF YEAR QUARTERLY REPORT

	 EXHIBIT K
	 	 -
	  	 FORM OF TRAILING 12-MONTH QUARTERLY REPORT

	 EXHIBIT L
	 	 -
	  	 FORM OF SMITH TRAVEL RESEARCH REPORT

	 EXHIBIT M
	 	 -
	  	 FORM OF CAPEX DRAW REQUEST

	 EXHIBIT N
	 	 -
	  	 FORM OF CAPEX DRAW SUMMARY

	 EXHIBIT O
	 	 -
	  	 FORM OF JOB COST REPORT – CAPEX

			
	 SCHEDULE 1
	 	 -
	  	 COMMITMENTS

	 SCHEDULE 2
	 	 -
	  	 ADDITIONAL ADVANCE CONDITIONS

	 SCHEDULE 3
	 	 -
	  	 HOTEL ACCOMMODATIONS, ROOM NUMBERS AND TYPES, ETC.

	 SCHEDULE 4
	 	 -
	  	 INSURANCE CLAIMS

	 SCHEDULE 5
	 	 -
	  	 HOTEL OPERATING AGREEMENTS

	 	 	 	  	 5A- MANAGEMENT AGREEMENTS AND MANAGERS

	 	 	 	  	 5B- FRANCHISE AGREEMENTS

	 SCHEDULE 6
	 	 -
	  	 INITIAL APPROVED BUDGET

	 SCHEDULE 7
	 	 -
	  	 DEFERRED MAINTENANCE SCHEDULE

	 SCHEDULE 8
	 	 -
	  	 [INTENTIONALLY DELETED]

	 SCHEDULE 9
	 	 -
	  	 CAPITAL EXPENDITURE RESERVES

	 SCHEDULE 10
	 	 -
	  	 GROUND LEASES

	 SCHEDULE 11
	 	 -
	  	 OPERATING LEASES, MATERIAL LEASES AND OTHER LEASES AFFECTING PROPERTIES

	 SCHEDULE 12
	 	 -
	  	 ENVIRONMENTAL MATTERS

	 SCHEDULE 13
	 	 -
	  	 ENTITIES FILING CONSOLIDATED TAX RETURNS

	 SCHEDULE 14
	 	 -
	  	 MECHANIC’S LIENS, ETC.

  

 -xiii- 

  
 AMENDED AND RESTATED LOAN
AGREEMENT 
  
 This Amended and Restated Loan Agreement (this
“Agreement”) is entered into as of October 26, 2004 among SUNSTONE SH HOTELS L.L.C. (“Sunstone SH”), SUNSTONE OP PROPERTIES L.L.C. (“Sunstone OP”), SHP OGDEN LLC
(“SHP Ogden”), and SUNSTONE CHANDLER, LLC (“Sunstone Chandler”), each a Delaware limited liability company (each of Sunstone SH, Sunstone OP, SHP Ogden and Sunstone Chandler being
referred to herein as a “Borrower” and, collectively, as the “Borrowers”); each of the lenders that is a signatory hereto identified under the caption “LENDERS” on the signature pages
hereof together with any successor thereto as registered owner of all or any portion of such lender’s promissory note pursuant to the terms hereof (individually, a “Lender” and, collectively, the
“Lenders”); and MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a corporation organized under the laws of the Commonwealth of Massachusetts, as administrative agent for the Lenders (in such capacity, together with its successors
in such capacity, the “Administrative Agent”). 
  
 RECITALS 
  
 A. The Borrowers and an affiliate of
the Borrowers, Sunstone LAX Airport, LLC (“Sunstone LAX”), are parties to that certain Loan Agreement dated as of August 28, 2003 (as modified, amended, restated, renewed or replaced as of the date hereof, the
“Original Loan Agreement”), by and among such parties, the Lenders, and the Administrative Agent. 
  
 B. Pursuant to the terms of the Original Loan Agreement, the Lenders made a mortgage loan (the “Original Loan”) to the Borrowers
and to Sunstone LAX in the original principal amount of up to $399,500,000.00 (the “Original Loan Amount”). 
  
 C. At the time of the closing of the Original Loan, the Original Loan was secured, in part, by a portfolio of thirty-five (35) properties consisting of
hotels and related land and improvements, each of which was either owned in fee simple by a Borrower or was the subject of a ground leasehold estate held by a Borrower. 
  
 D. Prior to the date hereof, four (4) of such properties have been released by the Administrative Agent from the collateral
securing the Original Loan and a portion of the Original Loan has been prepaid in connection therewith. On or about the date hereof, the property ground-leased to Sunstone LAX was also released by the Administrative Agent from the collateral
securing the Original Loan and a portion of the Original Loan was prepaid in connection therewith. As of the date hereof, taking into account the releases and prepayments described in this recital and made pursuant to the terms of the Original Loan
Agreement, the current outstanding principal amount of the Original Loan is Three Hundred Three Million Eight Hundred Sixty-Four Thousand Three Hundred Twenty-One and 39/100 Dollars ($303,864,321.39) (the “Current Outstanding Principal
Amount”). 
  
 E. Contemporaneously with the execution and
delivery of this Agreement, the Borrowers and their respective affiliates (the “Sunstone Parties”) have caused to occur an initial public offering (the “IPO”) of shares in Sunstone Hotel Investors,
Inc., a Maryland corporation 

  

 
formed as a real estate investment trust (the “REIT”). Immediately upon the consummation of the IPO, the REIT has become the owner,
directly or indirectly, approximately eighty-four percent (84%) of the beneficial interest in each of the Borrowers. 
  
 F. In connection with and as a condition to the consummation of the IPO, the Borrowers, the Lenders and the Administrative Agent have agreed to
restructure the Original Loan in accordance with the terms and condition set forth herein. In connection with such restructuring: 
  
 1. Certain terms and conditions of the Original Loan shall be modified as set forth in this Agreement. 
  
 2. The Lenders shall make an additional loan advance to the
Borrowers, jointly and severally, in the original principal amount of Four Million Five Hundred Thousand and 00/100 Dollars ($4,500,000.00) (the “Additional Advance”). 
  
 3. The terms and conditions governing the aggregate amount
of the loans made by the Lenders to the Borrowers, which consist of the Current Outstanding Principal Amount loaned to the Borrowers pursuant to the Original Loan Agreement and the Additional Advance loaned to the Borrowers as of the date hereof,
including, without limitation, the interest rates applicable thereto, the maturity thereof, and permissibility of prepayments in connection therewith, all shall be as set forth in this Agreement. 
  
 4. Each of the Borrowers has agreed to remain jointly and
severally liable for the full amount of all such loans. 
  
 G.
Each of the Borrowers, each of the Lenders, and the Administrative Agent desire to amend and restate the Original Loan Agreement in its entirety. 
  
 NOW, THEREFORE, in consideration of the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and agreed, the parties hereby agree to be bound as follows: 
  
 ARTICLE I 
  
 CERTAIN
DEFINITIONS 
  
 Section 1.1 Certain Definitions.
As used herein, the following terms have the meanings indicated: 
  
 (1) “Access Laws” has the meaning assigned in Section 8.14(a). 
  
 (2) “Acceleration” means the acceleration of the Loans upon and after the occurrence of an Event of Default, and
the declaration by the Administrative Agent on behalf of the Lenders that the entire amount of the Loans, including (without limitation) all accrued interest, Prepayment Fees and other amounts due and owing in connection therewith are made or deemed
to be made immediately due and payable. 
  

 -2- 

 (3) “ACH” has the meaning assigned in Section 2.5(1)(a).

  
 (4) “Additional Advance”
has the meaning set forth in the Recitals to this Agreement. 
  
 (5) “Additional Costs” has the meaning assigned in Section 2.6(1)(a). 
  
 (6) “Adjusted Libor Rate” means, for any Interest Period for any Floating Loan, a rate per annum (rounded upwards,
if necessary, to the nearest 1/16 of one percent (1%)) determined by the Administrative Agent to be equal to the Libor Base Rate for such Interest Period divided by 1 minus the Reserve Requirement (if any) for such Interest Period.

  
 (7) “Administrative
Agent” has the meaning assigned in the introductory paragraph on page one of this Agreement. 
  
 (8) “Administrative Agent Lost Servicing Fee” means, with respect to any prepayment of the Fixed Loans during the
Closed Prepayment Period, whether voluntarily made by any Borrower or made as a result of an Acceleration or otherwise, other than a prepayment made by any Borrower pursuant to Section 3.3(3) in the event Net Proceeds are not made available
for the Restoration of an Individual Property, an amount equal to the product of (a) the amount of such prepayment multiplied by (b) 0.015% multiplied by (c) the number of months (either full or partial) remaining until the expiration of the Closed
Prepayment Period. 
  
 (9)
“Affiliate” means (a) any corporation in which any Borrower Party or any Person that directly or indirectly owns a beneficial interest in any Borrower Party, directly or indirectly owns or Controls more than ten percent (10%)
of the beneficial interest of such corporation, (b) any partnership, joint venture or limited liability company in which any Borrower Party, or any Person that directly or indirectly owns a beneficial interest in any Borrower Party, is a partner,
joint venturer or member, (c) any trust in which any Borrower Party, or any Person that directly or indirectly owns a beneficial interest in any Borrower Party, is a trustee or beneficiary, (d) any other Person which directly or indirectly Controls
any Borrower Party, (e) any partner, shareholder, director, officer, member, manager or employee of any Borrower Party, or any Person that directly or indirectly owns a beneficial interest in any Borrower Party, or (f) any Person related by birth,
adoption or marriage to any partner, shareholder, director, officer, member, manager, or employee of any Borrower Party, or any Person that directly or indirectly owns a beneficial interest in any Borrower Party. 
  
 (10) “Agreement” means this Amended
and Restated Loan Agreement, as further amended from time to time. 
  
 (11) “Allocated Loan Amount” means, for each Individual Property (a) as of the Modification Closing Date, the amount set forth as the “Allocated Loan Amount” on Exhibit
E and (b) after a Release or other prepayment, the revised amount calculated in accordance with Section 2.5(2)(f) or Section 2.7(4)(a), as applicable. The sum of the Allocated Loan Amounts for all of the Properties shall at
all times equal the aggregate principal amount advanced by Lenders and outstanding under the Loans. 
  

 -3- 

 (12) “Allocated Percentage” means, for each Individual Property
(a) as of the Modification Closing Date, the percentage set forth as the “Allocated Percentage” on Exhibit E and (b) after a Release or other prepayment, the revised percentage calculated in accordance with Section 2.5(2)(f)
or Section 2.7(4)(a), as applicable. The sum of the Allocated Percentages for all of the Properties shall at all times equal one hundred percent (100%). 
  
 (13) “Alternate Interest Rate” means, for any Floating Interest Period and for any
Floating Notes, a rate per annum equal to the sum of the Prime Rate plus the Prime Rate Spread applicable to such Floating Notes. 
  
 (14) “Alternate Interest Rate Loans” means Floating Loans that bear interest at the Alternate Interest Rate
applicable to such Floating Loans, if any. 
  
 (15) “Annual Budget” has the meaning assigned in Section 5.3(2). 
  
 (16) “Applicable Lending Office” means, for each Lender, the “Lending Office” of such Lender (or of an
affiliate of such Lender) designated on the respective signature pages hereof or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrowers as the
office by which its Loans are to be made and maintained, which shall at all times be maintained in the United States. 
  
 (17) “Appraised Value” means with respect to any Individual Property at any time, the value of such Individual
Property, as most recently determined by an appraisal, reasonably acceptable to the Administrative Agent in form and substance, and prepared by an appraiser holding the MAI designation that is reasonably acceptable to the Administrative Agent, which
appraised value shall be calculated using methodology consistent with that set forth in the appraisal delivered in connection with the funding of the Loans. Such appraisers and appraisals shall satisfy the requirements of the Uniform Standards of
Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Foundation. 
  
 (18) “Approved Budget” means (a) if no Cash Trap Period exists at the time of delivery of the Annual Budget to the
Administrative Agent pursuant to the Section 5.3(2), the Annual Budget prepared by the Borrowers or (ii) if a Cash Trap Period exists at the time of delivery of the Annual Budget to the Administrative Agent pursuant to the Section
5.3(2), the annual budget approved by the Administrative Agent pursuant to Section 5.3(3). 
  
 (19) “Approved Financial Institution” means a financial institution reasonably selected by or approved by the
Administrative Agent. 
  
 (20)
“Approved Franchise Agreements” means those agreements specified on Schedule 5B. 
  
 (21) “Assignment and Acceptance” means an Assignment and Acceptance, duly executed by the parties thereto, in
substantially the form of Exhibit C hereto and consented to by the Administrative Agent in accordance with Section 2.1(3)(d). 
  

 -4- 

 (22) “Assignments of Leases and Rents” means each of those
certain Assignments of Leases and Rents, dated as of August 28, 2003, by each Borrower and Operator in favor of the Administrative Agent (on behalf of the Lenders), as amended by a certain modification agreement dated as of the date hereof by each
Borrower, each Operator and the Administrative Agent. 
  
 (23) “Assignments of Licenses” means that certain Amended and Restated Assignment of Licenses, Permits and Approvals and Contracts, Agreements and Equipment Leases, dated the date hereof, by each Borrower, and each
Operator in favor of the Administrative Agent (on behalf of the Lenders). 
  
 (24) “Award” has the meaning assigned in Section 3.2. 
  
 (25) “Bankruptcy Party” has the meaning assigned in Section 9.8. 
  
 (26) “Basel Accord” means the
proposals for risk-based capital framework described by the 1988 “International Convergence of Capital Measurement and Capital Standards,” Basel Committee Publications No. 4 (Basel I Capital Accord), as amended, modified and supplemented
and in effect from time to time, or any applicable law, rule, regulation, policy, statement or recommendation (whether or not having the force of law) as a direct or indirect consequence of, in connection with or with a view to the matters discussed
in relation to the change, amendment and/or replacement of the foregoing agreement. 
  
 (27) “Books and Records” has the meaning assigned in Section 5.4(1). 
  
 (28) “Borrower” has the meaning
assigned in the introductory paragraph on page one of this Agreement and is subject to the rules of interpretation set forth in Section 1.3 hereof. 
  
 (29) “Borrower Party” means each of the Borrowers; each of the Operators; Sunstone; Sunstone Holdco; Sunstone
Hotel TRS; and any of their respective successors or permitted assigns from time to time. 
  
 (30) “Business Day” means a day other than (a) a Saturday, a Sunday, or a legal holiday on which national banks
located in the State of New York or the Commonwealth of Massachusetts are not open for general banking business and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a Conversion of or into, or an
Interest Period for, a Floating Loan, a day on which dealings in Dollar deposits are not carried out in the London interbank market. 
  
 (31) “Business Plan” has the meaning assigned in Section 5.3(1)(c). 
  
 (32) “Capital Budget” has the
meaning assigned in Section 5.3(1)(b). 
  
 (33) “Capital Expenditure Reserve” has the meaning assigned in Section 5.8(2). 
  
 (34) “Capital Improvement” has the meaning assigned in Section 5.9(3)(a). 
  

 -5- 

 (35) “Capital Lease” means each of those certain leases
designated as “Capital Leases” on Schedule 11 hereto with respect to the Properties and any other leases that would be deemed “capital leases” pursuant to GAAP or the Uniform System of Accounts. 
  
 (36) “Cash Trap Period” means a
period commencing when DSCR is less than Minimum DSCR and continuing until (a) DSCR has equaled or exceeded Minimum DSCR for six (6) consecutive Loan Months and (b) no Event of Default (or event or condition which with the giving of notice or the
passage of time would constitute an Event of Default) exists at the conclusion of such period of six (6) consecutive Loan Months. 
  
 (37) “Casualty Consultant” has the meaning assigned in Section 3.3(2)(iii). 
  
 (38) “Casualty Retainage” has the
meaning assigned in Section 3.3(2)(iv). 
  
 (39) “Closed Prepayment Period” means the period commencing on the Modification Closing Date and ending on [April 30], 2007. 
  
 (40) “Closing Date” means the Original Closing Date or the Modification Closing
Date, as applicable. 
  
 (41)
“Code” means 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. 
  
 (42)
“Collateral Assignment of Interest Rate Cap Agreement” means that certain Collateral Assignment of Interest Rate Cap Agreement, dated the Original Closing Date, among the Borrowers, Sunstone LAX and the Administrative Agent
(on behalf of the Lenders). 
  
 (43)
“Commercially Reasonable Rates” has the meaning assigned in Section 3.1(1)(k). 
  
 (44) “Commitment” means, as to each Lender, the obligation of such Lender to make a Loan in a principal amount up
to but not exceeding the amount set opposite the name of such Lender on Schedule 1 under the caption “Commitment” or, in the case of a Person that becomes a Lender pursuant to an assignment permitted under Section 11.22. as
specified in the respective instrument of assignment pursuant to which such assignment is effected. The aggregate principal amount of the Commitments of the date hereof is Three Hundred Eight Million Three Hundred Sixty-Four Thousand Three Hundred
Twenty-One and 39/100 ($308,364,321.39), which the parties hereto acknowledge has been fully advanced as of the date of this Agreement. 
  
 (45) “Concentration Account” has the meaning assigned in Section 5.7(2). 
  
 (46) “Condemnation” has the meaning
assigned in Section 3.2. 
  
 (47)
“Condemnation Limit” means, with respect to any Individual Property, the lesser of (a) $500,000 or (b) the amount equal to ten percent (10%) of the Allocated Loan Amount of such Individual Property. 
  

 -6- 

 (48) “Condemnation Proceeds” has the meaning assigned in
Section 3.3(2). 
  
 (49)
“Continue”, “Continuation” and “Continued” refer to the continuation pursuant to Section 2.2 of a Floating Loan from one Floating Interest Period to the next Floating Interest
Period for such Floating Loan. 
  
 (50)
“Control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “Controlling” or “Controlled” have meanings correlative to the foregoing. 
  
 (51) “Controlling Lenders” means the Lenders holding at least 66 2/3% of the aggregate outstanding principal
amount of the Loans. 
  
 (52)
“Convert”, “Conversion” and “Converted” refer to a conversion pursuant to the terms of this Agreement of one Type of Loans into another Type of Loans, to the extent applicable.

  
 (53) “Current Outstanding
Principal Amount” has the meaning set forth in the Recitals to this Agreement. 
  
 (54) “Debt” means, as to the relevant Person, without duplication: (a) all indebtedness of such Person for
borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase price of property for which such Person or its assets is liable, (b) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for
which such Person would be liable, if such amounts were advanced under the credit facility, (c) all indebtedness guaranteed by such Person, directly or indirectly, (d) all obligations under leases that constitute capital leases for which such Person
is liable, and (e) all obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is liable contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such Person otherwise assures a creditor against loss. 
  
 (55) “Debt Service” means, as of any date of calculation, the aggregate payments of interest and, if applicable,
principal due under the Loans for the period in question. 
  
 (56) “Decisionmaking Control” means, in reference to any Person that is the owner of equity interests in any entity, that such Person has control over all management and other decisions
relating to the business and operations of such entity, including, without limitation, all day-to-day management decisions and all decisions of an extraordinary nature, including decisions relating to the sale and refinancing of assets; dissolution,
sale of all or substantially all of the assets of such entity; the reorganization of such entity; and bankruptcy, receivership, conservatorship, or insolvency proceedings relating to such entity. 
  
 (57) “Default Rate” means the lesser
of (a) the maximum rate of interest allowed by applicable law and (b) five percent (5%) per annum in excess of (i) with respect to Fixed Loans, the Fixed Interest Rate, (ii) with respect to Floating Loans, the applicable Floating 

  

 -7- 

 
Interest Rate and (iii) with respect to Alternate Interest Rate Loans, if any, the Alternate Interest Rate. 
  
 (58) “Deferred Maintenance Reserve”
has the meaning assigned in Section 5.8(4). 
  
 (59) “Deposit Account Control Agreement” means an agreement substantially in the form of Exhibit H among the applicable Borrowers (or Operators), the Administrative Agent and the applicable Approved Financial
Institution which shall obligate said Approved Financial Institution to allow only the Administrative Agent to make withdrawals therefrom following said Approved Financial Institution’s receipt of notice from the Administrative Agent that an
Event of Default has occurred hereunder. 
  
 (60)
“Depository Account” means a depository account with an Approved Financial Institution approved by the Administrative Agent and maintained in the names of the applicable Borrowers (or Operators) and the Administrative Agent,
and which shall be subject to a Deposit Account Control Agreement. Each Operating Account and the Concentration Account shall be a Depository Account. 
  
 (61) “Dollars” and “$” means lawful money of the United States of America. 
  
 (62) “DSCR” means, as of any date of
calculation, the ratio of (a) the Trailing Twelve-Month NOI for all of the Properties then remaining as collateral for the Loans to (b) the anticipated Debt Service on the Loans for the twelve-month period immediately succeeding such date of
calculation (assuming that, for purposes of calculating anticipated Debt Service on the Floating Loans, the Floating Interest Rate then in effect shall remain in effect for such succeeding twelve-month period), provided, however, that if the
Floating Interest Rate is greater than the strike rate of the Interest Rate Cap then in effect, the strike rate shall be used to calculate the anticipated Debt Service. The calculation of DSCR shall not include any Net Operating Income or Debt
Service attributable to any Individual Property that was included as collateral for the Loans for all or any portion of the twelve-month period in question but was released from the lien of the Mortgages prior to the date of such calculation.

  
 (63) “Environmental Laws”
has the meaning assigned in Section 4.1(1). 
  
 (64) “ERISA” has the meaning assigned in Section 6.10(1). 
  
 (65) “Event of Default” has the meaning assigned in Article 9. 
  
 (66) “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
  
 (67) “Extension Fee” has the meaning assigned in Section 2.8(3)(d). 
  
 (68) “Extension Right” has the meaning assigned in Section 2.8(1). 
  
 (69) “FF&E” means all furnaces,
boilers, machinery, motors, compressors, elevators, fittings, piping, conduits, ducts, air conditioners, partitions, mechanical, electrical and 

  

 -8- 

 
HVAC systems and apparatus of every kind and all other fixtures, equipment and other personalty owned by any Borrower or any Operator and located on,
attached, affixed or incorporated into any Individual Property including, without limitation, all seating, tables, beds, draperies, cabinetry, chairs, mirrors, nightstands, furniture, furniture accessories, bathroom accessories, floor coverings,
curtains, lighting, appliances, lighting fixtures, tableware, table accessories, kitchen and laundry equipment, audio-visual equipment, wall decorations, office furniture, office and conference accessories, television wiring and jacks, and other
miscellaneous furniture, fixtures and equipment now or hereafter located at or on any Individual Property and used in the operation of the Improvements, including, without limitation, all replacements thereof. 
  
 (70) “Fifty Percent Rate” has the
meaning assigned in Section 3.1(1)(k). 
  
 (71) “Fiscal Year” means, with respect to any Person, the twelve-month fiscal period in which such Person keeps its books, records and accounts. 
  
 (72) “Fitch” means Fitch, Inc. and any successor thereto. 
  
 (73) “Fixed Interest Period” for the
Fixed Loans means a calendar month. 
  
 (74)
“Fixed Interest Rate” has the meaning assigned in Section 2.2(1)(a). 
  
 (75) “Fixed Lender” means any Lender which is the holder of a Fixed Note and any successor registered holder of a
Fixed Note pursuant to the terms hereof. 
  
 (76)
“Fixed Loans” means Loans that bear interest at the Fixed Interest Rate. 
  
 (77) “Fixed Loan Amount” means, as of the date hereof, $250,000,000. 
  
 (78) “Fixed Loan Prepayment Fee”
means: 
  
 (a) with respect to any prepayment
of the Fixed Loans made by the Borrowers during the Closed Prepayment Period in connection with a Release of an Individual Property in accordance with the provisions of Section 2.7(2), an amount equal to the greater of (i) one percent (1%) of
the principal amount of the Fixed Loans being prepaid or (ii) the Fixed Loan Yield Maintenance Amount, or 
  
 (b) with respect to any other prepayment of the Fixed Loans made or deemed made by the Borrowers (including, without limitation, any
prepayment of the Fixed Loans as a result of Acceleration), an amount equal to the greater of (i) three-quarters of one percent (0.75%) of the principal amount of the Fixed Loans being prepaid or (ii) the Fixed Loan Yield Maintenance Amount.

  
 (79) “Fixed Loan Reinvestment
Yield” means either: 
  
 (a) upon a
prepayment of the Fixed Loans in any circumstance other than as a result of Acceleration during the Closed Prepayment Period, the sum of 50 basis points and the yield to maturity of a U.S. Treasury issue which has the 

  

 -9- 

 
closest maturity (month and year) to the Maturity Date of the Fixed Loans, as quoted in The Wall Street Journal published on the Business Day
following the second (2nd) day immediately preceding the date for prepayment as set forth in Borrower’s notice of its intention to prepay, but if said second (2nd) day is not a Business Day, then as quoted on the following Business Day. If
there exists more than one Treasury issue of equal maturity, then the issue having the market yield that differs least from the Interest Rate on the Fixed Loans will be used in the calculations. If The Wall Street Journal is not in
publication on the applicable date, or ceases to publish such U.S. Treasury issue yield, then any other publication acceptable to the Administrative Agent quoting daily market yields for U.S. Treasury issues will be used. The term “Business
Day” as used herein shall mean any day other than a Saturday, Sunday, or other day on which the New York Stock Exchange is not open for business, or 
  
 (b) upon a prepayment of the Fixed Loans during the Closed Prepayment Period resulting from Acceleration, an amount equal to the
difference between the amount calculated in subsection (a) above minus two (2) percentage points, but in no event less than zero. 
  
 (80) “Fixed Loan Yield Maintenance Amount” means an amount equal to the present value of the series of Monthly
Payment Differentials from the date of prepayment of the Fixed Loans to the Maturity Date of the Fixed Loans, discounted at the Fixed Loan Reinvestment Yield on a monthly basis. 
  
 (81) “Fixed Notes” means the promissory notes evidencing the Fixed Loans of even
date herewith substantially in the form of Exhibit B-1 hereto and all promissory notes delivered in substitution or exchange therefor, in each case as the same may be modified, amended or expended from time to time. 
  
 (82) “Floating Interest Period” for
the Floating Loans means (i) the initial period commencing on and including the Modification Closing Date to and including October 31, 2004, and (ii) thereafter, the one, three, or six month period selected at the end of the immediately preceding
Floating Interest Period by Borrower in accordance with Section 2.2(2); provided, however, that each such Floating Interest Period shall commence on the date such Floating Loan is made or Converted from a Loan of another Type, or, in the
event of a Continuation, the last day of the next preceding Floating Interest Period, and shall end on the first Business Day of the next Floating Interest Period, and, provided further that, if any such Floating Interest Period would otherwise end
after the Maturity Date, such Floating Loan shall end on the Maturity Date. In no event may Borrower have more than one Floating Interest Period in respect of Floating Loans from all Lenders outstanding at any one time and to the extent any Floating
Loan does not qualify for such Floating Interest Period pursuant to the terms of this Agreement, such Floating Loan shall bear interest at the Alternative Interest Rate. 
  
 (83) “Floating Interest Rate” has the meaning assigned in Section 2.2(1)(b).

  
 (84) “Floating Lender”
means any Lender which is the holder of a Floating Note and any successor registered holder of a Floating Note pursuant to the terms hereof. 
  

 -10- 

 (85) “Floating Loans” means Loans that bear interest at the
Floating Interest Rate or Alternate Interest Rate, as applicable. 
  
 (86) “Floating Loan Amount” means, as of the date hereof, $58,364,321.39. 
  
 (87) “Floating Notes” means the promissory notes evidencing the Floating Loans of even date herewith substantially
in the form of Exhibit B-2 hereto and all promissory notes delivered in substitution or exchange therefor, in each case as the same may be modified, Converted, amended or expended from time to time. 
  
 (88) “Franchise Agreement” means
each of those certain franchise agreements specified on Schedule 5B hereto. 
  
 (89) “Franchisor Warning Event” means the receipt by the Administrative Agent of written notice from a franchisor
under a Franchise Agreement that an Individual Property is not being maintained in accordance with the requirements of such Franchise Agreement or that a default by the franchisee otherwise exists under the terms of such Franchise Agreement.

  
 (90) “Funds Release
Limit” means, with respect to any Individual Property, the lesser of (a) $500,000 or (b) the amount equal to five percent (5%) of the Allocated Loan Amount of such Individual Property. 
  
 (91) “GAAP” has the meaning assigned
in Section 7.2. 
  
 (92)
“Ground Lease Rent Reserve” has the meaning assigned in Section 5.8(3). 
  
 (93) “Hazardous Materials” has the meaning assigned in Section 4.1(2). 
  
 (94) “Hazardous Materials Indemnity
Agreement” means that certain Hazardous Materials Indemnity Agreement dated the date hereof, executed by Sunstone, Sunstone Holdco and each Borrower for the benefit of the Administrative Agent (on behalf of the Lenders). 
  
 (95) “Improvements” has the meaning
assigned to such term in the related Mortgage with respect to each Individual Property. 
  
 (96) “Indebtedness” has the meaning assigned to such term in the related Mortgage with respect to each Individual
Property. 
  
 (97) “Individual
Property” means a piece or parcel of real property and the improvements thereon owned by a Borrower and encumbered by a Mortgage, together with all rights pertaining to such property and improvements, as more particularly described in
the granting clauses of each such Mortgage and referred to therein as the “Mortgaged Property”, unless released pursuant to Section 2.7 hereof. 
  

 -11- 

 (98) “Initial Interest Rate Cap Agreement” has the meaning
assigned in Section 6.31. 
  
 (99)
“Institutional Investors” means each of the following Persons which, in the reasonable judgment of the Administrative Agent is a reputable institutional investor with substantial experience in real estate lending and
originating or investing in mortgage loans similar to the Loans, and (together with its affiliates) has assets of at least $500,000,000 including (i) any bank, trust company or national banking association, acting for its own account or in a
fiduciary capacity, (ii) any insurance company, (iii) any pension, endowment or retirement fund, (iv) any investment company or mutual fund, (v) any government, any public employees’ pension or retirement system or any other government agency
supervising the investment of public funds, (vi) any “real estate investment trust” as defined in Section 856 of the Code, or (vii) any finance company or credit company. 
  
 (100) “Insurance Premiums” has the meaning assigned in Section 3.1(2).

  
 (101) “Insurance
Proceeds” has the meaning assigned in Section 3.3(2). 
  
 (102) “Interest Period” means (a) with respect to a Fixed Loan, the Fixed Interest Period and (b) with respect to a Floating Loan, the Floating Interest Period. 
  
 (103) “Interest Rate” means the
applicable Fixed Interest Rate, Floating Interest Rate or Alternate Interest Rate, in each case as applicable. 
  
 (104) “Interest Rate Cap Agreement” means the Initial Interest Rate Cap Agreement and each Replacement Interest
Rate Cap Agreement meeting the criteria set forth in Section 6.31. 
  
 (105) “IPO” has the meaning set forth in the Recitals to this Agreement. 
  
 (106) “Leases” means all leases (including the Operating Leases and the Capital Leases), subleases, occupancy
agreements, licenses, concessions, rental contracts and other agreements (written or oral) now or hereafter existing relating (i) to any personal property utilized in connection with the operation of any Individual Property or (ii) the use or
occupancy of any Improvements located on any Individual Property, together with all guarantees, letters of credit and other credit support, modifications, extensions and renewals thereof, whether before or after the filing by or against a Borrower
of any petition of relief under 11 U.S.C. § 101 et. seq., and all related security and other deposits. All of the Leases as of the date hereof are specified on Schedule 11 attached hereto. 
  
 (107) “Legal Requirements” means,
with respect to each Individual Property, federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of governmental authorities affecting such Individual
Property or any part thereof or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to any Borrower, at any time in force affecting such Individual Property or any part thereof, including, without limitation, 

  

 -12- 

 
any which may (a) require repairs, modifications or alterations in or to such Individual Property or any part thereof, or (b) any way limit the use and
enjoyment thereof. 
  
 (108)
“Lender” and “Lenders” have the meanings assigned, respectively, in the introductory paragraph on page one of this Agreement. 
  
 (109) “Libor Base Rate” means, for any Interest Period for any Floating Loan, the
Dollar rate (rounded upward to the nearest one sixteenth (1/16) of one percent (1%)) per annum appearing on Page 3750 (i.e., the LIBOR page) of the Dow Jones Markets (Telerate) Service (or on any successor or substitute page of such Service) at
approximately 11:00 a.m. London time on the date two Business Days prior to the first day of such Interest Period as the rate for the offering of Dollar deposits having a term closest in duration to such Interest Period, provided that (i) if such
rate does not appear on such page, or if such page shall cease to be publicly available, or if the information contained on such page, in the reasonable judgment of the Administrative Agent shall cease accurately to reflect the rate offered by
leading banks in the London interbank market as reported by any publicly available source of similar market data selected by the Administrative Agent, the Libor Base Rate for such Interest Period shall be determined from such substitute financial
reporting service as the Administrative Agent in its reasonable discretion shall determine and (ii) if the Dow Jones Markets (Telerate Service) publishes more than one such rate, the average of such rates shall apply. 
  
 (110) “Libor Breakage Fee” for the
Floating Loans means the following, discounted to present value at the Libor Base Rate: 
 ((R-T) x P) x D, 
 (360)       
  
 Where: 

	 	1.	R = The Floating Interest Rate for the Floating Loans on the prepayment date 

	 	2.	T = Libor Base Rate 

	 	3.	P = The outstanding principal amount of the Floating Loans on the prepayment date 

	 	4.	D = Number of days remaining in the Interest Rate Period 

  
 (111) “Licenses” has the meaning assigned in Section 6.22. 
  
 (112) “Lien” means any interest, or
claim thereof, in any Individual Property securing an obligation owed to, or a claim by, any Person other than the owner of the Individual Property, whether such interest is based on common law, statute or contract, including the lien or security
interest arising from a deed of trust, mortgage, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The term “Lien” shall include reservations,
exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting an Individual Property. 
  

 -13- 

 (113) “Limited Guaranty” means that certain Limited Guaranty and
Indemnity Agreement, dated the date hereof, by Sunstone and Sunstone Holdco in favor of the Administrative Agent (on behalf of the Lenders). 
  
 (114) “Loan Documents” means: (a) this Agreement, (b) the Notes, (c) the Mortgages, (d) the Assignments of Leases
and Rents, (e) the Assignments of Licenses, (f) the Security Agreement, (g) the Limited Guaranty, (h) the Hazardous Materials Indemnity Agreement, (i) the Subordination of Management Agreements, (j) the Stock Pledge, (k) the Membership Pledges, (l)
the Uniform Commercial Code Financing Statements naming any of the Borrowers or Operators as debtor and the Administrative Agent as secured party, (m) the Interest Rate Cap Agreement, (n) the Collateral Assignment of Interest Rate Cap Agreement and
any collateral assignment of interest rate cap agreement hereafter executed by the Borrowers in favor of the Administrative Agent, (o) the Multi-Party Agreement, (p) all other documents now or hereafter executed by any of the Borrowers, Operators or
Manager or any other Person to evidence or secure the payment of the Indebtedness or the performance of the Borrowers or otherwise executed by a Person affiliated with any of the Borrowers in connection with this Agreement, the Notes, or the
Mortgages, and (q) all amendments, modifications, restatements, extensions, renewals and replacements of the foregoing. 
  
 (115) “Loan Month” means any full calendar month during the term of this Agreement, with the first Loan Month
being November 2004 and the 13th Loan Month being November 2005. The first Loan Month shall be deemed to include the partial month commencing on the date of this Agreement. 
  
 (116) “Loan-to-Value Ratio” means, as of the date such calculation is being made, a
percentage represented by a fraction, the numerator of which is the outstanding principal balance of the Loans and the denominator of which is the quotient obtained by dividing the Trailing Twelve Month NOI as of such date by ten and one-half
percent (10.5%). The Loan-to-Value Ratio shall be calculated by the Administrative Agent on behalf of the Lenders. 
  
 (117) “Loan Year” means the period between the date hereof and October 31, 2005 for the first Loan Year and the
period between each succeeding November 1 and October 31 until the Maturity Date. 
  
 (118) “Loans” means the Fixed Loans, the Floating Loans and the Alternate Interest Rate Loans, if any. 

 
 (119) “Losses” means all claims,
suits, liabilities (including without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive damages,
foreseeable and unforeseeable consequential damages of whatever kind or nature (including but not limited to reasonable out-of-pocket attorneys’ fees, costs and expenses). 
  
 (120) “Management Agreement” means, collectively, (a) the Master Management
Agreement and (b) each of those certain Hotel Management Agreements dated as of October 26, 2004 between an Operator and Manager as specified on Schedule 5A hereto. 
  

 -14- 

 (121) “Manager” means (a) with respect to all of the Properties
except for the Property located in Chandler, Arizona, Sunstone Hotel Properties, Inc., a Colorado corporation, and its successors and permitted assigns, and (b) with respect to the Property located in Chandler, Arizona, Heavlin Management Company,
Inc., a Georgia corporation. 
  
 (122)
“Master Management Agreement” means that certain Master Agreement dated as of October 26, 2004 by and among Manager (of all of the Properties other than the Property located in Chandler, Arizona), the Operators and certain
other Affiliates of Sunstone. 
  
 (123)
“Material Capital Lease” means any Capital Lease with annual rent in excess of $10,000. 
  
 (124) “Material Lease” means (a) any Lease of any portion of an Individual Property with annual rent in excess of
$10,000 where the premises leased thereunder are used or intended to be used as a restaurant, cafeteria or other food service or beverage establishment, (b) any Lease of any portion of an Individual Property under which the total rent payable by the
tenant (including base rent, percentage rent and any other incremental rent components) accounts for more than five percent (5%) of the total Operating Revenues of the Individual Property affected by such Lease, (c) any Operating Lease, or (d) any
other Lease which is identified as a “Material Lease” as of the date hereof on Schedule 11 attached hereto. 
  
 (125) “Maturity Date” means (a) with respect to the Fixed Loans, May 1, 2011, (b) with respect to the Floating
Loans, (i) November 1, 2007, or (ii) November 1, 2008 if the Floating Loans have been extended for the first one-year extension option pursuant to the provisions of Section 2.8, or (iii) November 1, 2009 if the Floating Loans have been
extended for the second one-year extension option pursuant to the provisions of Section 2.8, or (c) any earlier date on which all of the Loans are required to be paid in full, by Acceleration or otherwise, under this Agreement or any of the
other Loan Documents. 
  
 (126)
“Maximum Loan to Value Ratio” means seventy-five percent (75%) during the first five (5) Loan Years, seventy percent (70%) during the sixth (6th) Loan Year, and sixty-eight percent (68%) from the first day of the seventh
(7th) Loan Year to the Maturity Date. 
  
 (127)
“Membership Pledge” means each of those certain Limited Liability Company Interest Pledge and Security Agreements (together with the attachments thereto and consents, certificates, powers and other materials referred to
therein), dated the date hereof, relating to the pledges of membership interests to the Administrative Agent (on behalf of the Lenders) from (a) Sunstone as pledgor regarding its pledge of its 100% equity interest in Sunstone Holdco, and (b)
Sunstone Holdco as pledgor regarding its pledges of its 100% equity interests in each Borrower. 
  
 (128) “Mezzanine Obligation” means any obligation of the REIT or Sunstone under a loan, guaranty or other
contractual undertaking which is secured, either in whole or in part, by a Mezzanine Pledge. 
  
 (129) “Mezzanine Pledge” means a pledge of either direct or indirect equity interests in either Sunstone or
Sunstone Hotel TRS by the REIT, by Sunstone, or by any other 

  

 -15- 

 
Person which may hold, whether directly or indirectly, either Decisionmaking Control over Sunstone or Sunstone Hotel TRS or a majority of the outstanding
equity interests in Sunstone or Sunstone Hotel TRS. 
  
 (130) “Minimum DSCR” means a ratio of 1.40 to 1.00. 
  
 (131) “Modification Closing Date” means the date of this Agreement. 
  
 (132) “Monthly Operating Statement”
has the meaning assigned in Section 7.1(2). 
  
 (133) “Monthly Payment Differential” means, in connection with a prepayment of outstanding principal on the Fixed Loans, the difference between (a) the amount of monthly interest (without
amortization) which would be earned on the amount of such prepayment if it were to be invested at the Fixed Interest Rate minus (b) the amount of monthly interest (without amortization) which would be earned on the amount of such prepayment if it
were to be invested at the Fixed Loan Reinvestment Yield, but in no event less than zero. 
  
 (134) “Moody’s” means Moody’s Investor Services, Inc. and any successor thereto. 
  
 (135) “Mortgage” means with respect
to each Individual Property, the Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, or the Leasehold Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, as applicable, each dated as of August 28, 2003 and executed by each of the Borrowers in favor of the Administrative Agent (on behalf of the Lenders), covering such Individual Property, as
amended by a certain modification agreement dated as of the date hereof by each Borrower and the Administrative Agent, and any further amendments, modifications, renewals, substitutions or replacements thereof. “Mortgages”
means all of the Mortgages on all of the Properties listed in Schedule A hereto, which Mortgages secure the Loans on a cross-defaulted, cross-collateralized basis. 
  
 (136) “Multi-Party Agreement” means that certain Amended and Restated Multi-Party
Agreement, dated the date hereof, among the Borrowers, the Operators, and the Administrative Agent. 
  
 (137) “Net Cash Flow” means, with respect to any specified period, the positive difference, if any of (a) the
aggregate of the Net Operating Income for all Individual Properties for such period minus (b) Debt Service for such period. 
  
 (138) “Net Operating Income” means, as of any date of calculation and for each Individual Property then serving as
collateral for the Loans, an amount calculated as the excess, if any, of (a) the Operating Revenues of such Individual Property over (b) the sum of (i) the Operating Expenses of such Individual Property plus (ii) the amount required to be set aside
as the reserve percentage of Operating Revenues of such Individual Property pursuant to Section 5.8(2). 
  

 -16- 

 (139) “Net Proceeds” has the meaning assigned in Section
3.3(2). 
  
 (140) “Net Proceeds
Deficiency” has the meaning assigned in Section 3.3(2)(vi). 
  
 (141) “Net Refinance Proceeds” means the difference between (a) the total gross proceeds from the refinancing of
an Individual Property, and (b) all commercially reasonable and customary expenses incurred and paid to third parties by Borrower in connection with said refinancing transaction, which closing costs shall not exceed four percent (4%) of the total
amount of the new loan. 
  
 (142) “Net
Sales Proceeds” means an amount determined in accordance with the following formula: 
  

					
	 Net Sales Proceeds =
	  	 	    	(a) Sales Price
	 	  	minus	    	(b) Sales Expenses

  
 Where: 
  
 Sales Price means the gross price shown in the contract of sale, as
adjusted for usual and customary prorations between the purchaser and the selling Borrower; 
  
 Sales Expenses means all commercially reasonable and customary expenses incurred and paid to third parties in connection with such sale. 
  
 (143) “Non-Recourse Exceptions” has the meaning assigned in Section
12.2(1). 
  
 (144)
“Notes” means the Fixed Notes, the Floating Notes and, without duplication, any promissory notes evidencing the Alternate Interest Rate Loans, if any. 
  
 (145) “OFAC” means the USA Patriot Act of 2001, including Executive Order 13324
– Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended through the date hereof, and other federal laws and regulations and executive orders administered by, the United
States Department of the Treasury, Office of Foreign Assets Control which prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals (such
individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanction and embargo programs). 
  
 (146) “OFAC Programs” means such additional programs administered by OFAC which
prohibit dealing with individuals or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. 
  
 (147) “Operating Account” has the meaning assigned in Section 5.7(1). 
  
 (148) “Operating Budget” has the
meaning assigned in Section 5.3(1)(a). 
  

 -17- 

 (149) “Operating Expenses” means, as of any date of calculation
and for each Individual Property then serving as collateral for the Loans, an amount calculated as the sum of (a) all salaries and employee expense and payroll taxes of all employees at such Individual Property (including salaries, wages, bonuses
and other compensation, and benefits including life, medical and disability insurance and retirement benefits); (b) management fees and expenses paid to any Manager under a Management Agreement; (c) costs and expenses related to the repair and
maintenance of such Individual Property (other than those paid with insurance proceeds); (d) costs and expenses of operational supplies and utilities; (e) the cost of any insurance procured with respect to such Individual Property; (f) governmental
fees and assessments (including real estate taxes, betterments, and similar charges); (g) ground rents paid to any third-party ground lessor, if applicable; (h) rentals or other amounts paid in connection with the leasing of any vehicles, telephone
or computer systems, or other equipment; (i) franchise fees and other amounts paid to any franchisor under any of the Franchise Agreements; (j) costs and expenses related to the provision of food, beverages, and laundry service; and (k) costs and
expenses related to supplies, license fees, advertising, marketing, reservation systems and any and all other operating expenses as are reasonably necessary for the proper and efficient operation of such Individual Property in accordance with the
provisions hereof and determined in accordance with GAAP and the Uniform System of Accounts; but excluding, however, (i) federal, state and municipal excise, sales, and use taxes collected directly from patrons and guests or as a part of the sales
price of any goods, services or displays, such as gross receipts, admissions, cabaret or similar or equivalent taxes paid over to federal, state or municipal governments; (ii) payments on the Loans or other mortgage or security instrument
encumbering such Individual Property; and (iii) depreciation and amortization on intangibles. 
  
 (150) “Operating Lease” means each of those certain leases designated as “Operating Leases” on
Schedule 11 hereto with respect to the Properties. 
  
 (151) “Operating Revenues” means, as of any date of calculation and for each Individual Property then serving as collateral for the Loans, an amount calculated as the sum of all revenues,
receipts, and income of any kind derived directly or indirectly by a Borrower or by an Operator from or in connection with such Individual Property whether on a cash basis or credit, paid or collected, determined in accordance with GAAP and the
Uniform System of Accounts, and including without limitation (a) revenues from the rental of guest rooms, whether to individuals, groups or transients; (b) revenues from the sale of food and beverages, whether from restaurants, room service,
catering or otherwise; (c) revenues from vending machines, honor bar, movie rental, telephone, concessions and similar services; (d) revenues from fitness centers, golf courses and other facilities and equipment rentals related to any of the
foregoing; (e) revenues from business centers, internet kiosks, fax stations and similar services; (f) revenues from parking and guest transportation services or facilities; (g) revenues from retail sales; and (h) rents and other revenues (including
any common area maintenance revenues and other items denominated as additional rent) received from tenants, lessees, licensees or concessionaires (but not including their gross receipts); but excluding, however: (i) federal, state and municipal
excise, sales, and use taxes collected directly from patrons and guests or as a part of the sales price of any goods, services or displays, such as gross receipts, admissions, cabaret or similar or equivalent taxes and paid over to federal, state or
municipal governments, (ii) gratuities, (iii) proceeds of insurance and condemnation, (iv) proceeds from sales other than sales in the ordinary course of business, (v) all loan proceeds from financing or refinancings of the Facility 

  

 -18- 

 
or interests therein or components thereof, (vi) judgments and awards, except any portion thereof arising from normal business operations of the hotel, and
(vii) items constituting “allowances” under the Uniform System of Accounts. 
  
 (152) “Operator” means each of SHP Lessee Corp., SHP Lessee II Corp. and SHP Lessee III Corp., each a Delaware
corporation, together with their successors and assigns. 
  
 (153) “Original Closing Date” means August 28, 2003. 
  
 (154) “Original Loan” has the meaning set forth in the Recitals to this Agreement. 
  
 (155) “Original Loan Agreement” has
the meaning set forth in the Recitals to this Agreement. 
  
 (156) “Original Loan Amount” has the meaning set forth in the Recitals to this Agreement. 
  
 (157) “Participant” has the meaning assigned in Section 11.22(3). 
  
 (158) “Payment Date” means December
1, 2004 and the first Business Day of each calendar month thereafter to and including the Maturity Date. 
  
 (159) “Permitted Encumbrances” means with respect to each Individual Property, only the outstanding liens,
easements, restrictions, security interests and other exceptions to title set forth in the Title Policy insurance insuring the lien of the Mortgage, together with the liens and security interests in favor of the Administrative Agent created by the
Loan Documents and such other matters as are expressly set forth in the Loan Documents. 
  
 (160) “Permitted Investment” means any one or more of the following: 
  
 (i) demand deposit accounts maintained at an Approved
Financial Institution; 
  
 (ii) direct
obligations of, or obligations guaranteed as to timely payment of principal and interest by, the United States of America (“USA”) or any agency or instrumentality thereof provided that such obligations are backed by the full faith and
credit of the USA; 
  
 (iii) repurchase
obligations with respect to any security described in clause (i) above entered into with a depository institution or trust company (acting as principal) whose long-term unsecured debt obligations have received one of the two highest ratings
available for such securities by at least two of the Rating Agencies; 
  
 (iv) units of taxable money market funds which funds are regulated investment companies, seek to maintain a constant net asset value of $1 per share and invest solely in obligations backed by the full 

  

 -19- 

 
faith and credit of the USA, and have been designated in writing by at least two of the Rating Agencies in one of the two highest credit rating categories as
Permitted Investments with respect to this definition; provided in each case, that no such investment shall be purchased at a premium to its face value (disregarding interest accrued to the date of acquisition) and that no such investment shall have
a maturity later than the earlier of (x) the Business Day before the proceeds of such investment are anticipated to be needed, or (y) one year from the date of acquisition; 
  
 (v) commercial paper which is (a) rated at least AA-1” by S&P and, if rated by Moody’s, at
least the equivalent Moody’s ratings, (b) issued by a corporation or company (other than any Borrower or affiliate thereof) and (c) in certificated form; and 
  
 (vi) investments in (A) the Oppenheimer Centennial Government Trust or (B) such other money market funds
rated at least AAm or AAm-G or its equivalent from any Rating Agency (for purposes of this definition, such investments may include money market funds sponsored by the Administrative Agent or any of its Affiliates that have the required credit
rating from any Rating Agency). 
  
 (161)
“Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust,
government or any agency or political subdivision thereof, or any other form of entity. 
  
 (162) “Personality” shall have the meaning assigned to such term in the related Mortgage with respect to each
Individual Property and shall include the FF&E with respect to such Individual Property. 
  
 (163) “PIP Budget” and “PIP Budgets” shall have the meaning assigned to such terms in
Section 5.9(3). 
  
 (164) “PIP
LC” shall have the meaning assigned to such term in Section 5.9(3). 
  
 (165) “PIP Reserve” shall have the meaning assigned to such term in Section 5.8(2)(b). 

 
 (166) “PIP Work” shall have the
meaning assigned to such term in Section 5.9(3). 
  
 (167) “Policies” shall have the meaning assigned to such term in Section 3.1(2). 
  
 (168) “Prepayment Fee” means, collectively and to the extent applicable, the Libor Breakage Fee and the Fixed Loan
Prepayment Fee. 
  
 (169) “Prime
Rate” means the highest prime rate (or base rate) reported in the Money Rates column or section of The Wall Street Journal as the rate in effect for corporate 

  

 -20- 

 
loans at large U.S. money center commercial banks (whether or not such rate has actually been charged by any such bank) from time to time. If The Wall
Street Journal ceases publication of the Prime Rate, the “Prime Rate” shall mean the prime rate (or base rate) announced by Bank of America, N. A. (whether or not such rate has actually been charged by such bank). If such bank
discontinues the practice of announcing the Prime Rate, the “Prime Rate” shall mean the prime or base rate charged by a large United States commercial bank selected by the Administrative Agent. 
  
 (170) “Prime Rate Spread” means,
with respect to any Floating Interest Period and any Floating Notes, the positive difference, if any, of (a) the Floating Interest Rate that would be in effect during such Floating Interest Period for such Floating Notes minus (b) the Prime Rate on
the day that is two (2) Business Days prior to the first day of such Floating Interest Period. 
  
 (171) “Properties” means collectively, the aggregate of all or more than one, as applicable, of each Individual
Property which is subject to the terms of this Agreement. 
  
 (172) “Property Improvement Plans” means, collectively, the capital or property improvement plan requirements set forth in the Franchise Agreements that require the Borrowers to make certain
improvements, upgrades and replacements to the Individual Properties. 
  
 (173) “Rate Cap Rating Criteria” means with respect to any Person, the long term unsecured debt obligations of the applicable Person are rated at least “AA” by S&P and at least
“Aa” by Moody’s. 
  
 (174)
“Rating Agencies” means each of S&P, Moody’s and Fitch, or any other nationally-recognized statistical rating agency which has been approved by the Administrative Agent. 
  
 (175) “Rebranding Renovation” means,
with respect to any Individual Property, extensive capital improvements or renovations to the Improvements which are undertaken in connection with a re-branding or change in franchise affiliation with respect to such Individual Property. 

 
 (176) “Register” has the meaning
assigned in Section 2.1(3)(b). 
  
 (177)
“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System of the United States of America (or any successor), as the same may be modified and supplemented and in effect from time to time.

  
 (178) “Regulatory Change”
means, with respect to any Lender, any change after the date hereof in Federal, state or foreign law or regulations (including, without limitation, Regulation D) or the adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Lender of or under any Federal, state or foreign law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or administration thereof. 
  

 -21- 

 (179) “REIT” has the meaning set forth in the Recitals to this
Agreement. 
  
 (180) “Related
Parties” has the meaning assigned in Section 6.27. 
  
 (181) “Release” means a release of an Individual Property carried out in compliance with the terms of Section 2.7(2). 
  
 (182) “Release Amount” means 
  
 (a) with respect to any Release of an Individual Property
being sold by any Borrower pursuant to Section 2.7(2) of this Agreement, 
  
 (i) if the Loan-to-Value Ratio immediately following the proposed Release will be less than or equal to the Maximum Loan-to-Value Ratio,
an amount equal to one hundred twenty-five percent (125%) of either (A) with respect to an Individual Property that is not a Tarsadia Property, the Allocated Loan Amount for such Individual Property or (B) with respect to a Tarsadia Property, the
Tarsadia Floor Release Amount, or 
  
 (ii) if
the Loan-to-Value Ratio immediately following the proposed Release will be greater than the Maximum Loan-to-Value Ratio, an amount equal to the greater of (x) one hundred twenty-five percent (125%) of either (A) with respect to an Individual
Property that is not a Tarsadia Property, the Allocated Loan Amount for such Individual Property, or (B) with respect to a Tarsadia Property, the Tarsadia Floor Release Amount and (y) the Net Sale Proceeds from the sale of such Individual Property,
or 
  
 (b) with respect to any Release of an
Individual Property which is the subject of a Rebranding Renovation or is being refinanced by any Borrower in connection with an extension of the Maturity Date of the Floating Loans pursuant to Section 2.8, in either case pursuant to
Section 2.7(2) of this Agreement, an amount equal to the greater of (i) one hundred twenty-five percent (125%) of either (x) with respect to an Individual Property that is not a Tarsadia Property, the Allocated Loan Amount for such Individual
Property, or (y) with respect to a Tarsadia Property, the Tarsadia Floor Release Amount; or (ii) the Net Refinance Proceeds from the refinancing of said Individual Property(ies). 
  
 (c) with respect to any Release of an Individual Property which is being refinanced by any Borrower in
connection with the repayment of the Floating Loans at the Maturity Date of the Floating Loans pursuant to Section 2.9, an amount equal to the greater of (i) one hundred twenty-five percent (125%) of either (x) with respect to an Individual
Property that is not a Tarsadia Property, the Allocated Loan Amount for such Individual Property, or (y) with respect to a Tarsadia Property, the Tarsadia Floor Release Amount, or (ii) the Net Refinance Proceeds from the refinancing of said
Individual Property(ies). 
  
 (183)
“Release Property” means any Individual Property which is the subject of a Release carried out in compliance with the terms of Section 2.7(2). 
  
 (184) “Rents” means all rents, revenues, issues, profits, income and proceeds due or
to become due from tenants of the Properties, including rentals and all other payments of 

  

 -22- 

 
any kind under the Leases or otherwise for using, leasing, licensing, possessing, operating from, rendering in, selling or otherwise enjoying the Properties.

  
 (185) “Replacement Interest Rate
Cap Agreement” has the meaning assigned in Section 6.31. 
  
 (186) “Reserves” means the Tax and Insurance Reserve, the PIP Reserve, the Capital Expenditure Reserve, the Ground Lease Rent Reserve, the Deferred Maintenance Reserve and the Trapped Cash
Reserve. 
  
 (187) “Reserve
Requirement” means, for any Interest Period for any Floating Loan, the average maximum rate at which reserves (including, without limitation, any marginal, supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding $1,000,000,000 against “Eurocurrency liabilities” (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall include any other reserves required to be maintained by such member banks by reason of any Regulatory Change with respect to (i) any category of liabilities that includes deposits by reference to which
the Libor Base Rate for any Interest Period for any Floating Loans is to be determined as provided in the definition of “Libor Base Rate” or (ii) any category of extensions of credit or other assets that includes Floating Loans.

  
 (188) “Restoration”
means the repair and restoration of an Individual Property after a casualty or Condemnation as nearly as possible to the condition the Individual Property was in immediately prior to such casualty or Condemnation, with such alterations as may be
reasonably approved by the Administrative Agent. 
  
 (189) “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto. 
  
 (190) “Scheduled Payment” means each payment of interest only, or of principal and
interest, due under each Loan on the related Payment Date as provided in Section 2.3(1) hereof. 
  
 (191) “Secondary Market Transaction” has the meaning assigned in Section 11.9(2). 
  
 (192) “Security Agreement” means
that certain Amended and Restated Security Agreement, dated the date hereof, by each Borrower, each Operator and the Administrative Agent in favor of the Administrative Agent (on behalf of the Lenders). 
  
 (193) “Servicer” has the meaning
assigned in Section 11.24. 
  
 (194)
“Servicing Agreement” has the meaning assigned in Section 11.24. 
  
 (195) “Severed Loan Documents” has the meaning assigned in Section 11.9(4). 
  

 -23- 

 (196) “Site Assessment” means an environmental engineering report
for an Individual Property prepared at the applicable Borrower’s expense by an engineer engaged by such Borrower and reasonably approved by the Administrative Agent, and in a manner reasonably satisfactory to the Administrative Agent, based
upon an investigation relating to and making appropriate inquiries concerning the existence of Hazardous Materials on or about such Individual Property, and the past or present discharge, disposal, release or escape of any such substances, all
consistent with ASTM Standard E1527-00 (or any successor thereto published by ASTM and in effect at the time such report was produced) and good customary and commercial practice. 
  
 (197) “Special Purpose Entity” has the meaning assigned in Section 6.27.

  
 (198) “State” means
with respect to each Individual Property, the state in which such Individual Property is located. 
  
 (199) “Stock Pledge” means each of those certain Stock Pledge and Security Agreements (together with the
attachments thereto and consents, certificates, powers and other materials referred to therein) dated the date hereof and relating to the pledges of stock to the Administrative Agent (on behalf of the Lenders) from Sunstone Hotel TRS as pledgor
regarding its pledges of its 100% equity interests in each of the Operators. 
  
 (200) “STR Report” means a Smith Travel Research Report for each Individual Property in the form of Exhibit L attached hereto. 
  
 (201) “Subordination of Management
Agreement” means (a) with respect to all of the Properties except for the Property located in Chandler, Arizona, that certain Assignment of Management Agreements and Guaranty of Management Agreements, Subordination of Management
Agreements and Consent to Assignment and Subordination, dated the date hereof, by and among Sunstone Hotel Investors, Inc. and each of the Operators in favor of the Administrative Agent (on behalf of the Lenders), and consented and agreed to by
Manager and Interstate Management Company, L.L.C., and (b) with respect to the Property located in Chandler, Arizona, that certain Assignment of Management Agreements and Guaranty of Management Agreements, Subordination of Management Agreements and
Consent to Assignment and Subordination, dated the date hereof, from Heavlin Management Company, Inc. in favor of the Administrative Agent (on behalf of the Lenders). 
  
 (202) “Sunstone” means Sunstone Hotel Partnership, LLC, a Delaware limited liability
company, together with its successors and assigns. 
  
 (203) “Sunstone Holdco” means Sunstone Holdco I, LLC, a Delaware limited liability company, together with its successors and assigns. 
  
 (204) “Sunstone Hotel TRS” means Sunstone Hotel TRS Lessee, Inc., a Delaware
corporation, together with its successors and assigns. 
  
 (205) “Sunstone LAX” has the meaning set forth in the Recitals to this Agreement. 
  

 -24- 

 (206) “Sunstone Parties” has the meaning set forth in the
Recitals to this Agreement. 
  
 (207)
“Tarsadia Floor Release Amount” means (i) for the Tarsadia Los Angeles Property, $11,777,000, or (ii) for the Tarsadia San Diego Property, $8,544,000. 
  
 (208) “Tarsadia Ground Lease” means each of the Tarsadia Los Angeles Ground Lease
and the Tarsadia San Diego Ground Lease. 
  
 (209) “Tarsadia Los Angeles Ground Lease” means that certain Ground Lease dated as of August 28, 1997 by and between Peacock, LLC, a California limited liability company, as “Landlord” and Sunstone OP
Properties L.L.C., a Delaware limited liability company, as “Tenant”, a memorandum of which dated August 28, 1997 was recorded on August 28, 1997 as Instrument No. 97-1344998 in the Official Records of Los Angeles County, and which Ground
Lease was amended by that certain Amendment Number One To Ground Lease dated as of September 2, 1997, that certain Amendment Number Two To Ground Lease dated as of January 23, 1998 and that certain Amendment Number Three To Ground Lease dated as of
January 26, 2002. 
  
 (210) “Tarsadia
Los Angeles Property” means that certain piece or parcel of land, together with the buildings and improvements thereon and appurtenances thereto, which is encumbered by the Tarsadia Los Angeles Ground Lease, in each case to the extent
of any Borrower’s interest therein. 
  
 (211) “Tarsadia Property” means each of the Tarsadia Los Angeles Property and the Tarsadia San Diego Property. 
  
 (212) “Tarsadia San Diego Ground Lease” means that certain Ground Lease dated as of August 7, 1997 by and between
Shivani, LLC, a California limited liability company, as “Landlord” and Sunstone Hotel Investors, L.P., a Delaware limited partnership, predecessor-in-interest to Sunstone OP Properties L.L.C., a Delaware limited liability company, as
“Tenant”, a memorandum of which dated August 7, 1997 was recorded on August 7, 1997 as Instrument No. 1997-0378110 in the San Diego County Recorder’s Office, and which Ground Lease was amended by that certain Amendment Number One To
Ground Lease dated as of January 23, 1998 and that certain Amendment Number Two To Ground Lease dated as of January 26, 2002. 
  
 (213) “Tarsadia San Diego Property” means that certain piece or parcel of land, together with the buildings and
improvements thereon and appurtenances thereto, which is encumbered by the Tarsadia San Diego Ground Lease, in each case to the extent of any Borrower’s interest therein. 
  
 (214) “Tax and Insurance Reserve” has the meaning assigned in Section 5.8(1).

  
 (215) “Tax Escrow
Rebalancing” has the meaning assigned in Section 5.8(l)(c). 
  
 (216) “Taxes” has the meaning assigned in Section 8.2 hereof. 
  

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 (217) “Terrorism Insurance” has the meaning assigned in
Section 3.1(1)(k). 
  
 (218)
“TIC Amount” has the meaning assigned in Section 3.1(1)(k). 
  
 (219) “Title Policy” means one or more lender’s polic(y)(ies) of title insurance issued to the Administrative
Agent (on behalf of the Lenders) on or about the Original Closing Date and insuring the lien of each of the Mortgages. 
  
 (220) “Trailing Twelve-Month NOI” means, as of any date of calculation, the Net Operating Income of all of the
Properties then remaining as collateral for the Loans for the twelve full calendar months immediately preceding such date of calculation. Trailing Twelve-Month NOI shall not include any Net Operating Income attributable to any Individual Property
that was included as collateral for the Loans during a portion or all of such twelve-month period but was released from the lien of the Mortgages prior to the date of such calculation. 
  
 (221) “Trapped Cash Reserve” has the meaning assigned in Section 5.8(5).

  
 (222) “TRIA” has the
meaning assigned in Section 3.1(l)(k). 
  
 (223) “Type” has the meaning assigned in Section 1.2. 
  
 (224) “Uniform System of Accounts” means the Uniform Systems of Accounts for the Lodging Industry (9th edition),
as revised and supplemented from time to time. 
  
 Section 1.2
Types. Loans hereunder are sometimes distinguished by “Type.” The “Type” of a Loan refers to whether such Loan is a Fixed Loan, a Floating Loan, or an Alternate Interest Rate Loan, if applicable. 
  
 Section 1.3 Borrower; Joint and Several Liability; Suretyship
Waivers. It is intended by the parties hereto that each Borrower shall be liable, jointly and severally, for all of the obligations of the Borrowers hereunder. Accordingly, each of Sunstone Chandler, Sunstone OP, SHP Ogden and Sunstone SH
expressly agrees and acknowledges with each Lender and the Administrative Agent that: 
  
 (1) It understands that the Lenders would not have made the Loans but for the agreement of each Borrower to be jointly and severally
liable for each and every obligation of the Borrowers set forth herein, and it agrees that it has received sufficient consideration for its agreement to be bound by and to the extent of the terms hereof. In particular, each Borrower is of the view
that the financial accommodations offered to each Borrower under this Agreement will enhance the aggregate borrowing powers of the Borrowers, and that each Borrower and Borrower Party will receive substantial direct and/or indirect benefits by
reason of the making of the Loans and other financial accommodations provided herein. 
  
 (2) In any provision of this Agreement where any Borrower makes a representation or warranty, such representation or warranty shall
constitute a separate representation or warranty made by each Borrower as to the content and substance thereof. 
  

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 (3) In any provision of this Agreement where any Borrower makes an agreement or covenant,
such agreement or covenant shall be a separate agreement or covenant of each Borrower, and each such entity shall be jointly and severally liable with each other such entity for the full and faithful performance thereof, without regard to whether
(i) any Borrower shall have better rights to control or assure the performance of such agreement or covenant or (ii) such agreement or covenant affects an Individual Property in which any Borrower does not have a direct interest. 
  
 (4) An Event of Default may occur hereunder, and the
Administrative Agent and Lenders shall be permitted to exercise their remedies as stated herein, if any Borrower by its action or inaction causes an Event of Default to occur, and the lack of fault or breach by any other Borrower shall neither serve
nor be deemed to halt such Event of Default nor prevent, delay or impair any such exercise of remedies. 
  
 (5) In exercising any remedies herein after an Event of Default, the Administrative Agent and Lenders shall be permitted to exercise their
remedies as stated herein against any or all of the Borrowers, or none of them, as the Administrative Agent and Lenders shall determine in their sole and absolute discretion, and any lack of fault or lack of breach by any Borrower shall not prevent,
delay or impair the pursuit or implementation of any such remedies against them. 
  
 (6) The obligations, covenants, agreements and duties of each Borrower under the Loan Documents shall in no way be discharged, affected or
impaired by any of the following: 
  
 (a) the
waiver by Administrative Agent of the performance or observance by Borrower or any other party of any of the agreements, covenants, terms or conditions contained herein; 
  
 (b) the extension, in whole or in part, of the time for payment by any Borrower of any sums owing or payable
under any Loan Document; 
  
 (c) any assumption
by any person of any or all of any Borrower’s obligations under any Loan Document; 
  
 (d) the waiver or release or modification or amendment (whether material or otherwise) of any provision of any Loan Document; 

 
 (e) any failure, omission or delay on the part of
Administrative Agent to enforce, assert or exercise any right, power or remedy conferred on or available to Administrative Agent under any of the Loan Documents, or any action on the part of Administrative Agent granting indulgence or extension in
any form whatsoever; 
  
 (f) the voluntary or
involuntary liquidation, dissolution, sale of all or substantially all of the assets, marshaling of assets and liabilities, receivership, conservatorship, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization or other
similar proceeding affecting any Borrower or any of its assets or any impairment, modification, release or limitation of liability of any 

  

 -27- 

 
Borrower or any of their estates in bankruptcy or of any remedy for the enforcement of such liability resulting from the operation of any present or future
provision of the Federal Bankruptcy Code or other similar statute or from the decision of any court; 
  
 (g) the release of any Borrower from the performance or observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law; 
  
 (h) the power or authority or lack thereof of any Borrower to execute, acknowledge or deliver any of the Loan Documents; 
  
 (i) the legality, validity or invalidity of any Loan Document; 
  
 (j) any defenses whatsoever that Borrower may or might have to the payment of any portion of the
Indebtedness except for the payment thereof; 
  
 (k) the existence or non-existence of any Borrower as a legal entity; 
  
 (1) any right of setoff, counterclaim or defense (other than payment in full of the Indebtedness in accordance with the terms of the Loan
Documents) that any Borrower may or might have to its respective undertakings, liabilities and obligations hereunder, each and every such defense being hereby waived by each Borrower; or 
  
 (m) any other cause, whether similar or dissimilar to any of the foregoing, that might constitute a legal or
equitable discharge of any Borrower (whether or not such Borrower shall have knowledge or notice thereof) other than payment in full of the Indebtedness. 
  
 (7) To the extent notwithstanding the above and the express intent of the parties, if any Borrower is deemed to be a surety or guarantor
of another Borrower, then the following shall apply: 
  
 (a) Each Borrower understands and further acknowledges that if the Administrative Agent forecloses judicially or nonjudicially against any real property securing the Loans, that foreclosure could impair or destroy any ability that such
Borrower may have to seek reimbursement, contribution or indemnification from another Borrower or others based on any right such Borrower may have of subrogation, reimbursement, contribution or indemnification for any amounts paid by such Borrower
hereunder. Each Borrower further understands and acknowledges that in the absence of this provision, the potential impairment or destruction of such Borrower’s rights, if any, may entitle such Borrower to assert a defense based on California
Code of Civil Procedure (“CCP”) § 580d as interpreted in Union Bank v. Gradsky, to the extent applicable. Each Borrower freely, irrevocably and unconditionally: (a) waives and relinquishes that defense, and agrees that such
Borrower will be fully liable hereunder, even though the Administrative Agent may foreclose judicially 

  

 -28- 

 
or nonjudicially against the real property securing the Loans; (b) agrees that such Borrower will not assert that defense in any action or proceeding that
the Administrative Agent may commence to enforce the terms of the Loan Documents; (c) acknowledges and agrees that the rights and defenses waived by such Borrower hereunder include any right or defense that such Borrower may have or be entitled to
assert based upon or arising out of any one or more of the following (to the extent applicable): (i) CCP § 580a (which, if such Borrower had not given this waiver, would otherwise limit such Borrower’s liability after any nonjudicial
foreclosure sale to the difference between the obligations for which such Borrower is liable and the fair market value of the property or interests sold at such nonjudicial foreclosure sale rather than the actual proceeds of such sale), (ii) CCP
§ 580b and CCP § 580d (which, if such Borrower had not given this waiver, would otherwise limit the Administrative Agent’s right to recover a deficiency judgment with respect to purchase money obligations and after any nonjudicial
foreclosure sale, respectively), (iii) CCP § 726 (which, if such Borrower had not given this waiver, among other things, would otherwise require the Administrative Agent to exhaust all of its security before a personal judgment may be obtained
for a deficiency), or (iv) California Civil Code § 2848 (which, if Borrower had not given this waiver, among other things, would entitle Borrower to enforce every remedy the Administrative Agent may have against the Borrower for its payments
hereunder); and (d) acknowledges and agrees that the Administrative Agent is relying on this waiver in making the Loans, and that this waiver is a material part of the consideration that the Administrative Agent is receiving for making the Loans.

  
 WITHOUT LIMITING THE FOREGOING, EACH BORROWER WAIVES ALL RIGHTS AND DEFENSES
THAT SUCH BORROWER MAY HAVE IN CONNECTION WITH THE FOREGOING TERMS. THIS MEANS, AMONG OTHER THINGS: 
  
 (i) THE ADMINISTRATIVE AGENT MAY COLLECT FROM SUCH BORROWER WITHOUT FIRST FORECLOSING ON ANY REAL OR PERSONAL PROPERTY COLLATERAL PLEDGED
BY THE BORROWER OR ANY OTHER BORROWER; AND 
  
 (ii) IF THE ADMINISTRATIVE AGENT FORECLOSES ON ANY REAL PROPERTY COLLATERAL PLEDGED BY THE BORROWER OR ANY OTHER BORROWER: 
  
 (A) THE AMOUNT OF THE ADMINISTRATIVE AGENT’S CLAIM HEREUNDER MAY BE REDUCED ONLY BY THE PRICE FOR WHICH THAT COLLATERAL IS SOLD AT
THE FORECLOSURE SALE, EVEN IF THE COLLATERAL IS WORTH MORE THAN THE SALE PRICE; AND 
  
 (B) THE ADMINISTRATIVE AGENT MAY COLLECT FROM SUCH BORROWER EVEN IF THE ADMINISTRATIVE AGENT, BY FORECLOSING ON THE REAL PROPERTY 

  

 -29- 

 
COLLATERAL, HAS DESTROYED ANY RIGHT SUCH BORROWER MAY HAVE TO COLLECT FROM ANY OTHER BORROWER. 
  
 THIS IS AN UNCONDITIONAL AND IRREVOCABLE WAIVER OF ANY RIGHTS AND DEFENSES THE BORROWERS MAY HAVE IN CONNECTION WITH THE LOANS. THESE RIGHTS
AND DEFENSES INCLUDE, BUT ARE NOT LIMITED TO, ANY RIGHTS OR DEFENSES BASED UPON CCP §§ 580a, 580b, 580d, OR 726 (TO THE EXTENT APPLICABLE). 
  
 Section 1.4 Interpretation. 
  
 For all purposes of this Agreement and each other Loan Document, except as otherwise expressly required or unless the context clearly indicates a contrary
intent: 
  
 (1) the capitalized terms defined in
this Article have the meanings assigned to them in this Article, include the plural as well as the singular, and, when used with respect to any instrument, contract or agreement, include all extensions, modifications, amendments and supplements from
time to time thereto; 
  
 (2) all accounting
terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP (as hereinafter defined) in effect on the date hereof; 
  
 (3) the words “herein,” “hereof,” and “hereunder” and other words of similar import refer to this Agreement
and each other Loan Document as a whole and not to any particular Article, Section, or other subdivision; 
  
 (4) the words “include” and “including” and other words of similar import shall be construed as if followed by the
phrase “, without limitation,”; 
  
 (5)
the phrases “satisfactory to any Lender” or “satisfactory to Administrative Agent” shall mean in form and substance satisfactory to such Lender or Administrative Agent, as the case may be, in all respects, the phrases “with
Lender’s consent”, “with Lender’s approval”, “with Administrative Agent’s consent” or “with Administrative Agent’s approval” shall mean such consent or approval at Lender’s or
Administrative Agent’s, as the case may be, discretion, and the phrases “acceptable to Lender” or “acceptable to Administrative Agent” shall mean acceptable to Lender or Administrative Agent, as the case may be, at such
party’s sole discretion, unless a different standard for consent or approval is expressly set forth; and 
  
 (6) any provision of this Agreement and each other Loan Document permitting the recovery of out-of-pocket attorneys’ fees, costs and
expenses shall be deemed to include such fees and costs incurred in all appellate proceedings. 
  
 Section 1.5 Amendment and Restatement. This Agreement is and shall for all purposes be deemed to be a further amendment and restatement of the provision of the Original Loan Agreement. This Agreement
shall supersede the Original Loan Agreement insofar as it constitutes the entire agreement between the parties concerning the subject matter of this Agreement, but does not constitute a novation of the Original Loan Agreement. All Loans made 

  

 -30- 

 
pursuant to the Original Loan Agreement shall be deemed to be Loans made under this Agreement, and all of the Borrowers’ obligations under the Original
Loan Agreement shall be deemed to be obligations under this Agreement. Notwithstanding anything to the contrary contained herein, however, nothing contained in this Agreement is intended to constitute a release of Sunstone LAX from its obligations
contained in the Original Loan Agreement which were intended by their terms to survive the release of an Individual Property or a release of the Original Borrowers with respect to their obligations to comply with the Legal Requirements of the state
of Oregon, including (without limitation) Environmental Laws in effect in the state of Oregon. 
  
 ARTICLE II 
  
 LOAN TERMS

  
 Section 2.1 The Commitments, Loans and
Notes. 
  
 (1) Loans.
Each Borrower jointly and severally acknowledges and agrees that the Lenders have previously advanced to the Borrowers the Current Outstanding Principal Amount of the Loans. On or about the date hereof (provided that the advance conditions set
forth in Schedule 2 shall have been satisfied to the satisfaction of the Lenders and Administrative Agent), each Lender severally agrees to advance the Additional Advance to the Borrowers in Dollars, in a principal amount equal to the
Commitment of such Lender with respect to such Additional Advance, as set forth on Schedule 1 attached hereto. The Loans shall be repaid in accordance with this Agreement and the other Loan Documents. 
  
 (2) Lending Offices. The Loans of each Lender
shall be made and maintained at such Lender’s Applicable Lending Office. 
  
 (3) Notes. 
  
 (a) Form. The Fixed Loan made by each Lender shall be evidenced by a Fixed Note of the Borrowers and the Floating Loan made by each Lender shall be evidenced by a Floating Note of the Borrowers. Each
Fixed Note shall be payable to the applicable Lender in a principal amount equal to the amount of such Lender’s Commitment with respect to the Fixed Loans, and each Floating Note shall be payable to the applicable Lender in a principal amount
equal to the amount of such Lender’s Commitment with respect to the Floating Loans. 
  
 (b) Register. The Administrative Agent shall cause to be kept a register (the “Register”) for the
registration of ownership and transfer or assignment of the Notes. The names and addresses of the registered owners of the Notes, the transfers or assignment of the Notes and the names and addresses of the transferees of the Notes will be registered
in the Register under such reasonable regulations as Administrative Agent may prescribe. Each Borrower and Administrative Agent shall deem and treat the registered owner of any Note as shown in the Register as the absolute owner thereof for all
purposes, and neither any Borrower nor Administrative Agent shall be affected by any notice to 

  

 -31- 

 
the contrary and payment of the principal of, interest on, and Prepayment Fee, if any, due on or with respect to the related Note shall be made only to or
upon the order of such registered owner. All such payments so made shall be valid and effective to satisfy and discharge the liability of any Borrower upon such Note to the extent of the sums so paid. Upon reasonable request from time to time,
Administrative Agent shall permit any Borrower to examine the Register. 
  
 (c) Exchange of Notes. Any Note may be exchanged for a new Note or Notes of the same Type if such Note or Notes to be so exchanged is surrendered for cancellation to Administrative Agent and is
accompanied by the request of the registered owner thereof specifying the denomination of the new Note or Notes to be issued in exchange therefor. Upon Administrative Agent’s request therefor, a new Note or Notes of the same Type, executed by
the Borrowers and payable to such registered owner in the denominations so requested and in an aggregate principal amount equal to the aggregate original principal amount of such Note to be so exchanged, shall be executed and delivered by the
Borrowers to Administrative Agent for delivery to such registered owner in exchange for such Note to be so exchanged. Each new Note issued pursuant to this Section 2.1 in exchange for, in substitution for, or in lieu of an outstanding Note
shall be dated the date of such old Note. All new Notes shall be valid obligations of the Borrowers, jointly and severally, evidencing the same debt as such old Notes and shall be entitled to the benefits and security of the Loan Documents to the
same extent as the old Notes. Each Lender and the Administrative Agent shall bear its own costs and expenses in connection with any request for an exchange of Notes and the Borrower shall have no liability therefor. 
  
 (d) Transfer of Notes. No transfer or
assignment of the Notes shall be effective until the same is shown on the Register and a certificate of transfer referred to below is duly issued. Any Note may be transferred on the Register if such Note is surrendered for cancellation to
Administrative Agent and is accompanied by an instrument of transfer satisfactory to Administrative Agent, a fully executed Assignment and Acceptance which has been consented to by the Administrative Agent and such other documents, certificates or
opinions as Administrative Agent may reasonably require. Upon Administrative Agent’s request therefor, a new Note of the same Type, executed by the Borrowers and registered in the name of the transferee in a principal amount equal to the
original principal amount of such transferred Note, shall be executed by the Borrowers and delivered to Administrative Agent for delivery to the transferee in exchange for such transferred Note. Upon completion of registration of transfer, a
certificate that such transfer has been completed shall be promptly provided by Administrative Agent to the Borrowers, the transferor and the transferee, and such certificate shall constitute conclusive evidence of such registration and the
effectiveness of such transfer and assignment. Each Lender and the Administrative Agent shall bear its own costs and expenses in connection with any request for a transfer of Notes and the Borrower shall have no liability therefor. 
  

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 (e) Loss, Theft, Destruction or Mutilation of Notes. In the event of the
loss, theft or destruction of any Note, upon receipt by the Borrowers and Administrative Agent of a reasonably satisfactory indemnification agreement executed in favor of the Borrowers and Administrative Agent by the holder of such Note (the
unsecured indemnity agreement of any Institutional Investor with a net worth at least equal to 200% of the outstanding principal amount of the lost Note being deemed satisfactory as to the creditworthiness of the indemnitor), or in the event of the
mutilation of any Note, upon the surrender of such mutilated Note by the holder thereof to the Borrowers, the Borrowers shall execute and deliver to such holder a new replacement Note in lieu of the lost, stolen, destroyed or mutilated Note. Each
Lender and the Administrative Agent shall bear its own costs and expenses in connection with any request for a replacement of Notes and the Borrower shall have no liability therefor. 
  
 Section 2.2 Interest Rate; Late Charge; Default Rate. 
  
 (1) Interest Rate. 
  
 (a) Fixed Loans. The outstanding principal
balance of the Fixed Loans shall bear interest at a rate per annum equal to FIVE AND 95/100 PERCENT (5.95%) (the “Fixed Interest Rate”). 
  
 (b) Floating Loans. The outstanding principal balance of the Floating Loans shall bear
interest (i) with respect to the initial Floating Interest Period beginning on the Modification Closing Date and expiring on October 31, 2004, at a rate equal to FOUR AND 225/1000 PERCENT (4.225%) per annum and (ii) with respect to each subsequent
Floating Interest Period, at a rate equal to TWO AND 35/100 PERCENT (2.35%) per annum in excess of the Adjusted Libor Rate for such Floating Interest Period (such applicable rate, the “Floating Interest Rate”).

  
 (c) Alternate Interest Rate
Loan. If any Floating Loan shall be Converted at any time to an Alternate Interest Rate Loan pursuant to this Agreement, the outstanding principal balance of such Alternate Interest Rate Loan shall bear interest at a rate of interest equal
to the Alternate Interest Rate for the related Interest Period. 
  
 (2) Interest Periods. Each Fixed Loan and (subject to the provisions of this Agreement which, in certain instances, require payment of interest at the Alternate Interest Rate), each Floating Loan shall
Continue from one Interest Period to the next Interest Period applicable thereto. In addition: 
  
 (a) With respect to the Fixed Loans, interest shall be computed on the basis of a fraction, the denominator of which is three hundred
sixty (360) and the numerator of which is thirty (30). 
  
 (b) With respect to the Floating Loans, interest shall be computed on the basis of a fraction, the denominator of which is three hundred sixty (360) and 

  

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the numerator of which is the actual number of days elapsed from the date of the initial advance or the date on which the immediately preceding payment was
due. The Borrowers may, subject to the definition of Floating Interest Period, select a Floating Interest Period of one, three, or six months by giving not less than three (3) Business Days’ prior irrevocable notice of the Floating Interest
Period so selected to the Administrative Agent. Notwithstanding any other provision of any Loan Document, if the Borrowers shall have failed to select such a Floating Interest Period by the date required pursuant to the immediately preceding
sentence, the Borrowers shall be deemed to have selected a one-month Floating Interest Period for the immediately succeeding Floating Interest Period. While any Event of Default exists, the Administrative Agent, on behalf of the Lenders, may, but
shall not be obligated to, suspend the right of the Borrowers to select the Floating Interest Period applicable thereto, in which event all Floating Loans may, at the option of the Administrative Agent, be Converted (on the last day of the
respective Interest Period therefor) into Floating Loans with Floating Interest Periods of one month. 
  
 (3) Late Charge. If any Borrower fails to pay any installment of interest or principal within ten (10) days after the date
on which the same is due, the Borrowers, jointly and severally, shall pay to Administrative Agent (on behalf of the related Lenders) a late charge on such past-due amount, as liquidated damages and not as a penalty, equal to five percent (5%) of
such amount, but not in excess of the maximum amount of interest allowed by applicable law. No such late charge shall be due or payable in connection with the final payment on the Loans due on the Maturity Date. 
  
 (4) Default Rate. While any Event of Default
exists, the Loans shall bear interest at the applicable Default Rate for Loans of the related Type. 
  
 Section 2.3 Terms of Payment. The Loans shall be payable as follows: 
  
 (1) Scheduled Payments. Immediately prior to the effectiveness of the modifications to the
Original Loan set forth in this Agreement, and as a condition to closing on the Modification Closing Date, the Borrowers shall pay to the Lenders any accrued and unpaid interest and other amounts then due and owing on the Current Outstanding
Principal Amount (including any Libor Breakage Fees with respect thereto) in accordance with the terms and conditions of the Original Loan Agreement. Thereafter: 
  
 (a) On the Modification Closing Date, a payment in advance of interest only at the applicable Interest Rate
shall be due and payable for the period from the Modification Closing Date to (but not including) the first day of the next calendar month. 
  
 (b) Borrower shall make the following scheduled payments of Debt Service on the Loans: 
  
 (i) Commencing on December 1, 2004 (with respect to the
Interest Period commencing on November 1, 2004 and continuing through 

  

 -34- 

 
November 30, 2004), and on each subsequent Payment Date during the term of the Loans, the Borrowers shall pay interest on the Loans in arrears at the
applicable Interest Rate; and 
  
 (ii)
Commencing on December 1, 2006, and on each subsequent Payment Date during the term of the Loans, the Borrowers shall make payments of principal on the Fixed Loans based upon a twenty-five (25) year amortization schedule (as such amortization
schedule may be adjusted upon a Release of an Individual Property pursuant to the provisions of Section 2.7(4)(c) or in connection with a casualty or Condemnation pursuant to Section 3.2 or 3.3); and 
  
 (iii) On the Maturity Date for each Type of Loans, the
Borrowers shall pay all outstanding principal, accrued and unpaid interest, and any other amounts due under the Loan Documents with respect to such Type of Loans until all amounts due under the Loan Documents in connection with such Type of Loans
are paid in full. 
  
 (2) Term of
Loans. The term of each Type of Loans shall commence on the date hereof and expire on the Maturity Date applicable to such Type of Loans. 
  
 (3) Prepayment. 
  
 (a) Additional Mandatory Prepayments. In addition to the regularly scheduled installments of principal required to be made
with respect to the Fixed Loans commencing on December 1, 2006 as set forth in Section 2.3(1)(b)(ii), the Borrowers shall also be required to prepay the outstanding principal amount of the Loans in the following circumstances: 
  
 (i) Commencing on the Payment Date occurring in November,
2009, and on every third Payment Date thereafter (the Payment Date occurring in February, 2010, the Payment Date occurring May, 2010, etc.), if the Loan-to-Value Ratio as of such Payment Date is greater than the Maximum Loan-to-Value Ratio, the
Borrowers shall make a principal payment on the Fixed Loans in an amount equal to FIVE MILLION and 00/100 DOLLARS ($5,000,000.00), which amount shall be applied by the Administrative Agent to reduce the outstanding principal balance of the Fixed
Loans. The Borrowers shall be required to pay a Fixed Loan Prepayment Fee in connection with any such prepayment described in this subsection. 
  
 (ii) Outstanding principal on the Loans shall be prepaid, in whole or in part, as applicable, in an amount equal to any Insurance
Proceeds or Condemnation Proceeds received and applied by Administrative Agent to prepay principal on the Loans pursuant to the terms of Section 3.3(3). So long as no Event of Default has occurred and is continuing, the Borrowers shall have
the right to elect whether to apply 

  

 -35- 

 
such proceeds to the prepayment of the Floating Loans, the Fixed Loans, or any combination thereof; however, if an Event of Default has occurred and is
continuing as of such date, the Administrative Agent, on behalf of the Lenders, shall have the right in its sole and absolute discretion to elect whether to apply such proceeds to the prepayment of the Floating Loans, the Fixed Loans, or any
combination thereof. The Borrowers shall pay a Libor Breakage Fee if any Floating Loans are so prepaid and such prepayment is made on a day other than on the last day of a Floating Interest Period, but otherwise such prepayment may be made without
any Prepayment Fee. 
  
 (b) Optional
Prepayments. 
  
 (i) In addition to
their rights to prepay the Loans in connection with a Release pursuant to Section 2.7(2) or a repayment of the Indebtedness after a casualty or Condemnation pursuant to Section 3.3(3), the Borrowers shall have the right after the
expiration of the Closed Prepayment Period to prepay the Fixed Loans in full or in part on any Business Day, provided that the Borrowers (A) furnish the Administrative Agent with at least thirty (30) days prior written notice of their intention to
make any such prepayment, the date thereof and the amount to be prepaid, and (B) pay the Fixed Loan Prepayment Fee in connection therewith, provided, however, that no Fixed Loan Prepayment Fee shall be due in connection with any such prepayment on
the Fixed Loans made during the period three (3) months prior to the Maturity Date of the Fixed Loans. 
  
 (ii) Pursuant to Section 2.7(2), the Borrowers may make a partial prepayment of the Loans: 
  
 (A) at any time during the term of the Loans, in an amount
equal to the Release Amount in connection with the sale or Rebranding Renovation of a Release Property in accordance with the terms of Section 2.7(2) of this Agreement; provided, however, that the Borrowers shall not be permitted to
cause more than $50,000,000 in Release Amounts to be applied to the prepayment of the Fixed Loans during the Closed Prepayment Period, and 
  
 (B) at the time of their exercise of an Extension Right pursuant to Section 2.8, in an amount equal to the Release Amount in
connection with the refinancing of a Release Property with a third party lender unaffiliated with any of the Borrower Parties in accordance with the terms of Section 2.7(2) and Section 2.8(3)(b) of this Agreement. 
  
 (iii) Any Release Amounts received in connection with a
prepayment of the Loans pursuant to subsection (ii) shall be paid and applied as specified in the payment application provisions of Section 2.7(4) 

  

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and the payment priority provisions of Section 2.5(2)(c). In addition, in connection with any prepayment of the Loans pursuant to subsection
(ii): 
  
 (A) if any Floating Loans are
prepaid in connection with any such prepayment and such prepayment is paid on any day other than the last day of an Interest Period, the Borrowers shall pay the Libor Breakage Fee to the Administrative Agent on behalf of the Floating Lenders;

  
 (B) if any Fixed Loans are prepaid in
connection with any such prepayment, the Borrowers shall pay the Fixed Loan Prepayment Fee to the Administrative Agent on behalf of the Fixed Lenders; and 
  
 (C) if any Fixed Loans are prepaid in connection with any such prepayment and such prepayment is made during the Closed Prepayment
Period, the Borrowers shall pay the Administrative Agent Lost Servicing Fee, which shall be paid to the Administrative Agent only to compensate it for its lost servicing opportunity. 
  
 (iv) The Borrowers shall not have the right to prepay the Floating Loans except in connection with a
Release pursuant to Section 2.7(2) or a repayment of the Indebtedness after a casualty or Condemnation pursuant to Section 3.3(3). 
  
 (c) Prepayments in General; Prepayment Election Upon Acceleration. If the Loans are prepaid, in whole or in
part, including, without limitation, pursuant to a casualty or Condemnation or the sale or refinancing of a Release Property or a Rebranding Renovation, each such prepayment shall be made to the Administrative Agent on the related Payment Date (or
if elected by the Borrowers or required to be made on another date, such other date), and in every case together with (i) the accrued and unpaid interest on the principal amount prepaid, (ii) the Prepayment Fee and Administrative Agent Lost
Servicing Fee, if any, due with respect thereto, and (iii) any amounts payable to a Lender holding a Loan pursuant to Section 2.6(5) as a result of such prepayment while a Loan is in effect. If the Loans are accelerated for any reason other
than casualty or Condemnation, the Borrowers shall be deemed to have elected to prepay the Loans in full on the date of the related Event of Default and shall pay to the Administrative Agent (on behalf of the Fixed Lenders) the Fixed Loan Prepayment
Fee, and, if applicable, to the Administrative Agent (for its lost servicing opportunity) the Administrative Agent Lost Servicing Fee (if any Fixed Loans are so prepaid and such Acceleration occurs during the Closed Prepayment Period). Each of the
Borrowers expressly acknowledges and agrees that, although voluntary prepayment of the Fixed Loans is not permitted during the Closed Prepayment Period (except as provided in Section 2.7), the Fixed Loan 

  

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Prepayment Fee shall nevertheless be due and payable in connection with any Acceleration of the Fixed Loans during the Closed Prepayment Period.
Notwithstanding anything to the contrary contained herein, no Fixed Loan Prepayment Fee or Administrative Agent Lost Servicing Fee is due with respect to the Scheduled Payments of principal required to be made pursuant to Section
2.3(1)(b)(ii) or Section 2.3(1)(b)(iii) hereof or in connection with the prepayment of the Loans, or any portion thereof, as a result of any casualty or Condemnation (including but not limited to, in the event that any Borrower prepays a
portion of the Loans in order to obtain a release of an Individual Property for which the Administrative Agent has elected to apply Net Proceeds received in connection with a casualty or Condemnation towards repayment of the Indebtedness pursuant to
Section 3.3(3) hereof), provided that if any such prepayment is made after the occurrence of an Event of Default or an Acceleration of the Loans and prior to the acceptance of a cure thereof by Administrative Agent, including, without
limitation, by virtue of any sale of any Individual Property by foreclosure or power of sale, the Borrowers shall pay to the Administrative Agent (on behalf of the Lenders) any Prepayment Fee and to the Administrative Agent (for its lost servicing
opportunity) the Administrative Agent Lost Servicing Fee that may then be due as set forth above, if any. In the event that the Administrative Agent elects to apply any Net Proceeds received in connection with a casualty or Condemnation pursuant to
Section 3.3(3) to the repayment of the Loans, the Administrative Agent shall invest such Net Proceeds in Permitted investments through the last day of the Interest Period, as directed by the Borrowers, until such Net Proceeds are applied to
the Indebtedness on the next Payment Date and the Borrowers shall continue to pay interest on the Loans until so applied. The Administrative Agent shall not be obligated to obtain any specified rate of return with respect to Permitted Investments on
the Net Proceeds and in no event shall the Administrative Agent or the Lenders be liable for any loss of the principal amount of the Net Proceeds, the risk of such losses to be borne solely by the Borrowers for the term of the Loans (unless such
loss is caused by the Administrative Agent’s conversion or misappropriation of such Net Proceeds). 
  
 Section 2.4 Security. The Loans shall be secured by inter alia (1) the Mortgage creating a first priority lien on each Individual
Property, (2) the Assignment of Leases and Rents creating a first priority lien on such Leases and Rents with respect to each Individual Property, (3) the Stock Pledge and Membership Pledges, (4) the assignment by the Borrowers to the Administrative
Agent of the Interest Rate Cap Agreement pursuant to the Collateral Assignment of Interest Rate Cap Agreement, and (5) the other Loan Documents. As further security for the Loans, the Borrowers agree to fund the Reserves as set forth herein.

  
 Section 2.5 Payments; Priority; Etc. 

  
 (1) Payments Generally.

  
 (a) Payments by Borrowers.
Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Borrowers under this Agreement and the Notes, and, except to the extent 

  

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otherwise provided therein, all payments to be made by the Borrowers under any other Loan Document, shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to the Administrative Agent (on behalf of the Lenders). Such payments shall be made by the Borrowers, at the sole election of the Administrative Agent, either (i) by automatic clearing house
(“ACH”) debit of a bank account of one or more of the Borrowers of which the Administrative Agent has received at least thirty (30) days’ prior written notice or (ii) by wire transfer to an account designated by the
Administrative Agent by notice to the Borrowers. Each payment must be received by the Administrative Agent not later than 1:00 p.m., New York City time, on the date on which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business Day). 
  
 (b) Forwarding of Payments by Administrative Agent. 
  
 (i) Except as otherwise agreed by the Administrative Agent and the Lenders, each payment received by the
Administrative Agent under this Agreement or any Note shall be paid by the Administrative Agent promptly to the applicable Lenders in immediately available funds, for account of such Lender’s Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made. 
  
 (ii) Notwithstanding any other provision of this Agreement to the contrary, the Borrowers shall be deemed to have satisfied their obligation to make a payment to the Lenders hereunder if the Borrowers make such payment directly to the
Administrative Agent in accordance with the terms of Section 2.5(1 )(a) for forwarding by the Administrative Agent in accordance with the terms of this Section 2.5(1)(b). The Borrower shall have no liability to any Lender for any loss
or damages resulting from the Administrative Agent’s failure to forward any funds properly received by the Administrative Agent from the Borrowers in accordance with the terms of Section 2.5(1)(a). 
  
 (c) Extensions to Next Business Day. If the
due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the
period of such extension. 
  
 (2) Priority
and Application of Payments; Revised Schedule E. 
  
 (a) All Scheduled Payments on the Loans and any mandatory prepayments of the Loans shall be applied to the applicable Type of Loans to which such payments relate on an equal priority, pari passu basis, and
shall be paid to the Lenders holding each Type of Loans on a pro rata basis in accordance with the respective unpaid principal amounts of such Loans. 
  

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 (b) Any optional prepayments made on the Fixed Loans shall be paid to the Fixed Lenders
on a pro rata basis in accordance with the respective unpaid principal amounts of such Fixed Loans. 
  
 (c) Any Release Amounts shall be applied as set forth in Section 2.7(4)(a), with all such payments being applied first
to reduce the Floating Loan Amount to zero and second to reduce the Fixed Loan Amount to zero. All such payments shall be made to the Lenders holding Loans of the applicable Type, pro rata in accordance with the respective unpaid
principal amounts of such Type of Loans. 
  
 (d)
Any Insurance Proceeds or Condemnation Proceeds applied to the repayment of the Indebtedness shall be paid to either the Fixed Lenders, the Floating Lenders or a combination thereof, as the Borrower shall elect pursuant to Section
2.3(3)(a)(ii), provided, however, that if an Event of Default has occurred and is continuing as of such date, such proceeds shall be paid to either the Fixed Lenders, the Floating Lenders or a combination thereof, as determined by the
Administrative Agent in its sole and absolute discretion. 
  
 (e) Any accrued interest, Libor Breakage Fees, Fixed Loan Prepayment Fees or other payments required to be made in connection with any such prepayments of principal on any of the Loans shall be applied and paid to the
Lenders which have received such prepayments of principal of the applicable Type of Loans in accordance with the provisions hereof, including, without limitation, Section 2.7(4)(a), in each case on a pro rata basis. 
  
 (f) After any prepayment of the Loans, the Administrative
Agent shall prepare a revised Exhibit E to this Agreement which reflects the revised Allocated Loan Amounts as calculated pursuant to this subsection and shall distribute such revised schedule to the Borrowers and Lenders. Such revised
exhibit shall, absent manifest error, be conclusive evidence of the revised Allocated Loan Amounts and shall be binding upon the parties hereto without the necessity of any formal amendment or other writing. 
  

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 (3) Sharing of Payments, Etc. 
  
 (a) Right of Set-off. Each Borrower agrees
that, in addition to (and without limitation of) any right of set-off, banker’s lien or counterclaim a Lender may otherwise have, each Lender shall be entitled, at its option (to the fullest extent permitted by law), to set off and apply any
deposit (general or special, time or demand, provisional or final), or other indebtedness, held by it for the credit or account of the Borrowers at any of its offices, in Dollars or in any other currency, against any principal of or interest on any
of such Lender’s Loans or any other amount payable to such Lender hereunder, that is not paid when due (regardless of whether such deposit or other indebtedness is then due to any Borrower), in which case it shall promptly notify the Borrowers
and the Administrative Agent thereof, provided that such Lender’s failure to give such notice shall not affect the validity thereof. 
  
 (b) Sharing. If any Lender shall obtain from any of the Borrowers payment of any principal of or interest on any Loan owing
to it or payment of any other amount under this Agreement or any other Loan Document through the exercise of any right of set-off, banker’s lien or counterclaim or similar right or otherwise (other than from the Administrative Agent as provided
herein), and, as a result of such payment, such Lender shall have received a greater percentage of the principal of or interest on the Loans or such other amounts then due hereunder or thereunder by any Borrower to such Lender than the percentage
received by any other Lender, it shall promptly pay over such excess to the Administrative Agent for further distribution to the other Lenders, pro rata in accordance with the unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. 

 
 (c) Rights of Lenders; Bankruptcy. Nothing
contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of such Borrower.
If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section 2.5(3) applies, such Lender shall, to the extent practicable, exercise its rights in respect
of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 2.5(3) to share in the benefits of any recovery on such secured claim. 
  
 Section 2.6 Yield Protection: Etc. 
  
 (1) Additional Costs. 
  
 (a) Costs of Making or Maintaining Floating
Loans. Each Borrower shall pay directly to each Lender from time to time such amounts as such Lender may reasonably determine to be necessary to compensate such 

  

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Lender for any increased costs that such Lender determines are attributable to its making or maintaining of any Floating Loans or its obligation to make any
Floating Loans hereunder, or any reduction in any amount receivable by such Lender hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called “Additional
Costs”), resulting from any Regulatory Change that: 
  
 (i) subjects any Lender (or its Applicable Lending Office for any of such Loans) to any tax, duty or other like charge in respect of such Loans or its related Note or changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its Note in respect of any of such Loans (excluding Regulatory Changes affecting the rate of tax on the overall net income of such Lender or of such Applicable Lending Office); or 
  
 (ii) as to any Floating Loans, imposes or modifies any
reserve, special deposit or similar requirements (other than the Reserve Requirement used in the determination of the Adjusted Libor Rate for any Interest Period for such Loan) relating to any extensions of credit or other assets of, or any deposits
with or other liabilities of, such Lender (including, without limitation, any of such Loans or any deposits referred to in the definition of “Libor Base Rate”), or any such commitment of such Lender (including, without limitation, the
Commitment of such Lender hereunder); or 
  
 (iii) as to any Floating Loans, imposes any other condition affecting this Agreement or its Note (or any of such extensions of credit or liabilities) or its Commitment. 
  
 If any Lender requests compensation from the Borrowers under this paragraph (a), the Borrowers may, by notice to such Lender (with a copy to
the Administrative Agent), suspend the obligation of such Lender thereafter to make or Continue Floating Loans until the Regulatory Change giving rise to such request ceases to be in effect (in which case the provisions of Section 2.6(4)
shall be applicable), provided that such suspension shall not affect the right of such Lender to receive the compensation so requested. 
  
 (b) Costs Attributable to Regulatory Change or Risk-Based Capital Guidelines. Without limiting the effect of the foregoing
provisions of this Section 2.6(1) (but without duplication), each Borrower shall pay directly to each Lender from time to time on request such amounts as such Lender may determine to be necessary to compensate such Lender (or, without
duplication, the bank holding company of which such Lender is a subsidiary) for any costs that it determines are attributable to the maintenance by such Lender (or any Applicable Lending Office or such bank holding company) as to any Floating Loans,
pursuant to any law or regulation or any interpretation, directive or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or monetary authority 

  

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(i) following any Regulatory Change or (ii) implementing any risk-based capital guideline or other requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basel Accord (or as a direct or indirect consequence of, in
connection with or with a view to the matters discussed in the Basel Accord), of capital in respect of (as to its Floating Loans) its Commitment or Loans (such compensation to include, without limitation, an amount equal to any reduction of the rate
of return on assets or equity of such Lender (or any Applicable Lending Office or such bank holding company) to a level below that which such Lender (or any Applicable Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request). 
  
 (c) Notification and Certification. Each Lender shall notify the Borrowers of any event occurring after the date hereof entitling such Lender to compensation under paragraph (a) or (b) of this Section
2.6(1) as promptly as practicable, but in any event within forty-five (45) days, after such Lender obtains actual knowledge thereof; provided that (i) if any Lender fails to give such notice within forty-five (45) days after it obtains actual
knowledge of such an event, such Lender shall, with respect to compensation payable pursuant to this Section 2.6(1) in respect of any costs resulting from such event, only be entitled to payment under this Section 2.6(1) for costs
incurred from and after the date forty-five (45) days prior to the date that such Lender does give such notice and (ii) each Lender will designate a different Applicable Lending Office for the Loans of such Lender affected by such event if such
designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable opinion of such Lender, be disadvantageous to such Lender. Each Lender will furnish to the Borrowers a certificate setting forth the
basis and amount of each request by such Lender for compensation under paragraph (a) or (b) of this Section 2.6(1). Determinations and allocations by any Lender for purposes of this Section 2.6(1) of the effect of any Regulatory Change
pursuant to paragraph (a) of this Section 2.6(1), or of the effect of capital maintained pursuant to paragraph (b) of this Section 2.6(1), on its costs or rate of return of maintaining Floating Loans or its obligation to make
Floating Loans, or on amounts receivable by it in respect of Floating Loans, and of the amounts required to compensate such Lender under this Section 2.6(1). shall be conclusive absent manifest error, provided that such determinations and
allocations are made on a reasonable basis. 
  
 (2) Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, on or prior to the determination of the Libor Base Rate for any Interest Period for any Floating Loan: 
  
 (a) the Administrative Agent determines in good faith, which
reasonable determination shall be conclusive, that quotations of interest rates for the relevant deposits referred to in the definition of Libor Base Rate or upon which the Libor Base Rate is determined, are not being provided in the relevant

  

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amounts or for the relevant maturities for purposes of determining rates of interest for Floating Loans as provided herein; or 
  
 (b) Lenders holding at least 51 % of the aggregate
outstanding principal amount of the Floating Loans determine in good faith, which reasonable determination shall be conclusive, and notify the Administrative Agent that the relevant rates of interest referred to in the definition of Libor Base Rate
upon the basis of which the rate of interest for Floating Loans for such Interest Period is to be determined or upon which the Libor Base Rate is determined, are not likely adequately to cover the cost to such Lenders of making or maintaining
Floating Loans for such Interest Period; 
  
 then the Administrative Agent shall
give the Borrowers and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to make additional Floating Loans or to Continue Floating Loans, and the Borrowers shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Floating Loans, either prepay such Loans (without premium or penalty, other than a Libor Breakage Fee if such prepayment is made on any day other than the last day of an Interest
Period) or such Loans shall be automatically Converted into Alternate Interest Rate Loans. 
  
 (3) Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender
or its Applicable Lending Office to honor its obligation to make or maintain Floating Loans hereunder (and the designation of a different Applicable Lending Office would either not avoid such unlawfulness or would be materially disadvantageous to
such Lender, in the reasonable opinion of such Lender), then such Lender shall promptly notify the Borrowers thereof (with a copy to the Administrative Agent) and such Lender’s obligation to make or Continue, or to Convert Loans of any other
Type into, Floating Loans shall be suspended until such time as such Lender may again make and maintain Floating Loans (in which case the provisions of Section 2.6(4) shall be applicable). 
  
 (4) Treatment of Affected Loans. If the
obligation of any Lender to make Floating Loans or to Continue, or to Convert Alternate Interest Rate Loans into, Floating Loans shall be suspended pursuant to Section 2.6(1), 2.6(2) or 2.6(3), such Lender’s Loans shall be automatically
Converted into Alternate Interest Rate Loans on the last day(s) of the then current Interest Period(s) for Loans (or, in the case of a Conversion resulting from a circumstance described in Section 2.6(3), on such earlier date as such Lender
may specify to the Borrowers with a copy to the Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 2.6(1). 2.6(2) or 2.6(3) that gave rise to such Conversion no
longer exist: 
  
 (a) to the extent that such
Lender’s Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s Floating Loans shall be applied instead to its Alternate Interest Rate Loans; and 
  
 (b) all Loans that would otherwise be made or Continued by
such Lender as Floating Loans shall be made or Continued instead as Alternate Interest 

  

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Rate Loans, and all Loans of such Lender that would otherwise be Converted into Floating Loans shall remain as Alternate Interest Rate Loans. 
  
 If such Lender gives notice to the Borrowers with a copy to the Administrative Agent that the
circumstances specified in Section 2.6(1), 2.6(2) or 2.6(3) that gave rise to the Conversion of such Lender’s Floating Loans pursuant to this Section 2.6(4) no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist), such Lender’s Alternate Interest Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for Floating Loans, to the extent necessary so that after giving effect
thereto, all Alternate Interest Rate Loans and Floating Loans are allocated among the Lenders ratably (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments. 
  
 (5) Compensation. In connection with the
prepayment of any Floating Loan on a date other than the last day of the Floating Interest Period for such Floating Loan (including, without limitation, any prepayment resulting from the Acceleration of said Floating Loan pursuant to the
Administrative Agent’s or the Lender’s rights referred to in Article 9), the Borrowers shall pay to the Administrative Agent for account of each Floating Lender, the Libor Breakage Fee to compensate said Floating Lender for any
loss, cost or expense incurred by such Floating Lender in connection with such prepayment. 
  
 (6) U.S. Taxes. 
  
 (a) Gross-up for Deduction or Withholding of U.S. Taxes. Each Borrower agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of any amount due to such non-U.S. Person hereunder after deduction for or withholding in respect of any U.S. Taxes imposed with respect to such payment (or in lieu
thereof, payment of such U.S. Taxes by such non-U.S. Person), will not be less than the amount stated herein to be then due and payable, provided that the foregoing obligation to pay such additional amounts shall not apply: 
  
 (i) to any payment to any Lender hereunder unless such
Lender is, on the date hereof (or on the date it becomes a Lender hereunder) and on the date of any change in the Applicable Lending Office of such Lender, either entitled to submit a Form W-8BEN (relating to such Lender and entitling it to a
complete exemption from withholding on all interest to be received by it hereunder in respect of the Loans) or Form W-8ECI (relating to all interest to be received by such Lender hereunder in respect of the Loans), or 
  
 (ii) to any U.S. Taxes imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of America of such non-U.S.
Person if such compliance is required by statute 

  

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or regulation of the United States of America as a precondition to relief or exemption from such U.S. Taxes. 
  
 For the purposes hereof, (A) “U.S. Person” means a citizen, national
or resident of the United States of America, a corporation, limited liability company, partnership or other entity created or organized in or under any laws of the United States of America or any State thereof, or any estate or trust that is subject
to Federal income taxation regardless of the source of its income, (B) “U.S. Taxes” means any present or future tax, assessment or other charge or levy imposed by or on behalf of the United States of America or any taxing
authority thereof or therein, (C) “Form W-8BEN” means Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) of the Department of the Treasury of the United States of America and (D)
“Form W-8ECI” means Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption From Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America. Each of the Forms referred to in the foregoing clauses (C) and (D) shall include such successor and related forms as may from time to time be adopted by the relevant taxing authorities of the United States
of America to document a claim to which such Form relates. 
  
 (b) Evidence of Deduction, Etc. Within 30 days after paying any amount to the Administrative Agent or any Lender from which it is required by law to make any deduction or withholding, and within 30 days
after it is required by law to remit such deduction or withholding to any relevant taxing or other authority, each Borrower shall deliver to the Administrative Agent for delivery to such non-U.S. Person evidence satisfactory to such Person of such
deduction, withholding or payment (as the case may be). 
  
 (c) Notice. Each Lender shall notify the Borrowers of any change in circumstances which would modify or render invalid any claimed exemption or reduction. The applicable Lender will designate a different
Applicable Lending Office for the Loans that such Lender may then be maintaining if such designation will avoid the need for, or reduce, the amounts due to such Lender pursuant to this Section 2.7(6), provided (i) in the sole opinion of such
Lender the change in the Applicable Lending Office will not be disadvantageous to such Lender and (ii) such Lender will have no obligation to designate an Applicable Lending Office located in the United States of America. 
  
 (d) Borrower’s Rights. Notwithstanding
anything to the contrary contained in this Section 2.6, in the event that any Lender (or the Administrative Agent, on behalf of any Lender) shall demand payment from the Borrowers of any additional amounts under this Section 2.6(6),
then the Borrowers shall have the right to prepay in full the Floating Loan(s) held by such Lender, subject in each instance to payment of the Libor Breakage Fee, but otherwise without premium. 
  
 Section 2.7 Release of Properties; Release of Borrowers. Except
as set forth in this Section 2.7 or in Section 3.3(3), no repayment or prepayment of all or any portion of the Notes shall cause, give rise to a right to require, or otherwise result in, the release of the Lien of the 

  

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applicable Mortgage or any other Loan Document on any Individual Property or other collateral securing the Loans. 
  
 (1) [Intentionally Deleted]. 
  
 (2) Release of Properties. Subject to the
limitation set forth in Section 2.3(3)(b)(ii)(A) of this Agreement that the Borrowers may not cause more than $50,000,000 in Release Amounts to be applied to the prepayment of the Fixed Loans during the Closed Prepayment Period, at any
time on or prior to the Maturity Date, the Borrowers on one or more occasions may obtain and the Administrative Agent and Lenders shall take such actions as are necessary to effectuate pursuant to this Section 2.7(2): (a) the release of any
Release Property from the Lien of the Mortgage thereon (and related Loan Documents) in connection with any of (i) a sale of such Release Property to a third party unrelated to any of the Borrowers, or (ii) a Rebranding Renovation of such Release
Property or (iii) a refinancing of such Release Property in connection with the exercise by the Borrowers of an option to extend the Maturity Date of the Floating Loans as set forth in Section 2.8, (b) the release of a Borrower’s
obligations under the Loan Documents with respect to such Release Property (other than those expressly stated to survive payment of the Release Amount and the release of the Mortgage thereon, including, but not limited to, those obligations set
forth in the Hazardous Materials Indemnity Agreement), and (c) the release of any funds in the Tax and Insurance Reserve and any other Reserve, to the extent such funds are related or allocated to such Release Property and have not been previously
disbursed, all upon the satisfaction by the Borrowers of each of the following conditions to the satisfaction of the Administrative Agent: 
  
 (i) At the time of the notice from the Borrowers to the Administrative Agent of a Borrower’s desire (A) to sell the Release
Property, (B) to conduct a Rebranding Renovation of the Release Property, or (C) to refinance such Release Property, as applicable, and at the time of the Release of the Release Property and the tendering of the Release Amount, there shall exist no
Event of Default or condition which, with the giving of notice from the Administrative Agent to the Borrowers or the passage of time, or both, would constitute an Event of Default; 
  
 (ii) The Borrowers shall provide Administrative Agent with at least fifteen (15) days prior written notice
of the pending sale, Rebranding Renovation, or refinancing, as applicable, of the Release Property and the partial prepayment of the Loans pursuant to this Section 2.7(2); 
  
 (iii) The Borrowers shall remit to the Administrative Agent (on behalf of the Lenders) an amount equal to
the Release Amount for the applicable Release Property; 
  
 (iv) The Borrowers shall pay to the Administrative Agent all sums, including, but not limited to, any Libor Breakage Fee, any Fixed Loan Prepayment Fee, any Administrative Agent Lost Servicing Fee and all interest due
pursuant to Section 2.3(3) hereof and all other sums then 

  

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due and payable under the Notes, this Agreement, the Mortgages and the other Loan Documents with respect to said Release Property; 
  
 (v) If the Release Property is not being Released in
connection with a Rebranding Renovation, such Release Property shall either (A) be sold and transferred from a Borrower to another Person, which is not an Affiliate of any of the Borrowers, pursuant to a contract of sale that is a bona fide
arm’s length contract, and the transferring Borrower shall provide Administrative Agent with true and correct copies, certified by an officer of such Borrower, of the contract of sale for said Release Property and the closing documents for the
sale of said Release Property, including but not limited to the deed and the closing statement, or (B) be refinanced upon market terms with a third-party lender unaffiliated with any of the Borrower Parties in order to permit the Borrowers to
satisfy the maximum Loan-to-Value Ratio described in Section 2.8(3)(b) in connection with the exercise by the Borrowers of an option to extend the Maturity Date of the Floating Loans as set forth therein and, as further conditions upon the
right of the Borrowers to cause such a Release of one or more Individual Properties pursuant to this clause (B), (I) the applicable Borrower shall convey such Release Property to a legal entity which is not a Borrower immediately prior to
encumbering such Release Property with such new indebtedness, (II) such Borrower shall provide Administrative Agent with true and correct copies, certified by an officer of such Borrower, of the closing documents for such new indebtedness, including
but not limited to the promissory note, security instrument and the closing statement related thereto, and (III) upon and after such Release, each of the Borrowers shall continue to be a Special Purpose Entity and shall not be obligated or bound by
the new indebtedness used to refinance such Release Property; 
  
 (vi) The Borrowers shall submit to the Administrative Agent (on behalf of the Lenders), not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such
Release Property for execution by the Administrative Agent. Such release shall be in proper form for recording in the jurisdiction in which the Release Property is located and shall be reasonably satisfactory to the Administrative Agent. In
addition, the Borrowers shall provide all other documentation the Administrative Agent reasonably requires to be delivered by the Borrowers in connection with such release, together with a Borrower’s certificate certifying that such
documentation (A) will effect such release in accordance with the terms of this Agreement, and (B) will not impair or otherwise adversely affect the Liens, security interests and other rights of the Administrative Agent or Lenders under the Loan
Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released); 
  
 (vii) After giving effect to the partial prepayment of the Loans in an amount equal to the Release Amount and the release of the
Mortgages 

  

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and other Loan Documents encumbering the Release Property being sold, the DSCR for all of the remaining Properties shall be greater than or equal to 1.50:1;

  
 (viii) Following the Release of the Release
Property (or Properties) in question and the payment of the Release Amount, the outstanding principal balance of the Loans shall be greater than or equal to $30,000,000 and there shall be at least four (4) remaining Individual Properties owned by
the Borrowers and encumbered by the Mortgages securing the Loans. If the outstanding principal balance of the Loans following such prepayment is less than $30,000,000 or if there are four or fewer Individual Properties then owned by the Borrowers
and encumbered by the Mortgages securing the Loans, the Administrative Agent (on behalf of the Lenders) may, in its sole and absolute discretion, accelerate the Loans and require the Borrowers to repay the Loans in full, together with all applicable
Prepayment Fees as a condition to the release of the Mortgage encumbering the Release Property being sold by any Borrower. 
  
 (3) Release of Certain Borrowers; Payment in Full. 
  
 (a) In the event that all of the Individual Properties owned by any Borrower have been Released pursuant to
the terms of Section 2.7 hereof, then (i) such Borrower shall be released from its obligations under the Notes and the other Loan Documents and (ii) the Stock Pledge or Membership Pledges, as applicable, relating to such Borrower and any
applicable Operator shall also be released (but only if such Stock Pledge or Membership Pledges do not also relate to any other Borrowers who remain liable under the Notes and the other Loan Documents or to any Operators who remain liable under any
other Loan Document). In connection with any such release of a Borrower or any Stock Pledge or Membership Pledges relating to such Borrower, the Borrowers shall submit to the Administrative Agent proper release documentation for execution by the
Administrative Agent. All reasonable costs and expenses associated with the Administrative Agent’s review, execution and delivery of such documentation shall be borne by the Borrowers. 
  
 (b) The Administrative Agent shall, upon the written request
and at the expense of the Borrowers, upon payment in full of all principal and interest on the Loans and all other amounts due and payable under the Loan Documents in accordance with the terms and provisions of the Notes and this Agreement, release
the Liens of the Mortgages and all other security interests created by the Loan Documents not theretofore released provided that the requirements of this Section have been satisfied. 
  
 (c) In connection with the release of the Liens and any other security interests created by the Loan
Documents, the Borrowers shall submit to the Administrative Agent, not less than fifteen (15) business days prior to the related payment date, a release of Lien (and related Loan Documents) for each Individual Property and other collateral for
execution by the Administrative Agent. Such 

  

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release shall be in a form appropriate in each jurisdiction in which an Individual Property or other collateral is located and reasonably satisfactory to the
Administrative Agent. In addition, the Borrowers shall provide all other documentation the Administrative Agent reasonably requires to be delivered by any Borrower in connection with such release. 
  
 (4) Allocated Loan Amounts and Percentages; Revised
Exhibit E. 
  
 (a) Upon any Release of an
Individual Property, the Allocated Loan Amounts and Allocated Percentage for the remaining Properties shall be recalculated as follows and in the following order of priority: 
  
 (i) First, the Release Amount shall be applied to reduce the Allocated Loan Amount for such Release
Property to zero. 
  
 (ii) Second, if any
Tarsadia Properties are then subject to the lien hereof, any remaining portion of the Release Amount shall be applied to reduce the Allocated Loan Amounts of such Tarsadia Properties on a pro rata basis in accordance with their respective Allocated
Percentages, until the Allocated Loan Amount of each Tarsadia Property has been reduced to zero. 
  
 (iii) Third, the Administrative Agent shall recalculate the Allocated Percentage for each remaining Individual Property to a
fraction, the numerator of which is the Allocated Loan Amount for such Individual Property and the denominator of which is the aggregate outstanding principal amount of the Loans. 
  
 (iv) Fourth, any remaining portion of the Release Amount shall be applied to reduce the Allocated
Loan Amounts for all of the remaining Properties on a pro rata basis in accordance with their respective Allocated Percentages, until the Allocated Loan Amount of each Individual Property has been reduced to zero. 
  
 (v) Fifth, the Administrative Agent shall
recalculate the Allocated Loan Amounts for all of the remaining Properties to account for the prepayments specified in this subsection. 
  
 (b) In connection with any Release of fewer than all of the Properties, the Administrative Agent shall prepare a revised Exhibit E
to this Agreement which reflects the revised Allocated Percentages and revised Allocated Loan Amounts as calculated pursuant to subsection (a) and shall distribute such revised schedule to the Borrowers and Lenders. Such revised exhibit shall,
absent manifest error, be conclusive evidence of the revised Allocated Percentages and revised Allocated Loan Amounts and shall be binding upon the parties hereto without the necessity of any formal amendment or other writing. 
  

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 (c) If any Release occurs after the Borrowers have begun to make Scheduled Payments of
outstanding principal on the Fixed Loans pursuant to the provisions of Section 2.3(1)(b)(ii), subsequent amortization payments shall be adjusted to reflect an amortization schedule equal to twenty-five (25) years minus the number of months
(whether full or partial) existing between December 1, 2006 and the date of such Release. For example, if a Release occurs on August 15, 2007 (which is nine (9) full or partial months since December 2006), the amortization payments due on the
Payment Date occurring in September, 2007 and each subsequent Payment Date shall be based on an amortization schedule of twenty-four (24) years and three (3) months. The amounts of such reduced amortization payments shall be determined by the
Administrative Agent and shall, absent manifest error, be deemed conclusive and binding upon the parties hereto without the necessity of any formal amendment or other writing. 
  
 Section 2.8 Extension of Floating Loan Terms and Maturity. 
  
 (1) The Borrowers shall have the right to extend the
Maturity Date of the Floating Loans (but not the Fixed Loans) for up to two (2) consecutive extension terms of one year each (an “Extension Right”). Each such Extension Right may only be exercised in strict compliance with
the provisions of this Section. If Borrower properly exercises the first such Extension Right, the Maturity Date of the Floating Loans shall be November 1, 2008. If Borrower properly exercises the second and final such Extension Right, the Maturity
Date of the Floating Loans shall be November 1, 2009. 
  
 (2) If the Borrowers elect to extend the Maturity Date of the Floating Loans as set forth in this Section, they shall give prior written notice of such election to the Administrative Agent. Such notice must be received by the Administrative
Agent not earlier than one hundred twenty (120) days prior to the Maturity Date of the Floating Loans (as it may have been previously extended) nor later than thirty (30) days prior to the Maturity Date of the Floating Loans (as it may have been
previously extended). 
  
 (3) The Borrowers’
right to exercise any Extension Right shall be expressly conditioned upon satisfaction of each of the following conditions precedent (it being understood that the term “Maturity Date” as used in this section shall mean the Maturity Date
prior to the effectiveness of each such Extension Right): 
  
 (a) On the date of such written election by the Borrowers and on each Maturity Date of the Floating Loans, no Event of Default (or event or condition which with the giving of notice or the passage of time would
constitute an Event of Default) shall have occurred and be continuing. 
  
 (b) On the date of such written election by the Borrowers and on each Maturity Date, the Loan-to-Value Ratio shall be less than or equal to sixty-five percent (65%); provided, however, that Borrower shall have the
right to cause one or more Individual Properties to be Released in order to allow the Borrowers to satisfy such maximum Loan-to-Value Ratio, so long as (i) such Release occurs in connection with the refinancing of such Individual Property upon
market terms 

  

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with a third party unrelated to any of the Borrower Parties, (ii) such Release does not occur more than one hundred twenty (120) days prior to the Maturity
Date, (iii) at the time of such Release, the Borrowers have irrevocably exercised their option to an Extension Right, and (iv) such Release otherwise satisfies the requirements of Section 2.3(3)(b)(ii) and Section 2.7(2) hereof.

  
 (c) Not later than thirty (30) days prior to
each Maturity Date, the Borrowers shall have provided to the Administrative Agent a Replacement Interest Rate Cap Agreement covering the period from the original Maturity Date to the Maturity Date as so extended. 
  
 (d) On or prior to each Maturity Date, the Borrowers shall
pay to the Lenders a non-refundable extension fee in an amount equal to the product of one fourth of one percent (0.25%) times the outstanding principal amount of the Floating Loans as of the Maturity Date (the “Extension
Fee”). 
  
 (e) On or prior to each
Maturity Date, the Borrowers shall execute and deliver to the Administrative Agent (i) a written certification stating that (A) no Event of Default has occurred and is continuing as of such date and as of the Maturity Date and (B) all of the
representations and warranties of each Borrower contained in this Agreement and in the other Loan Documents are true, complete and correct in all material respects as of such date and as of the Maturity Date (except as to such matters which by their
nature can no longer be true as a result of the passage of time and not as a result of any action or inaction by any Borrower) and (ii) such other agreements, title insurance endorsements, legal opinions or other items as may be reasonably requested
by the Administrative Agent on behalf of the Lenders in connection with such extension. It is understood that if applicable state and local title insurance requirements so allow, the Administrative Agent will accept one or more endorsements to the
Title Policy, without requiring the Borrowers to obtain new policies of title insurance in connection with such extension, if such endorsements would provide the same substantive coverage to the Administrative Agent with respect to the extended
maturity date of the Loans. 
  
 (f) On or prior
to each Maturity Date, the Borrowers shall pay all expenses incurred by the Administrative Agent and the Lenders in connection with such extension, including, but not limited to, title search fees, title insurance or endorsement premiums, legal fees
and expenses, due diligence fees, and consultant’s fees. 
  
 Section 2.9 Repayment of Floating Loan at Maturity Date. If the Borrowers do not extend the Maturity Date of the Floating Loans in accordance with the terms of Section 2.8, Borrowers may refinance one or more of the
Individual Properties within thirty (30) days prior to the Maturity Date of the Floating Loans and apply the Release Amount from said Individual Property(ies) to the repayment of the Floating Loans and, to the extent applicable under this Section
2.9, to the Fixed Loans. Any such refinance one or more of the Individual Properties shall be for an amount of Net Refinance Proceeds substantially the same as the then current 

  

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outstanding principal balance of the Floating Loans. If the Release Amount(s) from the Individual Property(ies) so refinanced exceeds the outstanding balance
of the Floating Loans, such excess shall be applied by the Administrative Agent to repay a portion of the Fixed Loans. Any such partial prepayment of the Fixed Loans shall include the Fixed Loan Prepayment Fee. 
  
 ARTICLE III 
  
 INSURANCE, CONDEMNATION, RESERVES AND CASH MANAGEMENT 
  
 Section 3.1 Insurance.(1) The Borrowers shall obtain and maintain, or cause to be maintained, insurance for
each Borrower and each of the Individual Properties providing at least the following coverages: 
  
 (a) comprehensive all risk property insurance on the Improvements and the Personality, insuring against loss or damage to such Individual
Property by fire and other “extended coverage” risks of physical loss, including contingent liability from “Operation of Building Laws,” in each case (i) in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of land, excavations, foundations, underground utilities and footings) with a waiver of depreciation together with endorsements for
“Demolition Costs” and “Increased Costs of Construction” with each such endorsement having a $5,000,000 sublimit per occurrence, (ii) containing an agreed amount endorsement with respect to the Improvements and Personality
waiving all coinsurance provisions; (iii) providing for no deductible in excess of Fifty Thousand Dollars ($50,000) for all such insurance coverage; and (iv) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement
if any of the Improvements or the use of the Individual Property shall at any time constitute legal non-conforming structures or uses. Except as expressly provided in Section 3.1(l)(k) of this Agreement, such policy may not include any
exclusion for acts of terrorism. In addition, the Borrowers shall obtain: (A) if any portion of the Improvements is currently or at any time in the future located in a federally designated “special flood hazard area”, flood hazard
insurance in an amount equal to the lesser of (I) the outstanding principal balance of the Notes allocated to the applicable Individual Property or (II) the maximum amount of such insurance available under the National Flood Insurance Act of 1968,
the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended or such greater amount as the Administrative Agent shall require; and (B) earthquake insurance in amounts and in form and substance
satisfactory to the Administrative Agent in the event the Individual Property is located in an area with a high degree of seismic activity, provided that the insurance pursuant to clauses (A) and (B) hereof shall be on terms consistent with the
comprehensive all risk insurance policy required under this subsection (a). With respect to the earthquake insurance referred to in clause (B) hereof, the Borrowers shall at all times be required to maintain such coverage on Improvements located in
San Diego, California and Salt Lake City, Utah; the Borrowers shall be required to maintain such coverage on Improvements located 

  

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in other areas only to the extent such coverage may be obtained at commercially reasonable premium rates. 
  
 (b) commercial general liability insurance against claims
for personal injury, bodily injury, death or property damage liability occurring upon, in or about the Individual Property, such insurance (i) to be on the so-called “occurrence” form with a combined limit of not less than Two Million
Dollars ($2,000,000) in the aggregate and One Million Dollars ($1,000,000) per occurrence (and, if on a blanket policy, containing an “Aggregate Per Location” endorsement); (ii) to continue at not less than the aforesaid limit until
required to be changed by the Administrative Agent in writing by reason of materially changed economic conditions making such protection inadequate, provided that the Administrative Agent has required such change with respect to similar loans held
or administered by the Administrative Agent; and (iii) to cover at least the following hazards: (A) premises and operations; (B) products and completed operations on an “if any” basis; (C) independent contractors; (D) blanket contractual
liability for all legal contracts; and (E) contractual liability covering the indemnities contained in the Mortgages to the extent the same is available; 
  
 (c) business income or interruption insurance (i) with loss payable to the Administrative Agent (on behalf of the Lenders); (ii) covering
all risks required to be covered by the insurance provided for in subsection (a) above; (iii) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and Personality has been repaired,
the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date that the Individual Property is repaired or replaced and operations
are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; (iv) in an amount equal to one hundred percent (100%) of the projected gross income from the Individual Property for a period of
twelve (12) months from the date that the Individual Property is repaired or replaced and operations are resumed; and (v) providing for “extra expense” coverage in an amount reasonably satisfactory to the Administrative Agent. The amount
of such business income or interruption insurance shall be determined prior to the date hereof and at least once each year thereafter based on the Borrowers’ reasonable estimate of the gross income from each Individual Property for the
succeeding twelve (12) month period. If a Cash Trap Period has occurred and is continuing, all proceeds payable to the Administrative Agent pursuant to this subsection shall be deposited into the Trapped Cash Account; otherwise, such proceeds shall
be deposited into the applicable Operating Account upon the written request of the Borrowers; provided, however, if such insurance proceeds are disbursed to the Administrative Agent in an amount representing losses for a period in excess of
one (1) month, then such insurance proceeds shall be held by the Administrative Agent in an interest-bearing account and applied on a monthly basis in the amount attributed to the related month by the insurance company providing such loss of rents
and/or business income insurance. Nothing herein contained shall be deemed to relieve any Borrower of its obligations to pay 

  

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the obligations secured by the Loan Documents on the respective dates of payment provided for in the Notes and the other Loan Documents except to the extent
such amounts are actually paid out of the proceeds of such business income insurance; 
  
 (d) at all times during which structural construction, repairs or alterations are being made with respect to the Improvements by or on
behalf of any Borrower at an Individual Property, and only if the Individual Property coverage form does not otherwise apply, (i) owner’s contingent or protective liability insurance covering claims not covered by or under the terms or
provisions of the above mentioned commercial general liability insurance policy; and (ii) the insurance provided for in subsection (a) above written in a so-called builder’s risk completed value form (A) on a non-reporting basis, (B) against
all risks insured against pursuant to subsection (a) above, (C) including permission to occupy the Individual Property, and (D) with an agreed amount endorsement waiving co-insurance provisions; 
  
 (e) if any Borrower has any employees, workers’
compensation subject to the statutory limits of the state in which the Individual Property is located, and employer’s liability insurance with a limit of at least One Million Dollars ($1,000,000) per accident and per disease per employee, and
One Million Dollars ($1,000,000) for disease aggregate in respect of any work or operations on or about the Individual Property, or in connection with the Individual Property or its operation (if applicable); 
  
 (f) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by the Administrative Agent on terms consistent with the commercial property insurance policy required under subsection (a) above; 
  
 (g) umbrella liability insurance in an amount not less than Fifty Million Dollars ($50,000,000) per
occurrence on terms consistent with the commercial general liability insurance policy required under subsection (b) above; 
  
 (h) motor vehicle liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits
per occurrence of One Million Dollars ($1,000,000); 
  
 (i) if any Borrower has any employees, insurance against employee dishonesty in an amount not less than one (1) month of gross revenue from such Individual Property with a deductible not greater than Fifty Thousand Dollars ($50,000);

  
 (j) upon sixty (60) days’ written
notice, such other reasonable insurance and in such reasonable amounts as the Administrative Agent from time to time may reasonably request against such other insurable hazards which at the 

  

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time are commonly insured against for property similar to the Individual Property located in or around the region in which the Individual Property is
located; and 
  
 (k) notwithstanding the
provisions of Section 3.1(1)(a) above that require that Borrowers’ comprehensive all risk property insurance policy not to exclude from coverage terrorism events and that such policy therefore include 100% replacement cost insurance
without co-insurance for damage to any Individual Property caused by terrorist activities and that such insurance have a deductible of not more than the amount set forth in said Section 3.1(1)(a) (collectively, “Terrorism
Insurance”), Administrative Agent, on behalf of the Lenders hereby agrees, solely for the benefit of Borrowers during Borrowers’ ownership of the Properties and not for the benefit of any successor or assignee of Borrowers, during any
period that the Terrorism Risk Insurance Act (“TRIA”) is in effect, Borrower shall be required to purchase Terrorism Insurance so long as the same can be obtained at Commercially Reasonable Rates. If TRIA is no longer in effect,
then for a period of 12 months from the date TRIA expires, in the event Borrowers’ existing comprehensive all risk property insurance policy is renewed by the current insurer or a new policy is obtained upon expiration of the existing policy
and such renewal or new policy does not include or specifically excludes Terrorism Insurance or contains any material modification of the Terrorism Insurance requirements set forth above, Borrowers will be required to use “commercially
reasonable efforts” (as defined below) to either purchase at Commercially Reasonable Rates a rider or a separate insurance policy providing for Terrorism Insurance. Such policy and the insurer must in all respects be satisfactory to
Administrative Agent. Should the commercial mortgage lending environment relating to Terrorism Insurance and the insurance environment for obtaining Terrorism Insurance at the expiration of the 12-month period be substantially similar to the lending
and insurance environment on the date TRIA expires, then Administrative Agent will reasonably consider extending this provision for an additional 12 month period or successive additional 12 month periods should lending and insurance conditions so
warrant. 
  
 As used in this Section, “Commercially
Reasonable Rates” shall mean a rate, for the Terrorism Insurance portion of Borrowers’ insurance policy only, that is equal to or less than 50% of the total cost of the remaining portion of the all-risk policy that will then co-exist
with the Terrorism Insurance at the time the Terrorism Insurance is considered for purchase (the “Fifty Percent Rate”). As used in this Section, “commercially reasonable efforts” shall mean that Borrowers have obtained and
provided to Administrative Agent written quotes for Terrorism Insurance from at least three (3) insurers each calendar quarter during any period that Terrorism Insurance for the Properties is not in place. 
  
 If after using commercially reasonable efforts, Borrowers are unable to
obtain 100% replacement cost Terrorism Insurance at Commercially Reasonable Rates, then unless Administrative Agent in its sole discretion approves otherwise, Borrowers will use commercially reasonable efforts to purchase the maximum amount of
Terrorism Insurance as may be then available at a premium which is 

  

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equal to the Fifty Percent Rate, provided the amount of such coverage would be for at least $50,000,000 (the “TIC Amount”). Should
Borrowers, after using commercially reasonable efforts, be unable to purchase at least the TIC Amount of coverage of Terrorism Insurance at a cost equal to or less than the Fifty Percent Rate, then Borrower shall provide written notice thereof to
the Administrative Agent. In such event, the Borrower shall have the right, exercisable by delivering a written notice signed by the Borrowers and the Guarantor within ten (10) Business Days of the lapse of such coverage, to cause Guarantor to
indemnify the Administrative Agent and the Lenders, on a full recourse basis, for any and all Losses, up to an aggregate limit of $10,000,000, which they may incur or suffer which would have been covered by Terrorism Insurance had such coverage been
in effect. In the event the Borrowers and Guarantor fail to timely deliver such notice, the Administrative Agent shall have the right (but not the obligation) to force place at least $10,000,000 of coverage of Terrorism Insurance for the Properties,
and Borrowers agree to promptly reimburse Administrative Agent for the actual premium costs of such force-placed Terrorism Insurance up to an amount equal to the Fifty Percent Rate (it being understood that Borrower shall not be required to
reimburse the Administrative Agent for said Terrorism Insurance premiums if at any time during the term of the Loan the Borrowers or the Administrative Agent learns that the amount of Terrorism Insurance coverage obtained by the Administrative Agent
for a premium in an amount equal to the Fifty Percent Rate is less than $10,000,000). If no Terrorism Insurance is placed by Borrowers or Administrative Agent on the Properties, then if at any time during the Loan term, the TIC Amount of Terrorism
Insurance becomes available at Commercially Reasonable Rates, Borrowers shall be required to purchase such Terrorism Insurance. 
  
 (2) All insurance provided for in Section 3.1(1) shall be obtained under valid and enforceable policies (collectively, the
“Policies” or in the singular, the “Policy”), and shall, to the extent not specified above, be subject to the reasonable approval of the Administrative Agent as to insurance companies, amounts,
deductibles, loss payees and insureds. The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the state in which the Properties are located with a rating of “A-X” or better as
established by Best’s Rating Guide and having a claims paying ability rating of “A-” (or the comparable rating) or better by at least two (2) of the Rating Agencies (one of which shall be (a) S&P if S&P is rating the
securities issued in any Secondary Market Transaction of which all or any portion of this Loan is a part, and (b) Moody’s if Moody’s is rating the securities issued in any Secondary Market Transaction of which all or any portion of this
Loan is a part). Not less than ten (10) days prior to the expiration dates of the Policies theretofore furnished to the Administrative Agent, certificates of insurance evidencing the Policies accompanied by evidence satisfactory to the
Administrative Agent of payment of the premiums due thereunder (the “Insurance Premiums”), shall be delivered by the Borrowers to the Administrative Agent; provided, however, the Borrowers shall not be required to deliver
evidence of the payment of Insurance Premiums if they have deposited sufficient funds in the Tax and Insurance Reserve to enable the Administrative Agent to pay such Insurance Premiums. 
  

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 (3) The Borrowers may obtain a blanket insurance policy with respect to the Properties
which satisfies all of the requirements contained herein. Any blanket insurance Policy shall specifically allocate to the Individual Property the amount of coverage from time to time required hereunder and shall otherwise provide the same protection
as would a separate Policy insuring only the Individual Property in compliance with the provisions of Section 3.1(1), including an acknowledgement that the payment of the premium allocated to the Individual Property shall continue such Policy
as to the Individual Property notwithstanding any other payment of premiums. 
  
 (4) All Policies of insurance provided for or contemplated by Section 3.1(1), except for the Policy referenced in Section 3.1(1)(e), shall name the applicable Borrower as the insured and the
Administrative Agent as the additional insured (on behalf of the Lenders), as its interests may appear, and in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain a so-called New York standard
non-contributing mortgagee clause in favor of the Administrative Agent providing that the loss thereunder shall be payable to the Administrative Agent (on behalf of the Lenders). 
  
 (5) All Policies of insurance provided for in Section 3.1(1) shall contain clauses or endorsements to
the effect that: 
  
 (a) no act or negligence of
any Borrower, or anyone acting for any Borrower, or of any tenant or other occupant, or failure to comply with the provisions of any Policy, which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect
the validity or enforceability of the insurance insofar as the Administrative Agent or Lenders are concerned; 
  
 (b) the Policy shall not be materially changed (other than to increase the coverage provided thereby) or canceled without at least thirty
(30) days’ written notice to the Administrative Agent; 
  
 (c) each Policy shall provide that the issuers thereof shall give written notice to the Administrative Agent if the Policy has not been renewed fifteen (15) days prior to its expiration; and 
  
 (d) The Administrative Agent and Lenders shall not be liable
for any Insurance Premiums thereon or subject to any assessments thereunder. 
  
 (6) If at any time the Administrative Agent is not in receipt of written evidence that all insurance required hereunder is in full force and effect, the Administrative Agent shall have the right, on the first Business
Day following written notice to the Borrowers, to obtain such insurance coverage as the Administrative Agent reasonably deems appropriate and all premiums incurred by the Administrative Agent in connection with obtaining such insurance and keeping
it in effect shall be paid by the Borrowers to the Administrative Agent upon written demand and until paid shall be secured by the Mortgages and shall bear interest at the highest Default Rate then applicable to any of the Notes. 
  
 (7) If an Individual Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, the Borrowers shall give prompt notice of such damage to the 

  

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Administrative Agent and shall promptly commence and diligently prosecute the completion of the Restoration of the Individual Property and otherwise in
accordance with Section 3.3 hereof. The Borrowers shall pay all costs of such Restoration whether or not such costs are covered by insurance. The Administrative Agent may, but shall not be obligated to make proof of loss if not made promptly
by the Borrowers. 
  
 (8) In the event of
foreclosure of a Mortgage with respect to an Individual Property, or other transfer of title to an Individual Property in extinguishment in whole or in part of the Indebtedness all right, title and interest of the Borrowers in and to the Policies
that are not blanket Policies then in force concerning the Individual Property and all proceeds payable thereunder (including proceeds payable under blanket policies which relate to the Individual Property) shall thereupon vest in the purchaser at
such foreclosure or the Administrative Agent or other transferee in the event of such other transfer of title. 
  
 Section 3.2 Condemnation Awards. Each Borrower shall promptly give the Administrative Agent notice of the actual or threatened commencement
of any condemnation or eminent domain proceeding (a “Condemnation”) affecting any Individual Property and shall deliver to the Administrative Agent copies of any and all papers served in connection with such proceedings. So
long as no Event of Default has occurred, the Borrowers shall be entitled to negotiate and settle any Condemnation proceedings which involve claims of less than the Condemnation Limit and which do not have a material adverse effect on parking,
access or Improvements at any Individual Property without obtaining the prior consent of the Administrative Agent. If an Event of Default has occurred, or if the Condemnation involves a claim equal to or greater than the Condemnation Limit and would
have a material adverse effect on parking, access or Improvements at any Individual Property, the Administrative Agent may participate in any such negotiations and proceedings and the reasonable out-of-pocket costs of the Administrative Agent with
respect thereto shall be at the expense of the Borrowers and the Borrowers shall deliver to the Administrative Agent all instruments required to permit participation in such negotiations and proceedings. Each Borrower shall, at its expense,
diligently prosecute any such proceedings, and shall consult with the Administrative Agent, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings (subject, however, to the Borrower’s rights to
negotiate and settle certain claims without the consultation of the Administrative Agent as set forth above). The Administrative Agent is hereby irrevocably appointed as each Borrower’s attorney-in-fact, coupled with an interest, with exclusive
power to collect, receive and apply any award consistent with the Loan Documents and, upon any Borrower’s failure to diligently prosecute a claim for an Award, to make any compromise or settlement in connection with any such Condemnation.
Notwithstanding any taking by any public or quasi-public authority through eminent domain or otherwise (including but not limited to any transfer made in lieu of or in anticipation of the exercise of such taking), the Borrowers shall continue to pay
the Indebtedness at the time and in the manner provided for its payment in the Notes and in this Agreement and the Indebtedness shall not be reduced until any award or payment therefor (an “Award”) shall have been actually
received and applied by the Administrative Agent, after the deduction of reasonable out-of-pocket expenses of collection not previously paid by the Borrowers, to the reduction or discharge of the Indebtedness. The Administrative Agent shall not be
limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Notes. If an Individual Property or any portion thereof 

  

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is taken by a condemning authority, the Borrowers shall promptly commence and diligently prosecute the Restoration of the Individual Property and otherwise
comply with the provisions of Section 3.3 hereof. If an Individual Property is sold, through foreclosure or otherwise, prior to the receipt by the Administrative Agent of the Award, the Administrative Agent shall have the right, whether or
not a deficiency judgment on the Notes shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Indebtedness. 
  
 Section 3.3 Restoration. The following provisions shall apply in connection with the Restoration of any
Individual Property: 
  
 (1) If the Net Proceeds
shall be less than the Funds Release Limit, and the costs of completing the Restoration shall be less than the Funds Release Limit, such Net Proceeds will be disbursed by the Administrative Agent to the applicable Borrower upon receipt, provided
that all of the conditions set forth in Section 3.3(2)(i) are met and such Borrower delivers to the Administrative Agent a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in
accordance with the terms of this Agreement. 
  
 (2) If the Net Proceeds are equal to or greater than the Funds Release Limit or the cost of completing the Restoration is equal to or greater than the Funds Release Limit, the Administrative Agent shall make the Net Proceeds available for
the Restoration in accordance with the provisions of this Section 3.3. The term “Net Proceeds” for purposes of this Section 3.3 shall mean: (a) the net amount of all insurance proceeds received by the
Administrative Agent pursuant to Section 3.1 (1)(a), (d) and (f) as a result of such damage or destruction, after deduction of its reasonable out-of-pocket costs and expenses (including, but not limited to, reasonable counsel fees), if any,
in collecting same (“Insurance Proceeds”), or (b) the net amount of the Award, after deduction of its reasonable out-of-pocket costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting
same (“Condemnation Proceeds”), whichever the case may be. 
  
 (i) The Net Proceeds shall be made available to the Borrowers for Restoration provided that the Net Proceeds are received at least one
hundred eighty (180) days prior to the Maturity Date and each of the following conditions are met: 
  
 (A) no Event of Default shall have occurred and be continuing; 
  
 (B) (I) in the event the Net Proceeds are Insurance Proceeds, less than sixty percent (60%) of the total
floor area of the Improvements of the Individual Property have been damaged, destroyed or rendered unusable as a result of such fire or other casualty or (II) in the event the Net Proceeds are Condemnation Proceeds, less than twenty-five percent
(25%) of the land constituting the Individual Property is taken, and such land is located along the perimeter or periphery of the Individual Property, and no portion of the Improvements is located in such land; 
  

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 (C) the applicable Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than ninety (90) days after such Net Proceeds have been received by the Administrative Agent or Borrower, as applicable) and shall diligently pursue the same to satisfactory completion; 
  
 (D) the Administrative Agent shall be satisfied that any
operating deficits, including all scheduled payments of principal and interest under the Notes, which will be incurred with respect to the Individual Property as a result of the occurrence of any such fire or other casualty or taking, whichever the
case may be, will be covered out of (I) the Net Proceeds, (II) the insurance coverage referred to in Section 3.1(1)(c), if applicable, or (III) by other funds of the Borrowers; 
  
 (E) the Administrative Agent shall be reasonably satisfied that the Restoration will be completed on or
before the earliest to occur of (I) three (3) months prior to the Maturity Date, (II) such time as may be required under all Legal Requirements in order to repair and restore the Individual Property to the condition it was in immediately prior to
such fire or other casualty or to as nearly as possible the condition it was in immediately prior to such taking, as applicable or (III) the expiration of the insurance coverage referred to in Section 3.1(1)(c) 
  
 (F) the Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all Legal Requirements and all necessary operating or reciprocal easement agreements for the operation and maintenance of the Individual Property (including, without limitation, the
Franchise Agreement for such Individual Property) are, or remain, in effect; 
  
 (G) the Restoration shall be done and completed by the Borrowers in an expeditious and diligent fashion and in compliance with all Legal Requirements (including, without limitation, all applicable Environmental Laws)
and in compliance with the plans and specifications that have been approved by the Administrative Agent and/or the Casualty Consultant; 
  
 (H) such fire or other casualty or taking, as applicable, does not result in either a loss of access to the Individual Property or the
related Improvements or a loss of a material portion of the parking spaces benefiting such Individual Property such that, following the loss of such parking spaces, the Individual Property is no longer in compliance with applicable zoning and land
use regulations; 
  

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 (I) no Cash Trap Period then exists or, as determined by the Administrative Agent in its
reasonable discretion, would be likely to result from the release of such Net Proceeds for the Restoration of such Individual Property; 
  
 (J) Legal Requirements permit the Improvements to be rebuilt to substantially the same size and scope and at substantially the same
location as they existed prior to such fire or other casualty or taking, as applicable; and 
  
 (K) the applicable Borrower shall commence and complete the Restoration within the time period specified by any Legal Requirements which
might limit the Improvements from being rebuilt to substantially the same size and scope and at substantially the same location as they existed prior to such fire or other casualty or taking, as applicable. 
  
 (ii) The Net Proceeds shall be held by the Administrative
Agent in an account maintained by the Administrative Agent at an Approved Financial Institution and any income earned thereon shall be added to such Net Proceeds and become a part thereof and, until disbursed in accordance with the provisions of
this Section 3.3, shall constitute additional security for the Indebtedness and other obligations under the Loan Documents. Such Net Proceeds shall be invested in Permitted Investments. All out-of-pocket costs and expenses of maintaining and
administering such Net Proceeds shall be paid by the Borrowers. The Administrative Agent shall not be obligated to obtain any specified rate of return with respect to Permitted Investments on the Net Proceeds and in no event shall the Administrative
Agent be liable for any loss of the principal amount of the Net Proceeds, the risk of such losses to be borne solely by the Borrowers for the term of the Loans (unless such loss is caused by the Administrative Agent’s conversion or
misappropriation of such Net Proceeds). The Net Proceeds shall be disbursed by the Administrative Agent to, or as directed by, the Borrowers from time to time during the course of the Restoration, upon receipt of evidence satisfactory to the
Administrative Agent that (A) an amount equal to the portion of the Net Proceeds requested by the Borrowers to be disbursed is due and payable to or required to be deposited with third parties approved by the Administrative Agent in connection with
the Restoration, (B) all materials installed and work and labor performed in connection with the Restoration have been installed and/or completed in accordance with the plans and specifications for the Restoration previously approved by the
Administrative Agent and/or the Casualty Consultant, and (C) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Individual Property arising out of the Restoration which have not either been fully bonded to the reasonable satisfaction of 

  

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the Administrative Agent and discharged of record or in the alternative fully insured to the reasonable satisfaction of the Administrative Agent by the title
company issuing the title insurance policy. 
  
 (iii) All plans and specifications required in connection with the Restoration shall be subject to prior review and approval in all respects by the Administrative Agent and by an independent consulting engineer selected by the
Administrative Agent (the “Casualty Consultant”), which approval shall not be unreasonably withheld, conditioned or delayed. The Administrative Agent shall have the use of the plans and specifications and all permits,
licenses and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which they have been engaged, shall be subject
to prior review and approval by the Administrative Agent and the Casualty Consultant, which approval shall not be unreasonably withheld, delayed or conditioned. All reasonable out-of-pocket costs and expenses incurred by the Administrative Agent in
connection with making the Net Proceeds available for the Restoration including, without limitation, reasonable counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by the Borrowers. 
  
 (iv) In no event shall the Administrative Agent be
obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, minus the Casualty Retainage.
The term “Casualty Retainage” shall mean an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has
been completed. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 3.3(2), be less than the amount actually held back by the Borrowers from contractors, subcontractors and
materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to the Administrative Agent that the Restoration has been completed in accordance with the provisions of this Section
3.3(2) and that all approvals necessary for the re-occupancy and use of the Individual Property have been obtained from all appropriate governmental and quasi-governmental authorities, and the Administrative Agent receives evidence reasonably
satisfactory to the Administrative Agent that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage. 
  
 (v) the Administrative Agent shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar
month. 
  

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 (vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in
the reasonable opinion of the Administrative Agent in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of
the Restoration, the Borrowers shall deposit the deficiency (the “Net Proceeds Deficiency”) with the Administrative Agent before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency
deposited with the Administrative Agent shall be held by the Administrative Agent in the same manner as the Net Proceeds and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 3.3(2) shall constitute additional security for the Indebtedness and other obligations under the Loan Documents. 
  
 (vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited with the Administrative Agent after the Casualty Consultant certifies to the Administrative Agent that the Restoration has been completed in accordance with the provisions of this
Section 3.3(2), and the receipt by the Administrative Agent of evidence reasonably satisfactory to the Administrative Agent that all costs incurred in connection with the Restoration have been paid in full, shall, so long as no Event of
Default shall have occurred and be continuing under the Notes, this Agreement or any of the other Loan Documents, either (A) if no Cash Trap Period then exists, be remitted by the Administrative Agent to the Borrowers or (B) if a Cash Trap Period
then exists, be deposited by the Administrative Agent into the Trapped Cash Reserve, whereupon such excess funds shall become part of the Trapped Cash Reserve and constitute additional security for the Loans. 
  
 (3) All Net Proceeds not required (a) to be made available
for the Restoration or (b) to be returned to the Borrowers or deposited in the Trapped Cash Reserve pursuant to Section 3.3(2)(vii) may be retained and applied by the Administrative Agent toward the payment or prepayment of the Indebtedness,
without the payment of any Prepayment Fee (it being understood that, pursuant to Section 2.3(3)(c)(i), the Administrative Agent shall hold and invest such Net Proceeds until the next Payment Date so as to avoid the incurrence of any Libor
Breakage Fee), as set forth in Section 2.3(3)(a)(ii), or, at the discretion of the Administrative Agent, the same may be paid, either in whole or in part, to the Borrowers. In the event that the Administrative Agent elects to apply Net
Proceeds toward the payment or prepayment of the Indebtedness pursuant to the preceding sentence, the Borrowers may obtain the release of the Lien of the Mortgage (and related Loan Documents) pursuant to Section 2.7(2) hereof with respect to
the Individual Property that has suffered the casualty or Condemnation; provided, however, with respect to the requirement set forth in (w) Section 2.7(2)(iii), the Borrowers shall only be required to pay the excess of the Release Amount for
such Individual Property over the Net Proceeds actually received by the Administrative Agent and applied toward the prepayment of the Indebtedness, (x) Section 2.7(2)(iv), the Borrowers shall not be required to pay any 

  

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Prepayment Fee (except a Libor Breakage Fee, if such payment is made on a day other than on the last day of an Interest Period), (y) Section
2.7(2)(v), the Borrowers shall only be required to transfer the Individual Property to another Person, which may be an Affiliate of any Borrower, in accordance with the other terms and provisions of this Agreement, including, but not
limited to, Section 6.27 hereof and (z) Section 2.7(2)(viii), the Borrowers shall not be required to satisfy the 1:50:l:00 DSCR requirement. 
  
 ARTICLE IV 
  
 ENVIRONMENTAL MATTERS 
  
 Section 4.1 Certain Definitions. As used herein, the following terms have the meanings indicated: 
  
 (1) “Environmental Laws” means any
applicable local, state, federal or other governmental statute, ordinance, code, order, decree, law, rule or regulation (or a part thereof) pertaining to or imposing liability or standards of conduct concerning environmental regulation,
contamination or clean-up including, without limitation, (a) any Arizona statutes contained in Arizona Revised Statutes Title 49 (the foregoing statutes only to the extent applicable to the Individual Properties located in Arizona); (b) the
California Environmental Quality Act and the applicable provisions of the California Health and Safety Code, California Labor Code and the California Water Code (the foregoing statutes only to the extent applicable to the Individual Properties
located in California); (c) Articles 6.5 to 18, inclusive, of Title 25 of the Colorado Revised Statutes (the foregoing statutes only to the extent applicable to the Individual Properties located in Colorado); (d) Minnesota Environmental Response and
Liability Act, Minn. Stat. chap. 115B, the Minnesota Petroleum Tank Release Cleanup Act, Minn. Stat. chap. 115C (the foregoing statutes only to the extent applicable to the Individual Properties located in Minnesota); (e) the following provisions of
the New Mexico Statutes Annotated (“NMSA”): the Air Quality Control Act, Sections 74-2-1 through 74-2-17, NMSA 1978; the Hazardous Waste Act, Sections 74-4-1 through 74-4-14, NMSA 1978; the Emergency Management Act, Sections 74-4B-1
through 74-4B-14, NMSA 1978; the Voluntary Remediation Act, Sections 74-4G-1 through 74-4G-12, NMSA 1978; and the Water Quality Act, Sections 74-6-1 through 74-6-17, NMSA 1978 (the foregoing statutes only to the extent applicable to the Individual
Property located in New Mexico); (f) [intentionally deleted]; (g) the following provisions of the Utah Code Annotated (“UCA”): Hazardous Substances Mitigation Act, U.C.A. §§ 19-6-301—325; Solid and Hazardous Waste Act,
U.C.A. § 19-6-101—123; Underground Storage Tank Act U.C.A. §§ 19-6-401—429; Lead Acid Battery Disposal Act, U.C.A. §§ 19-6-601-607; Used Oil Management Act, U.C.A. §§ 19-6-701-723; Voluntary Cleanup
Program, U.C.A. §§ 19-8-101— 118; Environmental Institutional Control Act, U. C. A. §§ 19-9-101—108; Water Quality Act, U.C.A. §§ 19-5-101—119; Safe Drinking Water Act, U.C.A. §§
19-4-101—112; Air Conservation Act, U.C.A. §§ 19-2-101—127; and the Radiation Control Act, U.C.A. §§ 19-3-101—113 (the foregoing statutes only to the extent applicable to those Properties located in Utah); (h) the
following provisions of the Revised Code of Washington (“RCW”): Washington Water Pollution Control Act, RCW Chapter 90.48, Washington Clean Air Act, RCW Chapter 70.94, Washington Solid Waste Management Recovery and Recycling Act, RCW
Chapter 70.95, Washington Hazardous Waste Management Act, RCW Chapter 70.105, Washington Hazardous Waste Fees Act, RCW Chapter 70.95E, Washington Model Toxics Control Act, RCW Chapter 

  

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70.105D, Washington Nuclear Energy and Radiation Act, RCW Chapter 70.98, Washington Radioactive Waste Storage and Transportation Act of 1980, RCW Chapter
70.99, Washington Underground Petroleum Storage Tanks Act, RCW Chapter 70.148 (the foregoing statutes only to the extent applicable to those Properties located in Washington); and (i) the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Resource Conservation and Recovery Act, as amended, the Emergency Planning and Community Right-to-Know Act of 1986, as amended, the Hazardous Substances Transportation Act, as amended, the Solid Waste Disposal Act, as
amended, the Clean Water Act, as amended, the Clean Air Act, as amended, the Toxic Substances Control Act, as amended, the Safe Drinking Water Act, as amended, the Occupational Safety and Health Act, as amended, the Federal Insecticide, Fungicide
and Rodenticide Act, as amended, the National Environmental Policy Act, as amended, the Rivers and Harbors Appropriation Act, as amended, any applicable state environmental superlien and environmental clean-up statutes, and all regulations adopted
in respect of the foregoing laws whether presently in force or coming into being and/or effectiveness hereafter. 
  
 (2) “Hazardous Materials” means (a) petroleum or chemical (to the extent regulated by Environmental Laws)
products, whether in liquid, solid, or gaseous form, or any fraction or by-product thereof, (b) asbestos or asbestos-containing materials, (c) polychlorinated biphenyls (pcbs), (d) radon gas, (e) underground storage tanks, (f) any explosive or
radioactive substances, (g) lead or lead-based paint, (h) toxic mold, or (i) any substance or item listed in the United States Department of Transportation Optional Hazardous Materials Table, 49 C.F.R. §172.101, as to date or hereafter amended,
or in the United States Environmental Protection Agency List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302, as to date or hereafter amended, or (j) any other substance, material, waste or mixture which is or shall be listed,
defined, or otherwise determined by any governmental authority to be hazardous, toxic, dangerous or otherwise regulated, controlled or giving rise to liability under any Environmental Laws. 
  
 Section 4.2 Representations and Warranties on Environmental
Matters. To each Borrower’s knowledge, except as set forth in the Site Assessments or on Schedule 12 attached hereto, (1) no Hazardous Material is now or was formerly used, stored, generated, manufactured, installed, treated,
discharged, disposed of or otherwise present at or about any Individual Property or any property adjacent to any Individual Property (except for cleaning and other products used in connection with the routine operation, maintenance or repair of any
Individual Property (a) in full compliance with Environmental Laws and (b) consistent with the use of the Individual Property as a hotel and ancillary hotel related uses) and no Hazardous Materials were removed or transported from any Individual
Property, (2) all permits, licenses, approvals and filings required by Environmental Laws as to any Individual Property have been obtained, and the use, operation and condition of any Individual Property do not, and did not previously, violate any
Environmental Laws, (3) no civil, criminal or administrative action, suit, claim, hearing, investigation or proceeding has been brought or been threatened, nor have any settlements been reached by or with any parties or any liens imposed in
connection with any Individual Property concerning Hazardous Materials or Environmental Laws and no underground storage tanks exist on any part of any Individual Property, and (4) none of the Individual Properties located in California has been or
is now being used in violation of any applicable Environmental Laws and the Property has not been designated as “hazardous waste 

  

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property” or “border zone property” pursuant to Section 25220, et seq., of the California Health and Safety Code. 
  
 Section 4.3 Covenants on Environmental Matters. 
  
 (1) Each Borrower shall (a) comply strictly and in all
respects with applicable Environmental Laws; (b) notify the Administrative Agent immediately upon its discovery of any spill, discharge, release or presence of any Hazardous Materials at, upon, under, within, contiguous to or otherwise affecting any
Individual Property (except for cleaning and other products used in connection with the routine operation, maintenance or repair of any Individual Property (i) in full compliance with Environmental Laws and (ii) consistent with the use of the
Individual Property as a hotel and ancillary hotel related uses); (c) promptly remove such Hazardous Materials and remediate any Individual Property in full compliance with Environmental Laws; and (d) promptly forward to the Administrative Agent
copies of all orders, notices, permits, applications or other written communications and reports in connection with any spill, discharge, release or the presence of any Hazardous Materials or any other matters relating to the Environmental Laws or
any similar laws or regulations, as they may affect any Individual Property or any Borrower. 
  
 (2) Each Borrower shall not cause, install or conduct, as applicable, and shall prohibit any other Person within the Control of such
Borrower from causing, installing or conducting, as applicable, and shall use prudent, commercially reasonable efforts to prohibit other Persons (including tenants) from, installing or conducting, as applicable, (a) any spill, discharge or release,
or the use, storage, generation, manufacture, installation, or disposal, of any Hazardous Materials at, upon, under, within or about any Individual Property or the transportation of any Hazardous Materials to or from any Individual Property in
violation of Environmental Laws, provided that (i) each Borrower shall be required to give the Administrative Agent prior written notice of any intended use, storage, generation, manufacture, installation, or disposal of any Hazardous Materials at,
upon, under, within or about any Individual Property or the transportation of any Hazardous Materials to or from any Individual Property (except for cleaning and other products used in connection with routine maintenance or repair of any Individual
Property and (ii) such activity is in full compliance with Environmental Laws and consistent with the use of the Individual Property as a hotel and ancillary hotel related uses), (b) any underground storage tanks at any Individual Property, or (c)
any activity at any Individual Property that requires a permit or other authorization under Environmental Laws, unless the activity is conducted in the ordinary course of the applicable Borrower’s business at said Individual Property, in full
compliance with all applicable Environmental Laws and any necessary permit or authorization required in connection therewith is obtained and maintained and such Borrower’s business is consistent with the use of the Individual Property as a
hotel and ancillary hotel related uses. 
  
 (3)
Each Borrower shall, at Borrower’s sole cost and expense, provide to the Administrative Agent promptly upon the written request of the Administrative Agent from time to time, a Site Assessment or, if required by the Administrative Agent, an
update to any existing Site Assessment, to assess the presence or absence of any Hazardous Materials and the potential costs in connection with abatement, cleanup or removal of any Hazardous Materials found on, under, at or within any Individual
Property; provided, however, (a) the Administrative Agent 

  

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shall not request a Site Assessment under this Section 4.3 more than one (1) time in any twelve (12) month period for each Individual Property unless:
(i) the Administrative Agent’s request for a Site Assessment is based on a reasonable suspicion of Hazardous Materials at or adjacent to any Individual Property, (ii) a breach of representations under Section 4.2 exists, or (iii) an
Event of Default exists, and (b) Borrower shall not be required to pay the expenses incurred by the Administrative Agent in connection with any such Site Assessment or update of a Site Assessment unless one or more of the conditions described in
clauses (i), (ii) and (iii) above exist. 
  
 Section 4.4
Allocation of Risks and Indemnity. (1) As between the Borrowers, the Administrative Agent and the Lenders, all risk of loss associated with non-compliance with Environmental Laws, or with the presence of any Hazardous Material at,
upon, within, contiguous to or otherwise affecting any Individual Property shall lie solely with the Borrowers. Accordingly, the Borrowers shall bear all risks and costs associated with any loss (but not including any loss in value attributable to
Hazardous Materials), damage or liability therefrom, including all costs of removal of Hazardous Materials or other remediation required by the Administrative Agent pursuant to this Agreement or by law. The Borrowers shall indemnify, defend and hold
the Administrative Agent and the Lenders and their respective shareholders, directors, officers, employees and agents harmless from and against all loss, liabilities, damages, claims, costs and expenses (including reasonable costs of defense and
consultant fees, investigation and laboratory fees, court costs and other litigation expenses) arising out of or associated, in any way, with (a) the non-compliance with Environmental Laws at, upon, within, contiguous to or adjacent to any
Individual Property or otherwise relating to the Loans; (b) the existence of Hazardous Materials in, on, about, contiguous to, or adjacent to, any Individual Property; (c) any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to Hazardous Materials in, on, about, contiguous to, or adjacent to, any Individual Property; (d) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Materials; or
(e) a breach of any representation, warranty or covenant contained in this Article 4, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law, including those arising from the
joint, concurrent, or comparative negligence of the Administrative Agent and the Lenders. The Borrowers’ obligations under this Section 4.4(1) shall arise upon the discovery of the presence of any such Hazardous Materials, whether or not
any governmental authority has taken or threatened any action in connection with the presence of any such Hazardous Materials, and whether or not the existence of any such Hazardous Materials or potential liability on account thereof is disclosed in
the Site Assessment and, except as expressly provided in this Section 4.4(1). shall continue notwithstanding the repayment of the Loans or any transfer or sale of any right, title and interest in any Individual Property (by foreclosure, deed
in lieu of foreclosure or otherwise). Notwithstanding the foregoing provision regarding the survival of the Borrowers’ indemnity obligations under this Section: (x) if the Loan is repaid in full in accordance with the terms and conditions of
the Loan Documents and the Mortgages encumbering each Individual Property are released and discharged or if a Release Property is released from the lien of the Mortgage encumbering said Individual Property pursuant to Sections 2.8 or 2.7(2),
respectively, the Borrowers may deliver to the Administrative Agent a new Site Assessment for the Individual Property(ies) in question and the Borrowers’ indemnification obligations under this Section 4.4 with respect to the Individual
Property(ies) released from the lien of the Mortgage(s) shall expire one year following the date of the delivery 

  

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of the Site Assessments to the Administrative Agent if and only if there are no pending or threatened claims relating to Hazardous Materials at said
Individual Properties at the end of said one year period, and the Administrative Agent confirms in writing that the Site Assessment has been approved by the Administrative Agent (which approval shall not be unreasonably withheld) and does not raise
any issues with respect to potential environmental liability with respect to said Individual Properties; provided, however, if the Administrative Agent disapproves the Site Assessment, Borrower’s liability for any claims, potential claims and
risks not otherwise identified in said Site Assessment shall expire one (1) year after the delivery of such Site Assessment to the Administrative Agent; and (y) the Borrowers’ indemnification obligations under this Section 4.4 shall not
extend to Hazardous Materials first present on an Individual Property after (or the violation of an Environmental Law first occurring after) the Administrative Agent or its designee takes title to said Individual Property by foreclosure or by its
acceptance of a deed in lieu of foreclosure provided (A) such Hazardous Materials were placed, deposited or released in, on or under the Premises after the date of foreclosure or deed in lieu of foreclosure by third parties unrelated in any way to
Borrowers or any person or entity affiliated with or having an interest in any Borrower or a partner, member or manager of any Borrower and (B) such placement, deposit or release was not caused by and does not result from the acts or omissions of
any Borrower, any partner, member or manager of any Borrower or any person or entity having a direct or indirect interest in any Borrower or partner or member of any Borrower. This indemnification shall inure to the benefit of any Affiliate of the
Administrative Agent or any Lender that takes title to one or more Individual Properties pursuant to a foreclosure or the acceptance of a deed in lieu of foreclosure but shall not benefit any third party purchaser of an Individual Property from the
Administrative Agent, any Lender or any Affiliate of the Administrative Agent or any Lender. 
  
 Notwithstanding the foregoing, with respect to an Individual Property located in the State of Arizona, this indemnity shall survive payment of the Notes (subject, however, to the time limitation on a Borrower’s
liability for claims as set forth in the preceding paragraph), but shall become null and void and of no further force or effect with respect only to such Individual Property in the event the Administrative Agent, the beneficiary under the applicable
Mortgage, or any other party obtains title to such Individual Property through foreclosure or exercises a power of sale under the applicable Mortgage or deed in lieu of foreclosure or exercise of power of sale. This indemnity shall remain in full
force and effect with respect to all other Properties securing the Loan. 
  
 (2) Additionally, if any Hazardous Materials affect or threaten to affect the Properties, the Administrative Agent may (but shall not be obligated to) give such notices and take such actions as it deems necessary or
advisable at the expense of the Borrowers in order to abate the discharge of any Hazardous Materials or remove the Hazardous Materials as required by any Environmental Laws if the Administrative Agent determines in its reasonable discretion that any
Borrower is not diligently and in good faith taking such action and such Borrower does not commence such action within fifteen (15) Business Days of receipt of notice thereof from the Administrative Agent. Any amounts paid by the Administrative
Agent by reason of the application of Section 4.4(1) shall become immediately due and payable and shall bear interest at the Default Rate from the date loss or damage is sustained, or amounts paid or expended, by the Administrative Agent
until paid. The obligations and liabilities of the Borrowers under this 

  

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Section 4.4(2) shall survive any termination, satisfaction, assignment, entry of a judgment of foreclosure or delivery of a deed in lieu of
foreclosure. 
  
 (3) So long as no Event of
Default exists, the Borrowers may submit to the Administrative Agent a proposal to substitute an environmental insurance policy for the Borrowers’ indemnification obligations set forth in Section 4.4(1) above and for the indemnification
obligations of the Borrowers, Sunstone and Sunstone Holdco set forth in the Hazardous Materials Indemnity Agreement. Any such request by the Borrowers shall include a true and complete copy of the proposed environmental insurance policy and the
projected premium for said policy. The Administrative Agent shall consider any such proposal in good faith and make a recommendation to the Lenders with respect to any such request. The Administrative Agent shall not be obligated to consent to or
approve the substitution of the proposed environmental insurance policy for said indemnification obligations, and the Administrative Agent shall only grant such consent or approval if it receives the written consent of the Controlling Lenders, which
consent may be granted, conditioned or withheld in each Lender’s sole and absolute discretion. 
  
 Section 4.5 No Waiver. Notwithstanding any provision in this Article 4 or elsewhere in the Loan Documents, or any rights or remedies
granted by the Loan Documents, the Administrative Agent and the Lenders do not waive and expressly reserves all rights and benefits now or hereafter accruing to the Administrative Agent and/or any Lenders under the “security interest” or
“secured creditor” exception under applicable Environmental Laws, as the same may be amended. No action taken by the Administrative Agent and/or any Lender pursuant to the Loan Documents shall be deemed or construed to be a waiver or
relinquishment of any such rights or benefits under the “security interest exception.” 
  
 ARTICLE V 
  
 CERTAIN PROPERTY MATTERS; CASH MANAGEMENT 
  
 Section 5.1 Leases. Except as set forth on Schedule 11, there are no Leases affecting the Properties. The Leases disclosed on Schedule 11 (including the amendments disclosed thereon) represent the full and
complete terms and provisions of the leases entered into between the respective parties thereto which are in effect as of the date hereof, and there are no amendments, modifications, or other agreements relating thereto. No Borrower has executed any
prior assignment of Leases which is presently effective or during the term of the Loans will become effective, nor has it performed any act or executed any other instrument which might prevent the Administrative Agent (on behalf of the Lenders) from
operating under any of the terms and conditions of the Assignments of Leases and Rents or which would limit the Administrative Agent (on behalf of the Lenders) in such operation other than the Leases themselves. No Borrower has executed or granted
any modification whatsoever of the Leases, except as indicated on Schedule 11, and to the best of each Borrower’s knowledge there are no defaults now existing under the Leases. 
  

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 Section 5.2 Lease Covenants and Limitations. 
  
 (1) Each Borrower (a) shall perform, or cause to be
performed, the obligations which such Borrower is required to perform under the Leases; (b) shall use commercially reasonable efforts to enforce the obligations to be performed by the tenants under the Leases; (c) shall promptly furnish to the
Administrative Agent any notice of default or termination received by any Borrower from any tenant under a Material Lease or sent by any Borrower to any tenant under a Material Lease; (d) shall not collect any Rents under any Material Lease for more
than thirty (30) days in advance of the time when the same shall become due, except for bona fide security deposits not in excess of an amount equal to two months rent; (e) during a Cash Trap Period shall not enter into any new Material Lease or
Capital Lease, or modify, amend or terminate any existing Material Lease or Capital Lease, without the Administrative Agent’s prior written consent, which consent shall not be unreasonably withheld; (f) at all times when a Cash Trap Period does
not exist, shall provide the Administrative Agent with at least ten (10) days prior written notice of any new Material Lease or Material Capital Lease, or any material modification or amendment of a Material Lease or Material Capital Lease or any
termination of any existing Material Lease or Material Capital Lease; (g) shall not further assign or encumber any Lease; and (h) promptly upon the request of the Administrative Agent, shall obtain and furnish to the Administrative Agent written
estoppels in form and substance reasonably satisfactory to the Administrative Agent, executed by tenants under Material Leases at the Properties or lessors under Capital Leases, as applicable, and confirming the term, rent, and other provisions and
matters relating to the Leases. 
  
 (2) Borrower
acknowledges and agrees that the Administrative Agent shall not be obligated to provide a non-disturbance agreement to any tenant under any Lease entered into after the date hereof which has not been reviewed and approved by the Administrative Agent
in writing. 
  
 (3) Each Borrower shall
indemnify, defend and hold the Administrative Agent and each Lender harmless from and against any and all Losses incurred or suffered by any of them in connection with (A) any assignment fees which are due and payable, or claimed by the ground
lessor to be due and payable, under Section 14.1 of any of the Tarsadia Ground Leases as a result of or in any way arising from or related to (i) the grant of lien of the Mortgage and the assignment of Sunstone OP’s rights therein to the
Administrative Agent, (ii) the foreclosure by the Administrative Agent, or the Administrative Agent’s acceptance of a deed in lieu of foreclosure, of Sunstone OP’s rights in the Tarsadia Ground Leases, or any similar exercise of remedies
by the Administrative Agent with respect to any of the Tarsadia Ground Leases or the Tarsadia Properties, or (iii) the sale, conveyance, transfer or other grant by the Administrative Agent of its rights in any of the Tarsadia Ground Leases or the
Tarsadia Properties subsequent to its exercise of any of the remedies described in subsection (ii) and (B) any failure, refusal or inability of any ground lessor under any Tarsadia Ground Lease, or any mortgagee or lender of such ground lessor, to
release to a Borrower or the Administrative Agent any proceeds of casualty insurance or condemnation proceeds relating to any of the Tarsadia Properties. The liabilities and obligations of the Borrowers under this Section 5.2(3) are separate
and several and shall survive the termination of this Agreement, the satisfaction and discharge of the Indebtedness, merger and judgment. 
  

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 Section 5.3 Budgets. 
  
 (1) For each Individual Property, each Borrower shall deliver to Lender the following prior to the end of
each Fiscal Year during the term of the Loans: 
  
 (a) A projection of Operating Revenues, Operating Expenses and cash flow by month for the next Fiscal Year presented in a form consistent with the Uniform System of Accounts (the “Operating Budget”) and including
projections of average daily room rates and occupancy levels. Any Operating Expense that will involve a payment to or for the benefit of any Borrower, Manager, or an Affiliate of either shall be noted as a separate line item in the Operating Budget.
The Operating Budget will be presented in comparison with the budgeted and actual performance for the then current Fiscal Year. 
  
 (b) A projection by month of FF&E and capital expenditures for the next Fiscal Year (the “Capital Budget”).

  
 (c) A narrative description of each
Borrower’s plans and goals (the “Business Plan”), including a reasonably detailed marketing plan (specifying, among other things, rack rates being charged at hotels similar in nature and in the general vicinity of the
applicable Properties for the next Fiscal Year and, with respect to the two (2) Fiscal Years thereafter, including a projection by summary category of Operating Revenues, Operating Expenses, FF&E costs and capital requirements. 
  
 (2) The Operating Budget and the Capital Budget shall
constitute the “Annual Budget” for such Fiscal Year; a form of the Annual Budget for the current Fiscal Year is attached hereto as Schedule 6. The delivery of the Annual Budget shall be deemed a certification by each
Borrower that it contains only information and relies only upon assumptions reasonably believed to be correct and achievable by such Borrower and Manager. If requested by the Administrative Agent, the Borrowers and Manager shall meet with the
Administrative Agent to explain and discuss the Annual Budget. 
  
 (3) If no Cash Trap Period exists at the time of delivery of the Annual Budget to the Administrative Agent, the Operating Budget presented by the Borrowers shall be for information purposes only and the Capital Budget
presented by the Borrowers shall be for discussion purposes only, and the Administrative Agent shall have no rights over approval with respect thereto and Borrower shall also have the right to make revisions to the Operating Budget and Capital
Budget from time to time without the Administrative Agent’s approval and will deliver a revised Operating Budget and/or Capital Budget to the Administrative Agent for information purposes only. However, if a Cash Trap Period exists at the time
of delivery of the Annual Budget to the Administrative Agent, the Administrative Agent shall have the right to approve the Annual Budget in accordance with the following procedures: The Administrative Agent shall promptly review the Annual Budget
and shall endeavor to advise the Borrowers, within ten (10) Business Days of receipt of the Annual Budget and Business Plan, of the portions as to which the Administrative Agent has no objection. If requested by the Administrative Agent, the
Borrowers and Manager shall meet with the Administrative Agent to explain and 

  

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discuss the Annual Budget. If the Administrative Agent shall object to the Annual Budget or any portion thereof, the Administrative Agent shall specify its
objections and the Borrowers shall submit to the Administrative Agent a new proposed Annual Budget or relevant portion thereof within ten (10) Business Days after notice of the Administrative Agent’s objections. This procedure shall be repeated
until a complete approved budget exists. Until such time as an Approved Budget is agreed upon, the prior year’s Approved Budget shall be deemed in effect, subject to reasonable increases for taxes and insurance. 
  
 (4) While any Cash Trap Period exists, the Borrowers may not
make any changes, modifications or line-item transfers to the Approved Budget then in effect without obtaining the prior written consent of the Administrative Agent, which shall not be unreasonably withheld or delayed. 
  
 Section 5.4 Books and Records. 
  
 (1) Each Borrower shall keep accurate, complete and detailed
books and records including, without limitation, books of account, tax records, guest records, front office records and other records (collectively referred to as the “Books and Records”) in which shall be entered fully and
adequately every transaction with respect to the operation of the Individual Property, all substantially in accordance with GAAP. The Books and Records shall be kept on the basis of a calendar accounting year. All of the Books and Records with
respect to an Individual Property shall be kept at such Individual Property or at the Borrowers’ corporate headquarters in San Clemente, California, unless otherwise approved in writing by the Administrative Agent. 
  
 (2) The Books and Records shall be available to the
Administrative Agent, the Lenders and their respective representatives during normal business hours upon reasonable advance notice for examination, audit, inspection, copying and transcription. Each Borrower and its agents shall maintain such
control over the Books and Records as is required to protect them from theft, error, fraudulent activity or use for purposes other than the operation of the Properties. 
  
 Section 5.5 Notices. Each Borrower shall deliver to the Administrative Agent copies of all notices of default
or termination received or given by such Borrower (or its agents or representatives) under any of the Licenses, Policies and other contracts that could materially affect any of the Properties within three (3) Business Days after such notice is given
or received, as the case may be. Each Borrower shall also provide the Administrative Agent with copies of all notices and correspondence pertaining to any of the Properties received by such Borrower (or any of such Borrower’s agent or
employees) from any governmental authority or from any company providing insurance Policies and all other material notices, within three (3) Business Days after such notices are received. 
  
 Section 5.6 Management and Franchises. 
  
 (1) Each Borrower shall provide competent and responsible management for each Individual Property (including
room rental, maintenance and security) by a manager and pursuant to a written management agreement satisfactory to the Administrative Agent. The 

  

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Managers and Management Agreements specified on Schedule 5A are currently satisfactory to the Administrative Agent. Any future manager of any
Individual Property must be reasonably satisfactory to the Administrative Agent and must be a nationally recognized hotel manager and operator with at least ten (10) years experience. Any management agreement must contain subordination and
termination provisions reasonably acceptable to Lender. Except as expressly permitted pursuant to the terms and conditions of the Management Agreements, no Borrower shall modify, amend or terminate any approved management agreement without the
Administrative Agent’s prior written consent, not to be unreasonably withheld. 
  
 (2) Each Borrower shall maintain franchise agreements with nationally recognized operators of hotels pursuant to franchise agreements
reasonably satisfactory to the Administrative Agent. The franchises and Franchise Agreements specified on Schedule 5B are currently satisfactory to the Administrative Agent. Any future franchise agreements must be reasonably acceptable to
Administrative Agent. Except as expressly permitted pursuant to the terms and conditions of the Franchise Agreements, no Borrower shall modify, amend or terminate any approved Franchise Agreement without the Administrative Agent’s prior written
consent, not to be unreasonably withheld. At all times prior to the repayment in full of the Indebtedness, the Borrowers shall maintain in full force and effect a “comfort letter”, so called, with respect to the Franchise Agreement for
each Individual Property, which comfort letter shall be on substantially the same terms and conditions as the comfort letters for each Individual Property delivered to the Administrative Agent on the Modification Closing Date. 
  
 Section 5.7 Establishment of Depository Accounts. 

 
 (1) Operating Accounts. For each Individual
Property, each Borrower shall establish and maintain (or cause the Manager or applicable Operator to establish and maintain) a segregated Depository Account into which such Borrower shall deposit (or shall cause to be deposited) on a daily basis all
Operating Revenue from the applicable Individual Property (the “Operating Account”). All Operating Revenues shall be billed and collected in the name of the applicable Borrower, Operator or Manager or its or their respective
names which are trademarks and in no other names. 
  
 (2) Concentration Account. If the Borrowers so elect, they may establish and maintain (or cause the Manager or applicable Operator to establish and maintain) a segregated Depository Account (the
“Concentration Account”) into which the Borrowers shall deposit (or shall cause to be deposited) all Operating Revenues previously deposited in the Operating Accounts. 
  
 (3) Limitation on Permitted Uses. Each
Borrower shall apply (or cause to be applied) all Operating Revenues as set forth in Section 5.9(1). Except as set forth therein, Operating Revenues shall not be used for distributions to or for the account of such Borrower or any of its
Affiliates or applied to the payment of any Borrower’s obligations, debts or expenses not set forth on the then current Approved Budget. 
  
 Section 5.8 Establishment and Funding of Reserves With Administrative Agent. As further security for the Loans, each Borrower agrees to
establish and fund the following reserves with the Administrative Agent (or, at the election of the Administrative Agent, with a 

  

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financial institution approved by the Administrative Agent and in an account in the name of the Administrative Agent), to be held by the Administrative Agent
as security for the Loans: 
  
 (1) Tax and
Insurance Reserve. 
  
 (a) On the
Original Closing Date, the Borrowers deposited with the Administrative Agent the sum of $1,175,000.00 for the purpose of reserving funds for the payment of insurance premiums and Taxes with respect to the Properties (the “Tax and
Insurance Reserve”). 
  
 (b) Each
Borrower shall deposit with the Administrative Agent (for further deposit into the Tax and Insurance Reserve) on a monthly basis: 
  
 (i) one-twelfth (l/12th) of the annual charges for Taxes, assessments and similar charges relating to the Properties, or such other
monthly amount determined by the Administrative Agent (which determination shall be conclusive in the absence of manifest error) to be necessary to provide sufficient funds for payment of such amounts as and when they shall next become due; and

  
 (ii) one-twelfth (1/12th) of the Insurance
Premiums that the Administrative Agent estimates will be payable for the renewal of the coverage afforded by the insurance policies required hereunder upon the expiration thereof, or such other monthly amount determined by the Administrative Agent
(which determination shall be conclusive in the absence of manifest error) to be necessary to provide sufficient funds for payment of such amounts as and when they shall next become due. 
  
 (c) Not less than two times per year, the Administrative Agent shall review the annual charges for Taxes,
assessments and similar charges relating to the Properties and re-determine the monthly amount it deems necessary to receive from the Borrowers in order to provide sufficient funds for payment of such Taxes as and when they shall next become due
(such process, a “Tax Escrow Rebalancing”). In addition to each semi-annual Tax Escrow Rebalancing, in the event that Individual Properties with aggregate annual Tax charges in excess of $300,000 have been Released since the
most recent Tax Escrow Rebalancing, the Borrowers shall have the right to require the Administrative Agent to conduct another Tax Escrow Rebalancing. If the Administrative Agent determines as a result of any Tax Escrow Rebalancing that the required
monthly Tax escrow amount for the Borrowers shall have changed, the Administrative Agent shall notify the Borrowers thereof and each monthly Tax escrow payment thereafter shall reflect the new monthly amount so determined by the Administrative
Agent. Under no circumstances shall the Administrative Agent be required to refund monies from the Tax and Insurance Escrow to Borrower as a result of any Tax Escrow Rebalancing. 
  

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 (d) Due to the seasonal nature of the Borrowers’ business, the Borrowers may elect
in their sole discretion in any month to pay to the Administrative Agent an amount greater than that required to be deposited in the Tax and Insurance Reserve as set forth above. To the extent that the Borrowers have made such excess payments to the
Administrative Agent and the Tax and Insurance Reserve is, in the Administrative Agent’s reasonable calculation, over-funded, the Borrowers may elect in any subsequent month to reduce the monthly Tax and Insurance Reserve payment to the
Administrative Agent by an amount equal to the amount by which the Administrative Agent has determined that the Tax and Insurance Reserve is over-funded (which determination shall be conclusive in the absence of manifest error). 
  
 (e) At its election, the Administrative Agent may establish
separate reserve accounts for taxes and insurance premiums, so long as any amounts deposited in or disbursed from the separate tax reserve account are allocable to tax expenses and any amounts deposited in or disbursed from the separate insurance
reserve account are allocable to insurance expenses. The provisions of this Agreement which are applicable to the Tax and Insurance Reserve shall be equally applicable to any separate tax reserve account and insurance reserve account established by
the Administrative Agent. 
  
 (f) Notwithstanding
the foregoing provisions of this Section 5.8(1), the Administrative Agent as of the date of this Agreement has agreed not to require the Borrowers to deposit funds for insurance premiums so long as (i) no Cash Trap Event has occurred and (ii)
no Event of Default has occurred hereunder. Upon the occurrence of a Cash Trap Event or an Event of Default hereunder, the Administrative Agent shall have the right to require the Borrowers (and each of the Borrowers hereby agrees) to immediately
make monthly deposits for insurance premiums into the Tax and Insurance Reserve in accordance with the provisions and requirements of this Section 5.8(1), together with payment of a sum which, together with such monthly deposits, will be
sufficient to pay all insurance premiums at least thirty (30) days prior to the date initially due. Nothing in this subsection shall be deemed to limit the obligations of the Borrowers to deposit funds for tax payments into the Tax and Insurance
Reserve as of the date of this Agreement. 
  
 (2)
PIP Reserve. 
  
 (a) On the
Modification Closing Date, the Borrowers shall deposit with the Administrative Agent cash or the PIP LC (as described in more detail in Section 5.9(3) below) in the amount of $10,000,000.00 (the “PIP Reserve”). 
  
 (b) Commencing in November 2004 and continuing each month
thereafter until such time as the PIP Reserve has been fully funded in accordance with the requirements of Section 5.9(3)(h) of this Agreement, the Borrowers shall deposit with the Administrative Agent (for further deposit into the PIP
Reserve), not later than the tenth (10th) day of each month, an amount equal to the greater 

  

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of (i) four percent (4.0%) of the sum of the Operating Revenues for each Individual Property during the preceding month, as calculated based on the Monthly
Operating Statement for each Individual Property, provided, however, that if any Franchise Agreement requires a Borrower to establish reserves for any Individual Property for capital improvements, FF&E or other purposes in an amount
greater than would otherwise be required by the foregoing provision, then such Borrower shall deposit such greater amount into the PIP Reserve with respect to such Individual Property, and (ii) Five Hundred Sixty-Five Thousand and 00/100 Dollars
($565,000.00). At the option of the Administrative Agent, the Administrative Agent may direct the Borrowers to deposit the required PIP Reserve amounts directly into the PIP Reserve account and shall notify the Administrative Agent of the date and
amount of each such deposit. 
  
 (3)
Capital Expenditure Reserve. 
  
 (a) On the Original Closing Date, the Borrowers deposited with the Administrative Agent the sum of $1,185,962.43 (the “Capital Expenditure Reserve”). 
  
 (b) The Borrowers shall deposit with the Administrative
Agent (for further deposit into the Capital Expenditure Reserve), not later than the tenth (10th) day of each month, an amount equal to four percent (4.0%) of the sum of the Operating Revenues for each Individual Property during the preceding month,
as calculated based on the Monthly Operating Statement for each Individual Property, provided, however, that if any Franchise Agreement requires a Borrower to establish reserves for any Individual Property for capital improvements, FF&E
or other purposes in an amount greater than would otherwise be required by the foregoing provision, then such Borrower shall deposit such greater amount into the Capital Expenditure Reserve with respect to such Individual Property. At the option of
the Administrative Agent, the Administrative Agent may direct the Borrowers to deposit the required Capital Expenditure Reserve amounts directly into the Capital Expenditure Reserve account and shall notify the Administrative Agent of the date and
amount of each such deposit. 
  
 (4) Ground
Lease Rent Reserve. 
  
 (a) On the
Original Closing Date, the Borrowers deposited with the Administrative Agent the sum of $285,000.00 (the “Ground Lease Rent Reserve”). 
  
 (b) Not later than thirty (30) days prior to the effective date of any scheduled increase in the amount of
monthly rent under any of the Ground Leases, the Borrowers shall deposit with the Administrative Agent an amount equal to the amount of such increase, such that the Ground Lease Rent Reserve shall contain an amount equal to two (2) times the sum of
the monthly ground 

  

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rents which will be payable under the Ground Leases on the effective date of such increase. 
  
 (c) In the event that the Administrative Agent applies any portion of the funds on deposit in the Ground
Lease Rent Reserve to the payment of rent under any of the Ground Leases, the Borrowers shall immediately (and in any event within three Business Days) deposit with the Administrative Agent an amount equal to such amount so paid, such that the
Ground Lease Rent Reserve shall at all times contain an amount equal to two (2) times the sum of the monthly ground rents which are then currently payable under the Ground Leases. 
  
 (5) Deferred Maintenance Reserve. On the Original Closing Date, the Borrowers deposited with
the Administrative Agent the sum of $416,600.00 (the “Deferred Maintenance Reserve”). 
  
 (6) Trapped Cash Reserve. During any Cash Trap Period and for each Individual Property, each Borrower shall deposit with the
Administrative Agent (or, at the election of the Administrative Agent, with a financial institution approved by the Administrative Agent and in an account in the name of the Administrative Agent) not less frequently than monthly, in arrears, an
amount equal to all Net Cash Flow for such Individual Property as set forth in the then current Monthly Operating Statement for such Individual Property (the “Trapped Cash Reserve”). 
  
 Section 5.9 Cash Flows; Interest on and Disbursements From
Reserves. 
  
 (1) Depository
Accounts. 
  
 (a) So long as there is no
Event of Default hereunder and no Event of Default shall be created thereby, each Borrower shall have the right to make disbursements from the Depository Accounts to pay Operating Expenses which are then authorized under the Approved Budget. All
checks drawn on the Depository Accounts shall require the signatures of two appropriately insured representatives of such Borrower approved by the Administrative Agent. So long as no Cash Trap Period then exists, any amounts remaining on deposit in
the Depository Accounts in excess of those required to pay Operating Expenses as set forth on the Approved Budget and Debt Service may be released to or for the account of such Borrower and distributed by such Borrower to its respective Members, in
each case to the extent that such release would not cause the occurrence of a Cash Trap Period. 
  
 (b) If at any time there are insufficient funds in the Depository Accounts to make the required periodic deposits to the Reserves or to
pay Operating Expenses and Debt Service, the Borrowers shall promptly fund from outside sources the amounts necessary to make such required periodic deposits and to pay all Operating Expenses and Debt Service when due. 
  

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 (2) Tax and Insurance Reserve. 
  
 (a) Each Borrower shall furnish the Administrative Agent
with bills for the Taxes and insurance charges for which payments are required at least thirty (30) days prior to the date on which the charges first become payable. If at any time the amount on deposit with the Administrative Agent in the Tax and
Insurance Reserve, together with amounts to be deposited by the Borrowers at least thirty (30) days before such charges are payable, is insufficient to pay such charges, the Borrowers shall deposit any deficiency with the Administrative Agent
immediately upon demand. The Administrative Agent shall pay such charges to the extent funds are available on deposit with the Administrative Agent in the Tax and Insurance Reserve and the Administrative Agent has received a bill for such charges.
The Administrative Agent shall have no obligation to make disbursements from the Tax and Insurance Reserve while any Event of Default exists. 
  
 (b) No portion of the funds on deposit in the Tax and Insurance Reserve shall be required to be released by the Administrative Agent as a
result of or in connection with the Release of any Individual Property. 
  
 (3) PIP Reserve. 
  
 (a) Funds on deposit in the PIP Reserve and, until the completion of all repairs, improvements and replacements required under the Property Improvement Plans, in the Capital Expenditure Reserve are to be used solely
for the cost of the repairs, improvements and replacements required under the Property Improvement Plans (collectively, the “PIP Work”), in each case to the extent identified in the PIP Budget. For purposes of this Section
5.9(3), the term PIP Reserve shall be deemed to include all funds in the Capital Expenditure Reserve until such time as the PIP Work has been completed. 
  
 (b) The Borrowers may submit an application requesting that the Administrative Agent make a lump sum disbursement from the PIP Reserve to
pay for expenses incurred in accordance with the PIP Budgets for completed PIP Work. The Administrative Agent shall disburse funds from the PIP Reserve to or for the benefit of the Borrowers for expenses incurred by the Borrowers completing PIP Work
in accordance with the PIP Budgets if each of the following conditions is met: 
  
 (i) The Borrowers shall make such request for a disbursement from the PIP Reserve via delivery to the Administrative Agent of a draw
request that will include the following: 
  
 (A)
an Officer’s Certificate making the request for a disbursement from the PIP Reserve substantially in the form of Exhibit M attached hereto; 
  
 (B) a summary schedule of payments identifying expenditures on an Individual Property basis showing the job 

  

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number, job name, vendor name, invoice number and, if applicable, the check number, check date and check amount and sub-total for each Individual Property in
the form attached hereto as Exhibit N; and 
  
 (C) unconditional lien waivers and releases from all parties that have provided materials and/or services in connection with any prior disbursements from the PIP Reserve. 
  
 (ii) If the Borrowers’ disbursement request is properly made and documented in accordance with the
provisions of this Section, the Administrative Agent shall disburse the applicable funds from the PIP Reserve within five (5) Business Days of receipt of a complete draw request so long as there are sufficient funds in the PIP Reserve to satisfy
such request; provided, however, that if at the time of any disbursement an unconditional lien waiver or release remains outstanding from a party that furnished materials and/or services and for which a payment has previously been disbursed from the
PIP Reserve, the Administrative Agent shall have the right to reserve funds in the PIP Reserve in an amount equal to the amount previously disbursed for such materials and/or services. 
  
 (iii) Requests may be submitted no more frequently than on a monthly basis for any of the Properties unless
reasonably necessary under the circumstances, and requests shall not be in an amount less than $500,000. 
  
 (iv) On a quarterly basis, Borrowers will deliver to the Administrative Agent copies of the Job Cost Report – CapEx for each
Individual Property in the form attached hereto as Exhibit O. The Administrative Agent reserves the right to request copies of invoices and to challenge the validity of payments included in previous disbursements and may require an inspection
of any applicable Individual Property related thereto, all at the Borrowers’ expense. The Administrative Agent shall also have the right to reserve funds in the PIP Reserve in an amount equal to any funds previously disbursed if the
Administrative Agent subsequently determines that all the conditions precedent and subsequent for such prior disbursement from the PIP Reserve were not satisfied. A disbursement by the Administrative Agent from the PIP Reserve shall not be construed
as evidence that all of the conditions for such disbursement were met. Notwithstanding the foregoing, the Administrative Agent shall not have the right to withhold any disbursements based on the insufficiency of draw requests or supporting
information for disbursements paid more than sixteen (16) months prior thereto, unless prior to the expiration of such sixteen (16) month period the Administrative Agent notified the Borrowers of the insufficiency of such draw requests or supporting
information. 
  

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 (c) So long as no Event of Default, Cash Trap Event or Franchisor Warning Event exists,
(i) the Administrative Agent will, upon Borrowers’ request, commingle in the PIP Reserve the deposits made by Borrowers pursuant to Section 5.8(2) of this Agreement and said funds shall not be held by the Administrative Agent in separate
accounts for each Individual Property and will not be required to be disbursed on an Individual Property by Individual Property basis; and (ii) a request by a Borrower for disbursement from the PIP Reserve with respect to any Individual Property
need not be limited to the amount of funds on deposit in the PIP Reserve which are allocable to such Individual Property. 
  
 (d) If an Event of Default, Cash Trap Event or Franchisor Warning Event exists, the Administrative Agent reserves the right to require the
Borrowers to establish separate PIP Reserve accounts for each Individual Property or group of Individual Properties and shall not be required, in connection with any request by a Borrower for a disbursement related to any Individual Property or, if
applicable, group of Individual Properties, to disburse from the PIP Reserve any amounts which are in excess of the funds then on deposit in the PIP Reserve which are allocable to such Individual Property or, if applicable, group of Individual
Properties. 
  
 (e) The Administrative Agent
shall have no obligation to make disbursements from the PIP Reserve while any Event of Default exists. 
  
 (f) On or prior to November 30, 2004, the Borrowers shall submit to the Administrative Agent a detailed budget for the PIP Work for each
Individual Property, said budgets are individually referred to as a “PIP Budget” and collectively referred to as the “PIP Budgets.” The PIP Budgets shall be subject to the approval of the
Administrative Agent. No disbursements shall be made by the Administrative Agent from PIP Reserve until the Administrative Agent has approved the PIP Budgets; provided, however, the Administrative Agent shall make disbursements from the PIP Reserve
in accordance with the provisions of this Section 5.9(3) prior to the approval of all of the PIP Budgets in an aggregate amount not to exceed $2,000,000, but only for Individual Properties for which the PIP Budget has been approved by the
Administrative Agent. Unless otherwise agreed upon in writing by the Administrative Agent, all disbursements from the PIP Reserve shall be made in accordance with the PIP Budgets. The Administrative Agent shall have the right, in its reasonable
discretion, to periodically review the PIP Budgets to determine whether they continue to accurately reflect the cost to complete the PIP Work and to require revisions to the PIP Budgets. 
  
 (g) Notwithstanding any provision of this Section 5.9(3) to the contrary, the Administrative Agent
shall not make (and the Borrowers shall not be entitled to receive) any disbursements from the PIP Reserve if such disbursement will cause the balance of funds in the PIP Reserve to be less than Two Million Dollars ($2,000,000) until such time as
all of the PIP Work has been completed and approved by the Administrative Agent and the Borrowers have delivered to 

  

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the Administrative Agent a written certification that all requirements under the Franchise Agreements have been satisfied with respect to the PIP Work.

  
 (h) The Borrowers shall continue to make
monthly deposits into the PIP Reserve until such time as Borrowers have deposited into the PIP Reserve (and the Capital Expenditure Reserve) an amount equal to the sum of (i) the budgeted cost of all of the PIP Work, as set forth in the PIP Budgets
approved by the Administrative Agent, and (ii) Two Million Dollars ($2,000,000). 
  
 (i) The initial $10,000,000 deposit into the PIP Reserve may, at the Borrowers’ election, be made in cash or by delivery to the
Administrative Agent of an irrevocable evergreen sight draft letter of credit in the amount of $10,000,000 (the “PIP LC”). If said initial $10,000,000 deposit into the PIP Reserve is made by the Borrowers in cash, the Borrowers may
substitute the PIP LC for said cash deposit at any time within sixty (60) days following the Modification Closing Date. If the Borrowers satisfy the requirement to deposit with the Administrative Agent the initial $10,000,000 in the PIP Reserve by
delivering the PIP LC, the PIP LC shall be issued Citibank, N.A. or by another bank that is “A” rated by at least two national rating agencies and that is satisfactory to the Administrative Agent in its sole discretion. The PIP LC shall be
in form and on terms and conditions satisfactory to the Administrative Agent in its sole discretion and shall be deemed to be collateral for the Loans pursuant to Section 5.10 of this Agreement. So long as no Event of Default exists and Borrowers
have fully funded the PIP Reserve in accordance with the requirements of Section 5.9(3)(h) above, upon satisfaction by the Borrowers of all conditions for the disbursement of funds from the PIP Reserve, the Borrowers may, in lieu of a cash
disbursement from the PIP Reserve, elect to reduce the amount of the PIP LC by the amount that the Borrowers would otherwise be entitled to have disbursed from the PIP Reserve; provided, however, the Borrowers shall have satisfied all of the
conditions precedent to a disbursement of funds from the PIP Reserve set forth in this Section 5.9(3), and (i) Borrowers shall have paid for the PIP Work that is the subject of the requested disbursement from the PIP Reserve and have
delivered to the Administrative Agent unconditional lien waivers for such work, (ii) such reductions in the amount of the PIP LC shall be in increments of not less than $500,000 and shall occur not more than once in any thirty (30) day period, and
(iii) the replacement PIP LC shall be in form and substance satisfactory to the Administrative Agent in is sole discretion. 
  
 (4) Capital Expenditure Reserve. 
  

(a) Following the completion of all work, repairs, improvements and replacements required under the Property Improvement Plans, Funds
on deposit in the Capital Expenditure Reserve are to be used for (i) FF&E and (ii) the cost of those repairs and improvements which may be capitalized under the Uniform System of Accounts or, if and to the extent that the Uniform System of
Accounts does not address and resolve the categorization of an expenditure, determined using GAAP (each a “Capital Improvement” and collectively, the “Capital 

  

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Improvements”), in each case to the extent identified in the then effective Annual Budget or, during any Cash Trap Period, the then
effective Approved Budget, provided that funds on deposit in the Capital Expenditure Reserve may not be applied to expenses of rebranding or paying for any major capital projects or expenses involving any of the Properties unless approved in advance
by the Administrative Agent on behalf of the Lenders, which approval shall not be unreasonably withheld. 
  
 (b) The Borrowers may submit an application requesting that the Administrative Agent make a lump sum disbursement from the Capital
Expenditure Reserve to pay for expenses incurred for those items of FF&E and/or Capital Improvements that had been (i) previously contained in the then effective Annual Budget or the Approved Budget, as applicable, or (ii) not so contained but
submitted to and approved by the Administrative Agent in writing. If the applicable FF&E or Capital Improvements are in the Annual Budget or the Approved Budget, as applicable, or are approved by the Administrative Agent, the Administrative
Agent shall disburse funds from the Capital Expenditure Reserve to or for the benefit of the Borrowers for such amounts if each of the following conditions is met: 
  
 (i) The Borrowers shall make such request for a disbursement from the Capital Expenditure Reserve via
delivery to the Administrative Agent of a draw request that will include the following: 
  
 (A) an Officer’s Certificate making the request for a disbursement from the Capital Expenditure Reserve substantially in the form of
Exhibit M attached hereto; 
  
 (B) a
summary schedule of payments identifying expenditures on an Individual Property basis showing the job number, job name, vendor name, invoice number and, if applicable, the check number, check date and check amount and sub-total for each Individual
Property in the form attached hereto as Exhibit N; and 
  
 (C) unconditional lien waivers and releases from all parties that have provided materials and/or services in connection with any prior disbursements from the Capital Expenditure Reserve. 
  
 (ii) If the Borrowers’ disbursement request is
properly made and documented in accordance with the provisions of this Section, the Administrative Agent shall disburse the applicable funds from the Capital Expenditure Reserve within five (5) Business Days of receipt of a complete draw request so
long as there are sufficient funds in the Capital Expenditure Reserve to satisfy such request; provided, however, that if at the time of any disbursement an unconditional lien waiver or release 

  

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remains outstanding from a party that furnished materials and/or services and for which a payment has previously been disbursed from the Capital Expenditure
Reserve, the Administrative Agent shall have the right to reserve funds in the Capital Expenditure Reserve in an amount equal to the amount previously disbursed for such materials and/or services. 
  
 (iii) Requests may be submitted no more frequently than on
a monthly basis for any of the Properties unless reasonably necessary under the circumstances. 
  
 (iv) On a quarterly basis, Borrowers will deliver to the Administrative Agent copies of the Job Cost Report – CapEx for each
Individual Property in the form attached hereto as Exhibit O. The Administrative Agent reserves the right to request copies of invoices and to challenge the validity of payments included in previous disbursements and may require an inspection
of any applicable Individual Property related thereto, all at the Borrowers’ expense. The Administrative Agent shall also have the right to reserve funds in the Capital Expenditure Reserve in an amount equal to any funds previously disbursed if
the Administrative Agent subsequently determines that all the conditions precedent and subsequent for such prior disbursement from the Capital Expenditure Reserve were not satisfied. A disbursement by the Administrative Agent from the Capital
Expenditure Reserve shall not be construed as evidence that all of the conditions for such disbursement were met. Notwithstanding the foregoing, the Administrative Agent shall not have the right to withhold any disbursements based on the
insufficiency of draw requests or supporting information for disbursements paid more than sixteen (16) months prior thereto, unless prior to the expiration of such sixteen (16) month period the Administrative Agent notified the Borrowers of the
insufficiency of such draw requests or supporting information. 
  
 (c) So long as no Event of Default, Cash Trap Event or Franchisor Warning Event exists, (i) the Administrative Agent will, upon Borrowers’ request, commingle in the Capital Expenditure Reserve the deposits made
by Borrowers pursuant to Section 5.8(2) of this Agreement and said funds shall not be held by the Administrative Agent in separate accounts for each Individual Property and will not be required to be disbursed on an Individual Property by
Individual Property basis; and (ii) a request by a Borrower for disbursement from the Capital Expenditure Reserve with respect to any Individual Property need not be limited to the amount of funds on deposit in the Capital Expenditure Reserve which
are allocable to such Individual Property. 
  
 (d) If an Event of Default, Cash Trap Event or Franchisor Warning Event exists, the Administrative Agent reserves the right to require the Borrowers to establish separate Capital Expenditure Reserve accounts for each Individual Property or
group of Individual Properties and shall not be required, in connection 

  

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with any request by a Borrower for a disbursement related to any Individual Property or, if applicable, group of Individual Properties, to disburse from the
Capital Expenditure Reserve any amounts which are in excess of the funds then on deposit in the Capital Expenditure Reserve which are allocable to such Individual Property or, if applicable, group of Individual Properties. 
  
 (e) No portion of the funds on deposit in the Tax and
Insurance Reserve shall be required to be released by the Administrative Agent as a result of or in connection with the Release of any Individual Property. 
  
 (f) The Administrative Agent shall have no obligation to make disbursements from the Capital Expenditure Reserve while any Event of
Default exists. 
  
 (5) Deferred
Maintenance Reserve. 
  
 (a) Funds on
deposit in the Deferred Maintenance Reserve are to be applied to the cost of those repairs and replacements designated on Schedule 7 in accordance with the provisions hereinafter set forth. 
  
 (b) The Borrowers may submit an application requesting that
the Administrative Agent make a disbursement from the Deferred Maintenance Reserve to pay for expenses incurred in connection with such deferred maintenance items. If the applicable deferred maintenance item is in the Approved Budget or is approved
by the Administrative Agent, the Administrative Agent shall disburse funds from the Deferred Maintenance Reserve to or for the benefit of the Borrowers for such amounts if each of the following conditions is met: 
  
 (i) The Borrowers shall make such request via delivery of
the Administrative Agent’s standard form of draw request accompanied by invoices for the amounts requested, together with (as applicable) paid receipts for all costs that were the subject of any prior disbursements from the Deferred Maintenance
Reserve and lien waivers and releases from all parties furnishing materials and/or services in connection with such prior disbursements. The Administrative Agent may issue joint checks payable to the applicable Borrowers and the supplier,
materialmen, mechanic, subcontractor or other party to whom payment is due. The Administrative Agent may require an inspection of the applicable Individual Property at the Borrowers’ expense prior to making a disbursement related thereto.

  
 (ii) Requests may be submitted no more
frequently than on a monthly basis for any of the Properties unless reasonably necessary under the circumstances. 
  
 (iii) The Administrative Agent shall have no obligation to make disbursements from the Deferred Maintenance Reserve while any Event of
Default exists. 
  

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 (6) Ground Lease Rent Reserve. 
  
 (a) If any Borrower fails to make timely payment of rent
under any of the Ground Leases, the Administrative Agent may disburse any portion of the funds then on deposit in the Ground Lease Rent Reserve to the extent necessary to cure such failure or to make such timely payment, as applicable, together with
any default interest, late charges or other amounts that may be due and payable under such Ground Lease in connection therewith. In making any such disbursement, the Administrative Agent shall not be limited by the amount of funds on deposit in the
Ground Lease Rent Reserve which are allocable to the Individual Property or to the Ground Lease on account of which such payment is being made. 
  
 (b) In the event that any of the Individual Properties which is the subject of a Ground Lease is Released, the Administrative Agent shall
promptly the disburse to Borrower an amount equal to the funds on deposit in the Ground Lease Rent Reserve which are allocable to such Individual Property, provided that immediately after such disbursement the Ground Lease Rent Reserve shall contain
an amount equal to two (2) times the sum of the monthly ground rents which will be payable under the Ground Leases affecting the Individual Properties then remaining as security for the Loans. 
  
 (7) Trapped Cash Reserve. 
  
 (a) The Administrative Agent shall make disbursements from
the Trapped Cash Reserve from time to time as requested in writing by the Borrowers (but not more frequently than monthly) for payment of (i) Operating Expenses which are in accordance with the Approved Budget, but not including any Operating
Expenses for which reserves exist under the Capital Expenditure Reserve, Deferred Maintenance Reserve or Ground Lease Rent Reserve, (ii) shortfalls on Debt Service payments, and (iii) repairs, upgrades or improvements to the Properties which are in
accordance with the Approved Budget but for which funds are not available from the Capital Expenditure Reserve, in each case with the prior written approval of the Administrative Agent, not to be unreasonably withheld. 
  
 (b) The Borrowers shall make such request via delivery of
the Administrative Agent’s standard form of draw request accompanied by invoices for the amounts requested, together with (as applicable) paid receipts for all costs that were the subject of any prior disbursements from the Trapped Cash Reserve
and lien waivers and releases from all parties furnishing materials and/or services in connection with such prior disbursements. The Administrative Agent may issue joint checks payable to the applicable Borrowers and the supplier, materialmen,
mechanic, subcontractor or other party to whom payment is due. The Administrative Agent may require an inspection of the applicable Individual Property at the Borrowers’ expense prior to making a disbursement related thereto. 
  

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 (c) Upon the termination of any Cash Trap Period, any amounts remaining on deposit in the
Trapped Cash Reserve shall be released by the Administrative Agent to the Borrowers in accordance with their written instructions. 
  
 (d) Requests for withdrawals of funds in the Trapped Cash Reserve may be submitted no more frequently than on a monthly basis for any of
the Properties unless reasonably necessary under the circumstances. 
  
 (e) The Administrative Agent shall have no obligation to make disbursements from the Trapped Cash Reserve while any Event of Default exists. 
  
 Section 5.10 Pledge and Grant of Security Interest. Each Borrower hereby pledges to the Administrative Agent
(on behalf of the Lenders), and grants a security interest in, any and all monies now or hereafter deposited in any of the Depository Accounts and Reserves from time to time as additional security for the payment of the Loans. Each Borrower shall
not further pledge, assign or grant any security interest in any of the Depository Accounts or Reserves (or any monies on deposit therein from time to time) or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any
UCC-1 financing statements (except those naming the Administrative Agent as the secured party) to be filed with respect thereto. Upon the occurrence of an Event of Default, the Administrative Agent may apply any sums then present in the Depository
Accounts or Reserves to the payment of the charges for which such funds have been deposited or to the payment of the Loans or any other charges affecting the security of the Loans, as the Administrative Agent may elect, but no such application shall
be deemed to have been made by operation of law or otherwise until actually made by the Administrative Agent. Until expended or applied as above provided, such funds shall constitute additional security for the Loans. 
  
 Section 5.11 Interest on Funds in Reserves. 
  
 (1) Monies on deposit in the Reserves from time to time
shall be invested by the Administrative Agent in Permitted Investments selected by it in its discretion from time to time. The Administrative Agent shall not be obligated to obtain any specified rate of return with respect to any investments of such
funds and in no event shall the Administrative Agent be liable for any loss of the principal amount of such funds, the risk of such losses to be borne solely by the Borrowers (unless such loss is caused by the Administrative Agent’s conversion
or misappropriation of such funds). 
  
 (2) Any
interest income earned on funds on deposit in the Trapped Cash Reserve shall be redeposited in the Trapped Cash Reserve and shall become part of the Trapped Cash Reserve and constitute additional security for the Loans. 
  
 (3) Any interest income earned on the Tax and Insurance
Reserve or the Ground Lease Rent Reserve shall accrue for the benefit of the Lenders. Such funds shall be disbursed to the Lenders on a quarterly basis. 
  
 (4) Any interest income earned on the PIP Reserve, the Capital Expenditure Reserve or the Deferred Maintenance Reserve accrue for the
benefit of the Borrowers, in 

  

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accordance with their respective rights to such reserved funds. Such funds shall be disbursed to the Borrowers on a quarterly basis, provided that if an
Event of Default has occurred and is continuing, any interest that would otherwise be distributable to the Borrowers shall be redeposited in the applicable Reserve Accounts and constitute additional security for the Loans. 
  
 ARTICLE VI 
  
 REPRESENTATIONS AND WARRANTIES 
  
 Each of the Borrowers jointly and severally represents and warrants to the Administrative Agent and Lenders and, with
respect to Section 6.27, jointly and severally covenants to the Administrative Agent and Lenders that it shall, or shall cause: 
  
 Section 6.1 Organization, Power and Authority. Each Borrower and each Borrower Party (1) is duly organized, validly existing and in good
standing under the laws of the state of its formation or existence and (2) is in compliance with all legal requirements applicable to doing business in the State. Each Borrower and each Borrower Party has the full power, authority and right to
execute, deliver and perform its obligations pursuant to this Agreement and the other Loan Documents to which it is a party. Each Borrower has the full power, authority and right to mortgage each Individual Property pursuant to the terms of the
applicable Mortgage. 
  
 Section 6.2 Validity of Loan
Documents. The execution, delivery and performance by each Borrower and each Borrower Party of the Loan Documents to which it is a party: (1) are duly authorized and do not require the consent or approval of any other party or governmental
authority which has not been obtained; and (2) will not violate any law or result in the imposition of any lien, charge or encumbrance upon the assets of any such party, except as contemplated by the Loan Documents. The Loan Documents constitute the
legal, valid and binding obligations of each Borrower and each Borrower Party, in each case to the extent a party thereto, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, or similar laws generally
affecting the enforcement of creditors’ rights. 
  
 Section
6.3 No Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents by each Borrower and each Borrower Party, in each case to the extent a party thereto, will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of such party pursuant to
the terms of any indenture, mortgage, deed of trust, loan agreement, operating agreement or other agreement or instrument to which it is a party or by which any of its property or assets is subject, nor will such action result in any violation of
the provisions of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over such party or any of such party’s properties or assets, and any consent, approval, authorization, order,
registration or qualification of or with any court or any such regulatory authority or other governmental agency or body required for the execution, delivery and performance by each Borrower of this Agreement or any other Loan Documents has been
obtained and is in full force and effect. 
  

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 Section 6.4 Liabilities; Litigation. 
  
 (1) All financial data of the Borrowers including, without
limitation, the statements of cash flow and income and operating expense, that have been delivered by or with respect to any Borrower, any Borrower Party or any Individual Property (i) are true, complete and correct in all material respects, (ii)
accurately represent the financial condition of the Borrowers, the Borrower Parties and Properties, as applicable, as of the date of such reports, and (iii) to the extent prepared or audited by an independent certified public accounting firm, have
been prepared in accordance with GAAP throughout the periods covered, except as disclosed therein. Other than the Loans, no Borrower has any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to any Borrower and reasonably likely to have a materially adverse effect on the Properties or the operation thereof as hotels, except as referred to or reflected in said financial
statements. Since the date of the financial statements, there has been no materially adverse change in the financial condition, operations or business of any Borrower, any Borrower Party or any Property from that set forth in said financial
statements. There is no litigation, administrative proceeding, investigation or other legal action (including any proceeding under any state or federal bankruptcy or insolvency law) pending or, to the knowledge of any Borrower, threatened, against
the Properties, any Borrower or any Borrower Party which if adversely determined could have a material adverse effect on such party, the Properties or the Loans. 
  
 (2) Neither any Borrower nor any Borrower Party is contemplating either the filing of a petition by it under
state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and neither any Borrower nor any Borrower Party has knowledge of any Person contemplating the filing of any such petition against
it. 
  
 Section 6.5 Taxes and Assessments.
Except for any Permitted Encumbrances, there are no pending, proposed, special or other assessments for public improvements or otherwise affecting the Properties, nor to each Borrower’s best knowledge are there any contemplated improvements to
the Properties that may result in such special or other assessments. 
  
 Section 6.6 Other Agreements; Defaults. Neither any Borrower nor any Borrower Party is a party to any agreement or instrument or subject to any court order, injunction, permit, or restriction which might materially
adversely affect any of the Properties or the business, operations, or condition (financial or otherwise) of any Borrower or any Borrower Party. Neither any Borrower nor any Borrower Party is in violation of any agreement which violation would have
a material adverse effect on any of the Properties, any Borrower or any Borrower Party, any Borrower’s or any Borrower Party’s business, properties, or assets, operations or condition, financial or otherwise. 
  
 Section 6.7 Title. Each Borrower has good, marketable
and insurable title to the Properties, free and clear of all Liens whatsoever except the Permitted Encumbrances. Each Mortgage and the related security instrument creates (1) a valid, perfected Lien on the applicable Individual Property, subject
only to Permitted Encumbrances and (2) perfected security interests in and to, and perfected collateral assignments of, all Personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents. Except as otherwise disclosed on Schedule 14 attached hereto, there are no claims for payment for work, 

  

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labor or materials affecting any of the Properties which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan
Documents. 
  
 Section 6.8 Compliance with
Law. 
  
 (1) Each Borrower has the
necessary governmental approvals to own the Individual Properties owned by it, and each Borrower, Operator and Manager has the necessary governmental approvals to operate the respective Individual Properties operated by it and to conduct the
business now conducted or to be conducted thereon. 
  
 (2) Each Borrower, each Operator and Manager has all requisite licenses, permits, franchises, qualifications, certificates of occupancy or other governmental authorizations to own, lease and operate each of the Properties, as applicable,
and carry on its business as presently conducted therein and in connection with the use of the Properties as hotels and other ancillary and related uses. Without limiting the generality of the foregoing, each Borrower, each Operator and Manager has
obtained all licenses, permits, franchises, qualifications, certificates of occupancy or other governmental authorizations which are necessary (a) to operate a hotel and lodging business at the Properties, (b) to operate any spas, saunas, swimming
pools or related facilities at the Properties, (c) to operate any elevators or escalators at the Properties, (d) to offer food or beverage service at the Properties, including the sale of alcoholic beverages, and (e) to serve food products or
operate any food service establishment at the Properties. Prior to the date hereof, each Borrower has provided to the Administrative Agent a true, correct and complete copy of each such license, permit, franchise, qualification, certificate of
occupancy or other governmental authorization and it is in full force and effect as of the date hereof and has not expired or been modified. Each Borrower, each Operator and Manager shall maintain in full force and effect throughout the term of the
Loan each of the foregoing licenses, permits, franchises, qualifications, certificates of occupancy and governmental authorizations. Each of the Properties is in compliance with all applicable Legal Requirements and is free of structural defects,
and all building systems contained therein are in good working order, subject to ordinary wear and tear. To the best of each Borrower’s knowledge, none of the Properties constitutes, in whole or in part, a legally non-conforming use under
applicable Legal Requirements; 
  
 (3) Except as
set forth on Exhibit F attached hereto, no Condemnation has been commenced or, to any Borrower’s knowledge, is contemplated with respect to all or any portion of the Properties or for the relocation of roadways providing access to the
Properties; and 
  
 (4) Each Individual Property
has adequate rights of access to public ways and is served by adequate water, sewer, sanitary sewer (including septic) and storm drain facilities. 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 each Individual Property or a private right-of-way abutting each Individual Property provided that such private right-of-way is an irrevocable covenant running with the land that may be used by the
applicable Borrower for all purposes for which public right-of-ways may be used, and all such utilities are connected so as to serve each Individual Property without passing over other property, except to the extent such other property is subject to
a perpetual easement for such utility benefiting the relevant Individual Property or the applicable utility. All roads necessary for the full utilization of each 

  

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Individual Property for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities or are private
rights-of-way which are irrevocable covenants running with the land that may be used by the applicable Borrower for all purposes for which public rights-of-ways may be used. 
  
 Section 6.9 Location of Borrowers. Each Borrower’s principal place of business and chief executive
offices are located at the address shown on its respective signature page of this Agreement. No Borrower has had any other principal place of business or chief executive offices in the five (5) year period immediately preceding the execution and
delivery of this Agreement. 
  
 Section 6.10 ERISA.

  
 (1) As of the date hereof and throughout the
term of the Loans, (a) each Borrower is not and will not be an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which is subject to
Title I of ERISA, and (b) the assets of each Borrower do not and will not constitute “plan assets” of one or more such plans for purposes of Title I of ERISA or if after the date hereof the assets of each Borrower are plan assets, an
applicable prohibited transaction exemption will exist such that the making and/or continuance of the Loans will not be “Prohibited Transactions” under and as such term is defined in Title I of ERISA and Section 4975 of the Code as
determined to the Administrative Agent’s reasonable satisfaction based upon the information delivered to the Administrative Agent thirty (30) days prior to any assets of any Borrower becoming “plan assets”; and 
  
 (2) As of the date hereof and throughout the term of the
Loans (a) each Borrower is not and will not be a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with any Borrower are not and will not be subject to state statutes applicable to any Borrower
regulating investments of and fiduciary obligations with respect to governmental plans. 
  
 Section 6.11 Forfeiture. There has not been and shall never be committed by any Borrower or any Borrower Party or, to the best of each Borrower’s knowledge, has never been committed by any other
person in occupancy of or involved with the operation or use of the Properties, any act or omission affording the federal government or any state or local government the right of forfeiture as against the Properties or any part thereof or any monies
paid in performance of any Borrower’s obligations under any of the Loan Documents. Each Borrower hereby covenants and agrees not to commit or permit to exist any act or omission affording such right of forfeiture. 
  
 Section 6.12 Tax Filings. Each Borrower and each Borrower Party
has filed all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by each Borrower and each Borrower Party,
respectively. The tax returns of each Borrower and each Borrower Party properly reflect the income and taxes of the applicable Borrower and Borrower Party, for the periods covered thereby. 
  

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 Section 6.13 Solvency. (1) Neither Borrower nor any Borrower Party has entered into the
transaction or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (2) each Borrower and each Borrower Party has received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving
effect to the Loans, the fair saleable value of each Borrower’s assets exceeds and will, immediately following the making of the Loans, exceed such Borrower’s total liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities. The fair saleable value of each Borrower’s assets is and will, immediately following the making of the Loans, be greater than such Borrower’s probable liabilities, including the maximum amount of its
contingent liabilities on its debts as such debts become absolute and matured. Each Borrower’s assets do not and, immediately following the making of the Loans will not, constitute unreasonably small capital for such entity to carry out its
business as conducted or as proposed to be conducted. Each Borrower does not intend to, and does not believe that it will, incur Debt and other liabilities (including contingent liabilities and other commitments) beyond its ability to pay such Debt
and liabilities as they mature (taking into account the timing and amounts of cash to be received by it and the amounts to be payable on or in respect of obligations of such party). No petition in bankruptcy has been filed against any Borrower or
any Borrower Party in the last seven (7) years, and neither any Borrower nor any Borrower Party in the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors.

  
 Section 6.14 Full and Accurate Disclosure. (i)
All written information submitted to the Administrative Agent by any Borrower or any Borrower Party and prepared by any Borrower or any Borrower Party or by any other Person that is an Affiliate of a Borrower or a Borrower Party in connection with
the Loans or in satisfaction of the terms thereof, (ii) to the best of the Borrowers’ knowledge, all written information submitted to the Administrative Agent by any Borrower or any Borrower Party and prepared by a third party that is not an
Affiliate of any Borrower or any Borrower Party in connection with the Loans or in satisfaction of the terms thereof, and (iii) all statements of fact made by each Borrower or any Borrower Party in this Agreement or in any other Loan Document, are
accurate, complete and correct in all material respects. No statement of fact made by or behalf of any Borrower or any Borrower Party in this Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits
to state any material fact necessary to make statements contained herein or therein not misleading. There is no fact presently known to any Borrower or any Borrower Party which has not been disclosed to the Administrative Agent which materially
adversely affects, nor as far as any Borrower can foresee, is likely to materially adversely affect, any Individual Property or the business, operations or condition (financial or otherwise) of any Borrower or any Borrower Party. 
  
 Section 6.15 Flood Zone. No portion of the improvements
comprising any Individual Property is located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Act of 1994, as amended, or any successor law, or, if located within any such area, the Borrower which owns or the Operator which operates such Individual Property has obtained and will
maintain the insurance prescribed in Section 3.1 hereof. 
  

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 Section 6.16 Federal Reserve Regulations. No part of the proceeds of the Loans will be used
for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U
or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents. 
  
 Section 6.17 Not a Foreign Person. Neither any Borrower nor any Borrower Party is a “foreign person”
within the meaning of § 1445(f)(3) of the Code. 
  
 Section
6.18 Separate Lots. Each Individual Property is comprised of one (1) or more parcels which constitutes one (1) or more separate tax lots and does not constitute a portion of any other tax lot not a part of such Individual Property.

  
 Section 6.19 No Prior Assignment. There are no
prior assignments of the Leases or any portion of the Rents due and payable or to become due and payable which are presently outstanding. 
  
 Section 6.20 Insurance. Each Borrower has obtained and has delivered to the Administrative Agent certified copies of all insurance policies
reflecting the insurance coverages, amounts and other insurance requirements set forth in this Agreement. Except as set forth in Schedule 4 attached hereto, no claim has been made under any such Policy the amount of which is reasonably
expected to exceed $50,000. No Person, including any Borrower or any Borrower Party, has done, by act or omission, anything which would impair the coverage of any such policy. 
  
 Section 6.21 Use of Properties. Each Individual Property is and shall be used exclusively as a hotel and other
appurtenant and related uses. 
  
 Section 6.22 Certificate
of Occupancy; Licenses. To the best of each Borrower’s knowledge, all certifications, permits, licenses and approvals, including without limitation, certificates of completion and occupancy permits required for the legal use, occupancy
and operation of each of the Individual Properties as a hotel and all current appurtenant and related uses (collectively, the “Licenses”), including those enumerated in Section 6.8 hereof, have been obtained and are in
full force and effect. The Borrowers shall keep and maintain all licenses necessary for the operation of each of the Individual Properties as a hotel. The use of each Individual Property as a hotel is in conformity with any applicable certificate of
occupancy issued for such Individual Property. 
  
 Section 6.23
Physical Condition. Except as expressly set forth in the building condition reports delivered to the Administrative Agent in connection with the initial advance of the Loans, and to the best of each Borrower’s knowledge: each
Individual Property, including, without limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; there exists no structural or other material defects or damages in any Individual Property,
whether 

  

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latent or otherwise, and no Borrower has received written notice from any insurance company or bonding company of any defects or inadequacies in any
Individual Property, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or
bond. 
  
 Section 6.24 Boundaries. Except as
disclosed in the Permitted Encumbrances, all of the improvements which were included in determining the appraised value of each Individual Property lie wholly within the boundaries and building restriction lines of such Individual Property, and no
improvements on adjoining properties encroach upon such Individual Property, and no easements or other encumbrances upon the applicable Individual Property encroach upon any of the improvements, so as to materially adversely affect the value or
marketability of the applicable Individual Property except those which are insured against by title insurance. 
  
 Section 6.25 Survey. To the best of each Borrower’s knowledge, the survey for each Individual Property delivered to the
Administrative Agent in connection with this Agreement does not fail to reflect any material matter affecting such Individual Property or the title thereto. 
  
 Section 6.26 Filing and Recording Taxes. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any
Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgages
encumbering the Properties have been paid, and, under current Legal Requirements, the Mortgages encumbering the Properties are enforceable in accordance with their respective terms by the Administrative Agent or any subsequent holder thereof (on
behalf of the Lenders), subject to applicable bankruptcy, insolvency, or similar laws generally affecting the enforcement of creditors’ rights. 
  
 Section 6.27 Single Purpose Entity. Each Borrower is and shall continue to each be a Special Purpose Entity until the Indebtedness is paid
in full. A “Special Purpose Entity” means a corporation, limited liability company or limited partnership: 
  
 (1) whose purpose shall be limited solely to, as applicable, (i) owning, holding, selling, leasing, transferring, exchanging, operating
and managing the Properties and any other assets which it owns as of the date hereof and (ii) transacting any and all lawful business for which it may be organized under its constitutive law that is incident, necessary and appropriate to accomplish
the foregoing; 
  
 (2) which shall not acquire
any asset or property other than (i) the Properties and any other assets which it owns as of the date hereof, and/or (ii) incidental Personalty necessary for and used or to be used in connection with the ownership or operation of the Properties and
any other assets which it owns as of the date hereof; 
  
 (3) which shall not engage in any business other than the businesses in which it is engaged as of the date hereof; 
  
 (4) which, except for the Operating Leases specified on Schedule 11. shall not enter into any contract or agreement with any
Affiliate, any constituent party of itself, any of its 

  

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owners, any guarantors of its obligations, or any Affiliate of any constituent party, owner or guarantor (collectively, the “Related
Parties”) of itself, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties not so affiliated with
itself or such Related Parties; 
  
 (5) which
shall not make any loans or advances to any Person and shall not acquire obligations or securities of any Related Party other than those which it has made or owns, as applicable, as of the date hereof; 
  
 (6) which is and shall remain solvent and shall pay its
debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; 
  
 (7) which has done or caused to be done and shall do all things necessary to observe organizational formalities and preserve its
existence, and shall not, except as otherwise permitted herein, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents
without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld; 
  
 (8) which shall maintain all of its books, records, financial statements and bank accounts separate from those of any other Person; except
as set forth on Schedule 13 attached hereto, shall file its own tax returns and shall not file a consolidated federal income tax return with any other Person; and shall maintain its books, records, resolutions and agreements as official
records; 
  
 (9) which shall be, and at all times
shall hold itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other related party), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate checks; 
  

(10) which shall maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations; 
  
 (11) which shall not seek its own dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of its material assets (except as expressly permitted herein); 
  
 (12) which shall not commingle its assets with those of any
other Person and shall hold all of its assets in its own name; 
  
 (13) which, except for the Indebtedness, shall not guarantee or become obligated for the debts of any other Person and does not and will not hold itself out as being responsible for the debts or obligations of any
other Person; 
  

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 (14) which shall allocate fairly and reasonably any overhead expenses that are shared
with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or related party; 
  
 (15) which shall not pledge its assets for the benefit of any other Person other than with respect to the Loan or as otherwise permitted
herein; and 
  
 (16) which shall maintain a
sufficient number of employees in light of its contemplated business operations and pay the salaries of its own employees from its own funds. 
  
 Section 6.28 Management Agreements. Each of the Management Agreements pursuant to which the Operators operate the Properties (a) is in full
force and effect and there is no default or violation by any party thereunder and (b) has been entered into with Manager. There are no management, operation or similar agreements affecting any of the Properties other than as are disclosed on
Schedule 5A, and there are no other fee or payment arrangements in connection with Manager’s performance of its management obligations with respect to each Individual Property except as set forth in the Management Agreements. The
Management Agreements disclosed on Schedule 5A (including the amendments disclosed thereon) represent the full and complete terms and provisions of the management contracts entered into between the respective Operators and the Manager which
are in effect as of the date hereof, and there are no amendments, modifications, or other agreements relating thereto. The fees due under each Management Agreement, and the terms and provisions of each Management Agreement, are subordinate to this
Agreement and to each Mortgage and every other Loan Document. The Manager under each Management Agreement has agreed (a) to attorn to and subordinate its interest in such Management Agreement to the Administrative Agent and (b) that such Management
Agreement may be terminated by the Administrative Agent, without cause, at any time after the occurrence of a monetary Event of Default or the Acceleration of the Loans by the Administrative Agent, on behalf of the Lenders, following the occurrence
of any Event of Default. 
  
 Section 6.29 Franchise
Agreements. Each of the Franchise Agreements pursuant to which any Operator operates the Properties is in full force and effect; there is no default or violation by any Operator thereunder; and, to the best of each Borrower’s knowledge,
there is no default or violation by any franchisor thereunder. The Franchise Agreements disclosed on Schedule 5B (including the amendments disclosed thereon) represent the full and complete terms and provisions of the franchise or license
contracts entered into between the respective franchisors or licensors and the Operator which are in effect as of the date hereof, and there are no amendments, modifications, or other agreements relating thereto. There are no franchise or similar
agreements affecting any of the Properties other than as are disclosed on Schedule 5B, and there are no other fee or payment arrangements in connection with the franchise rights except as set forth in the Franchise Agreements. 
  
 Section 6.30 Investment Company Act. Each Borrower is not (1)
an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (2) a “holding company” or a “subsidiary company”
of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, 

  

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as amended; or (3) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money. 
  
 Section 6.31 Interest Rate Cap Agreement. A complete and
correct copy of the Interest Rate Cap Agreement provided by the Borrowers for the benefit of the Administrative Agent (on behalf of the Lenders) is attached hereto as Exhibit G (the “Initial Interest Rate Cap
Agreement”). The Interest Rate Cap Agreement is in full force and effect and enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws generally affecting the enforcement
of creditors’ rights. Not later than 90 days prior to the expiration of any Interest Rate Cap Agreement, the Borrowers shall replace the same with an interest rate cap agreement (i) covering an amount not less than the then outstanding
principal balance of the Floating Notes, (ii) issued at a strike price identical to the Initial Interest Rate Cap Agreement, (iii) issued by a counterparty satisfying the Rate Cap Rating Criteria and otherwise reasonably satisfactory to the
Administrative Agent, and (iv) otherwise in form and substance reasonably satisfactory to the Administrative Agent (the “Replacement Interest Rate Cap Agreement”). The Borrowers shall maintain in full force and effect
an Interest Rate Cap Agreement during the entire term of the Loans so long as any Floating Note has not been paid in full. In the event that (1) an Interest Rate Cap Agreement is terminated for any reason or is otherwise unenforceable by the
Administrative Agent (on behalf of the Lenders) or (2) the counterparty executing the Interest Rate Cap Agreement is not a financial institution satisfying the Rate Cap Rating Criteria, the Borrowers shall immediately obtain from a financial
institution that satisfies the Rate Cap Rating Criteria a replacement Interest Rate Cap Agreement in form and substance satisfactory to the Administrative Agent in its reasonable discretion. 
  
 Section 6.32 Terrorism and Money Laundering. 
  
 (1) As of the date hereof and throughout the term of the
Loans, to the best of each Borrower’s knowledge: (i) each Borrower; (ii) any person or entity Controlling or Controlled by any Borrower; (iii) if any Borrower is a privately held entity, any person having a beneficial interest in Borrower; or
(iv) any person for whom any Borrower is acting as agent or nominee in connection with this transaction, is not a country, territory, individual or entity named on an OFAC list or any other relevant lists maintained by governmental authorities, and
is not a person or entity prohibited under the OFAC Programs. 
  
 (2) To comply with applicable U.S. anti-money laundering laws and regulations, all payments by any Borrower to the Lenders or from any Lender to any Borrower will only be made in such Borrower’s name and to and
from a bank account of a bank based or incorporated in or formed under the laws of the United States or a bank that is not a “foreign shell bank” within the meaning of the U.S. Bank Secrecy Act (31 U.S.C. § 5311 et seq.), as amended,
and the regulations promulgated thereunder by the U.S. Department of the Treasury, as such regulations may be amended from time to time. 
  
 (3) Each Borrower agrees to provide the Administrative Agent and each Lender at any time and from time to time during the term of the
Loans with such information as the Administrative Agent or such Lender determines to be necessary or appropriate to comply with the anti-money laundering laws and regulations of any applicable jurisdiction, or to respond to requests for information
concerning the identity of any Borrower, any person or entity 

  

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Controlling or Controlled by any Borrower or any person or entity having a beneficial interest in any Borrower, from any governmental authority,
self-regulatory organization or financial institution in connection with its anti-money laundering compliance procedures, or to update such information. 
  
 (4) The representations and warranties set forth in this Section 6.32 shall be deemed repeated and reaffirmed by each Borrower as
of each date that any Borrower makes a payment to any Lender under the Notes and other Loan Documents or receives any payment from any Lender. Each Borrower agrees promptly to notify the Administrative Agent and each Lender in writing should such
Borrower become aware of any change in the information set forth in these representations. 
  
 Section 6.33 Certain Organizational Matters. 
  
 (1) With the exception of the Membership Pledges and the Stock Pledges, there are no outstanding pledges of equity interests in any of the
Borrower Parties as of the date hereof. 
  
 (2)
Sunstone, as holder of one hundred percent (100%) of the outstanding equity interests in Sunstone Holdco, has Decisionmaking Control over Sunstone Holdco and the Borrowers. No other Person has Decisionmaking Control over Sunstone Holdco. 

 
 (3) The REIT, as managing member of Sunstone, has
Decisionmaking Control over Sunstone. No other Person has Decisionmaking Control over Sunstone. 
  
 ARTICLE VII 
  
 FINANCIAL
REPORTING 
  
 Section 7.1 Financial Statements.

  
 (1) Obligations of Borrowers.
Each Borrower will keep and maintain or will cause to be kept and maintained, in accordance with GAAP proper and accurate books, records and accounts reflecting the financial affairs of such Borrower and income and expense in connection with the
operation on an individual basis of each of the Individual Properties. The Administrative Agent and any Lender shall have the right from time to time at all times during normal business hours, upon reasonable advance notice, to examine such books,
records and accounts at the office of such Borrower or at the Individual Property and to make such copies or extracts thereof as the Administrative Agent or Lender shall desire. Upon the occurrence of any Event of Default (following any required
notice from the Administrative Agent to the Borrowers and following the expiration of any applicable cure period), each Borrower shall pay any costs and expenses incurred by the Administrative Agent to examine each Borrower’s accounting records
with respect to the Properties, as the Administrative Agent shall determine to be necessary or appropriate in the protection of the Lenders’ interests. 
  
 (2) Monthly Reports. Each Borrower shall deliver or shall cause to be delivered to the
Administrative Agent, within thirty (30) days after the end of each calendar month during the term of the Loans, a report for each Individual Property which shows room 

  

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availability and occupancy, Operating Revenues, Operating Expenses, overhead costs and other information with respect to such Individual Property during the
preceding month, together with a report showing the same information for all of the Properties, on a cumulative basis, during the preceding month (collectively, the “Monthly Operating Statement”). Each Monthly
Operating Statement shall be prepared in a manner consistent with the Uniform System of Accounts, shall be in the form of Exhibit I attached hereto, and shall be accompanied by a certificate signed by the chief financial officer of the
Borrowers stating that to such officer’s knowledge the attached Monthly Operating Statement is true, correct, accurate and complete and fairly presents the results of the operations of each Individual Property and all of the Properties on a
cumulative basis. The Borrowers shall provide the Administrative Agent with the Monthly Operating Statement in electronic form only (unless otherwise requested by the Administrative Agent), provided that with the delivery of the Monthly Operating
Statement for December of each year during the term of the Loans, the Borrowers shall provide the Administrative Agent with a hard copy of such Monthly Operating Statement, together with supporting documentation and cumulative detailed backup for
the contents of such Monthly Operating Statement. 
  
 (3) Quarterly Reports. Each Borrower shall deliver or shall cause to be delivered to the Administrative Agent, within forty-five days after the end of each calendar quarter ending March 31, June 30 and September 30 (a) a
report for each Individual Property in the form of Exhibit J attached hereto which shows, among other things, the actual, forecast and variance figures for each Individual Property during the preceding quarter, together with a report showing
the same information for all of the Properties, on a cumulative basis, during the preceding quarter (collectively, the “Remainder of Year Quarterly Report”) and (b) a report for each Individual Property in the form of
Exhibit K attached hereto which shows, among other things, the trailing twelve-month performance of each Individual Property during the preceding quarter, together with a report showing the same information for all of the Properties, on a
cumulative basis, during the preceding quarter (collectively, the “Trailing 12-Month Quarterly Report” and, together with the Remainder of Year Quarterly Report, the “Quarterly Report”). Each
Quarterly Report shall be prepared in a manner consistent with the Uniform System of Accounts and shall be accompanied by (a) a certificate signed by the chief financial officer of the Borrowers stating that to such officer’s knowledge the
attached Quarterly Report is true, correct, accurate and complete and fairly presents the results of the operations of each Individual Property and all of the Properties on a cumulative basis and (b) the most recent STR Report for each Individual
Property. The Borrowers shall provide the Administrative Agent with the Quarterly Report and each STR Report in electronic form only (unless otherwise requested by the Administrative Agent). 
  
 (4) Annual Reports. Within one hundred twenty
(120) days after the end of each calendar year, the Borrowers shall furnish to the Administrative Agent the following annual financial statements and related certifications and opinions: 
  
 (a) Consolidated financial statements audited by a “big four” accounting firm or other nationally
recognized accounting firm reasonably acceptable to the Administrative Agent in accordance with GAAP covering the REIT for such calendar year, and which shall include (i) a consolidated balance sheet, consolidated statement of operations,
consolidated statement of cash flow and consolidated statements of changes in members’ equity, (ii) the notes to such 

  

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consolidated financial statements, and (iii) with respect to the REIT, an unqualified opinion by the accounting firm which is rendering such financial
statements, provided that if separate audited financial statements and accompanying materials are prepared with respect to any other Borrower Party from time to time, the Borrowers shall also furnish a copy of such materials to the Administrative
Agent within the time period specified above. 
  
 (b) A balance sheet, statement of operations and statement of cash flow for each Borrower for such calendar year. 
  
 (c) A certificate executed by the chief financial officer of Sunstone and of each Borrower stating that, to the best of said chief
financial officer’s knowledge, all of such financial statements, balance sheets, statements of operations and statements of cash flow (i) present fairly in all material respects the financial condition and the results of operations of Sunstone,
each Borrower, and the Properties and (ii) have been prepared in accordance with GAAP. 
  
 (5) Certification; Supporting Documentation. Each such financial statement shall (a) be certified by the chief financial
officer of the applicable Borrower, (b) be derived from the Books and Records maintained by each Borrower either at the applicable Individual Property or at the corporate office of the Borrowers located at 903 Calle Amanecer, Suite 100, San
Clemente, CA 92673, (c) follow the general form set forth in the Uniform System of Accounts, and (d) be accompanied with copies of supporting documentation to the extent that the Administrative Agent shall request. 
  
 (6) Additional Reports. Each Borrower shall
deliver to the Administrative Agent such other information relating to the Borrowers, Operators or Properties as it may reasonably request as soon as reasonably available but in no event later than thirty (30) days after such information becomes
available to such Borrower in final form. 
  
 (7)
Officer Certificates. The chief financial officer of the Borrowers shall not be personally liable for any inaccuracies contained in the officer certificates and related deliveries required by Sections 7.1(2), (3),
(4) and (5) hereof. 
  
 Section 7.2 Accounting
Principles. All financial statements shall be prepared in accordance with generally accepted accounting principles in the United States of America as in effect on the date so indicated and consistently applied, as supplemented by the Uniform
System of Accounts (“GAAP”) (or such other accounting basis reasonably acceptable to the Administrative Agent). 
  
 Section 7.3 Other Information; Access. Each Borrower shall deliver to the Administrative Agent such additional information regarding such
Borrower, its subsidiaries, its business, any Borrower Party and any Individual Property within thirty (30) days after the Administrative Agent’s reasonable request therefor. The Administrative Agent shall have the right to choose and appoint a
certified public accountant to perform financial audits as it deems necessary, at Lender’s expense; provided, however, upon the occurrence of an Event of Default 

  

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and prior to the acceptance of a cure thereof by the Administrative Agent such audits may be performed at the Borrowers’ expense. 
  
 Section 7.4 Format of Delivery. Any reports, statements or
other information required to be delivered under this Agreement shall be delivered (1) in paper form (unless a specific section of this Agreement states that any such reports, statements or other information shall be delivered only in electronic
form) and (2) electronically via e-mail or by delivery of a CD-ROM or other digitally readable device which is compatible with the Administrative Agent’s computer hardware and software and using a Microsoft Word for Windows or WordPerfect for
Windows files (which files may be prepared using a spreadsheet program and saved as word processing files). 
  
 ARTICLE VIII 
  
 COVENANTS 
  
 Each Borrower covenants and agrees
with the Administrative Agent and the Lenders as follows: 
  
 Section 8.1 Due on Sale and Encumbrance; Transfers of Interests. 
  
 (1) Other than those Liens created by the Loan Documents, without the prior written consent of the Administrative Agent and the Lenders
(to the extent required under Section 11.2), and except as expressly permitted by Section 8.1(2): 
  
 (a) neither (i) any Borrower, (ii) any Borrower Party, (iii) any other Person having a direct or indirect ownership or beneficial interest
in any Borrower or any Borrower Party, nor (iv) any Person that is a manager of any Borrower or any Borrower Party shall (A) directly or indirectly sell, transfer, convey, mortgage, pledge, or assign any interest in any Individual Property or any
part thereof (including any partnership, limited liability company or any other, direct or indirect, ownership or management interest in any Borrower or any Borrower Party); (B) further encumber, alienate, grant a monetary Lien or grant any other
interest in any Individual Property or any part thereof (including any partnership, limited liability company or management interest or other, direct or indirect, ownership interest in any Borrower or any Borrower Party), whether voluntarily or
involuntarily; or (C) enter into any easement or other agreement granting rights in or restricting the use or development of any Individual Property which materially and adversely affects the value of an Individual Property as determined by the
Administrative Agent; 
  
 (b) no new general
partner, manager, member or limited partner shall be admitted to or created in any Borrower, any Operating Lessee or Sunstone Holdco, nor shall any existing general partner, manager, member or limited partner withdraw from any Borrower, any
Operating Lessee or Sunstone Holdco, and no change in the organizational documents of any such party shall be effected; and 
  

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 (c) without limiting the provisions of Section 8.1(1)(b) above, no new general
partner, manager, member or limited partner having the ability to Control the affairs of any Borrower or any Borrower Party shall be admitted to or created in any Borrower, any Borrower Party or any other Person having a direct or indirect interest
(including a management or ownership interest) in any Borrower or any Borrower Party (nor shall any existing general partner, manager, member or Controlling limited partner withdraw from any Borrower, any Borrower Party or any other Person having a
direct or indirect interest (including a management or ownership interest) in any Borrower or any Borrower Party), and no change in any Borrower’s or any Borrower Party’s organizational documents relating to Control over any Borrower or
any Borrower Party and/or any Individual Property shall be effected. 
  
 (2) Notwithstanding anything to the contrary contained in this Section 8.1, the following transfers and other transactions shall be permitted and not be deemed a violation or breach of the provisions of
Section 8.1(1): 
  
 (a) Releases completed
in accordance with the requirements of Section 2.7. 
  
 (b) A one-time merger of the REIT with and into a public company or privately held company, or any similar transaction involving the REIT, which shall be completed with the prior written consent of Lender, provided
that: 
  
 (i) such transaction must occur, if at
all, prior to the expiration of the sixtieth (60th) Loan Month, 
  
 (ii) immediately after the completion of such transaction, the tangible net worth (exclusive of goodwill) of the surviving entity shall be equal to or greater than the sum of (A) $250,000,000 plus (B) the greater of
(i) eighty-five percent (85%) of the sum of the tangible net worths (exclusive of goodwill) of all of the Borrowers on the date of this Agreement and (ii) the sum of the tangible net worths (exclusive of goodwill) of all of the Borrowers immediately
prior to the closing of such transaction, 
  
 (iii) the surviving entity shall have executed and delivered to the Administrative Agent an assumption of all of Sunstone’s obligations and liabilities under the Loan Documents in form and substance satisfactory to the Administrative
Agent in its sole and absolute discretion, 
  
 (iv) immediately after the completion of such transaction, the surviving entity shall be of equal or greater creditworthiness as the Borrowers and Sunstone immediately prior to the closing of such transaction, 
  
 (v) the surviving entity shall have a ratio of debt to book
assets that does not exceed 60%, 
  

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 (vi) the surviving entity shall be able to make all of the representations and
warranties set forth in Section 6.32 hereof relating to OFAC and other Legal Requirements relating to terrorism and money laundering, and shall otherwise comply with all requirements of the Lenders and the Administrative Agent relating
thereto, 
  
 (vii) the surviving entity (and its
Affiliates) is not and has not been involved in any litigation with the Administrative Agent or any Lender and has not defaulted on any obligations owed to the Administrative Agent or any Lender, 
  
 (viii) the surviving entity has no less experience in the
ownership and management of full service hotel assets than the Borrowers and their respective principals and is otherwise approved by the Administrative Agent on behalf of the Lenders, 
  
 (ix) at the closing of and as a condition to any such approved transaction, the Borrowers shall, jointly
and severally, pay to the Administrative Agent on behalf of the Lenders a fee in the amount of one percent (1%) of the then outstanding principal balance of the Loans, 
  
 (x) the Borrowers shall, jointly and severally, pay all of the reasonable costs and expenses of the
Administrative Agent and Lenders incurred in connection with the proposed transaction, whether or not such transaction actually occurs, including, without limitation, attorneys’ fees, and 
  
 (xi) The Loan Documents shall be modified to include such
other provisions with respect to such transaction as the Administrative Agent and Lenders shall reasonably require. 
  
 (c) The issuance or transfer of publicly traded shares in the REIT, or the issuance or transfer of any interests in Sunstone (whether
membership interest or operating partnership units) in connection with the acquisition of other hotel properties and assets, so long as there is no change in the Decisionmaking Control over the REIT or Sunstone. 
  
 (d) The issuance or transfer of any interests in Sunstone
(whether membership interest or operating partnership units), including, without limitation, any issuance or transfer of interests in Sunstone in connection with a merger, acquisition or other business combination other than as described in
Section 8.1(2)(b) above; provided, however, if there is a change in the Decisionmaking Control over the REIT or Sunstone as a result of such an issuance or transfer of interests in Sunstone, then each of the following conditions must
be satisfied: 
  
 (i) immediately after the
completion of such transaction, the tangible net worth (exclusive of goodwill) of each of the REIT and Sunstone shall be equal to or greater than the sum of (A) $250,000,000 

  

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plus (B) the greater of (i) eighty-five percent (85%) of the sum of the tangible net worths (exclusive of goodwill) of all of the Borrowers on the date of
this Agreement and (ii) the sum of the tangible net worths (exclusive of goodwill) of all of the Borrowers immediately prior to the closing of such transaction, 
  
 (ii) immediately after the completion of such transaction, each of the REIT and Sunstone shall be of equal
or greater creditworthiness as the Borrowers immediately prior to the closing of such transaction, 
  
 (iii) each of the REIT and Sunstone shall have a ratio of debt to book assets that does not exceed 60%, 
  
 (iv) each of the REIT and Sunstone shall be able to make
all of the representations and warranties set forth in Section 6.32 hereof relating to OFAC and other Legal Requirements relating to terrorism and money laundering, and shall otherwise comply with all requirements of the Lenders and the
Administrative Agent relating thereto, 
  
 (v)
each of the REIT (and its Affiliates) and Sunstone (and its Affiliates) are not and have not been involved in any litigation with the Administrative Agent or any Lender and have not defaulted on any obligations owed to the Administrative Agent or
any Lender, 
  
 (vi) the Person which has
Decisionmaking Control over Sunstone shall have no less experience in the ownership and management of full service hotel assets than the Borrowers and their respective principals and shall be otherwise approved by the Administrative Agent,

  
 (vii) the Borrowers shall, jointly and
severally, pay all of the reasonable costs and expenses of the Administrative Agent and Lenders incurred in connection with the proposed transaction, whether or not such transaction actually occurs, including, without limitation, attorneys’
fees, and 
  
 (viii) The Loan Documents shall be
modified to include such other provisions with respect to such transaction as the Administrative Agent and Lenders shall reasonably require. 
  
 (e) The transfer of partnership or limited liability company interests in Westbrook Real Estate Fund III, L.P., Westbrook Real Estate
Co-Investment Partnership III, L.P., Westbrook Sunstone Investors, L.L.C., Westbrook Real Estate Partners, LLC, Westbrook Real Estate Partners Management III, LLC, or any Affiliate thereof. 
  

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 (f) Any Mezzanine Pledge, so long as: 
  
 (i) at all times prior to the enforcement (whether by
possession, foreclosure, sale, or otherwise) by the holder of such Mezzanine Pledge of its security interest in the equity interests in Sunstone, the REIT shall have Decisionmaking Control over Sunstone and Sunstone shall have Decisionmaking Control
over Sunstone Hotel TRS, and 
  
 (ii) as a
condition precedent to the execution and delivery of such Mezzanine Pledge, the holder thereof (and, if different, the Person or Persons which enter into the Mezzanine Obligation with Sunstone, Sunstone Hotel TRS or the REIT) shall enter into an
intercreditor agreement with the Administrative Agent which is in form and substance reasonably acceptable to the Administrative Agent. 
  
 (3) As used in this Section 8.1, “transfer” shall include the sale, transfer, conveyance, mortgage, pledge, or assignment
of the legal or beneficial ownership of (a) any Individual Property, (b) any partnership interest in any general partner in any Borrower or any Borrower Party that is a partnership, (c) any membership interest in any member, or non-member manager,
of any Borrower or any Borrower Party that is a limited liability company, and (d) any voting stock in any general partner in any Borrower or any Borrower Party that is a corporation; “transfer” shall not include (i) the leasing of space
within the Properties so long as each Borrower complies with the provisions of the Loan Documents relating to such leasing activity and (ii) the Release of any Individual Property in compliance with the terms of Section 2.7 or Section
3.3(3) hereof. 
  
 Section 8.2 Taxes; Charges. Each
Borrower shall pay before any fine, penalty, interest or cost may be added thereto, and shall not enter into any agreement to defer, any real estate taxes and assessments, franchise taxes and charges, and other governmental charges that may become a
Lien upon any Individual Property or become payable during the term of the Loans (the “Taxes”), and will promptly furnish the Administrative Agent with evidence of such payment; however, each Borrower’s compliance with
Sections 5.8(1) and 5.9(2) of this Agreement relating to impounds for taxes and assessments shall, with respect to payment of such taxes and assessments, be deemed compliance with this Section 8.2. No Borrower shall suffer or
permit the joint assessment of any Individual Property with any other real property constituting a separate tax lot or with any other real or personal property. Each Borrower shall pay when due all claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in a Lien on any Individual Property; however, so long as no Event of Default (following any required notice from the Administrative Agent to the Borrowers and following the expiration of any
applicable cure period) shall exist, a Borrower may contest the validity of such claims and demands or Taxes so long as (a) such Borrower notifies the Administrative Agent that it intends to contest such claim or demand or Taxes, (b) such Borrower
provides the Administrative Agent with cash or an irrevocable letter of credit issued by a financial institution satisfactory to the Administrative Agent in an amount equal to 110% of the contested amount or such other security satisfactory to the
Administrative Agent in its reasonable discretion (including an endorsement to the Administrative Agent’s title insurance policy insuring against such claim or demand) assuring the discharge of such Borrower’s obligations for such claims
and demands or payment of Taxes, including interest and penalties, and (c) such Borrower is diligently contesting the 

  

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same by appropriate legal proceedings in good faith and at its own expense and concludes such contest or obtains a stay thereof prior to the thirtieth (30th)
day preceding the date on which any Individual Property is scheduled to be sold for non-payment. In the event that any Borrower is contesting any Taxes in accordance with this Section 8.2, the Administrative Agent shall not pay such Taxes as
required pursuant to Section 5.9(2) hereof provided that such Borrower provides the Administrative Agent with (i) a written request to cease payment of Taxes and (ii) evidence reasonably satisfactory to the Administrative Agent that the Taxes
are being contested in accordance with this Section 8.2. 
  
 Section 8.3 Control; Management; Negative Pledge. 
  
 (1) There shall be no change in any of the Managers under any of the Management Agreements or otherwise with respect to the Properties
without the prior written consent of the Administrative Agent. No Borrower shall terminate, replace or appoint any property manager or terminate, cancel, or materially modify the Management Agreement or enter into any agreement relating to the
management or operation of the Properties with Manager or any other Person without the Administrative Agent’s prior written reasonable approval; provided, so long as no Event of Default exists and Borrower provides written notice to the
Administrative Agent, the Borrowers may, upon the expiration of the term of any Management Agreement, extend or renew said Management Agreement on substantially the same terms and conditions as the then existing Management Agreement and, with the
Administrative Agent’s prior written approval, not to be unreasonably withheld, to make such revisions thereto as may be reasonably required for tax planning purposes of the Borrowers and/or the Borrower Parties. Each Borrower, upon the request
of the Administrative Agent, shall terminate the Manager, without penalty or fee, if at any time during the Loans, (1) the Manager shall become insolvent or a debtor in any bankruptcy or insolvency proceeding, (2) the Manager is in default under the
Management Agreement beyond any applicable notice and cure period or (3) there exists a monetary Event of Default or the Loans have been accelerated by the Administrative Agent, on behalf of the Lenders, following the occurrence of any Event of
Default. At such time as the Manager may be so removed, a replacement manager and management agreement reasonably acceptable to the Administrative Agent shall assume management of the Properties and shall receive a property management fee not to
exceed then current market rates. If at any time the Administrative Agent consents to the appointment of a new manager, such new manager and each Borrower shall, as a condition of the Administrative Agent’s consent, execute a Manager’s
Consent and Subordination of Management Agreement in the form then used by the Administrative Agent. Each property manager shall be required to hold and maintain all necessary licenses, certifications and permits required by law. Each Borrower shall
fully perform all of its covenants, agreements and obligations under the Management Agreement. 
  
 (2) The Borrowers acknowledge and agree that (a) the “Basic Fee” (as defined in the Management Agreements) may not exceed two
and one-tenth percent (2.1%) of Operating Revenues for any Individual Property, (b) the “Incentive Fee” (as defined in the Master Management Agreement) may not exceed one and one-half percent (1.5%) of Operating Revenues for any Individual
Property and (c) the sum of all management fees payable to Manager in connection with the Management Agreement (whether characterized as a “Basic Fee,” an “Incentive Fee” or otherwise) may not exceed three and six-tenths percent
(3.6%) of Operating Revenues for any Individual Property. 
  

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 (3) At all times that any portion of the Loan is outstanding, except to the extent set
forth in Section 8.1(2) in connection with certain permitted transfers, the REIT shall have Decisionmaking Control over Sunstone. 
  
 Section 8.4 Operation; Maintenance: Inspection. 
  
 (1) Each Borrower shall observe and comply with all Legal Requirements applicable to the ownership, use and
operation of the Properties unless it contests such Legal Requirement in the same manner as it would contest Taxes pursuant to Section 8.2 hereof. Each Borrower shall maintain the Properties in good condition and promptly repair any damage or
casualty. Each Borrower shall permit the Administrative Agent and the Lenders and their agents, representatives and employees, upon reasonable prior notice to the Borrowers and during normal business hours, to inspect the Properties and conduct such
environmental and engineering studies as the Administrative Agent may require subject to Section 4.3(3), provided such inspections and studies do not materially interfere with the use and operation of the Properties and the costs and expenses
related thereto are paid by the Administrative Agent, unless such costs and expenses are to be paid by the Borrowers pursuant to any other section contained herein or the other Loan Documents. 
  
 (2) With respect to each of (a) the Courtyard by Marriott
located at 1551 North Peach Avenue, Fresno, California, and (b) the Courtyard by Marriott located at 1510 University Avenue, Riverside, California, the Borrowers shall cause such facilities to remain out of the “red zone” of the applicable
franchisor’s Quality Assurance Program Guest Satisfaction Survey from the date hereof through the expiration of the six-month tracking period which ends December 31,2004. 
  
 (3) With respect to the Courtyard by Marriott located at 3347 Cerrillos Road, Santa Fe, New Mexico, the
Borrowers shall cause such facility to remain out of the “red zone” of the applicable franchisor’s Quality Assurance Program Guest Satisfaction Survey through the expiration of the six-month tracking period which ends December 31,
2005. 
  
 Section 8.5 Taxes on Security.
Without duplication of the requirements contained in Section 2.6 hereof, the Borrowers shall pay all taxes, charges, filing, registration and recording fees, excises and levies payable with respect to the Notes or the Liens created or
secured by the Loan Documents, other than income, franchise and doing business taxes imposed on the Administrative Agent or any Lender. If there shall be enacted any law (1) deducting the Loans from the value of any Individual Property for the
purpose of taxation, (2) affecting any Lien held by the Administrative Agent or any Lender on any Individual Property, or (3) changing existing laws of taxation of mortgages, deeds of trust, security deeds, or debts secured by real property, or
changing the manner of collecting any such taxes so as to increase the amount of taxes payable by the Administrative Agent or any Lender, the Borrowers shall promptly pay to the Administrative Agent, on demand, all taxes, costs and charges relating
to the Loans for which the Administrative Agent or any Lender is or may be liable as a result thereof; however, if such payment would be prohibited by law or would render the Loans usurious, then instead of collecting such payment, the
Administrative Agent may (and on the request of the Controlling Lenders shall) declare all amounts owing under the Loan Documents to be immediately due and 

  

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payable within thirty (30) days thereafter without any Prepayment Fee (except a Libor Breakage Fee, if such payment is made on a day other than on the last
day of an Interest Period). 
  
 Section 8.6 Legal Existence;
Name; Etc. Each Borrower shall preserve and keep in full force and effect its existence as a Special Purpose Entity as required pursuant to Section 6.27 hereof, and no Borrower shall change its name, identity, or the location
of its chief executive office or principal place of business unless such Borrower (a) shall have provided the Administrative Agent at least 30 days prior written notice thereof, and (b) shall have taken all actions necessary or requested by the
Administrative Agent to file or amend any financing statement or continuation statement to assure perfection and continuation of perfection of security interests under the Loan Documents. 
  
 Section 8.7 Affiliate Transactions. Without the prior written consent of the Administrative Agent,
which shall not be unreasonably withheld, delayed or conditioned, no Borrower may engage in any transaction affecting any Individual Property with an Affiliate of any Borrower, other than the Management Agreements and the Operating Leases.

  
 Section 8.8 Further Assurances. Each
Borrower shall promptly (1) cure any defects in the execution and delivery of the Loan Documents, and (2) execute and deliver, or cause to be executed and delivered, all such other documents, agreements and instruments as the Administrative Agent
may reasonably request to further evidence and more fully describe the collateral for the Loans, to correct any omissions in the Loan Documents, to perfect, protect or preserve any liens created under any of the Loan Documents, or to make any
recordings, file any notices, or obtain any consents, as may be necessary or appropriate in connection therewith. 
  
 Section 8.9 Estoppel Certificates. Each Borrower, within ten (10) Business Days after request, shall furnish to the Administrative
Agent a written statement, duly acknowledged, setting forth the amount due on the Loans, the terms of payment of the Loans, the date to which interest has been paid, whether to the best of such Borrower’s knowledge any offsets or defenses exist
against the Loans and, if any are alleged to exist, the nature thereof in detail, and such other matters as the Administrative Agent reasonably may request. 
  
 Section 8.10 Notice of Certain Events. Each Borrower shall promptly notify the Administrative Agent of (1) any Event of Default,
together with a detailed statement of the steps being taken to cure such Event of Default; (2) any written notice of default received by such Borrower or the Operator under other obligations relating to the Properties or otherwise material to such
Borrower’s business; and (3) any threatened or pending legal, judicial or regulatory proceedings, including any dispute between a Borrower or an Operator and any governmental authority, materially adversely affecting such Borrower, Operator or
any Individual Property. 
  
 Section 8.11
Indemnification. Each Borrower shall indemnify, defend and hold the Administrative Agent and each Lender harmless from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever, including the reasonable fees and actual expenses of their counsel, in connection with (1) any inspection, review or testing of or with respect to any Individual Property
(the costs and expenses of such inspection, review or testing shall be paid as otherwise set forth in this Agreement), (2) any investigative, administrative, 

  

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mediation, arbitration, or judicial proceeding, whether or not the Administrative Agent or any Lender is designated a party thereto, commenced or threatened
at any time (including after the repayment of the Loans) in any way related to the execution, delivery or performance of any Loan Document or to any Individual Property, (3) any proceeding instituted by any Person claiming a Lien, and (4) any
brokerage commissions or finder’s fees claimed by any broker or other party in connection with the Loans, any Individual Property, or any of the transactions contemplated in the Loan Documents due to other than the Administrative Agent’s
or Lender’s acts, including with respect to the foregoing items (1) through (4) those arising from the joint, concurrent, or comparative negligence of the Administrative Agent or any Lender, except to the extent any of the foregoing is caused
by the Administrative Agent’s or any Lender’s gross negligence or willful misconduct. 
  
 Section 8.12 Payment for Labor and Materials. Each Borrower will promptly pay when due all bills and costs for labor, materials, and
specifically fabricated materials incurred in connection with any Individual Property and never permit to exist beyond the due date thereof in respect of any Individual Property or any part thereof any lien or security interest, even though inferior
to the liens and the security interest hereof, and in any event never permit to be created or exist in respect of any Individual Property or any part thereof any other or additional lien or security interest other than the liens or security
interests hereof, except for the Permitted Encumbrances; provided, however, each Borrower shall have the right to contest such bills or costs in accordance with Section 8.2 hereof. 
  
 Section 8.13 Alterations. Each Borrower shall obtain the Administrative Agent’s prior written consent,
which consent shall not be unreasonably withheld or delayed, to any alterations to any Improvements on any Individual Property other than alterations performed in connection with the restoration of the Individual Property after the occurrence of a
casualty in accordance with the terms and provisions of this Agreement; provided, however, the Administrative Agent may reasonably request that the Borrowers deliver additional collateral as additional security for the Loans in connection with any
such alterations. Notwithstanding the foregoing, the Borrowers shall have the right, without obtaining the prior written consent of the Administrative Agent, to make alterations which (a) are provided for in the Approved Budget then in effect or (b)
which cost less than $250,000. 
  
 Section 8.14 Handicapped
Access. 
  
 (a) Each Borrower agrees that
the Properties shall at all times comply in all material respects to the extent applicable with the requirements of the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all state and local laws and ordinances related
to handicapped access and all rules, regulations, and orders issued pursuant thereto including, without limitation, the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (collectively, “Access
Laws”). 
  
 (b)
Notwithstanding any provisions set forth herein or in any other document regarding the Administrative Agent’s approval of alterations of the Properties, no Borrower shall alter any of the Properties in any manner which would materially increase
any Borrower’s responsibilities for compliance with the 

  

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applicable Access Laws without the prior written approval of the Administrative Agent, which approval shall not be unreasonably withheld, delayed or
conditioned. The foregoing shall apply to tenant improvements constructed by any Borrower or by any of its tenants. The Administrative Agent may condition any such approval upon receipt of a certificate of Access Law compliance from an architect,
engineer, or other person reasonably acceptable to the Administrative Agent. 
  
 (c) Each Borrower agrees to give prompt notice to the Administrative Agent of the receipt by such Borrower of any written complaints related to violation of any Access Laws with respect to any Individual Property and
of the commencement of any proceedings or investigations which relate to compliance with applicable Access Laws. 
  
 Section 8.15 Bottom Dollar Guaranties. The Borrowers may request from time to time that direct or indirect beneficial owners of the
Borrowers be given the opportunity to provide “bottom dollar guaranties” of a portion or portions of the Loan. For purposes hereof, to guarantee a portion or portions of the Loan on a bottom dollar basis means that (i) the guaranty may be
of collection and not payment or performance, (ii) the guaranty may require that the Administrative Agent, on behalf of the Lenders, pursue all other collateral and security for such guarantied liability (other than any other bottom dollar
guarantys) prior to seeking collection from the guarantor under such guaranty, and (iii) the guaranty may limit the Administrative Agent’s recourse against the guarantor such that the Administrative Agent may pursue the guarantor if, and solely
to the extent that, the total amount recovered by the Administrative Agent with respect to the guarantied debt, after the Administrative Agent has exhausted its remedies as set forth above, is less than the amount guaranteed by such guarantor. The
Administrative Agent shall, at the Borrowers’ expense, reasonably cooperate with the Borrowers in connection with the provision of such guarantees. The acceptance of any such bottom dollar guaranty by the Administrative Agent, on behalf of the
Lenders, shall not (x) modify or amend any Loan Document, (y) impair the rights and remedies of the Administrative Agent under the Loan Documents, or (z) limit or amend the obligations of the Borrower, Sunstone or any other Sunstone Party under the
Loan Documents. 
  
 ARTICLE IX 
  
 EVENTS OF DEFAULT 
  
 Each of the following shall constitute an Event of Default under the Loans:

  
 Section 9.1 Payments. Any Borrower’s
failure to pay any regularly scheduled installment of principal, interest or other amount due under the Loan Documents within five (5) days of (and including) the day it is due, or any Borrower’s failure to pay the Loans at the Maturity Date,
whether by Acceleration or otherwise, or any Borrower’s failure to pay the Extension Fee on or prior to the Maturity Date. 
  
 Section 9.2 Insurance. Any Borrower’s failure to maintain insurance as required under Section 3.1 of this Agreement. 

 

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 Section 9.3 Single Purpose Entity. If any Borrower or Operator materially breaches any of
its covenants with respect to maintaining its status as a “single purpose entity” pursuant to Section 6.27. 
  
 Section 9.4 Taxes. If any of the taxes are not paid when the same are due and payable; provided, however, a Borrower shall
have the right to contest the amount of taxes due if such Borrower provides to the Administrative Agent with adequate funds and assurances as required pursuant to Section 8.2 hereof. 
  
 Section 9.5 Sale, Encumbrance, Etc. The sale, transfer,
conveyance, pledge, mortgage or assignment of any part or all of any Individual Property, or any interest therein, or of any interest in any Borrower, in violation of Section 8.1 of this Agreement. 
  
 Section 9.6 Representations and Warranties. Any representation
or warranty made in any Loan Document proves to be untrue in any material respect when made or deemed made. 
  
 Section 9.7 Other Encumbrances. The acceleration of any debt or the exercise of any remedies under any document or instrument, other than
the Loan Documents, evidencing or creating a monetary Lien on an Individual Property or any part thereof; provided, however, this provision shall not be deemed to permit any such monetary Lien on any Individual Property other than the Mortgages and
other Loan Documents securing the Loans. 
  
 Section 9.8
Involuntary Bankruptcy or Other Proceeding. Commencement of an involuntary case or other proceeding against any Borrower, any Borrower Party, any other Person having an ownership interest in any Individual Property, or any Operator
(but expressly excluding any Borrower or Borrower Party that has been released from its obligations and liabilities under the Loan Documents in accordance with the terms of Section 2.7(3) of this Agreement) (each, a “Bankruptcy
Party”) which seeks liquidation, reorganization or other relief with respect to it or its debts or other liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeks the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any of its property, and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of ninety (90) days; or an order for relief against a Bankruptcy
Party shall be entered in any such case under the Federal Bankruptcy Code. 
  
 Section 9.9 Voluntary Petitions, Etc. Commencement by a Bankruptcy Party of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts or
other liabilities under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or any of its property, or consent by a Bankruptcy Party to any such
relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or the making by a Bankruptcy Party of a general assignment for the benefit of creditors, or the failure by a
Bankruptcy Party, or the admission by a Bankruptcy Party in writing of its inability, to pay its debts generally as they become due, or any action by a Bankruptcy Party to authorize or effect any of the foregoing; 
  

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 Section 9.10 Budgets; Financial Statements. Any Borrower’s failure to deliver the
budgets and financial statements required pursuant to Article V or Article VII hereof within the time frame provided therein and the continuance of such failure for thirty (30) days after notice by the Administrative Agent to such
Borrower. 
  
 Section 9.11 Interest Rate Cap Agreement.
The Borrowers’ failure to replace any Interest Rate Cap Agreement by a date no later than ninety (90) days prior to its expiration or other termination with a Replacement Interest Rate Cap Agreement satisfying the requirements of Section
6.31. 
  
 Section 9.12 Default Under Other
Agreements. The occurrence of an event of default under any of the Ground Leases or Franchise Agreements and the expiration of any applicable notice or cure periods thereunder. 
  
 Section 9.13 Enforcement of Mezzanine Pledge. The occurrence of an event of default under any Mezzanine
Obligation and the commencement by the holder of the related Mezzanine Pledge of its remedies thereunder to enforce (whether by possession, foreclosure, sale, or otherwise) its security interest in the equity interests in Sunstone or Sunstone Hotel
TRS, as applicable, which are the subject of such Mezzanine Pledge. 
  
 Section 9.14 Covenants. Any Borrower’s failure to perform or observe any of the agreements and covenants contained in this Agreement or in any of the other Loan Documents and not specified above, including, without
limitation, any such failure under any Mortgage, and the continuance of such failure for thirty (30) days after notice by the Administrative Agent to the Borrowers; however, the Borrowers shall have an additional ninety (90) days to cure such
failure if (a) such failure does not involve the failure to make payments on a monetary obligation; (b) such failure can reasonably be cured but cannot reasonably be cured within thirty (30) days; and (c) the Borrowers are diligently undertaking to
cure such default. 
  
 All notices and cure periods described herein shall not be
applicable to any event which with the giving of notice, the passage of time or both would constitute an Event of Default, if such event has occurred as of the date on which the Administrative Agent commences a nonjudicial foreclosure proceeding
with respect to another Event or Events of Default. Such event shall constitute an independent Event of Default hereunder. 
  
 ARTICLE X 
  
 REMEDIES 
  
 Section 10.1 Remedies - Insolvency Events. Upon the occurrence of any Event of Default described in Section 9.8 or 9.9, the obligations of the Administrative Agent (on behalf of Lenders) to advance amounts hereunder,
shall immediately terminate, and all amounts due under the Loan Documents immediately shall become due and payable, all without written notice and without presentment, demand, protest, notice of protest or dishonor, notice of intent to accelerate
the maturity thereof, notice of Acceleration of the maturity thereof, or any other notice of default of any kind, all of which are hereby expressly waived by the Borrowers; however, if the Bankruptcy Party under Section 9.8 or 9.9 is other
than a Borrower, then all amounts due under 

  

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the Loan Documents shall become immediately due and payable at the Administrative Agent’s election. 
  
 Section 10.2 Remedies - Other Events. Except as set forth in
Section 10.1 above, while any Event of Default exists, the Administrative Agent may (1) by written notice to the Borrowers, declare the entire amount of the Loans to be immediately due and payable without presentment, demand, protest, notice
of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of Acceleration of the maturity thereof, or other notice of default of any kind, all of which are hereby expressly waived by the Borrowers, (2) terminate the
obligation, if any, of the Lenders to advance amounts hereunder, and (3) exercise all rights and remedies therefor under the Loan Documents and at law or in equity. 
  
 Section 10.3 Lender’s Right to Perform the Obligations. If any Borrower shall fail, refuse or neglect to
make any payment or perform any act required by the Loan Documents, then upon the occurrence of any Event of Default (following any required notice from the Administrative Agent to the Borrowers and following the expiration of any applicable cure
period), and without further notice to or demand upon any Borrower and without waiving or releasing any other right, remedy or recourse the Administrative Agent or any Lender may have because of such Event of Default, the Administrative Agent may
(but shall not be obligated to) make such payment or perform such act for the account of and at the expense of the Borrowers, and shall have the right to enter upon the Properties for such purpose and to take all such action thereon and with respect
to the Properties as it may deem necessary or appropriate and to take all other action it may deem necessary or appropriate with respect to any Event of Default. If the Administrative Agent shall so elect to pay any sum due with reference to any
Individual Property or with reference to any Event of Default (following any required notice from the Administrative Agent to the Borrowers and following the expiration of any applicable cure period), the Administrative Agent may do so in reliance
on any bill, statement or assessment procured from the appropriate governmental authority or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in making any such payments to protect the security intended to be
created by the Loan Documents, the Administrative Agent shall not be bound to inquire into the validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of preventing or
removing the same. Additionally, after the occurrence of an Event of Default (following any required notice from the Administrative Agent to the Borrowers and following the expiration of any applicable cure period), if any Hazardous Materials affect
or threaten to affect any Individual Property, the Administrative Agent may (but shall not be obligated to) give such notices and take such actions as it deems necessary or advisable in order to abate the discharge of any Hazardous Materials or
remove the Hazardous Materials as required by Environmental Laws. Each Borrower shall indemnify, defend and hold the Administrative Agent and the Lenders harmless from and against any and all losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever, including reasonable out-of-pocket attorneys’ fees, costs and expenses incurred or accruing by reason of any acts performed by the
Administrative Agent or any Lender pursuant to the provisions of this Section 10.3. All sums paid by the Administrative Agent pursuant to this Section 10.3, and all other sums expended by the Administrative Agent or any Lender to which
it shall be entitled to be indemnified, together with interest thereon at the highest Default Rate then applicable to any Type of Loan from the date of such payment or expenditure until paid, shall constitute additions to the Loans, shall be 

  

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secured by the Loan Documents and shall be paid by the Borrowers to the Administrative Agent upon demand. 
  
 Section 10.4 Cross-Default; Cross-Collateralization; Waiver of
Marshalling of Assets. 
  
 (1) Each
Borrower acknowledges that the Administrative Agent has made the Loans to the Borrowers upon the security of the Borrowers’ collective interest in the Properties and in reliance upon the aggregate of the Properties taken together being of
greater value as collateral security than the sum of the Properties taken separately. Each Borrower agrees that the Mortgages are and will be cross-collateralized and cross-defaulted with each other so that (a) an Event of Default under any of the
Mortgages shall constitute an Event of Default under each of the other Mortgages which secure the Notes; (b) an Event of Default under the Notes or this Agreement shall constitute an Event of Default under each Mortgage; and (c) each Mortgage shall
constitute security for the Notes as if a single blanket lien were placed on all of the Properties as security for the Notes. 
  
 (2) To the fullest extent permitted by law, each Borrower, for itself and its successors and assigns, waives all rights to a marshalling
of the assets of any Borrower, and others with interests in any Borrower, and of the Properties, or to a sale in inverse order of alienation in the event of foreclosure of all or any of the Mortgages, and agrees not to assert any right under any
laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of the Administrative Agent
(on behalf of the Lenders) under the Loan Documents to a sale of the Properties for the collection of the Indebtedness without any prior or different resort for collection or of the right of the Administrative Agent to the payment of the
Indebtedness (on behalf of the Lenders) out of the net proceeds of the Properties in preference to every other claimant whatsoever. In addition, each Borrower, for itself and its successors and assigns, waives in the event of foreclosure of any or
all of the Mortgages, any equitable right otherwise available to any Borrower which would require the separate sale of the Properties or require the Administrative Agent to exhaust its remedies against any Individual Property or any combination of
the Properties before proceeding against any other Individual Property or combination of Properties; and further in the event of such foreclosure each Borrower does hereby expressly consents to and authorizes, at the option of the Administrative
Agent, the foreclosure and sale either separately or together of any combination of the Properties. 
  
 ARTICLE XI 
  
 MISCELLANEOUS 
  
 Section 11.1
Notices. Any notice required or permitted to be given under this Agreement shall be in writing and either shall be mailed by certified mail, postage prepaid, return receipt requested, or sent by overnight air courier service, or
personally delivered to a representative of the receiving party, or sent by telecopy or e-mail (provided an identical notice is also sent simultaneously by mail, overnight courier, or personal delivery as otherwise provided 

  

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in this Section 11.1). All such communications shall be mailed, sent or delivered, addressed to the party for whom it is intended at its address set
forth below. 
  

					
	If to any Borrower:	  	To such address included on such Borrower’s signature page hereto.
		
	With a copy to:	  	 Allen Matkins Leek Gamble & Mallory LLP
 515 South Figueroa Street
 7th Floor
 Los Angeles,
California 90071-3398

	 	  	Attention:	  	Michael F. Sfregola
	 	  	Telecopy:	  	(213) 620-8816
	 	  	E-mail:	  	msfregola@allenmatkins.com
		
	If to Administrative Agent:	  	 Massachusetts Mutual Life Insurance Company
 c/o Babson Capital Management LLC
 1500 Main Street, Suite 2100
 Mail Stop: TS21
 Springfield, MA 01115

	 	  	Attention:	  	 Richard F. McKeever,
 Managing Director
 Real Estate Finance Group

	 	  	Telecopy:	  	(413) 226-2432
	 	  	E-mail:	  	rmckeever@babsoncapital.com
		
	With copies to:	  	 Massachusetts Mutual Life Insurance Company
 c/o Babson Capital Management LLC
 1500 Main Street, Suite 2100
 Mail Stop: TS28
 Springfield, MA 01115

	 	  	Attention:	  	 Lawrence J. Boudreau,
 Assistant Vice
President
 and Counsel

	 	  	Telecopy:	  	(413) 226-2077
	 	  	E-Mail:	  	lboudreau@babsoncapital.com
		
	and	  	 Day, Berry & Howard LLP
 One Canterbury
Green
 Stamford, CT 06901-2047

	 	  	Attention:	  	Michael P. Byrne, Esq.
	 	  	Telecopy:	  	(203) 977-7301
	 	  	E-mail:	  	mpbyrne@dbh.com
		
	If to Lender:	  	To Administrative Agent as set forth above and, if different,, to each other addressee included on such Lender’s signature page hereto.

  

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 Any communication so addressed and mailed shall be deemed to be given on the earliest of (1) when actually delivered, (2)
on the first Business Day after deposit with an overnight air courier service, or (3) on the third Business Day after deposit in the United States mail, postage prepaid, in each case to the address of the intended addressee, and any communication so
delivered in person shall be deemed to be given when receipted for by, or actually received by the Administrative Agent, a Lender or Borrower, as the case may be. If given by telecopy or by e-mail, a notice shall be deemed given and received when
the telecopy or e-mail is transmitted to the party’s telecopy number or e-mail address specified above, and confirmation of complete receipt is received by the transmitting party during normal business hours or on the next Business Day if not
confirmed during normal business hours, and an identical notice is also sent simultaneously by mail, overnight courier, or personal delivery as otherwise provided in this Section 11.1. Any party may designate a change of address by written
notice to each other party by giving at least ten (10) days prior written notice of such change of address. 
  
 Section 11.2 Amendments, Waivers, Etc. 
  
 (1) Subject to any consents required pursuant to this Section 11.2. Section 13.3 and any other provisions of this
Agreement and any other Loan Document which expressly require the consent, approval or authorization of the Controlling Lenders, this Agreement and any other Loan Document may be modified or supplemented only by an instrument in writing signed by
the Borrowers and the Administrative Agent; provided that, the Administrative Agent may (without any Lender’s consent) give or withhold its agreement to any amendments of the Loan Documents or any waivers or consents in respect thereof or
exercise or refrain from exercising any other rights or remedies which the Administrative Agent may have under the Loan Documents or otherwise provided that such actions do not, in the Administrative Agent’s judgment reasonably exercised,
materially adversely affect the value of any collateral, taken as a whole, or represent a departure from the Administrative Agent’s standard of care described in Section 13.5 (and the assignment or granting of a participation by any
Lender shall not limit or otherwise affect its discretion in respect of any of the foregoing), except that the Administrative Agent will not (provided that no Lender’s consent shall be required for any of the following which are otherwise
required under the Loan Documents): (a) without the consent of each Lender affected thereby, agree to reduce the principal amount of the Loans or reduce the interest rate thereon; (b) without the consent of each Lender: (i) modify any of the
provisions of this Section, the definition of “Controlling Lenders” or any other provision in the Loan Documents specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder or (ii) extend any stated Payment Date for principal of or interest on the Loans payable to such Lender; or (c) without the consent of the Controlling Lenders: (i) release the Borrower or any other party
from liability under the Loan Documents, (ii) release or subordinate in whole or in part any material portion of the collateral given as security for the Loans, (iii) modify the terms of any Event of Default, (iv) take any actions or exercise any
remedies with respect to such Event of Default (other than any actions which the Administrative Agent believes should be taken to protect the rights of the 

  

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Administrative Agent (on behalf of the Lenders) or of the Lenders under the Loan Documents on an emergency basis and within the Administrative Agent’s
standard of care described in Section 13.5) or (v) consent to (A) the sale, transfer or encumbrance of any portion of any Individual Property (or any interest therein) or any direct or indirect ownership interest therein, provided that the
Administrative Agent shall not be required to obtain the prior consent of the Lenders to any Release or other sale or transfer which is expressly permitted by the terms of this Agreement if the conditions to such Release or other sale or transfer
set forth herein have been satisfied or (B) the incurrence by Borrower of any additional indebtedness secured by any Individual Property, in each case to the extent (and subject to any standard of reasonability) such consent is required under the
Loan Documents. 
  
 (2) Notwithstanding anything
to the contrary contained in this Agreement, any modification or supplement of Article 13, or of any of the rights or duties of the Administrative Agent hereunder, shall require the consent of the Administrative Agent. 
  
 Section 11.3 Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws. Accordingly, all agreements between the Borrowers, the Administrative Agent and the Lenders with respect to the Loans are hereby expressly limited so that in no event, whether by reason of
Acceleration of maturity or otherwise, shall the amount paid or agreed to be paid to the Administrative Agent or any Lender or charged by any Lender for the use, forbearance or detention of the money to be lent hereunder or otherwise, exceed the
maximum amount allowed by law. If the Loans would be usurious under applicable law (including the laws of the State and the laws of the United States of America), then, notwithstanding anything to the contrary in the Loan Documents: (1) the
aggregate of all consideration which constitutes interest under applicable law that is contracted for, taken, reserved, charged or received under the Loan Documents shall under no circumstances exceed the maximum amount of interest allowed by
applicable law, and any excess shall be credited, without any Prepayment Fee, on the Notes of the related Type by the holders thereof; and (2) if maturity is accelerated by reason of an election by the Administrative Agent in accordance with the
terms hereof, or in the event of any prepayment, then any consideration which constitutes interest may never include more than the maximum amount allowed by applicable law. In such case, excess interest, if any, provided for in the Loan Documents or
otherwise, to the extent permitted by applicable law, shall be amortized, prorated, allocated and spread among Notes of the related Type from the date of advance until payment in full thereof so that the actual rate of interest is uniform through
the term hereof. If such amortization, proration, allocation and spreading is not permitted under applicable law, then such excess interest shall be cancelled automatically on the Notes of the related Type as of the date of such Acceleration or
prepayment and, if theretofore paid, shall be credited, without any Prepayment Fee, on the Notes. The terms and provisions of this Section 11.3 shall control and supersede every other provision of the Loan Documents. The Loan Documents are
contracts made under and shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts as set forth in Section 11.19 hereof, except that if at any time the laws of the United States of America permit the
Lenders to contract for, take, reserve, charge or receive a higher rate of interest than is allowed by the laws of the Commonwealth of Massachusetts (whether such federal laws directly so provide or refer to the law of any state), then such federal
laws shall to such extent govern as to the rate of interest which the Lenders may contract for, take, reserve, charge or receive under the Loan Documents. 
  

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 Section 11.4 Invalid Provisions. If any provision of any Loan Document is held to be
illegal, invalid or unenforceable, such provision shall be fully severable; the Loan Documents shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof; the remaining provisions
thereof shall remain in full effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a
part of such Loan Document a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible to be legal, valid and enforceable. 
  
 Section 11.5 Reimbursement of Expenses. Each Borrower shall pay or reimburse on demand of the applicable party
for: (a) all reasonable out-of-pocket fees, costs and expenses incurred by the Administrative Agent in connection with the making of the Loans, including out-of-pocket fees, costs and expenses of the Administrative Agent’s attorneys,
environmental, engineering and other consultants, title insurance premiums, and fees, charges or taxes for the negotiation, recording or filing of Loan Documents, subject to the terms of and limitations contained in that certain commitment letter
dated as of September 16, 2004 and entered into by and among the Administrative Agent and the Borrowers, (b) to the extent set forth in another section contained herein or in any other Loan Documents, all reasonable out-of-pocket fees, costs and
expenses of the Administrative Agent in connection with the administration of the Loans, including audit costs, inspection fees, settlement of Condemnation and casualty awards, and premiums for title insurance and endorsements thereto in each case
in accordance with the terms and provisions contained in this Agreement and (c) all out-of-pocket fees, costs and expenses expended, advanced or incurred by the Administrative Agent and the Lenders to collect the Notes, or to enforce the rights of
the Administrative Agent and the Lenders under this Agreement or any other Loan Document, or to defend or assert the rights and claims of the Administrative Agent and the Lenders under the Loan Documents or with respect to the Properties (by
litigation or other proceedings), which amounts will include all court costs, attorneys’ fees, costs and expenses, fees, costs and expenses of auditors and accountants, and investigation fees, costs and expenses as may be incurred by the
Administrative Agent and the Lenders in connection with any such matters (whether or not litigation is instituted), together with interest at the highest Default Rate then applicable to any Type of Loan on each such amount from the date of
disbursement until the date of reimbursement to the Administrative Agent and the Lenders, all of which shall constitute part of the Loans and shall be secured by the Loan Documents. This provision is separate and several and shall survive merger and
judgment. 
  
 Section 11.6 Approvals; Third Parties;
Conditions. All approval rights retained or exercised by the Administrative Agent and the Lenders with respect to Leases, contracts, plans, studies and other matters are solely to facilitate the Lenders’ credit underwriting, and shall
not be deemed or construed as a determination that the Lenders have passed on the adequacy thereof for any other purpose and may not be relied upon by any Borrower or any other Person. This Agreement is for the sole and exclusive use of the
Administrative Agent, the Lenders and the Borrowers and may not be enforced, nor relied upon, by any Person other than the Administrative Agent, the Lenders and the Borrowers. All conditions of the obligations of the Administrative Agent and the
Lenders hereunder, including the obligation to make advances, are imposed solely and exclusively for the benefit of the Administrative Agent and the Lenders, their successors and assigns, and no other Person shall have standing to require
satisfaction of such conditions or be entitled to assume that the Lenders will refuse to make advances in the absence 

  

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of strict compliance with any or all of such conditions, and no other Person shall, under any circumstances, be deemed to be a beneficiary of such
conditions, any and all of which may be freely waived in whole or in part by the Administrative Agent and the Lenders at any time in their sole discretion. 
  
 Section 11.7 Lenders and Administrative Agent Not in Control; No Partnership. None of the covenants or other provisions contained in this
Agreement shall, or shall be deemed to, give the Administrative Agent or any Lender the right or power to exercise Control over the affairs or management of any Borrower, the power of the Administrative Agent and the Lenders being limited to the
rights to exercise the remedies referred to in the Loan Documents. The relationship between the Borrowers and the Lenders is, and at all times shall remain, solely that of debtor and creditor. No covenant or provision of the Loan Documents is
intended, nor shall it be deemed or construed, to create a partnership, joint venture, agency or common interest in profits or income between the Administrative Agent, the Lenders and any Borrower or to create an equity in the Properties in the
Administrative Agent or any Lender. The Administrative Agent and the Lenders neither undertake nor assume any responsibility or duty to any Borrower or to any other person with respect to the Properties or the Loans, except as expressly provided in
the Loan Documents; and notwithstanding any other provision of the Loan Documents: (1) neither the Administrative Agent nor any Lender is, nor shall be construed as, a partner, joint venturer, alter ego, manager, Controlling person or other business
associate or participant of any kind of any Borrower or its stockholders, members, or partners and neither the Administrative Agent nor any Lender intends to ever assume such status; (2) no Lender or the Administrative Agent shall in any event be
liable for any Debts, expenses or losses incurred or sustained by any Borrower; and (3) no Lender or the Administrative Agent shall be deemed responsible for or a participant in any acts, omissions or decisions of any Borrower or its stockholders,
members, or partners. The Administrative Agent, the Lenders and the Borrowers disclaim any intention to create any partnership, joint venture, agency or common interest in profits or income between the Administrative Agent, the Lenders and
Borrowers, or to create an equity in the Properties in the Administrative Agent or any Lender, or any sharing of liabilities, losses, costs or expenses. 
  
 Section 11.8 Time of the Essence. Time is of the essence with respect to this Agreement. 
  
 Section 11.9 Successors and Assigns; Secondary Market
Transactions. 
  
 (1) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of Administrative Agent and its permitted successors and assigns as administrative agent hereunder, the Lenders and each successor and assign thereof which is the
registered owner of any Note, and the Borrowers, provided, however, that no Borrower shall assign any of its rights or obligations under this Agreement (except as otherwise expressly permitted by this Agreement) without the prior written consent of
Administrative Agent, on behalf of the Lenders, and provided further that, notwithstanding anything to the contrary contained herein or in any other Loan Document, any transfer or assignment by any Lender of all or a portion of its interest, rights
or obligations under this Agreement, any Note or any other Loan Document shall be made in accordance with the applicable provisions of this Agreement and shall not be effective until the identity of the transferee or assignee is registered in the
Register as a registered owner of the related Note. A certificate that such registration has been 

  

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completed shall be promptly provided by Administrative Agent to the Borrowers, the relevant Lender or any transferee or successor thereof and such
certificate shall constitute conclusive evidence of such registration and the effectiveness of such transfer or assignment. 
  
 (2) Secondary Market Transactions. Each Borrower acknowledges that (a) each Lender may without the consent from such
Borrower or prior notice to such Borrower (i) sell all or a portion of its Notes together with its rights as a Lender with respect to such Type of Notes under this Agreement and the other Loan Documents as set forth herein to one or more
Institutional Investors, (ii) participate and/or syndicate the Loans, subject to Section 11.22 hereof, to one or more Institutional Investors, or (iii) otherwise sell, transfer or assign the Loans or interests therein to Institutional
Investors in one or more transactions (the transactions referred to in clause (a) are hereinafter also each referred to as a “Secondary Market Transaction”), (b) the Administrative Agent may without the consent of such
Borrower or notice to such Borrower sell or transfer all or any portion of its rights and obligations as administrative agent hereunder or under any of the other Loan Documents as permitted in Section 13.8 hereof, and/or (c) the
Administrative Agent may without the consent of such Borrower or notice to such Borrower sell or transfer all or any portion of its rights and obligations as administrative agent hereunder if (i) the Administrative Agent is required to resign or is
removed by the Lenders in connection with any syndication, participation or other agreement governing co-investment in the Loan and/or (ii) the Administrative Agent is exiting the business of serving as administrative agent on commercial loans
similar to the Loans. Each Borrower shall reasonably cooperate with the Administrative Agent and each Lender in effecting any such Secondary Market Transaction and shall reasonably cooperate and use all reasonable efforts to satisfy the market
standards to which the Administrative Agent and each Lender customarily adheres or which may be reasonably required by any participant, investor, purchaser or any Rating Agency involved in any Secondary Market Transaction (including, without
limitation, delivery of opinions of counsel in form and substance similar to the opinions of counsel delivered to the Administrative Agent on the date hereof and delivery of estoppel certificates of each Borrower, each Borrower Party and each
Manager). Each Borrower shall provide such information and documents relating to the Borrowers and the Properties as the Administrative Agent and each Lender may reasonably request in connection with such Secondary Market Transaction. In addition,
each Borrower shall make available to the Administrative Agent and the Lenders all information concerning the Properties, its business and operations that the Administrative Agent and the Lenders may reasonably request. The Administrative Agent and
the Lenders shall be permitted to share all information with the participants, investors, purchasers, investment banking firms, Rating Agencies, accounting firms, law firms and third-party advisory firms involved with the Loans and Loan Documents or
the applicable Secondary Market Transaction. The Administrative Agent and the Lenders and all of the aforesaid participants, investors, purchasers, advisors, Rating Agencies and professional firms shall be entitled to rely on the information
supplied by or on behalf of the Borrowers. Each Borrower also agrees to execute any amendment of or supplement to this Agreement and the other Loan Documents as the Administrative Agent and the Lenders may reasonably request in connection with any
Secondary Market Transaction, provided that such amendment or supplement does not (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Notes, (ii) modify or amend any other economic term of the Loans or
(iii) materially increase any Borrower’s obligations or materially diminish any Borrower’s rights under the Loan Documents. 
  

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 (3) The liabilities and obligations of both the Borrowers and Lenders under Section
11.9 shall survive the termination of this Agreement and the satisfaction and discharge of the Indebtedness. 
  
 (4) The Administrative Agent (on behalf of the Lenders) shall have the right subject to Section 11.22 with respect to a Secondary
Market Transaction from time to time to sever the Notes and the other Loan Documents into two or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations as the
Administrative Agent shall determine in its sole discretion in connection with a Secondary Market Transaction or for purposes of evidencing and enforcing its rights and remedies provided hereunder. Each Borrower shall execute and deliver to the
Administrative Agent from time to time, promptly after the request of the Administrative Agent, a severance agreement and such other documents as the Administrative Agent shall reasonably request in order to effect the severance described in the
preceding sentence, all in form and substance reasonably satisfactory to the Administrative Agent. Each Borrower hereby absolutely and irrevocably appoints the Administrative Agent (on behalf of Lenders) as its true and lawful attorney, coupled with
an interest, in its name and stead to make and execute all documents necessary or desirable to effect the aforesaid severance, each Borrower ratifying all that its said attorney shall do by virtue thereof. The provisions of this paragraph are
subject to Sections 2.1(3)(b), (c) and (d). 
  
 (5) All reasonable out-of-pocket third party expenses incurred in connection with Sections 11.9(2) and (4) and Section 11.10 hereof shall be paid by the Administrative Agent (on behalf of the Lenders), except as may be
otherwise agreed by the Borrowers. Each Borrower shall provide invoices or other evidence of such expenses to the Administrative Agent (on behalf of the Lenders) for its review and approval prior to incurring any such charges. Notwithstanding
anything to the contrary contained herein, this Section 11.9(5) shall not limit any Borrower’s liability in connection with the indemnifications provided by any Borrower in such sections. 
  
 Section 11.10 Renewal, Extension or Rearrangement. All
provisions of the Loan Documents shall apply with equal effect to each and all promissory notes and amendments thereof hereinafter executed which in whole or in part represent a renewal, extension, Conversion, increase or rearrangement of the Loans.
For portfolio management purposes, the Administrative Agent may elect to divide the Loans into two or more separate loans evidenced by separate promissory notes so long as the payment and other obligations of the Borrowers are not effectively
increased or otherwise modified or the rights and benefits given to the Borrowers under the Loan Documents are not affected. Each Borrower agrees to reasonably cooperate with the Administrative Agent and to execute such documents as the
Administrative Agent reasonably may request to effect such division of the Loans. The provisions of this paragraph are subject to Sections 2.1(3)(b), (c) and (d). 
  
 Section 11.11 Waivers. No course of dealing on the part of the Administrative Agent or any Lender, their
officers, employees, consultants or agents, nor any failure or delay by the Administrative Agent or any Lender with respect to exercising any right, power or privilege of the Administrative Agent or any Lender under any of the Loan Documents, shall
operate as a waiver thereof. 
  

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 Section 11.12  Cumulative Rights. Rights and remedies of the Administrative Agent and
the Lenders under the Loan Documents shall be cumulative, and the exercise or partial exercise of any such right or remedy shall not preclude the exercise of any other right or remedy. 
  
 Section 11.13  Exhibits and Schedules. The exhibits and schedules attached to this Agreement are
incorporated herein and shall be considered a part of this Agreement for the purposes stated herein. 
  
 Section 11.14  Titles of Articles, Sections and Subsections. All titles or headings to articles, sections, subsections or other
divisions of this Agreement and the other Loan Documents or the exhibits hereto and thereto are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such articles,
sections, subsections or other divisions, such other content being controlling as to the agreement between the parties hereto. 
  
 Section 11.15  Promotional Material. Each Borrower authorizes the Administrative Agent and each Lender to issue press releases,
advertisements describing in general terms or in detail the Administrative Agent’s or Lender’s participation in this transaction. All references to the Administrative Agent, Lender or Borrower in any press release or advertisement issued
by any Borrower, the Administrative Agent, Lender, and/or any of their respective principals, affiliates or agents must be approved in advance of issuance by the other party; provided, however, that such approval shall not be required with respect
to the Administrative Agent’s or any Lender’s marketing or promotional activities in connection with a syndication or Secondary Market Transaction. 
  
 Section 11.16  Survival. All of the representations, warranties, covenants, and indemnities of each Borrower hereunder (including
environmental matters under Article 4, the obligations under Section 2.7. and under the indemnification provisions of the other Loan Documents shall survive (a) the repayment in full of the Loans and the release of the Liens evidencing
or securing the Loans, (b) the transfer (by sale, foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all right, title and interest in and to the Properties to any party, whether or not an Affiliate of Borrower and (c) in the case
of any Lender that may assign any interest in its Commitment or Loans hereunder in accordance with the terms of this Agreement, the making of such assignment, notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.

  
 Section 11.17  WAIVER OF JURY TRIAL.
EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH 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, THE ADMINISTRATIVE AGENT AND EACH LENDER, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH 

  

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BORROWER, THE ADMINISTRATIVE AGENT OR ANY LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY SUCH OTHER PARTY. 
  
 Section 11.18 Waiver of
Punitive or Consequential Damages. None of the Administrative Agent, the Lenders or any Borrower shall be responsible or liable to the other or to any other Person for any punitive, exemplary or consequential damages which may be alleged as
a result of the Loans or the transaction contemplated hereby, including any breach or other default by any party hereto. 
  
 Section 11.19 Governing Law. (1) THIS AGREEMENT WAS NEGOTIATED IN THE COMMONWEALTH OF MASSACHUSETTS, AND MADE BY THE ADMINISTRATIVE AGENT
AND LENDERS AND ACCEPTED BY THE BORROWERS IN THE COMMONWEALTH OF MASSACHUSETTS, AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE COMMONWEALTH OF MASSACHUSETTS, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH COMMONWEALTH (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY
APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS
SHALL OTHERWISE GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH BORROWER, THE ADMINISTRATIVE AGENT AND LENDERS HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES. 
  
 (2) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY AT THE ADMINISTRATIVE AGENT’S OPTION (OR SHALL IF SO DIRECTED BY THE MAJORITY LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF BOSTON, COUNTY OF SUFFOLK, MASSACHUSETTS, AND EACH BORROWER WAIVES 

  

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ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CT CORPORATION SYSTEM, 101 FEDERAL STREET, SUITE 300, BOSTON, MA 02110 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 BOSTON, MASSACHUSETTS, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE COMMONWEALTH OF MASSACHUSETTS.
EACH BORROWER (A) SHALL GIVE PROMPT NOTICE TO ADMINISTRATIVE AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (B) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN BOSTON, MASSACHUSETTS
(WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (C) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN BOSTON, MASSACHUSETTS OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR. 
  
 Section 11.20 Entire
Agreement. This Agreement and the other Loan Documents embody the entire agreement and understanding between the Administrative Agent, the Lenders and the Borrowers and supersede all prior agreements and understandings between such parties
relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the
parties. The parties hereto acknowledge that the Lenders and the Administrative Agent may enter into a separate written agreement which will relate to the relationship among and between the Lenders and the Administrative Agent with respect to the
Loans. 
  
 Section 11.21 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document. 
  
 Section 11.22 Assignments and Participations. 
  
 (1) Assignments by Borrower. No Borrower may assign any of its rights or obligations hereunder or under the Notes without
the prior consent of the Administrative Agent except as otherwise expressly permitted pursuant to this Agreement. 
  
 (2) Assignments by the Lenders. Each Lender may assign any of its Loans, its rights and obligations under this Agreement,
its Notes and other Loan Documents as provided in Section 2.1(3)(d) and in Section 11.9(1). 
  

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 (3) Participations. A Lender may sell or agree to sell to one or more other
Persons (each a “Participant”) a participation in all or any part of any Loans held by it, or in its Commitment, provided that such Participant shall not have any rights or obligations under this Agreement or any Note or any
other Loan Document (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreements executed by such Lender in favor of the Participant). All amounts payable by the Borrowers to any Lender
in respect of Loans held by it shall be determined as if such Lender had not sold or agreed to sell any participations in such Loans, and as if such Lender were funding each of such Loans in the same way that it is funding the portion of such Loans
in which no participations have been sold. 
  
 (4) Certain Pledges. In addition to the assignments and participations permitted under the foregoing provisions of this Section 11.22 (but without being subject thereto), any Lender may (without notice to any Borrower,
the Administrative Agent or any other Lender and without payment of any fee) assign and pledge all or any portion of its Loans and its Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any operating circular issued
by such Federal Reserve Bank, and such Loans and Note shall be fully transferable as provided therein. No such assignment shall release the assigning Lender from its obligations hereunder. 
  
 (5) Provision of Information to Assignees and
Participants. A Lender may furnish any information concerning any Borrower or any of its Affiliates in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants).

  
 Section 11.23 Brokers and Financial Advisors.
Each Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Each Borrower hereby agrees to
indemnify, defend and hold each Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including each Lender’s attorneys’ fees, costs and expenses) in any way relating to or arising from a claim
by any Person that such Person acted on behalf of any Person other than any Lender, Administrative Agent or their affiliates in connection with the transactions contemplated herein. The provisions of this Section 11.23 shall survive the
expiration and termination of this Agreement and the payment of the Indebtedness. 
  
 Section 11.24 Servicer. At the option of the Administrative Agent, the Loans may be serviced by a Servicer/Trustee (“Servicer”) selected by the Administrative Agent.
Administrative Agent may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to the Servicer pursuant to a servicing agreement (“Servicing Agreement”) between the
Administrative Agent and Servicer. 
  

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 ARTICLE XII 
  
 LIMITATIONS ON LIABILITY 
  
 Section 12.1 Limitation on Liability. 
  
 (1) Notwithstanding anything to the contrary contained in the Loan Documents, except as provided below, the Borrowers shall not be
personally liable for amounts due under the Loan Documents or other obligations under the Loan Documents. Each Borrower, jointly and severally, shall be personally liable to the Administrative Agent and the Lenders, and the Administrative Agent and
the Lenders shall have full recourse to the Borrowers, to the extent provided below in connection with the following: (1) any Borrower’s commission of a criminal act – recourse liability for any Losses incurred by the Administrative Agent
or the Lenders in connection with such act, (2) insurance proceeds and/or Awards received by any Borrower but not paid over or applied in accordance with the Loan Documents – recourse liability for the amount of insurance and/or condemnation
proceeds not paid over to the Administrative Agent or applied in accordance with the Loan Documents; (3) the fraud or intentional material misrepresentation by any Borrower or any Borrower Party made in or in connection with the Loan Documents or
the Loans – full recourse liability for the entire Indebtedness under the Loans; (4) misappropriation of security deposits, advances or prepaid rents, cancellation or termination payments and other similar sums received by any Borrower from any
tenants or other occupants of any Individual Property – recourse liability for the amount of security deposits, advances or prepaid rents, and cancellation or termination payments not applied or paid over to the Administrative Agent in
accordance with the terms of the Loan Documents or applied to Operating Expenses; (5) rents, revenues or other income of any Individual Property which are not applied to payments due under the Loan Documents or to real and personal property taxes,
capital improvements to such Individual Property or operating expenses of such Individual Property (including, without limitation, any deposits, reserves or escrows required by a Loan Document), thereby resulting in or contributing materially to a
default under the Loan Documents – recourse liability to the extent of the rents, revenues and other income which are misapplied; provided, however, that no Borrower shall have any personal liability for Losses based on distributions of
Operating Revenues, Net Operating Income or Net Cash Flow of an Individual Property to a Borrower, or any general partner, principal, stockholder, member or manager of a Borrower, made in good faith (after determining the sufficiency of Operating
Revenues of an Individual Property to cover the payments due under the Loan Documents and operating expenses of such Individual Property) more than one hundred eighty (180) days prior to an Event of Default; (6) any Borrower’s indemnification
of the Administrative Agent and/or any Lender with respect to environmental matters as provided in the Loan Documents – recourse liability for any Losses incurred by the Administrative Agent or the Lenders in connection with such matters; (7)
any Borrower’s failure to maintain or pay premiums when due for any insurance as required by this Agreement or to pay any taxes or assessments affecting any Individual Property, except to the extent such Borrower has made all payments to the
Tax and Insurance Reserve as and when required pursuant to Section 3.4 hereof and with respect to such insurance the failure to maintain such insurance is due solely to the non-payment thereof – recourse liability for any Losses incurred
by the Administrative Agent or the Lenders in connection with such failure to maintain insurance or pay premiums; (8) damage or destruction to any Individual Property caused by the willful misconduct or omissions of any Borrower, its agents or
employees – recourse liability for any Losses incurred by the Administrative Agent or the Lenders in connection with such acts or omissions; (9) any Borrower’s obligations with respect to environmental matters under Article 4 –
recourse liability for any Losses incurred by the Administrative Agent or the Lenders in connection with such matters; (10) any Borrower’s failure to pay for any Losses incurred by the Administrative Agent or any Lender arising out of 

  

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any claim or allegation made by any Borrower, its successors or assigns, or any creditor of any Borrower, that this Agreement or the transactions
contemplated by the Loan Documents establish a joint venture, partnership or other similar arrangement between any Borrower, the Administrative Agent and any Lender – recourse liability for any Losses incurred by the Administrative Agent or the
Lenders in connection with such matters; (11) the failure to return, or reimburse the Administrative Agent for, any FF&E taken from the Property by or on behalf of any Borrower and not replaced with FF&E of the same utility and of the same
or greater value – recourse liability for the replacement value of the FF&E which is taken and not replaced; (12) any act of arson or malicious destruction or waste by any Borrower or any Borrower Party – recourse liability for any
Losses incurred by the Administrative Agent or the Lenders in connection with such act; or (13) any brokerage commission or finder’s fees claimed in connection with the transactions contemplated by the Loan Documents which arise out of any
Borrower’s actions or omissions – recourse liability for any Losses incurred by the Administrative Agent or the Lenders in connection with such actions or omissions (each of the foregoing exceptions, collectively, the
“Non-Recourse Exceptions”). 
  
 (2) Notwithstanding anything to the contrary in this Agreement, the Notes or any of the Loan Documents, (i) the Administrative Agent and Lenders shall not be deemed to have waived any right which Lenders or the
Administrative Agent may have under Section 506(a), 506(b), 111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of the Indebtedness secured by the Mortgages or to require that all collateral
shall continue to secure all of the Indebtedness owing to Lenders in accordance with the Loan Documents, and (ii) the Indebtedness and all amounts payable under the Loan Documents shall be fully recourse to each Borrower in the event that: (A) there
is an Event of Default under Sections 9.9 hereof ; (B) an involuntary case or other proceeding is commenced against any Bankruptcy Party by an Affiliate of any Borrower, Borrower Party, or Operator which seeks liquidation, reorganization or
other relief with respect to it or its debts or other liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeks the appointment of a trustee, receiver, liquidator, custodian or other similar official of it
or any of its property; (C) an involuntary case or other proceeding is commenced against any Bankruptcy Party by a third party creditor with the cooperation of or in concert with an any Borrower, Borrower Party, or Operator (or any Affiliate of any
of the foregoing Persons) which seeks liquidation, reorganization or other relief with respect to it or its debts or other liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeks the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any of its property; (D) any Borrower fails to obtain the Administrative Agent’s prior written consent to any subordinate financing, any mezzanine financing or other
voluntary lien encumbering any Individual Property or the equity interests in any Borrower Party; or (E) any Borrower fails to obtain the Administrative Agent’s prior written consent to any assignment, transfer, or conveyance of any Individual
Property or any material interest therein as required by the Loan Documents. 
  
 (3) Whenever the obligations of any of the Borrowers are satisfied in part by any payment or foreclosure or other exercise of remedies, then at the Administrative Agent’s election the obligations which constitute
non-recourse liabilities shall be deemed satisfied first before any obligations which constitute or fall within the Non-Recourse Exceptions. 
  

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 Section 12.2 Limitation on Liability of the Administrative Agent’s and the Lenders’
Officers, Employees, etc. Any obligation or liability whatsoever of the Administrative Agent or any Lender which may arise at any time under this Agreement or any other Loan Document shall be satisfied, if at all, out of the Administrative
Agent’s or such Lender’s respective assets only. No such obligation or liability shall be personally binding upon, nor shall resort for the enforcement thereof be had to, the property of any of the Administrative Agent’s or any
Lender’s shareholders, directors, officers, employees or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise. 
  
 ARTICLE XIII 
  
 THE ADMINISTRATIVE AGENT 
  
 Section 13.1 Appointment, Powers and Immunities. Each Lender hereby appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are specifically delegated to the Administrative Agent by the terms of this Agreement and of the other Loan Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent (which term as used in this sentence and in Section 13.5 and the first sentence of Section 13.6 shall include reference to its affiliates and its own and its affiliates’ officers, directors,
employees and agents): 
  
 (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement, in the other Loan Documents and in any written agreement entered into by the Lenders and the Administrative Agent with respect to the Loan, and shall not by reason of
this Agreement, any other Loan Document or any such written agreement be a trustee or fiduciary for any Lender; 
  
 (b) shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in
any other Loan Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Loan Document, or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Loan Document or any other document referred to or provided for herein or therein or for any failure by any Borrower or any other Person to perform any of its obligations hereunder or thereunder;
and 
  
 (c) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except to the extent any such action
taken or omitted violates the Administrative Agent’s standard of care set forth in the first sentence of Section 13.5. 
  
 The Administrative Agent may employ agents and attorneys-in-fact, and may delegate all or any part of its obligations hereunder, to third parties and shall not be
responsible for the negligence or misconduct of any such agents, attorneys-in-fact or third parties selected by it in good faith. 
  

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 Without limiting the foregoing, if the Administrative Agent is not qualified in a particular jurisdiction to hold the
Mortgaged Property (as defined in the related Mortgage) or to exercise remedies with respect thereto on behalf of the Lenders, the Administrative Agent may subcontract with a qualified third party to do so, with the Administrative Agent remaining
responsible for directing the activities of any such subcontractor in accordance with the provisions of this Agreement. The Administrative Agent may deem and treat the payee of a Note as the holder thereof for all purposes hereof unless and until a
notice of the assignment or transfer thereof shall have been filed with the Administrative Agent and such assignment or transfer of the Note (or such portion thereof as has been so assigned or transferred) has been registered on the Register in
accordance with Article 2 hereof. Without limiting the generality of the foregoing provisions of this Section 13.1, the Administrative Agent shall also be entitled to retain a Controlled servicer and/or other sub-servicers to perform
its loan servicing and administration duties to be performed under this Agreement on behalf of the Lenders. Any sub-servicer retained by the Administrative Agent shall also be entitled to employ one or more sub-servicers (which may also include a
Controlled servicer) in connection with performance of their loan servicing and administration duties. Such retention shall not relieve the Administrative Agent of any of its obligations as the administrative agent under this Agreement, and the
Administrative Agent shall be and remain solely responsible for such obligations and for the fees and expenses of such sub-servicers payable under sub-servicing agreements. 
  
 Section 13.2 [Intentionally Deleted]. 
  
 Section 13.3 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon
any certification, notice or other communication (including, without limitation, any thereof by telephone, telecopy, e-mail, telegram or cable) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. As to any matters not expressly provided for by this Agreement or any other Loan Document,
the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Controlling Lenders, and such instructions of the Controlling Lenders and
any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. 
  
 Section 13.4 Defaults. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default unless the Administrative Agent has received notice from a Lender
or a Borrower specifying such Event of Default and stating that such notice is a “Notice of Default”. In the event that the Administrative Agent receives such a notice of the occurrence of an Event of Default, the Administrative Agent
shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to Section 13.7) take such action with respect to such Event of Default and other matters relating to the Loans after an Event of Default as may be taken
by the Administrative Agent hereunder and, if applicable, under any written contract entered into by the Lenders and the Administrative Agent with respect to the Loans. Not more often than once every 6 consecutive months during (a) the continuance
of an Event of Default which has resulted in the Acceleration of the Loans, and (b) any period thereafter during which the Administrative Agent is exercising remedies or has taken title to one or more of the Individual Properties, Lenders holding at
least 51% of the aggregate outstanding principal amount of the Loans may send written notice to the Administrative Agent 

  

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requesting that the Administrative Agent hire a reputable MAI appraiser to determine the Appraised Value of the Properties. Promptly after receipt of such
appraisals, the Administrative Agent shall send copies thereof to the Lenders. 
  
 Section 13.5 Rights as a Lender. If the Administrative Agent is also a Lender hereunder it shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent and its affiliates
may (without having to account therefor to any Lender) lend money to, make investments in and generally engage in any kind of lending, trust or other business with any Borrower (and any of its Affiliates) as if it were not acting as the
Administrative Agent, and the Administrative Agent and its affiliates may accept fees and other consideration from any Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

  
 Section 13.6 Standard of Care; Indemnification.
In performing its duties under the Loan Documents, the Administrative Agent will exercise the same degree of care as the Administrative Agent normally exercises in connection with real estate loans in which no syndication or participations are
involved, but the Administrative Agent shall have no further responsibility to any Lender except as expressly provided herein and except for its own gross negligence or willful misconduct which resulted in actual loss to such Lender, and, except to
such extent, the Administrative Agent shall have no responsibility to any Lender for the failure by the Administrative Agent to comply with any of the Administrative Agent’s obligations to any Borrower under the Loan Documents or otherwise. The
Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed under Section 11.5, but without limiting the obligations of any Borrower under Section 11.5) ratably in accordance with the aggregate principal amount of
the Loans held by the Lenders (or, if no Loans are at the time outstanding, ratably in accordance with their respective Commitments), for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against the Administrative Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses that any Borrower is
obligated to pay under Section 11.5, but excluding, unless a Event of Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of
the terms hereof or thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the Administrative Agent’s breach of its standard of care set forth in the first sentence
of this Section. 
  
 Section 13.7 Non-Reliance on
Administrative Agent and Other Lenders. Each Lender agrees that it has, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its
own credit analysis of any Borrower and its Affiliates and decision to enter into this Agreement and that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at 

  

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the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Loan Document. Subject to
the provisions of the first sentence of Section 13.5, the Administrative Agent shall not be required to keep itself informed as to the performance or observance by any Borrower of this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the Properties or the books of any Borrower or any of its Affiliates. Except for notices, reports and other documents and information expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or as otherwise agreed by the Administrative Agent and the Lenders, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of any Borrower or any of its Affiliates that may come into the possession of the Administrative Agent or any of its affiliates. 
  
 Section 13.8 Failure to Act. Except for action expressly required of the Administrative Agent hereunder, and
under the other Loan Documents, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 13.5 against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. 
  
 Section 13.9 Resignation of Administrative Agent. The Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers but such resignation shall not be effective until a new successor Administrative Agent accepts such appointment. Upon any such resignation, the Controlling Lenders shall have the right to appoint a
successor Administrative Agent, which successor shall: (a) be a financial institution that has knowledge and experience comparable to the resigning Administrative Agent’s knowledge and experience in the servicing of loans similar to the Loans
hereunder; and (b) be subject to the approval of the Borrowers, which approval shall not be unreasonably withheld. If no successor Administrative Agent shall have been so appointed by the Controlling Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation of the retiring Administrative Agent, then the retiring Administrative Agent shall appoint an interim successor Administrative Agent as determined
by the retiring Administrative Agent in its reasonable discretion, to serve in such capacity until such time as the Controlling Lenders and the Borrowers agree upon a successor administrative agent, and upon the acceptance of such appointment by the
successor Administrative Agent, the retiring Administrative Agent’s resignation shall become effective and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. Upon the acceptance of any appointment
as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder (if not already discharged therefrom as provided above in this Section 13.9). The fees payable by the Borrowers to a
successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Section 13 and Section 11.5 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent. 
  

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 [NO FURTHER TEXT ON THIS PAGE] 
  

 -132- 

 EXECUTED as an instrument under seal as of the date first written above. 
  

			
	LENDER:
	
	 MASSACHUSETTS MUTUAL LIFE
 INSURANCE COMPANY

		
	 By:
	 	 Babson Capital Management LLC
 Its Authorized
Agent

		
	 By:
	 	 /s/ David Christensen

	 Name:
	 	 David Christensen

	 Title:
	 	 Managing Director

  
 [Signatures
continue on the following page] 
  

 S-1 

					
	LENDER:
	
	 GENERAL ELECTRIC CAPITAL
 CORPORATION

		
	 By:
	 	 /s/    Illegible

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 Authorized Signatory

	
	 Address for Notices:

	
	 General Electric Capital Corporation

	 125 Park Avenue

	 10th Floor

	 New York, New York 10017-5529

	 Attention: Loan Administrator

	 Sunstone/Westbrook

	 Facsimile No.: (212) 573-9733

	
	 With a copy to:

	
	 Morrison & Foerster LLP

	 1290 Avenue of the Americas

	 New York, New York 10104

	 Attention: Mark Edelstein, Esq.

	 Facsimile No.: (212) 486-7900

	
	 And to:

	
	 General Electric Capital Corporation

	 Real Estate Legal Department

	 16479 Dallas Parkway, Suite 400

	 Addison, Texas 75001

	 Attention: David Turner

	 Facsimile No.: (972) 447-2647

  
 [Signatures
continue on the following page] 
  

 S-2 

					
	LENDER:
	
	 HARTFORD ACCIDENT AND INDEMNITY
 COMPANY

		
	 By:
	 	 Hartford Investment Services, Inc.
 Its Agent
and Attorney-in-Fact

			
	 	 	 By:
	 	 /s/ Donald W. O’Neill

	 	 	 Name: Donald W. O’Neill

	 	 	 Title: Senior Vice President

	
	 Address for Notices:

	
	 Hartford Investment Management

	 55 Farmington Avenue, 10th Floor

	 Hartford, CT 06105

	 Attention: Joseph C. Cammilleri

	 Facsimile No.: (860)297-8853

	 Email: Joe.Cammilleri@thehartford.com

	
	 With a copy to:

	
	 The Hartford/Hartford Investment Management

	 55 Farmington Avenue, 11th Floor

	 Hartford, CT 06105

	 Attention: Marvin R. Pilo

	 Assistant General Counsel and
 Assistant Vice President

	 Facsimile No.: (860) 297-8892

	 Email: Marvin.Pilo@thehartford.com

  
 [Signatures
continue on the following page] 
  

 S-3 

			
	BORROWER:
	
	 SUNSTONE SH HOTELS L.L.C.

		
	 By:
	 	 /s/ Jon Kline

	 	 	 Jon Kline

	 	 	 Vice President

  

			
	Principal place of business and chief executive office:
	
	 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

	
	 Address for Notices:

	
	 c/o Sunstone Hotel Partnership, LLC
 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

  
 [Signatures
continue on the following page] 
  

 S-5 

			
	BORROWER:
	
	 SUNSTONE OP PROPERTIES L.L.C.

		
	 By:
	 	 /s/ Jon Kline

	 	 	 Jon Kline

	 	 	 Vice President

  

			
	Principal place of business and chief executive office:
	
	 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

	
	 Address for Notices:

	
	 c/o Sunstone Hotel Partnership, LLC
 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

  
 [Signatures
continue on the following page] 
  

 S-6 

			
	BORROWER:
	
	 SUNSTONE CHANDLER, LLC

		
	 By:
	 	 /s/ Jon Kline

	 	 	 Jon Kline

	 	 	 Vice President

  

			
	Principal place of business and chief executive office:
	
	 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

	
	 Address for Notices:

	
	 c/o Sunstone Hotel Partnership, LLC
 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

  
 [Signatures
continue on the following page] 
  

 S-7 

			
	BORROWER:
	
	 SHP OGDEN LLC

		
	 By:
	 	 /s/ Jon Kline

	 	 	 Jon Kline

	 	 	 Vice President

  

			
	Principal place of business and chief executive office:
	
	 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

	
	 Address for Notices:

	
	 c/o Sunstone Hotel Partnership, LLC
 903 Calle Amanecer, Suite 100
 San Clemente, CA 92673

  
 [Signatures
continue on the following page] 
  

 S-8 

			
	ADMINISTRATIVE AGENT:
	
	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
		
	 By:
	 	 Babson Capital Management LLC
 Its Authorized
Agent

		
	 By:
	 	/s/ David Christensen
	 Name:
	 	 David Christensen

	 Title:
	 	 Managing Director

  

 S-9

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